In this week's brief, we're exploring two deals to scale nascent direct air capture technology, Copenhagen's program to encourage environmentally-conscious tourism, and China's investment in scaling the country's electric grid.

Microsoft and Occidental ink deal on direct air capture: Microsoft will purchase 500,000 carbon credits for an undisclosed amount from oil producer Occidental over the next six years. The deal comes as the tech company attempts to maintain its commitment to be carbon-negative by 2030 amid a surge in power needed for artificial intelligence. The credits will come from Occidental's direct air capture project in West Texas, which the company is developing with BlackRock and is set to become the world's largest DAC facility when it opens next year. While Occidental's team expects to market their credits at $400-630 per tonne, DAC credits typically trade at a premium of $1,000 per credit and have not yet been proven at scale. 

Google spinoff scales direct air capture: Startup 280 Earth, a spinoff of Alphabet's moonshot factory, signed agreements worth $40M to extract carbon dioxide from the atmosphere. The agreements, brokered by the Frontier coalition, will fund the removal of 61,600 tonnes of greenhouse gas emissions over the next six years at the company's new facility in Oregon. 280 Earth uses waste heat from data centers to improve efficiency and reduce the data center's cooling costs.

Copenhagen incentivizes climate-conscious travel:  As part of its CopenPay program, the city of Copenhagen will reward tourists who embrace climate-friendly behavior – including cycling, train travel, and clean-up effort – with access to museum tours, kayak rentals, free meals, and more. More than 20 attractions will participate in the pilot program this summer, including the National Gallery of Denmark, which will host workshops on how to turn plastic waste into art, and the Copenhagen Surf School, which will offer free lunches to surfers to spend 30 minutes cleaning up beaches.

China invests in the nation's grid: China is set to invest $800 billion over the next six years to overcome strains on its electricity grid as it shifts to renewable sources. The country has accounted for more than a third of the world's transmission grid expansion over the last decade, and it has the highest proportion of transmission lines that are less than 10 years old. Still, electricity demand growth in the country first the first part of 2024 was 7.4% year on year, driven by increased demand for data centers and electric vehicles. The country aims to have peak emissions in 2030, and accounted for 65% of global wind capacity and 60% of global solar capacity in 2023.

Climate tech funding falls: According to CTVC, global venture funding for climate-tech startups totaled $11.3B in the first half of 2024, down 20% from the same period last year and down 41% from the second half of 2023. Venture leaders attributed the drop to wider macro issues, including high interest rates and election uncertainty, as well as the realities of a hardware and capital-intensive industry.

African forest is a critical carbon sink: A new report found that Africa's miombo woodlands, which stretch from Mozambique to Angola, store twice as much carbon as previously estimated. Led by London-based carbon data provider Sylvera, the survey used 450 billion laser-scanning measurements across an area eight times the size of Manhattan and found the forests captured 2.2 times more carbon than previously estimated using older techniques. With Mozambique among the 10 countries with the biggest annual net loss of forest area between 2010 and 2020, this finding increases the potential value for carbon offset and debt-for-nature projects to channel financial resources into protecting nature.

Azerbaijan commits $500M for green projects: The host of this November's COP29 climate summit announced it will raise at least $500M for climate investments, beginning with a commitment from Socar, the state's oil company. It's a small amount compared to the $30B fund announced at COP28 in Dubai, which seeks to marshal another $250B in private sector investment in climate by 2030.

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