Spiking Energy Costs Push More Governments and Companies to Rigorously Work on Their Sustainability and Decarbonization Initiatives

Updated on :July 06, 2024
By :Lisa Brian

Increasing carbon emissions have become a threat to the environment and life and demand urgent attention from governments and companies globally. Electricity produced from renewable sources emits zero carbon. However, numerous challenges in achieving decarbonization prevent governments and companies from implementing these sustainability measures on a broader scale. Amidst these issues, rapidly rising energy costs are now forcing governments and companies to diligently work towards strategies to reduce carbon emissions, switch to renewable or low-carbon energy sources, and design sustainable, energy-efficient structures and processes. Electrical design software systems facilitate efficient energy usage and adoption of renewable energy sources, reducing overall costs, minimizing carbon emissions, and promising a better future.

The News:

  • Studies suggest that the built environment alone generates 40% of annual global CO2 emissions. Also, just three materials, concrete, steel, and aluminum, are responsible for 23% of total global emissions, most of this in the built environment.
  • Petroleum refining, chemicals, iron and steel, cement, and food and beverage sectors represent approximately 51% of energy-related CO2 emissions in the US industrial sector and 15% of US economy-wide total CO2 emissions.
  • Deforestation accounts for 12% to 20% of global greenhouse emissions.
  • If brought to scale, digital technologies could reduce emissions by 20% by 2050 in the three highest-emitting sectors, energy, materials, and mobility.
  • Local Law 97 passed by the New York City Council, aims to reduce the emissions of the city’s largest buildings by 40% by 2030 and 80% by 2050.
  • To achieve net zero emissions by 2050, improving the affordability of energy is critical, says the International Energy Agency (IEA).
  • Spiking Energy Costs Push More Governments and Companies to Rigorously Work on Their Sustainability and Decarbonization Initiatives.
  • Energy efficiency strategies like the adoption of EaaS have the potential to substantially control the electricity load resulting from the widespread adoption of electrification.
  • The global Electrical Design Software market size is predicted to reach USD 8490.53 million by 2028.

How did we get here?

#1. Decarbonization - Why Is It Important?

The major contributors to carbon emissions are fossil fuels, agriculture & land use, industrial processes, manufacturing, transportation, heating & cooling of buildings, waste management, volcanic activities, deforestation, wildfires, etc. Most of these result from human activities that can be controlled to enhance sustainability. Today, decarbonization and sustainability are critical as carbon emissions are causing severe damage to the environment and living beings in various ways, including:

  • Rising carbon emissions and increasing levels of carbon in the air are causing global warming and gradual climate change that is becoming a worldwide threat and causing extreme weather events.
  • Global warming due to carbon emissions results in faster melting of polar ice caps and glaciers, resulting in rising sea levels, coastal erosion, increase in ocean temperatures, development of coastal storms/hurricanes, and damage to arctic food webs.
  • Carbon emissions significantly contribute to air pollution. Toxic air has become a significant cause of respiratory infections, cancers, and other life-threatening illnesses in humans.
  • Higher levels of carbon in the atmosphere result in acid rain that damages the environment, humans, plants, and animals.
  • Acid rains cause contamination of rivers and other water bodies, causing the extinction of many marine species.
  • Global warming due to carbon emissions has also increased the frequency of forest fires, which cause heavy losses, including pollution and loss of valuable resources and property.

The above threats make it necessary for governments and companies to take immediate steps toward implementing decarbonization and sustainability initiatives. However, they face numerous hurdles that limit the adoption of such strategies.

#2. Challenges Governments and Companies Face in Implementing Decarbonization and Sustainability Initiatives

Here are the common challenges and limitations that prevent companies and governments from embracing decarbonization and sustainability initiatives.

High Costs

The upfront costs of implementing decarbonization initiatives and sustainability measures are typically high and require significant investment. This becomes a major barrier for companies and governments. Moreover, for businesses, these expenses directly affect their profitability.

Infrastructural Needs

Decarbonization initiatives demand significant changes/modifications to infrastructure, particularly in the energy sector, which is challenging and time-consuming for businesses to implement.

Social Acceptance and Political Support

Decarbonization initiatives require changes in lifestyle and general behavior from people. However, this cannot be achieved without social acceptance and public support. It is also particularly challenging in countries largely dependent on fossil fuels. Decarbonization and sustainability initiatives also require political acceptance/approval and cooperation that largely depend on the country's political structure and policies.

Technological Limitations

Achieving decarbonization and sustainability may require significant research and technological innovations in areas like renewable energy, energy storage, and carbon capture and storage. However, developing and scaling these technologies is slow and challenging. It is further limited due to the scarcity of resources and funds, particularly for companies and governments in developing and underdeveloped countries.

Financial Limitations

Though decarbonization and sustainability cannot be ignored anymore, access to finance is critical for implementing decarbonization and sustainability. In most countries, businesses and governments typically struggle to avail the requisite funds to implement decarbonization and sustainability measures, decelerating the efforts.

#3. Top Strategies to Reduce Carbon Emissions and Drive Sustainability

Here are some easy and effective techniques that governments and companies must implement to accelerate decarbonization and sustainability.

Enhance Energy Efficiency

Decarbonization can be achieved by gradually enhancing overall energy efficiency. Adopting energy-efficient practices and improving the energy efficiency of buildings, vehicles, and appliances can help reduce carbon emissions and energy consumption; for example, switching to energy-efficient appliances and promoting the use of public transport, carpooling, and electric vehicles. Moreover, reusing and recycling materials from manufacturing instead of discarding them can reduce/lower carbon emissions from waste.

Another significant way to increase energy efficiency is by reducing energy wastage by improving, renovating, and upgrading existing infrastructure, for example, retrofitting buildings with energy-efficient technologies and materials, upgrading insulation and lighting systems, and replacing these with renewable energy systems wherever feasible.

Besides, implementing smart grid technologies can help optimize energy distribution and consumption and promote efficient energy use, for example, by installing smart meters, demand response systems, and energy storage systems.

Standards and Regulations

Governments must establish and enforce minimum energy efficiency standards for buildings, industries, appliances, and vehicles through regulations, incentives, and policies. These regulations will necessitate and promote adopting energy efficiency practices. Urban areas are major contributors to carbon emissions; thus, governments must encourage the adoption of green infrastructure like permeable pavements (that allow liquids and gasses to pass through) and green roofs in cities to help reduce carbon emissions.

Low-Carbon Fuels

Industries must switch to no-carbon or low-carbon fuels and feedstocks to reduce emissions from combustion in industrial processes, for example, the adoption of hydrogen fuels, feedstocks, and biofuels. These low-carbon fuels, including natural gas, bioethanol, and bio-diesel, are easy and highly cost-effective solutions to reduce carbon emissions.

Renewable Energy Alternatives

Fossil fuels are widely used energy sources. However, these are the biggest culprits for carbon emissions as they produce excessive carbon dioxide upon burning. Thus, to reduce carbon emissions, it is essential to minimize the use of fossil fuels and replace these with renewable energy sources like solar, wind, hydroelectric, and geothermal energy. While these alternatives may incur infrastructure costs initially, they can be highly efficient and profitable in the long run.

Carbon Capture, Use, and Storage

CCUS or carbon capture, use, and storage, significantly contribute to decarbonization. CCUS involves capturing carbon dioxide or CO2 emissions from fossil-fuel-based power generation and industrial processes. The captured carbon is stored or injected deep underground. The stored carbon can also be efficiently reused, for example, in manufacturing processes for industrial materials like plastic, concrete, foam, fabrics, and more.

Carbon Pricing

Experts suggest pricing carbon through mechanisms like carbon taxes, and cap-and-trade systems can help reduce carbon emissions. The government fixes a strict cap or limit on the overall carbon emission/pollution from industry in the cap-and-trade system. Further, the government modifies that cap yearly to achieve the set decarbonization targets. Many countries already have such carbon taxes in place, including Canada, Sweden, the European Union, Japan, and more.

Sustainable Agriculture

Regenerative agriculture is a set of practices that use natural ways to control pests and diseases in crops. It thus helps reduce greenhouse gas emissions or carbon footprint by eliminating synthetic fertilizers, pesticides, and other chemicals commonly utilized in conventional agricultural/farming practices.

Soil carbon sequestration is another easy and valuable regenerative agricultural technique that involves managing farmland in a manner that allows the soil to absorb and store more carbon; for example, cultivating perennial crops that survive longer and generate deep roots enables higher absorption and storage of carbon dioxide. This technique promotes resilient farming practices and sustainability.


Deforestation or forest burning and clearing causes the carbon stored in trees to get released into the atmosphere. Shrinking forest cover or deforestation is thus damaging the overall environment by contributing significantly to the increasing carbon footprint. Reforestation or preservation of forests by planting more trees enables higher carbon absorption and decarbonization.


Buildings account for a significant source of carbon emissions, as indicated by the above statistics. Electrification of residential, commercial, and industrial buildings and switching to all-electric operations in these buildings can thus help reduce carbon emissions significantly, for example, electric cooktops, ovens, and heat pumps for heating and air-conditioning. Similarly, vehicular emissions can be reduced by switching to electric vehicles that run on electric power instead of petrol and diesel.

EaaS Model

Energy-as-a-Service (EaaS) business models use distributed energy resources, renewable energy, and smart devices to deliver energy while managing the demand side flexibility, improving energy efficiency, and lowering the costs required for the organizations. These models are a prospective solution to the challenges related to carbon footprint, lack of digitization in the energy sector, and centralized energy distribution, supporting decarbonization and sustainability initiatives for companies and governments.

Leverage Software and Technology

Software and technology play a remarkable role in decarbonization and sustainability initiatives. These help governments and companies digitally transform and automate various processes, enabling better assessment of carbon emissions, in-depth data analysis, and enhanced operational efficiency to reduce carbon emissions.

Electrical design software provides comprehensive tools to estimate carbon emissions at the design stage and enable designing energy-efficient buildings and industrial structures. Advanced tools with AI and ML capabilities offer in-depth data analytics and insights that allow companies to monitor carbon emissions and take appropriate and timely actions to minimize these. The detailed benefits of using electrical design software for decarbonization and sustainability are discussed in the next section.

Internet of things (IoT) technology remarkably contributes to decarbonization initiatives; for example, Swiss startup ECCO2 provides a digital twin-based building energy management solution. The company uses a web-based software, Cumulus Cloud, that allows consumers to monitor and optimize building energy consumption by leveraging various IoT sensors to collect real-time data for air quality, humidity, temperature, and carbon (CO2) emissions by the heating systems.

Similarly, IntenCity, the Schneider Electric building designed as part of the company’s 4-step net-zero decarbonization strategy for buildings, has an advanced building information modeling system equipped with the internet of things (IoT), connected devices, sensors, edge control, and more. The system uses advanced analytics to monitor and report energy and carbon KPIs digitally. It helps minimize operational carbon emissions by reducing energy consumption and replacing fossil fuels with renewable energy sources.

#4. How Electrical Design Software Helps Achieve Decarbonization and Sustainability?

Electrical design software solutions offer comprehensive tools to monitor, predict, and reduce carbon emissions. Here is how electrical design systems help governments and companies drive decarbonization and sustainability initiatives.

Energy Efficient Design

Electrical design software like building information modeling (BIM) systems can model and simulate energy usage and optimize electrical systems for energy efficiency. This helps reduce energy consumption, lower carbon emissions, and shrink costs.

Renewable Energy Integration

Electrical design software helps integrate renewable energy sources such as solar, wind, and hydropower into electrical systems. It thus enables reduced dependence on fossil fuels and helps achieve decarbonization goals.

Load Balancing and Demand Response

Electrical design systems help monitor and manage energy usage and balance the load across the electrical systems. The software thus helps avoid peak demand periods and reduces the need for additional power generation, thereby reducing carbon emissions.

Electrical Vehicle Charging Infrastructure

Electric vehicles can be a game-changer in decarbonization initiatives. However, these require an efficient electric vehicle charging infrastructure. Electrical design and modeling software tools help design and implement electric vehicle charging infrastructure, enabling easy adoption of electric vehicles to reduce carbon emissions from transportation.

Building Energy Management Systems

Building energy management systems (BEMS) are information technology-based electrical design systems that leverage sensing, control, and automation hardware to assess heating, ventilation, and air-conditioning (HVAC) performance and energy efficiency. These systems predict building energy consumption, peak demands, carbon emissions, energy cost, and renewable energy production. Leveraging BEM systems helps companies enhance operational efficiency and achieve energy optimization in buildings, reducing carbon emissions and energy costs.

What’s Next?

Ever-rising carbon emissions have become a challenge for governments worldwide. If unchecked, this can result in a global crisis with considerable damage to the environment and living beings. As discussed above, companies and governments can help reduce carbon emissions and protect the environment through diligent efforts and increased focus on decarbonization and sustainability initiatives. Electricity produced from renewable sources emits zero carbon, and as the adoption of electrified smart devices increases, the use of energy needs to be efficient. The generation and transmission mechanism of electricity should be able to cost-effectively manage the demand of the high electrification situation.

Leveraging advanced software tools and technologies can help achieve decarbonization and drive sustainability. Electrical design software plays a crucial role for governments and companies in their decarbonization and sustainability efforts. It enables efficient planning and design of electrical systems, enabling the use of renewable energy sources, reducing carbon emissions, and significantly shrinking costs.

Adopt electrical design software to help reduce carbon footprint and create a greener and more sustainable world.

Lisa Brian
Lisa Brian

Lisa Brian is an Engineering graduate and a content writer with GoodFirms. She has 5+ years of experience in content writing and marketing. A tech enthusiast, Lisa loves to write about cutting-edge technologies and emerging trends in the software industry.

Read Similar Blogs

The Best 7 Free and Open Source Electrical Design Software

The Best 7 Free and Open Source Electrical Design Software

When it comes to building infrastructure, whether commercial or residential, it entails planning, designing, creating, testing, and supervising the lighting equ ... Read more