There’s no slowing the green transition in 2024

  • BI spoke to several experts about what to watch in 2024 for  climate action.
  • AI has the potential to reduce emissions in manufacturing, agriculture, and the power sector.
  • High borrowing costs won’t stop renewable energy projects.
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It’s been a transformative year for climate action. 

Artificial intelligence burst into our collective conscience like never before. Globally, renewable-energy capacity and electric-vehicle sales hit new records. Yet extreme weather was a reminder that decarbonizing the economy isn’t moving fast enough.

BI spoke to several experts about what they’re watching in 2024. Here are the takeaways:  

AI is headed for another blockbuster year

For the first time, AI was a focus of many sideline events at the UN summit in Dubai, known as COP28. It’s already being used to monitor greenhouse-gas emissions by analyzing vast amounts of data from satellites, drones, and land-based sensors. Scientists are also using AI to predict extreme weather events more precisely.

AI has the potential to reduce greenhouse-gas emissions by 5% to 10% by 2030, a November report by Google and Boston Consulting Group found. The cuts could come from the manufacturing, agriculture, and power sectors, but adoption is slow, said Alp Kucukelbir, the cofounder and chief scientist at Fero Labs, which develops machine-learning software for manufacturers. Kucukelbir coauthored an AI climate framework with other academics released at COP28 that outlined the opportunities, risks, and barriers to adoption.

“Any factory operating today is already digitized to the extent where you can bring in AI and empower the factory to improve the amount of recycled materials it’s using, reduce waste, reduce energy consumption, and improve the yields of its production,” Kucukelbir said. 

He’s keeping tabs on how governments approach AI and whether they cover the potential benefits and education gap. There aren’t enough workers with AI knowledge, a problem governments can help address. Kucukelbir noted that the US Department of Energy this month announced a new office dedicated to AI and other emerging technology. 

Rising costs won’t slow the green transition

Renewable-energy investment hit record levels in 2023, but high interest rates created challenges for offshore wind projects. Last month, the Danish company Ørsted canceled plans to build two large offshore wind projects off the coast of New Jersey. But on Wednesday, Ørsted said it would move ahead with plans to build the world’s largest wind farm in the North Sea after the UK increased financial support for the industry, The Financial Times reported.

James Sallee, a professor at UC Berkeley and an economist who studies energy and the environment, said the offshore wind industry is still new in the US, so projects are more costly and risky. The higher cost of borrowing money exacerbates that. Still, he doesn’t expect higher interest rates to be a setback for the green transition. 

“There’s a lot of momentum in standard solar and wind projects,” Sallee said. “They’re still the cheapest sources of new power in places where the natural resources are good. They will be in good shape. But some marginal projects, like big offshore wind, are at risk of being stopped.”

Some good news: Inflation is cooling, setting the stage for the Federal Reserve to slash interest rates as many as five times next year. 

Hot days ahead

This year has been the warmest on record. Climate scientists predict 2024 will be another scorcher. The climate crisis, combined with the weather pattern known as El Niño that leads to warmer temperatures, is increasing the risk of disasters. BI will continue covering how these weather-related disasters are reshaping where people live and disrupting industries like insurance and agriculture.

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Catherine Boudreau