Good COP, Bad COP
Labelled ‘a fragile win’, world leaders from almost 200 countries have agreed on a new climate deal after two weeks of negotiations at the annual COP26 summit in Glasgow. A record-breaking number of ambassadors gathered in the City, pledging to cut methane emissions, tackle deforestation, phase out coal and drive technology in the GreenTech industry.
“This is real progress in keeping 1.5 degrees within reach. Progress that we have made together. But the need for continued action and implementation to match ambition must continue throughout this decade,” Alok Sharma, the COP26 President told delegates after the agreement was signed.
Whilst some are calling it a success, others a failure and many saying it’s something in between, innovation among green technology startups are the only drivers turning the pledges into reality.
So what does it mean for the GreenTech industry? Storm4 reveal the three key opportunities GreenTechs should focus on from the COP26 outcomes.
A Focus On Methane Creates New Opportunities For The GreenTech Industry
A key development to emerge from the first week of the summit was an agreement by more than 100 countries to slash methane emissions by 30% by 2030. Research has shown that curbing methane emissions using existing technologies could shave up to 0.5 °C off global temperatures by 2100, providing an opportunity for the GreenTech industry to make these technologies the norm instead of an exception.
Being the world’s top emitter, China has shown a renewed interest in tackling the issue by pledging to cut methane emissions for the first time. The US has also made it a centrepiece in their commitments, which if implemented, could prevent the release of 37 million tons of methane by 2035 — equivalent to more than the annual carbon emissions from the nation’s fleets of passenger vehicles and commercial aircraft.
Storm4 foresee this pledge to open the doors for AgTech and waste to make their mark, who are responsible for 40% and 20% of methane emissions respectively.
Carbon-Trading Takes The Limelight
After six years of confounded battles due to fears of breaking the Paris settlement, negotiators at COP26 agreed upon a deal on Article 6 of the Paris Agreement. The long-awaited standards have created the foundation for establishing a carbon trading market that synthesises with existing credit systems.
Based on the premise that credits can be exchanged for carbon reduction, the market is on the cusp of growth as countries around the world clamber to partner with this new generation of startups to meet their net-zero pledges. Startups such as Pachama and Cloverly are proving the value and significance of the carbon market, having received impressive funding rounds of a combined total of $26.4M in the last year.
With carbon-trading rules now concrete, Storm4 expect to see demand from governments and corporates soar, funding from investors continue and new startups emerge.
The US Is Back On The Scene
One of the notable promises to come out of COP26 was the US’ commitment to the GreenTech industry. Joe Biden’s ‘Build Better Back’ economic bill will be transformative in the fight against climate change, doubling its climate finance commitment to $11 billion per year.
The landscape is already thriving, with startups having more success in drawing venture capital and scaling. As many as 43 unicorns currently operate out of Greater Los Angeles, Greater Boston, New York, and the Bay Area, with 61 more are on track to hit unicorn status in the foreseeable.
This demonstrates the growing demand for more sustainable technologies from consumers in the U.S. Having a more mature climate tech ecosystem than anywhere else in the world, Storm4 anticipate investment levels to continue to rise as a focus on climate change dominates the political landscape, business environment, and the community at large.
While pledges are a promising step in the right direction, Storm4 believe attention must now shift to implementation. Reliance on the GreenTech industry is the only hope to ensure COP26 becomes a catalyst for change.