TLDR:
- Investors and venture capital managers clash over effective ways to fund emissions reductions in Asia
- Disagreements over whether capital is being misallocated, with some focusing on mobility sector and others on agriculture, food, and deforestation
Institutional investors and venture capital managers are at odds over how to best fund emissions reductions in Asia. Quentin Vaquette of Wavemaker Impact believes that current investments are misallocated to southeast Asia, with too much focus on the mobility sector, which generates only 12% of the region’s emissions. He argues that agriculture, food, and deforestation, responsible for 50% of emissions, should receive more attention.
However, Luuk Zonneveld of EDFI challenges the idea of misallocation, citing the longer investment horizons needed for sectors like agriculture. He believes that any investment that reduces emissions is welcome, as there is currently insufficient investment overall to address climate change.
Both Vaquette and Zonneveld agree on the importance of investor education and the role of development institutions in attracting private investors to worthwhile projects. BII, for example, made a $6 million fund investment in Wavemaker to support climate-related projects in southeast Asia, aiming to increase its allocation to as much as $500 million by 2026.
Overall, the article highlights the ongoing debate between institutions and managers over the most effective ways to fund emissions reductions in Asia, as well as the importance of attracting private capital and increasing investments in climate-related projects in the region.
