Chris Anderson, CEO of TED, discusses the critical role of entrepreneurs in combating climate change. He argues that while governments have a role to play, the biggest impact will come from disruptive, innovative climate companies.
“Almost all of the greenhouse gas emissions happen because of something that a company does”, he argues, “and so the way to reduce them, and get rid of them, is to change what companies do.”
Anderson calculates that we need approximately 120 breakthrough climate-tech companies to achieve the necessary reduction of 12 gigatons of CO2 emissions by 2040. These companies would need to reach an average scale of about 100 megatons of emissions reduction each, he explains.
“At first glance, that’s a terrifying number”, Anderson admits. “Startup companies have to account for 12 billion tonnes of emissions annually. Is that even imaginable?”
Yes, it is, he believes – provided that enough climate companies get the startup capital they need to become big enough and make a difference. This is a challenge because many startups struggle to secure funding for unique projects. “Climate companies are capital-intensive, and it costs a lot of money to do these first-of-a-kind things”, Anderson says.
To bridge this gap, Anderson proposes a collaborative investment model that brings together early-stage and late-stage capital. “We have to figure out how to collaborate – both VCs with each other, and early-stage and late-stage capital”, he urges.
He’s optimistic this can be done because of the enormous rewards that investors can hope for when a startup makes a difference on a global scale. Investors will “potentially get a 50X return” on their money, he says, “which is vastly more than most late-stage money gets on its investments.”
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