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Contrary to the rest of the U.S. tech industry, the market for climate mitigation solutions has boomed of late. Since 2022, U.S. solar energy capacity has grown 51%; sales of electric vehicles rose 146%; and investors have plowed $473 billion into 152 manufacturing clean energy manufacturing projects. The U.S. Energy Information Administration projects battery storage capacity will double in 2024. In 2022 alone, private investors threw more than $70 billion at startups working to decarbonize everything from cement production to aviation fuel. And this is all as the cost of solar has dropped 82% over the past decade. Globally, the world now invests almost twice as much in clean energy as it does in oil and gas.
The period has not been quite so fecund for adaptation solutions, however. Whereas mitigation technologies focus on cutting emissions, adaptation and resilience focuses on solutions that can reduce the risks and impacts of climate change. Although Bank of America analysts predicted four years ago that adaptation and resilience could become a $2 trillion market by 2026, annual investment grew just 28% in 2022 to $63 billion. In that same time, financing for mitigation technologies reached $1.2 trillion.
The main distinguishing factor between the two approaches to climate tech: Where the money is coming from. While global mitigation spending is generally shared evenly between the public and private sector, 98% of adaptation finance comes from the public sector. Without the profit motive to drive down costs, many solutions don’t make financial sense for investors. “Our targeting is better but the cost curve has not been substantially cut,” said Ali Zaidi, the president’s chief climate advisor, at the Innovations in Climate Resilience conference in April. We’ve made progress, he said, but “we haven’t cut it by a factor of four or a factor of eight — that’s the kind of progress we’ve made on mitigation technology, but not in the arena of resilience.”
Sonam Velani, co-founder of Streetlife Ventures and an early investor in adaptation solutions, told me that, “traditionally, adaptation has been seen as a government problem. But today, more and more businesses are actually coming to solve those solutions.” The new climate disclosure rules from the U.S. Securities and Exchange Commission put further pressure on companies to understand their products’ climate impact. “If you look at a lot of the climate-related disclosures that are now being required,” Velani said, “companies are actually required to understand climate risk and what impact that has on their bottom line,” and making that information public drives accountability.
In early April, a coalition consisting of the Bezos Earth Fund, the philanthropic ClimateWorks Foundation, impact-focused private equity firm the Lightsmith Group, and MSCI Sustainability Institute issued a new report called “The Unavoidable Opportunity,” aiming to understand the private sector adaptation opportunity. Jay Koh, Managing Director of the Lightsmith Group, said the title was inspired by the United Nations Intergovernmental Panel on Climate Change’s own language on adaptation. “Climate resilience investments can be made at scale,” the report determined, “including in publicly traded companies.”
MSCI said its model “builds on existing definitions and approaches to identifying adaptation companies,” including the EU’s taxonomy of sustainable economic activities, then used a large language model to scour companies’ annual reports for products and services that qualified. MSCI considered the companies adaptation and resilience investments only if they were in the business of adaptation, as opposed to simply “taking measures to make their operations more internally resilient.” By that metric, 827 companies, or more than 11% of publicly traded entities in developed markets, could be considered adaptation solutions.
All these new green opportunities didn’t sprout from thin air. The idea is to push back the “investment frontier” for adaptation — to broaden the classification beyond solely “pure play” companies focused explicitly and exclusively on climate adaptations to include those with multi-use products — and thereby bring in more capital. The same is true in the mitigation market, where examples are more plentiful. Take Siemens, for instance. The German conglomerate that sells everything from healthcare IT to dishwashers; it also happens to be a leader in offshore wind energy. Despite no mention of climate mitigation in Siemens’ mission or sustainability tagline on their homepage, they are still a key player in climate mitigation technologies.
Katie MacDonald is a co-founder of Tailwind, a research and investment firm focused on accelerating the deployment of climate adaptation and resilience solutions. She told me that “most companies don’t call what they do adaptation or resilience.” In fact, she said, “most of the companies and solutions we’ve spoken to so far don’t call themselves climate change anything — they call themselves risk management or agriculture analytics or supply chain or healthcare diagnostics.”
The MSCI report sets out a list of qualifiers to help investors better understand what adaptation is, but — crucially — stops short of saying what adaptation isn’t. Koh explains the thinking. “We think it’s very early in the development of adaptation to consider” excluding any business in particular. “If we would had said early on that decarbonization only means solar panels, then we would have never opened up our minds enough to decarbonize agriculture, transportation, and buildings.”
While climate impacts will be felt across all areas of the economy, tagging such a wide range of companies as climate adaptation solutions could leave the space vulnerable to greenwashing. The report uses pipes as an example. Pipes are critical for resilience tasks such as stormwater drainage and irrigation. But the same companies also sell pipes oil fields.
There are existing standards that can help answer these questions. The UN’s 17 Sustainable Development Goals, for example, codified in 2015 at the landmark UN Sustainable Development Summit, provided a framework for organizations to measure their contributions across climate impact areas. There are also more complex metrics such as adaptive capacity, which measures, for instance, how much excess heat a crop can withstand before its yields begin to decline.
MacDonald told me she can envision other outcome-based metrics, as well. “Whether it’s looking at reduced negative health outcomes and mortality or increased asset health and functionality, there are a myriad of ways we can measure the presence of a climate resilience benefit,” she said.
The MSCI team hopes the report’s findings can enable investors and portfolio managers to create an investing strategy that encompasses every size of company including seed, venture, growth, and listed equities. Koh emphasizes that investing in adaptation isn’t a matter of wondering what the business models will be or waiting for new startups to appear. The report shows that there’s already an identifiable set of public companies that could make up an investment strategy for your existing 401k, pension plan, or portfolio.
The point is not merely to recharacterize more investing as adaptation-related, inflating the statistics with no real change in fortune for businesses and governments attempting to fortify themselves against the climate of the future. The point is for private capital to drive demand for solutions that not only prevent immense losses but foster a higher quality of life for billions of people.
“You actually know more right now about how climate change will unfold between now and 2040 than you do about the rate of inflation, interest rates, AI, consumer behavior or the betting odds on who Taylor Swift will be dating next,” Koh told me as he walked through the report’s findings. “We think that leads to an unavoidable opportunity,” though he added a caveat: “I believe these statistics were made before Travis Kelce.”
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Though it might not be as comprehensive or as permanent as renewables advocates have feared, it’s also “just the beginning,” the congressman said.
President-elect Donald Trump’s team is drafting an executive order to “halt offshore wind turbine activities” along the East Coast, working with the office of Republican Rep. Jeff Van Drew of New Jersey, the congressman said in a press release from his office Monday afternoon.
“This executive order is just the beginning,” Van Drew said in a statement. “We will fight tooth and nail to prevent this offshore wind catastrophe from wreaking havoc on the hardworking people who call our coastal towns home.”
The announcement indicates that some in the anti-wind space are leaving open the possibility that Trump’s much-hyped offshore wind ban may be less sweeping than initially suggested.
In its press release, Van Drew’s office said the executive order would “lay the groundwork for permanent measures against the projects,” leaving the door open to only a temporary pause on permitting new projects. The congressman had recently told New Jersey reporters that he anticipates only a six-month moratorium on offshore wind.
The release also stated that the “proposed order” is “expected to be finalized within the first few months of the administration,” which is a far cry from Trump’s promise to stop projects on Day 1. If enacted, a pause would essentially halt all U.S. offshore wind development because the sought-after stretches of national coastline are entirely within federal waters.
Whether this is just caution from Van Drew’s people or a true moderation of Trump’s ambition we’ll soon find out. Inauguration Day is in less than a week.
Imagine for a moment that you’re an aerial firefighter pilot. You have one of the most dangerous jobs in the country, and now you’ve been called in to fight the devastating fires burning in Los Angeles County’s famously tricky, hilly terrain. You’re working long hours — not as long as your colleagues on the ground due to flight time limitations, but the maximum scheduling allows — not to mention the added external pressures you’re also facing. Even the incoming president recently wondered aloud why the fires aren’t under control yet and insinuated that it’s your and your colleagues’ fault.
You’re on a sortie, getting ready for a particularly white-knuckle drop at a low altitude in poor visibility conditions when an object catches your eye outside the cockpit window: an authorized drone dangerously close to your wing.
Aerial firefighters don’t have to imagine this terrifying scenario; they’ve lived it. Last week, a drone punched a hole in the wing of a Québécois “Super Scooper” plane that had traveled down from Canada to fight the fires, grounding Palisades firefighting operations for an agonizing half-hour. Thirty minutes might not seem like much, but it is precious time lost when the Santa Ana winds have already curtailed aerial operations.
“I am shocked by what happened in Los Angeles with the drone,” Anna Lau, a forestry communication coordinator with the Montana Department of Natural Resources and Conservation, told me. The Montana DNRC has also had to contend with unauthorized drones grounding its firefighting planes. “We’re following what’s going on very closely, and it’s shocking to us,” Lau went on. Leaving the skies clear so that firefighters can get on with their work “just seems like a no-brainer, especially when people are actively trying to tackle the situation at hand and fighting to save homes, property, and lives.”
Courtesy of U.S. Forest Service
Although the Super Scooper collision was by far the most egregious case, according to authorities there have been at least 40 “incidents involving drones” in the airspace around L.A. since the fires started. (Notably, the Federal Aviation Administration has not granted any waivers for the air space around Palisades, meaning any drone images you see of the region, including on the news, were “probably shot illegally,” Intelligencer reports.) So far, law enforcement has arrested three people connected to drones flying near the L.A. fires, and the FBI is seeking information regarding the Super Scooper collision.
Such a problem is hardly isolated to these fires, though. The Forest Service reports that drones led to the suspension of or interfered with at least 172 fire responses between 2015 and 2020. Some people, including Mike Fraietta, an FAA-certified drone pilot and the founder of the drone-detection company Gargoyle Systems, believe the true number of interferences is much higher — closer to 400.
Law enforcement likes to say that unauthorized drone use falls into three buckets — clueless, criminal, or careless — and Fraietta was inclined to believe that it’s mostly the former in L.A. Hobbyists and other casual drone operators “don’t know the regulations or that this is a danger,” he said. “There’s a lot of ignorance.” To raise awareness, he suggested law enforcement and the media highlight the steep penalties for flying drones in wildfire no-fly zones, which is punishable by up to 12 months in prison or a fine of $75,000.
“What we’re seeing, particularly in California, is TikTok and Instagram influencers trying to get a shot and get likes,” Fraietta conjectured. In the case of the drone that hit the Super Scooper, it “might have been a case of citizen journalism, like, Well, I have the ability to get this shot and share what’s going on.”
Emergency management teams are waking up, too. Many technologies are on the horizon for drone detection, identification, and deflection, including Wi-Fi jamming, which was used to ground climate activists’ drones at Heathrow Airport in 2019. Jamming is less practical in an emergency situation like the one in L.A., though, where lives could be at stake if people can’t communicate.
Still, the fact of the matter is that firefighters waste precious time dealing with drones when there are far more pressing issues that need their attention. Lau, in Montana, described how even just a 12-minute interruption to firefighting efforts can put a community at risk. “The biggest public awareness message we put out is, ‘If you fly, we can’t,’” she said.
Fraietta, though, noted that drone technology could be used positively in the future, including on wildfire detection and monitoring, prescribed burns, and communicating with firefighters or victims on the ground.
“We don’t want to see this turn into the FAA saying, ‘Hey everyone, no more drones in the United States because of this incident,’” Fraietta said. “You don’t shut down I-95 because a few people are running drugs up and down it, right? Drones are going to be super beneficial to the country long term.”
But critically, in the case of a wildfire, such tools belong in the right hands — not the hands of your neighbor who got a DJI Mini 3 for Christmas. “Their one shot isn’t worth it,” Lau said.
Editor’s note: This story has been updated to reflect that the Québécois firefighting planes are called Super Scoopers, not super soakers.
Plus 3 more outstanding questions about this ongoing emergency.
As Los Angeles continued to battle multiple big blazes ripping through some of the most beloved (and expensive) areas of the city on Friday, a question lingered in the background: What caused the fires in the first place?
Though fires are less common in California during this time of the year, they aren’t unheard of. In early December 2017, power lines sparked the Thomas Fire near Ventura, California, which burned through to mid-January. At the time it was the largest fire in the state since at least the 1930s. Now it’s the ninth-largest. Although that fire was in a more rural area, it ignited for some of the same reasons we’re seeing fires this week.
Read on for everything we know so far about how the fires started.
Six major fires started during the Santa Ana wind event last week:
Officials are investigating the cause of the fires and have not made any public statements yet. Early eyewitness accounts suggest that the Eaton Fire may have started at the base of a transmission tower owned by Southern California Edison. So far, the company has maintained that an analysis of its equipment showed “no interruptions or electrical or operational anomalies until more than one hour after the reported start time of the fire.” A Washington Post investigation found that the Palisades Fire could have risen from the remnants of a fire that burned on New Year’s Eve and reignited.
On Thursday morning, Edward Nordskog, a retired fire investigator from the Los Angeles Sheriff’s Department, told me it was unlikely they had even begun looking into the root of the biggest and most destructive of the fires in the Pacific Palisades. “They don't start an investigation until it's safe to go into the area where the fire started, and it just hasn't been safe until probably today,” he said.
It can take years to determine the cause of a fire. Investigators did not pinpoint the cause of the Thomas Fire until March 2019, more than two years after it started.
But Nordskog doesn’t think it will take very long this time. It’s easier to narrow down the possibilities for an urban fire because there are typically both witnesses and surveillance footage, he told me. He said the most common causes of wildfires in Los Angeles are power lines and those started by unhoused people. They can also be caused by sparks from vehicles or equipment.
At more than 40,000 acres burned total, these fires are unlikely to make the charts for the largest in California history. But because they are burning in urban, densely populated, and expensive areas, they could be some of the most devastating. With an estimated 9,000 structures damaged as of Friday morning, the Eaton and Palisades fires are likely to make the list for most destructive wildfire events in the state.
And they will certainly be at the top for costliest. The Palisades Fire has already been declared a likely contender for the most expensive wildfire in U.S. history. It has destroyed more than 5,000 structures in some of the most expensive zip codes in the country. Between that and the Eaton Fire, Accuweather estimates the damages could reach $57 billion.
While we don’t know the root causes of the ignitions, several factors came together to create perfect fire conditions in Southern California this week.
First, there’s the Santa Ana winds, an annual phenomenon in Southern California, when very dry, high-pressure air gets trapped in the Great Basin and begins escaping westward through mountain passes to lower-pressure areas along the coast. Most of the time, the wind in Los Angeles blows eastward from the ocean, but during a Santa Ana event, it changes direction, picking up speed as it rushes toward the sea.
Jon Keeley, a research scientist with the US Geological Survey and an adjunct professor at the University of California, Los Angeles told me that Santa Ana winds typically blow at maybe 30 to 40 miles per hour, while the winds this week hit upwards of 60 to 70 miles per hour. “More severe than is normal, but not unique,” he said. “We had similar severe winds in 2017 with the Thomas Fire.”
Second, Southern California is currently in the midst of extreme drought. Winter is typically a rainier season, but Los Angeles has seen less than half an inch of rain since July. That means that all the shrubland vegetation in the area is bone-dry. Again, Keeley said, this was not usual, but not unique. Some years are drier than others.
These fires were also not a question of fuel management, Keeley told me. “The fuels are not really the issue in these big fires. It's the extreme winds,” he said. “You can do prescription burning in chaparral and have essentially no impact on Santa Ana wind-driven fires.” As far as he can tell, based on information from CalFire, the Eaton Fire started on an urban street.
While it’s likely that climate change played a role in amplifying the drought, it’s hard to say how big a factor it was. Patrick Brown, a climate scientist at the Breakthrough Institute and adjunct professor at Johns Hopkins University, published a long post on X outlining the factors contributing to the fires, including a chart of historic rainfall during the winter in Los Angeles that shows oscillations between wet and dry years over the past eight decades.
But climate change is expected to make dry years drier and wet years wetter, creating a “hydroclimate whiplash,” as Daniel Swain, a pre-eminent expert on climate change and weather in California puts it. In a thread on Bluesky, Swain wrote that “in 2024, Southern California experienced an exceptional episode of wet-to-dry hydroclimate whiplash.” Last year’s rainy winter fostered abundant plant growth, and the proceeding dryness primed the vegetation for fire.
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Editor’s note: This story was last update on Monday, January 13, at 10:00 a.m. ET.