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This time, it’ll happen more quickly, though still not right away.

In a completely unsurprising redux of President Donald Trump’s first term, the new/old U.S. president has officially notified the United Nations of America’s intent to withdraw from the Paris Agreement. According to the terms of the agreement, which went into effect in 2016, it takes a full year for withdrawal to become official. But Trump will almost certainly henceforth act as if the U.S. is no longer bound by the treaty, which has been adopted by nearly every other nation on Earth, in an effort to keep global warming “well below” 2 degrees Celsius.
“I’m immediately withdrawing from the unfair, one-sided Paris Climate Accord rip-off,” Trump told the crowd at the Capital One Arena in Washington, D.C., before signing a list of executive orders. “The United States will not sabotage our own industries while China pollutes with impunity,” he said. Trump has previously stated that he thinks it is unfair that less developed nations such as China are not required to peak their emissions for a number of years, while the U.S. is expected to continue decreasing its own.
This year, parties to the agreement are required to submit national climate action plans — or “nationally determined contributions” in the parlance of the treaty — to the United Nations, detailing how they’ll further reduce emissions and adapt to global warming. These updated plans are mandated every five years, though Trump failed to submit one in 2020. The Biden administration submitted a plan last month, in advance of Trump’s inauguration, which includes a goal of cutting emissions by 61% to 66% below 2005 levels by 2035. It’s safe to assume Trump will not abide by this. Once it leaves the Paris Agreement, the U.S. will also no longer have to submit yearly emissions reports or provide as much money to developing countries for climate change mitigation and adaptation.
So what will the fallout be? After all, America is the world’s second largest emitter of greenhouse gases, behind China. But logistically and legally, leaving the Paris Agreement is more symbolic than anything. Beyond the more nebulous — but very real — loss of international leadership on climate issues, there’s no tangible repercussions for exiting the agreement. Nor, as many party nations consistently demonstrate, any legal recourse for staying in while failing to meet targets or set sufficient goals.
As I reported in November, so long as the U.S. retains its membership in the United Nations Framework Convention on Climate Change, the U.S. can still attend the annual UN climate conference, a.k.a. COP, where all negotiations and decisions related to the Paris Agreement happen. But for all Paris-related meetings (which comprise much of the conference), the U.S. would have to attend as an “observer” with no decision-making power, the same category as lobbyists.
That’s actually never happened before. During Trump’s first term, the U.S. technically could (and definitely did) continue to play a role in negotiations. The Paris Agreement stipulated that no nation could officially announce its exit for three years after implementation, and, because it still took a year for withdrawal to become official, for every COP during Trump 1.0, the U.S. remained a party to Paris. While Trump’s COP delegations were smaller and less politically prominent than either Obama’s or Biden’s, U.S. representatives continued to show up and advocate for domestic interests. Since COP30 will happen in mid-November of this year, COP31 in 2026 will be the first climate conference where the U.S. will truly learn what it’s like to sit on the sidelines.
Making a more drastic break with the United Nation’s overall climate efforts by leaving the UNFCCC, which convenes the annual climate conference, is theoretically also an option. But leaving the framework convention would likely be a much more complex and arduous process than leaving Paris. While Trump has yet to make a statement indicating his intentions in this regard, the Heritage Foundation’s Project 2025 recommends it.
“We’re going to save over a trillion dollars by withdrawing from that treaty,” Trump told the crowd regarding the Paris Agreement, before returning to the Oval Office to sign a number of additional executive orders. As my colleague Jeva Lange explained, the math behind that figure comes from a study conducted by NERA Economic Consulting, which later released a statement saying that the administration “selectively used results” from its study, and that “NERA’s study was not a cost-benefit analysis of the Paris Agreement, nor does it purport to be one.”
Editor’s note: This story has been updated to reflect the signing of the executive order, “Putting America First in International Environmental Agreements."
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With new corporate emissions restrictions looming, Japanese investors are betting on carbon removal.
It’s not a great time to be a direct air capture company in the U.S. During a year when the federal government stepped away from its climate commitments and cut incentives for climate tech and clean energy, investors largely backed away from capital-intensive projects with uncertain economics. And if there were ever an expensive technology without a clear path to profitability, it’s DAC.
But as the U.S. retrenches, Japanese corporations are leaning in. Heirloom’s $150 million Series B round late last year featured backing from Japan Airlines, as well as major Japanese conglomerates Mitsubishi Corporation and Mitsui & Co. Then this month, the startup received an additional infusion of cash from the Development Bank of Japan and the engineering company Chiyoda Corporation. Just days later, DAC project developer Deep Sky announced a strategic partnership with the large financial institution Sumitomo Mitsui Banking Corporation to help build out the country’s DAC market.
Experts told me these investments probably won’t lead to much large-scale DAC deployment within Japan, where the geology is poorly suited to carbon sequestration. Many of these corporations likely don’t even plan to purchase DAC-based carbon offsets anytime soon, as they haven’t made the type of bold clean energy commitments seen among U.S. tech giants, and cheaper forestry offsets still dominate the local market.
Rather, contrary to current sentiment in the U.S., many simply view it as a fantastic business opportunity. “This is actually a great investment opportunity for Japanese companies now that the U.S. companies are out,” Yuki Sekiguchi, founder of Startup Navigator for Climate Tech and the leader of a group for the Japanese clean tech community, told me. “They get to work with really high caliber startups. And now everybody’s going to Japan to raise money and have a partnership, so they have a lot to choose from.”
Chris Takigawa, a director at the Tokyo-based venture firm Global Brain, agreed. Previously he worked at Mitsubishi, where he pioneered research on CO2 removal technologies and led the company’s investment in Heirloom. “Ultimately, if there’s going to be a big project, we want to be part of that, to earn equity from that business,” he told me of Mitsubishi’s interest in DAC. “We own large stakes in mining assets or heavy industrial assets. We see this as the same thing.”
Takigawa said that he sees plenty of opportunities for the country to leverage its engineering and manufacturing expertise to play a leading role in the DAC industry’s value chain. Many Japanese companies have already gotten a jump.
To name just a few, NGK Insulators is researching ceramic materials for carbon capture, and semiconductor materials company Tokyo Ohka Kogyo is partnering with the Japanese DAC startup Carbon Xtract to develop and manufacture carbon capture membranes. The large conglomerate Sojitz is working with academic and energy partners to turn Carbon Xtract’s tech into a small-scale “direct air capture and utilization" system for buildings. And the industrial giant Kawasaki Heavy Industries has built a large DAC pilot plant in the port city of Kobe, as the company looks to store captured CO2 in concrete.
During his time at Mitsubishi, as he worked to establish the precursor to what would become the Japan CDR Coalition, Takigawa told me he reached out to “all the companies that I could think about that might be related to DAC.” Most of them, he found, were already either doing research or investing in the space.
Japan has clear climate targets — reach net-zero by 2050, with a 60% reduction in emissions by 2035, and a 73% reduction by 2040, compared to 2013 levels. It’s not among the most ambitious countries, nor is it among the least. But experts emphasize that its path is stable and linear.
“In Japan, policy is a little more top down,” Sekiguchi told me. Japan’s business landscape is dominated by large conglomerates and trading companies, which Sekigushi told me are “basically tasked by the government” to decarbonize. “And then you have to follow.”
Unlike in the U.S., climate change and decarbonization are not very politically charged issues in Japan. But at the same time, there’s little perceived need for engagement. A recent Ipsos poll showed that among the 32 countries surveyed, Japanese citizens expressed the least urgency to act on climate change. And yet, there’s broad agreement there that climate change is a big problem, as 81% of Japanese people surveyed said they’re worried about the impacts already being felt in the country.
The idea that large corporations are being instructed to lower their emissions over a decades-long timeframe is thus not a major point of contention. The same holds for Japan’s now-voluntary emissions trading scheme, called the GX-ETS, that was launched in 2023. This coming fiscal year, compliance will become mandatory, with large polluters receiving annual emissions allowances that they can trade if they’re above or below the cap.
International credits generated from DAC and other forms of carbon removal, such as bioenergy with carbon capture and storage, are accepted forms of emissions offsets during the voluntary phase, making Japan the first country to include engineered credits in its national trading scheme. But to the dismay of the country’s emergent carbon removal sector, it now appears that they won’t be included in the mandatory ETS, at least initially. While a statement from the Chairman and CEO of Japan’s Institute of Energy Economics says that “carbon removal will be recognized in the future as credits,” it’s unclear when that will be.
Sekiguchi told me this flip-flop served as a wake-up call, highlighting the need for greater organizing efforts around carbon removal in Japan.
“Now those big trading houses realize they need an actual lobbying entity. So they created the Japan CDR Coalition this summer,” she explained. Launched by Mitsubishi, the coalition’s plans include “new research and analysis on CDR, policy proposals, and training programs,” according to a press release. The group’s first meeting was this September, but when I reached out to learn more about their efforts, a representative told me the coalition had “not yet reached a stage where we can effectively share details or outcomes with media outlets.”
Sekiguchi did tell me that the group has quickly gained momentum, growing from just a handful of founding companies to a membership of around 70, including representatives from most major sectors such as shipping, chemicals, electronics, and heavy industry.
Many of these companies — especially those in difficult to decarbonize sectors — might be planning for a future in which durable engineered carbon offsets do play a critical role in complying with the country’s increasingly stringent ETS requirements. After all, Japan is small, mountainous, densely populated, and lacks the space for vast deployments of solar and wind resources, leaving it largely dependent on imported natural gas for its energy needs. “We’ll always be using fossil fuels,” Takigawa told me, “So in order to offset the emissions, the only way is to buy carbon removals.”
And while the offset market is currently dominated by inexpensive nature-based solutions, “you have to have an expectation that the price is going to go up,” Sekiguchi told me. The project developer Deep Sky is certainly betting on that. As the company’s CEO Alex Petre told me, “Specifically in Japan, due to the very strong culture of engineering and manufacturing, there is a really deep recognition that engineered credits are actually a solution that is not only exciting, but also one where there’s a lot of opportunity to optimize and to build and to deploy.”
As it stands now though, the rest of the world may expect a little too much of Japan’s nascent DAC industry, experts told me.
Take the DeCarbon Tokyo conference, which was held at the beginning of December. Petre, Sekiguchi, and Takigawa all attended. Petre’s takeaway? “Deep Sky is not the only company that has figured out that Japan is really interested in decarbonization,” she put it wryly. DAC companies Climeworks and Airmyne were also present, along with a wide range of other international carbon removal startups such as Charm Industrial, Captura, and Lithos Carbon.
Overall, Sekiguchi estimated that about 80% of the participants in the conference were international companies or stakeholders looking for Japanese investment, whereas “it should be the other way around” for a conference held in Tokyo.
“I think there’s big potential, Japan can be a really big player,” she told me. But perhaps Americans and Europeans are currently a little overzealous when it comes to courting Japanese investors and pinning their expectations on the country’s developing decarbonization framework. “There’s so much hope from the international side. But in Japan it’s still like, okay, we are learning, and we are going steadily but kind of slowly. So don’t overwhelm us.”
Why America’s environmental institutions should embrace a solutions mindset
Innovation has always been core to the American story — and now, it is core to any story that successfully addresses climate. The International Energy Agency estimates that 35% to 46% of the emissions reductions we’ll need by 2050 will come from technologies that still require innovation in order to scale.
Yet there’s a gap between what society urgently needs and what our institutions are built to do. Environmentalism, especially, must evolve from a movement that merely protects to a movement that also builds and innovates.
As an environmentalist, I am profoundly grateful for the hard-won battles of the environmental movement over the past 50 years; fighting pollution, toxicity, deforestation, and community harm has been essential to the health of our families and ecosystems. Yet in this moment, we need to complement these efforts by cultivating a new generation of environmental organizations who have the drive to build in their DNA.
Today’s environmental leaders can drive innovation forward, or they can stand in its way.
I founded Elemental Impact 15 years ago to invest in bold entrepreneurs who are building and scaling the next generation of critical technologies. As a nonprofit investor, we pair catalytic capital with deep expertise to create lasting environmental and local impact, supported by philanthropic and government funders. We recycle any returns back into our nonprofit to invest in future companies.
We’ve seen a common pattern in many discussions where philanthropic and environmental priorities are being set: Most nonprofit organizations remain structurally oriented toward preventing harm — not innovating on solutions. The world needs vigorous efforts to speed and spread clean energy technology, and we must find a way to do this in partnership with traditional environmental protection.
Here’s an example of how the dynamics often play out today: One entrepreneur we know is building a carbon dioxide removal facility, and we’ve been partnering with her on community engagement. While she has seen strong support from local businesses, policymakers, and labor leaders, she has also encountered early resistance from one unexpected group: environmental advocates. “This experience has been eye-opening and disheartening,” the entrepreneur told me over gingerbread cookies. “I became an entrepreneur to change the world — and now I’m facing a barrier I didn’t expect.”
We see this story again and again as entrepreneurs trying to deploy new technologies face pushback from those with largely the same goal: to slow down and ultimately reverse global climate change while supporting human health and well-being.
For instance, my team recently engaged in a planning session with large environmental philanthropies to talk about the future of data centers. With global investments in data centers expected to reach nearly $7 trillion by 2030, we know that meeting their energy, water, and material needs — and the needs of the communities they’re in — will be essential. Yet the conversation focused solely on how to stop data centers from being built. Building new infrastructure at this scale requires solving for numerous complexities, and we need a strategy for community and company engagement that is just as nuanced — one that prioritizes local benefits and leverages the market momentum to accelerate clean energy and sustainable materials faster than would otherwise be possible.
This dynamic also shows up in policy designs that operate too slowly to keep up with the race to address climate change. At times, we see the environmental policy agenda working against environmental innovation. This has real consequences, in some cases doubling the cost of the very solutions we need to build.
There are many ways technological innovation can provide tangible benefits across both communities and the environment. Elemental’s investment in a geothermal company helped support a local university in creating an apprenticeship program in rural Utah, leading to good jobs and economic development while also providing clean power. This is an example of philanthropy, through our nonprofit investor model, working in concert with technology in a way that is highly catalytic.
Philanthropy has often stepped in to seed new movements, empower new leadership, and provide risk capital when there are market or policy challenges. However many funders we talk to are not yet leveraging philanthropic capital to shape markets, which is exactly what’s required to accelerate climate innovation.
The research backs this up. More than 90% of philanthropic leaders believe climate change will negatively affect the people and places they serve, according to a 2022 study by the Center for Effective Philanthropy. But less than 2% of foundation dollars have gone to advance climate solutions, per a separate analysis last year by Climateworks Foundation. And based on our conversations with researchers and funders in the space, we estimate that only a fraction of that goes to organizations that are focused on accelerating new technologies.
It’s important to remember that solar, batteries, and electric vehicles were once considered risky, untested, and controversial. Now they’re proven to be better, cheaper, and faster than their alternatives in large part due to philanthropic and government support in their early days. But to address today’s environmental challenges, those solutions are not enough. New breakthroughs in critical minerals, fertilizers, wildfire management, industrial efficiency, carbon utilization, next-generation energy systems, and so many more need the same catalytic support.
“Enhanced geothermal is only where it is today because of backing from philanthropy-funded initiatives that took risks where others didn’t,” Tim Latimer, the CEO of next-generation geothermal company Fervo Energy, an Elemental portfolio company, told us. This capital is particularly essential now, when government funding has been ripped away and hundreds of critical technologies are seeing their financing gap widen as they attempt to scale.
At Elemental, we work with influential philanthropists and foundations that are leading the way by funding innovation and new technology deployment. These organizations and others like them are the ones pushing the art of what’s possible with philanthropic capital and showing entrepreneurs that they are the solution — not the problem.
We know market interventions from philanthropy work. With catalytic capital, Elemental companies are 2.5x more likely to scale from early to late stage, and for every dollar we invest, our companies unlock an additional $100 of follow-on capital. Working every day with entrepreneurs, we have unique visibility into how innovations succeed, fail, or get blocked.
In the age of artificial intelligence, unprecedented technological change, and an affordability challenge brewing in the U.S. energy sector, we need leaders who understand the leverage points in technology and are finding creative opportunities to make the biggest environmental and social impact. We know that new technologies carry risk, and not all will drive social progress. But the way forward is to help shape and accelerate the ones that will contribute the most to the communities where they operate. That includes being a responsible participant in our changing climate.
This is the best time in history to have a front row seat to innovation. Magic can happen when entrepreneurs, philanthropy, government, corporate leaders, and communities come together to drive speed, scale, and impact. Let’s be bold and build.
Current conditions: Days after atmospheric rivers deluged the Pacific Northwest, similar precipitation is headed for Northern California, albeit with less than an inch of rain expected in the foothills of the Bay Area • Australia is facing a heatwave, temperatures hovering around 90 degrees Fahrenheit this week • Heavy rains threaten flash floods in Ghana, Togo, Benin, and southern Nigeria.
Three Senate Democrats considered top progressives announced Tuesday a probe into whether and how data centers are driving up residential electricity bills. In letters sent Monday to Google, Microsoft, Amazon, Meta, and three other companies, the lawmakers accused the server farms powering artificial intelligence software of “forcing utilities to spend billions of dollars to upgrade the power grid,” expenses then passed on to Americans “through the rates they charge all users of electricity,” The New York Times wrote. The senators — Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland, and Richard Blumenthal of Connecticut — warned that ratepayers will be left holding the bag when the AI bubble bursts, a possibility Friday’s stock plunge (which Heatmap’s Matthew Zeitlin covered) has made investors all too aware of.
Opposing data centers is emerging as a touchstone political test on the left. On Tuesday afternoon, Senator Bernie Sanders, the democratic socialist independent from Vermont, posted a video on his X account in which he argued that “a moratorium” on building new data centers nationwide “will give democracy a chance to catch up, and ensure that the benefits of technology work for all of us, not just the 1%.” Polling suggests the political issue has populist appeal. Just 44% of Americans said they would support a data center built nearby in a September survey from Heatmap Pro.
The House of Representatives voted 215-209 Tuesday to advance the bipartisan permitting reform bill known as the SPEED Act, despite mounting opposition from Republicans to provisions meant to protect already-licensed projects from the type of legal assault the Trump administration has unleashed on offshore wind. Republican critics of the bill, including Maryland Congressman Andy Harris and New Jersey Congressman Jeff Van Drew, vowed to vote against any legislation that included measures that might defend offshore turbine developers from Trump’s “total war on wind.”
Yet, “while the bill is alive for now, the outcome casts a pall over the prospects for any permitting deal this Congress,” as Heatmap’s Jael Holzman wrote last night, because “there is little shot of a grand deal on NEPA reform without exactly the sort of executive power restrictions Republican objectors feared.”
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The nationwide transformer shortage is getting worse as extreme weather destroys the existing grid and data centers demand the buildout of power infrastructure at a rate not seen in decades. A new Wall Street Journal feature on the manufacturers racing to churn out the big transformers featured a fresh statistic from the consultancy Wood Mackenzie that illustrates just how bad the problem has become. Orders for large transformers exceeded supply by about 14,000 units so far this year. The Biden administration made the transformer crisis worse by proposing — then revoking — a regulation to increase the energy efficiency of the equipment at the cost of requiring manufacturers to decide between investing in compliant assembly lines by 2027 or additional output to match today’s demand. The Trump administration has made the problem worse still by imposing strict trade tariffs on the very material transformers need most, as Heatmap’s Emily Pontecorvo wrote.

In the race to build the nation’s first small modular reactor, there are startups that developed designs based on less-powerful models of existing light water reactors and startups that are pursuing next-generation technologies shrunken down to a tiny fraction of a normal atomic power plant’s size. Washington, D.C.-based Last Energy is doing both. The company, founded by the entrepreneur and nuclear podcaster Bret Kugelmass, started out by proposing to build 20-megawatt light water reactors in Europe, before embarking on a U.S. project after the Trump administration vowed to ease the way for new nuclear reactors. On Tuesday, in a sign of investors’ confidence in the new trans-Atlantic direction, Last Energy announced a $100 million fundraising round. “For the first half a decade that I was telling people I was doing nuclear, I had to convince them, ‘Hey, here’s why nuclear is important,’” Kugelmass told TechCrunch. “Now everyone just comes to us saying, ‘Oh yeah, of course nuclear is a key part of the solution.’ I’m like, okay, great, I’m glad everyone’s caught up now.” The company is among the 10 startups in the Department of Energy’s reactor pilot program, meant to speed up deployments of new technologies by bringing at least three to the atom-splitting phase of development by next July 4.
The fundraising news came as the Trump administration took yet another stake in a private minerals company. On Tuesday, the military announced a deal to take a 40% share of the nearly $8 billion mineral processing plant the South Korean industrial company Korea Zinc promised to build in Tennessee.
BlackRock’s retreat from sustainable investing has cost the world’s largest asset manager the business of at least two European pension funds. On Tuesday, the PME group, which manages more than $69 billion in retirement savings for Dutch workers in the metal and technologies sectors, said it had “decided to end our relationship with BlackRock,” the Financial Times reported. The move comes after the Dutch healthcare workers pension group PFZW withdrew about more than $16 billion from the financial giant, though its money-market funds are still under BlackRock’s management. It’s not just BlackRock facing backlash for its softening position on emissions. In February, the United Kingdom-based People’s Pension yanked nearly $38 billion from State Street, saying it was prioritizing “sustainability, active stewardship, and long-term value creation.”
For penguins, bad weather is good news. In a new study in Nature Geoscience, researchers from the University of Gothenburg showed that storms in the Southern Ocean that encircles Antarctica regulate the Earth’s climate by moving heat, carbon, and nutrients out in the world’s oceans. The effect amounts to what scientists called “a critical climate service” marked by “absorbing 75% of the excess heat generated by humans globally.”