On the second day of COP26’s World Leaders Summit, the European finance consultancy Oxera hosted a session titled “The Economics of Climate Change.” This event spotlighted the crucial role that investors and green technology startups can play in advancing decarbonization efforts.
The session featured six distinguished CEOs and founders from some of the fastest-growing startups in the climate sector, showcasing how economics can empower diverse disciplines to facilitate decarbonization.
Jon Wallace, fund manager of Jupiter Green Investment Trust, emphasized that over two-thirds of the emissions gap could be addressed using existing technologies, both well-established and those in earlier development stages but already commercially viable. However, the remaining third requires urgent capital infusion to reach the market. Wallace highlighted the importance of collaboration among businesses to foster innovation, paving the way for substantial reductions in global emissions as the greentech sector flourishes.
As attendees converged in Glasgow for COP26, investment professionals were eager for strong signals from businesses prepared to tackle climate issues.
Geo-Mapping Climate Risk Exposure
One of the prominent greentech innovations presented was Cervest, a climate intelligence and geo-mapping platform. Dr. Min Shi, head of litigation at Oxera, underscored the need for accurate and current data to comprehend the impacts of climate change on essential assets. To meet this requirement, Cervest has engineered EarthScan, an AI-driven tool that assesses climate risks for various infrastructures, including buildings and power plants.
Cervest’s CEO, Iggy Bassi, noted that the increasing frequency of environmental disruptions poses substantial risks, potentially costing trillions. Therefore, integrating resilience and adaptation strategies into organizations is vital. Dr. Benjamin Laken, head of innovation at Cervest, explained that EarthScan combines data modeling and machine learning to provide real-time climate insights. By analyzing risk changes from 1970 to 2100, organizations can identify vulnerabilities and opportunities, facilitating informed portfolio management.
Cervest recently secured $30 million in Series A funding, led by Draper Esprit, which will enable an accelerated entry into the U.S. and European markets, assisting numerous enterprises in quantifying climate risks at the asset level.
Harnessing Hydropower
The oceans also offer vital solutions for addressing interconnected crises in food, climate, and biodiversity. Simply Blue Group is pioneering blue economy initiatives, such as floating offshore wind farms and sustainable aquaculture. Co-founder Sam Roch-Perks explained that these projects not only address energy and food demands but also create economic opportunities for local communities. Dr. Leonardo Mautino, head of regulation at Oxera, added that innovations from firms like Simply Blue can meet these demands sustainably.
Low-Carbon Freight Delivery Systems
As online delivery demands surge, environmental consequences must be considered. Andrew Meaney from Oxera pointed out that the increase in small-package deliveries will intensify air pollution and traffic issues. Magway, a zero-emission delivery solution, aims to revolutionize logistics with an integrated system of underground tunnels and remote-controlled vehicles. This approach could dramatically reduce online delivery trucks on roads by up to 90%.
Nigh-Infinite Battery Power
With rising energy demands linked to population and economic growth, effective green technologies are critical for sustainable progress. Infinite Power has developed a revolutionary energy cell capable of providing continuous power for up to a century with zero carbon emissions. COO Steve Whitehead highlighted the technology’s versatility, likening it to solar cells but powered by a radioisotope. At just two cents per kWh, it stands out as one of the most economical green energy solutions available globally.
Driving Carbon Offset Quality
As the pursuit of net-zero emissions intensifies, the demand for high-quality carbon offsets will grow. However, not all carbon offset projects deliver uniform results. Michelle Granastein, head of aviation at Oxera, stressed the need for clear standards and accessible information for consumers to evaluate offset projects effectively. Sylvera, a carbon offset platform, is addressing this issue by enhancing transparency about project quality.
Co-founder Sam Gill emphasized the critical role of natural ecosystems as carbon sinks, warning that without proper valuation, they face destruction. He urged that with the right focus, land could sequester significant carbon levels but acknowledged the existing incentives favoring ecosystem degradation.
Sylvera utilizes ground-based and satellite data, augmented by advanced models, to provide a precise assessment of project performance and quality. The company aims to empower buyers with reliable information to avoid subpar offsets, ultimately facilitating investment in nature restoration and protection.
Supporting Innovation Now and in the Future
Economics plays a vital role in fostering solutions and technologies that advance climate goals. The necessary greentech to reach net-zero is already available; the challenge lies in mobilizing financial resources for wider deployment. Investment vehicles such as Jupiter, with a long history of supporting sustainability initiatives, are crucial in promoting this green transformation.
As Margaret Thatcher once remarked, we do not truly own this planet; we borrow it for future generations. The challenges facing the financial sector can be transformed into opportunities by focused efforts from investors and green technology innovators.