If there’s no silver bullet, can green tech hit the target?

George Atalla

EY Global Government & Public Sector Leader

Working with governments to address complex issues and build a better working world.

Gianluca Di Pasquale

EY Global Green Economies & Infrastructure Leader and Future Cities Co-Leader

Start-upper and a social entrepreneur. Business mentor. Interested in working for big things that will shape the future.

12 minute read 18 Oct 2023

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Choosing the most scalable technologies will bridge the gap between ambition and action.

This is part of a trilogy of articles exploring the role of governments in accelerating a green and just transition.

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In brief

  • Current governmental policy commitments aren’t enough to deliver net zero.
  • Technology can help bridge the gap, but only with the right level of governmental support.
  • Getting the mix right between policy and investment in scalable technologies will be critical to success.

While technology can drive decarbonization, governments may not have the right policies and investment strategies to scale that technology to meet net zero promises. According to the latest IEA report, only electric vehicles, lighting and solar photovoltaics are on track with the Net Zero by 2050 trajectory.1

The current policy path, global level of investments, and existing technologies will not reach net zero by 2050, which is a missed opportunity given the net zero trajectory indicates 2030 climate goals can be met with technologies that exist today. However, by 2050 half of the required emission reduction should come from technologies such as carbon absorption, hydrogen-fueled engines and clean batteries that still are in the demonstration or prototype phase. If governments are genuinely committed to realizing a just transition, they need a proactive approach to developing and deploying existing and new technologies.

To better understand the challenges governments and industry sectors will face over the coming decades to get to net zero, we worked with Politecnico di Milano to analyze the available low-carbon technologies and assess which offers the best potential.

To do this, we modeled two scenarios plus a baseline scenario:

  1. The first scenario is called low-carbon economy (LCE). This scenario models GDP based on Nationally Determined Contribution (NDC) policy announcements, including the COP27 pledges. 
  2. The second scenario is low-carbon economy plus (LCE+), which provides a feasible pathway to minimize carbon emissions beyond political pledges. It is based on reducing emissions by adopting the optimum, least-emissions pathway within key industry sectors and available technologies. 
  3. The third baseline scenario depicts no policy implementation or technological changes, with energy demand driven only by economic growth until 2050.
  • More detail on each scenario

    Low-carbon economy scenario

    This scenario is based on the latest policy announcements (as of 2022) and declared pledges (after the UN COP27 conference) by governments, including energy and climate-related policies credibly expected to enter into force in the next years. The credibility threshold is defined by the existence of a specific timeline for such policies and their presence in a country’s (or region’s) legislative track ⏤ such as the proposed “Fit for 55” EU package. General long-term targets or statements not yet underpinned by precise practical implementation plans are not included.

    Low-carbon economy-plus scenario

    The LCE+ scenario provides a technologically feasible pathway that minimizes carbon emissions into the atmosphere while providing the costs of the technologies in each region and considering the relative competitiveness of various energy transition solutions. The technical credibility threshold is defined by the commercial readiness of technologies in terms of production and commercialization. Examples of credible technical threshold are solar power and energy storage.2 On the other hand, it is unlikely that technologies like nuclear fusion or carbon sequestration from the air will deliver relevant emission reductions unless a significant technological breakthrough is achieved in the next decade. Such technologies are not included in the LCE+ scenario.

    A baseline scenario was developed for comparative purposes. This scenario depicts a pathway in which none of the NDC stated policies are implemented and current technological mixes are kept unchanged up to 2050 while the energy demand is driven only by economic growth.


  • Open image description#Close image description

    A line chart. The purple line shows historical global CO2 emissions from 1990 to 2018. The red, orange and green lines show projected CO2 emissions from 2019 to 2050 following the baseline, LCE and LCE+ scenarios. The chart illustrates that current policies and technologies are insufficient to reach net zero by 2050.

Electric Bus Outdoor Charging Station
(Chapter breaker)

Chapter 1

The tech game changers governments can support

There is a need to support technological innovation and market breakthroughs of new technologies to move toward the net zero target.

Breakthrough technologies are still needed to reach net zero by 2050, but costs can be prohibitive. “The private sector plays a crucial role in driving the energy transition. It will ultimately create markets and sustainable economic growth that we can all benefit from,” suggests Amy Brachio, EY Global Vice Chair – Sustainability. “To get there, governments need to strike a balance between regulating and incentivizing investment through policy, giving investors confidence for the long term, enabling solutions to be scaled, to ensure an equitable impact for all.”

The private sector plays a crucial role in driving the energy transition. It will ultimately create markets and sustainable economic growth that we can all benefit from.
Amy Brachio
EY Global Vice Chair – Sustainability

The power and fuels sector will still be the major emitter in 2050 (61%), followed by manufacturing (15%), transport (10%), and construction (10%), and technology can drive decarbonization in these sectors. 

  • Open image description#Close image description

    A vertical waterfall chart. The bar on the left shows global cumulative CO2 emissions by 2050 according to the baseline scenario. Proceeding on the right, CO2 emission reductions by key economic sectors are shown to reach the cumulative LCE emissions by 2050, shown in the central bar of the chart. The same approach is used to indicate the LCE+ cumulative CO2 emissions by 2050 in the right bar of the chart.

Power and fuels

The real game changer in future power generation will be how governments can encourage low-carbon energy transitions at pace and scale while “keeping the lights on” and improving the lives of their citizens.

Established technology will play an essential role in smoothing out this transition. One example: natural gas can be seen as a transition path to fully renewable energy. Along the way, the Internet of Things can help reduce the risk of methane leakage in natural gas processing. Methane is far more potent in driving atmospheric global warming than CO2.

The end goal will require a rapid increase in wind, solar and geothermal power supply. Progress is happening at pace; the world is on course to add as much renewable power in the next five years as it did in the past 20.3 But the real game changer will be being able to store and distribute that renewable energy when needed.

Technology also could power a consumer-driven decentralization of energy production, but governments face challenges in helping create a future where citizens are not reliant on a central power grid.

Small-scale, demand-driven technologies like solar capture, wind harnessing, and battery storage will play a role, as will distributed energy resources and smart grids. In addition, car batteries in vehicle-to-grid (V2G) mode can absorb excess renewable energy and increase power grid flexibility.

But more than technology will be required. The EY Renewable Energy Country Attractiveness Index indicates that stronger regulatory support with subsidies and tax credits is needed to improve grid flexibility and predictability for future price realization.


Manufacturing companies will require innovative approaches across the value chain to achieve sustainability goals. While several green technologies are available, specific incentives will be required to make them more economically viable.

Waste sorting and identification are crucial for industrial companies to reduce environmental pollution. Leading companies need to take accountability for their environmental impact over the product lifecycle and establish circular manufacturing ecosystems. Repurposing old equipment with new components or processes can help reduce equipment wastage and costs, while offering take-back services can extend product lifecycles and build customer loyalty. Material passports, which document all the materials used in a product or construction, can aid manufacturers in achieving circularity.

Chemical companies are setting carbon-neutrality goals and prioritizing decarbonization through the efficient use of materials. They also are increasing the use of alternative energy sources (e.g., hydrogen, renewable energy), as well as investing in biorefining technologies such as H2ACE, which can capture carbon.

Sustainable sourcing can help companies reduce their indirect emissions by focusing on renewable materials in the chemical industry. Advanced materials and chemicals such as polymeric materials, biomaterials, composites and nanomaterials are becoming more critical for long-term environmental protection, cost and sustainability. Companies can replace existing input materials with less toxic and renewable materials, such as bio-based raw materials, which have a longer service life in production. Sustainable plastics can be either biodegradable or made from biological materials, such as bio-PET, which uses fermented leftovers from sugar manufacturing to produce soft drink bottles.  

How we use data will play a big role in helping shape new green economies. It will involve a better use of the data to create better products and services.
Craig Coulter
EY Global Advanced Manufacturing & Mobility, Strategy & Operations and Sustainability Leader

Digital manufacturing is the quickest potential path to impacting sustainability efforts significantly. By leveraging technologies such as Industrial IoT, additive manufacturing, and artificial intelligence, manufacturers can optimize their production processes, reduce material waste, and improve product sustainability. Craig Coulter, EY Global Advanced Manufacturing & Mobility, Strategy & Operations and Sustainability Leader, said, “How we use data will play a big role in helping shape new green economies. It will involve a better use of the data to create better products and services.”

Additionally, digital twin modeling can help improve sustainability across the product lifecycle, from design to end-of-life management.


Governments worldwide are wrestling with the challenge of rapidly decarbonizing our transportation systems. Some cities, like Paris, plan to ban all vehicles from their city center. Others are planning comprehensive restrictions on internal combustion engine vehicles while investing in new mass transit infrastructure.

In addition, governments are targeting large corporate and commercial fleet owners through incentive policies to trigger the transition to electric vehicles. And logistics and large freight players are announcing ambitious decarbonization targets: FedEx has committed to carbon-neutral operations by 2040,4 while Maersk aims to decarbonize its ocean transport through a 50% carbon intensity reduction by 2030, targeting net zero by 2040.5

Transportation is changing due to EVs, charging infrastructure, shared mobility, and autonomous driving. EV adoption will be rapid in Europe and China, but gradual elsewhere. The charging infrastructure and clean batteries are key for success, and governments must incentivize their development for all areas.

“The chicken-and-egg scenario right now is that people are not buying EVs because there isn’t the charging infrastructure,” says Marc Cotelli, EY Americas eMobility Energy Leader. “Yet infrastructure is not being installed because there are not enough EVs.”

The chicken and egg scenario right now is that people are not buying EVs because there isn't the charging infrastructure. Yet infrastructure is not being installed because there are not enough EVs.
Marc Coltelli
EY Americas eMobility Energy Leader

Other upcoming technologies, such as sustainable fuels, connected technologies for autonomous vehicles and shared mobility, battery-powered container ships, zero-emission powertrain systems for trucks and urban air mobility, need to be commercialized and implemented on a mass scale. For example, Boeing plans to have its commercial airplanes flying on 100% sustainable aviation fuels by 2030.

To decarbonize the transport sector, governments need a coordinated policy approach at national, regional, and city levels. This approach includes managing travel demand, creating enabling infrastructure, increasing low-carbon fuel availability, and encouraging R&D for transport technologies, including battery recycling.


To address the high greenhouse gas (GHG) emissions from steel and concrete production, the construction sector is developing numerous solutions for a rapid green transition. Green hydrogen and carbon capture, utilization and storage (CCUS) can play a critical role.

The IEA projects that by 2060, CCUS needs to be installed on 21% of global crude steel production capacity.6 In October 2022 ArcelorMittal teamed with BHP, Mitsubishi Heavy Industries Engineering and Mitsubishi Development to trial carbon capture technology at its steel plants in Belgium and North America.7 Several post-combustion carbon capture projects on cement plants are also under development.

The construction sector is also innovating with alternative materials, including mass timber, a lower-emission, modular option than cement and steel. New York City recently approved cross-laminated timber for buildings up to 85 feet tall.8

Young woman walking in the park labyrinth
(Chapter breaker)

Chapter 2

How governments can bridge the ambition gap

Governments must focus both on policies and investment strategies to scale up existing and breakthrough technology.

Given the size of the task in achieving a green transition that reaches net zero, governments must play a leadership role in supporting and subsidizing technological innovation and incentivizing private financing and fostering public-private cooperation to deliver a decarbonized, sustainable economy that creates measurable long-term value for everybody. “No single government can afford all the funding needed to tackle climate change,” says George Atalla, EY Global Government & Public Sector Leader. “Governments must work to encourage the flow of private capital into green energy and technology projects.”

The appropriate levels and types of support differ depending on the growth path, market penetration, and energy impact of each technology. Governments can help by regulating established or soon-to-be-deployed technologies, such as renewable energy and fuel-efficient vehicles. These regulations have driven the success of wind and solar power and improved ICEV performance in the energy and automobile sectors.

Governments can use various approaches to support technological progress. Tax incentives and user subsidies, such as government efforts to encourage EV adoption, home energy efficiency, and recycling, can help make established technologies commercially viable. Funding R&D and creating connections between business and academia can support promising yet underdeveloped technologies like CCUS, tidal and oceanic energy, and green hydrogen.

Direct public ownership, oversight and management of some technologies is necessary, as it is for sensitive or hazardous operations that are yet to be commercially feasible and need to remain under government oversight, like next-generation nuclear and large-scale hydroelectric power.

Essentially, green technologies will be highly influential in helping the world dramatically reduce GHG emissions. Still, their effectiveness will depend on how they are supported, funded and deployed.

Governments have a pivotal role in developing and promoting green technologies for a just transition to a world no longer dependent on fossil fuels.

To help bridge the ambition gap, we believe they can take the following five actions now:

  1. Increase funding for green technology innovation and create policies that incentivize private investment while lowering risk. This can be achieved through a mix of incentives and penalties such as green taxes, support for tech R&D clusters and startups, which will set the pace of the transition.
  2. Develop integrated policies that promote public-private cooperation across industry sectors to achieve comprehensive decarbonization. Transformation is needed beyond just the power sector; all sectors of the economy must be included, acknowledging that some industries may have limited options for improvement with current technologies.
  3. Adopt a technology-neutral perspective that relies on the specific capacity and cost of each technology to contribute to the transition. This approach can also help couple different technological needs.
  4. Embrace science-informed policymaking. To foster technological innovation and leverage data, governments should use an evidence-based policymaking approach and tools (consultations, multilateral dialogue, policy briefing) within a broader science diplomacy framework.
  5. Advance behavioral change at individual group and societal levels. As a direct consequence of governments’ awareness campaigns, incentives and innovative solutions, the impact of behavioral change may bring a significant contribution toward decarbonization.
No single government can afford all the funding needed to tackle climate change. Governments must work to encourage the flow of private capital into green energy and technology projects.
George Atalla
EY Global Government & Public Sector Leader
Putting collaboration at the heart of the green transition

Governments are at the front line of the green transition, but existing action plans and policies do not provide credible pathways to limit temperature growth.

Green technologies are vital in triggering the transition out of fossil fuels and strengthening NDC commitments, but most need to be on track with the net zero 2050 trajectory. Governments must take a proactive role by prioritizing and facilitating R&D investments to decarbonize the economy through fostering public-private cooperation and an ecosystem of innovation.

The authors of this article would like to give special thanks to Tony Canavan, Marco Cavalli, Marc Coltelli, Craig Coulter and Erin Roberts from the EY organization for their insights.

  • Methodology

    To better understand the leadership role government can play, EY collaborated with a team of academic economists and public policy experts at Politecnico di Milano in Italy throughout 2022 to model possible pathways for governments to lead a green transition. This group and advisory board conducted methodical research to create projections of major macroeconomic, financial and real energy impacts through 2050.

    The analysis is based on an input output stock-flow consistent model (IOSFC), a technique that fully accounts for how energy is produced in (with financial and human capital), and how it flows through (as an input into production and consumption), the economy.

    In business parlance, IOSFC modeling techniques generate an economy-wide integrated set of financial, economic and physical energy accounts, describing changes to both the balance sheet (e.g., stocks of assets) and the income statement (e.g., flows of energy, goods and services) in a consistent fashion. The technique produces realistic projections of major macroeconomic, financial and real energy variables, enabling a detailed understanding of the feasibility of different transition pathways subject to social, political and economic constraints such as government debt ratios and the unemployment rate.

    In this instance, the dataset for this model covered three regions, Europe, the USA, Asia, the Middle East and Australia, which together represent 75% of global GDP and 80% of global CO2 emissions.


Given the immediate need to address the climate emergency, governments must look to the proven potential of existing technology in reducing carbon emissions rather than hoping for some breakthrough new solution that will take decades of research and development to bring to market. Those existing technologies, if supported through policymaking and government investment, could yet prove game changers in transitioning to a green economy.

About this article

George Atalla

EY Global Government & Public Sector Leader

Working with governments to address complex issues and build a better working world.

Gianluca Di Pasquale

EY Global Green Economies & Infrastructure Leader and Future Cities Co-Leader

Start-upper and a social entrepreneur. Business mentor. Interested in working for big things that will shape the future.