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Will the Banking Busts Hurt Clean Tech?

Rather than impeding the clean-energy race, the recent collapse of the US start-up community's go-to bank offers valuable lessons for managing the public-private minuet that the net-zero transition requires. The doomsayers are missing the bigger picture.

NEW YORK – The collapse of Silicon Valley Bank last month seemed to bode ill for the global clean-energy race. Just as recently enacted US investment packages and the rest of President Joe Biden’s climate dreams were about to take off, the high-tech start-up sector’s bank of choice went bust, and commentators are warning of a looming slowdown in “the transition to clean energy.”

Yet, rather than hampering the clean-energy race, this episode should be a teachable moment. Yes, the initial handwringing over the banking fallout and its implications for climate policy were justified. SVB occupied an important place in the startup sector, and it was especially tapped in to clean-tech firms (its website still boasts “over 1,550 prominent clients” among clean-tech and sustainability startups). But if we learn the right lesson here, SVB’s bust may become a godsend.

First and foremost, SVB’s fate ought to bury the silly idea, peddled by some of the tech sector’s loudest voices, that technology alone will save us from society’s ills. It helps that SVB has “Silicon Valley” in its name. Recall how the Valley’s self-styled “libertarians” snickered at the bank bailouts of 2008 and the automaker bailouts of 2008-09, regarding it as obvious that big staid Wall Street and boring old Detroit would need taxpayer cash. If only tech CEOs had been in charge, innovative and independent-minded thinking would have prevented the whole mess. We now know how fanciful such arguments were.

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