Venture capital investment into technologies aimed at combating climate change reached a record high in 2020, according to PitchBook, a private-market data firm.
Why it matters: Clean-energy technologies must increase substantially to drastically reduce greenhouse gas emissions over the next 30 years. It’s also notable that the pandemic didn’t dampen the trend.
By the numbers: The climate technology market amounts to around $2.5 trillion, per PitchBook.
- In 2020, VC deals amounted to $16.4 billion, which barely surpassed 2018’s total of $16.3 billion.
- However, 2018 saw more deals (448) compared to 2020 (416).
- As the chart shows, venture capital investments in this space started increasing significantly in 2016 and 2017, despite President Trump’s dismissal of the problem.
- For context, the overall amount of global venture capital investment in 2019 was a little more than $300 billion, per PitchBook.
How it works: PitchBook broadly defines climate technology as including energy, transportation, agriculture, buildings, industry, materials, resources and adapting to the impacts of a warming world.
The big picture: Moves by major emitting nations, such as China, Japan and the United States (under President-elect Joe Biden), to commit to aggressively cutting emissions over the next 30 years are set to drive even more investment in the coming years, the report states.
- The impacts of a warming world is also a big factor, it says.
- “Whether it be water scarcity or flash flooding, people around the world are feeling the effects of climate change more viscerally, putting their plight in greater focus and spurring governments to take the issue more seriously,” states a report PitchBook wrote on this topic last year, which was updated with complete 2020 data at Axios’ request.
Go deeper: Why clean energy isn’t enough to tackle climate change