Climate Change | The need for new funding solutions is increasing

As the effects of climate change continue to ramp up, affecting the everyday lives of ordinary people, so too is the need for new climate solutions. Investment solutions for climate change are one of the main problems because while the pool of ideas to deal with things like carbon dioxide and other greenhouse gasses is practically endless, the money to bring those global warming solutions to life is not. The unfortunate reality is that human activity will only change en-masse if it is done in a way that makes it worth the individual while.

Climate action as a business

It is becoming increasingly clear that putting a stop to the drivers of climate change is going to require more than good intentions. Philanthropy, charities, and foundations play their role in reducing greenhouse gas emissions, but widespread, effective change will need the willingness of all people to act, not just those who feel compelled to do the right thing.

In practical terms, this means treating the climate crisis and the solutions needed to deal with it like a business. Businesses cannot succeed if they do not make money, and they cannot make money if they don’t have a good product. This reframing is the way to drive climate impact investing and stop relying on world leaders to make climate solutions mandatory.

The business incentive to adapt to climate change

By treating world climate change as a business problem, corporations can continue to operate in the traditional manner while still working towards climate resilience.

There are many potential solutions to cutting down greenhouse gases in this manner; for example, developing and manufacturing renewable energy sources so that they become a more cost-effective alternative to burning fossil fuels or coal oil. Ergo, if a utility company can produce energy more affordably by trapping the sun than burning coal, it will become in their best interests to adopt green energy. 

In this manner, tackling the sea level rise and other impacts of climate change becomes a beneficial side effect of doing business rather than something governments and businesses are reluctantly forced into facilitating.

Climate investment funds

Unfortunately, we often come back to the same problem. Businesses need ways to tackle climate change that are effective and profitable, but convincing a typical business that the research and development necessary to achieve this is worthwhile can be a stumbling block.

Funding solutions for climate change may, in the near future, mean more than the leaders of developed countries attending an occasional climate change conference, signing up to the Paris agreement, and stating they will reduce their carbon footprint over the next few decades. It could mean funding research—even research carried out by private companies—into technologies that will bring about the profitable solutions we need. 

Of course, this is not to say that things like the United Nations Framework Convention on Climate Action are pointless or that the Glasgow Climate Change Conference of October 2021 should have been abandoned, but there is a need to start looking beyond our governments for solutions to this existential threat.

The reality is that we can’t do this without private companies on board, but we can’t rely on the good nature of those companies. We can, however, rely on their obligation to their own bottom line. Climate change business risk is something that we may have to help mitigate in order to make this happen.

Funding from the private sector

It would be unfair to paint a wholly profit-driven picture of the business world. While the vast majority of businesses are, at this stage in the climate change saga, still only concerned with their profits, there are some out there who are trying to bring about the change we need.

One example of this is venture capitalist Ibrahim AlHusseini. His company, FullCycle, has been set up to invest in “market-ready climate restoration technologies”. This venture promises to be an incentive to create those market-ready technologies and is just one way in which new funding sources are being brought to the table.

Climate finance for long term security

Another aspect of climate finance is the escalating expense of not investing in ways to slow down climate change. A business may shy away from investing in ways to reduce greenhouse gases on the basis that it doesn’t help its bottom line, but this is a temporary state of affairs.

Climate change is something that we are all going to have to deal with—and many of us already are—and that applies to businesses as well. The cost of investing in the necessary technologies and research now will be far outstripped by the costs later if we don’t invest. Making businesses aware of this reality is another tool at our disposal.

Self-interests come first… for now

It would be nice if everyone was eager to do what needed to be done, but the reality of human nature is that self-interests will come first more often than not. By making the solutions we need serve those self-interests, we can start shifting the world in the direction it needs to go before it’s too late.