According to Stevenson, the valuations in the renewable energy sector have since become much more attractive. The fund and others like it are seeing a significantly expanded pool of investment opportunity, she said, as multiple governments aside from the U.S. turn their attention toward navigating the green energy transition.
That’s been underscored over the past several weeks with the recently concluded UN Climate Change Conference, COP26, where leaders from around the world came together to knuckle down on the problem of global warming. Arguably the most pivotal among the many bullet points covered, Stevenson said, is the tightened focus on hitting climate goals originally contemplated in the 2015 Paris Agreement.
“Rather than the loose target of one and a half to two degrees, we’ve seen a tighter focus on limiting global warming to 1.5 degrees Celsius above pre-industrial levels,” she said. “We’ve seen discussions among different groups of countries about working together towards that, and pledges from companies and countries centred on that goal. And that will take a Herculean amount of effort in terms of renewable energy investment.”
In support of that, Stevenson said developed countries revisited a commitment they had made in Paris – which unfortunately, they’d failed to follow through on – to provide $100 billion in financing for developing nations struggling to meet crucial climate targets on their own. Beyond that, a large contingent of wealthy nations have also agreed to curb subsidies on fossil-fuel industries, an economic cornerstone to which much of the world’s greenhouse-gas emitting activity can be traced.
“Emissions measurements can be quite nebulous, because you talk about not just scope 1 and scope 2, which are kind of directly tied to the production and energy consumption of companies, but also scope 3 emissions, which involves customers’ activities that are far outside their control,” she said. “But roughly speaking, 30% of emissions comes from the transportation sector, about 25% from the electricity sector, and 23% is in industry generally. Commercial and residential consumption constitutes about 12% to 13%, and agriculture makes up 10%.”
