A framework for climate change
The Prompt
This is my response to a Twitter prompt from Chamath Palihapitaya for designing a framework for allocating a few billion dollars via a holding company to advance the fight against climate change. Below is the original prompt:
The Pitch
Build the future! A vision more exciting than colonizing Mars -- a post Industrial world that’s 100% electrified, with air/sea ships for long-distance travel, high-quality VR/telepresence, rent-over-own society, high mobility, hyperloops, rewilded/reforested countrysides, fake meat without factory farmed farting cows and 10x abundance using bits to create a lot more bang per joule of earth resources.
Background
Traditional climate action portfolios focus on three major vectors:
- Generation - cut emissions
- Consumption - reduce consumption
- Substitution via dematerialization
In short, we already know what we must do to avoid climate disaster. We just haven’t done it.
Problem
We’ve left climate action to the bureaucrats and hippies.
Leadership action (or inaction, rather) has been hampered by gridlocked committees inching towards ineffective and expensive compromises that do much too little, and too late. While these committees labor over consensus and optics, hundreds of thousands of Bangladeshis and Sub-Saharan Africans will lose their lives or livelihoods.
Meanwhile, our climate tech community is dominated by earnest, ideology-driven Lisa Simpson types. I love them, but guilt ridden “sustainability” frames are simply not compelling enough to mobilize the world.
Once again, the problem is not figuring out what to do. The problem is designing institutions and mechanisms that will, in fact, create meaningful and lasting impact.
The Opportunity
We need new players in the game.
As we approach dangerous inflection points, it’s time to attract the builder / adventurer types. As opposed to most climate frameworks which focus on mitigation, this document puts forth an opportunity framing. Another cut here, cut there, can’t-do-this-anymore framework will not attract 10x builders. If you put aside for a minute that it could very well end civilization, climate change is easily the most exciting techno-socio-political problem I can think of.
The Holding Company
We’ve played through the Industrial Age game and it’s boring now. Social Capital is the perfect brand to break with sustainability frames and advance a climate future that is different and fun. Attracting new players can take us beyond the Industrial Age.
It’s important to stay aware that the problem of Climate Change represents a complexity, scale and urgency beyond anything humanity has ever seen. Only mobilizing for World War II comes close. To cope with this the framework proposes a company with a dual-pronged attack of (1) decentralized Active Businesses and (2) centralized Infrastructure & Tech alongside (3) binding principles to navigate tradeoffs.
The Holding Company
TERRA is an acronym which represents companies actively building our post industrial future. The expectation is that these companies operating in a decentralized fashion will be profitable and able to finance the next generation of companies, technologies and mitigation strategies.
Transportation, Travel & Telepresence
Electrify Everything
Rent-over-own
Rewilding & Reforesting
Agriculture and Food
Transportation, Travel & Telepresence
Reduction opportunity: 28.2% greenhouse gas emissions
A dynamic society is a high mobility society. A post Industrial Age where we’re trapped in pods 23.5 hours a day waiting for civilization to collapse is not a future I want to be a part of.
With the near shutdown in global travel post COVID-19 we find ourselves at a critical juncture. The time is now to reimagine personal and business travel. There are huge optics and social engineering benefits here. Modernizing travel (particularly business and influencer travel) pushes society’s most privileged members to visibly become part of the solution. Nailing these optics will open the door to action on bigger pieces of the pie.
A transportation upgrade:
- High Quality VR / Telepresence - Let’s dispense with 20th century business travel altogether. The Zoom revolution is version 1.0 of technology which represents a sea change in how we conduct business and casual social interaction. The immediacy of telepresence can far outweigh the inefficiencies of coordination and waiting associated with a majority of business travel.
- Hyperloops - This zero emission technology can allow for frequent transit of goods and services along predictable routes (e.g. SF to LA, or Amazon distribution into NYC)
- High speed electric rail - Flying is a terrible experience. Driving is dangerous and subject to congestion. Let’s make domestic travel awesome.
- Passenger ships - International air travel is one of the few big climate impact vectors with no reasonable substitute. If a NY-London flight takes 9 hours and costs $2000 but a 1-week crossing by ship costs less, (all inclusive with WiFi, food etc, so you could work, attend classes or a meditation retreat onboard), some travelers will choose the ship. Over time, carriers can experiment with offerings and prices to draw an increasing share of international travelers. Marketing to elite passengers will be critical for adoption.
Electrify Everything
Reduction opportunity: 26.9% of greenhouse gas emissions
We’re overdue for a major tech upgrade to our energy systems. And much ink has been spilled on this topic. Put simply, the movement to “electrify everything” has two primary goals:
(1) Clean up electricity (zero carbon)
(2). Electrify everything (from individual vehicles to public transport to home heating systems)
Rent-over-own
Reduction opportunity: 22% of greenhouse gas emissions
Additional opportunity: 12.3% of greenhouse gas emissions if you include real estate
Rent-over-own will be a multi-faceted endeavor intended to cut down on the production and transportation of meaningless goods. For example, consider the humble beach toy:
Three times per year, every parent of young children has the uncanny experience of lugging fifteen distinct plastic sand toys to the beach only to get there and find every other family has an identical set. They’re all manufactured in China. They’re all stored in plastic packaging. They’re all shipped to the US, where they make the same gas-guzzling trips to the beach.
Naturally, every kid on the beach fights over the same four toys. 72 go unused. This fleet of cloned commodity toys then falls into a predictable cycle of being lost, repurchased, and eventually discarded.
Imagine not having to store a bag of plastic toys at your home 365 days a year. Instead, you visit the beach and let your kids play with high-quality on-site tools which don’t harm the environment.
We can do better for the planet, for workers and for consumers! When viewed through a sustainability lens and with the goal of building closed loop supply chains this category can significantly reduce waste and emissions. Right now, the ownership of low quality goods involves an unacceptable level of waste and inefficiency. Already, consumers would prefer not to own and store these things - they just don’t have any alternative to going without. When viewed through a profitability lens these goods are unattractive to go after with a “rent-over-own” model. A sustainability lens combined with a rent-over-own business model provides incentives to generate far fewer of these items while creating an improved user experience.
Note: This category may evolve into higher order goods (e.g. housing) over time. However, because higher order goods are fraught with regulation, emotion and credible allegations of inequality creation, sticking to the realm of “meaningless” goods is a fast path to impact.
Rewilding & Reforesting
Reduction opportunity: 11.6% of greenhouse gas emissions
Rewilding is a form of environmental conservation and ecological restoration which reintroduces lost animal species to natural environments. It is an exciting and promising conservation strategy aimed at restoring natural processes and wilderness areas, providing connectivity between such areas (corridors), and reintroducing large herbivores, predators and/or keystone species. Rewilding has significant potential to increase biodiversity, create self-sustainable environments and mitigate climate change.
Reforesting means replanting historically wooded settings that no longer have forests. This is the natural solution with the most potential to capture additional carbon. Additional actions like improving tree plantations, managing cropland nutrients, and restoring tidal wetlands also offer promising mitigation opportunities, but on a much smaller scale. Using a combination of drones, high quality imaging and machine learning we can accomplish reforesting at scale for the first time in history.
High-end eco tourism presents plausible monetization scenarios.
Agriculture & Food
Reduction opportunity: 9.9% of greenhouse gas emissions
Factory farming is a major contributor to climate change through the release of vast volumes of greenhouse gases, biodiversity loss, increasing pollution and the waste of land and energy resources. And what do we get in return? Food that makes us sick, obese and addicted.
Our food supply chain must be reimagined. Our planet and our health depend on it. We need:
- Bio manufacturing to create healthy, tasty fake meat options which reduce the need for factory farmed farting cows
- Just in time food delivery - I want coffee that was roasted today. I want an apple just picked from a tree. Updated supply chains based on internet assumptions should be able to reduce the waste associated with food storage, transport and presentation even when offset against increases in delivery frequency.
- Sustainably-produced fast food options available at the press of a button
- Clean drinking water regardless of location
- Incentives and structures to create conservation focused landowners
- Early adoption programs to change the taste and flavor profiles of the young (i.e. make healthy sustainable food freely available to all)
Shared Infrastructure & Assets
At the outset each TERRA letter will be appointed a CEO. Over time, it is the expectation that these letters will spawn additional companies and leaders. Though we generally believe in empowering companies to solve problems on their own there are elements worth centralizing.
Measurement & Analysis
The Holding Company will be primarily judged by its ability to impact the three main action vectors listed in the beginning: (1) Generation (2) Consumption (3) Substitution. The company’s North Star will likely look something like this:
As such, the company will need to take on centralized functions of measurement and analysis. This will mean portfolio companies have access and input to:
- High-precision low-cost sensors for measuring the output and consumption of greenhouse gases
- Data and trend analysis of data capture across portfolio companies
- Planning and simulation tools which allow for on the fly generation of models. These models can be updated using data from centralized measurement.
- Centralized Analysis and Best Practices - A lot of the best knowledge around climate is buried in experiments and research being done across universities and private institutions. The goal of centralized analysis would be to raise up the latest and best research, while constantly updating our prior assumptions with regards to action.
Miscellaneous Holdings
- Land Holdings - If necessary for reforesting, rewilding or agriculture, the company will maintain land holdings under a separate arm.
- Technology Holdings - If necessary for direct climate action or for use across portfolio companies (e.g. 3d printing, supply chain upgrades), the company may acquire or develop technologies for use across companies.
Operating Principles
Climate change is not a game for amateurs. The recent vaccine debates show that any attempt at action in a politically charged domain will be opposed by uninformed, but ideologically strident and media-savvy interest groups being misled by charismatic figures. Established experts from other domains have the potential to quietly re-imagine and implement TERRA programs quickly and effectively when given new incentives. The “climate work” is managed within the holding company.
Despite this, we cannot entrust the implementation of our future to a slow moving bureaucracy. The evolving nature of the science, and the possibility that some of today’s beliefs might be overturned by new evidence and models requires a dynamic organization resilient to change. Though we have a centralized mission, the company will adopt some of the operating mechanisms that have earned the widespread trust of contemporary technologists and have been proven out at scale by internet era companies. Most notably:
- Agile, Open processes
- Networked organizations
- Lack of credentials in favor of visible accomplishments
- Extreme Scale (e.g. Droneseed > growth kits > individuals planting trees)
This structure does not mean there are no risks. The document closes by acknowledging that we cannot act beyond a certain scale and speed without risk. ¡Pa'lante!
The Terra Company Visualized
Open Questions
- What guardrails, if any, will there be on profitability for TERRA companies?
- How will we deal with regulatory and compliance issues?
- How will we approach the need for global action in an increasingly deglobalizing society (i.e. how do we prevent this from becoming US centric while ignoring China / India)?
- Related to the above, if there is a bottleneck in reducing consumption or emissions should the holding company push to invoke regulatory action?
- Should the holding company invest in direct impact technologies (e.g. carbon capture)?
- Should centralized analysis and measurement be backstopped with decentralized analysis by held companies?