This piece was first published in Tech Round
Something incredible happened in Q1of 2023: venture capital investment in climate tech surpassed investment in fin tech for the very first time. This was unimaginable just two years ago, when climate tech was barely a ‘thing’. However with global heating rapidly accelerating and multiple planetary boundaries being burst, I firmly believe these investors are onto something: there will be no greater return than investing in the future of humanity.
Whilst this long overdue investor awakening is something to be celebrated, there’s unfortunately a very large elephant in the climate tech room. And it’s that the collective investment thesis appears to be to measure the problem (via carbon accounting software), finance the clean energy transition (by investing in renewables), and suck the remaining emissions out of the air (via carbon capture and storage technologies).
Whilst these are all admirable and much needed solutions, none of them address the actual root cause problem of the climate crisis: excessive consumption. Perhaps this is because to challenge consumption is to challenge the very core of our economic being and investors are not yet ready to put their money behind a concept so revolutionary.
But they must.
Last year Earth Overshoot Day — the day of the year in which humanity has consumed all the resources the earth can replenish in that year — was the 28th July. What that means is that every single thing, that every single one of us 8 billion people consumed after the 28th July last year was net net depletive to the planet. It doesn’t take a rocket scientist to figure out this is completely unsustainable. And so, any pretension that we can simply swap out the ‘carbon engine’ of our economy for a ‘renewable engine’, and mop up the excess emissions, is nothing short of delusional.
Circular is best
The reality is, like it or not, we must move from our current linear, extractive, and wasteful model of consumption, to one that is circular and resourceful. Where sharing rather than shopping, and re-use rather than rubbish are the new defaults. This transition will make the digital revolution look like a walk in the park. And like the digital revolution preceding it, there will be few parts of our daily lives that will be untouched; however, the sustainability transition will have just a handful of years to take hold, rather than decades.
And, much as it was during the digital transition, the linear economy incumbents will be faced with the prospect of having to ‘eat their own dinner’ before the startups eat it for them. This is a very real challenge because the proposition of the circular economy upstarts is a powerful one: goods are cheaper (pre-loved) or more durable (built to last and repair), making people’s lives healthier and happier through the human connections and sustainable foundations that circularity enables. A real win for the people, win for the planet, and win for the innovators.
Working on a more sustainable future
As the impacts of the climate crisis, resource depletion crisis and biodiversity crisis make themselves increasingly felt, it’s clearer than ever that we need to call time on the naive notion of endless consumption-fuelled growth on a finite planet. The transition to the circular economy will require all the ingenuity and creativity that humanity can muster, in record time; but when we get it right, the future will be very bright indeed.