We all know that in order to make the transition towards a more sustainable climate, we require a communal effort from the private and public sectors. Recent research from the Centre for Climate Finance & Investment (CCFI) drives home the need for closer collaborations between the two areas. As the global community struggles to inch closer towards the net zero transition, it is important to for all parties to create a forum where productive, meaningful, and cross-industry discussions can take place.
Innovation Zero is a two-day Clean Tech Congress held at Olympia from 23-24th May 2023. It was launched and endorsed by Prime Minister Rishi Sunak and chaired by the Rt. Hon Dr Liam Fox MP, partnered with the UK Government. The Congress’ motives are to connect leaders across industries such as energy, transport, industrials, finance, and the built environment, to accelerate the low carbon transformation.
Last Thursday, Dr Raúl Rosales, Senior Executive Fellow of the CCFI, participated in a roundtable discussion on Carbon Markets and Carbon Offset Strategies at the clean tech congress. The panel included:
- Michelle You, Co-Founder & CEO of Supercritical
- Jennifer Sullo, Managing Director of Asset Management and Investing Solutions of Earth Finance,
- Mireille Meneses, Senior Consultant & Carbon Markets Specialist of Ecoact,
- Kalyani Inampudi, Independent ESG and Carbon Consultant,
- Dr Raúl C. Rosales, Senior Executive Fellow, CCFI
During the session, Dr Rosales emphasised the importance of carbon offsetting strategies and addressed the challenges of regulating and measuring the efficiency of projects classified in the carbon markets. He highlighted the need for due diligence and project verification to avoid greenwashing. The discussion also touched on the potential use of blockchain technology to enhance transparency and integrity in the carbon markets.
Supporting the net zero transition
To ensure transparency, liquidity, and compliance with investors' requirements, carbon trading needs to accelerate its upscale of market infrastructure and regulations. The London Stock Exchange's involvement in carbon offset shares is a successful first initiative example of mapping carbon credits to traditional capital markets. However, challenges within the carbon market space still exist. These include, but are not limited to, lack of data, limitations in technology, and the difficulty of measuring carbon credits in certain areas like biodiversity projects.
Several seminar programmes were held during the Congress, tapping into the challenges and possibilities of unlocking the necessary $3 trillion annual investment that would be required to reach net zero. Various topics related to nature, climate estimates, and the transition to a low-carbon economy were touched on. These topics included the up-scaling of low-carbon assets such as renewable energy sources, sustainable aviation fuels, zero-emissions ships, and zero-emissions trucks.
The development of renewable electricity generation, carbon capture and storage (CCS) technologies, and biomass plants are crucial components of the transition of energy infrastructure. From the financing lens, the venture capital sector plays a significant role in mitigating and decarbonising various sectors including energy, transportation, and the built environment. The Congress discussions also emphasised a need to support climate transition projects beyond traditional venture capital and private equity. Opportunities for this support include venture debt, grants, project finance, and other funding mechanisms.
The Congress’ seminars in the finance space highlighted the risks, opportunities, and pathways to speed- and scale-up investments required to achieve net zero emissions. The event underlined the importance of policy measures, financial innovations, and transparent market infrastructure to mobilise the necessary capital for a successful energy transition. Speakers encouraged the need to act immediately and not wait for perfect solutions. Carbon credits should be seen as a management tool, rather than a speculative tool that calls for policies like carbon taxes to drive emissions reductions in heavy industries.
The next Innovation Zero event will take place 30 April – 1 May 2024.
Authored by Jean Sau, CCFI Intern and Research Assistant. Published 1 June, 2023.