Private financiers in the United States are turning their investment focus to a menu of sometimes questionable carbon storage technologies, while government funding for more immediate carbon reduction options—like the climate components of the Biden administration’s Build Back Better bill—languishes in legislatures.
“Dozens of companies are working on ways to remove carbon from the air and sea, doing everything from burying it in the ground to making carbon-based cutlery and faux-leather goods,” reports The Independent.
Start-ups are exploring new methods from agricultural advancements, using drones to reseed fire-scarred land, to carbon capture and storage technologies that directly pull carbon from the atmosphere. None of the methods those dozens of companies are pitching make immediate financial sense compared to buying carbon offsets—or investing in proven decarbonization winners like energy efficiency and renewable energy. But many investors see the research and development as a good bet for the long haul.
“The next 1,000 unicorns won’t be search engines of social media companies, they’ll be sustainable, scalable innovators,” said Blackrock founder Larry Fink in his annual letter to CEOs.
But while those investments pick up speed, public climate funding is stalling. U.S. President Joe Biden’s Build Back Better bill was recently derailed after renegade Senator Joe Manchin (D-WV) withdrew support for the bill in an evenly divided Senate, while Republican senators opposed it en bloc. Solar stocks are also suffering from political pressure, as electricity utilities in California and Florida work to hamstring incentives for homeowners to invest in rooftop solar.
“The opposition argument to climate programs like Build Back Better and the solar panels in California and Florida is all down to money, which effectively removes the benefit of fighting global warming from the equation,” The Independent writes. “It’s exasperating for progressives and other climate advocates to watch.”
But big private funds have the resources to drive carbon storage forward. Wall Street and Silicon Valley investments for various environmental, social, and governance ideas added up to billions of dollars in the first two weeks of 2022. Some notable announcements so far in the new year have included Goldman Sachs’ US$25-million investment in Toronto-based energy storage company Hydrostor, the Carlyle Group’s $100 million invested in energy storage and electric vehicle charging stations, and an announcement from Bill Gates’ Breakthrough Energy Catalyst Group that it will fund $15 billion in energy storage and renewable energy projects in the U.S., the United Kingdom, and European Union.