To solve climate change, the innovations we need are financial

As the country and the world wait with bated breath to see how Biden’s precedent-setting infrastructure package will move forward, there were a few other developments this week in the world of fighting climate change that are worth calling attention to, which should give us some optimism — and also a very clear sense of direction.

The main thread between these is this: The innovation we need to solve the climate crisis is not so much technological but rather innovations in the world of finance.

First, the International Energy Agency, a body of international energy experts that typically err on the conservative side as far as predicting our energy future go, had somewhat of an about face this week. In their Net Zero roadmap they released last Tuesday, they said in no ambiguous terms that in order to reach net zero by 2050 and give ourselves at least a shot at limiting warming to 1.5 degrees Celsius, there would be “no need for investment in new fossil fuel supply.” That’s a pretty big statement coming from the IEA.

And in case you needed any more persuasion, how about this statement from the Vatican this week: “We know that the fossil fuels are causing the climate crisis and destroying our planet. Still, we keep on investing [in] the dirty fossil fuels,” said the head of the dicastery’s ecology and creation sector, Fr. Joshtrom Kureethadam. “It is a physical imperative that we change course, that we divest.”

OK, so we have to divest from fossil fuels. The climate movement has been screaming that for years of course, but at least the message is starting to get through.

But that begs the question: What will we use to power society in its place? 

Climate envoy John Kerry made a statement last week that said that “I am told by scientists that 50 percent of the reductions we have to make to get to net zero are going to come from technologies that we don’t yet have.” Thankfully that’s not true, and Mark Jacobson a professor of Civil Engineering at Stanford recently explained how the former Secretary of State was off the mark.

Actually, it’s very clear what we will use in the place of fossil fuels. We’ll electrify everything and power it all with clean energy, mostly solar. The EIA reports “In our pathway to net zero, almost 90% of global electricity generation in 2050 comes from renewable sources, with solar PV and wind together accounting for nearly 70%.”

But there was something else in the EIA report that caught my attention and perhaps deserves a bit more of all of our attention — how much investment in clean energy is needed. Take a look at this graph. The amount of money that was spent on clean energy in the last four years will need to be quadrupled in 2030 and again in 2050. 

That’s no small feat. Especially when the investment world has been timid at best on clean energy over the last decade, although thankfully that’s starting to change.

In part, it’s changing because solar and wind energy are now the cheapest forms of energy in history. Last year, 80 percent of all new energy capacity built around the world was renewable. That means that markets are already responding to the new reality of cheap renewables.

Companies also see the writing on the wall and are making moves to be at the forefront of the changing energy landscape. Ford released it’s all electric Ford F-150 pickup truck this week and had 20,000 reservations in 12 hours. Not only that, but they partnered with the country’s largest residential solar installer SunRun to provide an electric charger that doubles as backup power source for your home.

Leading American automakers partnering with leading American solar companies to offer innovative cleantech products that are flying off the shelf, is exactly the type of trend we want to see. Investors, too.

But in addition to the clean energy investment carrot, thankfully there are also some anti-fossil fuel sticks moving in our favor.

First, and this isn’t news, but needs to be repeated, we owe a tremendous debt of gratitude to the divestment movement that was started by grassroots climate organization 350.org that spurred college students, faith communities and civic groups across the world to petition their universities, institutions and governing bodies to divest from fossil fuels over the past decade. The movement was so successful that nearly $15 Trillion of endowments, pensions and investment funds have been pulled out of the fossil fuel industry. That’s the power of organizing. 

Thankfully, the concept is catching on and government leaders are starting to follow suit. The G7 countries announced this week that they will stop funding all new coal projects this year and will begin a phase out of all fossil fuel investments. That’s amazing. 

And for those that fear Biden’s climate goals will wind up on the cutting room floor of Congress, fear not. He’s not waiting around for Sen. Joe Manchin (D-W.Va.) on his climate plan that, if passed as originally constructed would be the most significant climate change legislation we’ve ever seen.

The White House issued an executive order this week that requires every branch of government to assess the climate-related financial risk of all their actions. If implemented well, that means that we could see a lot of money flowing in new, cleaner directions very soon. But that’s not a certainty. We need to continue to develop innovative financial products that allow Americans to acquire these technologies easily, policies and incentives that spur investment in the sector and mechanisms that de-risk those investments.

While we’re on the subject of helping capital flow faster into climate solutions, allow me to touch on one other important piece of the equation. Philanthropy. As The Hill reported last week, only 2 percent of all philanthropic dollars in 2019 went to climate change mitigation. Seriously, only 2 percent? Most of us tip servers 20 percent even if the service was lousy. But when it comes to solving the most pressing global problem we’ve ever faced, the most we can scrape together is 2 percent of our collective generosity? Not a great look.

Consider this: Whatever issues the other 98 percent of philanthropy is working to solve — from disease eradication, to poverty alleviation, to reducing hunger — all of the world’s problems will get significantly worse if climate change is left unabated. And the window of time we have to solve the climate crisis is closing fast. There are so many amazing clean energy and climate justice organizations, on both sides of the aisle, working on the front lines of a just energy transition that can use our support.

The bottom line is: We have all the technology we need to solve the climate crisis. And if we implement them fast enough, it’ll save us tons of money on our energy bills, create millions of jobs, prevent millions of premature deaths each year from air pollution, and save our planet from impending doom. But it’s going to take a lot of money flowing in new directions very quickly. And that means we need to get very creative very quickly about how to make that happen in the United States and around the world.

Andreas Karelas is the founder and executive director of RE-volv, a nonprofit clean energy advocacy organization that helps fellow nonprofits across the country go solar. He’s also the author of the book “Climate Courage: How Solving Climate Change Can Build Community, Transform the Economy, and Bridge the Political Divide in America” published by Beacon Press. Follow him on Twitter: @AndreasKarelas.