Capital Markets Will Power the Energy Evolution

The world is embarking on what may be one of the greatest transformations since the Industrial Revolution. Over the next three decades, countries and companies could spend tens of trillions of dollars to build a low-carbon global economy. While governments, especially in the U.S. and Europe, are leading the way with bold policy initiatives, most of the work and the vast majority of the money will have to come from the private sector. The need for capital will challenge the financial markets, but at the same time it will open up enormous opportunities for innovators who can find profitable paths to a greener economy.

The work has already begun. Over the past year, dozens of new public companies, most of them small, have been created, either through traditional IPOs or through SPACs that acquired nascent clean energy companies. Although the numbers are impressive, they represent a tiny fraction of what is to come. In effect, we are just at the beginning of the beginning. Over time more new firms will emerge and established businesses will get into the act by reorganizing, divesting assets and sponsoring IPOs.