A broad term for any innovative technology that has the potential to address climate change.
The term “climate tech” intentionally casts a wide net. It includes both physical and digital technologies. It includes technologies that reduce greenhouse gas emissions, technologies that remove emissions from the atmosphere, and technologies that enable adaptation to an altered climate. If a technology has something to do with solving any aspect of the complex and multi-faceted problem of climate change, then it can conceivably be considered climate tech. This all-inclusive focus acknowledges the breadth of the climate challenge and the diversity of solutions needed, but it also allows for a certain looseness when startups, investors, and others seek to define their impact.
The term climate tech has recently surged in popularity, especially among investors, but what exactly does it mean? Ben Soltoff talks about the transforming reach of climate tech across multiple industries and sectors of the economy, the need for collective participation and the reason we should all be excited about its current growth.
Why not stick with existing solutions, rather than rely on new technology?
The short answer is to do both. In 2018, the world’s leading climate authority, the Intergovernmental Panel on Climate Change (IPCC), published a landmark report highlighting the urgency of limiting warming to 1.5 degrees Celsius. The report outlines four potential pathways for reaching that goal. The pathways are vastly different, but one thing they have in common is a central role for new technologies. Relying on emissions-reducing technology isn’t the same as blind techno-optimism. New technology needs to go hand in hand with existing solutions, deployed immediately. But the IPCC pathways make clear that the route to mitigation goes through innovation.
Where did the term climate tech come from?
The term itself is pretty new. It only sprung into wide usage around 2020. However, some of the startups and investors in the space have been around much longer, as have some of the technologies themselves. Many climate tech players have been around at least since the boom in interest in “cleantech” from 2008 to 2011.
What’s the difference between cleantech and climate tech? In theory, cleantech is technology that minimizes negative impact on the environment with a heavy focus on the energy industry, while climate tech has a focus on addressing climate impacts. In practice, there’s a whole lot of overlap between the two terms. Clean Energy Ventures has a good explainer on this, but the key thing to note is that these industry descriptions aren’t scientific classifications. Some technologies fit well under a given umbrella, and others don’t. A lot of cleantech investments didn’t pan out for investors, so there are strong reservations around that term, and it makes sense many investors would gravitate towards a new one. Before cleantech, the term was greentech, which goes to show that tech vocabulary is dynamic. However, “cleantech” and “greentech” are somewhat nebulous. A strength of “climate tech” is that it signals a clarity of purpose around managing the havoc wrought on our climate by greenhouse gas emissions.
A major underlying factor behind the surge of interest in climate tech is the rising public demand for climate action, as evidenced by youth-led climate movements around the world. Adults pay attention when teenagers sternly address the United Nations with messages like, “We are in the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth. How dare you!”
Naturally, the response to that sentiment from Silicon Valley and other tech hubs is to solve the problem with new technology and new business models...
That's obviously a bit glib, but there’s some value to that approach, even if it seems counter-intuitive. The global shift from an emissions-heavy economy to a presents a massive business opportunity for the companies and technologies who can aid with the transition. That dual monetary and moral imperative is a tough force to stop.
Which innovations are needed, specifically?
A 2020 report from professional services firm PwC provides a detailed overview of the climate tech landscape. Click on the images below to check out how they break it down by category and technology:
Here are some further resources on climate tech:
This 2018 report from Breakthrough Energy (a firm founded by Bill Gates) that dives deep into the policies and technologies needed for low-emission energy innovation.
This 2017 article in the Stanford Social Innovation Review shows how and why there’s a lack of funding for climate tech solutions. It’s written by some of the founders of Prime Coalition, which aims to fill the gap through philanthropy and impact investing.