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Illustration: Rebecca Zisser/Axios

Silicon Valley startup accelerator Y Combinator has thrust carbon removal startups into the spotlight, amid growing concerns over climate change.

Why it matters: Venture capital's natural appetite for funding moonshots could make it a positive force — if it overcome disappointments from last decade's failed cleantech investments.

How it started: In October, YC asked for program applications from startups and non-profits working to remove carbon dioxide from the atmosphere.

  • The "request for startups" came two weeks after a major UN report concluded that carbon removal will be needed to prevent warming from reaching a tipping point.
  • Still, the two relevant startups that participated in YC's most recent accelerator program, which concluded earlier this week, are using better known approaches — providing project verification for carbon offsetting projects and turning carbon dioxide into a fuel — than the techniques highlighted in October.

What investors are saying: "For too long, the world has ignored the scientists, inventors, organizers, and entrepreneurs who are pursuing solutions that could dramatically reduce emissions, remove carbon from the atmosphere, actively cool the planet, and save human, animal, and plant life as we know it," venture capitalist Chris Sacca told Axios via email.

  • Sacca has invested in YC program participant Pachama, which uses drones and other tech to verify carbon offsetting projects like forest restoration. Pachama co-founder and CEO Diego Sáez Gil wouldn't share details about the startup's current fundraising but hinted that investors have been receptive.
  • Prometheus co-founder and CEO Rob McGinnis, whose startup turns carbon dioxide into fuel and also participated in YC's program, says that investors he meets fall into two camps: those who are excited and can't wait to invest, and those who say it all sounds too good to be true (Prometheus says it will be able to produce a gallon of fuel for only $3 by next year).
  • And there seems to be broader market appetite: Earlier this week, Canadian company Carbon Engineering, which hopes to commercialize machines that directly capture carbon dioxide from the atmosphere, announced a record $68 million in funding.

Yes, but: There’s still some caution among some investors who don’t want to repeat the missteps of the cleantech investing boom a decade ago, which ended in a series of disappointing results.

  • “The challenge often is that, from a venture perspective, you dump $10 million to $40 million into a startup just to figure out if that works,” says Congruent Ventures managing partner Abe Yokell, a veteran cleantech investor. He also points out that carbon offsetting is still a voluntary activity in the U.S., which raises questions about how successive a marketplace like Pachama can be without regulatory changes.
  • Other investors told Axios that uncertainty about market economics in the future can make them hesitant, especially if a company’s technology is also unproven—it’s a double risk, they say.

The bottom line: "Timing is very important for a startup company," says Prometheus' McGinnis. "If I had tried to do this five years ago, I would have had the timing wrong."

Go deeper:

Go deeper

Updated 24 mins ago - Economy & Business

The next worker fight: Time off for Juneteenth

Illustration: Annelise Capossela/Axios

Who gets paid time off to celebrate Juneteenth in the years to come will be uneven and complicated, if history is any guide.

Why it matters: Corporate America hasn't grappled with a new federal holiday since Martin Luther King Jr. Day was authorized almost 40 years ago. How they responded took years to evolve.

24 mins ago - World

UN assembly condemns Myanmar military coup

Protesters make the three-finger salute as they take part in a flash mob demonstration against the military coup. Photo: AFP via Getty Images

The UN General Assembly on Friday condemned Myanmar's military coup and called for an arms embargo against the country, AP reports.

Why it matters: The rare move demonstrates widespread global opposition to Myanmar's military junta, which overthrew the country's democratically elected government and seized power on Feb. 1.

Pakistan PM will "absolutely not" allow CIA to use bases for Afghanistan operations

Pakistan will "absolutely not" allow the U.S. Central Intelligence Agency to use bases on its soil for cross-border counterterrorism missions after American forces withdraw from Afghanistan, Prime Minister Imran Khan tells "Axios on HBO" in a wide-ranging interview airing Sunday at 6 pm ET.

Why it matters: The quality of counterterrorism and intelligence capabilities in Afghanistan is a critical question facing the Biden administration as U.S. forces move closer to total withdrawal by Sept. 11.