Accelerating the fight against climate change

Borrowing some inspiration from Everything is a Remix, I would like to recast some thoughts that Stephen Lacey first shared in The Energy Gang Podcast.

The question that he answered, and which I will also address here was:

How would you spend a million dollars to fight against climate change?.

A political path

Probably the most cost-effective strategy is to focus on policy. There are already quite a lot of good policy ideas out there (Paris Agreement, Future Clean Act, caps and trade, etc.).

Another point that I would like to highlight is that the solutions to prevent global warming and to avoid the accumulation of CO2 emissions are mostly known, e.g. Project Drawdown.

According to a recent study, the social tipping interventions that could help us achieve a decarbonized future by 2050 are:

  1. removing fossil-fuel subsidies and incentivizing decentralized energy generation;
  2. building carbon-neutral cities;
  3. divesting from assets linked to fossil fuels;
  4. revealing the moral implications of fossil fuels;
  5. strengthening climate education and engagement; and
  6. disclosing information on greenhouse gas emissions

Angel investment in clean technologies

Mr. Lacey suggested that an alternative strategy for fighting climate change could be based on spreading the million dollars on financing startups creating the technologies required to solve these issues. You can find them in any of these places:

Mr. Lacey further explained that he would apply the following recipe to get the most ‘bang for the buck’ for the identification of the relevant startups:

  • High potential reward
  • Focus on interesting areas
  • Not too high tech: not requiring too much capital or dependent on scientific breakthroughs
  • Demonstrated resource efficiency
  • Drones
  • Sensors
  • Data plays
  • Robotics
  • Other enabling technologies to help deploy clean energy faster

He explained that the most obvious way to address the issues relating to fighting climate change is to focus on startups contributing to the reduction of CO2 emissions. Other than that, he said he would invest in:

  • Water
  • Forestry
  • Urban agriculture (my addition)
  • Reducing waste (my addition)

Our investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors. And with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward

Larry Fink, CEO Blackrock

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