Climate and progress

Jan 13, 2022

Have you ever felt like a large swathe of climate solutions feel sort of "pointless?" I'm talking to things like carbon accounting, carbon offsets, etc.

One criticism of thse solutions it that they're ineffective. I disagree. If offsets work, they might have the biggest impact of any single solution. And carbon accounting is a great tool for funneling money into the problem. Quantitatively it may make a huge difference in solving the problem.

But even though I understood their impact logically, these solutions still felt... like the wrong things for us to be working on? Besides efficacy, they felt like they were missing a core component of what I consider to be a "robust" climate solution.

For a long time, I was confused about these feelings. These things fix the climate problem, but I still don't like them? What gives?

Eventually, I was able to pinpoint what my objections actually were. It was the fact that these solutions don't create we

These solutions are aimed at maintaining the status quo and they do not create progress or prosperity. They solve the climate problem, but they do not create wealth for our economic systems. In fact, they actually remove wealth. . Let me explain.

My mental model of climate

In very rough strokes, here's the climate problem:

  1. Humans perform trillions of economic activities every day.
  2. Most of these actions, as a side effect, emit greenhouse gases— mainly CO², into the atmosphere.
  3. These gases are gradually warming up our planet.

Distinguishing between economic activities and their side effects is important. There's no particular reason why these activities have to release CO², but they just happen to. The side effects are the problem, not the activities themselves.⁽¹⁾

Categories of climate solutions

This model gives a good framework for how to deal with the climate problem. The problem is all about these economic activites and their side effects. What are our options?

Well, if economic activites have side effects, maybe we can just figure out how to get the economic results we want in a different, "carbon-neutral" way.

So, the goal is switching to "carbon-neutral" methods. How can we do this? Generally, there are two ways:

One option is to (1) develop lower-cost alternatives. Maybe we can better ways of doing things that just happen to be carbon-neutral. Company-building is a great way to expedite these changes, with examples like Tesla, Solugen, many clean energy companies, etc.

We can also (2) switch to higher-cost alternatives. If there are carbon-neutral methods to perform an economic activity, but they're inferior to the status quo, a government can step in to incentivize or force a change. Think heat pump / clean energy subsidies, regulating high-GWP chemicals, etc.

These two options aren't always excusive. Subsidization often kickstarts industries which then take over on a purely economic basis. We are seeing this happen with solar, batteries, etc.

These two options will certainly solve the problem eventually. But some people looked at them and thought:

"This looks really hard. We're slow at changing how we do things at scale. Why don't we leave our economic activities as-is, and work on dealing with the side effects directly? Then people can just pay us directly, and they can become "carbon-neutral" by just adding a cost."

This is the essential idea behind (3) carbon sequestration.

There is also the peculiar case of companies which produce economic goods in a carbon-negative way. If you capture CO2 and make it into, say, plastic, are you a carbon sequestration company or an "economic solutions" company? I'd say that if you are producing an economic good, then you are fundamentally an economic solutions company. You are performing an economic activity (producing something of value to society,) but y.our economic activity just happens to have a positive side-effect, not a negative one. This is distinct from a company that is seeking to remove carbon as its primary goal without producing something else of value to society.

Lastly, if you squint your eyes, these "economic activities" and "side effects" don't look so separate. You may conclude that all economic activities have bad side effects (even carbon-neutral ones; they might not emit carbon, but they probably have some other bad effects.) The natural conclusion of this worldview: we should (4) perform less economic activities. This is the principle behind degrowth.

Solutions and progress

So we have the following solutions:

  1. Develop lower-cost ways of performing economic activities
  2. Switch to higher-cost ways of performing economic activities
  3. Offset CO2 emissions by adding a cost to economic activities
  4. Perform less economic activities via degrowth

This list is quite striking when viewed through the lens of economic prosperity. The first item increases economic prosperity. But all of the other items actively decrease prosperity. This is the root of my objections!

In isolation, these interventions make people poorer. Consider subsidization, where the government pays people to switch to higher-cost alternatives. Society ends up bearing these additional costs, which will inevitably reduce economic activity somewhere, in a "death by a thousand cuts" kind of way.

What about offsets? The fundamental aim of offset proponents is to create an apparatus which adds a cost to pretty much ever economic activity. I'm not necessarily against this! If I could pay a 10% tax on my consumption and solve climate change, I would. But it's important to clarify that this is in fact the proposal! ⁽²⁾

And finally, we come to degrowth. I'll spare you the rant, but it's clearly anti-progress— it's in the name!

Even if many climate solutions reduce economic prosperity, why do we care? At first glance, these might seem like separate issues.

Many view people as our singular generational challenge. On the quest to solve this problem, some economic disruption is OK. After all, if we ignore climate, it'll create a lot of economic disruption in the future. Isn't mitigating problem "progress" in some sort?

It is true that climate solutions are solving a real problem today. But besides mitigating a potential problem, this type of climate work is not making lives better for humans. The prevention of regression is not progress.

The root of my objections was a misplaced interest. I've always been interested in progress and the prospect of making things better, especially in a pro-growth sense. But this type of climate work is not pro-growth. The goal of it is to preserve the status quo.

Understanding my objections came down to a realization. I care about progress a lot. In fact, I care about progress at least as much as I do about climate. To me, human prosperity is at least as important as the planet.

Understanding this, I wholeheartedly support "climate people" on their quest to solve climate. I agree that some economic disruption is OK on the path to that goal. But this is not the end-all-be-all for me.

I suppose I realized, you can be interested in climate, without climate being your top priority!

Climate is fertile ground for progress

Why should a "progress person" care about climate at all? The goal of climate work is to maintain the status quo. Can someone want to work on climate but not care about emissions? Yes!

https://pbs.twimg.com/media/FkISQsCVsAAgecu?format=jpg&name=medium

Climate is demanding change in the "infrastructure layers" of society, like energy, manufacturing, chemicals. These areas are "mature"; customers needs have mostly been met. Things are growing, but slowly.

First of all, building technology for this layer of society is very exciting for progress. There has been a tech boom over the past 20 years, but it hasn't tricked down into the primitives of infrastructure industries. Yes, we've digitized physical industries and through that we've drove some incremental efficiencies, but less effort has gone into changing the fundamental, base-level way we perform activities.

Seond of all, industry players in these areas are old and highly entrenched. This makes sense— entering a "mature market" is hard, and infrastructure industries are the most mature markets in the world. But since entrenched players have low incentives to innovate, we've ended up with industries that mostly consist of "dead players", unable to do new things or build for the future.

Climate is funnelling an immense amount of investment and human capital into these areas. This is giving us an opportunity to build new technology, and possibly enough momentum to disrupt the status quo players.

These are once-in-a-lifetime conditions that might birth new, vital companies in mature, industrial markets. This is a highly uncommon occurrence— in most industrial markets, the dominant players have been around for hundreds of years. Software didn't kill any industrial giants— while it was a disruptive innovation in certain industries, it was entirely a sustaining innovation in industrials.

Here's one quote from a climate founder on how energy transition dynamics (originating from climate) might lead him to build a chemicals company:

I always wanted my own chemical plant, but it's billions of dollars to build plants so that was a pretty big step. So I think with [cheap solar and new technology], there's a window where you might be able to build smaller plants until it optimizes to be hard to enter again.

(Quote at 01:07:20); the enabling technology right before the quote

New technology at the infrastructure layaer is key for prosperity. Every progress-minded person should be excited about the infrastructure technology that climate is incubating. But personally, I'm thrilled at the prospects of new institutions. Imagine if our industrial giants can crank out new products and actively usher in the future, instead of shuffling their feet and digging their heels in against change. Climate work has the potential to create:

I can only think of a few companies who have line-of-sight on unseating industrial giants, and they're all climate companies. ∎

¹ As a side note, why do a bunch of different activities all have the same by-products? It's an interesting question. In essence, the commonality between all of these activities is energy. One way to make energy is to transition matter from a high energy-state to a low energy-state, and CO2 is a molecule with a low energy-state. We ended up scaling C-H bond energy in the 1800s, and we never switched to something better (although we were on track to in the 70s.) ⤴

² To put numbers on this tax, Wren says my carbon footprint is 25 metric tons per year, and says it'll cost me $50 a month to offset this. But the confidence interval on these numbers are huge. Wren said the average household footprint was 20 metric tons / year, while other sources say that it's double that. I'm also unsure of the veracity of Wren's offsets, but if you paid Climeworks to suck your emissions out of the air, it'd cost you tens of thousands of dollars per year. ⤴