The growing threat of climate change is no longer a matter of contentious scientific debate. Climate scientists now agree that humanity’s “carbon budget”—the cumulative sum of greenhouse gases that humanity can emit while avoiding the worst effects of climate change—will be exhausted by roughly 2040 at current emission rates. While all levels of warming carry consequences, exceeding this budget will likely cause more than 2 degrees Celsius of warming, triggering irreversible, dangerous, and costly climatic change.

For decades, investors, policy makers, academics, and entrepreneurs have been debating the best path forward. In recent years, the costs of clean and efficient technologies such as solar photovoltaics (PV), LEDs, and electric vehicles have plummeted, and deployment of these technologies has skyrocketed.

While we all applaud these achievements, they have also led high-profile investment professionals such as Jigar Shah, academics such as Marc Jacobson, and other vocal figures to proclaim that the world already has the portfolio of solutions necessary to solve the climate crisis, and that investors and governments should focus their efforts on supporting the deployment of these later-stage solutions. This assertion calls into question the value of funding early-stage solutions and places the funding of early-stage and later-stage solutions in competition with one another.

On the contrary, we argue that investments in early- and late-stage solutions are complementary. The most effective portfolio to achieve climate change mitigation will require thoughtful investments in climate solutions along the entire “innovation continuum,” from conceptual ideas to solutions that are ready for commercial deployment and widespread impact. Drawing a distinction between so-called innovation and deployment presents a false dichotomy; innovation takes place as solutions are ideated, developed, and deployed.

An investment approach that supports and links solutions at the earliest stages of development to more mature solutions will improve the stock and the flow of solutions capable of mitigating greenhouse gas emissions. Yet this is not the investment approach we see in today’s financial marketplace. In fact, the amount of capital flowing to early-stage solutions is disturbingly low, despite the critical role that these investments play in mitigating climate change.

To correct this funding gap, new financing vehicles—especially from charitable asset owners—are needed that better align with the development of climate solutions that will secure a low-carbon future. These vehicles must harness capital that can tolerate long development timelines and accept high risk in exchange for high social and environmental impact. Philanthropists are the investors best suited to fund these vehicles.

Read the full article about the investment gap threatening the planet by Scott P. Burger, Fiona Murray, Sarah Kearney & Liquian Ma at Stanford Social Innovation Review.