Nearly half of the emissions from 2022 in the United States will come from industry and the electric power sector, due mainly to the fossil fuels used for energy.
Environmental Protection Agency (EPA) identifies agriculture, personal and commercial transport and agricultural activities as additional major contributors.
According to experts, intensifying the research on carbon capture as well as reducing emissions directly at their source can mitigate these negative effects.
However, the industries that are responsible for producing high levels of emissions allocate only a fraction of their revenue to R&D.
Statista
R&D expenditures in industries with high emissions are low
The Economic of Industrial Research and Innovation Project of the European Commission analyzed R&D expenditures of the 2,500 firms with the largest spending in this field. R&D intensity was calculated by dividing R&D expenses by 2022 annual revenue.
These findings show a dramatic contrast between the performance of each sector. Oil and gas companies, such as Chevron and Petrobras and China Petroleum & Chemical showed a R&D median intensity of only 0.3%.
Electricity, another major emitter had a median R&D intensities of 0.8%, which was slightly higher than the other sectors.
In spite of these modest numbers, certain companies make significant investments in the research and development of new technologies. This increases the R&D intensity on average in these industries. Overall, however, these spending levels are not sufficient to achieve significant emission reductions.
Construction and Materials, which includes energy-intensive processes like cement manufacture, showed a median R&D intensities of 2.5%.
The R&D intensity is a little higher than the European average of 2,2% calculated as a percentage of GDP.
In the transition to greener options like hydrogen fuel and electric cars, automakers have increased their R&D expenditure.
Seven of the top 10 R&D investment companies in 2022 were tech-related.
R&D is a major investment for companies like Apple, Microsoft, Alphabet and Huawei.
Volkswagen, Roche and Johnson & Johnson rounded out the top three with respective investments of EUR19, EUR14, and EUR14 Billion.
Software and services account for 20.7% of R&D expenditure in the tech sector, followed by hardware and chips (10%).
The extent of their R&D activities aimed at emission reduction remains unclear, especially in relation to the environmental impact data centers and generative AI.
Sectoral strategies to reduce global emissions
To effectively mitigate the environmental impacts of global emissions, cross-sectoral cooperation is required. The transportation sector has several key strategies, including the transition to electric vehicles, alternative fuels such as hydrogen and biofuels and smart urban planning.
In the energy sector as well, switching to renewable sources of energy such as wind and solar power, and adopting energy-efficiency measures for businesses and buildings are all critical steps in reducing emissions.
The cross-sectoral collaboration is a key strategy. Integrated solutions, such as renewable powered electric vehicle charging infrastructures are promising.
Consistency and effectiveness are ensured by aligning cross-sector policies and optimizing supply chains to cleaner modes of transportation.
Innovative low-carbon technologies are possible through technological advancements such as R&D on smart grids and sustainable mobility, digitalization, and data analytics.
By increasing public awareness about the impact on the environment of energy and transportation choices, individuals can make eco-conscious decisions.
Incentivizing sustainable behavior, like driving a low-emission vehicle and taking public transportation, can encourage a shift towards achieving a more green future.
Latin America is highly vulnerable to climate change impacts
Latin America and Caribbean only account for 11% of the global emissions. However, this region is extremely vulnerable to climate change impacts, and therefore requires concerted measures of adaptation and resilience.
The latest CAF Economics and Development Report “Renewed Energies – Just Energy Transition to Sustainable Development” offers an in-depth analysis of the energy landscape.
This report highlights how the region can contribute to global energy transformation by leveraging key mineral resources, gas supply for emission reduction transitions, and the production of renewable energy.
Sergio DiazGranados is the executive president of CAF. He highlights the ability of the region to lead the global energy transformation through the decarbonization strategies detailed in the CAF report.
These include promoting energy efficiency, biofuels, hydrogen and other low-emissions fuels.
Finaly, while there are some improvements, current R&D expenditures in sectors with high emissions do not allow for significant reductions of emission. It is vital that both policymakers and industry leaders work together to promote innovation and move the world toward a sustainable future.
The post Why high-emission industries are lagging in R&D investments: What it means may be updated as new information becomes available
