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Climate change and carbon removal VC investing are key components of the climate fight
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Climate change and carbon removal VC investing are key components of the climate fight

Screenshot of tweet from climate scientist Andrew Dessler disagreeing over carbon removal with Robert Downey Jr.


Robert Downey Jr., actor and climate tech investorLast week, he caused controversy when he Tweet that “the technologies that suck carbon out of the air and capture it” are as equally important in global efforts to halt global warming, as “building new renewable energy.”

Why it mattersClimate tech investors (and scientists) see the topic as more nuanced. The debate focuses on the optimal scale of carbon removal and capture to combat climate change.

The big pictureOver the past few years, venture capital and other investments into climate tech and energy companies has skyrocketed.

  • Venture capital and private equity investors invested $87.5 billion in climate tech between the second half 2020 and the first quarter of 2021. More than $60 billion was invested in the first quarter of 2021. per PwC. This is a 210% increase over the 12 months before.
  • PwC notes that climate technology now represents 14 cents of every dollar of venture capital.
  • Within that broader category, backers invested more than $250 million in greenhouse gas capture, removal and storage in the first half of 2021 — double that of the prior six months, and often generating more headlines than other types of tech.

What they’re saying: “I think there’s definitely a little bit of irrational exuberance around [carbon dioxide removal],” Congruent Ventures managing partner Josh Posamentier tells Axios.

  • It’s easy for investors pondering the challenge of greenhouse gas emissions to think, “Oh that’s just a perfect solution we’ll just take it out of the air!” he added.
Screenshot of tweet from climate scientist Andrew Dessler disagreeing over carbon removal with Robert Downey Jr.
Screenshot: @AndrewDessler/Twitter

Between the linesMany climate scientists believe it is crucial that we reduce carbon emissions as soon as possible to avoid placing our future on uncertain technology bets to remove carbon.

  • The United Nations has warned that the time is past when “minor or marginal, reactive, or incremental changes” can adequately prepare society to deal with climate impacts. as Axios’ Andrew Freedman reported.
  • To curb global warming, it will be necessary to move faster to clean energy sources, such as efficiency tech, renewables, and electric cars. Carbon removal is a complement to rapidly expanding clean-energy tech but not a replacement.
  • Critics also see corporations’ purchase of carbon offsets (such forest preservation and planting) as an attempt to appear climate-conscious, rather than actually making significant changes to their emissions and operations. All this is on top the ongoing integrity concerns and verification concerns in the carbon credit market.

Yes, but:Carbon capture and removal will remain a necessary tool in the fight against climate change.

  • “Every aspect of climate tech needs more funding. While we need to reduce emissions to zero… we simultaneously need to remove the trillions of tons of CO2 that are already in the atmosphere,” says Lowercarbon Capital partner Ryan Orbuch, who previously spearheaded Stripe’s carbon removal procurement program.
  • “In that light, funding for carbon removal has to grow quickly — and to date, it’s way behind relative to the market opportunity.”

Congruent Ventures’ PosamentierHe adds that the area that interests him in carbon capture is technology that transforms the carbon into something useful, such as alternative fuels or polymers, or permanently sequesters them. He believes that companies that can remove carbon are able to manage their emissions.

The bottom line:Although investors may not be equally optimistic about the individual technologies and companies’ efforts in curbing climate change, there seems to be a consensus that this fight requires a multi-pronged approach.


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