Graduation Year

2025

Date of Submission

4-2025

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Science and Management

Second Department

Environmental Analysis

Reader 1

Brahm Rhodes

Reader 2

Brandon Williams

Rights Information

2025 Sidney R Smith

Abstract

As global temperatures continue to rise at a rapid pace, the urgency for the development of highly effective climate technologies has grown. The increasing demand that exists has ignited a rise in venture capital investment within the last quarter century, though attention has remained on specific types of technologies. This thesis investigates the disproportionate allocation of venture capital funding toward mitigative technologies, including renewable energy systems, electric vehicles, and carbon capture solutions. Greatly underfunded, adaptive technologies are specifically designed to help communities as well as ecosystems withstand the current and near-term impacts of climate change. Innovations in climate-resilient agriculture, decentralized water purification, flood detection systems, and various other solutions are included. Data from over two decades of global venture capital activity shows that total climate tech investment exceeded $330 billion, yet a relatively small fraction of that capital targeted adaptation focused companies. Mitigative technologies consistently attract a greater share of investment because of greater scalability, higher potential profit margins, as well as alignment with existing policy incentives. This disparity has built a climate investment system that prioritizes reducing emissions over ensuring the immediate resilience, as well as safety, of populations already affected by climate disruption. Solutions that are adaptive generally tend to be more localized and context-specific while also being comparatively slower to yield returns. This leads to less attractiveness based on traditional venture capital models, which favor rapid growth and a global scale. Furthermore, many adaptation projects noticeably rely on public sector engagement or serve various communities that are not seen as lucrative markets. Government policy surrounding emissions reduction goals can present favorable opportunities for mitigation tech companies to gain market adoption, creating a more favorable investment for prospective investors. At the same time, tax credits and various subsidies have overwhelmingly favored specific mitigation efforts, further skewing the overall funding trends in that direction. Today, climate finance continues to be closely linked to various decarbonization metrics and the likelihood of common adoption, frequently measured in tons of carbon offsets instead of lives safeguarded or systems maintained. As a result, many people undervalue adaptive innovation, despite its important role in helping various societies endure increasing climate risks. This sizable gap has meaningful implications, particularly for many lower-income and climate-vulnerable regions. With climate change projections indicating that the world will continue to experience further changes in the environment, the demand for new innovations at a global scale will only increase. The thesis argues that the growing frequency and intensity of climate events will force a natural reorientation of funding priorities moving forward. Driven by necessity, adaptation will become a larger market, leading investment trends to follow. Should global governments introduce policy initiatives that concentrate on climate resilience, disaster prevention, and long-term stability while also maintaining support for emission reduction, it is possible that the funding gap separating mitigation from adaptation might start to close. A balanced approach would enable the climate tech sector to address the urgent needs of today more effectively while also tackling the sustainability challenges of the future.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.

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