Conversations on Policy & Funding at Climate Week NYC 2023
We at Piva are still buzzing from all the activity this year at NYC Climate Week. Not only did we connect with our climate-tech friends, old and new, but we also teamed up with the distinctive Wireframe Ventures and Overture VC to gather builders, investors, policymakers, and leading experts for a discussion on the integral tools within policy & finance that are accelerating the critical scale-up of companies on a mission to address climate change.
Over breakfast, we held a fireside chat and a panel with policy experts and leaders at the city, federal, and international levels. The discussion featured Rohit T. “Rit” Aggarwala, Deputy Commissioner, NYC Department of Environmental Protection (DEP) being interviewed by Alan Neuhauser, a climate-focused reporter with Axios. The panel, also moderated by Neuhauser, brought together Arpita Bhattacharyya, Chief Climate Officer, Loan Programs Office, Department of Energy (DOE), Simon Brandler, Vice President, Policy & Public Affairs, Brimstone; and Jake Levine, Chief Climate Officer, U.S. International Development Finance Corporation. They shared insights from their roles and organizations about what is working, what is moving too slowly, how to partner, and how to leverage new opportunities to accelerate and maximize positive impact.
Here is what we learned …
NYC is stepping up as a testbed for innovation and a pioneer for sustainable cities
Rit shed light on the environmental technology challenge, a project that is currently underway with the Partnership for New York City. This challenge aims to tap into innovative solutions from the startup ecosystem, especially those utilizing and developing sensors and smart operations. Rit emphasized the urgent need for monitoring and advanced analytics as the city’s infrastructure faces unprecedented climatic stresses.
Rit also highlighted the Transit Technology Partnership, an organization that works closely with government agencies and startups, providing pathways for effective collaboration to achieve critical objectives. Recognizing the challenge for startups in connecting with the right government entities, he announced the upcoming Office of Strategy and Innovation to make the collaboration process more efficient.
Encouraging founders and investors to view New York City as a hub of opportunity, Rit emphasized that success lies not just in technology but in effective delivery and financing.
The DOE can be a catalyst in the race to net-zero
Bhattacharyya, reflecting on the role of the DOE, underscored a monumental task at hand: mobilizing $10 trillion of investment to hit net-zero targets by 2050. With last year’s private investment tallying up to $140 billion, the gap is evident and considerable. She emphasized that the DOE’s capital acts as a catalyst, with greater momentum needed from private investments.
To facilitate a productive relationship between the government and private sector capital allocators, the DOE has initiated a two-way conversation. Part of this effort, Bhattacharyya noted, has led to the recent release of the DOE’s Commercial Liftoff Reports which provide a commercialization outlook on various emerging technologies deemed critical to the clean energy transition. For technologies such as advanced nuclear, carbon management, clean hydrogen, and long duration energy storage, the DOE has provided a perspective as to how and when these technologies could reach full-scale commercial deployment. Bhattacharyya stressed the DOE is actively seeking industry and investor involvement to make their initiatives more impactful.
Global solutions are needed to solve a global problem
On the urgency of global climate action, Levine highlighted an underappreciated forecast: a staggering 95% of GHG emissions by 2100 are projected to emanate from regions outside the U.S. as major economies like China, India, Vietnam, Indonesia, South Africa, and Brazil undergo massive demographic and economic growth.
To emphasize the scale of the challenge, Levine stressed that achieving the 1.5°C global warming target realistically requires a seven-fold increase in financing for climate-centric projects and companies
Transferring a fraction of NYC’s innovation, both in mitigation and adaptation, to these major cities world-wide could result in monumental climate benefits. However, drawing a comparison between project financing in New York City and developing nations, Levine acknowledged a stark contrast in capital costs. For instance, while a project in NYC might attract financing at 8–9% cost of capital, the same venture could cost 20–25% in countries like Nigeria or India, once factoring in foreign exchange risk and other associated costs.
Herein lies the primary mission of the Development Finance Corporation (DFC): to de-risk such overseas investments, making them more financially viable and attractive. Levine cited examples of DFC’s recent undertakings, such as a $500 million loan for Tata Power’s solar panel production facility and a $125 million financing for a graphite production unit in Mozambique. These large-scale projects, crucial for green energy transitions, are complemented by DFC’s smaller equity investments in innovative startups in regions like Rwanda and India. The panelists emphasized that while innovation hubs like New York City are making commendable strides in climate action, it is the application of such advancements on the international stage that holds the key to our net-zero future.
We are incredibly grateful to all our guest speakers, whose valuable insights sparked important conversations that have lasted far beyond breakfast. We hope to see you next year for Climate Week!
