“The road to hell is paved with good intentions.” - Climate scientists, probably.
Look, we -love- climate tech as a space. We’re fans, and hope this is abundantly clear to anyone reading our work. We see climate tech as a generational unlock; of fixing the planet, economic opportunity, personal wealth creation, and societal abundance. We want the companies we write about to succeed wildly, and are building a portfolio of activities to help them get there.
All of this is to say that today’s piece is not our favorite, but we think it needs to be said. Let’s talk about second order effects, incentives, and the downside of a certain type of climate company.
Water
Our writing this month is all about bluetech, and companies building in the ocean. We like the sector in significant part due to raw size. Carbon dioxide and other GHGs are physical substances, any serious discussion of fixing the climate involves removal and storage of the same away from the atmosphere, and there’s a lot of water on our planet, which would seem like a logical place to store the atmospheric poison we’re trying to get rid of.
We are not, unsurprisingly, the first people to come up with this insight. Running Tide, which is among the earliest and most prominent bluetech companies, has a business which can be roughly summarized as “grab lots of carbon, tie it to buoys, sink into the ocean.”
This has turned into a good business. The company has raised about $70m, mostly from deepest-pockets-in-the-space Lowercarbon Capital, and just a few weeks ago announced that it had successfully delivered the first 100 tons of ocean-based carbon removal credits, largely funded by Shopify as a pilot customer.
Is this, like, a good thing?
To burn or not to burn
Go read the Reuters piece linked above, or any of the many posts on Running Tide’s (admittedly well written) blog, which is here; https://www.runningtide.com/blog
Did you notice their actual process? Running Tide sources waste-wood chips from forestry projects, covers them in specially developed limestone coatings, and sinks the resulting buoys into the ocean, all on the theory that doing so prevents the wood from being burned, and moves the carbon held therein from the fast to the slow carbon cycles.
We’re just going to say it; This is bullshit financial engineering disguised as climate science, and profoundly irresponsible.
There are plenty of ways to dispose of waste-wood chips into high-permanence sequestration. A few; Biomass creation as the power source for enhanced rock weathering, burn it in a facility that has a large Remora device slapped on the emissions pipe, improve forestry practices so that the wood is simply made into useful objects.
The next time anyone makes a convincing argument for not putting hypothetical carbon into the atmosphere as the basis for a removal credit will be the first time. Credits should only be issued to companies that actively remove GHG, not those that threaten to emit, then claim take-backsies.
Adding carbon to the ocean, outside of naturally balanced sequestration pathways, is demonstrated to increase acidity, and is therefore really bad for the viability of life in water. We acknowledge here that Running Tide claims that their limestone buoy coatings solve this problem, although they seem oddly reticent to publish the peer-reviewed science defending this position, and we’re curious as to how a small team has accurate data and modeling on this subject in less than 5 years.
Running Tide has billed itself as an ocean health company, a kelp company, oyster farmers, and what is essentially a think-tank and lab for ocean health, all in the past 5 years. What the company actually is is an offset factory in search of a narrative and business model, which gives us deep concern about their ability to manage the complex 2nd-order effects of the point above.
Incentives
As with all things in business, it’s about the incentives. We don’t blame Running Tide. They’ve accepted capital and signed contracts with folks who want returns on investment and demonstrable product launches, and so the company is performing its fiduciary duty to deliver both of those things. We also see great value in ocean-based sequestration, deep scientific study of the sea as the home for climate tech, and who doesn’t love a good oyster?
No, our annoyance is directed at the irresponsible capital allocation that allowed the situation to develop in the first place. We know that Shopify, as one example, is under great pressure to offset the emissions of their vast supply chain, and applaud that they’re putting real dollars to work in complex future-state solutions.
We simply wish that they’d convene a team of trained scientists, capital allocators, and technologists to help, to walk them through the years & decades long implications of their actions, and to generally say no where it’s warranted.
This observation is a significant part of why we started working on Coral; We want the climate tech industry to be equal parts scientifically rigorous and massively lucrative for all stakeholders, and saw a missing translation layer to bring this vision into reality.
As I wear the hat of a climate solution developer, working in the complex field of emissions reduction from lakes and oceans, I see the opposite mix at work in Runningtide's marketing-led model to our approach. Like you say, they got many things right.
Their approach had great chutzpah. It had a marketing machine with convincing messaging. It connects well with the capacious pockets, all advocating for the right stuff, in lowering carbon emissions. But when it came to being effective, best-of-breed emissions reduction, they looked thin. They went searching for convincing science and could only produce soundbite-scale research.
And if 500 tons of emissions reduction was all they could show to the market after $70 M of investment? As much of the Climate would say, "Only in America". Not true, when one considers the globally originated reforestation scams, but in the same vein.
We can learn from this because of funding for our heavily researched science and engineering solutions. These promise gigatons of carbon emissions reduction within decades, backed by two decades of R&D and testing. They do not sell as well without the marketing and messaging muscle, including a quick rejection from Lowercarbon.
It's a Catch-22 situation. There are thousands of scientific papers out there on the subject of what to do about the methane emission risk from lakes and oceans to keep it out of the atmosphere. One of our 2020 papers on solutions has already been cited 1467 times according to Academia. In academic terms, this is good. In marketing terms, it's a fat zero.
There's much to learn from Runningtide's marketing team, up to a point.