As climate change worsens, the gap between rhetoric and real action becomes more glaring. It’s time to shift focus from promises to pragmatic solutions that can deliver immediate impact.
With COP29 in Azerbaijan in full swing, the urgency to shift from lofty rhetoric to actionable solutions has never been greater. Now is a good time to reflect on this moment of collective opportunity and optimism amidst what seems like an endless drumbeat of negativity, division and hate.
Let’s Get Past the Talk-Action Gap
Earlier this year, New York Climate Week certainly felt like a refreshing week of unity and hope on ambitious climate action. However, I can’t stop thinking about the giant chasm between familiar platitudes—working together, being ambitious, acting now—and the scale of the challenge we’re up against. We’ve already reached 1.5°C above the pre-industrial average for more than 12 consecutive months, there is a “broken record of broken records” of hottest days/years recorded, and we’re dealing with more intense, frequent and deadly weather events. More net-zero by 2050 commitments aren’t going to help us right now.
This Talk-Action gap is always apparent at high-level conferences, but I feel that we’re at the point where this is almost insulting to those in attendance. We hopefully all know by now the urgency of the climate crisis and that we need to drastically and rapidly cut emissions.
Much Needed Attention on Methane Reduction
For my Delterra colleagues and I, we often find the most value in meetings, roundtables and sessions that focused on getting the right people in a room together to solve a particular issue. What are the main blockers to action, and how do we clear them out of the way as fast as possible?
One that stands out is a roundtable discussion with a number of different stakeholders trying to reduce methane emissions from waste. We’re glad to see methane reduction getting more attention, since it is arguably the best way to reduce emissions in the short term and have any hope of meeting the Paris Agreement targets.
The Bankability Gap: Bridging Funders and Scalable Projects
But there is still a divide between funders who are looking for projects that they can invest in and the supply of projects that are ready to take investments — the so-called bankability gap. At Delterra, we’re working to help our partners bridge this divide.
Take Mendoza, Argentina, where, thanks to support from Global Methane Hub, we are supporting the city to supply locally sourced, certified compost to vineyards reducing the need for long-distance imports from Buenos Aires. This initiative aims to support organic farming and offer a sustainable, cost-effective solution for the region’s wine industry. We believe that these types of projects that can return real dividends to investors, both in GHG terms and in funding. But it needs grant funding to develop the project before there is a path to profitability.
Concessionary Capital: The Missing Ingredient in Scaling Climate Projects
So, at the end of the day, we can’t have our cake and eat it too. By which I mean, we can’t aggressively reduce methane emissions (and other GHGs) and make a profit on those projects at the same time. It might be possible for some projects, but when it is cheaper to do the most emissions-intensive activity – like sending organic waste to landfill instead of composting – it is challenging to create a viable business without the right economic drivers and supportive policies. All of which will take years or decades to change.
Breaking the Funding Mold: Innovation vs. Profitability in Climate Action
What is needed now is more concessionary capital to develop, operate and scale projects at a loss while the policy and market enablers are developed to turn them to profitability. This is almost the playbook for many VC-backed businesses like Uber, OpenAI, and Airbnb, but it’s not yet translating into climate-focused projects.
In fact, the opposite trend seems to be happening, whereby more and more institutional funders (e.g., bilaterals, development banks, GCF, etc.) and private investors are seeking bankable projects rather than providing grants, donations and forgivable loans. As a result, projects tend to default to something familiar, such as waste-to-energy, anaerobic digestion or landfill gas capture. None of these are “bad,” but this approach stifles innovation and creativity in new ideas because the focus is more on getting to profitability rather than figuring out the best way to rapidly reduce GHGs.
A Call to Action: Creating the Path to Scale for Green Projects
To end with a specific recommendation and call to action on reducing GHGs from waste, donors from all sectors (corporate, philanthropy, and government) should:
- Provide the concessionary funds needed to develop and implement a project – for example, Black Soldier Flies or composting – including needed capacity building and equipment.
- Figure out how to operate it efficiently – i.e., work out the kinks and iterate on better approaches.
- Work with the city and private operators to make it sustainable – for example, through increased landfill tipping fees and the sale of processed organics.
- Then, in the final stage, the project is hopefully ready to take on investment (debt, equity) to scale.
To address the urgency of the climate crisis, funders and investors must avoid trying to make every project bankable from the outset and be willing to provide more upfront concessionary capital and room for innovation and risk. A rapidly warming planet doesn’t care about profitability.
Now, the stakes demand more than promises; they demand bold, pragmatic steps to deliver immediate climate impact.
This blog was contributed by:
Jeremy Douglas
Director of Global Partnerships
Delterra
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