How Can We Effectively Mobilize Impact Capital for Climate Action and Climate Justice?

Justin Belleme:
We are very excited to have you here for this Shift Conversation curated and co-hosted by Veris Wealth Partners. Today we are going to be talking about how to effectively mobilize capital for climate action and climate justice. Today's session will be moderated by Nicole Davis, a Partner and Senior Wealth Manager at Veris. 



Nicole Davis:
Thank you, Justin. Before I introduce all the panelists, I want to very briefly set the stage. I imagine many folks in our audience have read or heard the sobering conclusions of the recent climate change report from the UN IPCC. One of the key takeaways, which is the good news, is that there is a path to avoid catastrophic climate change. The big problem is that we are not currently on that path. But we really don't want this session to be one of doom and gloom. I think even the climate scientists who wrote that report agree it's not time for despair; it’s time to get to work.


Today we're going to hear from panelists who have been hard at work on climate solutions. They represent organizations that focus on many global problems beyond climate, but climate action is a key part of their work. And they spend a significant amount of time and energy determining how to allocate capital efficiently. We want to know, whether it is investment capital or grant capital, how do they allocate that capital in a way that's most impactful for these issues?
We really hope that hearing of their work today inspires action, whether that action is around how you allocate your capital or philanthropic dollars, how you turn your entrepreneurial ideas into action, or simply how you use your voice and votes.

So with that, I want to introduce our panelists: Alex Amouyel, the Executive Director of MIT Solve; Christian Okoye, a Partner in Sidewalk Infrastructure Partners; Geoff Eisenberg, a Partner at Ecosystem Integrity Fund; and Melissa Weigel, a Senior Director of Investment at NatureVest.

arrow_drop_down_circle
Divider Text

Nicole Davis: To give some context to the answers, we'll get to in our discussion, could we go around and briefly hear a bit more about your organizations

arrow_drop_down_circle
Divider Text
Alex Amouyel:
Hi, I'm Alex Amouyel, the Executive Director of
MIT Solve, an overall marketplace for social impact innovation. We find, fund, and support social innovators who are solving challenges, including climate action and climate justice.


Christian Okoye:
Hi everyone. I’m Christian Okoye, Partner at
Sidewalk Infrastructure Partners. We focus on moving innovation in the infrastructure space and investment vehicles, as well as starting up new technologies and deploying assets in infrastructure. Focus to date has been a number of sectors, including using AI and robotics for waste, autonomous vehicle infrastructure, broadband infrastructure, and the space that I focus on, which is increasing the participation of DER's (distributed energy resources) in the energy market. So excited to talk about all of this. I've spent several years investing and participating in energy finance.


Geoff Eisenberg:
Geoff Eisenberg, Partner
Ecosystem Integrity Fund. EIF has been around for about a decade. We're a sustainability-focused venture capital fund based here in San Francisco. We're investing out of our fourth fund. Mostly focused on the stuff that you would think about when you think about sustainability. So renewable energy, electric vehicles, but also things like clean water and sustainable agriculture, along with healthy consumer products and green chemistry, reduced toxicity. My focus areas are mostly renewable energy grid and EVs, but I've also been focused on reduced toxicity, green chemistry for that whole time too. Mostly series A, series B companies with proven technology and some revenue that need a boost scaling. So that's EIF.


Melissa Weigel:
Melissa Weigel. I'm a Director at
NatureVest, which is the impact investing division of The Nature Conservancy. So we are tasked with structuring investable products that can generate both a financial return for investors as well as help achieve the overall goals of The Nature Conservancy. Our investments are focused on nature-based solutions and natural climate solutions, including forestry, sustainable agriculture, aquaculture, green infrastructure, coral reefs, and mangroves. That's where we're able to create investable products, typically on the private side – utilizing private equity and private debt structures – to really reach the scale of the solution that the Nature Conservancy is looking to achieve.


arrow_drop_down_circle
Divider Text

Nicole Davis: The first question for our panelists is – what climate solutions are you most excited about? And, more importantly, why? Where can we get our biggest bang for our buck in terms of impact? 

arrow_drop_down_circle
Divider Text

Alex Amouyel:
For MIT Solve, we've done a lot of work around food and also natural climate solutions around restoring ocean and land ecosystems and other points like that. And to give you a little bit of context on how Solve works, we’re a marketplace for social impact innovation through open innovation challenges. We find, fund, and support innovators all around the world who are solving different challenges. One of our main pillars is sustainability and climate. We put out a call-out for applications. Then we bring together, I want to say, an army, but a community of funders–be it grant funders or investors–as well as other resources from the MIT Solve ecosystem to help these innovators grow and succeed.


To share an example, in 2020, we selected a woman named Talash Huijbers who lives in Kenya. Her solution is a startup called InsectiPro that is looking into using insects, black soldier flies, to be precise, as an alternative protein source for animal feed with the idea that this will reduce the sustainability cost, the carbon cost of meat. It's not the full solution. There are many other reasons to reduce our meat consumption and invest in meat alternatives, but reducing livestock emissions is also a key part of that.


Christian Okoye:
I spend most of my time thinking about Distributed Energy Resources (DERs) and increasing participation in the energy grid. That's the most exciting thing that I've been thinking about. With more people deciding to put solar on their roofs or get an EV charger, we think there's going to be increased numbers of prosumers to the grid.


The grid will increasingly become bi-directional, where we can all participate in the grid. You won't necessarily have to figure out how you trade and get value out of the grid. A lot of that will be automated through Tesla and other aggregators who will get all of the load at the consumer or prosumer level and be able to speak with the grid and participate in those marketplaces and give you value for your participation and for your load flexibility. This will effectively become a virtual power plant.

We are very excited thinking about the underlying technologies that will enable that space and help orchestrate and optimize this concept of virtual power plants. It's important because if you think about moving towards a hundred percent clean energy–a lot of that's going to come from renewables. A lot of that is intermittent. So, you either need to have a lot of storage, or you need to have a lot of transmission. Those things are all, still today, very expensive and pretty hard, but actually shifting how we use our energy at home is relatively easy—so changing when you turn your dishwasher on or when you charge your EV or when you do all of these very simple things. As we start to electrify everything, you can have nudges or incentives for you to shift your energy without having to change your lifestyle dramatically. And so that's what we've been really focusing on.

We made an investment in a company that uses a gamification system for encouraging customers to shift when they use energy. Maybe pre-cooling your home if there's going to be a heatwave, or something of the sort, and the grid is congested. The grid can get a lot of value out of that. And you can also capture some of the value for yourself if you're willing to do some of those things. So it has been an exciting space for us.

We're starting to move towards figuring out free-market solutions to these virtual power plants and transactive energy markets, which is what it's called now. And it's an exciting space for us to continue to explore and to see how we can incentivize the market to move faster.



Geoff Eisenberg:
I would say what he said. We're super excited about all that stuff, and it's a lot of what I cover. Beyond that, we're really focused on reducing vehicle miles traveled and different forms of mobility.


One of the things that the pandemic has shown is that there have been some unintended consequences, in terms of movement, because of where people have decided to live. Vehicle miles traveled in places like the Bay Area have actually rebounded to where it was before the pandemic because no one is taking public transit. We've invested in a bunch of different micro-mobility solutions based on the concept of rightsizing your transportation tool for the trip you're taking. You don't need to take a 4,000 pound SUV to get yourself two miles to the office. So I think people have really woken up to that, and there's a huge opportunity there.

I would also say enabling new markets outside the U.S. to leapfrog the mistakes that we made around hydrocarbon energy generation and hydrocarbon-based transportation; it’s not a “nice-to-have,” –it's a must-have. If the two billion people who are rising up into the middle-class go through the same processes that we went through, it's over. We'll be at six degrees C by the end of the century. So we've invested in a couple of solar battery mini-grid developers in Africa and electric motor scooter operators in Africa, places like that, where we think there's an opportunity to really leapfrog past some of the mistakes that we've made.

And then the last area I would say is around regenerative agriculture, soil, carbon. Is there anything that a venture capital fund can do to help enable that? Because I feel like it's going to take a lot of policy work. It's going to take a lot of practice change. And if there's a role for someone like us to play in that, in terms of investing in enabling technology, we'd like to be there.



Melissa Weigel:
Regenerative agriculture is also one of the climate solutions that we're most excited about. The Nature Conservancy is a science-based organization. So all of our investments first start with the science that our teams on the ground are doing. So, we actually put out a report a couple of years ago that looked at different natural climate solutions and what they could contribute towards this 1.5 degrees Celsius target, and what we found was, unsurprisingly, forests are the biggest potential contributor.


If we protect and increase reforestation, 30% of the needed contribution to that 1.5-degree target could come from forests. So the Nature Conservancy is very focused on both protecting and restoring forests. This looks different in different areas. The needs in the United States are very different from the forest protection needed in Brazil or Indonesia, or Subsaharan Africa. And so, we're designing investment solutions that are appropriate for those different areas.

In the United States, that might look like a traditional TIMO, timber investment management organization. Right now, we're partnering with BTG Pactual's Timberland Investment Group, where The Nature Conservancy is acting as the conservation advisor to their North American strategy. So we are looking at all of the halves a million acres that they currently have under management. We're looking at those half-million acres and designing sustainable forest management plans, increasing the ability of those forests to sequester carbon.

Separately, if you look at a place like Indonesia, the forestry needs aren't just “buy and protect.” It's really about engaging with local communities and making sure there are sustainable forest management plans in place that incorporate things like agroforestry. And so, we're working with an investment group there and a development finance institution to design an investable product that is appropriate for some of those agroforestry solutions.

That's getting exactly to Geoff's question around sustainable agriculture, regenerative agriculture, because that's also, think about soil carbon, that's a huge opportunity. And I would say the Nature Conservancy is absolutely working in this space, but we're still at the place where we're looking at the science behind soil carbon. A lot of very recent research has come out showing perhaps we don't understand it quite as much as we thought we did. And I think there's a lot of opportunities for venture capital firms to invest in some new technologies that can accurately measure the soil carbon that is being sequestered so that we make sure we're actually meeting the targets we're setting and not under or overestimating what some of our nature-based solutions can provide.


arrow_drop_down_circle
Divider Text
Geoff Eisenberg: Along the lines of regenerative agriculture, how are you dealing with forests in a changing climate? You read these articles that say the Amazon is now actually emitting more greenhouse gas than it's sequestering. And in California, we'll do carbon credits on forests that then burn down.

How do we help natural systems restore themselves? But at the same time, maybe we have to adapt to a changing climate?

I've been reading some really cool stuff about how handing land back over to Indigenous people is the best thing you can do for actually making that function again as a natural ecosystem. As opposed to the sort of corporate-owned solutions that I think you were talking about. What do we do there? What are you thinking in these areas?
arrow_drop_down_circle
Divider Text

Melissa Weigel:
That's the question of additionality, right? We want to make sure, if we're saying we're sequestering this amount of carbon and offsetting certain emissions, that we're actually doing that. All of the problems you're pointing out are real and are growing.

There are two interventions I can point to. One is a policy intervention requiring what are called buffer pools or insurance pools for the carbon sequestration. So if you're setting aside a hundred acres for sequestering carbon, you actually have to set aside 120 to make sure if a portion of the forest burns down or there's an insect destroying a portion of the forest, you are still sort of protected. That's a policy intervention.

And then at the same time, The Nature Conservancy has actually been working with some of the third-party verifiers–Verra, VCS–to develop new methodologies that are getting more accurate around measuring the baseline sequestration and what is additional over the years. So we've actually developed a new methodology that is looking at actual measured baselines rather than modeled baselines to make sure you're actually looking at the exact amount of carbon that is sequestered year over year. Alex, I can hand it over to you for the last part of the question.


Alex Amouyel:
My excitement was related to Indigenous communities and the link between preserving ecosystems and Indigenous communities. And indeed, not only from a carbon sequestration point of view, but also from a biodiversity point of view. The statistic that people often use is that 80% of biodiversity is still today controlled by Indigenous communities who, unfortunately, are very much at risk from encroachment through extractive practices and loss of livelihood, and a number of other issues.

One of the Solver teams we selected in 2021 has developed a tool that is helping frontline Indigenous communities around the world map their land and the land that they own through treaties, to help them defend their borders and be able to fight back against encroachments in various ways. So that's also really important. Also, apart from thinking about terrestrial ecosystems, ocean ecosystems are also absolutely key in terms of sequestering carbon. 


arrow_drop_down_circle
Divider Text

Nicole Davis: The point about Indigenous peoples is a great segue to climate justice and acknowledgment that low and moderate-income communities and communities of color, both domestically and abroad, have historically borne the brunt of environmental injustice in numerous ways, and are on track to be disproportionately affected by a warming climate. Not to mention not having the resources to then cope with the effects of that bad climate impact. 

Unless corrective action is taken, we're going to see climate change exacerbate inequitable social conditions. How do we include these communities in the transition to a low carbon economy, and also, how do we help ensure that communities can be resilient in the face of warming? 

During Climate Week, climate justice was a big topic on many panels. But the people talking about climate justice came, for the most part, from the nonprofit space. And I think that it can't be only the nonprofit folks focused on climate justice. If we're going to have a just transition, it needs to be the nonprofit community and government and investors and entrepreneurs who are really solving for climate justice as well as for the climate mitigation piece. We'd love to hear from the investor/entrepreneurial side. 

How are your organizations incorporating a climate justice lens?

arrow_drop_down_circle
Divider Text

Christian Okoye:
Since we're so focused on infrastructure, and infrastructure is important to everybody, we have to think about how broad-scale participation is embedded in the businesses and the technologies that we're looking at. How do we enable access to technologies in innovation and infrastructure?


Everything that we're doing in broadband access, that's obviously to address the digital divide and help communities get better access. But even with my work in virtual power plants, a lot of the energy savings that are applicable here are most important for low to moderate-income communities because their energy bills are a bigger part of their budgets. A lot of our companies are thinking about that every day.

How do we make this easy to use? How do we reach these communities? How do we actually get embedded and talk to them about participating in the clean energy transition and how we can actually save them money moving towards clean energy.

I think whenever we can move in lockstep, and whenever there's a high correlation between moving to clean energy and actually providing savings for consumers and enabling access for low to moderate-income communities and underserved communities, I think those businesses scale a lot faster and end up doing a lot better.

We've seen that to be the case with companies like Home Connect. And PosiGen, which I have invested in in the past. That is core to what they're doing –going out and doing solar for customers who may not have the highest credit scores but are very solid customers who continue to pay the bills. And if you're going to save them money, they're only going to pay their bills more. So it's turning that traditional investment structure on its head a little bit, and we’re really seeing how you can get more participation by rethinking our investment strategies.


Geoff Eisenberg:
When we started out ten years ago when we looked at companies, the screens were:
does it make a substantial contribution – to environmental sustainability, fighting climate change or cleaning up water or whatever, and is this a good business? Is it going to make money?

Six or seven years ago, we added another box to check, which is: does this enable increased climate justice? Does this help disadvantaged communities?

That change was made for a couple of reasons. One, we like to think of ourselves as decent human beings who would like to help everyone where we can. But I think the other part of it really is from an economic standpoint. That’s where a lot of consumers are, especially in this country. A lot of venture-backed technology companies don't focus on serving those customers. They focus on serving people in Manhattan and San Francisco with a high willingness to pay, leaving out hundreds of millions of people in this country who would make great customers if you can give them a good service or provide them with a good product, and hopefully one that can save them money. What we really like are things that check all three boxes and preferably solve a couple of environmental problems.

Just as an example, we're looking at an electric truck company that electrifies a diesel truck. That's great. You cut carbon emissions, but most ports and distribution centers are in low to moderate-income communities. And those people suffer massively higher rates of asthma and other health problems due to PM 2.5 pollution. And so, let's focus on getting the diesel out of those communities. And so, we have this, this wonderful impact of having these great trucks that solve a bunch of problems all at once. And it's a wonderful investment. They're selling these things as fast as they can make them.

The other side of it is, getting back to the consumer aspect of this, thinking about a tool like solar, as Christian was talking about, or electric vehicles where you actually have a product that saves people money. Driving an EV saves you money on total operating costs. And so what's preventing car companies from focusing on people for whom net savings would mean more and have to commute farther to get to their job? Why isn't the adoption level higher? Let's go solve that problem because it's a massive market. Improve their economics, make their life better, make their communities cleaner, and we can make a boatload of money.

Similarly, with solar, we invested in a company that was one of the first companies to go to the Central Valley and start offering PPAs (solar power purchase agreements) in Spanish, because you had people who were making $50,000 a year in the agriculture community and had $400 a month electricity bills in the summer. And you could cut that in half or cut it by two-thirds. Those people snapped up solar faster than people in East Bay who have tons of money.  And it made their lives a lot better. It made their communities cleaner and made them happy.

This is part of our whole strategy. We look for niches that other people aren't paying attention to and where there are real drivers for growth. And I think paying attention to this massive buyer base in this country that is being ignored by a lot of tech companies is a way that we can do well and do good at the same time.


Melissa Weigel:
I'd love to jump in because I think we see something very similar here at NatureVest, around what are the communities that are disproportionately impacted by climate events and by climate change, and how can we design solutions that help those communities?


I can give a couple of examples. Geoff referenced corporate ownership of forest land. So that is absolutely an area where The Nature Conservancy is playing because we think there's an opportunity for large-scale impact, but at the other end of the spectrum, when you look at forest land across the United States, almost 40% of it is owned by small family forest owners – those who own less than a hundred acres. This is traditionally land that has been in the family for multiple generations. And this is the land that is most at risk for conversion to development.

These family forest owners have traditionally been crowded out or have no access to the revenue drivers that some of those large corporate forest owners can access. For instance, the carbon markets – enrolling your forest land into the carbon market, selling offsets either into the compliance or voluntary market – there's high upfront costs associated with that, that a small family who owns 50 acres just can't afford. And so, The Nature Conservancy has worked with the American Forest Foundation to design a program that allows us to enroll these landowners. We basically provide upfront financing to these landowners to enroll in the carbon markets. We are securing the offtake agreements. So the landowners don't have to worry about who they're going to sell the carbon credits to. And then, there's essentially a profit-sharing mechanism whereby the landowner is able to access some of that additional revenue. And some of it goes to pay back the investors who've provided the upfront capital necessary.

At the other end of the spectrum, I just want to mention one other example because Alex pointed out the necessity of focusing on oceans and our other ecosystems, our debt swaps program, our sustainable debt program, is really looking at communities that are disproportionately affected by climate change–small island developing states. So if you think about these small island developing states, they're increasingly being hit by more frequent and more severe storms due to climate change. It's destroying their infrastructure. They have to borrow money on the capital markets to rebuild. Five years later, another storm hits, they have to borrow more money. Their debt is just snowballing. Then their credit rating is downgraded, and it costs more money for them to access that debt. And it's a cycle that they can't get out of.

The Nature Conservancy has designed this debt swap mechanism, so we're able to basically renegotiate a portion of that country's debt in exchange for the country achieving certain conservation outcomes primarily related to coastal resiliency – so protecting their coral reefs, protecting their mangroves. Not just because it's good for the environment, but because that actually protects their country from future storm events. Coral reefs can attenuate 97% of the wave energy that might come during a storm, and that's protecting that coastline from future damage. So it's actually making the community more resilient, and we're able to reduce their debt burden. So it's a win-win situation.


Nicole Davis:
Great. And some of those nature-based solutions are much, much cheaper than installing a man-made coral reef.



Melissa Weigel:
A sea wall. Absolutely.



Nicole Davis:
Alex?



Alex Amouyel:
MIT Solve supports both non-profit and for-profit solutions. As long as it has an impact, then we're agnostic to the business type in that sense. On the for-profit side of the equation, one solution is
ISeeChange based out of New Orleans. It is a citizen journalism platform or app that is mobilizing communities to share microdata about climate impacts in their streets and their cities and their communities. Through that, they are rebuilding data, bottom-up, that can be used by cities, by climate scientists, and a number of things to really understand how the climate is changing in a city like New Orleans. We helped them get partnerships with Miami and Boston as well. So they're expanding into different geographies. In terms of that business model and how they get paid, it is city governments, infrastructure firms, and other organizations which need this data to do planning and other things. So it provides a different type of data around climate adaptation.


Nicole Davis:
At Veris, we think it is really important that whoever is coming up with solutions are either from the communities that are being affected or have some real ties to those communities. We really look at who is on the team. Who are the people designing these solutions? I think you end up with solutions that are more creative than, no offense, if you just have a bunch of VCs in the room and what they might come up with or what they might think the best path forward is. We are looking for more creative solutions and ones that work really well in low to middle-income communities and in communities of color.



Alex Amouyel:
We talk about proximate entrepreneurs and proximate entrepreneurship. One of our colleagues, Angela Jackson at New Profit, has written a really good article in SSIR (
Effective Change Requires Proximate Leaders) about the value of proximate entrepreneurship.  


arrow_drop_down_circle
Divider Text

Nicole Davis: What are some of the challenges, structural or otherwise, are you seeing as you deploy different kinds of capital in your organizations? Beyond a lack of capital, what are some of the other challenges you face that you want to make sure people are aware of? 

arrow_drop_down_circle
Divider Text

Alex Amouyel:
I'm happy to take a positive outlook on that one, but share, nonetheless, a challenge. Because we do not play in the realm of traditional VC capital, we really look at the continuum of capital.


One of the companies we supported is eggXYt, an Israeli-based company that uses CRISPR Cas-9 to engineer livestock in various ways. It's starting off with avian applications–chickens. In chicken sexing, half of the chicks, the male chicks, are immediately culled and killed. It’s awful on many levels and not environmentally sustainable. Essentially eggXYt’s genetic engineering allows you to see whether an egg embryo is male versus female. You can then not incubate the male embryos and only incubate female embryos. This is a high-tech solution. I would think the founder, Yehuda Elram, would have access to a lot of types of capital, including traditional venture capital, because it's a really high growth market, and there's a lot of good opportunities for partnerships. It's a fairly vertically integrated market, so there are a lot of opportunities, and he has connections to the poultry industry.

Solve has a venture vehicle called Solve Innovation Future, and we invest in all Solver teams ourselves – on top of helping get different types of investors in the door. One of the things Yehuda said to me that I thought was pretty powerful, is that, through our help in getting a number of co-investors who are less high-growth, quick-return aligned and more impact aligned, he's able to focus the company on the more impactful applications of this technology as opposed to the more commercial applications – while hopefully still making good money.

I think that that's really quite powerful. The patience of the capital and the impact alignment of the capital are really important for impact-aligned entrepreneurs to succeed. That makes the difference between where they can spend their time. The entrepreneurs who go into the impact space do want to solve (challenges), but if the investors are pulling them away from that for-profit maximization, it's obviously a huge problem. So finding impact aligned and patient capital and offering those opportunities to (social entrepreneurs) is a challenge, but also an opportunity.

arrow_drop_down_circle
Divider Text

Nicole Davis: Another challenge that we talked about in our prep call that really struck me was around some of the policy-related structural issues. We talked about electrification and solar energy and the tax credit mechanism and how that impacts low and middle-income communities being able to access some of this technology. Will Christian and Geoff talk about some of the incentives that are currently in place?

arrow_drop_down_circle
Divider Text

Geoff Eisenberg:
From an incentive perspective, that is a huge barrier to broader adoption, especially in LMI communities, because it requires a tax burden in most cases. So if you're going to take the investment tax credit on solar or on an EV, you have to have $7,500 of tax liability to take advantage of that. I think the tax credit, in general, is a really bad mechanism, even for big solar power plant developers, because it's so expensive to structure these things. They end up really only getting about half the incentive that goes to bring down the cost of the power plant. 
Why are we wasting incentive dollars that way? Just make the darn thing a refundable grant. We're borrowing money to pay for everything anyway, at a very low percentage. I don't understand why we wouldn't do the same thing for this to make it more effective.

And then – thinking beyond the new. There are a lot of people who buy new cars, but they're generally rich people. Most people buy used cars. I think four or five times as many used cars get bought every year in this country as opposed to new cars. Why not some kind of tax credit for buying a used EV? Generally at one-third or one-half the price.
 

What about tax credits for micro-mobility? A more efficient, more effective, low-cost form of mobility for a family that can't afford two cars. Maybe they have one used car and an electric bike. 
Let's actually go after the large numbers of people and the way they buy things, as opposed to just giving big banks and big car companies what they're asking for.


Christian Okoye:
Those are all good points and a lot of things that we think about. Even at the utility level or the regulatory level, there's a lot of intransigence and recalcitrance that's very frustrating to deal with. The Ford CEO was just mentioning that the electric Ford trucks can be used to power your home and provide almost two days of power, but they can't then go and use that battery to back up the energy grid. There's no mechanism for it. There's no value that the grid currently allows for electric vehicles. And, these are effectively energy storage on wheels. So it's that bilateral system that we're trying to move towards. Utilities are just not incentivized to allow it to grow faster.


A lot of the way that they actually get their value is from building more infrastructure. We don't need more natural gas plants. Even more on a distribution and transmission grid, even though it would help, but there's a lot you can do with just the assets that we have now and looking at non-wired alternatives and optimizing it better. But there's just not really a mechanism for that performance-based enhancement of the system. 


arrow_drop_down_circle
Divider Text

Nicole Davis: I'd really like to open it up now for questions from the audience. One directed to you, Christian, is about this virtual power plant idea. What are the ways that you see for how we can ensure the transformation of our energy and grid system, so it has accountability to communities, such as complementing tribal sovereignty? What do we need to build so new systems can serve public interests and not just be a new form of wealth creation for some of the big energy companies?

arrow_drop_down_circle
Divider Text

Christian Okoye:
Yeah, I think it's a lot of the stuff that we touched on – making sure that every community can participate and actually get the value out of the grid. It takes going to these communities and finding ways that they can benefit and participate, such as from a tax credit or from more flexible financing. I do think there's a model that can work for most communities. These systems are getting cheaper and cheaper to allow people to save on their energy bills. I do think there needs to be more business model innovation, as well as regulatory innovation, in how we structure incentives.


arrow_drop_down_circle
Divider Text

Nicole Davis: We have a question about the intersection of climate justice and gentrification. Can anyone chime in with efforts that they've heard of to combat both of these issues, especially in communities of color?

arrow_drop_down_circle
Divider Text

Melissa Weigel:
I can give one example. I'm not sure it's exactly combating gentrification, but one thing that we see particularly in urban communities is a lack of green space and a lack of tree cover in low and moderate-income communities. So if you look at a map of New York City, the majority of trees are in Manhattan. And you get to the outer boroughs, and you're seeing a lot less tree cover. And this is contributing to a lot of negative outcomes for those communities. So you see higher instances of COPD. You see higher temperatures because trees can help keep the temperature down, and that's contributing to heat deaths.


The Nature Conservancy has designed an investment in green infrastructure primarily focused on low and moderate-income communities where there's a lack of green infrastructure. This is, in particular, useful for flooding events. So, a number of cities are facing increasing flooding, particularly east of the Mississippi, where you see increased storm events. I think Hurricane Ida really brought this home for a lot of people.

By building green infrastructure, you can actually absorb a lot of stormwater runoff. The combined sewer systems that these cities have are incredibly outdated and do not capture the amount of runoff needed. You can build green infrastructure, rather than spending millions of dollars for a cistern that you know is going to degrade over 10 or 20 years. Instead, you can build a bioswale or restore marshland that is absorbing more stormwater over time, rather than less. And if you focus this on low and moderate-income communities, oftentimes communities of color, you're increasing additional benefits for these communities as well – in particular, health benefits. And so, we've really targeted our green infrastructure for those communities.


arrow_drop_down_circle
Divider Text

Nicole Davis: And Geoff, I know you have in one of your portfolios a company that offers a technology solution that works with green infrastructure. 

arrow_drop_down_circle
Divider Text

Geoff Eisenberg:
I'm wondering if you're talking about Opti. It is applying smart grid technology or remote controllability to existing assets. So those stormwater systems that Melissa was talking about, a big part of the reason they don't work is that they're not actively controlled. When a storm like Ida rolls through New York, all of the storage ponds that would be really useful for slowing down the flow of that water or catching it might be full because it rained the week before, and no one thought we should go empty these things. And so, Opti tries to leverage the existing infrastructure and make it work better.

I think that's going to be a big part of this story in general. Yes, we need to invest a trillion dollars in infrastructure, but investing that money smartly and efficiently is going to get us a lot further. Let's use the infrastructure we already have as intelligently as we can. The grid is antiquated. It's terrible, but it's there. Let's use it to the best of our abilities to facilitate the outcomes we want. I think the other thing around this idea of land use, and like the word, gentrification, is obviously really charged. I think it's a super complex set of questions that people who deal with land use and zoning laws have to deal with. There are smart people trying to figure all that out. And I don't think anyone here on this call is an expert there. I think the only thing I would say is zoning laws do matter.

I think that what California has done recently around essentially abolishing single-family home zoning is really important. Listen, this may not be popular with people who left the cities to move into the suburbs during the pandemic, but urban infill, urban density, is an important part of reducing vehicle miles traveled and decreasing per capita energy use.

And so taking neighborhoods that are probably already well-to-do, and allowing for more density –taller buildings, more infill– probably takes some of the gentrification pressure off of the neighborhoods where people, if their neighborhood gets too expensive, they flee to where they can afford to buy a house. And I think that's a lot of the pressure on gentrification. And so you probably relieve some of that by also doing good by the climate by allowing for more dense, urban infill in existing neighborhoods. But who knows? That question is so complicated. I feel like I'm probably wrong on that one.


arrow_drop_down_circle
Divider Text

Nicole Davis: One final question. It's an all-hands-on-deck paradigm we're facing, and success will require partnership. I would really love to hear from Alex, who MIT Solve is partnering with. 

arrow_drop_down_circle
Divider Text

Alex Amouyel:
What Solve is set up to do, as this idea of a marketplace for social impact innovation. On one side, we have innovators from all around the world and all these different communities. We don't think there's one silver bullet solution to climate. But we have this portfolio of different solutions. And on the other side, we have what we call members. There are over a hundred members who are part of the ecosystem so far. And in addition to all the MIT resources that are available, we have corporations, foundations, impact investors, high net worth individuals, and philanthropists, multilateral organizations, and government entities. We welcome everyone in that sense.


We measure our impact through the partnerships we broker or capitalize for our Solver teams. And we count that as anything that is $10,000 or more in value. It doesn't have to always be grants or investments. It could be revenue generation; it could technically be in-kind, but we're very conservative in how we count the in-kind thing. So far, we have capitalized over 400 partnerships which are valued at $50 million, and $49 million of that is actual cash and $1 million as an in-kind to give you an idea.

And that really ranges from grants to investments to revenue opportunities and things like that. So I do think that it takes everyone and everything, and the people who are at the table, at least at our table, are the people who are interested in and think that we need more innovation and we need more proximate entrepreneurs to do those innovations, and they're coming to us.

Nicole Davis: Thank you so much to all of our panelists. I know we're at time. And I really, for the audience, hope that some of the actions that they've taken have inspired you to take action in any way that you can. Thanks for joining us.



The transcript of this Shift Conversation has been edited for clarity. 
Shift Conversations
A series of free webinars with leaders in the impact space.

Shift events are brought to you by JB Media Group

[bot_catcher]