UBS: Climate Techs Are Having a 'Green Hockey Stick' Moment

Green hockey sticks. No, this isn't a breaking news story about compostable sports equipment. That's a story for another day.

Climate technology is experiencing what industry veterans call 'green hockey sticks' — the moment when sustainable solutions become commercially competitive with the carbon-intensive incumbents.

This is a pattern that is already evident in renewable energy — particularly solar power — and is emerging across multiple sectors as technologies mature and costs plummet.

UBS, a global wealth management company, recently published some industry analysis of this trend. 

"Climate techs that facilitate greenhouse gas emissions reductions need to scale by becoming 'better' than incumbent solutions across all dimensions of performance," says the company's report.

The challenge lies in bridging the gap between technological promise and market reality, as most solutions remain economically uncompetitive despite their environmental benefits.

Breaking through to commercial viability

Recent data suggests we're standing on shifting ground.

In 2023, renewables accounted for 87% of all new power capacity globally, demonstrating how rapidly markets can transform once technologies reach price parity.

Similar patterns are emerging in electric vehicles, battery storage and heat pump technologies too, which bodes very well for the global energy transition.

But this transition isn't happening in isolation. New "small tent" climate strategies are emerging, where aligned stakeholders concentrate resources on specific technologies to accelerate their journey to commercial tipping points.

These targeted approaches aim to address the implementation gaps left by broader climate agreements.

The capital conundrum

While global capital availability isn't the primary constraint, its distribution presents challenges.

Early-stage climate technologies readily attract venture capital, while mature solutions appeal to institutional investors. However, a critical funding gap exists for technologies in the intermediate development phase.

"Financial innovation will prove key to ensuring capital avoids becoming a bottleneck on deployment in the same way infrastructure is today," the report emphasises.

This has given rise to a new breed of impact investors and philanthropists who specialise in helping promising technologies navigate this crucial middle ground.

Sector-specific trajectories

The pathway to commercial viability varies significantly across sectors.

Solar, wind and battery technologies have already reached or are approaching their tipping points.

Electric vehicles and heat pumps are projected to achieve price parity with conventional alternatives before 2030. However, other crucial technologies, such as synthetic fuels, face more protracted journeys to market competitiveness.

The scale of the opportunity is substantial. Analysis suggests that if just 15 key climate technologies were fully deployed, they could address approximately 70% of the emissions reductions needed to meet 1.5°C targets. However, achieving 2035 deployment targets will require trillions in investment.

"Focusing reform, resources and capital on bringing forward tipping points for almost-mature, high-abatement climate techs is possibly the most efficient way to quickly reduce emissions in the near term," the report concludes, highlighting the strategic importance of identifying and supporting technologies on the cusp of commercial breakthrough.

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