2022 – Climate Tech Time Capsule

ClimateAngels | Feb 02, 2023

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Climate tech had a pivotal year in 2022, with several major events shaping the industry and the world’s response to the climate crisis.

The $370 billion Inflation Reduction Act in the US was the most comprehensive legislative action taken to address climate change.

Russia’s interactions with Ukraine disrupted Europe’s natural gas supply chain, leading to record-high energy prices and a race to secure energy supplies. However, it also led to countries realizing the importance of pivoting to renewables.

On the other hand, the US and China, two major polluters, shifted their focus from diplomacy to industrial policy in their climate war. Meanwhile, climate disasters wreaked havoc, including Hurricane Ian, heatwaves in Europe and China, and devastating floods in India’s neighbour’s home – Pakistan.

The IPCC’s sixth assessment report painted a grim picture of the future, while United Nations’ COP27 ended with limited progress. The International Energy Agency (IEA) declared that the decade of peak fossil had arrived.

The public markets took a hit, with public climate tech companies down 53% from their 2021 peak, and climate SPACs underperforming.

The SEC proposed a rule mandating climate disclosure for public companies, while California made strides in transitioning away from fossil fuels, with a ban on natural gas heaters by 2030 and a requirement for all new vehicles sold to be electric by 2035.

The First Movers Coalition strengthened public-private partnerships in industries that are hard to decarbonize, including aviation, shipping, and steel. Frontier launched a $925 million advanced market commitment to advance carbon removal technologies.

Patagonia demonstrated a new form of climate philanthropy by transferring its stock to causes fighting the climate crisis. The UK established the £800 million UK Advanced Research and Invention Agency to follow in the footsteps of the US’ ARPA.

While the push for Environmental, Social, and Governance (ESG) investing faced criticism, it was a great year for climate entrepreneurship, with $37 billion in new investable climate-dedicated dry powder across 132 new climate funds.

Wondering to Invest in Climate Tech?

The year 2022 was a mixed bag for climate tech, with progress in some areas, setbacks in others, and ongoing challenges ahead. However, the stats are in favour of climate tech since the push by international alliances and the united nations to achieve net zero by 2050. Hence, it is the right time to invest in something that is more meaningful and is here to stay with us.

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References

1. https://www.ipcc.ch/assessment-report/ar6/
2. https://en.wikipedia.org/wiki/2022_United_Nations_Climate_Change_Conference
3. https://www.iea.org/news/world-energy-outlook-2022-shows-the-global-energy-crisis-can-be-a-historic-turning-point-towards-a-cleaner-and-more-secure-future
4. https://www.sec.gov/news/press-release/2022-46
5. https://www.ncsl.org/fiscal/arpa-state-fiscal-recovery-fund-allocations
6. https://www.weforum.org/first-movers-coalition