Climate crisis business opportunities

A couple of weeks ago during a business dinner with a banker the topic of climate change came up. Over bottles of red wine we discussed ways of reducing CO2 and methane emissions and realized that it will be virtually impossible to get this done on time. We have about 11 years left until the CO2 level hits 450 ppm, by which time the arctic will melt and huge amounts of methane will be released into the air, causing an unstoppable cycle of increasing temperatures, crop failures and sea level increase.

The problem is that right now the only way not to reach 450 ppm is by severely limiting our CO2 emissions. The longer we wait the more we will need to reduce the emissions. For a while I thought that governments may be able to force us to change our lifestyles, but during the dinner I suddenly realized it will likely be too late for that. People may be able to cut their CO2 emissions by 20-30% (if we are lucky), but we won’t be able to get down by 80% or more, which would be needed. There are simply no substitutes for our lifestyles yet and governments will get voted out if they try to push for more. I am an optimist (otherwise I can’t be an entrepreneur), but I am also a realist.

I don’t believe it’s realistic to force people to give up meat, even though it would be best for the planet. Cows emit large amounts of methane (through burps), so reducing the number of cows on earth would help to stabilize the climate (methane is 30-40 times more dangerous as a greenhouse gas than CO2). Also people won’t stop flying completely within a few years, it’s too much part of (business) culture. It may happen eventually, but not in 11 years and not before there are decent substitutes.

Therefore it’s most important is that we develop alternatives for our lifestyles. We need electric planes and electric boats, but commercially viable solutions won’t be here by 2030. Maybe the hyperloop can be a solution, but whether we will have tunnels below the ocean bottom within the next decade remains to be seen. For sure we will start to travel less when we realize the climate crisis is getting out of hand, but we need better incentives to do so.

For meat, companies like Beyond Meat and Impossible Foods produce decent meat replacements. I regularly grill Beyond Meat burgers and I am surprised how good they are (my son hates them though and I can’t trick him to believe that it’s real meat). But the food additives in Beyond Meat burgers (such canola oil, sodium, and methyl cellulose) may be worse for humans than not eating meat, so I have some doubts about the long term viability of this. That’s why I am looking at companies that create lab-grown meat, but I am also looking at alternatives that will reduce the amount of methane that cows emit (e.g. adding sea weed to cow feed).

But most likely the holy grail will be companies that take greenhouse gasses out of the air. The technology is there, although it has not been done at scale yet. It will be extremely expensive (think in the trillions of dollars), but it’s feasible. The ‘good’ thing is that we can keep on living similar lifestyles to our current ones, until viable alternatives have been developed. In a way this will reward oil companies (they will get a life extension), but I hope we can force them to scale down significantly with taxes: offsetting their carbon emissions with carbon credits. This could lead to a huge cycle of innovation, when companies that develop these carbon reduction innovations can create carbon credits and sell them to oil companies and other bad actors.

I see major business opportunities in this space and I spend a lot of time talking to people, meeting companies and doing research to develop a thesis on what will happen over the next 5 years.

More soon…