Upcoming technologies, dealing with alternative production, energy efficiency and alternative sources of energy, will not only enable industries to improve environmental performance but also achieve reductions in the cost of operations over the period. For example, carbon-neutral hydrogen can spur industrial de-carbonisation and economic growth for India.

According to Niti Aayog, green hydrogen, a carbon-neutral hydrogen type, can help India abate 3.6 gigatonnes of cumulative CO2 emissions by 2050 and help India emerge as a cost-competitive producer of green hydrogen. However, the scale of emission reduction ambition would require that many more technologies are developed and deployed at a massive scale, that too quickly. Allied technologies for energy generation, like energy storage, 

smart grids, and efficient turbines, need to be worked upon. Furthermore, while immature technologies exist for mitigation in hard-to-abate sectors like food, aviation, shipping, cement, ammonia, steel and industrial heat, they need to be fine-tuned, requiring higher investment from funders. Carbon capture and storage (CCS) will play a vital role in offsetting unavoidable emissions. The CCS technology, both point source and direct air, are still in the early stages of development.

Climate investments often have longer timelines for development and encounter challenges in deployment, from regulatory approvals to a limited customer base. By financing early-stage inventions, philanthropy can play a patient, catalytic role in climate innovation, facilitating the testing of different technologies and business models.

While philanthropy cannot provide sufficient finance to deploy such technologies at scale, it can adopt an important function of fostering enabling policy environments and making innovations commercially viable for them to scale.

Going forward, private capital will have a big role to play in meeting our net zero goals. With the private sector accounting for 57 per cent of green finance ($210 billion) in India, as of 2019-20, India will rely heavily on private capital to fund mitigation and adaptation efforts to reduce emissions to meet its net zero goals by 2070.

There is also tremendous potential to create economic value with mitigation efforts, with Deloitte’s study predicting that the Indian economy could gain $11 trillion (in present value terms) by 2070 by investing in rapid de-carbonisation. A rising number of technological innovators and unicorn start-ups entering the climate space could also facilitate economic growth aligned with climate mitigation efforts. While private capital could, over the next few decades, help address the ‘missing middle’ in climate innovation finance, for now, philanthropists could provide access to capital to bridge this gap. To drive philanthropy towards climate investments, the mindset must expand from assured immediate impact to the potential for long-term impact. 

Philanthropists could also cover other types of risk that funders, such as venture capitalists and markets, will not bear. For example, awareness around climate change and its solutions is important to generate momentum in society to demand change. Funding community wide awareness may not see direct, measurable impact, but it is vital to encourage a culture of innovation in our universities and workplaces.

As we transition towards a greener future, energy sources will change and new business models will emerge to incorporate more circularity in the economy. Every resource in the economy will have a possible circular pathway. The business model around how to make each resource circular may be diverse and counterintuitive. It will take entrepreneurs time and patience to fine-tune their value proposition. Working with organisations that help make a viable business model is critical to funding this transition.

Those models that scale will arguably have the most disproportionate impact on the amount spent. However, this impact is not assured, long term, and difficult to quantify. Philanthropists are particularly suited to fund such kinds of work with no or low potential for immediate commercial benefit but could provide long-term ecological, economic, and social benefits. 

In addition to adaptation efforts, philanthropists can thus play a catalytic role in development-minded mitigation efforts, inching us towards our net zero goals. Without significant advances in climate innovation, the net zero goals remain afar. And since so much must change in so little time, business leaders, innovators, governments and all the stakeholders working towards a sustainable future need to come together and support the climate innovation landscape in India.

With efforts from a variety of funders, the technological innovation that integrates climate risks, equitable development, and low costs can potentially have ripple effects across the rest of the developing world.