COP28: To Meet Climate Targets, We Need Science Entrepreneurs
By Matt Price, Co-Founder and CFO at Activate
I just returned from COP28, the 28th Conference of the Parties to the UN Framework Convention on Climate Change, held this year in Dubai.
Every year, COP presents a powerful opportunity to bring world leaders together and set goals for climate action. The results are imperfect, but the aim is to work together to lock in steps forward.
This year’s deal, just announced last week, appears to be a significant accomplishment for the negotiators, and I was glad to see that for the first time it specifically called out a transition away from fossil fuels. However, as Activate CEO Cyrus Wadia stated, we need to be careful not to normalize a pace of progress that is too slow, and we need as many scientists as possible leading us in solving problems of this scale.
Here are my biggest takeaways from COP28 and the parallel conferences, Bloomberg Green and Axios House:
1. Leaders worldwide are focused on innovation.
Innovation was a big topic at COP28, receiving a significantly greater focus than in prior years. There was widespread acknowledgment that, among other drivers, science entrepreneurs play a key role in any plan to keep global temperatures to no more than 1.5 degrees Celsius above pre-industrial levels. It was exciting to have Activate’s mission affirmed on this global stage.
Accordingly, science entrepreneurs showed up to be part of the conversation with leaders and policy-makers, including several Activate Fellow alums—Tim Latimer (Fervo Energy, Cohort 2018, Cyclotron Road), Andrew Ponec (Antora Energy, Cohort 2018, Cyclotron Road), Kevin Kung (Takachar, Cohort 2018, Cyclotron Road), Leah Ellis (Sublime Systems, Cohort 2020), and Dan Stack (Electrified Thermal Solutions, Cohort 2021)—and more entrepreneurs from around the world.
“The message from the innovation community was consistent, whether it was coming from representatives in Africa, Asia, Europe, or North and South America: we need stronger entrepreneurial ecosystems and better ways of supporting the commercialization of new technologies.”
2. 1.5 is the focus, but time is against us.
There was unanimous focus on the 1.5-degree benchmark, but current odds predict that warming could rise to 2.9 degrees Celsius in this century—a scenario that would have devastating outcomes. COP28 participants universally agreed that the world needs to have all net-zero systems in place across technology, financing, policy, and supply chains by 2030 if we want to have any chance of staying below a 1.5-degree threshold.
From a technology standpoint, 50 percent of the solutions today are ready for commercial deployment if we can get the necessary financing and supply chains set up. As a McKinsey leader stated at the Bloomberg conference, the other 50 percent of the needed solutions are not yet cost-effective and will require additional development and commercial demonstration.
3. More capital—and, specifically, more blended capital—is needed.
While different groups cited different numbers, the general consensus was that $4 trillion is needed per year to fund the development and deployment of climate mitigation and adaption solutions by 2030—and by 2050, that number needs to grow to $8 trillion. (In 2021, we globally only invested and deployed roughly $700 billion toward climate solutions.)
“Innovation was a big topic at COP28, receiving a significantly greater focus than in prior years.”
When it comes to closing the financing gap, in addition to more capital, we need more creative solutions for managing risk, including blended capital. The idea is pretty simple: philanthropies, multilateral development banks, and institutional investors each have different risk tolerances and therefore different return expectations. By pooling their capital and allowing returns to flow based on those return expectations, they can finance more critical solutions. Activate, for example, uses a form of blended finance as we work with state and federal governments, philanthropy (both foundations and family offices), and corporations to fund Activate Fellows, and then we work programmatically with other donors and venture investors to provide additional funding to fellows’ companies once enough risk has been retired.
One innovative example of this came from Mark Gallogly, co-founder and managing principal at Three Cairns Group, and Ahmed Saeed, CEO of Allied Climate Partners. At COP, they announced the creation of the Southeast Asia Clean Energy Facility, which will use a blended finance approach to increase the number of bankable, climate-related projects and businesses in Southeast Asia.
4. The United States demonstrated leadership.
I was proud of the United States’ leadership presence at COP28, especially hearing about the global impacts of the Inflation Reduction Act. U.S. Vice President Kamala Harris spoke about expanding the United States’ commitment to international climate finance, including announcing a new $3 billion pledge to the Green Climate Fund. Ali Zaidi, the U.S. national climate advisor, addressed the financial headwinds that large utility-scale renewable energy projects are facing with the rise of interest rates. John Kerry, the U.S. special presidential envoy for climate, argued that the results of the 2024 election can’t reverse or slow down the current deployment speed of net-zero solutions; effectively the train has left the station, he said, and market forces are strong enough to sustain progress. Meanwhile, Al Gore advocated for phasing out fossil fuels immediately.
Like the nature of the conversations at COP, I am left feeling both optimism and realism. I am optimistic about the potential impact of new technologies because of what I see Activate Fellows and many other great science entrepreneurs achieving. However, I know that we’re dealing with some really entrenched industries that are going to be extraordinarily difficult to change quickly.
Next year, COP29 will take place in Baku, Azerbaijan. I will be eager to hear updates on major countries' responses to the global stockgate and how that will inform the climate action plans due in 2025. By then, I also hope to see significant commitments and partnerships made to help close the financing gap.
