31 May 2022 |

Keep Cool- 05/31/2022

By Nick Van Osdol

COMMUNITY BREWING

Last Thursday, I put a line at the end of my newsletter telling you all I was in LA and that I’d be happy to meet up with anyone to talk shop. I didn’t expect responses. When I got ~7 or so, I racked my brain about whether I could possibly ping pong back and forth on the 10 enough to meet everyone. Eventually, it occurred to me to just get everyone together in one spot. 

Which we did yesterday in Santa Monica. It was a joy meeting those of you who could make it! Chatting climate tech and getting to know everyone’s climate journeys in person had me a) invigorated and b) thinking a lot about how to build and roll out new ‘features’ for Keep Cool.

Firstly, I selfishly took a few minutes to ask the group what they like about the content. What I heard is that the breadth is appreciated. Everyone was interested in keeping up with multiple verticals across climate tech and routinely getting exposed to new ideas, companies, trends, and founder profiles. 

In parallel, we discussed the idea of content ‘seasons’, i.e., taking 1-2 newsletters a week over a month or two to drill deeper into specific subject areas or climate ‘verticals.’ We’ve accomplished this to an extent in the past few months at times. For instance, March and April featured a lot of carbon removal + carbon market content. 

I do feel like more structured seasons will be a valuable way to forecast content and build more profound knowledge moving forward. If you have ideas for what you’d like the next ‘season’ of content at Keep Cool to look like… let me know! Decarbonizing manufacturing or heavy industry? The built environment? Critical software solutions for climate? All good ideas. I’m all ears.

Secondly, meeting people whose own experiences run the gamut from initial engagement with climate concepts to long careers in corporate sustainability had me thinking about hosting a series of events in the second half of the year.

I have the same questions on this front as I do concerning content ‘seasons’. Namely, how should they look? What would folks enjoy beyond getting out from behind the screens after 2+ years of zoom fatigue? 

Of course, as I joked with the guys over coffee yesterday, I’m not using this space to get you to work for me for free. Leave these questions to me, but feel free to weigh in if you have firmly held opinions or loosely held ideas!

DEVELOPING COUNTRIES DEVELOPING CLIMATE TECH

On the climate and climate tech front, one thing that came out of our conversations yesterday was an interest in exploring the challenges and opportunities for climate tech in other geographies, particularly emerging markets globally.

We spend so much time focused on the U.S. and Europe, partly because of where a lot of the headline deal announcements and venture capital funding announcements stem from any given week. In doing so, we risk becoming too western-centric. We put our blinders on to the rest of the world. I’m guilty of this at times. 

This narrow vision already manifests in disputes internationally around things like emissions reductions. Who should bear the brunt of decarbonization, whether in cost, immediacy, or both? Countries like India have contributed relatively little anthropogenic greenhouse gas emissions compared to developed countries. Is it ‘fair’ that they have to forego the wealth creation benefits of burning fossil fuels that developed nations enjoyed? 

If the answer is yes, shouldn’t some get paid ‘reparations’ to do so? For a country like India to phase out coal entirely, it’s estimated they’ll need to spend $2B every year from now to 2050. No small price tag! Nor are ‘developed’ nations done cutting coal; the U.K.Germany, and China are all firing up more coal power to keep pace with demand, too. 

My interest in exploring emerging markets is also driven by a hypothesis that they’ll innovate faster ‘of necessity.’ People talk about the necessity of climate tech in the West. But have they really internalized the necessity the way entrepreneurs in India, where deadly heat is front of mind, have? Unfortunately, many emerging markets will feel the brunt of climate change first. I imagine they’ll respond with solutions even more urgently as a result. Not that it should be up to them alone either.

Suffice to say spending time with climate tech in emerging markets is a fruitful area of investigation. Nor does it all have to be ‘high’ tech to be interesting. Here are some things that already come to my mind that are cool and compelling. 

Mini and micro grids

Decarbonizing electricity access in developed countries is a massive challenge in and of itself. What about decarbonizing electricity access that doesn’t exist yet?

The number of people living without electricity access dropped by ~33% from 2010 to 2019, even as the world population grew. Still, there are nearly 1B people who still lack electricity access. 

Is getting those who have never had electricity access zero-carbon electricity easier or harder than decarbonizing the electricity people already enjoy?

That’s an interesting question for me. In the same way access to telecommunications and the internet in many developing countries skipped the ‘pole and wire’ phase (straight to cellphone!), ideally, expanding electricity access can skip the ‘coal & gas’ phase. Technologies and infrastructure like mini and micro grids will likely be a big part of the solution. Mini and micro grids refer to systems with electricity generation capacity above or below 10 kW, respectively. 

Here’s an example. The below chart shows the competitiveness of mini grids powered by solar vs. diesel across Africa and Asia, with darker yellows and orange highlighting places where solar is more cost-competitive. That’s a lot of coverage!

Orange is the new blue

Further, here are the countries with the largest % of people ‘plugged’ into mini grids:

Note also that it’s not all about solar – biogas mini grids are quite popular in some geos as well

Zero-carbon electrification is an area that I’m excited to explore more deeply, especially on the tech side. There are plenty of challenges to solve with mini and micro grids. E.g., how do you couple them with better energy storage to minimize the need for backup diesel power generators? 

Nor are mini grids just applicable in emerging markets or for populations without electricity access. Teams are working on utilizing them globally, whether for individual businesses or to enhance energy resilience. 

Next month, I’m attending a product release/demo in the Bay Area for a solar nanogrid technology I’ll be excited to share with y’all after. More to come then!

Ecosystem conservation and nature-based solutions

While it’s been an exciting year for high-tech carbon removal technologies, the ‘lowest hanging fruit’ in carbon removal still hangs on … well… trees. And on other ‘nature-based’ solutions. 

Peat bogsMangrove forests. Whatever your favorite ecosystem, odds are it acts as a fantastic greenhouse gas sink and / or has tons of other co-benefits. And odds are emerging markets abound with opportunities to preserve and expand them.

The literal lowest hanging fruit is in preventing deforestation. As much as the world needs to build sophisticated climate technologies, slowing deforestation in the Amazon could be a powerful palliative for global warming. Unfortunately, that’s not going well right now.

As far as climate tech funding goes, far too little goes towards ecosystem preservation, reforestation, and other nature-based solutions, especially when considering the potential decarbonization impact. Climate Tech VC visualizes this mismatch well below.

Part of the problem lies in markets like the voluntary carbon market, which have done a bad job of translating capital paid for carbon credits into measurable and verifiable impact. Another major challenge is measurement and verification for efforts like reforestation. Understanding the impact when money is deployed in these types of efforts has historically been challenging. Teams like Pachama are working (and raising) to tackle that challenge.

Capital also has to flow in a way that’s beneficial for local stakeholders. Which is to say, not for financiers or middlemen in the U.S. Achieving alignment between project developers and local stakeholders for this type of work has been far from guaranteed in the past. 

And more

Countless other low-tech, high-impact ideas come to mind. Cleaner cookstoves are a big one. 

Many of the same populations who could be well served by mini grids also deserve better solutions for cooking. Cookstoves fired by firewood, charcoal, or kerosene are common. These release significant emissions, aren’t necessarily economical, and cause considerable air pollution that profoundly impacts individuals’ health. 

Expanding access to cleaner cookstoves and biomass or biochar-based cooking fuels can help drive decarbonization and improve living conditions. As the CEO of Mandulis Energy, Peter Nyeko, once shared with me:

“Every year, over 4 million people die due to poor indoor air quality. Clean cookstoves dramatically improve air quality, leading to healthier lungs and less deforestation.”

Another team I’m (slightly) familiar with is working in stealth on an ambitious model to expand access to clean cooking fuels while making money via carbon credits rather than the tech and fuel itself, reducing costs for consumers. Hopefully I can share more on them soon, too!