A harmful and misguided narrative is taking shape that Silicon Valley Bank’s collapse could derail our progress in fighting climate change.
From where I sit, I see no connection.
Last year, more than $1 trillion were invested globally in clean energy and other climate solutions. These ran the gamut from investments in some of the world’s largest publicly traded companies to multi-billion-dollar debt syndications in huge renewable energy projects to venture investments in early-stage innovators.
The clean energy economy is now one of the most dynamic industries on the planet, and it is bigger than one bank.
That wasn’t always the case. When I ran the United States Energy Department’s Loan Programs Office during the Obama administration, we placed bets on what are now trusted and proven clean technologies like wind, solar and electric vehicles.
Under President Obama, the loan office made the first such government loan to Tesla, financed the nation’s first utility-scale solar projects and executed many first-of-their-kind clean energy investments that are now commonplace.
At that time, convincing institutional investors to commit to the clean energy sector was a major challenge. Exxon Mobil sat atop the Dow Jones, and many remained dubious an actual energy transition was on the horizon and unsure about which technologies could succeed.
A lot has changed in ten years. Today, we know which technologies work at scale, and the cost of clean energy has plummeted. Our confidence is supported by a decade of regulatory certainty and the federal government taking definitive action through legislation like the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.
Three incontrovertible facts highlight clean energy’s momentum:
1) wind and solar accounted for 81% of all new power generation built worldwide in 2021. That sector employs three million people in the U.S. alone—nearly half of all American energy jobs, according to the U.S. Energy Department. 2) Every major automaker has committed to stop making cars with internal combustion engines after 2040. 3) Finally, heat pumps outsold gas furnaces in the U.S. last year thanks to electrification efforts.
We don’t need to wait for new breakthroughs and discoveries to achieve our climate goals. Future innovations and inventions will play an important role in our future, but this next decade must be dedicated to scaling technologies we already know work—solar, wind, batteries and electric vehicles—and deploying them as fast as possible to save our planet, keep energy costs low and achieve energy independence from petrostates like Russia and Iran.
I don’t mean to dismiss the potential fallout from SVB’s collapse had the FDIC not stepped in, and I know SVB has supported entrepreneurs of all kinds in the tech sector. The banking sector’s stability is critical to the entire economy, clean energy included.
But we need to guard against being too pessimistic. Yes, SVB was a pioneer when it started making clean energy loans in 1980. Today, every major bank worldwide has sizable investments in clean energy, because it is the cheapest and fastest-growing energy source on the planet.
The world and global economy are barreling towards a low-carbon future. SVB’s demise will not derail this momentum.