Notes on tech and climate change
We have a negative, conformist, static mindset about climate change. Climate will drive major transformation. That presents a great opportunity for innovative, tech led businesses.
I get very frustrated by the climate change “debate”. It feels like we have been running over the same arguments forever. Media and campaigners frame every solution as heavy-handed regulation, gargantuan costs or painful change. Usually all three.
For me, climate change is an enormous opportunity for innovation and economic growth. As such, its a perfect field for starting great tech businesses. Here’s why.
Notes:
Change is always the biggest driver of business opportunity.
Climate is one of the biggest changes in our history. Transforming energy, agriculture, transport and others will require dramatic change.
We have never tackled climate change before in history. So solving the problem requires innovation. We have already seen lots of new ideas and we need many more.
Colossal change and lots of space for innovation means this is a vast pool of business opportunities.
The same applies even if we fail. If the climate warms by over 1.5 degrees, adapting to the new environment will also mean lots of change.
(Aside: does anyone really think that a single, fixed global threshold is a good way to manage a problem of this scale and complexity?)
The economics work. Nothing in economics is one sided. Every cost is revenue for someone. All revenue is a cost somewhere else. Whatever number you pick for the “costs” of climate change, that is going to be income somewhere. Most of that will flow as revenue to businesses. That creates jobs and incomes for millions of people.
You can take your pick on the numbers from this google search. None of these estimates actually means anything. The fundamental point that dealing with climate change is better than ignoring it is valid.
There are critical sustainability problems where economic growth already looks like the solution not the problem. For example, wealthy countries have been driving reforestation since the 1980s. Why not aim to raise all the poor countries into the wealthy world?
First thing to think about. “Anything we can actually do, we can afford,” John Maynard Keynes. I will write more about this soon. If you take nothing else from this post, find the time to read the transcript of the original broadcast.
Second thing to think about. What really matters is the economic value generated by all that “cost”. Great businesses create economic value and distribute it widely. The core mechanism needs to be great businesses, built on innovation. Did I mention that tech is the best way to achieve this?
Third thing to think about. A significant amount of the “cost” will be incurred by governments. Or in some way directed by governments. Government direction is a terrible way to generate economic value. So great, innovative businesses need to manage this downside risk.
One final thought on tech. There will be plenty of pure tech, software and/or AI business opportunities. We will also see an emerging trend of tech led businesses that integrate physical world technologies. These will be essential in many areas to address climate change.
Reading:
How much does finance matter? Transcript of a radio broadcast by John Maynard Keynes, 2 April 1942. Can you imagine this being broadcast now, never mind in a time of national crisis and total war?
No, the world is not going to pass its 1.5°C warming target in the next few years, Hannah Ritchie. Hannah's blog is a fantastic source of facts and analysis about climate change. Including why some headlines are just plain wrong.
Growing forests from Works in Progress. Analyses how and why wealthy countries are driving reforestation. Not a full solution but progress.
How did solar power get cheap, Brian Potter. The costs of a technology fall dramatically once it reaches scale. The history of solar power provides a great example of this principle.
Carbon footprint of Estonia’s digital public services. There are plenty of alarmists who think tech will make the climate worse. I am a huge fan of the Estonian model and this is a great explainer of why the digital approach is better than the alternative.
End note:
My plan is to post fairly regularly in this general format. Something to think about, but no conclusions or advice. Many posts will be quite rough. At some point I have realised my notes are my writing, so that is what you will see.