Having worked on climate solutions for nearly 15 years, I often worry that great strides in progress can get lost in the panic of a worsening crisis. One of the best ways to fight that gloom is Climate Week – one of the biggest industry convenings on global climate action. So, I headed to New York on the sidelines of the United Nations General Assembly for dozens of events and meetings to find out is the latest developments. Here were my key takeaways:
- Capital is scaling to meet the challenge: In 2014, the nonprofit Ceres wrote about the massive risk of a trillion dollar gap in climate financing. Fast forward a decade, and capital is no longer the bottleneck it once was. The passage of the Inflation Reduction Act has unlocked a wave of government financing across climatetech sectors. Additionally, a boom in climate venture and infrastructure funds has unlocked capital for startups to launch and scale. The recent contraction in the venture market has hit climate, but mainly through lower valuations and longer capital raises – a new wave of climate innovators is still getting funded.
- A Just Transition: A decade ago, most attention went primarily toward scaling up low carbon solutions to bend the curve of emissions reductions. Today, equal weight is going to the ideas of climate justice and community resiliency. Major corporates are recognizing that worker rights, equitable access to climate solutions, and protecting community rights must go hand in hand with scaling up green solutions. As one example, a new innovation studio Tailwind launched this month specifically focused on bringing climate resiliency and adaptation startups to market (led by a former colleague during my time at Greentown Labs).
- From Moonshots to Infrastructure: Much of the early discussion around climate was around the invention of breakthrough gigawatt scale technologies that could lower emissions at lower cost than today. Fast forward, and now there is a consensus that much of the technology we need to tackle climate change is commercially ready but too expensive and sub-scale. Thus, there is a new focus on providing catalytic financing for first-of-a-kind (FOAK) infrastructure. FOAK infrastructure helps shorten the time it takes for a technology to be commercially ready and in customer hands, scaling production and driving down the cost curve. This is drawing in new corporate, banking, and infrastructure partners that are newer to the climate world.
- Earth, Air, Fire, Water: The biggest climate solutions to date have tended to be highly technical and energy-focused, such as solar panels, electric cars, heat pumps, and direct air capture. This month, I saw a renewed focus on the intersection between climate and water, oceans, and nature-based solutions. One large bank convened a small group to discuss how to finance access to clean water infrastructure in the developing world. Another group brought funders together (on a boat, of course) to highlight two dozen leading ocean entrepreneurs – working on innovations including kelp farming and electric boats. And finally, there has been a surge of interest in focusing on nature-based solutions – from green infrastructure to oyster reefs to regenerative agriculture practices. Natural innovations are popular because they can achieve climate resiliency goals while providing a wave of “cobenefits” around community health, biodiversity preservation, and soil enhancement that is lost with highly engineered solutions.
It is hard not to leave Climate Week with a mix of inspiration, information overload, and exhaustion. We have been putting the puzzle pieces in place to truly rise to the challenge of tackling this crisis. Now, it’s time to get back to work.
Check out CapShift’s climate resources for more ways to take action and build a climate-focused investment portfolio.
