will host leaders from around the world to discuss urgent climate change issues. The summit will focus on implementing strategies to limit global temperature rise and mitigate the impacts of climate change. The Australian Government aims to foster collaboration and develop innovative solutions to address this pressing global challenge. recommitted heading towards a world in which clean energy dominates
If those in charge agree, Australia is likely to become the top contender for hosting the prestigious COP31 summit in 2026.
However, in order to achieve a future powered by clean energy and take the lead in global climate action, we must expedite and expand the development of our own climate technologies. Encouragingly, we have already started to see some advancements in this area.
One example is Australia’s biggest venture capital fund for climate technology. Virescent for climate tech companies on behalf of the Clean Energy Corporation .
example, Virescent recently joined in a round of financing for its Series A, raising a total of $23 million. Novalith Technologies , The innovator behind a new method for extracting lithium from natural resources that eliminates the production of harmful by-products and waste typically associated with conventional techniques.
Companies like Greenhouse – The most courageous climate action system in Australia is supporting industries that are difficult to reduce emissions in becoming carbon neutral. This is being done through various initiatives and programmes.Greenhouse and WEF’s Near Zero Steen Challenge are closely connected. .
achieved significant progress in catching up with the latest developments, displaying improvement within our banking sector. An illustrative case is National Australia Bank (ASX: NAB), which has recently made strides in this regard. celebrated It has been declared that over the span of ten years, the company achieved carbon neutrality. Additionally, it was stated that they will cease to provide traditional loans to fossil fuel companies unless those companies present verifiable strategies to eliminate all emissions.
However, there are still numerous obstacles that we need to face before we can secure sufficient financing for climate technology – an industry that offers tremendous opportunity for investors to expand.
A short-term approach lacking certainty
Australia’s A plan for investing in technology.It sets aside $20 billion for investing in low-emissions technology until 2030. However, the lack of future plans or certainty after the election may worry investors and make it more difficult for them to decide where to put their money.
The absence of a clear long-term plan, along with investors’ strict requirements for risk tolerance and return on investment, leads to a disconnect. Without a strong and lasting national legislative framework that guides, regulates, and assesses the amount and impact of funding for climate technology, our country’s goals will encounter challenges.
Offshore raises such as Novalith’s may become less common if programs like the enticing $734 billion one are implemented. US Inflation Reduction Act (IRAs) are causing Australian entrepreneurs to start seeking opportunities overseas in more favorable environments.
potential crisis looming for the Australian startup ecosystem. The success and growth of the ecosystem have led to an increasing number of startups competing for limited resources, such as funding and talent. This situation may result in a scarcity of support for early-stage startups, making it more challenging for them to succeed. Sally-Ann Williams emphasizes the need for strategic government intervention and investment to ensure the long-term sustainability of the Australian startup scene. potential brain drain If we fail to resolve the issue of insufficient funding for deep tech companies that are working towards solving the world’s most significant problems, such as climate change.
What would be our benefit if we find a solution to this issue?
The climate tech opportunity
a firm specializing in investments on a global scale and in private equity, The Riverside Company , I recently made a sale of a company that specializes in software for the energy market. Energy Exemplar Blackstone and Vista Equity Partners acquired Energy Exemplar in a deal valued at $1.8 billion. Since 2018, the company’s original investment in Energy Exemplar has resulted in an impressive annual growth of 30%, marking a remarkable achievement for Australian climate technology and its stakeholders.
Our local climate tech sector offers a promising opportunity for investors, especially during a time of wider market decline.
increase in awareness and concern over climate change. The market for these stocks is experiencing significant growth as investors recognize the potential for profits in companies that are actively working towards reducing carbon emissions and promoting sustainable practices. This surge in demand for climate stocks is driven by a global shift towards prioritizing environmental sustainability and the need for innovative solutions to combat climate change. shift Private investors are increasingly being presented with profitable prospects as we make progress towards a future with less carbon emissions. This growth can be observed in industries such as renewable energy, clean technology, and sustainable resources, and is gradually resulting in financial benefits for those who invest in them.
suggest that the Australian climate tech industry is experiencing significant growth. The findings of this report indicate that investments in climate tech have doubled in the past year, reaching an impressive $2.4 billion. Furthermore, it highlights the increasing number of startups and innovators in the sector. The report also emphasizes the potential for Australia to become a global leader in climate tech, given its abundance of renewable energy resources. reveal The founders have set a goal of raising a significant $1.5 billion within the next year.
Despite the challenges mentioned earlier, the report indicates that the industry has shown remarkable strength, as evidenced by a significant increase in total funding raised. Specifically, the capital raised has soared by an impressive 64% from $338 million in 2021 to $553 million in 2022.
Australia’s climate tech industry has already generated over 3,000 new jobs, with an estimated 2,400 more expected by 2024, indicating an impressive 80 percent increase.
Significantly, approximately 17 percent of the upcoming job opportunities are projected to be situated in rural areas, thereby guaranteeing a wide-ranging and varied socio-economic influence.
Moreover, this is a sector that can flourish on a global scale. Nearly half of the climate tech companies in Australia are already engaged in international operations, and an astounding 94 percent of them aspire to expand their presence worldwide.
Therefore, Australia has the capacity to become a worldwide center and exporter of measures for climate change.
How can we actively attain these ambitious objectives?
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A multi-faceted approach
To achieve our goals in the field of climate technology, we need to adopt a comprehensive strategy. This may include implementing federal and state legislations known as Climate Tech Acts or similar initiatives, which would encourage the formation of numerous collaborations between the public and private sectors and also the establishment of funds dedicated to climate technology.
An Act called Climate Tech Act has the potential to work similarly to the US IRA mentioned earlier. It would provide sufficient funds and partnerships to greatly accelerate the process of rapid research and development, commercialization, and expansion of domestically developed clean and sustainable technologies.
The paragraph suggests that fostering collaborations among government agencies, academic institutions, and private industries would be helpful. By working together, these sectors can speed up advancements and guarantee that the most talented individuals are collectively striving for sustainable solutions.
This type of legislation would appeal to and keep top-notch researchers, scientists, engineers, entrepreneurs, investment managers, and a wide range of skilled individuals.
This would, in turn, increase the sector’s value for both private and public investors significantly.
If we have these effective mechanisms, our chances of achieving our climate action goals would greatly improve. As a result, we would be deserving of hosting COP31 in 2026.
