Why we need to make Miami a place where great climate tech companies are built
By Matt Haggman with additional reporting by Riley Kaminer for Opportunity Miami
As the reality of climate change becomes widely accepted, new industries are emerging around the world with business models centered on reducing or reversing the greenhouse gas emissions warming our planet — and doing it profitably. No single hub has emerged for these businesses, which will create the jobs of the future. It’s in Miami’s interests to embrace efforts to cut carbon emissions – it’s a coastal city threatened by sea-level rise. But there is another reason to become a place that pioneers climate solutions: it’s one of the biggest business opportunities in decades. Some call it the biggest business opportunity in our lifetime.
Climate tech is a term for any new business model or technology that reduces the amount of carbon in the atmosphere. This includes how we manufacture things, how we get around, how cool or heat our homes and offices, how we produce our food and where we get our energy.
The category is growing because of consumer demand, government policies, and new technologies that make green products and processes more competitive than they were during the “cleantech” boom 20 years ago. Indeed, climate-friendly tech and operations play a major role in some of the largest American companies, including Tesla, Apple, and Microsoft.
World leaders have pledged to achieve a carbon-neutral economy by 2050, which scientists identify as a tipping point for climate change. While environmentalists say those pledges are long on talk and short on action, billions of public and private dollars are nonetheless flowing to transition the global economy to one that is net-zero, meaning one that is putting no more greenhouse gasses into the atmosphere than are being removed.
In his book, “How to Avoid a Climate Disaster,” Bill Gates wrote that the “countries that build great zero-carbon companies and industries will be the ones that lead the global economy in the coming decades.” The same can be said for cities.
Miami can be one of these places. It’s on the frontlines of climate change and widely associated with the challenges a warming planet presents. As a result, it can be a proving ground where new ideas, innovations, and cutting-edge ideas are tried first, making it attractive to companies in the broad category known as climate tech.
New climate tech companies, combined with government efforts to reduce energy consumption and shrink Miami’s carbon footprint, will create tens of thousands of so-called green jobs, many of which require skilled workers but not college degrees, opening new paths for social mobility.
Two decades ago, lots of money flowed into cleantech but then turned away during the 2008-12 recession. Now the investment is back at a greater scale — and with a greater focus on profitability.
Zooming out to the broader investment landscape, climate tech companies overall raised $87.5 billion between July 2020 and June 2021, according to PwC Global. These figures are impressive if you consider that VC-backed American companies raised $329.9 billion in 2021.
From 2020 to 2021, venture capital investment aimed at decarbonizing the world nearly doubled. Automakers continue to make bigger financial bets on an electric vehicle future; General Motors declared it will sell only EVs by 2035. Wall Street saw a 96 percent year-over-year investment increase in mutual funds focused on sustainability.
Chris Sacca, who oversees the $800 million VC fund Lowercarbon Capital, writes that transformation of massive industries such as aviation, building or steelmaking will happen through the invention of processes that are not only cleaner, but also “cheaper, better, faster, stronger, simpler, and just plain cooler than what’s available today.”
Lowercarbon Capital invests in companies that are slashing carbon emissions, pulling CO2 out of the atmosphere, or buying time. Its portfolio includes a company producing industrial chemicals with enzymes, not petrochemicals; others producing beef without cows, bacon without pigs, and cheese without milk, consuming less energy than traditional agriculture; and a startup using artificial intelligence to transform the way flood insurance is sold and paid.
Green jobs as a path to the middle class
As climate tech transforms more and more sectors of the economy, the definition of a green job will expand dramatically, encompassing marketers of electric vehicles to accountants at sustainable manufacturers to bankers creating instruments to mitigate flood risk. In fact, Lowercarbon Capital’s Clay Dumas told the Opportunity Miami podcast that eventually, all jobs will be green jobs.
For now, however, the term generally describes roles such as solar installers, EV mechanics, and construction workers retrofitting buildings. Because many of these jobs tend to be higher paying with lower barriers to entry, such as a college degree, there’s a unique opportunity to achieve meaningful upward mobility.
The growth of green jobs is not theoretical — it’s underway. LinkedIn reports that in 2015, the ratio of oil and gas to renewable and environmental jobs was 5:1. But by 2020 it was closer to 2:1. “At this rate, we expect that renewables and environment could actually outnumber oil and gas in total jobs on our platform by 2023, a major pendulum shift towards green jobs in a relatively short period,” Karin Kimbrough, LinkedIn’s Chief Economist, wrote in September.
The City of Miami recently published a report on the city's green economy and found that, from 2015 to 2019, green jobs grew at a 3.8 percent annualized growth rate compared to 1 percent growth for Miami’s non-green industries. On top of that, green jobs proved more durable during COVID, as green jobs showed little to no job loss while non-green sectors shed more than 6,000 jobs, the report found.
“This underlines the City of Miami’s strong potential to become a hub for green jobs in the future,” the draft report concluded. “By spurring demand for renewable energy, energy, and resource efficiency, electrification, and climate adaptation infrastructure now, these growing industries can continue adding green, middle-skill jobs that provide liveable wages.”