| Climate Tech Investment and Challenges
Climate Tech Funds See Cash Pile Rise to $86 Billion as Investing Slows Ethan M Steinberg, Bloomberg Google, John Doerr Bet on Startup Using Crushed Rocks to Capture CO2 Michelle Ma, Bloomberg In 2024, climate tech investing saw a significant increase in new capital, with $47 billion added to climate funds, marking a 20% rise from the previous year. This growth was largely driven by major financial players like Brookfield Corp. and TPG Inc. launching additional climate-targeted funds, signaling the success of their initial investments. Despite this influx of capital, the number of investors participating in climate deals decreased by 18%, and the deployment of capital slowed, indicating a shift towards more cautious investment strategies focused on proven technologies and companies. |
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| The data seems to suggest a growing preference for infrastructure funds that support energy transition projects, such as offshore wind farms and sustainable aviation fuel production plants. These projects are seen as less risky due to their contractually guaranteed revenue streams, offering downside protection over potential upside. This trend reflects a broader move away from speculative investments towards more secure, revenue-generating projects. Additionally, there was a 9% decline in new climate-focused venture capital firms, as limited partners showed reluctance to invest in funds without established track records.
Alphabet Inc.’s Google made a major investment in carbon dioxide removal by backing Terradot, a startup using enhanced rock weathering (ERW) to sequester CO2. Alongside Microsoft Corp. and investors like John Doerr and Sheryl Sandberg, Google supported Terradot’s initiative to commercialize its technology, pulling substantial amounts of CO2 from the atmosphere. These efforts help corporate buyers meet their net zero goals and advance the practical deployment of carbon removal technologies. The technique leverages natural processes by spreading ground basalt on fields, significantly accelerating CO2 sequestration and offering potential large-scale solutions for climate mitigation. There are potential challenges ahead, particularly with the incoming administration’s trade policies. President-elect Trump’s proposed tariffs on China could impact the supply of affordable solar panels, EV batteries, and wind turbines, while the rollback of clean energy subsidies could further strain the climate tech sector. On the other hand, deregulation and improved government efficiency could streamline permitting processes for renewable projects, potentially boosting clean energy deployment. The stock market’s positive response to Trump’s victory suggests that IPOs, including those for climate-focused startups, may increase, providing new opportunities for investment in the sector. |
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| Global Carbon Markets: Challenges for a Sustainable Future
Will UN Carbon Market Work? Indonesia Will Provide First Test Fred Pearce, Yale Environment 360
Mohamed Adow, Foreign Affairs The United Nations recently approved a global carbon trading market at the U.N. climate conference in Baku, Azerbaijan. This market aims to facilitate large-scale trading of carbon credits between nations, helping industrial countries meet their emissions targets under the Paris Agreement by paying other nations to protect and restore forests and carbon-rich peatlands. Indonesia, led by newly elected President Prabowo Subianto, plans to leverage this opportunity by generating substantial revenues through bilateral deals to sell credits from its vast rainforests. This initiative is seen as a crucial step towards developing a multi-billion-dollar global carbon economy, potentially transforming the way countries collaborate to combat climate change.
However, the Paris Agreement Trading Mechanism has been criticized for potential loopholes and risks of fraudulent carbon accounting. Critics argue that the new market is vulnerable to double counting of credits and lacks robust enforcement and compliance timelines. These concerns highlight the possibility of nations engaging in large volumes of bilateral deals that bypass U.N. oversight, undermining global efforts to reduce emissions effectively. Additionally, climate change has severely impacted millions of people in developing countries. The inequity in the climate crisis is stark, with wealthier countries responsible for the majority of emissions historically, yet it is the poorer nations that suffer the worst consequences. Beyond the direct economic damage, climate change disproportionately slows economic growth in poorer countries, further widening the gulf between them and wealthy countries. A 2019 study found that in most low-income countries, higher temperatures are more than 90 percent likely to have curbed economic output. This disparity makes it harder for poorer nations to protect themselves from the consequences of climate change, lacking the resources to build necessary infrastructure and adapt their economies. Meanwhile, wealthier nations have yet to fulfill their financial commitments to help these vulnerable countries cope with the climate crisis, perpetuating a cycle of inequality and hardship. Developed nations need to commit to significant financial transfers and technological support to help developing countries adapt to climate change. This includes building resilient infrastructure, supporting sustainable agricultural practices, and ensuring access to clean energy. The disparities in carbon emissions and their impacts underscore the urgency for global cooperation and equitable solutions. By fulfilling their financial promises and implementing fair carbon trading practices, wealthy nations can help mitigate the effects of climate change and support sustainable development worldwide. Moreover, addressing climate change requires acknowledging the historical context of carbon emissions. Wealthy countries, responsible for a significant portion of historical emissions, must take responsibility and lead global efforts in reducing greenhouse gas emissions. This includes supporting developing nations in building adaptive capacities and transitioning to low-carbon economies. The commitment to climate justice and equitable solutions is crucial to closing the gap between developed and developing countries, ensuring that no nation is left to bear the brunt of climate change alone. |
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| Rising Sea Temperatures and the Melting Arctic
High Pacific surface temperatures fuel record warm year Kenza Bryan & Jana Tauschinski, Financial Times Jana Tauschinski, Financial Times Sea surface temperatures remained unusually high across many regions in the Pacific Ocean in November, leading to predictions that 2024 could be the warmest year on record. According to data from the European Earth observation agency Copernicus, November was the second-warmest month ever recorded on land and at sea, with air temperatures 1.62°C above pre-industrial levels and an average sea surface temperature of 20.58°C. This increase in temperature resulted in more rainfall than usual in several parts of the world, causing flooding due to warmer air holding more moisture. |
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| The anticipated cooling effect of the La Niña weather cycle failed to materialize significantly, contributing to the sustained high temperatures. Samantha Burgess, deputy director of Copernicus, highlighted the agency’s strong belief that 2024 would be the warmest year on record, marking the first time a calendar year would exceed 1.5°C above pre-industrial levels, although this does not breach the Paris Agreement threshold, which is measured over decades. Short-term and localized weather variations were observed, with colder temperatures in the western US, parts of northern Africa, far eastern Russia, and much of Antarctica, attributed to “dips” in the jet stream. |
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| Despite these variations, the long-term trend of rising global temperatures driven by greenhouse gas emissions from fossil fuels remains evident. Scientists stress that climate change continues to impact weather patterns, as seen in the notable decrease in snowfall across the Alps and increased rainfall in various regions. Typhoons in the western Pacific, heavy rainfall in Asia, and the devastating effects of Storm Bert in Europe further underscore the urgency for ambitious climate action to mitigate these impacts and protect vulnerable communities.
Adding to these concerns, a new scientific study concludes that the Arctic Ocean may experience its first ice-free day before 2030 due to rapid melting rates. The loss of half of the north pole’s late summer sea ice cover since the early 1980s highlights the accelerating pace of change. The study’s projections indicate that an ice-free Arctic could occur within the next three to six years, emphasizing the urgent need for robust climate action. This ice loss is further exacerbating climate change through feedback loops, such as the Albedo effect, and threatens both regional ecosystems and global weather patterns. The findings underscore the critical importance of reducing greenhouse gas emissions to delay these impacts, although complete prevention may not be achievable.
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