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Why the discussion on cooling is heating up (even in winter)
🔥 Why the discussion on cooling is heating up (even in winter)
The cooling problem
Air cooling (aka air conditioners) is already responsible for 4% of global greenhouse gas (GHG) emissions and demand is expected to grow 3x by 2050.* To put that into context, cooling's GHG emissions are equivalent to Russia's total emissions or roughly two times as much as the aviation industry.*
These emissions come from two main sources: (1) chemicals leaking, specifically hydrofluorocarbons (HFCs), and (2) the electricity needed for air cooling.
How can we solve it?
Good examples: all governments in Southeast Asia are now developing policies requiring efficient cooling (important as new air conditioners are 2x more efficient than the market average)*; the Kigali Amendment to the Montreal Protocol says consumption and production of HFCs must go down 80% by 2047*; and the US AIM says HFCs must go down by 85% within the next 15 years.*
2) New technologies
New innovations can be 95% more energy efficient than current market standards, while also using and leaking fewer HFCs. Two exciting technologies that we've invested in are Blue Frontier (reduces energy consumption by 90%) and Transaera (increases efficiency of existing air conditioners by >25%).
3) Passive cooling strategies
Passive cooling strategies come in the form of building design, shade usage, air flows and more. A tree is the simplest example, where the temperature is 7-15°C lower than in the sun.* The University of Oregon estimates that passive cooling strategies can reduce the load on air conditioning by as much as 80%.*
What is the outlook and funding landscape?
With already significant cooling GHG emissions, demand on the rise and policies being set in place, the market for innovative cooling tech is ripe for development. However, there has been relatively little funding flowing into the sector.
I'm on the lookout for climate venture capital and private equity funds ready to invest in the next pioneering companies in this space!
Want to dive into more details? You can read my extended breakdown here.
🚀 Is climate tech ready to capitalize on its impressive year of funding?
Climate tech in 2022 saw an 89% increase in year-on-year venture capital with more than $70 billion invested from January to December.* This webinar brings together two experienced climate investors and a leading chief economist to discuss climate tech’s opportunities in 2023.
Carbon Reform is developing a carbon capture capsule that works in the air system of buildings to filter out CO2 and recycle hot/cold air. From that process, it will create limestone for carbon-neutral concrete. Azolla Ventures led its recent $3m Seed round.
Group 14 is a leading commercial manufacturer and supplier of silicon battery technology. Its $614m(!) Series C funding rounding, a top ten climate tech funding round in 2022, was supported by Lightrock.
Genera is a leading agricultural pulp and thermoformed fiber producer. In other words, they're a very cool climate-friendly consumer packaging company. Ara Partners acquired Genera and provided an additional $200m to support its expansion.
This must be one of the more shocking graphs I’ve seen in a long time. 👀
The International Monetary Fund (IMF) has calculated that global subsidies (explicit and implicit) on fossil fuels amount to a whopping $6,000 billion — that’s about 7% of the global GDP.
What are the global subsidies for clean renewable energy sources you might ask? It’s about 0.1% of the global GDP.
However, we can still right our wrongs. The IMF estimates that raising fuel prices to their fully efficient levels could reduce global fossil fuel CO2 emissions by 36% below baseline levels in 2025.
What this tells us is that by cutting fossil fuel subsidies and implementing a carbon tax (i.e. the ‘global warming costs’ are set at $60 per ton of CO2), we can make a huge difference in the fight against climate change. Imagine what we can accomplish when we invest more in clean energy solutions at the same time!
In short: With nearly 3,000 terawatt hours produced, wind and solar accounted for more than 10% of global electricity demand, according to BNEF. This is the highest contribution to global power grids renewables has ever had!
In short: Climate tipping points are thresholds, that when exceeded, can lead to large-scale and potentially irreversible changes in climate. Leading scientists tell us that we aren’t taking these threats (like methane released from permafrost) seriously enough.
In short: McKinsey explains it as a concept reflecting the infeasibility of reducing carbon emissions to zero, making us reliant on carbon removal and long-term storage to halt the progression of global warming.
In short: The Dutch government still subsidizes fossil fuels by the billions, mostly through tax breaks. A group of scientists and economists wrote an op-ed, arguing that this seriously hinders the realization of the Dutch climate goals.
In short: Almost half of European ETFs and other public market funds call themselves 'dark green', meaning they have fossil fuel or aviation companies in their portfolio. Does that sound like ensuring a positive impact or no significant harm to you?
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