Net Zero

1. Lawsuit tidal wave
2. Protectionist tightrope
3. Problems going public
4. Want $217 billion?
5. CCS’s wide gap

The stakes of India’s elections, and banks’ dubious climate alliance.

Swiss women win landmark climate case

The European Court of Human Rights ruled Tuesday in favor of a group of older Swiss women who argued that failure to combat climate change put them at a higher risk of dying in heat waves, in a landmark case for the continent.

The court ruled that the Swiss government violated the human rights of 2,000 women over the age of 64, known as KlimaSeniorinnen, or Senior Women for Climate Protection, who said they cannot leave their homes and suffer ill-health during frequent record hot spells. The ruling compels Switzerland to take greater action on reducing carbon emissions, in line with targets to keep warming to below a global 1.5 C rise. The court’s decision has legal implications for all 46 European countries that are signatories to the European Convention on Human Rights. “Member states on the whole do abide by those rulings,” Kate Mackintosh, Executive Director of the UCLA Law Promise Institute Europe, told Semafor. “It opens the way for people in every single country who are part of this system to bring these cases domestically before their courts.”

Protectionist tightrope

U.S. Treasury Secretary Janet Yellen pushed her counterparts in China to address the country’s massive overcapacity in producing cheap green technology on a trip to the nation this week.

Experts largely agree that China’s unrivaled ability to churn out far more low-cost solar panels, EV batteries, and other green hardware than global consumers can absorb stymies international competition. But some are echoing Chinese media sentiment and calling Yellen’s economic goals a “a protectionist disaster in the making” that will hurt U.S. consumers and set back decarbonization efforts, because the U.S. struggles to make cheap solar panels and EVs. “China’s factories will keep chugging along, regardless of what overseas officials like Janet Yellen say,” wrote Reuters columnist Robyn Mak, who argued that Beijing had no plan “to unleash domestic economic consumption” and decrease exports.

John Morton, a managing director at the investment advisory firm Pollination and former climate advisor to Yellen, told Semafor this week that U.S. trade officials, having watched China come to dominate clean tech in the last decade, are “not willing to cede further leadership in critical technologies and sectors to anyone,” and that “leveling the playing field” with protectionist trade barriers could be worthwhile for sectors that “aren’t quite over the hump yet.”

Climate tech has an IPO problem

A record — and growing — climate tech war chest risks fizzling out as the sector’s startups struggle to pay off their early investors.

Climate-focused investment funds grew faster than they have in years during the first quarter of 2024, bucking the trend of slow fundraising that has descended on the overall venture capital market. But that momentum could run out, fund managers say, if more climate tech startups can’t “exit” to an initial public offering or high-dollar acquisition.

Since January, climate funds — including venture capital, private equity, and infrastructure funds — have raised at least $28.2 billion, mostly in eight “megafunds,” such as Brookfield’s $10 billion Global Transition Fund. Add up fundraising since 2021 and deduct what has already been invested — and money is indeed flowing out the door — and you’re left with a global climate tech warchest of about $41 billion, according to the analytics firm Sightline Climate.

Given that venture capital overall just had its worst quarter for fundraising since 2016, the climate tech figures suggest a growing coalition of investors riding the wave of the Inflation Reduction Act and other policy enticements, willing to place long-term bets on both brand-new startups and more advanced companies looking to build commercial-scale climate tech factories and clean energy farms. But that wave is probably peaking. Unless more climate tech companies can prove their worth to their initial investors, the sector’s financial gears could grid to a halt.

Spending race

Remaining amount for climate tech loans and loan guarantees from the U.S. Department of Energy’s Loan Programs Office, as of the end of March. The LPO has been racing to get money out the door as quickly as possible while maintaining the due diligence necessary to fend off accusations of waste from Congressional Republicans. But they’ve only disbursed about $26 billion so far. And if Donald Trump wins the presidency before that money gets allocated, one of the biggest pots of climate cash in the U.S. “would just die on the vine,” Sen. Martin Heinrich (D-N.M.) told Politico.

The US’s CCS shortfall

The U.S. is far behind in developing the tech and nature-based methods it will need to mop up unavoidable emissions in the next few decades, according to a new report on carbon removal from the Rhodium Group think tank. Dedicated projects for carbon removal, mostly via planting trees, amount to about 5 million metric tons today. Under current policies, including tax credits in the Inflation Reduction Act, the Rhodium report projects that figure to grow to 50 million tons by 2035, and expand to include a much wider range of technologies including direct air capture, biomass burial, ocean fertilization, and enhanced rock weathering.

But depending on which scenario you trust, around 20% of U.S. emissions in 2050 will need to be “netted out” with carbon removal, which amounts to one billion tons, or 20 times more than the forecast. “If the U.S. wants to continue its momentum on carbon removal, a lot more needs to happen, and soon, on a lot of different fronts,” said John Larsen, a co-author of the report. That includes more public investment in early-stage R&D on innovative carbon removal strategies, more research focused on measuring and monitoring real emissions data; more federally-funded “hubs” for first-of-a-kind projects to be built with special care, and more inducements for individuals and companies to purchase carbon removal credits.

All of that could add up to $100 billion a year by 2050, Larsen said — about the current budget of the U.S. Department of Agriculture. The easiest way to pay for it would be a national price on carbon, although Larsen said he has lost confidence in the political likelihood of that policy in the United States. Short of that, the best way to save taxpayers money on carbon removal in the future is to spend more on carbon avoidance now.

Xavier Becerra, U.S. Secretary of Health and Human Services; Raj Shah, President, Rockefeller Foundation; Andrew Steer, President & CEO, Bezos Earth Fund; Gargee Ghosh, President, Global Policy & Advocacy, Gates Foundation; Jay Shambaugh, Undersecretary for International Affairs, Treasury Department and Ani Dasgupta, President & CEO at World Resources Institute will join the Rising Global Middle Class Session at the 2024 World Economy Summit to discuss the debt burden developing countries are facing today and how governments and private sector players can foster economic growth to create greater opportunities.

April 18 | 9 a.m.-12 p.m. ET | Washington, D.C.

New Energy

• Ukrainian energy executives are stepping up their plea for Western companies and governments to help them build renewable energy projects. For clean energy, Ukraine is a rich but risky prospect.
• The European Union launched an investigation into possible subsidy abuse by Chinese wind turbine manufacturers. A trade official at China’s embassy in Brussels countered that his country’s advantages “have never been the so-called subsidies, but diligence, innovation and competitive awareness of generations of Chinese entrepreneurs.”

Fossil Fuels

• Shell might walk out on the London Stock Exchange. CEO Wael Sawan said his company’s shares are undervalued compared to what they would attract on the U.S. stock market, which is more bullish on fossil fuels.
• Total is expanding its production of natural gas in Texas, cementing its position at the top U.S. exporter of LNG.
• Egypt is stepping up its LNG imports, temporarily reversing its position as a rising star in the export market as it buckles down for peak summer power demand. But with the country on the verge of economic collapse and its Suez Canal revenue down because of Red Sea turmoil, it can hardly handle new gas bills.

Personnel

• Chris Wright, CEO of the small oilfield services company Liberty Energy, is stepping up as the public face of a legal campaign to block U.S. climate disclosure rules, effectively. The rules, he told Semafor’s Liz Hoffman, are “a lot of noise and fury that doesn’t drive any benefit.”

Finance

• ExxonMobil and other oil companies are moving ahead of tech giants in the stock market, a sign that investors see high oil prices sticking around for the foreseeable future.
• Europe needs to invest €800 billion by 2030 in its power infrastructure to meet its net zero goals. In the last decade, only a little more than €32 billion was invested.
• Banks with net zero targets behave no differently than those without when it comes to financing fossil fuels, a new study found. The findings imply that voluntary net zero groups for financial institutions are effectively useless.

EVs

• New-energy vehicles will make up 50% of new car sales in China by 2030, according to a forecast by Moody’s. According to the ratings agency, subsidies for buyers and tax breaks for manufacturers will drive growth in sales of pure-electric cars, plug-in hybrid type, and fuel-cell hydrogen-powered cars from 30% of market share in 2023.

Food & Agriculture

• The private sector arm of the World Bank faced accusations that its loans contribute to global warming and undermine animal welfare by providing financial support for factory farming in China. According to an analysis by the campaigners, the bank provided more than $1.6 billion in financial support for industrial farming between 2017 and 2023, The Guardian reported.

Mahak Agrawal, climate scientist and global campaign lead at Climate Clock. India’s general elections start on April 19.

• Trump chases Black support, but struggles to build an organization.
• Hong Kong, long an economic crossroads, now faces one.
• The US is sending confiscated Iranian weapons to Ukraine.