admin In a significant shift within the global climate-tech sector, the United States has emerged as the top market for climate technology investments during the first half of 2024. Despite an overall decline in funding, US companies secured $6.7 billion in investments, surpassing China, which raised $5.1 billion, according to a recent analysis by BloombergNEF (BNEF). This marks a notable change from the previous year, when China led the market with $14.5 billion in climate-tech funding.
Impact of US Policy on Climate-Tech Investments
The surge in US climate-tech investments is largely attributed to the nation’s proactive climate policies, particularly the Inflation Reduction Act (IRA). The IRA has played a crucial role in fostering investor confidence by offering generous tax credits, grants, and loans for emerging technologies such as batteries, hydrogen production, and carbon capture. These incentives have made the US a favourable environment for climate-tech startups, positioning it as a global leader despite the sector’s broader economic challenges.
BNEF analyst Musfika Mishi emphasised that the US’s dominance in climate-tech funding is no surprise given the strong support from federal policies. In contrast, China’s position has weakened due to overcapacity issues in its market, leading to a significant drop in investments. Meanwhile, Canada has emerged as the third-largest market, attracting $1.8 billion in climate-tech investments during the first half of the year.
Global Climate-Tech Funding Declines
The overall landscape of climate-tech investments has seen a considerable decline, with global funding shrinking by nearly 50% to $22 billion in the first half of 2024 compared to the same period in 2023. This downturn reflects broader macroeconomic trends, including high interest rates, which have tightened financial conditions across industries. Additionally, there has been a notable shift of investment focus towards artificial intelligence (AI), a sector that garnered nearly $47 billion in the first half of 2024, marking a 60% increase from the previous year, as reported by Pitchbook.
Despite the global slowdown, the US’s leadership in climate-tech financing underscores the critical role of government policy in shaping the future of sustainable technologies, highlighting the importance of strategic investment in this vital sector.
Magazine 
