TLDR:
Key points:
- Funding high-impact climate solutions requires a significant amount of capital, with the need for over US$200 trillion by 2050.
- Climate innovations require new investment strategies due to the nature of changing real industrial processes.
In the article “How To Fund High-Impact Climate Innovations,” the author discusses the challenges and strategies involved in funding climate solutions. The need for enormous capital, estimated at over US$200 trillion by 2050, to power the green transition is highlighted. The article emphasizes the importance of backing climate innovations with new investment strategies, as most of the impact will come from changing real industrial processes.
The author provides a hypothetical case study of a company called GreenCementCo and details its journey from concept to market, which took about 15 years and nearly $700 million. This journey showcases the long timelines and significant funding required for developing and testing greener products in the climate tech industry.
The article also delves into the concept of the climate tech capital stack, which includes different types of financial instruments needed to fund climate companies and projects. It discusses the importance of diverse funding sources and evolving funding strategies to match the hardware and R&D-intensive nature of many climate innovations.
In conclusion, the author emphasizes the need for new policy and funding structures, talent development, and diverse funding sources to rapidly build the climate tech capital stack. Unlocking private funding, incentivizing governments to create new funds, and developing new asset classes are highlighted as crucial steps in filling climate finance gaps and supporting climate innovations.
