It’s time to rethink how we reduce carbon emissions

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Hello readers,

I moved to New York City a little over a year ago. At the time, I – and many people I knew – lived in Manhattan, paying pandemic rent — still expensive, but much more tolerable than what it was before, so I’ve heard.

This year, many of those people relocated to the outskirts of the city, and some moved away to other countries because the cost of living in New York has become outrageously high. Over the past few months, not only have rental costs skyrocketed, but the prices of everyday items such as food and gas have also soared.

And inflation is not just hitting those of us living in the US. It’s affecting people everywhere, and its impacts can be felt on prices across various sectors. Yet, there is one driver of inflation that is often not talked about: climate change.

In this issue, I discuss different ways of how climate change contributes to rising prices worldwide.

Enjoy reading!

– Nicole

THE BIG STORY

Pandu Sjahrir, Indonesian tech’s power broker, on his next act: energy transition

Image credit: Timmy Loen

Pandu Sjahrir, former chairperson for Indonesia at Sea Group and current board member at Gojek, is moving on to his next ambition. He now serves as the CEO at electric vehicle startup Electrum, a joint venture between GoTo Group and coal mining-turned-clean energy firm TBS Energi.

Sjahrir also founded CarbonX, an impact investment firm that focuses on sustainability and aims to create a carbon marketplace in Indonesia.

DEEP READS

Until recently, climate change was a largely ignored driver of the rising prices across many sectors.

World leaders are coming to terms with it gradually.

In August, the chief of the European Central Bank said unequivocally that climate change has a clear impact on inflation and so should be taken into account in future decisions. US President Joe Biden also signed the Inflation Reduction Act, a bill that would commit US$369 billion to support climate- and energy-related technologies.

However, climate change’s impact on prices – while direct – can be easy to miss.

Think of the extreme weather events happening all over the world this summer–heavy rainfall and severe flooding in India, South Korea, central Europe, the American Northeast, and, most recently, Pakistan–that have severely affected people’s lives and livelihoods.

These events caused supply-chain breakdowns and worker shortages that pushed consumer prices higher. The renewables sector has also been affected, as China’s 60-year record heat wave severely disrupted the solar and EV industry.

Another way climate change – or more precisely the policy response to it – is driving up prices is “greenflation.”

For example, costs of electricity, gas, and petrol have been elevated as a result of the green transition, and prices for battery materials like graphite are also increasing as demand for EVs continues to rise. Some believe decarbonization efforts will continue to drive up inflation and will not relent anytime soon.

TRENDING NEWS

You can also check out Tech in Asia’s coverage of Asia’s greentech scene here.

Image credit: Unsplash

1️⃣ Ethereum completes the “Merge,” which ends mining and cuts energy use by 99.95%
Ethereum has completed its long-awaited transition to a proof-of-stake consensus, also known as “The Merge,” which its backers claim will eliminate mining and reduce its energy consumption by about 99.95%.

Why it matters:
Before the revamp, the cryptocurrency’s annualized electricity consumption was more than what the Philippines used in a year.

2️⃣ Toyota CEO says moving to all EVs would leave some customers behind
Akio Toyoda, chief executive of Toyota Motor, said that pursuing an all-EV strategy would be too narrow an approach for an automaker that sells to customers in disparate markets globally.

There remains mass-market adoption challenges such as a shortage of battery materials and underdeveloped charging infrastructures, he said.

Why it matters:
The automaker’s strategy–which includes hybrids and plug-in hybrids–is notably more conservative than its competitors, like Volkswagen and General Motors, which have said that they would be going all-in on electric vehicles.

3️⃣ Samsung Electronics to invest over $5b as it targets net zero emissions by 2050
Samsung announced it would invest over US$5 billion by 2030 as part of its efforts to become carbon-neutral. The funding would go toward research and development for technology aimed at carbon capture and storage technology.

Why it matters:
Samsung’s plants emitted 12.9 million tons of carbon dioxide equivalents in 2020, making it the second-biggest emitter in the semiconductor industry. The firm has been facing pressure to decarbonize and reduce energy consumption.

4️⃣ World Bank head says he’s not a climate denier, won’t quit
World Bank president David Malpass came under fire after he refused to acknowledge fossil fuels’ contribution to global warming on stage at an event. Instead, he responded, “I am not a scientist.”

Why it matters:
There is growing pressure on the bank to do more to help developing countries, many already facing the consequences of climate change.

5️⃣ Moody’s has a $1.9t warning over biodiversity
The credit rating firm has named nine sectors, which affect or depend heavily on natural capital, that could face nearly US$1.9 trillion in credit risk due to the mismanagement of these resources.

Among the high-risk sectors are metals and coal mining, oil and gas, building materials, environmental services and waste management, steel, as well as livestock and agriculture.

Why it matters:
Assessing nature-related risks is much more difficult to measure than carbon emissions, for example. Investors and policymakers are only beginning to consider nature-related risks in their assessments.

STARTUP WATCH

1️⃣ Indoor farming startup Gotham Greens raises $310m
Indoor farming startup Gotham Greens has raised US$310 million in a series E round led by BMO Impact Fund and Ares Management Fund.

The New York-based company, which sells leafy greens grown in hydroponics-equipped greenhouses, will use the funding to support its goal of delivering basil, butterhead lettuce, and romaine to grocery stores such as Whole Foods and Sprouts within a day of harvesting.

2️⃣ $100m financing raised by mobile battery storage manufacturer Moxion
Mobile battery energy storage startup Moxion has raised US$100 million in a series B round led by VC firm Tamarack Global, with participation from investors including Amazon’s Climate Pledge Fund, Microsoft’s Climate Innovation Fund, Energy Impact Partners, Enterprise, Marubeni Ventures, and Sunbelt Rentals.

3️⃣ Former Revolut employees raise $78m for Web3 energy startup
Web3 energy startup Tesseract has raised US$78 million in a funding round led by Balderton and Lakestar, with participation from Accel, Low Carbon, Ribit Capital, Box Group, Creandum, and former Formula One racing driver Nico Rosberg.

The startup operates as a vertically integrated renewable energy company that buys energy from generators at fixed prices that are then offered to consumers.

4️⃣ HK plant-based provider bags $70m from TPG-backed fund, others
Hong Kong-based Green Monday Holdings, a provider of plant-based food, announced that it has raised US$70 million in a funding round led by TPG’s The Rise Fund and Swire Pacific.

With the new funds, the company plans to boost research and development as well as production, according to a statement. It’s also looking to improve its distribution and supply chain capabilities, scale up its retail network, and strengthen partnerships with food and beverage brands.

5️⃣ Andreessen Horowitz, Coatue back carbon software startup Patch
Carbon market software startup Patch has raised US$55 million in a series B round led by Energize Ventures, with participation from Andreessen Horowitz and Coatue Management. The startup’s software enables companies to measure their carbon footprint and purchase carbon removal and offsets.

That’s it for this edition – we hope you liked it! Do subscribe to continue receiving The Offset.

See you next month!

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