April 28, 2023

Digitally Enabled Climate Finance Can Help LMICs Reduce Emissions and Adapt to the Impacts of Climate Change

Having engaged in the climate finance and technology sectors over the past several years, I agree with the GSMA that "Climate finance has increasingly taken center stage in debates about the future of climate action. For low- and middle-income countries (LMICs) to reduce emissions, significant financial support is needed to transition to low-carbon economies and adapt to the impacts of climate change." The UK-based organization notes in a new report that provides an overview of how mobile and digital technology can be used to facilitate and accelerate climate finance, "While disruptive technologies offer great promise, they require an enabling ecosystem and robust financing to be successful."

The report's Executive Summary importantly points out: "The use of mobile and digital technologies in delivering climate finance to underserved communities shows excellent promise. Emerging solutions moving climate finance forward include frontier technologies, such as the Internet of Things (IoT) and blockchain, as well as the voluntary carbon market (VCM).

The report's other main conclusions include:

Defining climate finance: "The research highlighted that the public and private sectors define climate finance differently. This has an impact on the level, quality and priority of investment in climate change. Understanding the various definitions of climate finance is also key to creating an inclusive ecosystem in which all actors can execute their mandates, including the mobile and digital technology community. The knowledge and technical expertise required for climate finance can be enhanced based on agreed definitions, and will help to develop tailored products, services and capacity building tools."

Building knowledge and technical expertise in digitally enabled climate finance: "Climate finance is a new, complex and contested field. Digitally enabled climate finance has added a layer of complexity because it incorporates technology in both climate action and climate financing. As a result, there is a gap in knowledge and technical expertise, which are key to developing solutions and accelerating climate finance for those most impacted by climate change."

Developing digital infrastructure and ecosystems in LMICs: "The deployment and delivery of climate finance via mobile and digital technologies depends on strong digital infrastructure. However, there are numerous barriers to the development of this infrastructure."

Improving access to quality data: "Digital technology needs to be integrated in climate finance to ensure quality data. However, in LMICs, there are data-related barriers that make it difficult to attract investment and compete for access to climate financing."

Reaching underserved populations: "Underserved groups in LMICs, especially women, are the least likely to access and use mobile technology. This is due to a variety of reasons, including the affordability of handsets and data, a lack of digital skills and social norms. Since these groups tend to be the most vulnerable to the impacts of climate change, solutions need to be tailored specifically to their needs and access to technology."

The development of carbon markets: "[T]he adoption of Article 6 and Article 6.4 of the Paris Agreement, which outline the development of a VCM, has sparked interest in this innovative climate financing mechanism. However, there are persistent implementation challenges, largely due to complex and immature markets."

I appreciate how the report showcases models and best practices for how mobile and digital technologies can ensure vital funds reach the most vulnerable people and communities. In doing so, it demonstrates the opportunities for transformative technologies to help counter the climate crisis. While climate finance is relatively new, research presented in the report "shows that mobile and digital technology are uniquely positioned to provide tools that catalyze and strengthen how it is delivered." The report also "offers a preliminary assessment of digitally enabled climate finance to guide public and private sector actors, including financial institutions and mobile network operators (MNOs). In doing so, it seeks to support the delivery of innovative solutions and partnerships that serve communities most affected by climate change."

The GSMA also produced a webinar that discussed the future of climate action and the role of mobile and digital technology in delivering climate finance in LMICs.

If finance is at the heart of tackling the climate change crisis, then what are your recommendations of how to use mobile and digital technologies to ensure vital funds reach the most vulnerable people and communities?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

April 14, 2023

Report Identifies Six Decarbonizing Technologies That Will Help Asia's Path to a Greener Future

"Asia, home to vast engines of economic growth, is at the center of the climate debate," says a report written by Economist Impact and sponsored by Eastspring Investment, which is a Singapore-based asset management business of Prudential plc. The report adds that "In the past two decades, global carbon emissions from fossil fuel combustion have risen by 45%, primarily driven by Asia, for which this figure stood at 135%. The region's ongoing dependence on coal has driven its per-head carbon emissions to equal that of the global average. Asia's carbon emissions are likely to rise by 16% over the next decade.

"Meanwhile, the effects of climate change are becoming more pronounced in parts of the region. In the past year, unprecedented floods in Pakistan wiped out a significant share of its crops; India recorded its highest-ever temperatures, with meteorologists sounding the alarm for more to come this year; and a severe heatwave in China exacerbated a drought that impacted food production and the power supply."

The report importantly points out that Asia "is facing significant human and economic costs arising from intense greenhouse gas (GHG) emissions. Under pressure to set ambitious net zero targets and reduce emissions, technologies that enhance efficiencies and help industries decarbonize will be crucial pieces of the climate puzzle in Asia."

The findings presented in Asia's path to a greener future: Six technologies with decarbonizing potential are based on an extensive literature review, an interview program, and analysis conducted between October 2022 and March 2023. The report's findings, which are listed below, are intended to act as a springboard for discussions to support the development of technologies that have decarbonizing potential and identify the roadblocks to their progress.
  • Technologies that are driving significant gains in Europe or the Americas need to be adapted to the Asian market. For example, the majority of alternative protein products are tailored to suit Western preferences and are prohibitively costly for the more price-sensitive Asian market. Alternative proteins would likely see broader adoption and create more impact if adapted to specific market preferences and price conditions.
  • Decarbonization efforts should aim to address emissions and waste across the entire lifecycle of production and use. Most of the hydrogen currently consumed is grey, which is produced from natural gas. The decarbonization potential of hydrogen-powered vehicles will significantly increase with the use of renewable energy to produce hydrogen fuel. Likewise, using food waste for manufacturing textiles moves away from the current highly polluting linear model of production to a circular economy.
  • Developing supporting infrastructure can enhance technology development. The growth of technologies such as hydrogen vehicles and battery recycling is currently limited due to insufficient supporting infrastructure. Spurring hydrogen vehicle uptake depends on installing a network of refueling stations and green hydrogen production plants. To diminish end-of-life impacts of batteries, well-designed and managed disposable and collection mechanisms are necessary. Implementing policies that support the development of necessary infrastructure will ensure a conducive environment for the growth and expansion of these technologies.
  • Addressing poor consumer sentiment will be key in scaling up technologies. Negative perceptions impede new technology adoption. In the case of alternative proteins, consumers can be deterred by concerns about taste and nutritional value. With hydrogen vehicles, safety is a key issue, while recycled batteries can be perceived as lower quality. Investigations into safety incidents can help curb concerns. In other cases, public awareness and better communication by businesses and governments can go a long way to address common misperceptions.
  • Recycling and reuse can present opportunities to overcome supply chain disruptions owing to changing global dynamics. The prices of critical minerals are on the rise because of growth in demand and fluctuations in supply. Recycling products, such as electric vehicle (EV) batteries, could ease the dependence on expensive raw materials, improve affordability and facilitate the transition away from a linear take-make-waste economy.
  • Policy support in the form of subsidies and financial incentives can reduce technology costs. At present, many new technologies are expensive, which is hindering their adoption and development. Government support through subsidies, grants and other financial incentives can help reduce production costs and enable economies of scale. Lower production costs could translate into lower purchase prices for end consumers and foster greater adoption.
  • Greater public and private investments are needed. While climate technology is attracting investment, more financial support is needed to scale-up the next wave of innovation. Funding is also needed to help install essential infrastructure to support the uptake of climate technologies such as hydrogen production plants and EV charging stations.

The six technologies with decarbonizing potential include are segmented into three verticals: agriculture (alternative proteins and precision farming), transport (EV batteries and hydrogen vehicles), and waste (alternative fabrics and battery recycling). These technologies "show considerable potential for reducing Asia's carbon footprint, as well as improving sustainability and security in the region." However, "each technology has its own set of unique challenges."

I support the report's assertion "Technology is a critical enabler of decarbonization efforts and, as it continues to advance, it brings greater scope to address emissions in hard-to-abate sectors." The report adds that "innovation plays a crucial role in improving energy efficiency and reducing waste, but challenges remain to the broader uptake of each technology. Investment in research, development and deployment of nascent technologies will be essential to achieving our climate goals."

What technologies do you think will have the biggest impact on Asia's path to a greener future?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

April 1, 2023

China's 5G Enterprise Services to See Greater Commercial Scale in 2023, Says GSMA

"China's economy is on the road to recovery, following the easing of Covid-19 restrictions from late 2022," the GSMA, an organization that presents the interests of mobile operators worldwide, said in its latest report on the state of China's mobile economy. "Mobile connectivity served as a lifeline throughout the pandemic and will play an even more crucial role in enabling the safe return to social interaction and the restart of many economic activities."

The report, which is available in English and Chinese, notes that "authorities across China have outlined plans to integrate digital technologies, underpinned by advanced mobile connectivity, into every aspect of society to sustain China's competitiveness in an evolving global economy. In 2022, mobile technologies and services generated 5.5% of China's GDP – a contribution that amounted to $1.1 trillion of economic value added."

The UK-based organization adds that "5G will underpin future mobile innovation and services, building on current deployments and adoption." What is more, "The number of 5G base stations in China exceeded 2.3 million at the end of 2022, including approximately 887,000 built during the year. China will be the first market with 1 billion 5G connections, reaching the milestone by 2025. The report also says that "By 2030, 5G connections in China will reach 1.6 billion, accounting for nearly a third of the global total. The technology will add $290 billion to the Chinese economy in 2030, with benefits spread across industries."

Additional key highlights from the report include:
  • 5G enterprise services to see greater commercial scale in 2023: "Mainland China is the largest 5G market in the world, accounting for more than 60% of global 5G connections at the end of 2022. With strong take-up of 5G among consumers, the focus of operators is now increasingly shifting to 5G for enterprises. This offers opportunities to grow revenues beyond connectivity in adjacent areas such as cloud services – a segment where operators in China have recently made significant progress."
  • Dedicated networks on the rise: "Private and dedicated wireless network solutions are back in vogue, as 5G’s enhanced capabilities move deployments beyond low-profile, niche offerings. Manufacturing and mining are two sectors where demand for private and dedicated 5G networks in China looks particularly strong."
  • Innovation underpins China's digital ambitions: "China's digital ambitions are driven by a combination of external and internal factors, notably a slowdown in growth of the real economy. The digital ecosystem, including start-ups, will be at the forefront of efforts to realize China's digital ambitions, with innovation and investments driving the creation of new solutions across the focus areas of China's 14th Five-Year Plan (2021–2025) and the Long-Range Objectives Through the Year 2035."
  • The mobile industry shifts towards circularity: "Across the telecoms ecosystem, sustainability has extended beyond corporate social responsibility (CSR) to become a core strategic priority. Industry players are increasingly adopting a model of production, service offering and consumption that involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products for as long as possible."
  • Fintech presents opportunities for mobile industry players: "China has developed a lead in fintech services over the past decade, driven by investments in an expanding portfolio of products and surging public demand for electronic payment options. As fintech innovators increasingly leverage emerging technologies (such as big data, AI and cloud computing) to enable more complex and customized solutions, operators have an opportunity to play a greater role in fintech."

The report also reveals the following statistics:
  • Unique mobile subscribers in China will total 1.33 billion by 2030;
  • There were 1.17 billion mobile internet subscribers in China in 2022, equivalent to 79% adoption;
  • 5G will overtake 4G in 2024 to become the dominant mobile technology in China;
  • China to be among leading 5G markets globally, with 88% adoption by 2030;
  • Smartphone connections will total 1.73 billion in China by 2030, accounting for 93% of connections;
  • Smartphone data traffic in China to more than double over the period to 2028;
  • Licensed cellular IoT connections in China to double to 3.6 billion by 2030;
  • Revenue growth is set to moderate in China over the coming years as 5G adoption reaches maturity;
  • Operators in China will spend $291 billion on their networks during 2023–2030, with most on 5G;
  • The mobile sector added $1.1 trillion of economic value to the Chinese economy in 2022;
  • At the end of the decade, mobile's economic contribution will reach $1.3 trillion;
  • The mobile ecosystem in China supported 6 million jobs in 2022;
  • The fiscal contribution of the mobile ecosystem reached $110 billion in 2022;
  • 5G will add almost $290 billion to the economy in China in 2030; and
  • Manufacturing and services will benefit the most from 5G in 2030.

Infographic: GSMA

Regarding the sixth generation mobile system standard (6G), the GSMA points out that "The mobile industry is already studying how 6G will shape the future of mobile. For regulators, ministries, operators, vendors and researchers, spectrum policy for 6G is becoming increasingly important." Furthermore, "2023 marks the beginning of a long journey as new studies begin when the WRC-27 cycle kicks off."

The report concludes by explaining how "6G is expected to become the primary mobile technology in the 2030s and will offer an enhanced user experience over previous generations. It promises ultra-fast data rates with lower latency, significant energy efficiency improvements and greater reliability."

What opportunities are you seeing in China's mobile sector?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.