Managing the Risks of Moonshots Climate Tech

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New climate mitigation technologies are essential to addressing the climate crisis and ensuring a stable climate future, and philanthropists should invest in them. Given the current trajectory and speed of warming, there is little doubt that we need to move beyond proven technologies in renewable energy to pursue a range of additional solutions, from carbon removal to hydrogen power, to next generation nuclear and so on.

Philanthropists and impact investors have a crucial role to play in funding these promising but unproven emission reduction solutions. Philanthropy can take risks that governments and commercial investors, locked into political constraints or market pressures, cannot, providing seed venture capital for technologies that might otherwise never receive funding.

But just as new emissions-reducing technologies have the potential to transformative in scale and impact, they also carry significant risks and possible unintended consequences. The risks fall most acutely on Black, Brown, Indigenous and low-income communities that have historically experienced the greatest negative impacts from environmental pollution. For example, carbon capture technologies could pollute communities located near coal-fired plants, while next-generation nuclear technologies could pose dangers to communities near nuclear power plants or nuclear waste storage sites. The potential harms of some technological moonshots, for example, geoengineering to cool the atmosphere or efforts to increase the alkalinity of the oceans to allow them to absorb more carbon have a much broader impact, with possible unintended consequences that could be globally catastrophic.

How can philanthropists support the development of emerging technologies that could be crucial in stabilizing the climate, while managing their unintended consequences and harms? They must pursue a multi-layered investment strategy that challenges new technologies to understand their potential impacts, both positive and negative, and combines funding for socially responsible technologies and projects with investments in governance capacity and local community self-determination . Below are four important elements of the broader investment ecosystem that need to be put in place to mitigate the potential negative impacts of climate-related technologies.

Support technology projects and companies that are committed to harm minimization and are accountable to community stakeholders. Philanthropists may use grants, collectable grants, program investments, and endowment capital to support early-stage for-profit companies and projects that are developing promising climate mitigation technologies and furthering one or more charitable purposes. However, lenders and investors need to scrutinize companies and technology projects to understand their potential social and ecological impacts and to ensure they are accountable to the communities that they may impact.

Non-profit investment brokerage Prime Coalition and non-profit accelerator Elemental Excelerator are doing the important work of identifying, scrutinizing and supporting climate-tech companies that have potential for large-scale impact in reducing emissions and a strong commitment to social equity. For project-based investments, Elemental Excelerator has created the Square Partnerships model, a set of recommended stakeholder engagement practices, including community partnership agreements, that promote equitable project distribution.

End users of new technologies and those whose communities are impacted by the implementation of climate solutions have skills we believe are necessary for best-in-class investment decision-making, said Prime Coalition Executive Director Sarah Kearney. Without their input and, ideally, ownership in the process, decisions about the use of capital are poorly informed from the outset.

Build the capacity and power of affected communities. Michelle Martinez, director of the Tishman Center for Social Justice and the Environment at the University of Michigan, argued that in the face of an existential climate crisis, local communities should be empowered with self-determination. As she says, all people deserve a fighting chance to survive the climate crisis, but we are seeing huge disparities in the resilience of communities. For the Black, Brown, Indigenous, and low-income communities most likely to be harmed by the unintended consequences of new climate technologies, self-determination means having a say in the policies and projects that impact them, including empowering to veto projects whose harms outweigh their benefits.

To foster self-determination for frontline communities, philanthropists must get more resources for grassroots environmental justice organizations. Environmental justice groups are shockingly under-resourced, a recent study estimated that they received only 1.3% of funding from major environmental donors during a two-year period and yet they are up against powerful and wealthy industries with a disproportionate influence in state legislatures and regulatory agencies.

The Inflation Reduction Act (IRA) created an immediate opportunity to scale back the capacity of environmental justice organizations. The IRA includes $60 billion in environmental justice investments and provides capacity-building funds to help environmental justice organizations engage in permitting and siting decisions for local technology projects. Philanthropists can now make targeted investments to help these groups take full advantage of the resources available through the IRA.

Danielle Deane-Ryan, director of equitable climate solutions at the Bezos Earth Fund, says providing resources to affected communities and engaging them in our climate work is a moral imperative, but it’s also a strategic necessity. Engaging local communities in shaping new climate technologies creates broader political support for the public policy measures needed to develop and scale those technologies.

Bring more people from communities to the forefront of the workforce, c-suites and meeting rooms of climate technology companies. Black and Hispanic Americans are underrepresented in climate NGOs and the clean energy workforce. Meanwhile, the venture capital and commercial investment sectors are predominantly white. As long as those developing and investing in climate technology are predominantly from white and affluent communities, they will bring major blind spots in understanding how new technologies can impact low-income communities and communities of color.

What can philanthropy do? There are non-profit organizations and donor networks trying to address the lack of diversity in technology sectors in general and environmental technology in particular. Browning the Green Space partners with education, clean tech and public sector leaders to increase the participation and leadership of women and people of color in the clean energy sector. The Public Interest Technology University Network (PIT-UN), which includes 59 universities, supports university programs that are building a diverse pipeline of technologists who understand the social, community and ecological impacts of climate change and climate technology innovation.

For example, PIT-UN supports a program at Miami Dade College that provides free online courses on how to model flooding and other risks associated with climate change. The courses are an entry point into environmental science for students from diverse racial and economic backgrounds.

Protect and strengthen our democracy. What new technologies take root in our society, and who benefits or harms them, is a function of our broader power dynamics. Maximizing the benefits and minimizing the harms of climate mitigation technology requires robust, responsive, and equitable democratic institutions and active, empowered citizenship.

Consider that the enactment of the IRA, the largest public investment ever in clean technology and green infrastructure in the United States, was the result of years of democratic organizing to build the political will for climate action and overcome the powerful opposition from the fossil fuel industry. As public investment in climate technology flows through the IRA, ensuring these new technologies achieve their intended impacts and minimize their potential harms alike requires effective democratic governance and oversight. Our regulatory institutions and processes must keep pace with the speed of new investment in technology development and implementation.

Funders of climate technology must therefore also be funders of democracy. We must invest in the health of our democratic systems and institutions by safeguarding fair access to the vote, reducing the influence of money in politics, and preventing the rise of authoritarianism that could undermine free and fair elections and our system of checks and balances . We must support the building of a democratic regulatory infrastructure that safeguards the self-determination of local communities and gives them the tools to weigh in on cleantech projects and, if necessary, veto them. We need to level the playing field in our policy between powerful industry interests and community stakeholders.

Technological innovation is an essential weapon in our fight against climate change, and philanthropy has a vital role to play in catalysing it. But to ensure that technology is a force for good, not a harmful one, philanthropists must also address the social and political ecosystem in which our technologies are employed. The ability of all people to survive the climate crisis depends as much on the health of our political system as it does on the audacity of our technological moonshots.

Bruce Boyd is executive director of the Morrison Family Foundation and a board member of The Windward Fund and Arabella Advisors. Loren McArthur is the head of thought leadership at Arabella Advisors.

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