Adaptation Required

June 12, 2022

The last two years have been an exciting time for those focused on climate. We’ve seen a drastic increase in interest in the space, 40% of the $220+ B invested since 2013 occurred in 12 months across 2020 & 2021. And a growing proportion of companies and countries agree to set science backed targets and commit to net zero.

At the same time, the science has been reinforced by both new IPCC reports defining our current state as a climate crisis and extreme weather that acts as a constant reminder of the challenge we face.

It seems like we have finally moved beyond climate denial to a growing demand for action on climate change.

However, when the conversation turns to what to do it feels binary. You are either for adaptation or for mitigation. There are plenty of bad examples of climate change adaptation, caused by poor solutions or poor planning. However, even if we were to magically stop emitting carbon today, we will be living with the risks of climate change for decades to come, and maybe even centuries.

We’ve lost the luxury of choice, but not the ability to choose correctly

Since our founding in 2020, Buoyant has advocated for both mitigation and adaptation. It is core to our investment thesis. The time for only pursuing mitigation was 20 years ago. Pursuing both means aggressively pushing for mitigation solutions to keep us under 1.5 degrees of warming while also adapting to the impacts that we are seeing today to save the lives and livelihoods of those being most impacted.

By reducing the risk and impacts of today's greatest climate pains, we free up capital (human and financial) to focus on reducing emissions. In other words, adaptation not only helps vulnerable communities but also enables mitigation. These investments are proven to have high returns when implemented.

The Best Types of Adaptation

A wider range of adaptation solutions are starting to emerge, and investing in the right types of adaptation will be key. The last thing we need are solutions like sea walls that fight with the power of mother nature. We should focus on the solutions that work with natural ecosystems, effectively price climate risk, are scalable and support all communities and importantly help support mitigation efforts.

There are lots of great companies focusing on providing these solutions:

Building, Managing, & Upgrading (the right types) of Infrastructure

StormSensor: Real-time insights into storm and wastewater infrastructure. This helps prevent urban flooding, contamination of natural water ecosystems, and provides data required for efficient water infrastructure maintenance and upgrades.
Shifted Energy: Shifts energy consumption from home appliances to when renewable energy is being produced. Keeping residents comfortable while allowing everyone (including renters) to benefit from reduced rates during peak times.

Insuring Against & Pricing Climate Risk

FloodFlash: Parametric flood insurance implemented using a flood sensor to provide payouts to impacted customers in under 48 hours instead of weeks or months, pricing the cost of climate change into operations and saving livelihoods.
DeltaTerra Capital: an investment research company providing impact assessment tools and working with policymakers to help minimize the damage done to homeowners as asset value adjustments happen.
Sinai Technologies: Software to measure, analyze, price, report and reduce emissions for corporations, identifing transition risks associated with a low-carbon economy.

Climate Disaster Detection & Mitigation

Gridware: Wildfire prevention enabled by remote telemetry and edge AI creating a smarter and more reliable grid.
Cornea: Real time and predictive models and risk analytics to inform decision makers of structural and financial risks and support in planning for and mitigation.

Food Security

Clean Crop Technologies: Helping to improve food yields, safety, and reduce food waste by removing contaminants.
Agtonomy: Improving the efficiency of farmers with an autonomous/tele-assist platform for agriculture vehicles that reduces equipment emissions and addresses labor shortages and limitations due to heatwaves.

FEMA's bias toward white and rich communities

We were disheartened but not surprised by this article and the graph below. The below graphic from the article is telling, but this quote is too:

What might be more telling is this quote:

In Old Greenwich, Conn., one of the nation’s richest communities, a couple received $100,000 from FEMA in 2018 to help elevate the luxurious waterfront home they had bought 16 years earlier for $1.33 million.

The Colonial-style house, which was flooded during Superstorm Sandy in 2012, features four bedrooms, four bathrooms, two fireplaces, a swimming pool and faces Greenwich Cove near the Long Island Sound.

Two-and-a-half years after the elevation was finished, the couple sold the home for $3.17 million, town records show.

Price increase: $1.84 million.

There are hundreds of examples of people selling homes within a few years of getting FEMA money for elevation projects. Nothing prohibits homeowners from selling their house immediately after FEMA pays to improve it. And many factors in addition to an elevation project can increase a property’s value