Climate Change - Evidence, Attribution, Projections and Remedies

Narrative

The most consistent signal from VC and analyst coverage in 2024 and 2025 is a two-speed market: overall climate tech venture funding contracted sharply while a small set of sectors, chiefly grid technology, nuclear, and direct air capture, attracted disproportionate capital. CB Insights' State of Climate Tech 2024 report recorded a 40 per cent year-on-year decline in global climate tech funding, with mega-rounds down 47 per cent and EV tech deal activity falling 61 per cent to its lowest level since 2020. Sightline Climate's H1 2025 data confirmed the contraction continued, with $13.2 billion deployed across 653 deals, down 19 per cent from the same period in 2024, and seed funding off 26 per cent. The CDR.fyi 2026 investment landscape report put total private capital in carbon dioxide removal companies at approximately $3.6 billion between 2021 and 2025, peaking in 2023 before declining, with DACCS dominating both deal count and dollar allocation throughout the period.

McKinsey's Global Energy Perspective 2024, redesigned around three bottom-up transition scenarios, concluded that CO2 emissions from combustion and industrial processes are projected to increase until around 2025 before beginning to decline, yet 2050 emissions remain meaningfully above net-zero targets across all modelled pathways. The same report characterised the anticipated end-of-decade fossil fuel peak as a "plateau" rather than a true peak, noting that the global carbon price is currently too low to drive the decarbonisation required under faster scenarios. McKinsey's January 2026 tracking article, drawing on the Global Energy Perspective 2025, found that despite a decade of commitments, global emissions have risen 9 per cent since 2015, and today less than 15 per cent of the low-emissions technologies required for Paris-aligned 2050 targets have been deployed. McKinsey Global Institute's December 2025 adaptation report estimated that at 2°C warming the world would need to spend $1.2 trillion annually to protect all people exposed to climate hazards at developed-economy standards.

Bain's 2025 CEO Sustainability Guide, a suite of practitioner-facing reports published in September 2025, documented a shift from climate ambition to adaptation reality across corporate boardrooms. The firm found that only 3 per cent of all climate capital expenditure is directed toward adaptation and resilience, despite operations executives ranking physical climate resilience as their top strategic priority alongside cost reduction. Bain's carbon removal analysis noted that in 2025 purchases of durable CDR credits are projected to reach 14 million tonnes of CO2, but actual deliveries will cover fewer than half a million tonnes, illustrating a large structural gap between contracted and delivered removal. Separately, Bain's energy executive survey found that only 32 per cent of energy executives now expect to reach net zero by 2050, down from nearly 40 per cent in 2024, with 44 per cent projecting net zero will not be reached until 2070 or later.

Gartner's 2024 Hype Cycle for Environmental Sustainability mapped 38 innovations and concluded that no sustainability technology had yet reached the slope of enlightenment or plateau of productivity, signalling that the entire field remains in earlier, less validated phases of adoption. Gartner's 2024 Low-Carbon Energy Hype Cycle separately tracked hydrogen, nuclear, and grid storage technologies, noting that economic expansion and AI-driven electricity demand are simultaneously pressuring energy systems while creating new demand for low-carbon firm power. Together with the Sightline and CB Insights data, the analyst consensus by mid-2025 is that the investment thesis has shifted from green premium to green discount: energy security and climate resilience now provide the primary commercial justification, with pure mitigation plays under pressure from weaker subsidies, high interest rates, and slowing ESG institutional mandates.