What is Carbonware?
“What if we succeed?” Advice and investments for a world where greenhouse gasses are increasingly scarce
Many people spend a great deal of effort imagining what it’ll be like if we fail to contain climate change. Makes sense. It makes for better movies. It’s be hard to envision all the impacts that greenhouse gas emissions could bring to the world, and an apocalypse makes a good box-office draw. Most humans, including me, can’t comprehend what a world of rising sea levels, human migration on a vast scale, and hotter days and years will look like, but it sure doesn’t sound good. What housing, jobs, food and politics will resemble in that world seems so distant and disruptive that we can’t hold all of those potential changes in our minds at once. But that hasn’t stopped people from imagining. These visions have already been the makings of several action films (including a few good ones), and inevitably they will be the fodder for many more.
Photo by Clyde Thomas on Unsplash
However, unlike the action movies of World War 2 or the Cold War, the enemy is all of us… all of us and our continued emissions of invisible greenhouse gasses. This collective action problem (we all need to cut our emissions, but none of us want to go first, nor do we really know how to coordinate the cutting - this goes for individuals, households, countries, regions, and companies), coupled with the political gridlock in many major economies has thus far resulted in us continuing to emit ever-increasing amounts of planet-warming greenhouse gasses. The specter of failure is both extremely available to us (we keep emitting more and more and we’re emitting about 40 gigatons a year, we only had a ‘carbon budget’ of 400 gigatons of carbon left after 2018 before we hit 1.5 degrees of global warming, and thus far there have been mostly empty promises), and it is visceral for many1.
Companies have begun to respond. Leaders of publicly listed firms are busy building net zero plans to cut their emissions, but many are dependent on others to develop the tools and products they need to cut their emissions - they haven’t done this before either, and they are figuring it out in real time. Action hasn’t yet matched these nascent plans. But they too can imagine what this will do to their P&Ls if the effects are as dire as has been described.
What if we succeed? However, what we can begin to sketch out is what life will be like for all of us as individuals, and for companies, if (and I hope when) we do succeed in limiting the growth of carbon. What will the scarcity of carbon (through pricing or regulation or social pressure or some combination of these and other factors) mean for people and firms - what products will we buy, how will we live? What can we say about how we interact with the built environment around us and how we consume? How will companies need to change how they finance, how they operate, how they are governed and how they go to market?
Through Carbonware, I’ll try to lay out some thoughts on our changing lives in a world of decarbonization, and the changes that will in turn happen for companies. I’ve been lucky enough to know a number of key leaders across a lot of sectors, and I’ll invite some of them to share their thoughts now & then.
Invest behind the thesis. I’ll also be investing some philanthropic and traditional capital in early-stage companies that are “long carbon” - meaning that they will prosper as the price of carbon increases (or as the ability to emit carbon becomes scarcer - that’s effectively the same thing to an economist) by helping build a low-carbon or zero-carbon future. This is the most basic form of the old truism “put your money where your mouth is.” I’ll start with philanthropic / impact capital, but I think the opportunity here is potentially vast and will attract tremendous capital as we as a world go “long carbon.” More on that later.
Let’s get it right together In the meantime, I hope you’ll join me as I share some thoughts on how the world, our economies, businesses, and consumer choices can evolve. I’ll attempt to cater to a more financially aware and business-focused audience, and to explain as best as I can the concepts for a general & policy audience - because I think these concepts are important enough that people who want to should be able to use the concepts. I’ll surely miss this balance, but I’m hoping that through discussions and comment we’ll get it right.
Work backwards from success. One of the tools I’ve often relied on in building technology companies is to imagine a world where I’ve succeeded at my goal, and all the things that are happening in that world. If our goal is a zero-carbon world, we can imagine our way to what that set of circumstances will look like (in terms of consumer products, financial markets, lifestyles and successful companies), and then find a path there. The path we imagine might not be the one we eventually take (politics and policy rarely result in a straight line), but charting a possible course can help us get there. And we urgently need to get there. Thanks for going on the journey with me.
cf, the Uninhabitable Earth - a fine and well-researched book and New York Magazine article with a justifiably and understandably clickbaity title that everyone who cares about this topic should read both because of and despite that title; it’s actually more about what life will be like if we fail to act and we hit 6-8 degrees of warming, but it works backwards to what our daily lives will be like if we only get partway there… or succeed late