By Anna Ren | September 15, 2024
I’ve often wondered if we’re asking the right questions as we seek environmental solutions. In the rush to win the next big contract or RFP, or to secure investor funding, it’s easy to become captivated with the latest advancements — AI, big data, cutting-edge technologies that promise to solve our biggest challenges. But are we getting lost in the novelty, forgetting to pause and ask: What is the problem we’re truly trying to solve?
And what does it take for us to even recognize when the answer might lie not in more complex technology, but in simpler, more thoughtful approaches — ones that prioritize policy, planning, and a deep understanding of the issues at hand?
The very action of doubting and pausing embodies the humanity that transcends technology and innovation. It’s a crisis of meaning — a deep, gnawing uncertainty. The paradox of progress is that as we inch closer to solving the mysteries, we may be drifting further from the truths that ground us.
The Green Hype
The climate-tech sector is attracting massive investment; yet, beneath the green veneer, these technologies carry substantial environmental costs.
Photovoltaic (PV) solar panels are often touted as a clean alternative to fossil fuels, but their production and disposal tell a different story. Research in Nature Communications by Louwen et al. (2016) reveals that the manufacturing process, especially in its early stages, involves energy-intensive silicon mining and refining, resulting in habitat destruction and pollution. Disposal presents further risks, including the leaching of toxic chemicals. While technological improvements have reduced these impacts over time, the initial environmental toll was steep.
Blockchain, particularly in cryptocurrencies like Bitcoin, is also seen as a tool for boosting transparency in climate initiatives. However, its reliance on energy-hungry proof-of-work algorithms is a major concern. A study in Nature Climate Change suggests that if Bitcoin adoption mirrors other widespread technologies, its carbon footprint could be large enough to jeopardize global temperature goals set by the Paris Agreement.
Recently, there was a false alarm regarding the presence of harmful algal blooms (HABs) in Lake Tahoe. Although these blooms were not detected, the warning is a reminder of the environmental challenges facing bodies of water across the United States. Other areas are not so fortunate, with increasing reports of deadly bacteria and HABs threatening ecosystems and tourism. This growing issue is a clear reminder of why we must stay vigilant and take proactive steps to safeguard the cherished retreat like Lake Tahoe.
Once again, the integration of AI, IoT, and big data is revolutionizing environmental monitoring. IBM’s Watson AI, used in the Lake George project, collects extensive data to predict harmful algal blooms. Similarly, Google Earth Engine (GEE) leverages satellite imagery and geospatial data for real-time environmental analysis. In Hong Kong, GEE's use of artificial neural networks provides accurate water quality mapping, highlighting its potential for managing complex ecosystems like Lake Tahoe.
GEE provides real-time satellite insights for Lake Tahoe, a freshwater lake in the Sierra Nevada Mountains
Furthermore, telecommunications are playing a role too. Verizon’s 5G-enabled IoT technology enables real-time tracking of water quality metrics, facilitating immediate interventions. Xylem’s Aquatalk IoT platform, through continuous monitoring, allows for data-driven water management practices, reducing environmental risks.
The drive for sustainable and regulatory-compliant solutions is also pushing venture capitalists and private equity firms to invest heavily in companies at the forefront of these innovations. Venture capital investments in environmental technology, including platforms like GEE, have surged by 37% year-over-year, reaching $44.1B in venture funding 2023.
In this context, Clean Energy Ventures (CEV) invested in Aquatic Informatics, a company specializing in sophisticated software for water data management, crucial for real-time lake monitoring. Similarly, HG Ventures, through its backing of 120Water, is targeting water quality management, underscoring the trend toward tech-driven solutions in addressing environmental challenges. The data also highlights the concentration of capital in mega-funds, with larger funds exceeding $1 billion accounting for nearly 70% of total environmental tech VC fundraising in 2022. This suggests that while the market is growing, a significant portion of capital is being directed toward a few large players, reflecting both the opportunities and challenges in scaling environmental technology solutions.
Scalability vs. Sustainability
PitchBook highlights a 14.5% drop in climate tech VC investments in 2023, which a stark contrast to the record $51 billion invested in 2021. While this decline could be attributed to macroeconomic factors such as rising interest rates and lower overall VC fundraising activity, it also raises critical questions about the sustainability of VC strategies in climate tech. As low-carbon mobility and solar photovoltaic technologies dominate the investment landscape, with $5.4 billion going into solar alone, it begs the question: are VCs chasing scalability at the expense of real, measurable environmental progress?
For example, solar PV technologies remain a main renewable energy solutions, and VCs are attracted by their ability to scale across markets. However, the environmental costs of their production and disposal, as outlined in earlier research, pose a significant challenge that is often underrepresented in investment theses. VCs need to evaluate whether these technologies are as “green” as they claim, especially when large-scale adoption may exacerbate these hidden costs, leading to longer-term environmental risks that contradict the very purpose of climate tech investments.
The Disconnect: Market appetite vs. Environmental reality
One of the driving forces behind this surge in climate tech investment is regulation and policy. Government incentives, like the Inflation Reduction Act (IRA) in the U.S., have been core drivers of capital allocation. However, the reliance on regulatory support creates a double-edged sword for VCs. While policies provide the necessary financial cushion for scaling clean technologies, they also skew investment priorities towards sectors that may benefit from subsidies or compliance mandates rather than those offering long-term sustainability.
For instance, carbon capture and hydrogen technologies have seen substantial investment thanks to these policy supports, but they may not always represent the most economically viable or environmentally sound choices in the absence of incentives. This raises a critical point: how sustainable are these investments in the long run, especially if regulatory environments shift or consumer preferences evolve?
Overemphasis on Mitigation Over Adaptation
The PitchBook report also shows that the largest deals continue to flow into sectors like low-carbon mobility and grid infrastructure, with low-carbon mobility alone raising $8.9 billion across 335 deals in 2023. Yet, the focus on climate mitigation—technologies aimed at reducing greenhouse gas emissions—seems to overshadow equally important adaptation solutions, which help communities and ecosystems adjust to the impacts of climate change already in motion.
Adaptation technologies, such as innovations in water management, land use, or disaster resilience, often receive far less funding. This is reflected in the fact that the land use category, which includes essential adaptation strategies like emissions monitoring from non-industrial land, only raised $1.57 billion across 140 deals. This disparity emphasizes a crucial gap in the climate tech investment thesis: without adequate focus on adaptation solutions, we risk prioritizing technologies that mitigate emissions in the short term but fail to address the long-term challenges of climate resilience.
The rightness of solutions
As I pondered these questions, I found myself in a thought-provoking conversation with a friend who’s currently pursuing her PhD in environmental planning at UC Berkeley. Ultimately, we found ourselves grappling with the concept of the rightness of solutions.
It’s not always straightforward to know when a solution is truly ‘right,’ because our understanding of solutions is often limited by our knowledge of the problems. How do we ensure we are not just solving a problem but solving the right problem?
“You know enough to know this is right, but you don’t know enough to know when you are wrong.”
Counterfactual thinking offers some insights, yet it also exposes the limits of our foresight, especially in speculative futures within environmental tech — there seems to be no way to truly evaluate what might happen if we chose different approaches. There are so many potential pitfalls in relying too heavily on big tech, as well as potential missed opportunities if we do not.
And so, we arrive at the question of localization. The “rightness” of a solution likely lies in how well it meets the specific needs of a community, region, or demographic. A solution that seems right in one context may fail in another due to differences in geography, culture, infrastructure, or social dynamics. (Which, of course, leads us down the rabbit hole of verification — where determining if our solutions truly work or just look good on paper becomes an entire field of study in itself.)
This, in turn, leads us to another layer of complexity: environmental technology must address the Triple Bottom Line — balancing economic, environmental, and social impacts. Solutions must meet multiple criteria that can often be at odds with one another.
It seems as though rightness is an elusive goal, almost beyond our reach.
I sought to understand how she interprets the signs that our pursuit is grounded in moral or logical integrity, even if certainty is out of reach. After a thoughtful pause, she suggested that true expertise might be less about claiming what is right but more about recognizing the limits of our knowledge and the risks of rigid thinking. It’s about understanding to what extent a solution works and how it might falter under different circumstances.
In the end, perhaps rightness is but a fleeting moment of alignment between intention and outcome. It is not the permanence of our solutions that defines their value, but the depth of our awareness and the grace with which we accept the ever-changing landscape of truth.
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