2016 to Bring Big Changes for Cleantech Investors?

Cleantech investors have a lot to consider as they look toward the new year. That’s because 2015 was rounded off by a couple of cleantech discussions and initiatives that have the potential to change the face of the industry in 2016.
Specifically, the year ended with COP21, the UN conference on climate change, and with the launch of the Breakthrough Energy Coalition. Here, the Investing News Network takes a look at these important macro developments and explores how they may impact the landscape for cleantech investors in 2016.

COP21 shows government cleantech commitment

Held in France, COP21, which began on November 30 and will run through December 11, is intended to create conditions for the meaningful advancement of cleantech in 2016. More specifically, the aim of the conference is to determine a new international agreement on climate change that will keep global warming below 2 degrees Celsius.
COP21 is the culmination of a full year of discussions and negotiations between participating countries. That year of talks was marked in October by a report published by the Organization for Economic Co-operation and Development and the Climate Policy Initiative; it shows that developing companies raised $62 billion to help cope with climate change last year. Furthermore, the indicates that developed countries’ 2009 commitment to raising $100 billion per year by 2020 may be doable.

However, that’s not to say COP21 hasn’t hit some snags. While some countries are pushing hard for a legally binding accord, not all are on board. For instance, Russian President Vladimir Putin and British Prime Minister David Cameron would like a legally binding accord, while the US has refused to endorse such an agreement. Chief US negotiator Todd Stern has said, “legally binding targets would have many countries unable to participate.”
The dissent seen even at this early stage of the conference reflects the seriousness with which many countries are taking the discussions. However, it also reveals the fact that national leaders need to be supported in making positive cleantech decisions. This is where cleantech investors need to jump in and support the continual development of the industry.

Big names back cleantech via Breakthrough Energy Coalition

Through the Breakthrough Energy Coalition, whose launch coincided with the start of COP21, some of the biggest names in government, business and entrepreneurship are stepping up to make clean, renewable energy a top priority. The timing of its launch draws a clear link between government efforts to reduce climate change and private investors’ belief in the power of cleantech.
Explaining its mission, the coalition states that it wants to create reliable, affordable and carbon-neutral energy; it believes “the only way to accomplish that goal is by developing new tools to power the world. That innovation will result from a dramatically scaled up public research pipeline linked to truly patient, flexible investments committed to developing the technologies that will create a new energy mix.”
The initiative, led by Bill Gates, is made up of a group of 28 cleantech investors committed to witnessing visible progress in the coming year. Among this group are Marc Benioff, founder, chairman and CEO of Salesforce.com (NYSE:CRM); Jeff Bezos, founder and CEO of Amazon (NASDAQ:AMZN); Mark Zuckerburg, founder, chairman and CEO of Facebook (NASDAQ:FB); Reid Hoffman, founder of LinkedIn (NYSE:LNKD); Jack Ma, executive chairman of Alibaba Group (NYSE:BABA); and Prince Alwaleed bin Talal, chairman of the board of trustees of Alwaleed Philanthropies. Longtime cleantech investors like Vinod Khosla, founder of Khosla Ventures, are also in the group.

The upshot for cleantech investors

Cleantech investors may be wondering exactly how much impact those two events may have on the sector in 2016. Speaking to the Investing News Network, industry observer Jonathan Keim of DreamTeamNetwork explained that “COP21 should give rise to sweeping new supranational incentivization for further sector growth. Continued emphasis on renewables by China and India, as well as South Africa, the Middle East and Africa, will help to drive the conversation in a new and more open direction.”
In terms of the Breakthrough Energy Coalition, those in the space should feel confident that big names are putting their weight behind the industry.
Commenting on the broader cleantech space, Keim was also positive, and said that 2016 should reflect a continued recovery for the market in the wake of 2013’s slump. He anticipates sweeping policy changes at the federal and national levels, as well as further innovation at the industry’s core. In particular, he sees electric vehicle proliferation factoring heavily into the cleantech landscape in 2016 as it will “help accelerate overall industry focus for markets.”