Historically, climate and environmental investing have focused primarily on clean energy, centering around the development and increased utilization of renewable energy. Fossil fuel consumption was identified as a driving source of pollution, and climate investing became synonymous with renewable energy efforts. While capital poured into decarbonization and transportation, the traditional consumer industries and supply chains continued, business as usual. As recent research initiatives begin to illustrate the $4.5T importance of “decoupling economic growth from natural resource consumption,” Regeneration.VC has identified an opportunity to engage and empower a key stakeholder group that has been effectively sidelined: consumers.
Today, it is difficult to ignore shifting attitudes around the clothes we buy, food we eat, and products we use. Extended producer responsibility conversations, straining global supply chains, and growing consumer awareness aligned the economic interests of three key stakeholders: manufacturers, distributors, and consumers. Among these groups lies a chance to address the 45% of greenhouse gas emissions not addressed by efforts to transition to clean energy. Born of interdisciplinary design principles that were championed two decades ago by an architect and chemist duo, the circular economy offers a framework to innovate production systems and supply chains with renewed appreciation for our natural ecosystems.
The circular economy has been around far longer than most folks recognize. The greatest designer of all time, Mother Nature, exemplifies circularity; living systems have evolved to symbiotically consume, reuse, and coexist. Product lifetime extension, sharing economies, and design for disassembly are a few example tenets of a framework that prioritizes waste reduction and resource management.
Post-Industrial Revolution, humankind has shown difficulty replicating the circular lifecycles most natural systems exhibit. Today, over 90% of materials we produce end up polluting native ecosystems; one-third of the global food supply is tossed; and fashion & textiles account for 20% of industrial water pollution. Not only do these linear economy outcomes threaten biodiversity and endanger other species, people are struggling to keep afloat in seas of our own waste and pollution. But, this is not another Doomsday story, rather a call to action. The time has come to focus our energies on cultivating circular solutions which can simultaneously close the gap for energy transitions and open the door to a next generation of products and materials.
Decades of international climate negotiations have produced several overarching standards that offer structure and common language for climate technology innovation. One of the most widely recognized is the concept of net-zero emissions.
Initially popularized by the Paris Agreement, net-zero emissions translates to minimizing the production of greenhouse gas emissions and re-absorbing the remainder. Though this concept has quickly become the face of global climate discourse, the Science Based Targets initiative (SBTi) partnership provides a more robust school of thought to inform private sector decarbonization efforts.
After reducing initial emission production, there are two main techniques for handling remaining emissions: (1) natural carbon sinks like reforestation and ocean sequestration, and (2) negative-emission technologies belonging to the carbon capture utilization & storage (“CCUS”) market. CCUS is a burgeoning space in climate tech focused on applying circular principles to curb carbon dioxide (CO2) pollution. “Carbon capture” consists of two primary techniques: “point source” and “direct air capture.” Point source refers to technologies that capture carbon at the point of emission, whereas direct air capture solutions target carbon emissions already in the atmosphere. With the emissions sequestered, there are two paths for next steps: repurpose the emissions (“utilization”) or find the emissions a permanent home (“storage”).
“Direct air capture solves a unique problem in the CO2 utilization markets because we can set up our machines at the site where the CO2 is required. This cuts out two major issues in the CO2 utilization industry: availability and cost of transportation. As a result, we can unlock the potential of CO2 as an industrial feedstock. Additionally, without massive removals of CO2 from the atmosphere, we will not come close to achieving the climate goals set by the scientific community or mitigating the worst effects of catastrophic climate change.”
- Benjamin Z Bronfman, Board Member & Founding Partner at Global Thermostat, Founder at Electric Tree
In excess, carbon dioxide is a global pollutant found in any region on Earth. Today, three main channels exist for circulating captured carbon dioxide. The first is carbon uptake. Feeding excess carbon dioxide to hyper-efficient photosynthetic organisms like algae can produce biofuels, fertilizers, and food. For example, fungal-dominant composts can rapidly consume carbon dioxide while detoxifying soil. The second option is a process called mineralization. Carbon dioxide can mineralize with alkaline reactants to produce materials like cement and other inorganic bicarbonates. Third, carbon dioxide can be chemically upcycled into new materials including biofuels, bioplastics, carbon fibers, and more.