A playbook on financing climate solutions | Nili Gilbert and David Blood
Dec 2, 2023
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Sustainable investment leaders Nili Gilbert and David Blood discuss the need for financial support in addressing climate change, along with the challenges and potential solutions. They explore the role of entrepreneurs, technology, and policy in driving the transition to a sustainable future, including the potential for sustainable aviation. The speakers emphasize the need for transformative change in industries, financial institutions, and public policy to combat climate change.
Transformational change is required in the finance sector, businesses, and public policy to effectively decarbonize the economy and allocate sufficient capital to climate solutions.
Collaboration between the finance sector, science, policy, and engineers is essential to invest in and scale up solutions for hard-to-decarbonize sectors like aviation, cement, steel, and shipping.
Deep dives
The Challenge of Financing Climate Solutions
The podcast episode delves into the slow progress of financial markets in decarbonizing the economy. According to the United Nations, $3-4 trillion annually is required to globally decarbonize the economy by 2050. While funds are being directed towards climate solutions, it is not nearly enough and is not reaching hard-to-decarbonize sectors or the global south. Transformational change is needed in the finance sector, businesses, public policy, and the way capital allocation is perceived.
The Optimistic Outlook for Financing Climate Solutions
Despite the challenges, there is reason for optimism. Over $150 trillion has been committed to achieving net zero, indicating there is enough capital for the transition. Legal barriers to allocating capital to sustainable solutions are minimal. Public policy is gradually responding to the climate crisis, such as the Inflation Reduction Act in the United States. The finance industry has a history of adapting, which can play a crucial role in addressing climate change.
Focus Areas for Financing Climate Solutions
The transition towards a low-carbon economy requires significant investment in sectors that are hard to decarbonize, such as aviation, cement, steel, and shipping. These sectors contribute almost one-third of global emissions. However, there are already solutions available, including sustainable aviation fuel produced from multiple pathways like ethanol and carbon capture. The finance sector must collaborate with science, policy, and engineers to bring these solutions to scale and invest in individual sectors to drive the transition.
Tackling climate change costs a lot of money — and the financial sector is key to getting that money flowing. In a wide-ranging conversation, sustainable investment leaders Nili Gilbert and David Blood discuss where progress is being made on climate solutions, where capital still needs to move faster and why this is an unprecedented opportunity for sustainable growth.