New technology generates excitement. Early investors get in on the ground floor of something new, and a few ideas gain traction. Then as the market develops, large investors move in, and the technology scales up.

It is happening now in the climate change investment space. Startups in climate tech did really well in 2021. Investors entered into more than 600 deals with companies gearing up to tackle climate change. The investment was $40 billion, which is more than twice as much as the previous year. Energy and mobility startups were the recipients of the largest amount of investment.

Last year, early-stage deals for climate technology saw lots of activity, which means that more companies will be raising later-stage funds in 2022. Those series B investments carry less risk for investors. The excitement is building, and the tech is scaling up.

Even with the increased funding, areas that could produce the best climate outcomes aren’t getting a proportional share of the money. Mobility attracted a larger share of funds but only accounts for 16% of greenhouse gas emissions. The technologies that are responsible for 80% of emissions received only 25% of the investment in climate tech over the past eight years.

Mobility is a more mature market, now attracting those later stage, less risky investments. In contrast, carbon capture is a newer industry, still sorting viable technology from proof of concept, and requires seed money or series A capital which is riskier for investors.

In another scenario, investments in wind power have concentrated on the manufacture and building of wind turbines to create renewable energy. Turbines are needed, but very little has been invested in advancing the technology to transport the energy away from the turbines to population centers, storing energy for times when the wind isn’t blowing, or upgrading the existing energy grid to best make use of the energy produced.

Climate tech needs more investment to enable new technologies to scale up more quickly to meet the demands of a climate-ravaged planet. A collaboration of governments, companies, and investors can tip the balance. Governments agreed to increase emissions reduction commitments at COP26 in Glasgow in 2021. They need to work with the private sector and businesses to ensure that the funding gets to the places where it can do the most good.

For example, farmers, ranchers, and forest landowners are eligible to apply for grants from the Department of Agriculture for tweaking their processes to curb greenhouse gas emissions or capture and store carbon. The USDA is investing $1 billion in these projects to incentivize change in how our food is produced. This partnership can benefit the government and the food producers, who have already been feeling the effects of the climate crisis on their livelihood. Investing in sustainable farming and food production will have lasting benefits for the planet as well.

We are moving in the right direction. We just need to move faster and more efficiently.