COP27 — Can Climate Tech save the world
Climate Tech firms have enjoyed an investment surge in 2022, but the funding falls short of the $1tn a year that a COP27 initiated report has said is needed. Whilst Climate Tech is very much part of this equation, we need to remember that many people quite rightly believe that we already have a lot of the technology we need to decarbonise (but not necessarily drawn-down) — what’s missing is the political and corporate will to enact change and deploy solutions.
So, whilst money is important, throwing money isn’t the only solution — we need leaders, corporate and political, to live up to the commitments they have already made. Surging inflation and the Russian invasion of Ukraine has certainly made this politically more precarious as political attention has been focused on domestic issues for governments around the globe.
But, this lack of commitment has come to the fore at COP27 in Egypt this week. Already, countries from the global south have urged rich countries to meet the $100bn climate finance pledge made in 2019, and to compensate vulnerable nations for the irreparable damages done to the climate by predominantly nations in the global north. Whilst Rishi Sunak, the UK Prime Minister appeared to open the door to this, it was promptly shut again by the collectively developed world. Meanwhile, the UK’s ex-PM Boris Johnson has taken the climate summit as an opportunity to polish his tarnished legacy, calling on the conference to fulfil the promises made at COP26 in Glasgow.
It is easy to let pessimism at all of this political manoeuvring overshadow the positive intention behind these COPs and the progress being made in the Climate Tech sector.
Climate Tech investment is going from strength to strength
Last week, PwC’s State of Climate Tech 2022 report suggested that over $50bn in VC money have been injected into climate tech companies this year — equating to 25% of VC capital in 2022 has gone to climate tech, despite the funding environment becoming noticeable flatter.
“In the face of its first real test over the past decade, climate tech markets have shown encouraging resilience,” said Will Jackson Moore, global ESG leader at PwC UK. “With a background of Russia’s invasion of Ukraine, inflation, and a sharp correction in the capital markets, there was all the potential for investor confidence to crumble. The task is to build on the momentum, focusing more on early-stage funding and further boosting technologies with the highest potential for reducing emissions.”
Can Climate Tech funding save the planet?
Climate Tech funding recovering from its 2021 dip is great news. However, it is important to recognise that technology itself won’t be enough to save the planet. Contrary to what boisterous press releases from climate tech startups may suggest, technology is not a silver bullet to halt the environmental collapse.
Technology can provide many advantages for organisations stepping up their efforts to stop global warming. Tech can provide data about carbon emissions, help them reduce traffic congestion, empower smart grids to distribute electricity more efficiently, and provide digital models to know where city planners need to up their efforts — essentially every promise ever made by smart city evangelists.
Efforts like these are admirable, but they fall short of what environmental experts suggest is needed to tackle climate change: a commitment from both politicians and companies around the world to step up their game.
NGOs and intergovernmental organisations around the world — such as the United Nations Development Programme, the OECD and the CDP — have called for not just active commitments, but that businesses and governments are held accountable to those commitments in a transparent way. Without that, businesses will continue to fail to recycle plastic, introduce carbon-catching technologies and halt the onslaught of global warming.
As the UN secretary-general António Guterres put it at the opening of COP27: “Humanity has a choice: cooperate or perish. It is either a climate solidarity pact — or a collective suicide pact.”
