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A growing number of startups are rolling out tech solutions to wildfires, but many VCs aren’t intere͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
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August 23, 2023

Net Zero

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Tim McDonnell
Tim McDonnell

Hi everyone, welcome back to Net Zero.

The wildfires raging across Hawaii, Canada, Greece, and elsewhere over the last few weeks point to a big emerging opportunity for climate tech. A growing number of startups are developing wildfire-fighting solutions, from AI-equipped smoke-spotting cameras to water-dumping drones. And they’re finding an increasingly desperate customer base among local emergency response agencies and utility companies. One thing that’s still in short supply: Venture capital. But that might be changing.

Also today: BlackRock explains why it voted against almost all climate-related shareholder resolutions, and what the historic anti-oil vote this week in Ecuador means for the Amazon at large.

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  1. GOP climate divisions
  2. EV leasing
  3. 🟡 Fighting wildfires with AI
  4. Public cash for fossils
  5. Solar spree speeds up
  6. 🟡 Anti-drilling momentum
  7. New EU climate chief
  8. WFH to fight smog
  9. 🟡 The global wildfire crisis
  10. 🟡 BlackRock votes down climate

GOP climate divisions

REUTERS/Jonathan Ernst

Republican U.S. presidential candidates — minus Donald Trump — will meet tonight for their first debate, which could present an opportunity to highlight their divisions on climate policy. None of the candidates is an outspoken champion of the energy transition, but some, including former governors Nikki Haley and Chris Christie, have at least been willing to concede that man-made climate change is real and a threat. The most pertinent question is how aggressively the candidates would seek to dismantle the Inflation Reduction Act if elected, as most have promised to do; the majority of investments in clean energy manufacturing announced over the last year have gone to Republican-majority districts.


EV leasing

Leasing an electric vehicle is the cheapest way to get a new car in the U.S. for most models, according to a new analysis from think tank Energy Innovation. The Inflation Reduction Act allows leased vehicles to qualify for a $7,500 tax credit without the same domestic manufacturing and material sourcing requirements that apply to purchased EVs. While car dealers are not required to pass those savings on to lessees, many do, the analysis found, making all but a few models cheaper to lease than to buy. And accounting for fuel costs, most EV models are cheaper than the comparable gasoline model. For some models, leasing an EV can be up to $6,000 per year cheaper than owning the gasoline equivalent.


Climate disasters are revealing a blind spot

Courtesy BoxPower

By Tim McDonnell


Where Angelo Campus grew up in northern California, evacuations and power outages caused by wildfires were routine. At college, he worked in a lab developing small solar-powered electric grids for places hit by natural disasters or high fire-risk areas to reduce the odds of an errant spark from a conventional transmission line. After graduation, he founded a startup called BoxPower to commercialize the technology, setting up his first system in Puerto Rico after Hurricane Maria in 2017.

As the frequency and severity of wildfires in his home state escalated, interest grew in his microgrids. But raising investment proved challenging: Backers gravitated to companies seeking to ward off climate change, not those readying the world for its impact.

“The number of ‘no’s we got from climate investors was surprising and pretty disappointing,” Campus said.

BoxPower eventually found backers and has installed dozens of microgrids. But in a summer where climate disasters have dominated the headlines — most recently devastating wildfires in Hawaii, Greece, and Canada — adaptation startups continue to get a cold shoulder from many venture investors.


This year’s onslaught of disasters should make the investment case for climate adaptation tech more obvious, and fuel innovation in the use of artificial intelligence and other cutting-edge technologies for confronting the unavoidable impacts of climate change.

On average, 97% of global climate-tech venture capital investment annually (about $50 billion in 2022) goes toward startups whose products or services reduce greenhouse gas emissions, predominantly in the electric mobility and renewable energy sectors, according to consulting firm PwC. Just 1% goes to ventures that focus on adaptation — technologies to mitigate or respond to natural disasters and other climate impacts (the remaining 2% is for carbon accounting and other climate-related data-management businesses).

“There is a clear innovation and funding gap, with adaptation solutions still perceived to lack an investable business case for many innovation investors,” Will Jackson-Moore, PwC’s global ESG leader, said in an email.

The gap dates back to the early days of climate tech, said Shaun Abrahamson, managing partner at Los Angeles VC firm Third Sphere. At that time, most investors saw climate change as a distant problem, with little urgency for adaptation. Of the few adaptation startups that did get funded, many failed, he said, because they struggled to find a sufficient base of customers among municipal governments, fire departments, and other public-sector agencies that were most often tasked with disaster response. That’s changing.

One example is Convection Capital, a San Francisco VC firm that launched in September last year with $35 million to invest exclusively in wildfire mitigation tech. Its portfolio includes startups deploying autonomous firefighting helicopters, using satellite imagery to guide preventative forest management, and offering homeowners insurance in vulnerable areas based on AI-driven risk modeling.

“The new normal of wildfires has crept up pretty quickly for the timescales VCs work on,” Anukool Lakhina, a partner, said. But as more disasters strike, he anticipates a rapid increase in the number of startups inventing climate adaptation solutions for organizations desperate to implement them. Investors will emerge, he said, as they see the profit opportunity in linking the two.

— For more, including The View From Nairobi and Room for Disagreement, click here.


Public cash for fossils

Government investment in fossil fuels by G-20 nations in 2022, a record. The surge was driven by subsidies for consumers to offset high energy prices following Russia’s invasion of Ukraine, and caused public financial support for fossil fuels to be nearly four times higher than for renewables, according to a new report by the International Institute for Sustainable Development, a think tank. World leaders agreed to phase out “inefficient” fossil fuel subsidies at COP26 in Glasgow two years ago, and will likely revisit the subject again at a G-20 summit in Delhi next month.


Solar spree speeds up

Global solar panel installations are set to exceed more than one gigawatt per day in 2023 for the first time, according to the latest estimate from BloombergNEF, and reach above 700 gigawatts annually by 2030. About half of those installations are in China, where electricity demand is rising as the cost of solar hardware falls to record lows.


One Good Text

Alex Rafalowicz, Bogotá-based director of the Fossil Fuel Non-Proliferation Treaty Initiative. Ecuadorians voted overwhelmingly this week to halt the development of new oil wells in the Yasuní National Park.


New EU climate chief

The European Commission appointed a new head of climate policy on Tuesday after longtime Executive Vice President Frans Timmermans stepped down to run to be prime minister of the Netherlands. Maroš Šefčovič, a member of the Social Democrat party from Slovakia and former leader of the commission’s energy department, will take the role at a moment when European lawmakers are trying to strike a tricky balance between their decarbonization aspirations and pushback from industry groups about overregulation and high energy prices.


WFH to fight smog

Indonesia took a raft of measures to curb pollution and accelerate its push for renewable energy. The country ordered random emissions tests on vehicles in Jakarta and instructed around 25,000 civil servants to work from home for two months to battle smog, and said this week it would temporarily relax local-content requirements that were slowing the development of solar power capacity. It’s not all good news for proponents of the energy transition, though: Indonesian authorities also delayed the launch of a $20 billion clean energy plan by several months, reportedly because of divisions with donor nations over its funding of new coal power plants.


The impact of global wildfires

Wildfires have ravaged northeastern Greece for the past four days, killing at least 20 people. Efforts to stop the fires, which are approaching Athens, have been hindered by the winds that whip up the flames and scorching temperatures of up to 40 degrees Celsius (104 degrees Fahrenheit). They are the latest in a string of blazes that have decimated swaths of Southern Europe and North America this summer, forcing tens of thousands to flee.


  • Wildfires both emit greenhouse gasses and destroy the forests that could absorb them. Europe’s more than 1,100 summer fires destroyed a wooded area of close to 3,000 square kilometers, capable of absorbing 2.3 million tonnes of CO2 per year. “When we add the fires in Canada, the United States, Africa, Asia and Australia to those in Europe, it seems that the situation is getting worse every year,” the head of the Italian Society of Environmental Geology said.
  • This year’s Canadian wildfire season has been the largest on record with almost 14 million hectares — an area larger than all of Greece — burned. The conditions that caused the spike in wildfires were made at least twice as likely due to human-caused climate change, according to a group of scientists. “The word ‘unprecedented’ doesn’t do justice to the severity of the wildfires in Canada this year,” a member of the World Weather Attribution team said. “From a scientific perspective, the doubling of the previous burned area record is shocking.”
  • The wildfires in Maui — previously a rare occurrence but now increasingly likely — could have a destabilizing impact on the island’s economy, raising already high home prices and insurance costs. Rising global temperatures, however, also make tropical storms likelier and wetter, potentially wreaking havoc on local economies throughout the southern U.S. “We’re looking at a multi-hazard situation, where we’re being hit by a string of different events over a short period of time,” an expert at Johns Hopkins University said. “It’s like a double or triple whammy, and when they happen frequently or at the same time, the negative effects are compounded.”

— Jeronimo Gonzalez



BlackRock, the world’s largest asset management firm, voted in support of just 7% of environment and social equity-related shareholder resolutions at companies in which it manages investments in 2023, according to a proxy voting summary the firm released today. That’s down from 22% last year, and 43% in 2021.

In an introductory essay, Joud Abdel Majeid, the firm’s global head of investment stewardship, wrote that the discrepancy was due in part to looser Securities and Exchange Commission rules adopted last year that made it easier for activist investors to file resolutions, resulting in an above-average number of proposals reaching a vote. Of those, most climate-related resolutions were either overly controlling of the company’s business decisions or pushed for actions related to emissions disclosure or decarbonization that, in BlackRock’s view, the company was already taking on its own.

“Because so many proposals were over-reaching, lacking economic merit, or simply redundant, they were unlikely to help promote long-term shareholder value,” Abdel Majeid wrote.

Activist investors see another explanation: The crackdown on ESG investing by Republican lawmakers and attorneys general has given the firm — which in previous years was more vocal about linking the clean energy transition to better long-term returns for its clients — cold feet.

“It’s jarring to see BlackRock stepping away from any real discussion of escalating and systemic climate risks while disclaiming any responsibility for holding companies accountable for their contributions to them,” said Eli Kasargod Staub, executive director of shareholder advocacy group Majority Action.

Still, BlackRock isn’t alone: Shareholder support for ESG proposals was down across the board this year against a backdrop of rising fossil fuel prices.