No clean homes without clean electricity

The International Energy Agency projects that worldwide electricity demand for cooling will triple by 2050, at which point air conditioners will consume as much electricity as all of China and India do today!1 The majority of that new demand will come from developing countries, which is why developing and deploying economically competitive clean energy systems will be so important. I covered the implications of clean electricity generation, transmission, and distribution for developing regions in Bringing Electricity to Net Zero so I won’t go into detail here. In this article, we’ll be exploring how we can use electricity along with other means to reduce emissions while using energy more efficiently when heating and cooling buildings.

Moving to efficient electric heating and cooling

A heat pump is an appliance that uses refrigerants and electricity to provide heating and cooling for buildings and other applications such as refrigerators. A refrigerant is a substance that can rapidly and efficiently phase change between solid, liquid, and gas forms, which helps it aggregate, transfer, and diffuse energy. To provide heat, a heat pump works by extracting heat from the air outside and transferring it to a refrigerant – the refrigerant is then compressed, which increases the temperature significantly, and is then moved to the indoor unit of the heat pump, which then passes air (or water) over the hot refrigerant and into a building. Heat pumps do a similar process in reverse to cool buildings. Geothermal heat pumps utilize similar principles, though exchange heat from underground, where temperatures are more stable, rather than from outside air. Although they are more expensive to install, geothermal heat pumps are often more efficient and can end up being the same price or cheaper when factoring in operating costs over a unit’s lifetime2. Dandelion Energy is one company leading the way in bringing geothermal heat pumps to homes. The energy efficiency gains from heat pumps in the right conditions are mind-boggling - for every unit of energy you put in, you get up 4 units of energy into the building; that 400% efficiency can be compared to ~98.5% for modern furnaces and boilers. And, if the grid is clean, it’s zero-emission3.

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Heat pumps have seen increased efficiency and cost reductions over the years. Fortunately, when developing new buildings in areas that are warm or temperate (regularly above 40℉/4.4℃) it’s now often cheaper to install and operate a heat pump as opposed to a gas furnace (that is not always true if the cost of electricity is high, which goes back to having a sound grid). According to the IEA, heat pumps could satisfy 90% of global heating needs. That’s great news for developing regions with sound electricity systems.

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It’s not so good for nations with large amounts of old infrastructure already in place, as electric heat pumps are used to heat only 5% of residential demand globally. Even though modern heat pumps can save owners money, the reason only 11% of Americans have them is that furnaces are typically replaced every decade or so, and people do not want to lay out the extra cash upfront for a new system6. This is where business model innovation and intelligent lending can play a big role. Companies like Bloc Power are paving the way to bring access and financing to underserved areas that would benefit immensely from heat pumps, insulation, and other energy/emissions-reducing deployments. This is good for the planet, good for consumers who save money long-term, and good for business. More on that in the next section.

It’s also where smart policy incentives come into play. In China, subsidies to replace coal-fired boilers with heat pumps through Northern China’s Coal-to-Electricity program have helped increase heat pump sales dramatically; the U.S. also implemented a federal tax credit which allowed homeowners to claim 30% of the amount they spent on purchasing and installing a geothermal heat pump from their federal taxes. That tax credit has stepped down to 26% and will be stepped down again to 22% in 20237.

Given that one-third of all building emissions globally come from furnaces and water heaters8, and the economic savings that can come from heat pumps, we should be aiming to get heat pumps deployed in all buildings that can house them.

Insulated and efficient buildings

As the world continues to build more (we will be building the equivalent of another New York City every month between 2020 and 2060!), we’ll want to keep insulation in mind. Insulation is one of the most practical and cost-effective ways to make buildings more energy-efficient, as they often lower energy operation costs more than the cost of installation. The range of insulating materials is wide including fiberglass, plastics, fibers, mineral wool, recycled newsprint; even natural fibers such as hemp, sheep’s wool, and straw all find themselves going into insulation. Innovation in insulation materials continues with the aim of improving their performance and producing them more sustainably. 

One exciting new piece of technology is electrochromic glass, which changes its opacity according to heat, sun, and the difference between indoor and outdoor temperature. This  “smart glass” has been shown to reduce energy use by 20% compared with traditional windows. They are also 50% more expensive (though you do save on curtains and blinds) so technology like this will need to go down before it is ready to be widely adopted9.

There’s also enormous innovation in the design of buildings to use flows of energy in dramatically more efficient ways. Net-zero buildings are becoming more common, utilizing the best of thermodynamics, material science, and creative design to create buildings that can be climate neutral or even positive by being net carbon sinks (plants on-site) or clean energy contributors to the grid. Hopefully, these designs can become templated and ubiquitous over time. 

In addition to buildings that use energy more efficiently, there’s also a push to make the construction of buildings less carbon-intensive. Remember that steel and cement, primary materials for buildings, make up 8% and 5% of global emissions respectively. Companies such as Katerra, and buildings like the Mjøstårnet (largest timber building in existence today at 280 feet) or the Ascent building (expected to be 284 feet tall and be complete in 2022), are rethinking how buildings can be constructed to use carbon neutral or negative materials, such as timber, rather than carbon positive materials10. Manufacturing steel beams requires 6-12 times more fossil fuel than producing laminated timber!11 New forms of processing wood make it much more fire-resistant and strong enough to be used in quite substantial buildings. We do need to be careful to ensure that at a building's end of life, the wood is recycled and reused in a way that doesn’t result in the captured carbon in the wood being released back into the atmosphere. If we can reuse wood effectively at a building’s end of life, that wood can find new life in other buildings, be composted, or be used as fuel. If we are able to do that well, the potential benefits are huge; according to a 2014 study out of Yale University, building with wood could reduce annual global emissions of carbon dioxide by over 14%12! Note, the 7% due to keeping warm and staying cool does not factor in building materials, but I wanted to highlight this while we are talking about buildings as it’s an important element of our decarbonization challenge.

Unfortunately, old buildings are being replaced at a rate of 1-3% per year, meaning we won't have all new buildings properly insulated or creatively designed anytime soon. In the meantime, there are many opportunities to retrofit buildings in a cost-effective way. The payback on retrofits from energy savings (ones that include not just purely insulation but also consider appliances, lighting, heating, and cooling), are five to seven years on average, depending on the building; given that buildings can last over 100 years, the ROI for such retrofits is obvious. Yet existing commercial buildings are being upgraded at a rate of just 2.2% per year due to the high upfront costs and friction in the process.

Once again, this is where creative business model innovation can come into play. There should be a big focus on the 8,000 big buildings over 500,000 square feet in the US, where you can concentrate the savings, such as the Empire State Building retrofitting project (which slashed emissions by 40%, is saving $4 million in energy per year, and is expected to be a net saver of costs overall) and The Willis Tower in Chicago. Then there’s the 139.5 million buildings that need retrofitting and would result in savings for consumers, lower emissions, and many jobs created along the way13.

Incentives and awareness matter

When it comes to a new building, the incentives of a construction developer can differ quite dramatically from the long-term owner of a building. The developer wants to make the building as cheaply as possible, whereas the long-term owner wants to save money through the entire duration of his or her proprietorship. When the cost of construction to insulate is high, but the net savings through energy efficiency over time are even greater, incentives can be at odds. Conflict of incentives is also at play between developers looking to minimize costs and governments who want to reduce emissions, where cheaper steel, insulation, and other materials result in greater emissions during construction and over a building’s lifetime.

Governments have the power to architect incentives such that their incentive to reduce emissions is in line with a developer's incentive of creating a building at the cheapest price. Subsidies/tax breaks on more efficient buildings are ways of doing that (taxing carbon inefficient buildings is also an option, though politically difficult).

Another way of changing behavior that doesn’t involve the governments of over-indebted western nations or cash-strapped developing nations footing the bill is to increase awareness such that long-term building owners are aware of the trade-offs they are making between cheap to buy vs cheap to operate. That way, the long-term owner can have a sense of how much they stand to save, and accordingly how much more they are willing to spend for those long-term savings. Awareness and access to smart financing options for building efficiency can align incentives even further, as owners don’t need to make a large tradeoff between a dollar now and a dollar later. A program like this requires governments, non-profits, or consortiums to develop informational campaigns and certification programs to facilitate informed decision making, much like the Leadership in Energy and Environmental Design (LEED) certification program, rolled out by the U.S Green Building Council, or the Living Building Challenge (LBC), owned and operated by the International Living Future Institute14. LEED certification results in tax benefits in the U.S., but other programs can be developed in regions where tax benefits don’t exist, and can still help consumers make more economically and environmentally rational decisions.

Minimize refrigerant leakage

Refrigerant reduction is the top solution on the Drawdown list, which is a large-scale project that evaluates the environmental and economic impact of the many different solutions to help get us down to net 0 emissions15. The resulting book that came from this project, Drawdown, is a must-read on the subject.

Chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) were once key culprits in depleting the stratospheric ozone layer, which is essential for absorbing the sun’s ultraviolet radiation. Modern CFCs and HCFCs replacements, primarily hydrofluorocarbons (HFCs) do not deplete the ozone layer, but their capacity to warm the atmosphere can be 1,000 to 9,000 times greater than that of carbon dioxide, depending on the chemical composition. 

Thanks to the 1987 Montreal Protocol on Substances That Deplete the Ozone Layer, CFCs and HCFCs have been phased out of use. HFC substitutes are already on the market, including natural refrigerants such as propane and ammonium and through an amendment to the Montreal Protocol, the world will begin phasing HFC out of use, starting with high-income countries in 2019 and then expanding to low-income countries – some in 2024, others in 2028. With that said, the adoption of air-conditioning is soaring, especially in rapidly developing economies. As a result, the number of HFCs (which are cheaper than clean alternatives) will grow substantially before all countries halt their use. 

Refrigerants currently cause emissions throughout their life cycles – in production, filling, service, and when they leak – but their damage is greatest at the point of disposal. 90% of refrigerant emissions happen at the end of life. When refrigerants are carefully removed and stored, they can be purified for reuse or transformed into other chemicals that do not cause warming. While Drawdown estimates the green premium on this process is quite high (~$900 billion over the next 30 years, or 30 billion a year compared to business as usual), the estimates also show it can reduce emissions by ~90 gigatons of CO2 equivalent. If amortized over the next 30 years, that’s 3 gigatons a year, or 5% of emissions per year!

Smart Buildings

In addition to changing building infrastructure to save energy while heating and cooling, software can play a big role in using energy in an efficient way. There are a few ways software can reduce energy consumption, a primary one being smart thermostats. Smart thermostats can heat or cool only when it benefits those inhabiting the building; by utilizing sensors and/or cell phone data to know when someone is in a building, or on certain floors, these smart thermostats can heat or cool only when it makes sense. Those smart thermostats can also learn a user’s preferences and nudge them to adopt more efficient energy patterns. Sidewalk Labs’ Mesa and products like Nest are built with that sort of functionality in mind. On a side note, Sidewalk Labs is exploring many interesting avenues in the smart and low carbon building/city space, including an offset construction company to deliver customizable mass timber buildings, among other products that could shape how our cityscapes function. Smart thermostats can also optimize when it draws electricity from the grid, doing so at a time when grid demand is low; this results in lower utility bills, but it also reduces emissions as it can avoid adding load on the grid when dirty peaker plants are in use due to high demand. Minor efficiency tweaks that software can leverage without human intervention can result in major energy reductions and large savings.

If we go from .4% of households that use smart thermostats today to 46% of households by 2050 (as Drawdown projects), the reduced energy could avoid 2.6 gigatons of CO2 and $640 billion on utility bills, and that’s not including commercial buildings16.

Closing

While we have a long way to go in bringing down the 7% of emissions from heating and cooling buildings down, the technology already exists today to make a drastic dent in those emissions and will save money for consumers. In many ways, this is a deployment challenge. Thoughtful business models, more focus on access (both making sure people are informed and making sure there are organizations that can serve various demographics), as well as the right government incentives can go a long way here.

We’ve now covered the five primary emissions categories that comprise our climate challenge and opportunity (electricity, agriculture, how we make things, transportation, and buildings). Next, we’ll look at hydrogen and carbon capture technologies more closely, then how we can mitigate the negative effects of climate change that will occur as we strive to decarbonize, and finally discuss what role different stakeholders (governments, companies, individuals, etc) can play in our climate challenge and opportunity.

Zero-emission vehicles and charging networks

The main progress in decarbonizing transport in the past decade has come from the rapid shift in the supply and demand of electric vehicles. Tesla made electric cars sexy, and now companies like Rivian and Lucid are ramping up to be new players in the space, while companies like Ford and GM are re-orienting their entire product suite around electric. EVs are generally more expensive than gas-powered automobiles, due to the cost of batteries. Range is also still a limitation for long-distance and/or heavy load trips. However, costs are becoming competitive and decreasing rapidly as investment ramps up, while range is increasing.

Today only 2.7% of passenger vehicles sold are EVs, though it’s expected that over half of vehicles sold in 2040 will be electric.1 As more companies are announcing plans to go fully electric, and battery cost curves come down, it is possible this transition will happen faster than expected. 

A big limitation to consumer demand is switching away from the convenience and security that ubiquitous gas stations provide. Many people do not want to risk being hundreds of miles within a charging station, and then having to wait a long time for batteries to charge. Fortunately, there is momentum to alleviate those speedbumps: companies like Volta, Tesla, Revel are deploying charging stations, while different levels of governments are accelerating deployment through incentives and direct investment. Biden is pushing to invest $15B to roll out half a million charging stations nationwide (though it needs to pass through congress)2, while states like New York already provide $4,000 per charging port3. All the while, charging times are decreasing as we iterate on current lithium-ion technology and pioneer in solid-state batteries (see Pt2a for more on batteries). 

Increased strain on our grid from EVs

As more transport goes electric, demand for electricity will go up accordingly. It’s estimated that grid demand will nearly double by 2050 in the U.S. if 66% of our cars are electric vehicles!4 This increased demand will require new generation, transmission, and distribution. Even worse for the grid, that demand clusters at roughly the same time in a given region: when people come home from work at night. Our grid, especially distribution, will have trouble handling that traffic all at once if we don’t build new infrastructure, and don’t develop more thoughtful solutions to spread out the increased load on our grid.

Long Distance

While Tesla has announced plans to release electric freight trucks for medium-range travel (300-400 miles), it will be a long road before long-range electric trucks are feasible (if ever), let alone economically sound. Companies like Proterra are ramping up electric bussing, due to the fact that most bus routes are short distance and buses can easily access charging ports within their routes. Meanwhile, companies like Remora are focusing on capturing the carbon that comes out of existing semi-trucks, helping mitigate the damage from what will be a long transition.

While batteries will continue to decrease in cost and increase in range, there are still constraints that will make it difficult to carry large amounts of goods over a long period of time. Remember from the previous discussion on batteries the best lithium-ion battery available today packs 35 times less energy than gasoline, pound for pound; while there will be major improvements in the coming years, it’s anticipated we’ll be able to get up to a 3x improvement, still leaving us with 12 times less energy per weight than gasoline.5 On the other hand, hydrogen is the most energy dense substance we know of, packing almost 3 times the amount of energy per weight compared to gasoline!6 For that reason, many people in the space feel hydrogen fuel cell technology will be the primary method of long-distance transport in the future.

Along with hydrogen’s obvious benefit of extreme gravimetric energy density, come some drawbacks. While it’s extremely gravimetrically energy-dense, hydrogen takes up a lot of space; to get hydrogen into a form that is easily transported, stored, and usable on vehicles requires very cold temperatures (about -250℃) and/or high pressure to make it more volumetrically dense. Additionally, since you cannot simply plug a hydrogen vehicle into an outlet, hydrogen may be restricted to industries that have networks of logistics hubs that vehicles regularly stop at those hubs (as is the case with trucking, aviation, and shipping) until a more robust supply chain is built out. One of the biggest constraints is that clean hydrogen is still expensive today; given the dramatic cost reduction of renewables, the falling costs of electrolyzers that make clean hydrogen, and the growing scale of clean hydrogen production facilities, it’s expected that the cost of hydrogen will be at a cost-competitive price by 2030.7

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We’ll discuss hydrogen at a greater length in upcoming sections, as it will likely become a major player in the green economy in the coming decades.

Air and Sea. Hydrogen is looking to be the likely the future of aviation. Airbus has revealed three concepts for the world’s first zero-emission commercial aircraft which could enter service by 2035.9 New companies are also innovating in the space, such as ZeroAvia and Universal Hydrogen. ZeroAvia envisions a world where solar, wind and other renewables create hydrogen from water through electrolysis, and that hydrogen is used to fuel the highly efficient power trains they are developing. They are starting with smaller planes doing ~500 mile trips and have ambitious plans to build hydrogen-electric powertrains that will exceed the capabilities of the larger and faster planes we see today. Universal Hydrogen is building a modular capsule to more easily store, transport, and use hydrogen within aviation, much like Nespresso has done for coffee. They are also developing a conversion kit to retrofit existing regional airplanes with a hydrogen-electric powertrain, which they claim will improve both cost and performance, and will help transition existing planes, which have a ~20-year lifespan. Given the difficulties and lack of infrastructure to store, transport, and utilize hydrogen (even if you have planes that can use it) Universal Hydrogen’s work to simplify the logistics and usage chain has the potential to reshape the aviation industry. 

Given the nascence of the clean hydrogen industry and the scale of the needed transition, there will be room for many innovative players in the space.

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A quick note on electric planes... while they are possible, it’s difficult to travel long distances given their mass-to-energy ratio - planes are very weight sensitive. Given the energy to weight ratios compared above (gasoline and jet fuel are 35 times more energy-dense than batteries, hydrogen three times more energy-dense than gasoline and jet fuel), it’s unlikely we’ll see any 747 sized electric planes. Long-range shipping will likely follow a similar path as air travel.

What’s available today: While hydrogen may be the preferred choice of fuel in the future, the fact is today we have thousands of air and sea crafts that will be in use for the next 20-30 years. If you wanted to use an advanced biofuel instead of regular jet fuel, you’d pay $5.35, compared to $2.22, a 140% markup, not to mention it’s extremely hard to find such fuel.11 Breakthroughs are needed to create cheaper bio/synthetic fuels or get carbon capture costs much lower within the transition period to get to an economically sustainable price.

Time is of the essence when it comes to transitioning vehicles since it takes ~20-25 years for cars, planes, and ships to be fully replaced. Even after production switches to all clean vehicles, it will take some time before all vehicles are clean.

Riding efficiency

In addition to decarbonizing the mechanisms by which vehicles are propelled, a lot can be done to minimize the amount that needs to be moved by large vehicles. A lot of energy is wasted to move a car while it carries a single person in it. Prior to COVID, increasing shifts towards mass transit systems and ride-sharing were helping reduce the per person footprint of daily commutes; we should be able to revert back to those trends over time. Mass transit systems greatly reduce the energy footprint per person, and when designed well, can result in a faster commute time. Cities that took a thoughtful approach to mass transit see wide adoption, while those that did not are seeing the results you’d expect. In Singapore and London, half of trips are made via public transportation, while in the U.S. metropolitan areas, less than 5% of daily commuters use mass transit12. The Boring company’s innovations in tunneling have the potential to greatly reduce the cost of underground mass transit in the coming decades. 

Cities that are biker friendly, such as Copenhagen, Amsterdam, San Francisco, and many in China, see much higher use of bikes and electric-pedal bike hybrids for transport - China accounts for ~95% of global e-pedal bike sales13. 

Being thoughtful around how we design future cities to facilitate efficient transportation will be crucial, as we’ll be building the equivalent of one New York city space worth of urban development per month globally until 2060. Those urban areas will be home to over 68% of global dwellers.14

Tangential innovation impacting transportation

Much like the shipping container upended the entire shipping industry and society along with it in unexpected ways, one piece of technology that could have profound and surprising consequences for society is the rise of 3D printing. As 3D printing costs come down and the technology becomes more ubiquitous, it has the potential to dramatically reorganize supply chains. Items will be built fully automated, locally, on-demand. Previous factors like the cost of labor will be greatly reduced, and with it, the number of things that need to be transported long distances. This fundamental shift will lead to a more efficient and more resilient global economy and will chip away at the 40%+ of the transportation energy expended worldwide for freight15.

Closing

As with many parts of our decarbonization goals, the challenge when it comes to transport will come in reducing costs and deploying changes fast enough. Companies innovating in electric vehicles and hydrogen fuel cells are making sure we have a bright future full of clean transport; while that vision is beautiful, we still need to deal with the fact that over 95% of vehicles sold use fossil fuels and will be on the road 20 years from now. Companies and governments that are helping us reduce our energy footprint today (whether through ride-sharing, building robust transit systems, or retrofitting existing vehicles) are crucial in this transition. 

It won’t be easy to decarbonize transportation, but we do have the fortune of having a visible path to decarbonizing the 16% of emissions that transport represents.

Making things constitutes the majority of our global emissions, which is why it’s so alarming that we’re far behind compared to other sources of emissions. It’s not even that we’re far behind; in some cases, such as cement, we don’t even have a visible path forward!

Emissions from cement, steel, and plastics comprise the majority of emissions in how we make things (5%, 8%, ~1.6%, of total global emissions respectively)1, and their usage will grow immensely as countries develop. For example, China used more cement from 2011-2013, than the US did in all of the 20th century!2 Though there’s a long tail of other emissions sources that come from mining, processing and creating other goods, we’re going to focus on these three areas, since they have the most potential for large-scale emission reductions. 

Previous sections of Our Climate Challenge and Opportunity can be found here.

Cement

Cement is a core component of concrete; it serves as the glue that keeps everything together. Cement production today requires calcium; we get calcium by burning limestone, which contains calcium along with carbon and oxygen. As the carbon and oxygen are burned off of the calcium, the carbon and oxygen bind to form CO2. Not only does this process require extremely high temperatures, which have been traditionally achieved by burning fossil fuels, the process itself inherently emits CO2. When you make a ton of cement you get a ton of CO2. Today, nobody knows a way around this. We also do not have an obvious replacement for cement in concrete.  

There are companies, such as CarbonCure (which recently won the Carbon XPRIZE), which inject CO2 into the cement during mixing, storing carbon within the cement. This process actually makes the cement stronger and allows slightly less cement to be required, therefore reducing production amounts. The CO2 captured can come from manufacturing processes (such as when CO2 is produced during the cement-making process). While this is a helpful solution, it is still less desirable than a process that doesn’t emit CO2 at all, as capturing that carbon in the first place requires energy and resources (read money), as we’ll see later when looking at the green premium for clean cement.3

There are also companies making concrete polymers that don’t use traditional Portland cement (again, cement is a primary ingredient in traditional concrete). These concretes use up to 90% less CO2 than Portland cement concrete and are cost-competitive with Portland cement concrete in many use cases. While these polymers have promise to be an important mix in the low carbon concrete space, they need to be scaled up and there are limitations as the materials needed to make them, such as fly ash, are not abundant enough to be used by the entire concrete industry. 

The long-term holy grail will be finding an alternative to limestone to make cement without emitting massive amounts of CO2, which we are still far from.

Steel

Steel falls into a similar category to cement, as it needs extremely high temperatures to smelt, and the traditional mixing of materials to make it emits CO2. The traditional way of making steel involves combining iron from iron ore with carbon from coke, which helps gives the steel its strength. The problem is that oxygen from iron ore binds with carbon from the coke in the smelting process, and lots of CO2 is emitted. 

Fortunately, there are clear paths to zero emissions, even if costly today. Some early technologies, such as molten oxide electrolysis, pass electricity through a cell that contains a mixture of liquid iron oxide and other ingredients. The electricity causes the iron oxide to break apart, leaving pure iron needed for steel, and pure oxygen as a by-product. There is no burning and no carbon dioxide produced in the process.4 There are also processes using hydrogen gas in the reduction process, which creates a clean byproduct of water vapor. As with the many breakthroughs that rely on hydrogen, the cost to produce clean hydrogen will need to decrease before this is economically appealing (we’ll be covering hydrogen in a later section).5

A beautiful property of steel is that it can be reused over and over again, by melting and remolding. When processed efficiently, recycled steel is a cost quite cost and emissions effective compared to mining and transporting raw materials, then going through energy-intensive reduction and processing; recycling steel saves ~74% of the energy used to produce it from raw materials!6 This is good news for those using steel in developed countries like the US, though plenty of new steel still needs to be made in growing countries that don’t have old infrastructure to recycle, and overall steel usage is expected to grow as populations grow and the world desires more things.

All of the processes above require extreme heat, oftentimes accomplished by burning fossil fuels and emitting carbon. There have been developments in the ability to generate extremely high temperatures through renewables, such as concentrated solar, which would reduce some of the emissions in the smelting process.

We need a lot of innovation to make cost-effective emission reductions in steel production. Since we’ll be producing 50% more steel by mid-century than we do currently, we need to invest today to bring costs down and scale up clean steel capabilities, especially since it takes decades to overturn expensive processing plants with long life cycles.7

Plastics

Plastic packaging production is expected to nearly quadruple by 2050.8 Traditional plastics go through multiple steps where they have the potential to emit carbon. Let’s look at some of the more intensive ones:

Fossil fuel usage in creation: Traditionally, fossil fuels are used as cheap ways to bind carbon to hydrogen and other elements. As an alternative, we can use sources like vegetable oils, woodchips, or recycled food waste, to create bioplastics. Today bioplastics are expensive, and some sources used for bioplastics are more harmful to the environment if they take up a lot of land and energy. Researchers and companies are developing cheaper and more climate-friendly ways (ex. using biomass waste) of producing bioplastics.9 

Refinement & production: When we make plastic, ~½ of the carbon stays in the plastic.10 For the rest, we need to utilize point-source carbon capture before it enters the atmosphere. It’s one of the cheaper ways to capture carbon, and declining, though still expensive today. We’ll be covering carbon capture in detail in future sections. 

End of life & recycling: This is where plastics get tricky. Bioplastic emissions look about the same at the end of life as regular plastics (since there is still carbon in bioplastics, even if coming from cleaner sources), so we need to be thoughtful.11 Here are some of the paths plastics can go down after they’ve been used:

Landfills: plastics take hundreds of years to degrade, so landfills are better than some alternatives regarding emissions, however, plastic takes up a lot of space, so many opt for…

Incineration: this is one of the worst outcomes as it related to emissions. Carbon capture may help here, though it’s expensive so it’s better if we can find ways to avoid incineration altogether. 

Leakage: there are about 100 million tons of plastic in our oceans, with 1 million marine animals killed each year, and growing.12 Not only is this bad for life in the ocean, it’s also bad for the climate as the waste of these marine animals serves as food for phytoplankton which play a critical role in capturing carbon.13 

The following are solutions we should be doubling down on to reduce emissions from end-of-life.

Enhanced recycling technology: recycling technology is quite inadequate so we end up relying on humans to decipher recyclables/compostables/waste, which we all know is far from perfect (only ~8.7% of plastic is recycled in the US14). Recycling goes beyond just plastics: aluminum, nickel, copper, lead, paper, and more - think of the savings highlighted when discussing steel recycling above. If we can deploy technologies leveraging computer vision and other ways to sort materials at scale, we can reduce the cost and friction to recycle, making it more economic for waste management plants to resell materials. These materials can then be recycled many times over, dramatically reducing emissions by curbing the amount of new plastics and metals that need to be produced and mined, as well as by avoiding incineration of materials like plastics. Today companies like AMP Robotics and Redwood Materials (they are focused on recycling batteries components, not solely plastics, but mentioning since recycling will be increasingly important in many areas) are pioneering in this space, and the technology is becoming economically viable in an increasing amount of cases.

Additionally, about 25% of plastics are thermoset plastics (as opposed to thermoplastics), which can not traditionally be recycled by heating. In 2020 there were new breakthroughs for breaking down thermosets in the lab15. While these processes will need some iterations before they can be scaled up, they are promising.

Waste to Energy: Anaerobic digesters, which use microbes to break down biodegradable material and turn it into energy sources, have been used for decades on food waste at an economic and climate profit16. The first anaerobic digestion system to turn plastic into energy and fertilizer was developed in South Australia in 2017 and while there are scientific and operational breakthroughs that need to occur, there is a lot of research underway.17

Green Premiums for Plastics, Steel, Cement

Current green premiums for cement, steel, plastic with carbon capture are still very high.18

Changing the way we make things will be one of the hardest parts of our climate challenge. This section of the economy is the biggest emitter, and we have a long way to go until we have the necessary economically feasible alternatives. In the next article, we’ll be covering how we can decarbonize the transportation sector, which fortunately has more solutions that are being scaled up today.

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Gates, Bill. How to Avoid a Climate Disaster (p. 107).

Today is April 22nd, Earth Day! A day to take a moment to appreciate this extraordinary planet we call home. There are trillions and trillions of planets out there in the Universe, but this one is particularly special - it’s the only planet we know of that contains life. 

We humans have lived for only 0.0044% of Earth’s 4.5 billion years! Over Earth’s long history, the climate has varied dramatically, with average global temperatures ranging from ~45℉ to 90℉ (global average is ~60°F today), through ice ages and great heats.1 Species have come and gone through many mass extinction events, with over 90% of life wiped out at a time! Fortunately, life has continued to build anew.

As we talk about human-driven climate change, it can be easy to conflate “hurting Earth” with “hurting life we love on Earth.” The truth is, Earth will be just fine no matter what we do. Whatever we spew into the atmosphere will eventually come back into a form of balance over hundreds of millions of years; carbon will be reabsorbed, ice sheets will melt and freeze again, the soils we are depleting today will be replenished by the ocean cycles, the sun will still set and fall each day. The question is not “will Earth be okay?” the question is “will we and other forms of life survive?” Given the short window of time we’ve lived on this Earth, the answer is anything but certain.

We are guests on this gracious planet, and it’s on us to remember that the delicate balance we rely on matters much less to our host than it does to the life we cherish on it. So thank you Earth for being a 5 start host all around, even if we’re letting the heating run a bit too high.

Agriculture, Forestry, and Land Use - 19% of Emissions

Now that we’ve taken a deep breath of air, enjoyed the trees, and contemplated our existence, what better way to celebrate Earth Day than by looking at how we use Earth’s land and resources through agriculture?  

When it comes to agriculture emissions, the main culprits are methane and nitrous oxide, which represent more than 80% of all greenhouse gas emissions in the agriculture, forestry, and land-use sector.2

Emissions by sector (CO2 Equivalent). World average 2000-2018.3

Farming solutions that can be implemented today

There are many techniques available to farmers today that would have an immense impact on emissions while being economically neutral or even beneficial. Sustainable and low emission farming techniques such as silvopasture, multistrata agroforestry, managed grazing, regenerative agriculture, aquaculture, farmland restoration, are all available today and can reduce emissions while being economically positive within agriculture. I’ll cover two of these techniques, and if you’d like to read more I highly recommend the Food, Agriculture, and Land Use section of Drawdown.

Improved Rice Cultivation: Rice provides a full one-fifth of calories consumed worldwide, more than wheat or corn, and is the essential staple in the daily diet of 3 billion people, many of them poor and food insecure. As highlighted in the chart above, rice cultivation represents 10% of greenhouse gas emissions in agriculture. A System of Rice Intensification (SRI) can help lower emissions and raise yields and income for farmers who implement it. SRI is now practiced by 4 million to 5 million farmers around the world, especially in Asia. 

The process, at a high level, is as follows: A) Plant seeds earlier (8-10 days out rather than 3 weeks) with slightly more space to soak up the sunshine and grow roots. B) Use purposeful, intermittent watering, rather than continuous flooding. It’s favorable to soil microbes and root systems that like to breathe while disrupting the waterlogged conditions that methane-producing microbes favor. Research shows mid-season drainage alone reduces methane emissions by 35-70%.  C) Use a rotating hoe and aerate the soil to handle weeds that come in the absence of flooding. Applying organic compost also helps enhance soil fertility and carbon sequestration.

It all adds up to creating the ideal environment for rice to grow, creating plants that are larger and healthier, with stronger root systems, aided by more abundant, thriving soil microorganisms. Yields are 50 to 100% higher than conventional rice production, seed use drops by 80 to 90%, and water inputs drop by 25 to 50%! All of this while reducing methane emissions dramatically.4

Silvopasture: Silvopasture is the integration of trees and pasture into a single system for raising livestock. Rather than seeing trees as a weed to be removed, silvopasture integrates them into a sustainable and symbiotic system. Pastures that are laced with trees sequester five to ten times as much carbon as those of the same size that are treeless. 

Aside from sequestering more carbon, there are demonstrable financial benefits for farmers who adopt silvopasture, coming from the fact that the livestock yield on a silvopasture plot is higher and a diversity of crops can be grown – from trees to nuts, fruit, mushrooms, and maple syrup – that come of age and generate income on different time horizons (some regularly and short-term, others at longer intervals). This allows farmers to mitigate weather events by diversifying their crop financial risk. 

Yields vary depending on the silvopasture system employed, but they regularly surpass that of a comparable grass-only pasture by 5-10%. Silvopasture can also cut farmers’ costs by reducing the need for feed, fertilizer, and herbicides. Because the integration of trees into grazing lands enhances soil fertility and moisture, farmers find themselves with healthier, more productive land over time.5

As you may not be a farmer yourself, the specifics are less important than the fact that there are many farming techniques available to reduce emissions while increasing yields.

Business model innovation

Though the advantages of SRI, silvopasture, and other techniques with climate and economic benefits are clear, its growth has been limited by both cultural and economic factors. For example, there is an outdated belief held by many in farming that trees and pastures are not compatible. It’s important we invest in educating farmers on the ground and share the benefits of this science-driven agriculture. 

An even more fundamental reason for the lack of adoption comes down to economics: while it might make them money in the long term, shifting farmland to new uses requires a lot of upfront capital that people do not want to spend. In Colombia, for example, farmers look at an investment of $400-800 per acre for silvopasture as a steep short-term expense.6 Much like power purchase agreements, pioneered by Jigar Shah in solar energy, this is where business model innovation can have an enormous impact. 

Power purchase agreements came about in the early 2000s because organizations wanted to adopt solar energy (for the environment but mainly because it was cheaper than alternatives) but resisted because they’d have to pay millions of dollars upfront to install a new solar energy system, money they’d prefer to invest into the business.  Under a project finance business model, companies like Generate Capital make the upfront investment to purchase and own the solar assets and then charge companies for energy as they use it – energy as a service – defined by a contract set in place before the solar unit was developed. This changed what was traditionally a capital expenditure into an operating expenditure for companies, unlocking the proliferation of solar as it allowed companies to spare upfront costs while paying less for energy over time. This business model innovation has created an entire industry worth 100s of billions of dollars and immense climate profits. There are literally trillions of dollars that can be unlocked when applying this sort of thinking to other fields like agriculture.

Reducing Emissions From Meat

Between the land, food, excrement decomposition, and processing required to husband animals, not to mention the immense amount of methane produced by ruminant animals such as cows and sheep through enteric fermentation, emissions from meat represent ~14.5% of global emissions! That number is expected to grow as our population grows and the standard of living rises globally.7 A shift in diet to a primarily vegetable-based diet would have major benefits for the climate, though there are obvious shortfalls relying on cultural and habitual change.

Plant-based alternative burgers, such as the ones from Impossible Foods and Beyond Meat, have emerged; while they have some way to go on taste (and they are improving), the economics do work well. There is also progress being made in lab-grown meat, however, the costs are still too high to scale; innovation is needed both to lower costs and to make a delectable diversity of alternative meat options.

While the ideal climate scenarios would entail a reduction in meat consumption and a swift transition to plant and lab-grown meat, that requires a change in cultural norms, which will be difficult to achieve.

Some progress is being made on ways to reduce methane emissions from ruminant animals. One such innovation started with a discovery that when cows are fed the kelp Taxiformis Asparagopsis their emissions are reduced by ~90%! Scientists are currently looking for ways to scale and distribute bromoform, the active ingredient in Taxiformis Asparagopsis, though we still have ways to go.

Food Waste. While the chart at the top of this article is useful in helping us understand where emissions come from within farming, it does not share the whole picture. The reason for that is there are a lot of emissions related to food that are separate but tied to agriculture. Worldwide 20% of food is wasted (40% in the United States!), representing 6% of global emissions.8 Part of this waste is due to consumption habits, but the major contributor, about ⅔ of food waste, is due to the waste created throughout the ‘cold chain’. The cold chain is a not well-known but crucial network of refrigerant warehouses, distributors, and edge modules that brings food (and many other things) from farm to table. Technologies like the ones developed by Therma exist to help reduce food waste in the cold chain; these technologies need to become ubiquitous as they are a positive for climate and save businesses money as wasted food means wasted revenue.

Zero-carbon fertilizer

Synthetic fertilizer, developed in the 1960s and 70s, has been a key factor in society’s ability to sustain its growth; surprisingly, it is estimated that the world’s population would be 40-50% smaller than it is today if not for synthetic fertilizer!

Fertilizer provides plants with essential nutrients such as phosphorus, potassium, and nitrogen. Nitrogen is very important, as it helps plants in the photosynthesis process; without it, plants wouldn’t grow. Coincidentally, nitrogen is also very bad for climate change. On average, less than half of the nitrogen applied to soil globally ends up being used by crops; the rest runs off into ground or surface waters, causing pollution, or escapes into the air and forms nitrous oxide (which has 265x global warming potential than carbon dioxide).

There are also the emissions that come from synthesizing ammonia used in fertilizer. Fertilizers are expected to represent 1.7 billion tons of greenhouse gas emissions by 2050. Moving to a clean synthesizing process would raise costs by more than 20% today, so innovation is still needed here to make it cost-competitive. Then there is still the problem of applying it in a way that is not wasted, resulting in extra nitrous oxide emissions.

While there is no equivalent of carbon capture for nitrous oxide, there is work being done to genetically modify a) plants that can recruit bacteria that produce nitrogen they need, and b) bacteria that produce nitrogen for plants in a way that’s more judicious to the environment.9 While on the topic of genetic modification, there are also genetically modified plants that have been developed to be more tolerant of varying climate conditions, which will be of use as temperatures and water levels rise and fall due to climate change; more on that in the discussion on mitigation strategies. 

Note on deforestation, reforestation, and planting trees and plants. 

Deforestation and other uses of land add a net 1.6 billion tons of carbon dioxide to the atmosphere a year and destroy essential wildlife habitats.10 This is a major problem we’ll cover in the section on what governments can do to make a difference. Additionally, there is a long dialogue taking place around the importance of reforestation, as well as planting trees and other plants for use in sequestering capture. We’ll cover this more in detail in the section on carbon capture.

Closing

While there’s a lot of scientific and technical innovation that needs to be done when it comes to things like enteric fermentation and fertilizers, there are many tools at our disposal today that can help us draw down and limit emissions in agriculture. Through business models that align incentives, utilizing known scientific and engineering methods, we can create a win-win for all involved. One of the biggest challenges when it comes to agriculture will be overcoming human systems - business models, stale knowledge, cultural and habitual barriers, government incentives, and so on. While there’s a long way to go, there is a lot we can do to change how we use the land and preserve the life on this beautiful planet we call home.

Happy Earth Day

Part 2 of our ongoing discussion is broken into multiple articles, each one covering one of the five emissions categories. We’ll talk about the solutions that need to be deployed in order to shift our society to one that can utilize energy and resources without emitting greenhouse gases. We’ll primarily be focusing on the physical systems that result in fewer emissions - infrastructure. This change in infrastructure will bring about a whole host of systems and software to facilitate and optimize this shift, which we’ll cover in later sections. 

After covering each of the five emissions categories, we’ll discuss how we can suck carbon out of the atmosphere, how we can mitigate the destruction that will come from the climate change already underway, as well as the big role that government-led national and international goals and incentives play. 

Innovation Takes Time

Especially when the infrastructure manifests in atoms rather than bits. Software’s nature allows for quick iteration cycles and easy deployment worldwide. Many of the solutions that will overhaul our energy and resource infrastructure require new scientific understanding, high capital expenditures, long iteration cycles, and a lot of energy to scale. 

While the past few decades and the recent venture capital interest in clean energy have seen a lot of excitement around the power of software, there’s no way of avoiding the fact that when it comes to how we utilize energy and resources, infrastructure needs to be built and deployed on a massive scale. 

As we discussed in part 1, the cost of that technology will go down over time through interaction cycles. However, in the realm of physical infrastructure, costs may be higher for a longer period of time than ideal. When discussing climate solutions, it’s important to know where technologies fall on that development and deployment curve. 

1

To convey this, I’ll highlight where a given solution a) is an obvious, economic or near economic, solution that simply needs to be scaled up b) exists today but needs iteration cycles to bring costs down, and c) requires scientific or engineering breakthroughs to be feasible.

A quick note, which will be discussed more in the section on government’s role: potential solutions in group c) as well as many in b) are not yet economically sustainable, meaning private markets will not be as willing to invest in them as the challenge calls for; this is where government incentives and investment can make a really big impact in helping bring new technologies to market. 

This is what happened with early government investment in computers, the internet, GPS, and the Human Genome Project, which all had large societal returns on investment. Once technologies are in group a), markets are a great vehicle to bring these technologies to the world, as long as entrenched interests and regulatory capture do not get in the way.

Emissions Categories

As a reminder, here is where our global emissions come from2: 

There are thousands of possible solutions targeting various sources of emissions, with their own risks, costs, and benefits. We’ll be covering some promising solutions over the next few articles, and along the way, I’ll share some resources highlighting more solutions. In this article, we’ll be covering how to bring electricity generation down to net-zero emissions.

Electricity Generation - 27% of emissions

Today, 29% of our energy is generated from renewables, and 10% is generated from nuclear, meaning ~60% of our electricity is generated from fossil fuels worldwide!3 The electricity cycle can be broken down into multiple stages - generation, storage, transmission, usage. Let’s look at these stages and some of their potential solutions.

Generation

Solar, Onshore Wind, Offshore Wind: Solar and wind are now cheaper than most other forms of energy. Wind and solar make up less than 10% of global electricity generation but that number is growing. We are now at a stage where these projects need to be scaled up. Today, most renewable electricity is generated with hydropower, at about 15% globally, though cost reductions in solar and wind make them cheaper solutions where the environment permits. As a result that balance is shifting.4

While scaling up these renewable sources is one of the biggest levers we have, they will not solve all of our problems, as their variability and dependence on weather means we need other systems to ensure we have adequate and predictable electricity generation. Because of the scale of the problem and the different environments in which supply and demand of energy will be balanced, we will need a diverse range of energy sources and storage solutions to bring down the 27% of emissions caused by electricity generation.

Nuclear fission: This is the nuclear we all know and (many don’t) love. It’s controversial, with one legitimate but workable concern being the question of how we dispose of nuclear waste. Another misplaced concern is about safety, a fear that has been amplified by the vivid imagery of Chernobyl and Three Mile Island. Counter to instinct, nuclear energy is actually one of the safest forms of energy generation by far - more people die from coal pollution in a single year than have died in all nuclear accidents combined.5

One of its main benefits is that nuclear doesn’t have intermittency issues (it can run 24/7) and is not reliant on atmospheric and geological conditions. Nuclear energy is expensive today (~9.3¢ compared to ~2-3¢ per kilowatt-hour for solar and wind)6, especially in the US where regulatory inefficiencies make the process expensive and time-intensive. 

New “Generation IV” plants are being designed to be cheaper and even safer. One such company focusing on new generation nuclear is TerraPower; while their designs currently live in software simulations, in late 2020 TerraPower received a grant and authorization from the U.S. Department of Energy to build two demonstration plants, expected to be operational in five to seven years.7

Nuclear fusion: It’s ambitious but physically possible, and it would be a holy grail of energy if we crack it. Companies like Commonwealth Fusion and researchers at MIT are working on it, and say it will be here in 15 years.8 Unfortunately, the decades-old industry joke for fusion is: it’s 20 years away and always will be. Hopefully, it truly is 15 years away, but we cannot risk waiting that long to find out.

Geothermal: We are getting to a point where geothermal can begin to scale and companies like Fervo Energy are hard at work to make that happen. The heat energy generated from geothermal is about 100 billion times more than current world energy consumption.9 The problem is that energy is hard to access. The cost of deep tunneling is still prohibitive in many instances and the tools for identifying where to drill are not advanced enough to make finding locations simple. While there is a lot of promise, current technologies leave large-scale geothermal projects economical only in certain locations today.

A quick reference to the cost of various energy sources:

10

Grid-scale electricity storage

Solar and wind are now extremely cost-effective, but they have the problem of intermittency - if the sun is not shining or the wind is not blowing, how do we power our lives? While battery storage is rapidly improving, it still has a long way to go. For context, the best lithium-ion battery available today packs 35 times less energy than gasoline, pound for pound.11 While renewables generate energy at less cost than fossil fuels, when large-scale storage is factored in, the picture does not look as good. 

Let’s look at some levelized costs of energy, which represent the total cost to build and operate a piece of infrastructure over its lifetime divided by the amount of energy it produces or stores.

• Diesel, coal, and combined gas cost about 10¢ 6¢ 4¢ per kWh, respectively.

• Wind and solar float in the 2¢-3¢ per kWh range, making generation cheaper than fossil fuels. However, higher costs come when we need to store that energy.

• Lithium-ion batteries and pumped hydro storage cost about 25¢ and 17¢ per kWh!12 If you need storage with your solar, you’ll need to pay 19¢-27¢ per kWh. 

If we want to get to a place where all energy is clean, we need innovation to bring these costs down. Let’s look at different options to get us there, as well as some that probably won’t.

Lithium-ion batteries are the best electrochemical batteries out there when balancing the tradeoffs of capacity (how much energy can be stored) and energy density (how much mass and/or volume is needed to store that energy).13 There are various ways to construct lithium-ion batteries being explored today to reduce costs, increase capacity, increase density (particularly volumetric density for EVs), and optimize manufacturing capabilities. QuantumScape recently rolled out a new solid-state lithium-ion battery (using a solid electrolyte instead of a liquid one), which allows for greater energy density and faster charging.14 While they have not yet scaled up manufacturing, the technology is promising.

Manufacturing and scaling are some of the hardest parts of battery production, and aside from process, there are supply chain constraints to consider. For example, nickel demand is expected to outstrip nickel supply, which is a major element typically used in Li-Ion batteries (there’s traditionally more nickel used than lithium); as a result, Tesla has announced they will be switching from nickel to iron for their standard range cars.15

Tesla, as well as companies like Panasonic and Samsung, are investing heavily to ramp up and optimize manufacturing capabilities for their batteries. There’s too much happening in lithium-ion batteries to cover in this high-level overview, though it’s safe to say we’ll continue to see a reduction in lithium-ion batteries as companies aim to lower prices, increase performance, and scale up manufacturing.

While cost reductions are happening for lithium-ion batteries, there are other forms of energy storage that will play an important role in grid-scale storage, such as mechanical and thermal forms of energy storage. 

Hydro storage pumps water up a hill and then allows the water to fall back down the hill, turning potential energy into kinetic energy, and then to electrical energy. This form of energy storage is quite mature and very effective at storing large amounts of energy, representing a surprising 95% of the world’s large-scale electricity storage as of 2016.16 

While it’s amongst the cheapest forms of large scale energy storage today, it likely won’t play a major role in energy storage in the future, as a topographical incline is needed, there isn’t that much innovation that can be done to reduce costs, and the current costs just aren’t worth it (reminder, it costs 17¢ per kWh, which is expensive). That is why 90% of new large-scale battery storage being developed is lithium-ion as of 2017.17

There are other forms of mechanical storage that are promising, such as stacking concrete blocks and letting them fall from the top of the stack, transferring potential energy to kinetic energy when needed. One company pioneering in this space is Energy Vault, and they have demonstrations showing they can store energy at 3.5¢ per kW-hour, which would make renewable energy generation + large scale storage cost-competitive with fossil fuels!18 It will be some time before this is a mature and time-tested technology, but innovations like this are promising.

On the thermal storage front, molten salt can be heated by mirrors and stored as thermal energy to be used throughout the day. While this technology has traditionally been expensive, new innovations like those from Heliogen have utilized computer vision to optimize the angle of the mirror based on where the sun is to concentrate solar energy to an extremely dense area. This breakthrough brings thermal storage to a competitive range; it also opens up opportunities because the energy is so concentrated. This heat can be used for industrial processes such as creating steel and cement, which typically use fossil fuels to reach the high temperatures necessary in the smelting process. It also can be used for electricity and hydrogen generation (more on hydrogen in a future article).19

Transmission and Tying it All Together

Modernizing the grid: Parts of the grid (particularly in the US) are about 100 years old and in need of serious repair. The North American Grid is the “world’s largest machine” and was designed and built at a time when utilities were the main generators of energy, which would provide highly predictable patterns of energy supply. 

As our grid needs to handle more intermittent sources from diverse places, there will be many challenges as we try to fit new use cases onto an old design. Countless infrastructural changes will need to happen, as well as the creation of new routing systems to ensure our grid supply, demand, and storage is balanced and resilient. 

If the grid fails, as it did in Texas recently, our efforts to transition to renewables will be delayed and costs will be higher. Unfortunately, events like the deep freeze in Texas are expected to increase as our old grid infrastructure becomes further obsolete and climate change causes more destructive weather events. 

The technologies to make the required changes to the grid – both hardware and software – exist today. The main roadblock will be getting the political will to make the transition at all levels of government, as much of the grid is mired with bureaucratic, financial, and political entrenchment, which I will cover in later sections. 

A Promising Future for Electricity

While it will be no easy feat, there is a visible and feasible pathway to net-zero emissions for electricity generation. Getting our electricity generation, storage, and transmission to net-zero at a competitive cost as soon as possible will have broad-ranging implications, as that energy will be used in all parts of our economy: how we make things, how we grow things, how we transport things, and how we warm things. 

We have a long way to go, with about 60% of electricity generation coming from fossil fuels, but there is major progress underway: 80% of all new electricity capacity in 2020 was renewable!20

For countries like India and those in Africa, which are seeing rapid development and will be the main source of global energy growth in the coming decades, it will be harder to go fully renewable, as they don’t have the extra wealth to spend on new expensive storage technology. With that being the case, the competitive price of solar and wind energy, and their localized nature, are enabling remote communities to generate electricity in a way that could only be done through fossil-fuel driven projects in the past, which need robust supply chains for ongoing fossil fuels and generally require large scale infrastructure. Just as many developing countries skipped over landlines and went directly to mobile, we may start seeing more towns and cities leapfrog over large-scale national grids and go directly to clean localized microgrids. In off-grid places today, many people are paying four to five times the average price paid for electricity in urban areas, while some are paying up to forty-five times the average electricity price in the US!21 At those prices, installing a modern solar plus storage system will bring huge economic benefits to the community. 

As more developers materialize globally, the development process becomes more standardized, business model innovations make costs more manageable (more on this in a future article), and these assets become more financialized, the opportunity for international investment will grow, further accelerating progress.

As we’ll see in the next article, the path ahead for decarbonizing how we make things is not as clear. Major breakthroughs are still needed to reach a net-zero emissions future.

We’ll be covering what the scope and scale of this challenge looks like, what solutions might get us to a favorable outcome, some of the limitations of those solutions, the opportunities this challenge presents, and how we can think about allocating society’s resources to give us the best shot at an outcome that’s positive for society. We won’t cover all aspects of this complicated subject — no single source will — but hopefully it strikes the right balance of brevity and depth to give you a fuller understanding of our climate challenge and opportunity. Additionally, we’ll spend more time focusing on solutions and opportunities, rather than the negative impacts of climate change, as we need to act fast in implementing change.

In this first part, we’ll cover some orienting information, what a bad climate outcome means for society, where our emissions are coming from, limitations we’ll need to keep in mind when discussing solutions, as well as the scale needed to make a meaningful dent in our emissions.

Orienting information

While navigating the complexities of climate, it’s easy to get lost in the details. We must always remember some basic orienting goals — we want our planet to stop warming, and we need to reduce greenhouse gas emissions to do so.

• 97% of scientists agree our climate is warming due to an unprecedented amount of greenhouse gases being pumped into the atmosphere by humans. To avoid climate disaster, we need to prevent the average global temperature from increasing 2℃, or 3.6℉.[1]

• The main greenhouse gases are carbon dioxide, methane, nitrous oxide, and fluorinated gases. While methane, nitrous oxide, and fluorinated gases are much more potent than CO2 when it comes to heating, the main bulk of our emissions come from CO2. For that reason, emissions are often referred to in terms of their CO2 equivalent.[2]

• 51 billion tons of CO2 equivalent are emitted each year and increasing. To stay below 2℃ and prevent a disastrous climate outcome, greenhouse gas emissions need to drop to net 0 emissions by 2050.[3]

• Ideally, we need to return to preindustrial levels of atmospheric CO2, which is about 280 parts per million (ppm); today, we are well above preindustrial levels, at 440 ppm.[4]

The negative impact of the “business as usual” path

Change is difficult. Every bit of society depends on an energy and resource infrastructure, developed over the past two hundred years, that relies on emissions to function. Restructuring our society in a matter of decades will be difficult and costly, but the cost of not making that transition will be much higher. If we go down the “business as usual” path and don’t check rise in atmospheric greenhouse gases, we can expect rising average temperatures, drought and heat waves, lengthened and new growing seasons in some areas (a positive for certain locations), change in rain patterns, stronger and more frequent hurricanes, rising sea levels engulfing coastal cities, and melting global ice sheets (which act as heat reflectors when frozen, helping keep our climate cooler). All of these changes (along with potentially many more) will result in the collapse of certain resources, confrontation over those resources, destruction of infrastructure, mass migrations, death of humans, and the extinction of thousands of species.

Current estimates predict climate change will cause roughly the same amount of deaths per year as COVID-19 (14 deaths per 100,000 people) by mid-century, and even more by the end of the century if we continue at the rate we are going. Estimates also show in the next decade or two, that destruction caused by climate change will be economically equivalent to a COVID-sized pandemic every 10 years![7]

Main contributors of emissions

In order to understand how we can best tackle this challenge, it’s important to look at the main contributors of emissions, which span five categories.

As you can see above, while getting everyone to use Electric Vehicles (EVs) is important, won’t solve our climate problem alone. If we are going to get to 0 emissions, we will need to change the ways society operates.

The Green Premium

It will cost money to go green. There will be major economic implications as we change the way society makes things, moves things, grows things, stays warm, refrigerates things, and plugs in. Today, the clean way of doing things is more expensive than the carbon-emitting alternative in many cases — fossil fuels have a lot of cheap energy packed into them. The cost difference between doing something the dirty way and taking the clean route is called the green premium. The green premium is an important metric to keep in mind as you think about climate solutions, as the comparative cost to transition is one of the primary factors that dictates whether a given solution can scale.

There are many reasons why a clean alternative will have a green premium, but one main reason comes from the fact that many solutions today, or on the horizon, are nascent. The cost reduction that occurs through research, iteration cycles and scale, simply hasn’t taken place yet in many domains. Much like buying a computer in the 70s, many solutions are still expensive, clunky, and lack the infrastructure to scale. Fortunately, we know from experience — like what happened with microwaves, televisions, and computers — with investment over time, costs can be reduced dramatically. This is what happened with solar and wind power, which were quite expensive early on but now are amongst the cheapest forms of energy.

We still have a long way to go to get to a renewable energy economy. Below is the amount of energy produced by various sources globally.

Emissions by Country

Nearly 75 percent of global greenhouse gas emissions are generated by just 20 countries, with 7 countries responsible for more than half of emissions.

This means we can set targets for a small number of countries and have a big impact on emissions today. A major caveat is that countries like India and many in Africa are expected to have massive population growth and economic development. While the economic development is phenomenal for the many impoverished people living in those countries, and an outcome we should all want, there is the inconvenient truth that emissions from those countries will likely rise dramatically. Clearly, it would be unfair and inhumane to tell these countries “do not build and bring millions of people out of poverty, like developed nations have been doing for decades, to save the climate.”

This represents a big challenge, as developed countries will need to reduce their emissions while developing countries will likely increase their emissions over the next few decades. Hopefully, the investments we make in clean and renewable sources will reduce prices to a point that it makes economic sense, as with wind and solar, for these countries to build in a way that is both conscious of the climate and productive for their growth.

Getting familiar with the scale of solutions needed

It’s hard to wrap your head around which possible solutions will make a meaningful dent in the 51 billion tons of emissions we emit each year. One framework, provided by Bill Gates, poses 5 questions that act as filters as to whether a solution is viable or not.[13]

• How many emissions of the 51 billion tons can this reduce?

• How much energy will it provide?

• How much cement is this going to use? (Cement is a major emitter and used in many large scale projects needed to reduce emissions.)

• How much space will this take up?

• How much will it cost?

On the question of “how much energy will it provide?” It’s often hard to understand energy metrics if you’re not working with them regularly. When you are working with energy metrics regularly, you’ll often come across a watt, which is a unit of power, representing the rate of energy transfer. You calculate watts by dividing the number of joules transferred over the number of seconds; one watt equals one joule per second. You may also hear the unit watt-hours used regularly. Watt-hours represent the amount of energy generated or consumed when you run an x watts of power for y hours. If you run a 100 watt appliance for two hours, you’ve used 200 watt-hours. Your utility bill is likely in the form of kilowatt-hours, representing how much energy you used in a given month.

So when you hear terms like kilowatts or gigawatts, what does that mean in the context of power usage? Here are some back of the envelope calculations that can help you get oriented[14]:

When you hear…..

• Kilowatt — think power used at a “house” scale (kilo means 1,000)

• Gigawatt — think power used at a “city” scale (giga means 1,000,000,000)

• 100+ Gigawatt — think power used at a “big country” scale

For reference:

• The world uses roughly 5,000 gigawatts of power at a given time.

• The United States uses roughly 1,000 gigawatts.

These factors of scale will be important to keep in mind as we discuss climate solutions in following sections.

Closing

In this section we covered some basic orienting information as it relates to the challenge, what a bad climate outcome means for society, where our emissions are coming from, limitations we’ll need to keep in mind when discussing solutions, as well as the scale needed to make a meaningful dent in our emissions.

In the next section, we’ll talk about solutions that exist today, or are on the horizon, that have the potential to reduce emissions in a meaningful way. Throughout this exploration, I will try to highlight what the green premium for a given solution is, what factors are either preventing or promoting its scale at the moment, and what the overall impact on emissions would be if a given solution was scaled up.

[1] https://climate.nasa.gov/scientific-consensus/

[2] Hawken, Paul. Drawdown (p. xiv) // https://unece.org/challenge#:~:text=Methane%20is%20a%20powerful%20greenhouses,a%20greenhouse%20gas%20than%20CO2. http://www.bbc.co.uk/climate/evidence/nitrous_oxide.shtml#:~:text=Nitrous%20oxide%20makes%20up%20an,trapping%20heat%20than%20carbon%20dioxide https://www.epa.gov/ghgemissions/overview-greenhouse-gases

[3] Gates, Bill. How to Avoid a Climate Disaster (p. 35)

[4] https://www.climatecentral.org/news/world-passes-400-ppm-threshold-permanently-20738

[5] https://environmentcounts.org/ec-perspective-accounting-for-800000-years-of-climate-change/

[6] https://ourworldindata.org/atmospheric-concentrations

[7] Gates, Bill. How to Avoid a Climate Disaster (p. 34).

[9] https://www.breakthroughenergy.org/our-challenge/the-grand-challenges

[10] Gates, Bill. How to Avoid a Climate Disaster (p. 70).

[11] https://ourworldindata.org/grapher/global-primary-energy?country=~OWID_WRL

[12] Harvey, Hal; Orvis, Robbie; Rissman, Jeffrey. Designing Climate Solutions.

[13] https://www.breakthroughenergy.org/our-challenge/five-questions

[14] Gates, Bill. How to Avoid a Climate Disaster (p. 56).