Focusing on the 2030 climate targets wrong approach

Venture capitalists benefit from clean technology, says VC Vinod Khosla

SEATTLE — Vinod Khosla, founder of Silicon Valley venture capital firm Khosla Ventures, says 2040 is the more important goal in the fight against climate change than 2030.

Khosla, who is currently worth more than $5 billion according to Forbes, made the claim at the inaugural Breakthrough Energy Summit in Seattle last week.

“If we try to reduce carbon by 2030, we will be much worse off than if we set the reduction target for 2040,” Khosla told an audience of conference attendees.

That’s because Khosla, who co-founded computer hardware company Sun Microsystems in 1982 and worked at venture capital firm Kleiner Perkins for 18 years, is interested in making big bets. In this context, Khosla published a Medium post in July 2020, which claimed that a dozen ambitious, catalytic leaders would change the climate space, compared to more than a hundred less transformative leaders.

Khosla was on stage with John Doerr, another investor who, like Khosla, made early investments in climate technology from the early 2000s and then watched a whole bunch of these so-called Clean Tech 1.0 companies go up in flames. Overall, venture capital firms invested more than $25 billion in climate technology companies between 2006 and 2011 and subsequently lost more than half their money, according to a study by the Massachusetts Institute of Technology. The investment crisis discouraged investors and the sector all but dried up for a few years.

Vinod Khosla and John Doerr speak onstage at the Breakthrough Energy Summit in Seattle on Tuesday, October 18.

CNBC cat Clifford

Doerr was more optimistic about the potential for iterative change than Khosla. “We need more technologies that are economical now deployed now‘ said Doerr on stage.

But Khosla reiterated his position that 2040 is the more consequential deadline.

“People who think we have the technology are wishful thinking. We can use the current technologies. I’m not saying slower, but we need the breakthroughs,” said Khosla. “And if we put a short-term window on any breakthroughs and focus on 2030, the reality is we’re going to be worse off, even though I wish it wasn’t true… What we need and what we’re likely to get is different and 2040 is.” the right target.

Khosla’s view is iconoclastic in climate space.

In April 2021, President Joe Biden announced that the United States would aim to reduce net greenhouse gas pollution by 50 to 52 percent by 2030 from 2005 levels, with the ultimate goal of having a net-zero emissions economy by 2050.

“We are planning both a short-term sprint to 2030 that keeps 1.5 degrees Celsius within reach, and a marathon that will take us to the finish line and transform the world’s largest economy into a prosperous, innovative, equitable, and only one clean energy engine from net zero – for a net zero world,” Biden said at the COP26 summit in Glasgow, Scotland in November.

The landmark United Nations Intergovernmental Panel on Climate Change, released in April, says greenhouse gases must peak before 2025 for any hope of limiting warming to 1.5 degrees Celsius, the level of global warming estimated in the Paris climate agreement was codified to be reduced by 43% by 2030. Methane would have to be reduced by a third, according to the report.

Why Khosla thinks short-term goals are a mistake

Focusing on “short-term goals will force us to deploy suboptimal technology,” Khosla told CNBC.

For an innovation to be meaningfully successful, a technology must be successful without government subsidies. “Any single large-scale technology must achieve unsubsidized competitiveness in the market. And if it doesn’t, it’s the wrong technology,” Khosla told CNBC.

Nuclear fusion is an example of the kind of breakthrough technology that Khosla believes is critical but won’t be commercialized by 2030. Khosla Ventures has invested in Commonwealth Fusion Systems, a fusion startup that emerged from the Massachusetts Institute of Technology and is at the forefront of the fusion space.

Fusion is the way the sun creates energy and is the secondary reaction of nuclear fission, which is the way conventional and existing nuclear reactors create energy. Fusion has not been replicated on a large scale on Earth, but when it can, it offers advantages over nuclear fission, including the elimination of long-lived radioactive waste.

Fusion “is an exciting example,” Khosla told CNBC. “It’s much better than nuclear fission. It sure is way better than coal and fossil fuels. But it is not finished yet. And we need to finish it and build it.” (Khosla is not alone: ​​The private sector fusion industry has seen nearly $5 billion in private investment, according to the Fusion Industry Association.)

Khosla is 67 and says: “It’s likely that while I’m still working – and I plan to work for a while if health permits – every coal and natural gas power plant in this country will be replaced by a fusion boiler. Every single . That is the goal. Within my professional life.”

Another transformative example is deep, advanced geothermal energy, derived from the natural warmth of the ground.

“But I’m not interested in geothermal today because it’s such a niche — it’s not scaling,” Khosla told CNBC.

“We’ve been focusing on the wrong problem, which is to take the geothermal heat that’s there and make it a little more efficient, rather than say, create 100 times more sites to mine geothermal energy,” by going much deeper into the earth is being drilled where there are much hotter temperatures, Khosla said.

For example, Khosla pointed to the work of the Quaise company in deep geothermal energy. (Khosla was the company’s first financier.)

“A super hot rock well at about 500 degrees produces ten times the power of a 200 degree well. And that’s exactly what we need,” said Khosla. “If we can drill deep enough, we can get these temperatures — many, many — the entire western United States could be powered by just geothermal wells, because there’s geothermal heat everywhere if you go 15 kilometers, 10 miles deep.”

The race is on to replicate the power of the sun with fusion energy


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