Climate Tech 101 (Part 4): What to Build

Welcome to the final post of Climate Tech 101, where the goal is to make climate tech more approachable.

There are a handful of important concepts others have taught me that help to understand climate tech. If you're new to the space, I hope you can use it as a jumping off point to go deeper wherever excites you!

The concepts are grouped by the themes below, each taking ~5-10 minutes to read:

• Part 1: a climate change primer
• Part 2: reduce, remove, and retrofit
• Part 3: technologies that win
• Part 4: what to build (This one!)
• The Breakout List for Climate

This last post builds on the others – given the foundations we've set, what should I build?

Onward to Part 4.

Part 4: what to build

Here's a summary of what we'll cover:

• Start your idea with most impactful solutions to climate change, to focus on the largest and most plausible solutions
• Pick a problem space that you love that fits your skill set – the enormous surge of climate tech venture capital means that ideas in any sector of the economy can get funded
• Take business model inspiration (and financial incentives) from the Inflation Reduction Act (IRA), the $370B climate bill that may result in $1.7T+ of investments to make the U.S. a global clean energy superpower
• [Bonus] Actions anyone can do today to have less negative climate impact

Start with the most impactful solutions to climate change

As a great jumping off point, Project Drawdown has a stack-ranked list of solutions ranked by climate impact by 2050.

Breakthrough Energy suggests focusing on problems that can scale to 500+ megatons/year of impact (1%+ of the problem). Anything less isn't a big enough shot on goal – we still need 100 businesses of that enormous scale – and there might be a huge business there.

You do not have to get a chemistry PhD to get started! Consider problems that fit your passions and skill set, whether you want to found a startup or join one.

As a few examples, if you are a...

• Designer, you might thrive designing new systems to reduce food waste, climate resilient retrofits for homes, or creating the UX/UI of carbon accounting software
• Software engineer, you might thrive building advanced flood/fire warning systems or carbon marketplaces that depend on processing enormous amounts of satellite or LiDAR data. Plus, nearly all climate startups have a software component
• Finance or BizOps person, you might look to build new insurance products for project risk or to underwrite risk, land ownership opportunities in reforestation/afforestation, or ways of deploying the IRA incentives faster

Regardless of your background, you can find an interesting problem to solve!

It’s a great time to get into climate tech as an entrepreneur. While broader venture capital slowed down in 2022 (outside of AI), climate tech venture capital accelerated.

As a result, if you have a good idea, strong founder-market fit, and have thought through the idea maze, you can very likely get funded. Furthermore, there's lots of patient capital available at later stages.

This is true globally, too! Each region has different problems and comparative advantages – and will need different solutions for their market.

Take ideas (and incentives) from the Inflation Reduction Act

The Inflation Reduction Act (IRA) created $370B of investments into climate tech, which may balloon to trillions of dollars. That's a huge jump-start as we refactor our entire economy to be greener! Looking through the bill, you can find great ideas for what sorts of companies to build.

Top Categories of IRA Investment:

1. Renewable energy. $128B. Largest categories include wind, solar, and storage. Stated goals are to decrease CO2 and decrease electricity bills. Bill also adds new U.S. jobs/apprenticeships, minimum wage requirements, made in America mani (including components)
2. Manufacturing tax credits. $37B. Goal is to bootstrap the domestic wind turbine, solar panel, and battery component industries.
3. Nuclear. Mostly funding for existing nuclear technologies, with smaller investments in advanced nuclear, geothermal, biofuels.
4. Home electrification. $22B. Rebates and tax credits for appliances, water heaters, furnaces, stoves. Goal is to save consumers money long term, for things with high upfront costs.
5. Home efficiency. $14B. Goal is to make homes more efficient through home energy audits, home envelope improvements (e.g., windows, doors, insulation), and tax credits for eligible appliances.
6. Electric vehicle tax credits. $12B. Goal is to center American manufacturing as manufacturing requirements are U.S.-based; currently few cars qualify.
7. Other. Touches nearly every sector of the economy. Includes forest fire prevention, decarbonization of airline fuels, electrifying city buses and garbage trucks, electrifying the postal service fleet, CCS for power plants, incentives for farmers to sequester, low carbon buildings, transmission lines, EV charging stations, tribal investments, and more. There are also allocations to community groups and universities, often in the form of matching dollars or low interest loans.

You can look for more ideas from the IRA here.

[Bonus] Three actions anyone can do today to help the climate

You can start having a personal impact today, regardless of the depth of your interest level.

🌱 Casual interest

1. Read along to stay educated (my two favorite recommendations are  Climate Tech VC & Climate Draft's Weekly Digest)
2. Try green products when you see them
3. Vote for climate politicians where climate is a top 3 issue for them

🙌 Growing curiosity

1. Self-study or take a climate class (link to resources)
2. Think about joining inspiring climate tech startups (Breakout List for Climate)
3. Consider lifestyle changes (e.g., offset your emissions, electrify your home, fewer flights, eat less meat)

😍 Genuine passion

1. Start a Climate Tech startup (re-read this post!)
2. Or, join one (getting started with a climate tech jobs page)
3. Fund/support climate politicians who are serious about fusion, solar, electrification, and eliminating permitting bureaucracy

I hope you enjoyed Climate Tech 101!

Thank you to the climate tech community and the countless people who have helped me get up to speed – I hope this series helps me start to be able to pay it forward in a small way.

Thank you most to Taylor Hughes for consistently helping me edit this series, as well as all of the friends who read early drafts. I’m so grateful to have such wonderful people in my life.