There’s no doubt that the climate change agenda has permeated most of the developed nations, with terms like carbon, ESG, and net zero becoming ingrained in our collective vocabulary and psyches. Since the late 1970s, when the terms “climate change” and “global warming” were first coined by scientists, there have been global efforts to halt and reduce the thinning of the Earth’s ozone layer. This has been propelled by the Paris Agreement, a legally binding international treaty on climate change, with the overarching goal to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.”
Activities that emit large amounts of carbon dioxide into the atmosphere include the burning of fossil fuels, construction, transportation, and agriculture. Many of these activities are necessary to produce energy, for us to heat our homes in the winter, to turn on the lights, and to cook and refrigerate food. Although many governments and blue chip corporations have committed to the concept of “net-zero”, it would be remiss to leave out a critical detail in this grandeur plan to achieve a “clean energy” society. The fact is, clean energy technology is far more expensive to run as it currently stands. This places developed nations, especially those whose populations can barely meet their basic needs at a great vulnerability. It’s a dangerous trade-off to sacrifice the livelihood of those ‘worse-off’ for the expensive clean energy agenda.
Larry Finch, Blackrock’s CEO, is among many of the influential figures in the business realm that has publicly commented about the viability and opportunity of investing in climate tech. He goes as far as saying that
“… The next 1,000 unicorns — companies that have a market valuation over a billion dollars — won’t be a search engine, won’t be a media company, they’ll be businesses developing green hydrogen, green agriculture, green steel, and green cement.”
Blackrock, which has $10 trillion in assets, raised $4.5 billion for a climate-focused infrastructure fund last year. But Finch cautions that this isn’t an overnight endeavor, and making climate tech accessible to developing nations will require “ …more than six times the current rate of investments of about $150 billion a year.” When more money is poured into the commercialization of climate tech, it will drive down the overall costs of implementation. Other big names that have started investment funds focused on climate tech include Jeff Bezo’s Earth’s Fund and Bill Gates’s Breakthrough Energy Ventures, which is invested in by Micheal Bloomberg and Ray Dalio.
Australia has faced its fair share of climate-related catastrophes within the last decade. Its dry and hot climate makes it more susceptible to bushfires, extreme heat waves, rising temperatures, and floods, which have likely been exacerbated by climate change. All of which have propelled startups and investors alike to act on climate tech. Located in the center of Australia, is known as the Red Center, a vast terrain of dusty, sunny, and flat land. It is also home to an abundance of wind and solar farms. This region has allowed Australia’s renewable energy production to increase from 16% in 2011 to 32% in 2022. The combination of climate issues, policy support, and technological readiness positions Australia nicely for green tech innovation. However, the tech startup scene is relatively young in Australia, and many startups face the challenge of raising enough capital to push past the scale-up phase. In recent years, climate tech investing has had an upward trend, from AU $338 million in capital raising in 2021 to AU$ 553 million in 2022. In Q3 2023, climate and clean tech led the deal count in Australia’s startup ecosystem.
All this is indicative that climate tech in Australia is brimming with potential. Even companies traditionally not focused on climate tech are paying attention. SUVO, an Australian company specializing in kaolin production (a mineral used in paints, ceramics, and rubber), has recently invested in a green concrete project. Their low-carbon, geopolymer concrete is made of waste-derived materials like fly ash. Compared to traditional concrete made from Portland Cement, they’ve been able to achieve a 50% reduction in GHG emissions with their geopolymer concrete formulation “Colliecrete”. Among SUVO’s goals is to commercialise Colliecrete and other low-carbon concrete formulations, and importantly, to be cost-competitive. In doing so, they would help local construction companies realize emission reductions immediately and at the same time repurpose waste-derived / industrial by-product materials saving millions of tonnes of waste going to landfills.
Though climate change has traditionally warranted concern, outcry, and maybe even a sense of impending hopelessness, business mavericks, and investors seem to take a different perspective. As Finch expressed, “Climate change is a business opportunity.” And as far as that sentiment goes, the likelihood of environmental sustainability and concepts like net zero becoming a global standard is not so far-fetched. However, one must also weigh the costs and benefits of spearheading campaigns against conventional energy, as it may not apply to places outside of the West. So though investing in green tech seems like a smart business decision, one must also consider whether the scale and costs will make sense for those who simply cannot afford to play into the green agenda.