19 July 2022 |

Hot hot heat

By Nick Van Osdol

When I was in Spain a month ago in Madrid, it was already sweltering. Now? The Iberian peninsula has set new record highs in heat across Portugal and Spain during both the day and night.

What’s the story here? It bears repeating every month, week, and maybe even every day. Climate change is here – it’s not some distant bogeyman to prepare for in 2040 or 2050.

Land surface temperatures on the Iberian peninsula

Hot hot heat

High temperatures in Europe aren’t confined to the Iberian peninsula. Basically every Western European country is going through it. Western France is dealing with fierce heat and wildfires. The U.K. declared a national emergency, with record heats scorching London and even melting a Royal Air Force airstrip runway. Predictably, the heat wave also comes with wildfires. Nor is the U.S. exempt; lots of parts of the country have heat waves of their own to deal with.

It’s easy to attribute every extreme weather pattern and natural disaster (excepting perhaps Volcanic eruptions?) nowadays to climate change. This isn’t warranted in every case. With heat waves, however, there’s no scientific doubt about whether climate change exacerbates them.

Similarly, the heat waves sweeping Europe right now may seem like an abomination. But the problem with increases in global mean temperatures means extremes become all the more common. Owen Woolcock, Partner at Climate Core Capital, and I discussed the real risks to human health, cities, and economies in a recent podcast presented by a warming planet. Here’s a scenario Owen illustrated to discuss how higher heat impacts people, economies, and where we live:

In Houston, a 2° Celsius rise above pre-industrial levels would mean 104 days a year above 95° Fahrenheit. So that’s nearly a third of the year. When you combine temperature with relative humidity to calculate the heat index or the heat that a human will feel on any given day, Houston passes the historical climate of Death Valley, California, sometime in the middle of this decade. There is no difference between the number of 95-degree days in Death Valley recorded from 1981 to 2010 and what the study projected for Houston.

What happens to a town with millions of people (also one of the most humid in the country) when it’s too hot to be outside every third day of the year? Increasingly, that’s a question that countless cities and areas worldwide will grapple with at some scale.

“Predicting the Climate Future” from Climate Core Capital

It’s not just about health. Heat means people can’t perform their jobs. Whether it’s construction workers or surgeons in operating rooms, heat can disrupt all facets of society. Similarly, scorching temperatures devastate for crops. Harvests in Italy are projected to be abysmal this year for various staple crops, driven partly by heat. Not an outcome you want to throw into the mix in addition to a global food shortage.

A stands for adaptation 

What we haven’t spent much time on in this newsletter, which we would undoubtedly prefer wasn’t necessary, are technologies and changes in practice that help humans adapt to a rapidly warming climate. 

This week’s heat in the U.K. provides a solid example of the importance of adaptation. London isn’t a city built for the heat. Across the U.K. as a whole, only 3-5% of people have cooling in their homes. Why? They never really needed it that much. Until now. People don’t build buildings to deal with heat the way they do in Delhi. The same goes for public transport and other infrastructure.

Updating building codes and retrofitting old buildings are just a few examples of what adaptation and increasing resilience can look like. In the short term, adaptive measures can be as simple as keeping air-conditioned public spaces open longer for anyone to use.

Of course, designing, developing, and deploying technology is higher impact over the long haul. Here are some areas where this is relevant to heat.

Cooling: Keeping cool when heats soar is critical. Technologies for cooling that are more efficient, reliable, and produce fewer emissions than air conditioning will be essential. Gradient is one company I have an eye on for their window-mounted heat pumps. At present, the price point is higher than where it needs to be to scale, but heat pumps generally have a ton of potential in this area. Plus, they reduce emissions!

This goes for heating, too. As in the name, ‘heat’ pumps have decarbonization potential for cooling and heating. Countries like the U.K. are already introducing schemes to incentivize people to replace natural gas boilers with heat pumps. To round it out, I enjoyed this take from Bloomberg Green this morning:

[Heat pumps are] one of the few examples of a single solution that can both mitigate the cause of climate change and adapt to its increasingly dangerous impacts.

See article in Bloomberg here

Water Use: Exacerbated by drought, water is another crucial concern during heat waves, whether for potable use or to fight wildfires. Beyond things like desalination, which, as we explored last week, face their own challenges, simply recycling more water would help immensely. 

Part of the challenge is that governments have traditionally tackled water sanitation at a city or county-wide level. And their infrastructure is old and hard to revamp. Los Angeles county recycles 1% of its water. 

An example of a company working on this challenge is Epic Cleantec. It builds water reuse systems that individual buildings can install to save significantly more water. These are increasingly in high demand – other Californian counties have mandated that new buildings above a certain size include onsite systems

Using or reusing more of what you already have = solid adaptation.

Agriculture and Land Use: As noted earlier in this email, warmer temperatures have profound implications for agriculture and land use. Climate change makes floods, pests, and poor yields for crops, in general, more likely. As a result, a lot of bioengineering work is going into genetically modifying and engineering crops for higher heat resilience, and other more resilient qualities. 

Similarly, better forecasts and weather analytics will help with resilience and help farmers prepare for extreme conditions. This cuts across many potential challenge areas; companies like Salient Predictions will help all types of businesses and communities better prepare for severe weather.

Those are just a handful of areas intended to be illustrative rather than exhaustive, in which adaptation will be front and center for investors, operators, and governments alike.

The net-net

A few takeaways for me. For one, the extreme temperatures around the world illustrate the failures of climate change media and storytelling. For one, see this Guardian article, which said:

We can expect this to keep happening until we reduce global greenhouse gas emission to net zero.

That’s inaccurate. Even after achieving net-zero emissions, higher temperatures are ‘locked in’ based on existing levels of atmospheric CO2 ppm. Negative emissions would be necessary to reverse course. H/t to Wolfgang Knorr on Twitter for this one.

More structurally, talking about global warming in terms of global mean average temperature increases, e.g., 1°C – 2°C, while accurate, fails to ‘spark’ the imagination the way a summer day that’s 20°F hotter than normal does. This problem won’t last all that long though I reckon. Soon almost everyone will have experienced what global warming has on offer. I doubt we’ll like it very much.  

To try to close all this a bit more optimistically, as is my charge in this newsletter, hopefully this Northern Hemisphere summer is a wake-up call. Biden’s already talking about declaring climate change an emergency in the U.S. And caught between twin terrors — heat this summer and impending fuel shortages this winter — Europe sees the writing on the wall.

Further, there were 30+ fundraising announcements for climate techs last week and 5 new climate tech-focused funds, totaling commitments of ~$1B. If there was any question, adaptive climate technologies will now be an essential subset for investors to consider.