President Biden has won quite a few fans in the climate tech sector during his time in office.
On his first day as president, he made a commitment to haul the US back into the Paris Agreement, the international treaty dedicated to curbing global warming.
Since then, his administration has introduced numerous policies, most notably the $369 billion Inflation Reduction Act (IRA), that have placed startups tackling the climate crisis in high demand.
Founders, investors, and stakeholders will all be paying close attention to the US presidential election in November, but many believe that support will continue even if a new president is elected.
“We’re expecting a season of headlines in the US,” Sierra Peterson, a co-founder of Voyager Ventures and former climate policymaker, told Business Insider.
“But fundamentally, not much will change in actual deployments of decarbonisation technology and the retooling of the US economy to be more robust, particularly against geopolitical threats.”
Legislation such as the IRA, the Bipartisan Infrastructure Law, and the CHIPS and Science Act has unleashed massive quantities of cash, boosting climate tech innovation and uptake.
There are significant economic reasons for a new administration to continue supporting these regulations, which go beyond addressing the climate catastrophe. Stakeholders reported that the legislation had helped create jobs, strengthen supply chains, and promote independence.
However, the implementation of policies and initiatives may take longer than expected. According to Katie Hoffman, partner at venture capital company Regeneration VC and senior fellow at bipartisan think tank The Future US, agencies implementing them may see turnover and different implementation mandates.
“We know that the legislation has been passed and will remain, and it’s now about how it is implemented,” she told reporters.
Many climate projects have bipartisan support
Battery facilities, carbon removal, computer chips, and key material mining all have bipartisan backing.
“We know that many red states and states that might even go for Trump are going to be the beneficiaries of the implementation of these bills, bringing manufacturing to the Dakotas, Nevada, and Arizona,” he said.
“Call it a green revolution, excellent jobs, or whatever. We don’t expect Trump to turn back anything that will help his base create jobs and reduce our dependency on foreign countries for goods, services, and essential minerals.
Climeworks, a European company, was attracted to the United States due to its favourable environmental legislation. The $3.5 billion Regional Direct Air Capture (DAC) Hubs programme aims to create jobs in energy-producing regions like Louisiana and North Dakota, as well as in California. Direct air capture is the process of removing CO2 directly from the atmosphere using a chemical reaction.
The Swiss company would have grown here eventually, but such policies accelerated its growth, according to Andrew Fishbein, Climeworks’ senior policy manager in the United States.
“We’re not waiting for a shoe to drop where there’s going to be some kind of apocalyptic change, because, again, there’s bipartisan support fundamentally for what we want to do,” he went on to say. The corporation is still finalising specifics with the Department of Energy for its project.
Kevin Stevens, partner at Energise Capital and head of the firm’s growth strategy, stated that significant investments have already been made in the construction of battery plants, which will aid in the deployment of additional electric vehicles. The investor backs energy software, which is often built on top of hardware assets. “Those things are in play; they’re happening,” he went on to say.
Getting money out the door
A Trump administration might prioritise employment over climate, resulting in budget cuts for climate innovation research and development at national agencies, hurting anything that does not fall under the purview of extremely clear-cut onshoring, energy, or minerals, according to Hoffman of Regeneration VC. But this is an opportunity for investors, she continued.
“We’ve seen so much capital flowing into climate funds that have dry powder and are prepared to make investments and maybe take on more risk if the government is not going to shoulder that,” he said.
According to Stevens of Energise Capital, nuclear or hydrogen tax credits may also come under more scrutiny.
For private enterprises and their investors, the priority is to support economically viable prospects that can flourish with or without government assistance.
For example, Regeneration VC does not include subsidies in its investment decisions or portfolio firms’ financial projections. Still, Hoffman stated that it considers the policy environment as a whole when determining potential opportunities for its enterprises.
Energise Capital’s Stevens added, “Policy can be a tailwind, but it should never be a headwind.”
Meanwhile, “it’s possible that some in Washington are motivated to get the IRA money out the door this year because of the risk of administrative change,” says Ben Wolkon, a partner at MUUS Climate Partners who began his career in solar.
“Who knows, maybe 2024 is going to be a banner year for climate technology,” he told the crowd.