2023 Climate Tech Predictions

2022 was a banner year for Redwood. We celebrated our first anniversary, hosted our first climate event, grew our staff from three to 10, launched a new website, and worked with an amazing array of climate tech clients.

It was also a big year for climate tech and climate progress. A rocky economy put the brakes on venture investment in tech companies, but climate tech investment held steady. After several deaths and rebirths, the most ambitious climate policy ever proposed at the national level became law as the Inflation Reduction Act.

Now that the year is nearly over, how can we build on these promising developments and make concrete progress toward mitigating and adapting to climate change? How will this progress manifest in the two areas that we at Redwood know best, climate tech and climate media? The Redwood team offered up some predictions to answer those questions.

Happy holidays and here’s to a productive and climate-positive 2023!

Innovators will push carbon markets in a positive direction; schemers will start to fall away

Carbon offsets have a huge role to play in climate action but, as they exist today, are not consistently effective at mitigating the climate crisis. You don’t have to look very hard to find proof of that fact. Revelatory reporting by climate journalists like Akshat Rathi at Bloomberg and even late night comedy news anchor John Oliver this year showed us that voluntary offsets 1.0 are at best a failed experiment and at worst an easy way for cynical companies to trick consumers into believing that they are “doing their part” to curb the crisis while they are in fact doing very little or nothing at all.

This year saw the launch of several companies and initiatives with the stated goal of “cleaning up” voluntary offset markets. Some were innovative and compelling; some looked a lot like attempts to cash in on voluntary offsets markets’ multibillion-dollar (and growing) value. At COP 27, UN negotiators put off an effort to create international rules and standards for both compliance and voluntary carbon markets.

In a departure from this lack of progress toward making offsets work, in 2023 the demand side of voluntary carbon markets will set higher standards for offset quality. Companies and organizations working hard to ensure that offsets work the way they are intended will get more of the attention and credit they deserve. This will mean greater transparency, new models for offset generation and sales, and clearer, more direct connections between offsets and projects that are verifiably additive and permanent. The market will reward offset sellers that perform meaningful carbon dioxide removal (CDR) and cut speculators and middlemen out of offset transactions. As offset buyers get more sophisticated and selective, offsets generated and (re)sold by cynical actors will decline in value and start to disappear. And maybe we’ll even see some “carbon offsets are finally getting better” coverage from skeptical climate journalists.

-Josh Garrett, CEO

More UN failures, more private sector progress

In 2021, Redwood posted regular updates on the COP 26 conference in Glasgow. In the end, the conference gave the world little to celebrate. This year, having learned our lesson, we gave COP 27 in Sharm El Sheikh, Egypt the exact amount of attention that it deserved: none.

The international conference, despite the attendance and heroic efforts of determined climate advocates and activists, was a failure. More talk, more interference from fossil fuel interests, and a complete absence of meaningful, binding commitments to emissions reduction or investments in climate adaptation. While the agreement to create a Loss and Damage Fund to transfer money from developed nations most responsible for the climate crisis to countries in the Global South offers a faint glimmer of progress, nothing was actually done at COP 27. When the international body meant to lead climate action can’t even say out loud that the world must curb production and consumption of oil and gas (and fast!) to avert climate catastrophe, it’s time to consider tossing out the COP model altogether.

In 2023, this troubling trend of ineptitude at the international level will continue. There’s no reason to expect any breakthroughs or even notable progress from COP 28 in Dubai. But the private sector will continue to produce amazing technogical advancements and, along wtih supporters and allies, will advance us toward a more secure future while world leaders waste more precious time.

-Josh Garrett, CEO

Wave energy’s rising tide

If you’ve ever gone surfing, you know just how powerful waves can get. Technologies that harness energy from this powerful source already exist, it’s just a matter of improving them to be more cost-effective, more efficient, capable of high-volume production, and, of course, reduce their impact on the marine environment. Engineers are close to overcoming these challenges, and will build on recent advancements to make 2023 the year of a major breakthrough in wave energy’s scalability. The breakthrough(s) will attract public interest and create demand for this ascendant clean energy source, attracting more investments from climate tech VCs. This progress will benefit many coastal communities and remote islands that typically rely on carbon-intensive fuel imports so that they too can ramp up their renewable energy deployment with the rest of the world.

-Jonaliza Ceklic, Account Director

First steps in overhauling the American electrical grid

Often overlooked in the conversations about the electrification of everything is the medium through which that power is distributed and delivered to end users: the electrical grid. With over 9,000 power plants, 1.2 terawatts of power generating capacity, and 360,000 miles of high voltage transmission lines, the American grid is a marvel of engineering. However, it is a rapidly aging one.

A U.S. Department of Commerce study found that the average transformer, the critical component that increases and decreases voltage of electricity to move it around the grid, in the U.S. is 38 years old, with 70 percent of U.S. transformers older than 25 years. Infamously, it was the failure of a simple 97-year-old “C-hook” that sparked the Camp Fire, the deadliest and most destructive wildfire in California's history.

The new year will see the Department of Energy continue with their Better Grid Initiative, and deploy $20 billion in federal financing tools, made available through the Infrastructure Investment and Jobs Act. While incremental modernization of the existing grid is good news, much work is needed to ensure that the future grid is optimized for renewable energy generation.

-Matt Matyjek, Account Director

Home service professionals will embrace clean energy and energy efficiency work

Winter heating fuel costs are on an unprecedented rise. The U.S. Energy Information Administration expects the prices of natural gas to increase by 28%, heating oil by 27%, and propane by 5%. From 2020 to 2022, oil prices increased globally by 350% – the largest increase for any two-year period since the ‘70s. These high prices are already driving surging interest in heat pumps and other energy-saving heating, ventilation, and air conditioning (HVAC) systems. With Inflation Reduction Act incentives providing $9 billion in energy efficiency and electrification program funds transferred from the federal government to states, 2023 will definitely be a year that home services professionals, from electricians to heating oil deliverers, will think about incorporating climate mitigation solutions such as heat pump installation and weatherization into their offerings. Redwood Climate Communications’ client Sealed has been referring home efficiency projects to professionals in this field for more than a decade, and media outlets like the Washington Post, GreenBiz and others published articles this year on the growing demand for climate tech tradespeople.

The shift won’t happen overnight. The most common home heating fuel in the U.S. by far is natural gas – it’s currently used in 57% of U.S. homes. But with residential energy use accounting for roughly 20% of the greenhouse gas emissions from the U.S., technicians on the ground helping people heat and cool their homes can breathe easier in more ways than one knowing that there are accessible – and healthier – options outside of oil and gas to keep their clients comfortable in 2023 and beyond.

-Erin Schultz, Lead Media Strategist

Climate change in mainstream media

Am I the only one who gets excited when they see reusable bags in a movie? Or Zac Efron talking about regenerative agriculture on Netflix? I don’t think so. With the majority of public opinion in favor of climate action and tests such as the Begley-Cohen Test, which measures the number of single-use plastics in content, in 2023, we will see more climate solutions portrayed in mainstream media.

-Emily Prettyman, Senior Account Executive

Increasing investments in climate adaptation

Awareness of the mounting effects of climate change is increasing across the globe. As a result, the vast array of challenges associated with the climate crisis is coming into focus. One such challenge is the need for our world to adapt to the new, changed climate. As general awareness of climate impacts grows, the communities most affected by those impacts, whose voices are often left out of the conversation, are finally being heard. With Breakthrough Energy Ventures announcing its plans to widen its scope beyond the “five grand challenges” to include investments in climate adaptation technologies and conversations at COP 27 pointing to the need to support adaptation in developing countries, it’s a solid bet that climate adaptation technologies will soon take center stage. In 2023, expect investment in climate adaptation technologies to increase from the current share of 20 percent of global funding and approach parity with investments in mitigation.

-Jessica Harrington, Senior Account Executive

Normalization of nuclear energy

Photo: DOE Lawerence Livermore National Lab

A big shift we saw after the Russian invasion of Ukraine in March 2022 and spiking energy prices was the renewed interest in nuclear energy as a power source. Several big energy players such as Germany and California reversed decisions to shut down nuclear power plants, and at COP 27 the US Secretary of Energy stressed the “importance of atoms as part of the clean energy future.” While fission is today’s only commercially viable nuclear energy source, longstanding concerns about its safety could be partially allayed by recent advancements toward the much safer (and more powerful) process of nuclear fusion. Countries like China, Russia, the United States, and several European governments are pouring billions into developing this technology to make it scalable and viable as a replacement for nuclear fission. Just last week, the US DOE announced a nuclear fusion breakthrough: for the first time, scientists produced a nuclear fusion reaction that produced more energy than its energy input. This was hailed as one of the most important advances in the 21st century.

Although fusion technology is still years away from being deployed at a large scale, look for nuclear power, in general, to be more widely discussed as an effective replacement for fossil fuels in 2023. As a result, public opinion will begin to shift in a positive direction, especially as excitement grows around advancements in fusion.

-Keely McNeme, Account Executive