Government leaders, scientists and researchers, corporate executives, entrepreneurs, investors, and activists spent the last two weeks in Glasgow, Scotland at COP26. This Conference of Parties (COP) was highly anticipated as a critical inflection point where our economies and societies set forth on an ambitious and clearly defined path to decarbonize by 2050 and keep warming below 1.5 degrees C to avoid the worst impacts of climate change — or continue with the status quo.
Elemental’s Policy Lab team unpacked the the major national, subnational, and private sector commitments that emerged from COP26, and what they mean for climate technology innovation in the United States and beyond.
Elemental’s portfolio companies are poised to accelerate progress on pledges
Several ambitious pledges emerged to phase down fossil fuels, limit methane emissions, stop deforestation, and turbocharge the adoption of electric vehicles. There is no question that actualizing these commitments will require hard work, clear measurement and accountability, and most crucially, significant deployment of new technologies. The climate technology innovation ecosystem is ready to play an integral role in providing the solutions that will bring these pledges within reach.
1. Fossil fuel phase down & out: The final COP26 agreement commits countries to accelerate the development, deployment, and dissemination of technologies — and the adoption of policies — to transition towards low-emission energy systems. This includes rapidly scaling up the deployment of clean power generation and energy efficiency measures, accelerating efforts towards the phase-down of unabated coal power and inefficient fossil fuel subsidies, and recognizing the need to support a just transition. Elemental is proud to back many companies that are developing technologies that will be critical to meet this commitment. BlocPower, for instance, is developing scalable solutions to help electrify our built environment and Dimensional Energy is working to replace fossil-fuel based jet fuel with a clean alternative.
2. Methane: 105 world leaders signed onto the Global Methane Pledge, a US and EU joint initiative to cut methane emissions by 30% by 2030. There are a variety of different sources of methane emissions and many solutions will be needed to curb those emissions. Elemental is excited for the growing demand this will create for Blue Ocean Barns, a company that is curbing methane emissions from the agricultural sector with a seaweed based feed product for livestock. In addition, companies like Full Harvest and Goodr are working to eliminate food waste — which is a major contributor to methane emissions — on farms and in landfills.
3. Deforestation: 100 countries representing 85% of the world’s forests pledged to end deforestation. The pledge has $19B in financing committed from companies, philanthropy, and 12 countries to help achieve this goal by the end of the decade. This ambitious pledge will require clear planning and measurement tools. Thankfully, there are many great technologies already on the market. Vibrant Planet, for example, is building cloud-based technology to help policymakers track and manage forest resources. The pledge will also require creative reforestation solutions like the one DroneSeed has built, which uses drone swarms to rapidly reforest regions after wildfires.
4. Electric vehicles: 30+ nations and 50+ auto companies, fleet operators, and investors made a nonbinding commitment for all car and van sales to be zero-emissions globally by 2040, and by 2035 in “leading markets.” Although some of the world’s biggest automakers and the governments of the United States, China, and Japan (which are three of the largest car markets) abstained from the pledge, we expect momentum to grow significantly for EVs and we’re excited to see the demand it will drive for Elemental companies like ChargerHelp and Xos Trucks.
The climate technology sector will certainly be key in achieving the ambitious goals coming out of COP26 and is necessarily poised for major growth. Accordingly, we can expect to see significant growth in “green jobs” created by the climate technology sector as the countries signed on to the above pledges ramp up on implementation. Simply put, climate action creates jobs.
Coalitions launched that will drive climate tech innovation
As Prime Minister of Barbados Mia Mottley noted in her powerful speech, many countries have made pledges that are dependent on the deployment of technologies that do not exist yet. She called this “at best reckless and at worst dangerous.” Her words underscore the need for emerging climate technologies to become reality as soon as possible which will require continued investment in climate innovation.
We are encouraged to see the following coalitions launched at COP26 to help spark continued climate technology innovation.
- Carbon Negative Shot is a U.S. Department of Energy–backed research effort to bring the cost of carbon removal below $100 a ton by 2030.
- First Movers Coalition is a public-private partnership committing large companies to make purchasing commitments for emerging cleantech.
- Glasgow Financial Alliance for Net Zero is a private-sector alliance of investors and banks with $130 trillion committed to transform the economy to net zero emissions.
- Green Hydrogen Catapult is a major corporate pledge to build 25 gigawatts of green-hydrogen production capacity by 2026.
- Net Zero World is a US Department of Energy initiative that commits the DOE to partnering with a growing list of philanthropies think tanks, businesses, and universities including Breakthrough Energy, the Global Energy Alliance for People and Planet, Lynne and Marc Benioff, and Bloomberg Philanthropies to help a range of countries create technology innovation roadmaps to implement climate ambition pledges and attract the billions of dollars in private capital needed for global clean energy transformation.
What needs to happen next
While we are energized by the momentum and opportunity created by the pledges, coalitions, and commitments announced at COP26, we recognize that we are still far from a clear pathway to equitable decarbonization in line with our 1.5 degree target. According to analysis by the International Energy Agency, even if we collectively meet all of the pledges and commitments made at COP26 we are still on track to 1.8 degrees C of warming.
It is essential that clear data and reporting standards emerge to drive accountability for the pledges that have been made. This is especially true in light of the recent Washington Post investigation that revealed that countries are using substantially different methodologies to measure and account for their carbon emissions. Clear tracking will be essential to ensure that we actually decarbonize in line with the pledges that have been made at COP26.
It is also essential to continue conversations about ensuring that climate action happens equitably. Wealthy, industrialized nations largely responsible for the climate crisis can and should financially support the decarbonization efforts of less wealthy nations, many of which are most likely to face significant climate impacts in the near term and have contributed the least to this problem.
Despite the many conversations on this topic over the course of COP26, no conclusions were reached on loss and damage financing, and the $100B a year goal on climate finance has been left unmet. Despite these critical gaps, climate tech startups are paving the way here, as we hope to see more partnerships like the one recently launched by Elemental portfolio company Jupiter and Rockefeller Foundation Resilience Center to deliver free granular-level heat risk data to frontline communities that are facing immediate climate impacts such as Sierra Leone, Athens, and Miami.
As we move from talk to action we’ll need collaboration across the entire innovation ecosystem, from investors, to entrepreneurs, to large corporates, to philanthropists, to public policy makers, to consumers — we all have a role to play in ensuring we meet the commitments made at COP26 and continue to take bold action to put us on a track to avoid the worst climate-related impacts.