The world is failing to get to grips with the climate crisis and Mother Nature’s alarm bells have never been louder, even for those in denial.
2023 was a major setback, temperatures once again broke records and extreme weather devastated homes and businesses. For anyone building or investing in businesses in the UK’s emerging climate tech sector there has never been a greater sense of urgency.
This week our Chancellor will make his Autumn statement and highlight this Government’s ambitions, particularly around growth and the economy. Then world leaders will head to Dubai for the UN’s COP28 meeting, where scientists and activists will try to refocus the world’s attention on the challenge facing us all.
The UK has an opportunity here to show leadership on a global stage. As founders and investors committed to investing in businesses focused on solving our climate problems, we urge this government to take back the initiative that it sadly squandered in September by watering down UK’s policies for achieving Net Zero.
In delaying the ban on sales of cars using fossil fuels and gas boilers, and in backing continuing fossil fuel use by awarding oil and gas licences for the North Sea annually, the government is displaying astonishing political short-termism. The long-term commitment to Net Zero may be unchanged but the loosening of mid-term goals creates unnecessary uncertainty and damages credibility.
The moves sent shockwaves through the UK’s emerging climate tech sector, which encompasses everything from companies discovering new battery technology to ESG intelligence platforms that are helping landlords reduce their carbon impact.
With the EU and the US making hundreds of billions of euros and dollars available to fund their economies’ energy transition, the UK will probably fall behind the curve both in decarbonising our cities and in attracting the capital needed to scale green energy.
Inevitably, these policy setbacks will also fail to help ordinary householders. Delaying the adoption of heat pumps and electric cars will leave UK voters subject to volatile energy prices for longer than people in Western Europe. Just the opposite effect of what was intended.
The UK has already achieved much progress in this area: between 2019 and 2020, there was a doubling of investment in climate tech, driven by interest in energy and clean transport. Last year, we hit a new record for climate tech investment of £2.8 billion and in 2023, London looks set to be the leading city in the world for attracting climate tech investment. It’s no coincidence that these money flows ramped up four years ago, as the UK codified its commitment to reach Net Zero greenhouse gas emissions by 2050.
With the EU and the US making hundreds of billions of euros and dollars available to fund their economies’ energy transition, the UK will probably fall behind the curve
As investors in technology focused on reducing the impact of our built world - which contributes 37% of global emissions - we want to see a more collaborative approach between the government and the private sector.
We want to see the Chancellor this week propose an economic plan that prioritises green investment - as we have seen in the US and the EU - addressing current barriers to growth, including finance and skills.
We stand ready to work with the government and set out specific measures to leverage the power of innovation and technology to take real action on climate. We urgently need to get back on the same agenda because as things stand, 45% of UK businesses expect to miss their 2030 decarbonisation targets.
Watering down the country’s climate commitments at this time also risks sacrificing hard-won credibility on a global stage that has been crucial to instilling business confidence and making the UK an attractive location for green investments.
Climate negotiations at COP28 will of course be difficult, but the UK government should not lose sight of the longer-term opportunity to lead a global industry focused on carbon removal, energy transition and building better infrastructure.
Investing in climate tech isn’t just the right thing to do. Done well, it can be a powerful lever to turbocharge our economy, create jobs and offer a great return on investment. Losing sight of this goal would be a misstep, at a time when we need to be doing everything we can to build a better world and invest in the innovation that can help us do that.
Gregory Dewerpe is founder and CIO of A/O
