Green Finance and Technological Innovation Forum
The Green Finance and Technological Innovation Forum will delve into the critical role of finance in supporting sustainable development. The discussions will focus on leveraging financial tools and market mechanisms to promote environmental projects and achieve sustainable development goals. Participants will include experts from green finance investment and research sectors across the United States and Asia. They will share the latest trends, challenges, and strategies for utilizing capital to drive environmental protection and social responsibility.
The forum was moderated by Jim Zhao, Founding Partner of Liquidmetal Ventures, and will feature discussions with Professor Nalin Kilatilaka of Boston University Questrom School of Business, Mitchell DONG, Founder and CEO of Pythagoras Investment Fund, Wei Wang, Co-founder and CEO of Robostreet Trucks, and Gui Chang, Founder of Infinitealgae. They will explore how green financial tools and technological innovations can jointly advance sustainable development projects, with a particular focus on investment strategies for green projects.
Key Points from the Discussion:
Do investors make a tradeoff between financial returns and impact?
Professor Nalin Kilatilaka: Our experience indicates that such tradeoffs rarely occur. There are investors willing to take on risks that conventional financial markets avoid, which reflects their preference for impact. A prime example is green banks, whose mission is to deploy green technology. These institutions might not necessarily compromise on returns but are willing to accept higher risks that others avoid.
How does green technology play in emerging markets, and how can financing mechanisms be tailored to support these technologies?
Jim Zhao: Emerging markets present significant opportunities and challenges due to their diverse needs and rapid industrialization, which often leads to high energy consumption and pollution. Innovations, such as startups from MIT working on affordable clean water solutions or specialized batteries for regions like India, are promising. These innovations often require tailored financing mechanisms. Many solutions successful in developed countries can also be adapted to emerging markets, with a focus on quality and manufacturing chains. Collaborative projects and funds are crucial in supporting these advancements.
Where do we find angel financing?
Mitchell Dong: Securing angel financing requires diligent effort and networking. Attending conferences like this one is essential, as they provide opportunities to connect with potential angel investors. If you have a compelling idea, engaging with people here could lead to initial funding. Networking is key.
How do you price the energy transition risk for companies moving towards green finance and carbon neutrality?
Nalin Kilatilaka: Pricing energy transition risk varies depending on the type of company. For incumbent fossil fuel companies, the transition involves direct energy risks. For manufacturing firms using fossil fuels, the transition risk includes potential changes in technologies used in their processes. Capital markets are grappling with these risks, which entail high transaction costs, though no definitive theory has emerged to quantify them yet.
Is a global carbon tax a better solution to our global problem?
Gui Chang: A carbon tax is an inevitable choice for the future. Despite the challenges and competition, a global carbon tax could offer a level playing field, allowing markets to address the issue more effectively. Historical solutions to global crises often involve scientific advances, similar to how life sciences can address environmental problems today.
Wei Wang: In my industry, we already pay carbon taxes, such as zero-emission vehicle credits in California. These taxes incentivize the purchase of electric vehicles over gas-powered ones, illustrating how policy can drive change.
Jim Zhao: While I agree that carbon taxes are necessary, implementing them fairly is complex due to numerous factors. In the U.S., carbon trading and calculating are booming markets, showing potential for global application in the long term.
Nalin Kilatilaka: Economists generally support carbon taxes as the optimal solution. The challenge lies in determining the appropriate tax level and coordinating its implementation across countries, given the difficulties in quantifying long-term carbon impacts and navigating political processes.
How can businesses balance profit-seeking objectives with environmental responsibility?
Mitchell DONG: Balancing profit with social missions is crucial in all sectors, including the environment. It requires executives and boards to carefully consider social aspects alongside profits. Extremes on either side can be problematic, but public opinion and regulators can help maintain this balance. For example, public outcry over excessive drug price hikes led to corrective actions by the companies involved.
What is the outlook for financing and innovation in technology disposal and recycling?
Ji (Jim) ZHAO: The disposal and recycling of technological materials is a growing field, exemplified by startups like M Batteries, which focuses on recycling lithium-ion battery materials. Their success in making these materials 95% recyclable highlights the importance of innovation in this sector. Government support through grants and policies can facilitate early-stage development and profitability of new technologies.
