The global carbon budget for a 66% chance of staying within 1.5C warming was maximum 500 Gt of CO2 equivalent emissions at the beginning of 2018*.
The world emits around 53Gt of CO2e per year. That means we can only continue at the current emissions rate for another 5 years. To avoid a catastrophe we need a minimum 40% cut by 2030. But it does not look like we are on track:
How do we get there? This is economically and technologically feasible, but hard to implement as all change. The Energy Transition Commision’s Keeping 1.5C Alive: Closing the Gap in the 2020s, published last month, addresses this question with a six-point plan. It focuses on significant and rapid methane emissions reduction, halting deforestation, decarbonisation of the power sector, heating sector, hard-to-abate sectors, electrification of road transport and retrofitting of old buildings. This is nothing new and those subjects have been the focus of many discussions and papers. What is still missing however is any tangible result as the world GHG emissions keep growing while COP26 has just failed to give the world an implementation plan for Keeping 1.5C alive.
Fortunately there has been more action leadership from financial and private sectors. David Blood together with Al Gore have recently launched the Just Climate fund, saying that not enough capital goes to the projects with an impact at scale. While there has been a significant growth in VC funding to climatetech in the last two years, most of the investors money go to digitech rather than capital intensive projects. While what will deliver impact at scale are exactly those types of investments: new biofuel production facilities, new green hydrogen plants and infrastructure, new carbon recycling infrastructure, new energy efficient equipment at old polluting plants. These projects do not wait for any technological innovation - it’s there. Capital is needed to bring the technologies they deploy to scale and enhance the learning curve. Companies like Fortescue Metals Group have announced ambitious plans of investment into green hydrogen, while being vocal about the associated methane emissions of blue hydrogen.
Odyssey Impact Investments upcoming Industry I Fund focuses on financing projects that will deliver tangible and quantifiable environmental impact together with return on capital. It will finance greenfield developments in equity part, attracting debt at project level, thus achieving its impact target of reduction of CO2 tonnes emitted. By doing so it will contribute to two Sustainable Development Goals: 13 - Climate action and 9 - Sustainable Industries. The Fund will be classified under Article 9 of EU SFDR regulations. Contact us for more information.