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☁️ "Venture Capital & Deep Decarbonization"

Azeem Azhar's Exponential View

Photo by Markus Winkler / Unsplash

Host: Azeem Azhar
Guest: Shayle Kann | Partner | Energy Impact Partners
Category: ☁️ Carbon Reduction | Deep Decarbonization

Podcast’s Essential Bites:

[6:53] “We actually do have a bunch of technologies that are economical today and can be deployed at orders of magnitude faster than they are being deployed currently, solar and wind being the obvious examples here, at little to no cost to society with significant decarbonisation impact. That is basically undeniably true in my mind. And at the same time, it is also true that those technologies alone are not going to get us nearly to net zero, let alone all the way there.

[8:40] “The way that I think about deep decarbonisation is looking past the near future. So, as an example, the IPCC just put out a new report […] and there's a great chart in the summary for policymakers […] and it has […] a list of 30 some technologies and approaches to decarbonize and the relative magnitude of the impact that they can have on greenhouse gas emissions by 2030. And there's some clear winners and it's basically solar and wind and forestry and land management. We can do all that stuff and have a pretty big impact in a very short period of time at very low cost. What we're looking at with deep decarbonisation is the next level. So let's assume we successfully do all those things. What else do we need to decarbonize? How do we deal with things like industrial emissions? Currently, electricity represents 25% of end use energy in the world roughly speaking. What do we do with the other 75%? Because you can add all the solar and wind you want, but if you don't either electrify or decarbonize his other sectors, you haven't solved the problem. How do we deal with things like meat, how do we deal with emissions in concrete?”

[10:48] “We have a tendency now to think that just because we've solved some really important things, namely how to generate renewable electricity cheaply and at scale, that we've solved electricity or that we've solved light duty transportation, because we can electrify it. And I don't think either of those things are foregone conclusions yet. So we still have some work to do on electricity. Specifically, we can deploy a lot of solar and wind, but we're going to start to hit some limitations there around the intermittency over long periods of time, we're gonna hit limitations around transmission capacity and land use. So we're not done with electricity, we just have the clearest path in the near term. But we still need things like baseload clean energy, be it nuclear, geothermal, we need long duration batteries to help us manage the intermittency of renewables.”

[11:38] “Assuming we solve all that and we get our cheap, clean, reliable, ubiquitous electricity, then that is, in my mind, the great unlock for a bunch of other sectors. Not everything, it doesn't solve all of climate change. But you can use cheap, clean, reliable, ubiquitous electricity to power parts of transportation, to power parts of industry, to power parts of agriculture. And so to me, that's the single biggest wedge we've got. So if you want to, for example, use electricity to decarbonize steelmaking. Steel is 8% of global greenhouse gas emissions, the single largest source of industrial emissions in the world. You can use electricity to produce steel, rather than using coal. But steel is a gigantic industry, trillions of dollars a year, it's gonna take a monumental effort, even if the technology works exactly as we hope it will, to get it to the scale where it can have a gigaton impact on CO2. So there's still just a long road ahead for all these new technologies.”

[14:23] “There's that famous quote from Marc Andreessen “software's eating the world” […]. And the idea there was software will go one by one through every major sector of the economy and transform it over time. And that I think, has generally proven to be true. I think you can say something similar about climate. In the sense that emissions come from nearly every major sector of the economy and if we're truly going to decarbonize, then basically every one of those industries needs to transform in some way or another in order to decarbonize. So climate, I think, will end up eating the world in a slightly different way from how software did, but it's a similar idea.

[15:58] “Climate tech, I think, is a sector of convenience. It's not really a sector. We call it a sector, but […] it's a theme. We're saying that something needs to change in a million different places and that single thing that needs to change can be measured in tons of CO2 equivalent. But the actual pathways to reduce or remove those tons of CO2 equivalent are myriad. And they vary a ton by sector. So climate tech is just a consistent theme across many different sectors. It's not a single technology or suite of technologies.”

[17:05] “I boiled it down to five core challenges [to get to net zero]. The first thing that we need to do is […] solve electricity, basically. And that means we need electricity on a global scale to be low cost, abundant, reliable, ubiquitous, and zero carbon. […] The second thing we need to do is we need to figure out how to solve the biggest industrial emitters. […] The third thing we need to do is solve transportation. […] The fourth thing we need to do is we need to build […] a carbon management industry, basically from zero. And that's going to involve capturing CO2, both from point sources from emitters, but probably even more than that, ultimately, removing carbon from the atmosphere, because there's basically no realistic way that we are going to get to net zero fast enough by just doing these other things. […] And then the final thing […] is we need to decarbonize Maslow's basic needs, […] which is food and agriculture and buildings. […] If we can solve all of those five things, then […] we're probably 90 to 95% of the way to deep decarbonisation.”

[38:39] “I think we're in the early days of the suite of technologies that we're going to use for this carbon management industry. And there's just this Cambrian explosion of new approaches right now, some of which are nature based, some of which are synthetic, some of which are kind of a hybrid, some of which use the oceans, some of which use soils, some of which he was land or trees, some of which build engineered machines. And so you add all that up, and I think there's at least a basket of promising opportunities that we can scale up. So I don't think [it’s] wrong to be optimistic, but I just think it's going to be a long road.

Rating: ⚡⚡⚡⚡

🎙️ Full Episode: Apple | Spotify | Google
🕰️ 47 min | 🗓️ 04/13/2022
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