This Week In Climate - August 26th, 2021
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Climate Tech Makes it Rain
Funding for clean tech is taking off, with investors more than doubling their investments in decarbonizing industries compared to a decade ago, according to an extensive report published by The Economist this week. Investors committed more than $500 million dollars to clean technology startups in 2020, the vast majority of which went to renewable energy innovations and electrified transport. The shift has come from institutional capital in all its forms. While venture capital firms have led the charge, funds ranging from family foundations to private equity firms to government innovation programs have all pitched into the trend. The boom comes on the heels of the successful IPOs of Tesla and Beyond Meat, both of which have returned billions to their investors. The latest wave of investments are a welcome trend in an industry where the Economist points out that “nearly 95% of founders have failed to secure follow-on funding.”
Countdown to COP26
The climate tech spending spree couldn’t come at a better time, as financing will be at the top of the agenda for the COP26 climate negotiations set to take place this November in Glasgow, Scotland. Scotland’s Net Zero Secretary Michael Matheson said the quiet part out loud earlier this month when he told the Scottish press that, “COP26 in Glasgow represents the world's best chance – perhaps one of our last chances – to avert the worst impacts of climate change.” To that end, U.S. Climate Envoy John Kerry landed in Tokyo this week to discuss the main priority of the conference: securing agreements from countries like Japan and China to draw down their use of coal. But how and who should pay for that transition will also be on the table. Earlier this year The Biden Administration pledged $5.7 billion annually to the UN’s Green Climate Fund, which was established to help vulnerable nations bear the costs of a sustainable transition. While the figure represents an increase of pledges from the Obama Administration, the United States is still well behind pace on its overall commitments to the fund.
Climate Goes to the Polls
Mounting climate catastrophes are leading up to a moment of truth for political leaders on disparate continents this week. Polls in Norway indicate that the Labour Party and its Green Party allies will replace Conservative Prime Minister Erna Solberg in upcoming elections— this in a country that currently holds the title of Western Europe’s most prolific oil producer. Meanwhile in Canada, relentless heat waves that have shattered records have led to climate change taking top priority among voters, according to pre-election polls. Roughly 18% of likely voters in Canada said climate was the most important issue in this election. The traditional political parties in both countries have so far walked a tightrope between promoting economic interests tied to fossil fuels and complying with ambitious climate commitments. In Norway, this will mean a coalition of pro-environment parties with differing approaches to oil exploration. In Canada, Prime Minister Justin Trudeau will have to square his pro-climate rhetoric with a 1% increase in Canada’s greenhouse gas emissions during his tenure.
Out of Thin Air
Swiss carbon removal startup Climeworks AG raised $10 million dollars over ten years from reinsurance firm Swiss Re this week, marking the biggest investment to date in direct air capture technologies. The deal represents an effort by Swiss Re to fulfill its own carbon neutrality commitments, but the company also hopes it can serve as a beacon to other actors in an industry already paying for the impacts of climate change. Climeworks uses geothermal energy and excess steam from industrial processes to power fans that suck CO2 directly from the air, and inject it into rock formations for permanent storage. The deal does not specify how much carbon Climeworks will capture at the end of 10 years, but the startup’s newest facility in Iceland will reportedly be able to capture and store 4,000 tons of CO2 each year. According to the latest IPCC report, carbon capture technologies will play a vital role in removing the estimated 100 billion to 1 trillion tons of carbon necessary to maintain a livable planet.
Rumors of chocolate’s demise in future climate scenarios may have been greatly exaggerated. That is one of the conclusions of research published by Biodiversity International in Peru this week, which projects that more resilient wild cacao trees may thrive where cultivated cacao declines. The forecast for cacao as it is produced today still looks grim: about 10% of the land currently dedicated to farming cacao will be inhospitable to the small tree in coming decades. The researchers caution that this doesn’t mean chocolate and coffee lovers aren’t out of the woods yet. Their model didn’t account for possible pests and disease, and the hardier strains of cacao bean will likely grow in areas harder to reach by human hands.
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