How Climate Innovation Opportunities are identified & shortlisted

The Climate Innovation Compass methodology: A problem-led process using economic potential, climate & environmental impact, and the market-pull score to uncover innovation opportunities

Identification

A problem-led approach with expert validation

The Climate Innovation Compass uses a problem-led methodology to find India's unsolved climate challenges. The problems were sourced from industry, communities, and policymakers; validated through secondary research and interviews with 100+ sector experts. After identification of the problems, we dive deeper into each problem to understand the core bottlenecks, what has already been tried and what is missing, to arrive at a problem statement.

Evaluation

We scored the problem statements on three criteria: impact potential, market attractiveness, and need for innovation. A problem must pass three tests to be included:

1

There is meaningful economic potential (estimated from market size, savings, and growth) and the market is ready to pull a solution in, measured by the p-ARL score.

2

Solving it delivers meaningful climate impact greenhouse-gas abatement (measured in Mt CO₂e for India) for mitigation problems, or reduced climate risk (measured by the Adaptation Risk Index) for adaptation problems.

3

The problem is underserved, i.e. few incumbents or startups are addressing it at scale in India, and it can actually be solved by innovation: a science breakthrough, engineering, a new business model, or financial innovation.

Problems that can be solved only by policy change or capital deployment with no role for new science, engineering, business models, or financial structures are excluded from the Compass, however important they are.

Market readiness is measured by an anchor framework, which uses a modified Adoption Readiness Level (the p-ARL score). This is a 4-point market-pull index adapted from the US Department of Energy's Adoption Readiness Level framework.

Need for Innovation asses if the problem is unsolved, and has an innovation pathway for solution. We evaluate whether the problem is truly underserved (few incumbents or startups are addressing it at scale in India) and it can actually be solved by innovation: a deep-tech science breakthrough, engineering, a new business model, or financial innovation.

Detailed Methodology

How is impact potential estimated?

Impact Potential is measured across four parameters

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Economic Impact

This measures the addressable market potential for India in 2025 and 2030 (and globally where relevant), built bottom-up from published market studies, government data, and stated assumptions. Every figure is footnoted on its page with sources and calculation assumptions. All estimates are directional and intended for opportunity prioritization, not precise market forecasting. These are conservative estimates with market penetration assumptions, not to be confused with TAM.

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Mitigation Impact

For mitigation problems, impact potential is the estimated greenhouse-gas abatement in India if the problem is solved with a conservative market penetration estimate. It is expressed in million metric tonnes of CO₂-equivalent (Mt CO₂e) for 2025 and 2030. Estimates cover Kyoto Protocol gases (Carbon dioxide CO₂, Methane CH₄, Nitrous oxide N₂O, Hydrofluorocarbons HFCs, Perfluorocarbons PFCs, Sulfur hexafluoride SF₆, and Nitrogen trifluoride NF₃) converted to CO₂e; they do not include particulate matter or other non-Kyoto pollutants, even where those co-benefits are significant.

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Adaptation Impact

Adaptation impact is measured via two metrices - one measuring risk potential of the problem if left unaddressed and the other indicating the number of lives impacted negatively. The two metrics together helps identify the urgency to address the problem and the extent to which it can cause adverse effects on lives or livelihoods.

For the Risk Potential Scoring, a framework is developed inpired from the IPCC AR6 Climate Risk Assessment Framework where parameters such as Hazard, Exposure, Sensitivity and Adaptive Capacity are given a relative scoring of low, medium or high in order to arrive at a Risk Score. This scoring helps understand the relative severity across varying problem statements identified. The Lives Impacted Metric captures the extent of impact on human lives across India, directly or indirectly. In order to measure for both metricies, research is done on existing data, capturing examples of extent of impact. The findings are then applied within our framework for evaluation. Where lives impacted is indirect - relation to livelihoods is made.

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Environmental & Social Co-benefits

This is a subjective indicator to highlight the additional co-benefits of the solutions to the environment (air pollution, water, waste, biodiversity) and social well-being (livelihoods, access to finance & connectivity)

icon Air Pollution icon Water icon Waste icon Biodiversity icon Livelihoods icon Access to Finance icon Connectivity

What is the p-ARL score?

The p-ARL (problem-based Adoption Readiness Level) score is a 12-point index that measures how strongly the market is pulling for a solution to a given problem before any specific technology is chosen. It adapts the Adoption Readiness Level framework developed by the US Department of Energy's Office of Technology Transitions, which assesses 17 adoption-risk dimensions for a specific technology, into four parameters that can be scored at the problem level.

Each parameter is scored from 0 to 3; the four scores sum to a p-ARL score out of 12. A higher score means stronger market pull today.

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ARL Parameters
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Low (0-1)
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High (2-3)
Economic Switching Cost Existing solutions are heavily subsidized or too cheap to replace (e.g. coal in some states, heavily subsidized electricity use for irrigation) The cost of status quo is rising rapidly (e.g. high DSM penalties for grid deviation)
Regulatory and Policy Force The problem is recognized by scientist, but there is no regulation, or penalty for ignoring it (e.g. Methane leaks with no fines) Legal mandate or compliance risk for the industry (eg. CCTS, CBAM, DSM, ZLD, etc.)
Infrastructure Readiness Large-scale new physical or digital infrastructure is required before deployment becomes viable at scale (e.g. Hydrogen pipeline for India for transport fuel) The problem can be solved by a plug-and-play or drop-in solutions (e.g. retrofitting existing industrial boilers, drop-in fuel substitute)
Value-chain Consensus The bottleneck is not yet widely recognized across the value chain (e.g., if in the electricity sector - utility or IPP doesn’t see it as a priority) All stakeholders recognize the issue as a major operational or strategic bottleneck (e.g., Grid Interia seen as a problem for investors, regulators, and utilities)
DOE OTT ARL Framework

Limitations

The Compass draws on industry interviews, published literature and market reports, government data, startup ecosystem mapping, and consultations with sector experts. Impact estimates are directional, with extensive assumptions built in the calculations.

Every problem statement carries its author and a last updated date. The pages will be refreshed bi-annually as regulations, markets, and technologies change. The Compass is a living document: new opportunities are added on an ongoing basis.

Read more about our detailed methodology here.

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