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The COVID-19 consequences for clean tech startups could be catastrophic for the planet

Clean tech startups are at more risk of failure during the coronavirus crisis than ever before and if they do, our climate could fail, too. Can we really risk letting them die?

COVID-19 is wreaking havoc across the entire world, driving healthcare workers to their edge in hard-hit areas, killing the economy and people like nothing ever has ever before.

It is a cataclysmic time of global disruption, said Jane Kearns, VP at MaRS Discovery District in an interview.

Kearns worries that one possible outcome of the pandemic could be the rolling back much of the clean tech progress we have made in the past decade. Already, we’ve seen supermarkets revert to plastic for “sanitary” reasons and many recycling centers are no longer accepting anything but trash.

“There is a real risk that when we come through the other side of this that we fall back into what we know,” she said. And if that happens, “given what clean tech startup companies are going through right now, they will die.”

Startup stress

In her role at MaRS, Kearns oversees, advises and helps launch a vast array of clean tech startups. And all of them are facing adversity.

“Literally every single startup is in the exact same boat,” said Kearns.

When the crisis first struck, many of the clean tech startups that had been promised money, soon discovered that it would no longer be coming. “That was the first wave of phone calls,” she said.

“In the olden days we advised them on how to grow, now we advise them on how to survive,” she added.

Kearns explained that startups must now learn to conserve capital, perhaps re-tool and, to the best of their abilities, just hang on.

They can’t get to their labs and for many that is problematic because their grants are dependent on them hitting certain milestones, she said. They can’t sell because their customers aren’t buying anything and they are seeing some of their best talent be scooped up by others.

“What we have seen happen is as soon as this really great talent is laid off — and Canada has exceptional engineering talent and artificial intelligence expertise — we’ve seen those people being scooped up immediately by the big players.”

MaRS helped one startup that was going to have to lay off its entire engineering team partner with another startup that had pivoted to manufacture PPEs and needed to scale up.

“So they have temporarily hired all of this other company’s engineers,” she said; a solution that “lets the one company survive through the downturn and lets the other one scale up.”

Setting up industry for a true low-carbon future

Partnerships like the one Kearns described, while wonderful, are rare and what Kearns would like to see is a commitment from governments around the world to focus on their clean energy and sustainability goals as they look toward a COVID-19-free future.

Almost every country is putting up some support measures to help revive their economies and Kearns said she’d like to see all of that stimulus money come with caveats.

“The packages need to come with requirements that those dollars be deployed helping those industries prepare themselves for a low-carbon future,” she said.

Airlines, the transportation industry, oil and gas, manufacturing – all of the industries, which are “notoriously bad at adopting early-stage technologies” could seize this opportunity to jump start their decarbonization, said Kearns.

“If we don’t take this opportunity to enable this transition, we are missing a really critical piece of enabling a low-carbon future,” she said, adding “our climate doesn’t have time for us to miss this opportunity.” 

Startups have innovation in their blood. Indeed, that’s why Clarion Energy launched Initiate! at all of its major energy events. Initiate, the energy startup program, invites energy-focused start-ups apply for exhibit space at the events and meet with utilities and power producers from all across the sector.

At DISTRIBUTECH International, for example, the program grew from a dozen startups in 2019 to 21 startups in 2020. The 2021 event, which will take place in San Diego, California, February 9-11, could see many more. Almost all of the startups in the energy space are focused on how to make or deliver electricity that is cleaner, more efficient, cheaper or more reliable. We can’t afford to lose them.

“Startups are critically important for our low-carbon economy of the future,” said Kearns.

“If we don’t do something to step up to the plate here and help these companies, I am quite concerned that not only are we going to have economic devastation that is going along with the health crisis, but we are also going to have increased climate troubles out the other side, too.”