Lunch with Al Gore

8 Key Takeaways about the Fight Against Global Climate Change

On Tuesday, April 18th, I attended a lunch, The Climate Reality Project, organized in Vancouver, British Columbia, Canada.

The Climate Reality Project is a non-profit organization founded by former US Vice President Al Gore in 2006 to catalyze a worldwide solution to the climate crisis by making urgent action a requirement across all sectors of society.

The group strives to raise public knowledge and comprehension of climate change science and the options available to solve it. Training individuals to become Climate Reality Leaders who can advocate for climate action in their communities, organizing public events and campaigns to raise awareness, and collaborating with businesses, governments, and other organizations to accelerate the transition to a low-carbon economy are all part of this effort.

The Climate Reality Project also produces research and instructional materials on climate change and its consequences. It advocates for policies and actions that promote a sustainable and equitable future for all.

The Vice President talked for about an hour, and I left feeling incredibly inspired. He has a passion and strong commitment to reducing the effects of climate change not only on our planet but for humankind.

Shortly after his remarks, I met him privately, further inspiring my passion for identifying novel technology and building transformative, purpose-driven companies. Investing in breakthrough hard science gives us the opportunity to tackle some of the biggest challenges that we are facing. Below are my key takeaways from the lunch, peppered in with my perspective.

1. The Climate Crisis Continues to Worsen

According to the most recent scientific reports, the Earth’s temperature continues to rise, resulting in more frequent and severe heat waves, droughts, floods, and other extreme weather phenomena. This wreaks havoc on ecosystems, infrastructure, and human health and well-being.

The science is clear: human actions, notably the combustion of fossil fuels, are causing the Earth’s temperature to rise at an alarming rate, leading to catastrophic effects such as extreme weather events, sea level rise, and biodiversity loss.

2. Chips Act and Inflation Reduction Act are Supercharging the Climate Tech Economy

On August 9, 2022, President Biden signed the CHIPS and Science Act of 2022 (“CHIPS Act”) to provide federal aid (roughly $280 billion over the next ten years) to boost semiconductor research, development, and manufacturing in the US. According to the White House, the aim of the Chips Act is “to strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future to keep the United States the leader in the industries of tomorrow, including nanotechnology, clean energy, quantum computing, and artificial intelligence.”

In the 1990s, the share of US semiconductor manufacturing was around 37%, which has been eroded to roughly 12% today because other countries have emerged, thanks to a mix of government incentives and macroeconomic and social conditions. The Chips Act is a catalyst to reverse this course and bring more resilience to the US supply chain.

As a result, Intel, Samsung, Micron Technology, and TSMC announced the construction of new manufacturing plants in the US to expand their capacity. Qualcomm has agreed to purchase $4.2 billion in semiconductor chips from a Global Foundries factory in Malta, New York. This follows the $3.2 billion agreement between the two companies to double the production of chips used in core applications, such as 5G transceivers, Wi-Fi, Automotive, and Internet of Things connectivity.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”), which includes $790 billion in new investment in climate change policy, a minimum corporate tax rate, and healthcare funding. The legislation allocates significant funds for climate change mitigation and adaptation efforts, including renewable energy development, clean transportation, and environmental restoration. Much of the spending is dedicated to wind and solar power deployment as strategic initiatives for the US economy. Other support areas for the IRA include carbon capture and storage, green hydrogen, geothermal, fusion, and clean transportation.

The IRA bill has roughly $386 billion in climate and energy-related provisions and $98 billion in healthcare provisions. The total spending would be $485 billion, which would be offset by $790 billion of additional revenue and savings over a decade. The Net Deficit Reduction will be $305 billion (more information here).

All these initiatives are signaling a clear message:

Semiconductor manufacturing and chips are essential for the country, and climate technology is not simply an additional part of the economy; it is at the core of the competitiveness of the United States. Together, they are critical drivers of economic growth and the future of the USA.

3. Venture Capital and Private Investments in Climate are Increasing and Will Have a Big Impact

Climate tech startups are essential to the fight against climate change. According to Holon IQ research, the Venture Capital investments in Climate tech totaled $70.1 billion in 2022, up 89% from 2021.

Based on the Climate Policy Initiative, in 2019 and 2020, the average climate finance flows amounted to $650 billion, with about half coming from public sources and half from private ones. In 2021, climate finance flows amounted to $850 billion, representing a roughly 30% increase from 2019/20 averages, reaching an all-time high.

Credit Suisse estimates that total federal spending will double to over $800 billion. This will bring the total amount of public and private spending the IRA will bring in over the next ten years to nearly $1.7 trillion (see Figure 5). Out of this $1.7 trillion, the power sector (around $580 billion) is still the biggest, but manufacturing jumps to second place (around $520 billion).

4. We Have the Technology to Address Climate Change

Many climate tech solutions can help lower greenhouse gas emissions and switch to a low-carbon economy. These include renewable energy, energy efficiency, sustainable transportation, carbon capture and storage, and more.

Renewable energy is starting to compete with fossil fuels more and more.

Saving energy is an integral part of the climate equation. Making buildings, appliances, and industrial processes more energy efficient can save money, waste less energy, and cut greenhouse gas emissions.

Greenhouse gas pollution is mostly caused by cars and trucks, but there are many ways to deal with this problem. These include electric vehicles, public transportation, bike-sharing programs, and more.

The switch to renewable sources comprises not only the industrial sector but also the transportation sector, where many countries are planning a fossil fuel phase-out in the next two decades. Leading countries like Norway are aggressively cutting their phase-out start date as early as this year.

6. Climate Justice and Equity are Becoming Increasingly Important Issues

It is acknowledged that vulnerable populations, such as low-income and minority communities, are disproportionately affected by climate change, and tackling this injustice is vital to creating a fair and sustainable future for all.

7. Focus on the Right Technologies

Vice President Al Gore has been skeptical about how Carbon Capture and Storage (CCS) technologies could help solve the climate issue. The high cost of CCS technologies and the slow trajectory to make them cheaper in the past decades can make it hard to justify their use on a large scale. There are also worries about how safe and long-lasting it would be to store a lot of carbon dioxide underground. A recent Oxford University study concluded that carbon Capture Technology and Storage is another example of non-improving technology. Despite significant effort, over its 50-year commercial history for enhancing oil recovery, costs have not declined at all.

A more efficient way to cut greenhouse gas emissions would likely be to focus on renewable energy and energy efficiency.

Recycling, and extracting precious metals and rare earths in a more sustainable way also play a fundamental role in energy security and the transition to renewable energy. For example, lithium, nickel, cobalt, manganese, and graphite are critical for battery performance, longevity, and energy density. Rare earth elements are used in the permanent magnets of wind turbines and EV motors. The energy grid needs a huge amount of copper and aluminum.

8. Some Corporations are Practicing Greenwashing

“Greenwashing” is a marketing strategy that some companies use to make their sustainability efforts appear to be better than they really are. The term “Greenwashing” refers to a situation when a company makes false or exaggerated claims about how good their product or service is for the earth. They do this to attract customers who care about the environment.

For example, a business might say that its products are made from recycled materials when, in reality, only a small part of the product is recycled. This is a form of greenwashing because the company is making people think their product is more environmentally friendly than it really is.

In addition, some companies might make environmental claims that are true, but they are just a distraction from the overall negative impact of their product or service. For example, an oil company could promote their new “clean burning” fossil fuels, which are still creating major environmental harm.

People who care about the environment should pay attention to this type of practice, which can mislead them and prevent them from making the right decision for the environment.

Overall, there is reason to be optimistic about the progress being made in climate tech, but much more work needs to be done to address the urgent threat of climate change. It is essential that we continue to invest in and support the development of climate tech solutions to ensure a sustainable future for our planet.

At Longview Innovation, I actively scout technologies and invest and build companies that offer more efficient processes to extract precious metals, recycling technologies, alternative materials, and semiconductor architectures to reduce power consumption. For example, Longview Innovation portfolio company, Enachip Inc. is dramatically reducing the power consumption associated with high-performing computers (HPC), data centers, CPUs, and more broadly, any semiconductor chips by delivering power directly on chips. If you are fighting the climate crisis, I’d love to hear from you and support you in this journey.