Davos, 26 May 2022 (TDI): The First Movers Coalition announced an expansion at the World Economic Forum (WEF). The announcement was accompanied by more companies and governments who were on board.
The First Movers Coalition, a public-private partnership, is aimed at decarbonizing difficult-to-abate industries. During a press conference at the WEF’s annual meeting, two new sectors were also announced.
First Movers Coalition: How investing in tech could save the climate #wef22@JohnKerry @ClimateEnvoy @mikaeldamberg @BillGates @gatesfoundation @Benioff @Salesforce @Google @BradSmi @Microsoft https://t.co/xzSp6gwpBV
— World Economic Forum (@wef) May 25, 2022
Aluminium and carbon dioxide removal are two of them. There was an investment of more than $85.7 billion in climate technology. This was between October 2020 and September 2021, as alluded to by PwC.
The coalition’s investment in technology would go a long way. It would motivate others to speed up their efforts to fulfill climate goals. These were the thoughts of John Kerry, the US Special Presidential Envoy for Climate Change.
More than 50 businesses in nine countries account for more than 40% of global GDP. They have pledged to decarbonize the world’s most carbon-intensive industries. This will be achieved through purchasing power and low-carbon legislation.
First Movers Coalition: On the Move for Clean Energy Technologies
The WEF and US Climate Envoy, John Kerry, launched the First Movers Coalition. The launch took place at COP26 in Glasgow. It has grown from 35 to 55 companies, with a combined market value of $8.5 trillion.
They want to get the market for low-carbon technologies off to a fast start. The outcome will result from pledging to buy a certain percentage of goods from suppliers who use near-zero or zero-carbon solutions.
The Coalition’s Steering Board now includes India, Japan, and Sweden. These countries have joined the US government.
Denmark, Italy, Norway, Singapore, and the United Kingdom have all committed to policies that will help green technologies become more commercially viable. This is the point at which these businesses make a buying commitment.
Technologies Essential to Limit Global Warming
The two new sectors launched are the technologies that are essential as stated by the Intergovernmental Panel on Climate Change (IPCC). They limit global warming to 1.50°C and use aluminum to do it.
These join the aviation, shipping, steel, and trucking initiatives launched at COP26 in Glasgow, which combined with other heavy industries account for 30% of global emissions.
John Kerry stated that the project would “kick everybody into a higher gear” to keep the promise made in Glasgow on climate change.
“The IEA made it clear that after we left Glasgow with 65% of global GDP committed to plans that legitimately hold the earth’s temperature increase at 1.5C degrees, then we have to bring the other 35% on.
These technology steps will encourage and make it easier for other countries and companies to be able to make the decision. The marketplace is going to do this.
It’s not going to happen by government decree. It’s going to happen because people are going to see there’s a demand for this. Citizens all around the world want a better life.
They want clean air, they don’t want drought, and fires and floods and storms and the threat of massive sea-level rise.
The greatest disrupter of business will be climate crisis if we don’t move fast enough. And the greatest risk for business is not the risk of putting their money into this, it’s the risk that comes with not doing enough, with not investing.”
Harnessing Value Chains to Reduce the ‘Green Premium’ of Innovative Tech
The success of advanced market commitments urged the creation of the First Movers Coalition. These commitments are promoting innovation in other industries.
This is the case for life-saving immunizations and commercial spaceflight. The electric power system is being decarbonized using today’s most industrially competitive clean energy technology.
These include renewable wind and solar energy, for example. However, they can not clean up steelmaking, shipping, aviation, and other difficult-to-abate industries on their own.
The required technological solutions are currently not industrially viable. The production of green hydrogen, for example, uses renewable energy.
Clean ammonia and near-zero carbon aviation fuels and technology are two examples. As a result, commercialization is key by 2030 to reach worldwide net-zero emissions by 2050.
The State of Climate Tech Investment
The good news is that there was an investment of more than $85.7 billion in climate technology. This was between October 2020 and September 2021. The most current State of Climate Technology study from PricewaterhouseCoopers (PwC) stated this.
In the first half of 2021, investment reached a new high of $60 billion. It represented a 210 percent increase over the previous year. There are around 3,000 climate tech start-ups worldwide.
Investment in clean technology accounts for 14 cents of every venture capital dollar. The size of the deals is also increasing. According to PwC, megadeals will closely quadruple.
“Technology is not the answer, it’s the amplifier of intent,” says the report’s co-author Leo Johnson. And climate tech alone is not the panacea.
It’s a space that is emerging rapidly as a critical mechanism to bend the emissions curve down and get the world back on track towards 1.5°C.”
There are start-ups worth more than $1 billion that are privately held. This is one of the 78 climate-tech unicorns’ discoveries so far. The mobility and transport industries account for the majority.
Food, agriculture, land use, industry, manufacturing, and resource use, as well as energy, make up the rest. Mobility and transportation received $58 billion. Between October 2020 and September 2021, this represents two-thirds of the total funding.
More than half of the money will go toward electric and low-emission automobiles. However, there has been a significant increase in the difficult-to-debate sectors of industry, manufacturing, and resource use.
It nearly quadrupled the amount of money it received in the same time span, to $6.9 billion. Around two-thirds of the climate-tech funding of $56.6 billion went to start-ups in the United States. Europe received $18.3 billion, while China received $9 billion.
Closing the Funding Gap: the Future for Climate Tech Investment
According to PwC, directing large untapped opportunities for resources toward initiatives that will have a bigger impact on addressing the climate challenge is the key.
There is only a fourth of the investment in the 15 sectors of climate technology. More money is also needed, according to PwC, across all difficult areas.
This will allow for game-changing advances and sectoral tipping points. In order to grow over the next decade, it is also necessary to support commercially ready technologies.
Investors in early-stage venture capital must be more patient with their money. This is to bring about future breakthroughs. Government initiatives that are more focused will help to jumpstart investment in difficult-to-abate areas.
Building materials and carbon-removal technology are among them. That’s exactly what the First Movers Coalition is aiming for.