Thomas Leurent, the CEO of the energy-tech firm Akselos, provides feedback on the climate change debate at the World Economic Forum in Davos.
In 2019, Greta Thunberg was a relative unknown when she spoke at Davos. A year later, she has global recognition and has become a figurehead for those sounding the alarm about the global climate crisis.
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But this year she was just one of many voices trying to galvanise action to save our planet, and together these voices very much meant that Davos 2020 felt like a climate change conference. If you looked closely enough, you’d have seen a significant geopolitical sea change. Europe is poised to seize the opportunity to become the global leader on climate change, as it partners with the global tech community to address the greatest challenge of our time.
Follow the leader
The intention was clear even before the conference began, with the European Commission announcing its Just Transition Fund (JTF) which aims to raise and organise capital worth €100 billion. The money will target carbon-intensive regions and industries across Europe, helping them to migrate towards greener industries while retaining economic prosperity. The European Union’s goal will be to unleash a wave of innovation similar to that created by DARPA and other US Government agencies in the post-war period.
More broadly, the feeling from a number of sessions is that the EU is looking to use its leverage as a ‘regulatory superpower’ to affect global change. Although the EU itself is only responsible for 9% of global emissions, several speakers argued that because of the EU’s economic might, any new Europe-wide legislation would likely cause others to follow suit. The introduction of GDPR indeed suggests that, if the EU brings in more stringent requirements for nations and businesses, other countries could move to maintain regulatory alignment rather than force companies to navigate multiple frameworks across borders.
There was also talk about how energy firms are already looking to pre-empt new regulatory measures, with discussions focusing on initiatives such as Occidental’s ‘carbon negative oil’ (by injecting more CO2 in the Permian Basin than the oil will generate) and their investment in the carbon-negative biotech firm, Cemvita Factory. Cemvita aims to remove a gigaton of carbon from the atmosphere over the next decade. And, while challenges remain about how to scale such technology, it offers a snapshot of the type of green investments energy companies are already making, as well as the type of innovation the EU is looking to encourage with the JTF.
Looking for America
The primary reason that the EU is looking to take on the role of global climate leader is that the US federal government has abdicated its position and has instead chosen to direct its focus on strengthening its economy at all costs. While several US states and municipalities remain committed to meeting their obligations under the Paris Climate Agreement, there is a substantial void at the federal level.
However, that isn’t to say that the US doesn’t retain a vital role in the fight against climate change. Despite the European Commission’s JTF announcement, the US private sector is still the best option for green tech investment. In 2019, US funding for green tech was ten times that of the biggest European nation, and we should expect to see American VCs play a critical role in helping grow and scale companies with vital green innovations.
The mood in Davos was focused on a single topic like never before, with the pressure to act on carbon emissions higher than ever before.
This will result in action from all corners of our economy; but in the energy sector, those slowest to act will be found out all the quicker ” making proactivity something of an asset all of its own.
About Thomas Leurent
Thomas Leurent is the CEO and co-founder of Predictive Digital Twin pioneer, Akselos. He’s based in the company’s global headquarters in Lausanne, Switzerland. An MIT alumnus, Thomas has spent the past seven years building Akselos into the digital transformation disruptor that it is today. The company has operations in Europe, the US, and Southeast Asia. Akselos’ most recent funding round involved Shell Ventures and Innogy Ventures.
