Two gaps on the horizon: technology and finance
More than four billion euros per year. This is also the assessment of the International Energy AgencyInvest in clean energy between now and 2030 Energy transition and decarbonisation of the economy should be given the necessary impetus. The EU alone needs 1.5 trillion euros a year, twice the amount invested so far. Although the increase in investment is important (in 2022 the EU alone will spend 158 billion euros more than the previous year), it is not enough.
According to the Allianz report, the financing gap is at least 40 billion euros annually from public investment and an additional 160 billion euros from the private sector. The EU budget for the period 2021-2027 is already contemplated 578,000 million euros for green transition of the economy (32% of the total budget) should also include an increase in the national financial effort in many countries of the Union.
“The search for a greener future is held back by a complex network of climate technology barriers. For the financial sector, the barriers are that investors often exhibit a short-term view and “They avoid the uncertainty of emerging technologies.” Adds Markus Zimmer. “This short-term view adds up to a panorama where a lack of information and a poor view of future plans make it difficult to assess risks and opportunities.”
In addition to the lack of investment A critical gap at the technical level. Wind turbines or photovoltaic panels are mature and well-established technologies, but they are insufficient to achieve decarbonisation targets. The Alliance report estimates that more than 75% of emissions reductions must come from emerging technologies. To accelerate its growth, an annual investment of more than 3 billion euros is necessary in this decade and the next.
Can Venture Capital Help ‘ClimateTech’?
Venture capital and private equity investments in climate technology have increased in recent years. Investments in climate technology and cleantech startups increased from $43.3 billion in 2019 97.3 billion dollars by 2022 Of this, European startups captured 30% and American startups 35%, according to the Alliance report. However, it is still necessary to attract more capital, especially for scaling up technologies and, in particular, in highly polluting sectors.
