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Climate tech’s biggest hits and misses in 2023


Climate tech might have been down in 2023, but it’s not out yet.

That’s not surprising, really. For the broader economy, this was the year of the recession that never arrived. Investors grew reticent to write checks and skyrocketing interest rates blunted profitability projections for large climate tech projects like offshore wind installations.

Yet, while investment in climate tech declined 40% in the third quarter of 2023 compared to a year earlier, according to a PwC analysis of PitchBook data, the sector fared far better than the broader market, which saw a drop of 50% in the same period. And, climate tech’s share of all checks written to startups has risen steadily over the years, amounting to 10% of all venture capital and private equity investments through the third quarter of 2023.

What’s more, early-stage deals represent only about half the total, continuing a trend that emerged in 2020.

That means climate tech is all grown up, right? In some cases, yes. But the sector is still riddled with risky bets that have the potential to reap enormous returns along with substantial climate benefits.

This year has been one full of drama for climate tech. Let’s dig in.

Fusion goes boom while fission goes bust

Late last year, the fusion world was awash in excitement. In December, the team at the National Ignition Facility said they had produced a net-positive fusion reaction, the first time anyone had been able to do that outside of a hydrogen bomb.

There was a big caveat, namely that the “net positive” qualifier met the scientific definition: The energy going into the reaction was measured at the point where the lasers hit the gold cylinder containing a BB-sized fuel pellet. That’s a heck of a qualifier, but crossing that scientific threshold gave other fusion projects confidence that their designs could pan out. The whole pursuit was no longer about chasing a theorem.

Then in August, the team announced that their first success wasn’t a fluke. When the facility’s 192 laser beams converged on the target and compressed the tiny fuel pellet, the resulting fusion reaction released more than 3.5 megajoules of energy, an improvement of more than 10%.



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