The climate view at Davos: Focus on the future
Friends, welcome to Thursday’s newsletter. Your climate editor has spent all week in Davos for the World Economic Forum. He’s learned Swiss fondue really is better, and that this week was like a mini climate summit. We’re here to talk about the vibe and Finland’s big climate commitment.
The Davos dispatch
Spring in Davos brought me back to my park ranger days: The smell of mountain conifers after rain is universally life-affirming. But while the mountain air made me nostalgic for the woods, the conference itself forced me to consider the future. Not the next few years, though. Many sessions and folks at the World Economic Forum have been focused on speeding up far-off fixes for the climate.
It’s not that there weren’t talks about wind turbines and the like. But the general vibe wasn’t excitement for the action we can take now; it was about celebrating technologies that will only become useful in the coming decades.
It’s been carbon dioxide removal week here in Davos. Tuesday’s newsletter highlighted that companies that suck carbon from the sky are banding together. And an announcement at Davos on Wednesday shows they’ll have some business opportunities ahead.
- Microsoft, Alphabet and Salesforce announced they would purchase $500 million of carbon removal services between now and 2030. (Though Alphabet’s commitment is part of another CDR purchase scheme called Frontier.)
- Ford and Volvo were among another set of companies that committed to getting 10% of their aluminum in near-zero carbon form by the end of the decade. The technology to make that type of aluminum doesn’t exist so, uh, someone should get on that.
- The companies are part of the First Movers Coalition, a group of more than 50 corporations willing to spend a little extra on CDR and products like green steel and aluminum. A number of countries are also members, and they could help pull the right policy levers to bring costs down even further.
- The goal is to invest in what are currently niche or totally speculative services that are nevertheless totally essential to getting the world to net zero, all in an effort to bring costs down.
Crypto was the talk of the town, including how to clean it up. I’ll have more to say about Davos being taken over by crypto in tomorrow’s Source Code newsletter and this weekend’s podcast. (Shameless plug to subscribe to both? Yes.) But I was really struck that one of the core crypto conversations was around decarbonizing it.
- From Polygon splashing an ad about going climate negative on the main drag to a panel discussion in the Congress Center about addressing crypto’s carbon footprint, the interest in the topic is clear. Protocol also hosted a crypto and climate roundtable under the Chatham House Rule, adding to the excitement.
- There was some of the whataboutism that often pops up in these discussions. At the Congress Center panel, for example, Anthony Scaramucci gravely intoned about the carbon emissions of his 85-year-old mother driving to the bank, a laughable piece of reasoning about why traditional banking is bad for the climate. (There are plenty of legit reasons, crypto folks. Try one of those instead.)
- But there was also a lot of thoughtful talk about the challenges posed by bitcoin being the powerful yet polluting face of crypto, even while other forms of magic internet money use much less damaging techniques to keep their systems secure.
- At our roundtable, participants were loathe to trash bitcoin — and some even praised it — despite its carbon footprint. But there’s clearly a tension there, and a lot of people are thinking about a climate-friendly crypto future. Whether that’s enough to warm a no-coiner’s heart is TBD.
All the focus on the future — a future where we use internet money to charge our electric vehicles that zip down highways lined with fanciful machines sucking up carbon dioxide — is … something. I mean, it’s cool on some level if you’re an ecomodernist or subscribe to Marc Benioff’s vision of a “new environmental capitalism” ruled by “ecopreneurs.” But there’s also a lot of work the world can do with the tools it has at its disposal right now. In fact, how much gets done with those tools will determine how much we rely on the speculative stuff.
While Davos may not have a Heat Pump House or a panel on the wonders of solar panels, that doesn’t make those solutions any less important. It may even make them more so.
Making it legal
In a week when good news has been thin on the ground, a glimmer of climate hope has been all the more welcome. With a historic vote yesterday, the Finnish Parliament approved a new Climate Change Act that would commit the country to carbon neutrality by 2035, and carbon negativity by 2040.
Finland is breaking ground: Assuming President Sauli Niinistö signs the law, as is anticipated, it would be the first country in the world to legally bind itself to negative emissions.
- Most countries have only made commitments to carbon neutrality, and most on a much longer timeline than Finland’s. While some of these are legally binding — Finland cites the laws of Sweden, Denmark and the United Kingdom as examples — many are not.
- University of Eastern Finland international law professor Kati Kulovesi called the new targets “remarkable,” though she said “there is an important gap between current measures and those required to reach the targets.”
- The targets are based on a scientific analysis of the country’s nationally determined contributions, which Kulovesi also commended.
The new law also comes with absolute reductions. Finland is committing to reducing its carbon emissions by at least 60% by 2030 and 80% by 2040, as compared with 1990 levels.
- Finland had previously committed to an 80% reduction by 2050, so this change pulls the country’s goals forward by a full decade.
If Finland achieves carbon negativity, it’ll join a small club. There are other, smaller countries that have already brought their emissions to below zero, such as Bhutan and Suriname.
- These members of the carbon negative club are largely forested and manage to absorb more carbon dioxide than they emit through a combination of land protection and aggressive measures to keep their emissions down.
- But the task is harder for Finland, which still relies heavily on fossil fuels for its energy needs. And according to preliminary data from Statistics Finland, for the first time in 2021 the country’s land use sector emitted more greenhouse gases than it absorbed: a step in the decidedly wrong direction.
But regardless of how hard it is, Finland will be committed. That’s the great thing about getting climate commitments written in national law: It gives countries no choice but to transform into the version of themselves they present at international climate conferences.
- That’s in marked contrast to the many major emitters that talk a big game at COP gatherings but have failed to pass meaningful climate legislation in the months since. (Oh hello, U.S. of A!)
A MESSAGE FROM STELLAR DEVELOPMENT FOUNDATION
Blockchain must be scalable and sustainable. The Stellar network has processed millions of payments in an energy efficient manner – generating CO2 emissions equivalent to those produced by 33.7 U.S. homes’ electricity use for one year. This is thanks to the unique Proof-of-Agreement consensus mechanism - the Stellar Consensus Protocol.
Make it rain
Linear generator maker Mainspring Energy raised more than $150 million in a series E funding round, led by Lightrock and joined by Bill Gates and others.
Renewable fuel startup Booster, which focuses on refueling commercial delivery fleets, raised roughly $125 million in its latest funding round, led by Rose Park Advisors.
Ousted WeWork founder Adam Neumann’s next act: tokenized carbon credits sold on the blockchain. The start-up Flowcarbon counts both Adam and Rebekah Neumann as co-founders, and said this week that it raised $70 million in both venture funding (led by Andreessen Horowitz's crypto fund) and a token sale.
ChargeLab, which provides building management software to help commercial EV customers juice up, raised $15 million in its series A funding round, led by King River Capital.
Neara, which provides cloud-based digital models for utilities, raised $14 million in series B funding, led by Skip Capital.
Big week for climate-blockchain mashups, clearly: The startup Allinfra allows users to store or monetize climate data on the blockchain, and it raised $6 million in series A funding led by the financial services company Nomura.
Singularity Energy, a platform that houses data on grid carbon intensity, secured $4.5 million from its initial seed round led by Spero Ventures and Energy Impact Partners.
In non-funding news that might make your head spin: Siemens Energy launched a $4.3 billion bid to take over the remaining minority stake in the struggling wind turbine maker Siemens Gamesa, a move that would eliminate the complex existing ownership structure and potentially result in cost savings of up to $321 million.— Lisa Martine Jenkins
Tesla wants to change Texas’ energy market rules. Doing so would potentially bolster the state’s fragile grid — and it doesn’t hurt that it comes with the added benefit of making the company’s residential energy products even more attractive.
Producing your own power in the U.S. is rife with red tape. A new system promises to simplify the bureaucratic nightmare that is adopting at-home solar.
The latest threat to carbon pricing? Inflation, of course. That’s the takeaway from the World Bank’s latest report.
God save the nukes! At least that’s what California is saying as it considers whether its last remaining nuclear plant is eligible for federal assistance to keep it open.
Using gas for power is “stupid,” at least according to the CEO of Italian electricity giant Enel. (Climate scientists mostly agree!)— Lisa Martine Jenkins
A MESSAGE FROM STELLAR DEVELOPMENT FOUNDATION
What does the footprint of crypto actually look like? And what needs to be done to secure the industry’s future in a way that aligns with global climate objectives? These are some of the questions that stand between crypto and its vision of a faster, more secure, and inclusive, financial system. Read more to hear what industry players, like the Stellar Network, are doing to realize that vision built on sustainable technology.
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