Tomer Shalit: 0:03

By helping cities understand this picture, what's needed to make the transition happen. Who are the winners, who are the losers? And getting a good as possible grip over this, we can start understanding what political and financial instruments we have to put in place to accelerate the transition

Tom Raftery: 0:23

Good morning, good afternoon, or good evening, wherever you are in the world. This is the climate 21 podcast. The number one podcast, showcasing best practices in climate emission reductions. And I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice, to be sure you don't miss any episodes. Hi everyone. Welcome to the Climate 21 Podcast. My name is Tom Raftery and with me on the show today, I have my special guest, Tomer. Tomer, welcome to the podcast. Would you like to introduce yourself?

Tomer Shalit: 0:55

Hi. Thanks for having me. Um, I'm Tomer Shalit . I'm the, um, founder and chief product officer of Climate View. We help cities reach their net zero goals.

Tom Raftery: 1:07

Okay. how?

Tomer Shalit: 1:11

In essence by helping them, helping them understand their financial needs, to reach their transition and connecting cities to capital and capital to city

Tom Raftery: 1:19

Okay. Again, how?

Tomer Shalit: 1:24

So, the agreement that we need to reach, uh, that we need to reach net zero, I think that that's the. Let's assume we have a global agreement on that. and um, actually remember this happened a lot over the last couple of years that, the sense of urgency is there. It's gone from being on high from the high on a political agenda to also be very high on business agenda. So just reminding here, there's a lot of good movement in the world towards understanding that we reach need to reach net zero that we need to come as close as possible to the Paris Agreement as we can. And cities are a very important part of that transition. Cities stand for nearly 70% of the world's emissions. The other center of our economic engines, uh, they are very, very important. They're also close to the citizens and very close to, um, the things that must change for us to make this transition happen. How we transport ourselves, how we, how we live, uh, how we heat our buildings, et cetera. So giving a big picture here that we want to reach net zero, uh, cities are a very important part of it. The world is waking up to this need, and what's beginning to happen now is that capital. Knows it has to be deployed towards the transition. And cities know they need more money to make this happen fast enough.

Tom Raftery: 2:49

Mm-hmm.

Tomer Shalit: 2:50

So it's a good situation here. We have cities that want, and need capital and, capital that seeks good projects to invest in. So we help cities by first of all, creating their climate action plans. And that's actually something that the cities have been doing for many for, for, for a few years, Like creating their climate action plans with ambitious goals to reach net zero by year so and so. These climate action plans have to become climate investment plans, have to actually say what kind of capital is needed to make this transition happen. And what's the return of investment and what's all the other benefits except for just carbon with the transition? So we help cities go from climate action plans to then having climate investment plans, which start saying what capital is needed. There's a really important insight that comes when you start working with this. Is that the transition has a positive return of investment. There is actually a good business case if one sees it on a macro perspective. Now, you'd argue, obviously there's a good business case with the transition if you calculate the cost of inaction. So let's not even go there because that's so obvious. But even, given just this situation as it is now, the transition for a city has a positive return of investment. But in a macro perspective, meaning in the big picture, because of course if it had been simple, it would just, just happened. It hasn't, and it isn't happening fast enough. The challenge is that, although in macro perspective, positive return investment, when you break it down, we have winners and losers. So by helping cities understand this picture, what's needed to make the transition happen. Who are the winners, who are the losers? And getting a good as possible grip over this, we can start understanding what political and financial instruments we have to put in place to accelerate the transition. And we are helping cities to understand that picture, to get the kind of decision intelligence they need to communicate, and argue for the financing they need.

Tom Raftery: 5:11

Okay. Again, how?

Tomer Shalit: 5:16

Mm-hmm.

Tom Raftery: 5:17

Sorry, this is becoming quite repetitive, but I, I wanna keep

Tomer Shalit: 5:20

The five whys? Yes.

Tom Raftery: 5:21

wanna keep digging into it.

Tomer Shalit: 5:23

Yes. Great. No, so. let's try and be very concrete, very concrete examples I'm saying there, there's a positive roi. That's, that sounds good. Bank of England said that a couple of years ago and like calculating, I can't even remember how many billions, et cetera. But let's look at some specific examples. So for example, an obvious, uh, transition opportunity for a city is to get people to go from taking their cars to cycling to work. That's a very obvious one. Now we can't assume everyone can cycle to work, but we can make an assumption that in very many cities, people which have less than 10 kilometers, going, uh, cycling to work, it's actually possible to get a substantial part of that population to start cycling. We have really good examples of that. Copenhagen, Amsterdam, whom you, where I am just now, so getting people to start cycling instead of taking, uh, the car requires, sometimes significant infrastructure investments.

Tom Raftery: 6:25

Mm-hmm.

Tomer Shalit: 6:26

We need a safer cycle path. People won't start cycling if they think they'll be killed or hurt when this cycle, we, uh, might need, uh, better infrastructure workplaces because frankly a shower when you arrive might be important for longer cycle ride. Uh, we definitely need good and safe parking places for cycles, et cetera. So there's lots of good practices here. And again, we can look at Amsterdam and Copenhagen on how we've actually made these shifts happen. And can reasonably well predict what kind of investments are needed to change people's behaviors so we shift from taking the car to taking the bicycle. Just giving one example here, so the city is going to do these investments cuz most of these things I spoke about are, most of them will be within the city's permit to invest in some of the, well, the, the, the companies, et cetera. The big winners of this transition is not the city. If we see in monetary terms, it's actually health benefits, the lower emissions from not taking the cars and above all the enormous health benefits of actually cycling to work versus taking the car. And these, studies on these are so, so shockingly clear that you, it's like, you know, in the fifties when started understanding the danger of smoking and, you know, it became like crazy to think of the idea of smoking. Well, the, the health benefits, the leap, the health benefits of cycling are nearly just as big compared to taking the car. So have these investments the city needs to make to shift the behavior towards cycling. And the big benefits is to the healthcare system. So in the US that would be private healthcare. In, in Europe, most of Europe, that would be healthcare system, but it's not the city, it's, it's on another budget. I dove down now very, very many stages into the why , cause you'll be asking there. But, this is one very simple example, where the costs and the benefits don't come to the same budget, so to speak. But seeing it out of a macro perspective, it's obviously good for society.

Tom Raftery: 8:34

Yep. So how do you marry the two things? I mean, what's the incentive for a city to put proper cycling infrastructure in place if they're not going to reap the rewards of the benefits to its citizens?

Tomer Shalit: 8:53

So you can answer two ways, sort of. First, a softer political perspective and then the hard cash perspective. The softer political perspective is that well, cities don't just do, balance sheet calculations. If our traffic public servant in the city or the climate strategist can, give a good case for the, uh, city council why they actually get happier citizens or health and healthier citizens it will actually help with investment. So this is actually just creating clear chain of reasonings to help the politicians, which usually actually are looking for their citizens wellbeing in a longer perspective. We can be cynical about, you know, election cycles, et cetera, but let's choose to also believe in, uh, one wants to make good decisions for the citizens. Politicians, uh, We'll be able to make decisions on investments and if they also can communicate the benefits to their citizens, they'll be even happy making those decisions even within those, their election cycles, so to speak. So by giving this impact intelligence, what investments are going to give, what kind of benefits we are giving. We are empowering decision makers with a better understanding, and therefore they can argue better for the decisions. So even if the city doesn't directly reap the gains of the health benefits, it's an important part of the decision making process. we can take this one step further because a city for many of these investments, a city actually borrows money from the market through bonds. For example, green bonds, sustainability link bonds, and a city gets a greenium if a, a premium on their bonds. If they can argue for how the money is being deployed for beneficial impact in carbon or other benefits. So when a city, for example, wants to borrow money for these investments and they can show that these investments are going to give the following carbon impact and the following health impact, they can get better financial terms

Tom Raftery: 12:27

Okay.

Tomer Shalit: 12:29

And that's directly financial terms connected to, impact metrics. It also has a softer perspective that the market will appreciate a city with very ambitious goals. And if a city can explain the big picture, then borrowing just money for say a couple of defined projects. Uh, the market will give a premium for understanding the city's overall ambitions and understanding where these projects fit into the bigger picture.

Tom Raftery: 13:01

Okay.

Tomer Shalit: 13:02

So we can continue talking here about the market in the sense of money wanting to be deployed towards impact and let's not dive into all the ESG ratings. And now there was, it's, we can say so much. It's beginning to bubble, it's beginning to percolate. there's coming criticism, what works and what doesn't. Without going into all those details, I think we can safely say that the market wants the best possible transparent chain of reasoning of the impact that are going to be created by the projects they are investing in. The better and more transparent and can describe the intended impact of the different projects one is investing in, the happier the market is. Without going into different financial instruments or whatever, newer financial instruments that can be invested, We can say for sure markets like numbers and they want to know where the numbers are coming from,

Tom Raftery: 14:05

Okay. And in the case of Climate View, what you're doing is you are exposing those numbers for cities so that they can show them to the investment communities that the, the point?

Tomer Shalit: 14:18

Precisely show the numbers and show the modeling behind them. So a very important aspect we are adding here is the dynamics. So when a city is creating their plan in, in Climate OS, they will enter all the projects and just find their impact to what we call transition elements, which are the different transition opportunities, but it's actually encapsulating a model of the physical and economic activity of the city. So when an investor then looks at this impact intelligence, they can understand assumptions that are there, but they can also start changing those assumptions. So, so very simple case, a city will explain it's, uh, let's take energy intensity. That's going to be, that's energy intensity of building. So the number of, kilowatt hours per square meter, that's required by the building stock to keep it warm. And then we can talk about range of fitting. So we'll see that we're going to improve the energy intensity of the building stock by 10%. And this is going to cost this much money. When this is all in the model provided with the impact intelligence we have, the investor can start pulling the levers and say, Okay, well, we don't know exactly what the, building stocks energy intensity is for the entire city. That's, that's an assumption. It's, it's an approximation. But if that approximation is 10% wrong, what will the change of value, what will the change of impact be in the energy savings? So we can, you can get this sensitivity analysis, of all the assumptions that have been made. Cause we have to remember here we are living in a world with lots of data. And whatever models we build with the cities are there, There are approximations and we have to, make estimates. But what we can do when we have a dynamic model is that we can see what kind of confidence intervals these estimates have and what's going to happen if we go outside those confidence intervals? So how much difference does it make if our guess of future price of biodiesel is wrong? How much difference will it make for our, assumptions, in the model?

Tom Raftery: 16:39

Cool. And what is the current market for a solution like this? I mean, how many cities are deploying climate action plans hoping to turn them into climate investment plans? I know there's a lot of, talk about it, but how many are actually doing something?

Tomer Shalit: 17:00

Well, there's a lot happening just as we speak, so, When we started this company four years ago, people hadn't heard of Greta Thunberg. I'm just reminding us of history is short. This happened a lot. and there were cities doing climate action plans and being super ambitious with their goals. And then we had a few years, like two years ago, we started having all these cities declaring climate, emergency and deploying their plans. And so many of these plans were without a budget, and I don't know in which field you could present a plan without a budget. within the climate action field, like we have all these plans, which are aren't really plans. There are ambitions mixed with, you know, things we want to happen

Tom Raftery: 17:46

Yeah.

Tomer Shalit: 17:47

but now. this is becoming apparent and pressure is higher, and also as we started saying there's more and more the, uh, financial resources are there. So, just as we are speaking just now in June, the EU, Net zero City Mission declared, A hundred cities to be the net zero city cities of, of eu, which are pilot cities to show the way towards net zero. And all of them are now, all of these hundred cities are now obliged to start making what they're calling climate investment plans. So this is becoming something that many cities need to deliver now.

Tom Raftery: 18:27

Okay. Superb. I actually checked in on that and I, I saw hearteningly that the city that I come from, the city of Cork and Ireland is one of two cities in Ireland that are net zero cities. Dublin and Cork are the two cities in Ireland, and I now live in Seville in the south of Spain. And Seville is also one of the Spanish cities, which has been chosen to be one of the net zero cities. So, that, that was nice to see. There's I, I think, six or seven cities in, in Spain that were chosen. Madrid, Valencia, Vitoria, Barcelona, Seville, That might be one or two others. I don't remember exactly, but it's, it's great to see that this is happening and these cities are going to, they're obliged, as you say, to get to net zero by 2030, if I remember correctly.

Tomer Shalit: 19:15

That's seven and a half years

Tom Raftery: 19:18

Not even. Not even, It's, it's, it's less than that again. It's, it's seven and a quarter and, and, and, and, and falling fast So that's, that's gonna be tough. That's, that, that would mean massive changes, no?

Tomer Shalit: 19:32

Yes. And it means we have to act now and it means that these cities really need to create their climate investment plans very, very fast.

Tom Raftery: 19:41

And how do they measure it? How do they measure their current emissions and how do they measure the, the net zero or the, the milestones between here and net zero?

Tomer Shalit: 19:51

So the current emissions, they they usually do, they have city inventories of different kinds where they are measuring, their emissions. Big picture a city's emissions is, is, most of it is the energy usage and actually, you know pretty well what energy the city is using because people are paying for it and it's tax. So you have a pretty good picture of that. Then you'll always have these discussions of like, cars in the city are the driving inside the city border or outside the city border and what should be accounted for, et cetera. Let's not dive into that because that doesn't really make a difference for the mission. It's still the same kind of things that need to happen. So when it comes to measuring, measuring how you reach that, it actually starts with deciding what you want to do. So for example, like again, I'll go with a simple example, getting people to cycle more. If you decide that that's what you want to do, one of the things of these projects you have to start. If you want to build cycle paths is figure out how to measure their usage, which isn't very hard, but that should be part of the measurement. So if we, for example, talk about, the retrofitting of buildings, the energy usage of buildings, which is of course a very important part of the transition. Well, you can measure the transition. The number of buildings that have been retrofitted, those are numbers that you have. So, usually what to measure comes from, from deciding which actions you want to be taking. I'll say this cuz this is actually sometimes a bit controversial because you'll be talking about we need the baseline and then we'll measure the baseline and then based on that, we can then continuously measure the same things. And then we know, we know when we're net zero. That's kind of true between start and end, but, you actually have much more if you start measuring what you actually want to change, you will obviously get better measurements. So we are trying to help cities focus on KPIs that make sense, not just their baseline emissions. They're good to have, You need to know them. And by the way, when they reach zero, you'll know because you'll know the energy flow of the city. But during that journey, you want to have better ways of measuring number people, cycling number, houses being retrofitted, et cetera.

Tom Raftery: 22:02

Okay. And I mean, you mentioned you're a startup. You've been in operation for four years now. How many cities are you working with currently? Or can you talk about some of the successes that you've had with some of the cities that you're working with? Uh,

Tomer Shalit: 22:18

Yes. wondering where to start. So we've had, there's more than a hundred cities that are sort of using, testing the platform, but they could point to about 30, which are using it very, very actively. And there's all the levels of helping the cities understand the current problem, helping them set their strategy, which we define as finding all those transition opportunities and then defining for execution, the things that need to happen to get there. Helping understand the challenge that's, that's very much out of the box. That's what we help them straight away with so they don't have to spend too much time in that because that's actually hardcore numbers. Just make sure they get them. Understanding the opportunities is what we call, we give them building blocks, which we call transition elements. Each one of them representing a transition opportunity, like shifting to bicycle or electric vehicles or retrofitting buildings, or changing district heating, well defined models, which encapsulates their carbon abatement, the economic scenarios for them. This we give cities and we can, many cities have with help of these building blocks, created their transition scenarios. And then of course, starting to build in actions to see how we get there. We can point to a number of cases where the, decision making has been changed by the data and the platform. But it would be hard to say exactly what obviously was just without or with or without us. We will, we will never know, but we are strengthening the arguments of the city climate strategists. You can see our platformers in essence, encapsulating lots of knowledge and data models. And by giving that in the platform, the climate strategists in the cities get empowered to take their arguments further within the city to the decision makers, be it other public servants or the politicians. By giving the climate strategist these, um, models and then encapsulated knowledge in the platform, we're giving them levers, chains of reasonings to help, communicate and make decisions happen across the entire city, council. Uh, so we have some really nice examples where, the entire climate strategy has been developed within our platform from, from start to end, and actually without using any PDFs or any Word documents or anything at all, but the entire climate strategy being evolved and executed within the platform.

Tom Raftery: 24:42

Fantastic. And so talk to me a little bit about prioritization, because if I am a city climate strategist, how do I decide which projects to, prioritize, which ones to go for first? Is it always the case that the ones with the highest carbon impact have the best financial return?

Tomer Shalit: 25:12

no

Tom Raftery: 25:13

So how, if I'm a climate strategist in a city, how do I prioritize? Do I prioritize around the ones that have the best ROI or the ones that have the biggest carbon impact?

Tomer Shalit: 25:24

I would say, so the first, the first step is actually to try and even create a clear picture of what projects they have. Because what tends to be is there's lots of different things. It's a bit of a cluster of stuff. So by helping sort that and understanding high priority, high impact, et cetera, you can start then making the prioritization. I would say then the prioritization is usually, what can we make happen cuz it's so much about, creating momentum. so we might know of about a cycle highway and something that needs to be done that's going to take two, three years to push through the system, but we can do other stuff, which doesn't give the same kind of impact, but we know is taking us to the right direction. So, There's a high level of, of sorting way or what's, what's high priority. High priority in the form of high impact. High maximum bang for the bucks. But there's another level of priority, which is just get things moving because we're a hurry. And so much of this is about momentum. Creating momentum, make things happen. And I think we are trying to help them prioritize by seeing both these angles, because otherwise when there's a bit of analysis paralysis, and that's the most dangerous in this situation, is actually we need to act. And doing about the right thing is actually more important than trying to figure out the best possible thing to do and waiting a year to do it.

Tom Raftery: 26:47

Fair enough. And how interconnected are these kind of things because nothing in a city happens in isolation. If you start increasing the amount of. EVs, you are increasing the amount of electricity usage. You know, are there grid implications? Are there increased carbon implications? Because maybe the grid isn't a very clean grid. How? How does all that factor in?

Tomer Shalit: 27:16

I said analysis paralysis before, and I'll say that again here. So usually they, the first thing one talks about is, oh, everything is interconnected and everything is interconnected. and you, you know, it becomes very hard to try and, sort this picture. So that's what we are helping them with by dividing this big challenge into small building blocks, but then are interconnected, but you can work with them one at a time. We sometimes say, that systemic thinking is the ability to look at the pieces without disconnecting them from the whole. So they are interconnected. So if we say, for example, take a EV strategy, we will be able to simply say to, to do the scenarios. What happens if we move 10,000 people from internal combustion engines to EVs? And we will then instantly see the energy, use the electricity use of that, and then we can instantly play with different scenarios. Do we believe in the grid as it is just now,? Do we believe that the, where the future grid is heading? And you can look at the sensitivity of those scenarios. So, you can make your EV strategy and then you can also say the consequences of the strategy depending on, the electricity mix. This has traditionally been very hard to do. So the way cities have done it today is very big, complex Excel spreadsheets, and it's actually becomes super hard with all these interconnectivities. Instead, we have our scenario tools, which means you pull the lever for EVs, and then you pull the levers for how much wind power, how much nuclear, how much district heating, et cetera. And you just pull those levers to set a future scenario and you instantly see. And actually this goes all the way back to when I started talking about the financial opportunities. Now it's a podcast, so I'm waving my hands a lot. But this is all . This is all very visual. We, it becomes a very important part of the platform we are building to make this interconnection, these interdependencies understandable for anyone, including the policymakers and the public so that they can play with these levers themselves. I mean, say take hydrogen. There'll, there'll be lot strong political biases towards believing in brown or blue or green hydrogen, whatever. We can present a scenario present it in, uh, one specific way of how we think we're going to get the future hydrogen for say, our trucks that we defined. And then if you just totally don't believe in green hydrogen, then you can, as a investor, you can pull the lever and see of, of other kinds of hydrogen and see how, what the outcome in the scenario would be for the case of investing in hydrogen heavy trucks for example.

Tom Raftery: 30:09

Okay, cool. Cool. And where to from here? I mean, what's, what's the kind of five, 10 year plan for you guys?

Tomer Shalit: 30:17

Well, we started talking about the net zero cities and how much in a hurry that is. So the five, 10 year plan is to make these kind of economic scenarios and predictions as good as possible, and as more people use the platform, . We are also enriching the platform in scenario with more and more data. So as the platform gets used, the um, scenario analysis gets better and better, and will help us make decisions faster. One way of seeing this transition is that it's the biggest allocation of money in the history of mankind and to make it happen, we need experience and knowledge sharing at an unprecedented rate. The really interesting thing with cities is that they actually pretty similar across the globe. Seville and Ummi were, are now sure they. Winter clearing strategy for the cycle pass probably different, but for many , for many things, cities are are very similar. So the faster they can learn from each other what things cost, what effect, different actions have both assumed effect. And then after a while, the measured outcome of these projects, the faster we can learn from each other. The bigger, the chances are that we can reach the net zero goal and ultimately the Paris Agreement. But that's, that's very bold. It's ex, it's it's experience and knowledge sharing at unprecedented rate. It's a collective collaborative intelligence that we need to create and we want that to happen, and we want to put the economic lens on the transition because frankly, without it, it's not gonna happen.

Tom Raftery: 32:07

Fair. We are coming towards the end of the podcast now Tomer. Is there any question that I haven't asked you that you wish I had or any aspect of this that we haven't covered off that you think it's important for people to be aware of?

Tomer Shalit: 32:21

I think we, we covered the, the most important, I think, What I spoke about analysis paralysis, and it's, it's hard to express, and again, to wave my hands on a podcast, the understanding that, it's only by action that we can learn. We can't analyze ourselves out with the situation.

Tom Raftery: 32:44

Yep.

Tomer Shalit: 32:45

We have to start moving fast. It's the standard agile principles, but in the same time, this is bigger than anything else. So we have to share that. So, I dunno what, what question that would be, but it's, I guess the question is how do we ensure that all the insights we are actually achieving across the globe and how to make this transition happen, get shared as fast as possible? and I think that's in sort of in the, in the top of the, of the agenda, what we have the way to look at this problem with, you know, how do we share, how do we share what we have learned and how do we apply the economic lens on that so that we can accelerate.

Tom Raftery: 33:27

Cool. Good, Tom, it's been really interesting. If people would like to know more about yourself or about Climate View or any of the things we discussed in the podcast today, where would you have me direct them?

Tomer Shalit: 33:41

Oh, I think, our website would be the, the easiest start of exploration. I can send you the, the link.

Tom Raftery: 33:48

Perfect, Perfect. I'll include that in the show notes. Tom, it's been fantastic. Thanks a million for coming on the podcast today.

Tomer Shalit: 33:54

Thank you so much for having me.

Tom Raftery: 33:56

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about Climate 21, feel free to drop me an email to Tom Raftery at outlook.com, or connect with me on LinkedIn or Twitter. If you like the show, please, don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show Thanks. Catch you all next time.