If you take a look at the values that comprise the core of our company and the team we are building, optimism is front and center. We do the work we do because we can picture a cleaner, more equitable future, and we get up every day to help bring a little more of it to life. And that future is more visible than ever as 2023 gets underway.
Historic Climate Policy: the Inflation Reduction Act
Perhaps the most significant driver of our enthusiasm for 2023 is the Inflation Reduction Act, which will be fully implemented this year. The law will onshore clean energy supply chains, supercharge investment in clean electricity grids and give every American household the tools they need to #electrifyeverything. We believe 2023 will be a tipping point year for the technologies that will power our homes, businesses and society for decades to come: record market penetration is anticipated for electric vehicles, heat pumps are poised to lead a transformation of the HVAC market, decarbonization policy will continue to advance across the country, and a whole host of companies are investing in America and building the workforce we need to deliver on these solutions.
Since the bill’s passage in August, we have helped our clients plan for and navigate this exciting new market reality. For some clients, we have focused on evolving their business models and products to align with the IRA’s positive policy changes. For others, our focus has been on exploring expansion into new markets, either with new product concepts or through partnerships that can strengthen their market advantage and core offerings. And for others, we are devising strategies that can deliver the IRA’s benefits to customers and stakeholders in innovative, streamlined ways.
Finally, through a few especially exciting engagements, we are contributing to the conversation on the most effective ways to implement the law, helping to ensure IRA programs are designed to deliver the rapid transformation that Congress intended to spark. Through pilots, newly-inked partnerships, and more, these strategies will come to life in 2023. To borrow a phrase we all know, the arc of history will really begin to bend toward climate progress.
A Turning Point for Carbon Markets
Another significant driver of work for the year ahead is the evolution of the voluntary carbon markets. According to S&P Global, as of Q3 2022, $750 million had already traded on the carbon market outpacing all of 2021 by nearly 40 percent. But as the market for carbon credits has grown, so too has scrutiny of its quality and performance. Are credits actually mitigating or removing carbon from the atmosphere? Are they as durable and permanent as they say they are? What is the impact of the carbon project, on local communities and ecosystems?
As registries, developers and buyers wrestle with these questions in 2023, we will see a redefinition of how we assign quality and value to carbon credits. The Integrity Council on Voluntary Markets will build on its Core Carbon Principles, and the newly announced The Global Carbon Trust will help lead the formation of a new global market for carbon credits. Given what will likely become a $50 billion dollar annual market, we are looking forward to continuing our work with global leaders who are bringing certainty and confidence to this critical market ecosystem, and to guiding our clients through new ways of thinking about carbon credits as a revenue or funding stream that brings decarbonization efforts to low-income and disadvantaged communities.
Combating Disinformation and Protecting Democracy
Over the past year, we began exploring a new pathway to supporting climate and equality outcomes: combating systems of disinformation.
Over the last decade, the rise of systemic channels that enable the viral spread of disinformation present deep and pervasive threats to our political systems and global progress. In 2021 and 2022, fabricated concerns about the 2020 election results led to passing of laws across 18 states that limited access to voting. Beyond the role these outcomes play in the degradation of our democracy, they highlight the impact that disinformation has on equality as research indicates that minority populations, specifically people of color and those with disabilities are disproportionately affected by the recently passed restrictive legislation. The disinformation machine extends far beyond election claims. Already in 2023, the New York Times reported on the role TV influencers are playing in the spread of disinformation surrounding electrification and climate solutions, promoted by the propane industry.
We have also learned that disinformation can be most effective when promulgated among small, local, communities. In March of 2022, NPR reported on the impact of disinformation in stopping local renewable projects. Michael Thomas, former founder of CarbonSwitch (which was acquired by Rewiring America in 2022), saw this first-hand when he joined more than 40+ local anti-renewable Facebook groups.
Despite the headwinds, it is not all bad news. The widespread rejection of election deniers across all levels of government from the U.S. Senate to local officials, during the 2022 midterm elections, indicate progress in our collective awareness of the disinformation crisis. Entering into 2023 we are channeling our optimism as we support clients to identify lasting solutions that will combat the systems enabling the sustained spread and investment in disinformation.
Continued Momentum for Climate Tech
Amidst the geopolitical and economic turmoil, inflation concerns and rising interest rates of 2022, one sector continued to attract historic levels of investment: climate tech. And the reason is simple: as the demand for climate solutions has remained strong and growing, so has the market’s belief in their potential. To name just three examples of this growth and investor confidence from our own client base: Mill, offering a new system tackling food waste, emerged from stealth, Mosaic, a leading finance platform, exceeded $10 billion in loans funded for solar and sustainable home improvements and, Dvele, a sustainable modular home builder launched Transcend Communities and completed its Series A round.
As thousands of highly skilled, motivated and passionate people re-entered the job market or looked for new opportunities this year, our clients have been able to grow their teams. We are excited and emboldened by the talent going to work on climate. The biggest challenges in society require the best and the brightest, and the most committed and passionate to solve them. It is very much time to catapult climate solutions from ideas to action.
As PVG enters 2023, we have our own example of this trend in the hiring of our first Managing Director, Diana Rhoten. With a background in scaling innovative ventures, building strategies for iconic Fortune 500 companies and leading teams, she will guide PVG’s own growth and bring exciting new ideas to our clients.
So that is why we are so optimistic for the year ahead. While there will always be headwinds to progress, it is hard to look at markets, public opinion and our own growth and not see that the winds at our back are stronger and more durable. Here’s to the year ahead. We look forward to working with you, learning from you and building a better future together.