A few days ago I wrote about Climate Tech and why it makes sense for anyone interested in tech and the future of humanity to focus on it.
Looking deeper at the PwC report referenced in that earlier blog post, it’s interesting to note that in addition to the five “traditional” challenge areas of Climate Tech, the authors have added two “horizontal” challenge areas, reflecting themes with significant potential for sector-agnostic solutions to emissions reduction.
Just to be clear, the five traditional key sectors, which contribute the majority of greenhouse gas (GHG) emissions, are:
Energy
Mobility and Transport
Food, Agriculture and Land Use
Heavy Industry
Built Environment
The two new horizontal sector-agnostic areas introduced in the PwC report are:
GHG Capture and Storage
Climate and Earth Data Generation
GHG Capture and Storage includes, according the PwC report, sub-areas like Carbon capture, utilisation and storage (CCUS), Biomass uptake of CO2 (excluding afforestation and land management), Geo-engineering based direct air capture and storage, and GHG monitoring and management platforms.
When it comes to CCUS specifically, Wikipedia defines it as follows:
The process of capturing waste carbon dioxide (CO2), transporting it to a storage site, and depositing it where it will not enter the atmosphere. Usually the CO2 is captured from large point sources, such as a cement factory or biomass power plant, and normally it is stored in an underground geological formation. The aim is to prevent the release of large quantities of CO2 into the atmosphere from heavy industry, and so help to limit climate change.
The PwC report doesn’t say much about Climate and Earth Data Generation, except that it could also include data provided by Low-GHG satellites and sensors. I would assume, however, that in addition to utilizing space technology to obtain climate data, there are many other types of sensors and data sources that can provide us valuable insights on GHG emissions and the effect of our countermeasures.
In any case, I find the categorization of Climate Tech into these 5+2 challenge areas useful. They are helpful when looking at the different technologies and ventures in the Climate Tech space, and they also give insight into investor activities.
For example, when looking at Venture Capital investments in Climate Tech between 2013 and 2019, you’ll see that Mobility and Transport has accounted for a lion’s share of investments, both when it comes to number of deals and amount invested. One would assume and hope that the distribution becomes more evenly spread across the seven challenge areas in the future.
On an aggregate level, as the PwC report notes, “investments in Climate Tech has grown at almost five times the rate of the overall global venture capital market”. Again, one would assume – and most certainly hope – that this trend continues.