Monetizing climate change-driven products and services
As the global climate crisis accelerates, a distinct and rapidly growing ‘climate economy’ is emerging, characterized by the imperative to monetize products and services that drive both mitigation (reducing emissions) and resilience (coping with inevitable changes). Samer Taleb, Director of Strategy Consulting at Knowledge Group Consulting, explores the trend.
This climate economy market encompasses a vast array of solutions, from hard green technologies (for example: carbon capture, renewable energy infrastructure) and circular economy models (product-as-a-service, like clothing rental) to climate data services and nature-based solutions (such as blue carbon credits).
While the societal need is clear, there are several complex hurdles that should be overcome in order to build profitable, impactful, and equitable markets around these solutions.
Core Monetization Strategies
Effective monetization involves shifting away from traditional linear business models toward value-driven mechanisms based on long-term efficiency, risk reduction, and access.
The challenge of consumer adoption
Market growth is heavily dependent on consumer willingness to adopt new, climate-friendly products and services. This area presents a significant challenge that requires both market and policy interventions.
- Price and Convenience Barriers: Consumer adoption is primarily influenced by price parity and convenience. If the sustainable option is more expensive or difficult, adoption stalls.
- Cognitive Overload and Efficacy: Most consumers are not capable of determining which behavior changes are most impactful for climate mitigation. Research highlights that consumers need considerable assistance to identify and execute effective behaviors.
- Government Stewardship: Demand-driven models often require strong government stewardship to ensure robust, equitable markets. This includes regulatory mandates, supportive infrastructure, and consistent policies that reflect the true cost of carbon in prices (for example: carbon taxes or border adjustments). Clear carbon labeling and incentives are crucial to making sustainable choices easy and attractive.
Market trends and financial mechanisms
The market for climate solutions is seeing rapid evolution, supported by significant shifts in global finance.
- Integrated Green Finance: Financial institutions are increasingly adopting Transition Finance frameworks, moving beyond simply excluding "brown" assets to actively funding high-emitting companies’ transition plans. This unlocks capital for mature climate solutions.
- Focus on Adaptation Technology: While mitigation has historically dominated, market trends now show increasing investment in adaptation and resilience, particularly in water management, resilient agriculture, and climate-proofing infrastructure.
- The Rise of Carbon Removal: Advanced and nature-based carbon removal technologies are attracting major investment, driven by corporate net-zero pledges. This trend shifts the market toward services that guarantee durable carbon storage.
Conclusion
Monetizing climate change-driven products and services requires innovative business models, robust financial mechanisms, and deep consumer engagement strategies. While opportunities for profit and impact are growing, the path to success depends on balancing market incentives with public good, ensuring equity in access and outcomes, and continuously adapting to evolving consumer behaviors and global policy landscapes.
The key is to make the climate-friendly choice the path of least resistance for both businesses and consumers.
Bibliography:
Thøgersen, J. (2021). Consumer behavior and climate change: consumers need considerable assistance. Current Opinion in Behavioral Sciences, 9-14.
Amasawa, E., Kimita, K., Yoshida, T., and Hirao, M. (2025). Exploring different product-service combinations for sustainable clothing rental service based on consumer preferences and climate change impacts. Scientific Reports, 15.
