Jim Coulter, founding partner, executive chair and director for the investment firm TPG, thinks a little more optimism is warranted in the climate tech sphere.
Speaking at the Bloomberg Green Festival in Seattle on Thursday, Coulter contrasted the visionary hopefuls in traditional tech with the often pessimistic tone in the climate space.
“We’ve been focused on the need side — we have a problem to solve,” Coulter said. “But the other side of the coin is actually the opportunity. We’re about to undertake a $120 trillion re-industrialization of the world.”
That includes decarbonizing transportation and energy production, building with climate friendly steel and concrete, changing agricultural practices, capturing and removing carbon dioxide, and helping communities adjust to living in a warmer world with more severe weather events.
While climate tech investing surged in 2021 and 2022, money flowing into the space declined last year and has dipped further this year, mirroring wider trends in the market. The news isn’t all bad: the size of earlier stage investments has increased, but later stage deals are smaller and taking longer to land, according to Sightline Climate.
Coulter, a billionaire venture capitalist whose firm has invested in 1,400 climate companies, remains hopeful and shared some of his reasons for optimism in the sector.
Understanding the power of cost curves. Technologies including cell phones and video conferencing reach a point where costs drop dramatically and adoption accelerates. That’s already happening with solar panels, batteries and wind turbines.
The impact of policy. The Biden Administration’s Inflation Reduction Act (IRA) unlocked billions of dollars of subsidies for climate tech and inspired similar actions globally. While the sums are 10-fold lower than fossil fuel subsidies, Coulter said, they’re creating jobs — often in conservative states — and providing domestic energy security here and abroad.
“Now politicians are in a box,” he said. If you eliminate the IRA, Coulter added, that wipes out jobs at new factories where politicians were previously celebrating ribbon cuttings.
Relay race of revolutions. World-changing innovations follow a similar route to widespread use, Coulter suggested. He envisions that path as a relay race that starts with scientists, then moves to evangelists promoting the innovation, to policy makers that support its use, then to builders that produce the tech at scale. The progression applies to game-changing developments including the creation of the internet and the COVID vaccine.
Coulter expects the same is happening with climate tech, and he’s hopeful we’re getting to that final step of broad adoption — which can go quickly.
“One of the things that happens in the relay race,” he said, “is the last leg is sometimes the fastest.”
https://ift.tt/vxQRMcI July 12, 2024 at 02:55PM GeekWire
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