COP29: Innovation, not funding, is key

Climate finance has been a key focus for world leaders at the COP29 Summit, which took place from November 11 to November 24 in Baku, Azerbaijan.

- ARPIT AGARWAL

In his opening remarks, UN Secretary-General António Guterres said, "The world must pay up, or humanity will pay the price...climate finance is not charity, it's an investment."

A bold and ambitious statement. The end goal is to support developing countries to effectively cut down on greenhouse gas emissions and protect their people from drastic impacts of climate change.

By the end of the summit, a climate finance goal was set, with an annual target of $300 billion. By doing so, there's an attempt to make climate change a very large global opportunity for the Global North to make money by "investing" in the Global South, broadening the appeal of climate action from a limited set of "crusaders" to "businessmen"—classic capitalism in action.

They are, however, missing a key point—that there are currently few new and scaled-up technology solutions to mitigate climate change to the extent required. Without these, finance could lead to suboptimal returns. It is unfortunate, therefore, that the conversation around innovation is only happening in small circles and has not yet taken centre stage. Is this because scaling up innovation is inherently a slow and risky process?

Maximum innovation for maximum impact

As a venture capitalist, I've listened to hundreds of pitches, and have only invested in a handful, knowing full well that deploying capital can only be effective at scaling outcomes if it backs an innovative offering with a viable business model.