Technological developments and trends

Cities cover just a small percentage of our planet’s surface. Yet they generate 50 to 80 percent of the world’s greenhouse gas (GHG) emissions and consume nearly 75 percent of global material resources.^[1] Technology and innovation have vital roles to play in transforming cities from carbon emitters to carbon sinks.

This chapter explores proven, frontier and horizon technologies for decarbonizing cities. The topics addressed include low-carbon mobility, heating and cooling and material efficiency. Key trends are presented in the introductory section below, focusing on technology, finance and patents.

Alternative fuels and material innovation

Many cities are witnessing a massive trend toward electrification of vehicle fleets, from cars and buses to rickshaws and scooters. Numerous startups are developing electric vehicle batteries that charge faster and run for longer with reduced reliance on critical minerals. Others are tackling barriers to electric vehicle use through battery-swapping stations and vehicle-grid integration enabled by charging apps, delayed charging technologies and real-time grid data.

Advances in waste valorization and non-food biomass could encourage biofuel use beyond its role as a transition fuel. The global micromobility market – such as electric bicycles and scooters – is bucking the trend toward larger and more energy-consuming cars and is currently estimated at around USD 180 billion.^[2] Innovations in composite materials, carbon fiber technology and high-strength steels to reduce vehicle weight, and therefore fuel consumption, have an important mitigating effect if applied at scale.

Compact cities and smart mobility

However, with the growth in transport demand offsetting efficiency gains, vehicle-level interventions alone may not be sufficient to decarbonize the mobility sector. Compact cities offer better opportunities for walking, cycling, public transport and pooled mobility options. There is also growing momentum in favor of performing certain tasks without the need to travel altogether.

However, with the growth in transport demand offsetting efficiency gains, vehicle-level interventions alone may not be sufficient to decarbonize the mobility sector.

As the world has recently witnessed, a rapid and large-scale modal shift is possible. The COVID-19 pandemic prompted unprecedented growth in non-motorized transport and telecommunication technologies. The need to socially distance drove a massive increase in bicycle sales, while car use reduced drastically as people worked from home. Some cities seized this opportunity to redesign streets, reclaiming parking space for new pedestrian and cycle lanes.^[3]

Digital technologies are increasingly allowing cities to plan and create sustainable urban environments for low-carbon mobility. For instance, mobility-as-a-service digital platforms enable bus/train intermodality and smart traffic management systems reduce traffic congestion. Shared mobility platforms were conceived to reduce car ownership but they can end up competing with public transport in cities where these services are dominant.

Addressing the cooling dilemma

Cooling is increasingly necessary for survival in a growing number of cities. But the energy use required for cooling contributes significantly to global warming. The most commonly available technologies are energy consuming, but significant advances to address this challenge are being made.

Although some regions are seeing a decrease in heating demand as a result of global warming,^[4] it still makes up around half the world’s energy consumption. Development and dissemination of highly efficient heat pumps that can both heat and cool features on many cities’ decarbonization agendas. Innovations range from improvements in energy efficiency and solar integration to the use of refrigerants with lower climate impact. Research on refrigerant-free heat pumps is underway.

Heating and cooling demand is currently met by individual devices but district heating and cooling solutions that offer efficiency and climate mitigation benefits are expected to grow. Next-generation district technologies can enable simultaneous heating and cooling, and integration with smart energy systems.

Heating or cooling solutions depend on the local climate, economy and culture. Embracing vernacular techniques and materials within modern applications can enable passive heating and cooling. Nature-based solutions, such as green zones and waterways, reduce the urban heat island effect. In certain settings, energy-consuming heating and cooling technologies can be avoided altogether. Countries ranging from India to Switzerland are limiting the use and operating temperature of air conditioners. This energy-saving measure is enabled through legislation and minimum energy performance standards.

Smart technologies and return schemes enhance recycling

Material efficiency has a massive impact on GHG reduction by reducing energy consumption from production. An important aspect is how discarded products are handled and reintroduced into production and use cycles. At present, globally, waste is still generally dumped in open landfill sites that pollute soil and groundwater, spread disease and generate GHG emissions as organic materials decompose. Recycling is currently failing to keep pace with the waste generated by the ever-growing production of products such as packaging and construction material.

Technology and innovation play vital roles in sustainable waste management, with policy and local institutional capacities as key enablers. Smart cities in high-income countries are increasingly harnessing the power of data and automation. Sensors and digital technologies optimize waste collection and separation while optical scanners and robotics divert materials away from landfill. Deposit return schemes and technologies that recirculate bottles and cans are growing in popularity. Alternative recycling technologies, such as chemical recycling, have reemerged rapidly as a means of converting plastic waste into oils and fuel. However, their high costs and energy demands will likely limit their usefulness from a climate perspective.

Material efficiency beyond waste management

In lower-income countries advancing from open dumping and burning, the organic fraction of the waste is often high. Locally appropriate technological solutions include composting, anaerobic digesters and recycling processes that often rely on the important work of informal waste pickers. Transitioning from open dumping to semi-aerobic landfill solutions has the potential to reduce emissions by 40 percent.^[5] While incineration technologies are gaining prominence in regions such as Southeast Asia, some countries in the European Union (EU) are phasing out such practices in favor of preserving materials for better uses.

Downstream waste management practices cannot adequately address the climate impact of our material consumption

Downstream waste management practices cannot adequately address the climate impact of our material consumption. Technologies and solutions that enable circular cities and upstream material efficiency are therefore taking precedence as climate mitigation measures. Innovations in lighter products and green manufacturing methods are ushering in a new era for material use in cities. Engineered wood and new applications for natural and sustainable construction materials offer both strength and sustainability. The substitution of timber for steel and concrete has significant potential to reduce embedded emissions in buildings if forests are managed sustainably and timber elements are reused or recycled at end of life. ^[6] Self-healing concrete, high-strength steel and deconstruction-ready design principles further extend the lifespan of materials and products, reducing the need for primary production.
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Patents and finance

Electric vehicle patents dominating

The section on Mobility in this year’s Green Technology Book focuses on road transport – the primary source of GHG emissions compared to rail, air and maritime transport. Road transport also dominates low-carbon innovation in the transport sector, with growth in electric vehicle technologies accelerating after 2005.^[7] Electric vehicle uptake has been boosted by government subsidies, regulatory targets and technological advances. These have led to a price drop of nearly 90 percent since 2010 for lithium-ion batteries – the most commonly used battery for electric vehicles.^[8]

Most low-carbon transport inventions relate to battery technology, with 9 of the top 10 filing companies based in Asia. Lithium-ion batteries still dominate research, with the greatest focus on extending battery life, increasing charging speed and facilitating recyclability. At the frontier, lithium-based solid-state batteries could offer longer lifespans and higher energy density. While these are not yet commercialized, they have seen an average 25 percent increase in patents since 2010. A number of companies have announced their intention to use this technology as an alternative to lithium-ion batteries in their vehicles in the next few years.^[9]

Micromobility, fuel cells and smart mobility

Micromobility systems have expanded significantly in recent years, with e-bikes and step scooters seeing the most intense level of innovation among European patent applications.^{[10] [11]} Research and development (R&D) activity in the field of hydrogen fuel cells has also accelerated with nearly 4,000 fuel cell patents filed in 2018 by applicants in China, which has overtaken Japan to become the leading patent country.^[12]

Patent trend reports on climate change mitigation in the mobility sector mainly focus on vehicle-level interventions. But technologies that enable a more transformative shift in travel patterns have become increasingly important in the last decade, driven by the rise in artificial intelligence (AI) and the internet of things (IoT). Such technologies range from smart traffic management systems and smart parking and charging solutions to technologies for vehicle-grid integration and urban planning.

Heat pump innovation on the rise

The global patent landscape for efficient heating and cooling technologies has evolved in the last decade. Reflecting their growing importance, heat pump patents have increased substantially since 2015. While China is the country with most patents, Austria and Germany are more specialized in this field.^[13] Meanwhile, conventional air-conditioner technology based on vapor-compression has witnessed slower growth.^[14] Comprehensive patent trend assessments are not available for passive cooling technologies, such as insulation and radiative coatings.^[15]

Advances in sustainable material alternatives

This chapter offers an overview of various technologies that reduce climate impact through material efficiency, ranging from lightweight and low-carbon materials to reuse and recycling. As this brief commentary on patent trends cannot address all these categories, examples of innovation activity are presented along the value chain of one specific material: plastic. After all, the United Nations Environment Programme (UNEP) estimates that the GHG emissions from plastic production, use and disposal could account for 19 percent of the global carbon budget by 2040.^[16]

After all, the United Nations Environment Programme (UNEP) estimates that the GHG emissions from plastic production, use and disposal could account for 19 percent of the global carbon budget by 2040.

The production and conversion stage generates 90 percent of plastic-related emissions. Recycled, biodegradable or bio-based plastics are considered important mitigating measures, but their share of total plastic will remain limited under current policies.^[17] The health-care sector is leading the way in bioplastic innovation with more than 19,000 international patent families in the period 2010–2019. The sector uses plastics for single-use or medical surgery tools and packaging.^[18]

Recent studies have cautioned that with the current level of technology, increased consumption of bioplastics is likely to generate GHG emissions from cropland expansion, warranting further innovation in this space.^[19] Plastic production also results in significant pre-consumer waste (i.e., waste generated during the manufacturing process that never reaches end-consumers). Material efficiency measures and innovation in this space are neither well understood nor discussed.

Plastic recycling innovations

In terms of plastic recycling, there is a discrepancy between patenting activity and technology needs from a climate perspective. Most activity relates to chemical or biological recycling where microbes and bacteria break down the plastics. These methods saw twice the number of patents compared to mechanical recycling, which is currently the most common recycling method. However, successful commercialization of chemical or biological plastic recycling is yet to materialize. Moreover, these are energy-intensive processes that produce oil and other simpler compounds rather than direct generation of new plastic outputs.

In terms of plastic recycling, there is a discrepancy between patenting activity and technology needs from a climate perspective

More recently, innovations that focus on high-quality or easily recyclable plastics have grown exponentially. This includes research into so-called dynamic covalent bonding. The field addresses typical recycling challenges and plastic materials capable of self-repair. This could enhance recycling rates while minimizing the need for frequent replacements due to wear and tear.^[20]

The urban climate finance gap

Climate finance for cities recently reached approximately USD 384 billion a year. Loans, rather than grants, represented a significant portion. Of the total climate finance flows assessed by the Cities Climate Finance Leadership Alliance, funding commitments through debt represented 42 percent. Regardless of the financing instrument, this sum is far from the estimated USD 4.5 to 5.4 trillion needed to transform cities’ power and transport systems and buildings. Cities in developing countries face a particularly large climate finance gap. Furthermore, the global balance is uneven with more than 90 percent of finance going into mitigation rather than adaptation.^[21]

Conversations on climate finance often relate to international grants and loans, or domestic public funding. For cities, however, household and individual spending on electric vehicles and energy efficiency improvements is a major growing contributor representing on average 32 percent of all private finance. This is particularly the case in developed country cities. Meanwhile, public sector investments in urban climate finance represented 38 percent of the total funding sources mapped. There are significant data gaps due to data confidentiality issues and the lack of centralized databases. Thus, the remaining urban climate finance mapped originated from unknown sources (figure 2.1).^[22]

Investment trends in urban decarbonization

Nearly 54 percent of climate investments for decarbonization of cities were directed at transport. While electric vehicles and charging infrastructure received a fifth of the total investment, the vast majority went to public transport measures such as metro, tram and electric buses. It is also relevant to consider the nature of climate finance. International finance that targets climate technologies in the transport and storage sector offers few grants in comparison to the number of debt instruments.^[23] This is surprising considering the dual challenge of climate change and urban air pollution addressed by investment in low-carbon urban transport.

The urban building sector attracts approximately 44 percent of total urban climate finance, representing an average USD 167 billion annually. Of this total, a little over USD 100 billion is directed toward energy efficiency and renewable heat investments.^[24] This includes energy efficient heating and cooling systems, but also consideration of the embodied carbon in building materials. This figure excludes district heating and cooling networks.

Global finance for climate mitigation within the waste sector amounted to an average of USD 2 billion in 2019/2020. This was merely a fraction of the total global mitigation finance in that period.^[25] When assessing climate finance figures, the waste sector typically does not include material efficiency measures such as demand management, waste prevention and material substitution. Generally, material efficiency has received less attention as a climate mitigation measure, meaning there is a lack of global aggregated data on related climate finance flows.

However, this does not mean that investments are not being made. For instance, the circular economy is a key pillar of the EU’s USD 1.2 trillion European Green Deal Investment Plan. In 2020, assets managed through public equity funds with a circular economy focus increased more than sixfold to USD 2 billion, and startups developing plastic alternatives raised more than USD 850 million in funding in the three years leading up to 2020.^[26]
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