By Frederick Teo, CEO, GenZero
“It was the best of times, it was the worst of times.”
The famous opening line of Charles Dickens’ A Tale of Two Cities captured the zeitgeist in the mid-19th century. A period of great hope and optimism sparked by dramatic political changes in Europe, but contrasted with a great sense of uncertainty and fear due to the upheavals brought about by these very same changes.
The climate space is facing similar conditions today. It has recently seen the best of times.
The 2015 Paris Agreement has delivered significant levels of investments and adoption of new climate solutions. The cost of renewable energy is now comparable to (or even less than) conventional fossil fuels. The price of battery storage has declined by around 90% over the past 10 years – enabling greater EV adoption and energy transition. Governments have enacted carbon pricing, raised NDC ambition, and strengthened protection for forests and ecosystems. The conclusion of Article 6 negotiations at COP29 and the roll-out of CORSIA brought cautious optimism that carbon markets could finally scale.
However, it is also now experiencing the worst of times. The net zero transition has entered its hardest phase, where ambition meets engineering constraints, balance sheets, and geopolitics head-on. Climate issues have lost the attention of boardrooms, capitals, and households. Security concerns, inflation, trade disruption, and political uncertainty now crowd the agenda – slowing ambition, slowing the energy transition, and slowing the capital flows needed for real-world decarbonisation. Headwinds are growing.
While global energy transition investment reached a record US$2.3 trillion in 2025, this headline conceals strain. Renewable energy investment fell 9.5% year-on-year. Climate tech funding pipelines narrowed sharply: nearly 50% fewer companies reached Seed to Series A in 2025 than in 2022; roughly 80% fewer progressed from Series A to Series B, and it took six months longer to move through each stage. Global sustainable funds recorded US$84 billion in net outflows in 2025 as well. If capital and talent continue to migrate away from climate, we will not meet 2050 decarbonisation targets. The atmosphere does not wait for political cycles or funding windows. It simply accumulates what we emit.
The cost of binary thinking and false dilemmas
Into this already-difficult landscape, ideological divisions are compounding the problem. The debate over removal versus reduction, technology versus nature, principle versus pragmatism – these are not serious analytical distinctions. They are binary wars: all-or-nothing positions that fragment capital, slow decisions, and delay build-out. In the current environment, delay has a measurable cost.
The first false binary is principle versus pragmatism. The debate is too often framed as integrity versus bankability. Markets reward both. Being principled means real-world emissions outcomes, transparent claims, no accounting shortcuts. Being pragmatic means acknowledging constraints: hard-to-abate sectors take time and grid upgrades take years. Sustainability will not be sustainable without a business case. That does not mean lowering standards. It means building commercially sensible models that deliver both outcomes and returns. The most durable transition strategies are portfolios, not single bets.
The second false binary is nature versus technology. Nature-based solutions reduce physical risk and strengthen resilience, but only with robust governance and verification. Technology-based pathways decarbonise operations and supply chains, but could require costly enabling infrastructure and long lead times. Treating these as rivals is a strategic error. We need both to meet our climate ambitions.
The third false binary is reduction versus removal. There is little evidence to show that removals are de facto higher quality than reductions. Carbon credit quality is multi-dimensional and driven by metrics such as additionality, permanence, and robust quantification. By these metrics, removals do not consistently outperform reductions. The recent disproportionate skew towards removals is driven more by perception than by robust quality assessments. In reality, both reductions and removals will be needed to achieve the goals of the Paris Agreement, and both should be incentivised as much as possible.
A fourth binary deserves equal attention: mitigation versus adaptation. Adaptation is operational risk management, covering community resilience, asset integrity, supply continuity, and insurance costs. It remains structurally underfunded. As climate impacts intensify, resilience becomes a competitive differentiator and a balance-sheet issue, not just a CSR line item.
What policymakers and capital allocators must do
Policymakers do not need to pick winners. They need to set credible, consistent direction, reducing friction in permitting, standards, and claims rules. Investment horizons for large capex projects outlast electoral cycles. Inconsistent or easily reversible policy signals do not just slow decisions; they raise the cost of capital for every project in the pipeline.
For capital allocators, the choice is not between different solutions but between delay and delivery. We need to actively develop investable pathways. It means contracting demand earlier through long-term procurement and advance offtakes, so supply chains become bankable. It means deploying catalytic capital, in the forms of blended finance, first-loss structures, to move credible solutions from first-of-a-kind to commercial scale. It means treating high-quality MRV as market infrastructure that lowers risk premiums, not as compliance overhead.
We cannot afford the narcissism of small differences. The net zero transition is not a culture war. It is an industrial transformation informed by scientific facts and under severe time pressure. We are not short on ambition but we are short on time. Rejecting these false binary choices is an important step to taking climate action at scale.
Frederick Teo is CEO of GenZero, a climate impact investor focused on three areas: tech-based solutions, nature-based solutions, and carbon ecosystem enablers. In other words, GenZero explicitly pursues a non-binary investment strategy across technology, nature, and carbon markets. It invests both into funds, and directly into companies and projects. GenZero was founded in 2022 by Temasek, a global investment firm based in Singapore.
Any opinions expressed in this commentary reflect the views of the authors and not of Carbon Pulse.
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