Lessons learned after 5 years of climate tech entrepreneurship | Hacker News Reader

Lessons learned after 5 years of climate tech entrepreneurship

oliviercorradi.com

112 pointscorradio35 comments

The core problem here is that emitting carbon doesn't cost the polluters much, so helping them or their customers to avoid it doesn't save them money. It's not a pain point, so the only motivation for them to do anything about it would be altruism/"Look How Green We Are!" CSR marketing. That's why the world desperately needs a carbon tax, so emission goes from being an externality (i.e. somebody else's problem) to being priced into the activities that emit. So the producers get a real incentive to change, and throw money at the problem, because it helps their bottom line to do so. So those that can easily change to less emitting techniques will do so. So those that can't will help fund research into tech that will. So there's a market for green tech like this. So consumers will favor less carbon-intensive products, not just if they are hippies, but simply because they value their wallets.

The only way to make a massive, global change like this up and down the supply chain is to give everyone involved - from producers to logistics to consumers - a direct economic incentive to do so. A carbon tax fits that bill, and allows the market to do what it does best.

From an engineering/economic perspective, I totally agree. From a sociology/philosophy perspective, a lot of the West was built on cheap carbon emission. Can we realistically take all that embodied energy that represents our current state and expect/demand that developing nations to pay the same price for carbon as we do, starting now?

> Can we realistically take all that embodied energy that represents our current state and expect/demand that developing nations to pay the same price for carbon as we do, starting now?

Yes. Because the alternatives are stark and unwelcoming. And developed nations should enact development sharing to assist at the desire of the developing nations (way more than tokens and pittances).

If we want to go far, we have to go together.

What’s in it for a developing county to not defect? I think to make this work, you need transfer payments from developed countries to developing countries and to have those payments tied to effective carbon taxation.

For that matter, we probably need transfer payments here in the US. Put another $5/gallon of taxes on gasoline and you smack the working class hard. Do that and give every individual (literally everyone) who files a tax return 1000 gallons worth of the tax. Commit to reducing the gallon subsidy by 25 gallons per year per person and increasing the tax by 5% per year for the next 20 years. Evaluate every 5 years and see how you’re doing towards your goals. At the end, you’re taxing gas about $10/gallon in today’s money and subsidizing everyone $5K (in today’s money) to cover some of the increased costs of goods and transport, but giving a painful signal at the pump to incent minimizing gas consumption.

I’ve thought about those numbers for five minutes. Undoubtedly, better numbers can be chosen, but I think we’re going to have to give money in one motion and take it away in carbon taxes in another in order to be able to implement carbon taxes steep enough to change behavior.

This policy is called "fee and dividend", and has a pretty well-fleshed out wikipedia article[1]. IMO it's the best way to implement a carbon tax while avoiding "yellow vest protests" or deepening inequality. A carbon tax will tend to increase the cost of consumption, and consumption makes up a larger part of your income the poorer you are. But with a dividend to give money back to households, you offset this, so a poor household that lowers their carbon footprint enough can even end up ahead.

[1] https://en.wikipedia.org/wiki/Carbon_fee_and_dividend

Washington state voted on a smaller version of that, I-732, but it was opposed by half the environmental groups because they couldn't skim money off the top for themselves. So unfortunately it's going to be hard to pass such laws.

https://en.m.wikipedia.org/wiki/2016_Washington_Initiative_7...

Since the game is long term the strategy space is much more open for punishment and incentive creation.

Long term existence can be a motivating force, but you have to get the citizens to support solving the issue.

Maybe. We’ve made other changes that didn’t have nearly universal support before (Emancipation, Civil Rights acts, forced integration of schools, women’s suffrage, and probably many others).

Sure, I’d prefer to wait a few years if that waiting would bring along willing participation. If we think it would only bring a larger number on the calendar and a slightly worse atmospheric carbon surplus, I’m not as inclined towards patiently explaining this again.

Developing countries get to avoid the mistakes done by developed countries. For example, the amount car dependency in the US is unsustainable. Developing countries could build their cities with higher density, walk-able, and bike-able. It is cheaper, you get higher quality of life without such a high carbon footprint.

Developing countries go with the cheaper option. Is higher density cheaper? No not in low value real estate which is found in developing countries.

> Can we realistically take all that embodied energy that represents our current state and expect/demand that developing nations to pay the same price for carbon as we do, starting now?

It's a false dichotomy.

The US and others can share climate friendly technologies with developing countries on attractive (cheap) terms and at the same time compensate those that developed them out of tax coffers on market terms. Almost all climate related investment can be financed in the capital markets if World Bank, IMF provide guarantees to investors.

In exchange there'd be an expectation that these technologies are deployed on an accelerated timescale and in greater quantities by nations taking up this offer.

Do we have other choices, when the alternative is the Apocalypse?

And it's not like rest of the world doesn't benefit at all. The early adopters always pay more, the late adopters get to leapfrog.

I agree with this, but the gp prolly wanted to brimg up that developed countries will offer subsidies that develping ones cant, just like in agriculture. Imo developed countries need to enact it first, and without subsidies and then pressure developing countries, even though developing countries produce more carbon. From a pure logic perspective thats not the optimal solution, but i think thats the only remotely plausible one that will make a global carbon tax work

A lot of companies think this way, but it isn't necessarily true that excess carbon emissions aren't a financial pain point. Putting aside the implementation of carbon taxes, there are a lot of enterprises out there who could increase their productivity and reduce carbon emission as a side effect.

Agriculture in particular would fit in that category but any manufacturer emitting carbon is basically burning something that they could burn less of and save money.

So I don't think carbon emission reduction is necessarily a good way to market a company. Efficiency and cost savings that just happen to reduce emissions? That's where the focus should be.

Companies use fossil fuels because they have no choice, either because of chemistry or because of the doctrine of shareholder primacy, or because they lack access to credit.

There are no alternatives to carbon-intensive inputs in the offing for many industries. For all of them, efficiency measures require capital investment. Borrowing to install efficiency measures reduces next-quarter returns to stockholders. Companies with low profits have a hard time borrowing.

Yes, it may be a pain point, but it's also a coordination problem (or three).

The cases where efficiency provides a clear benefit? Few and small, on the global scale.

I don't agree with that. Any opportunity to make a 10% reduction in carbon emission that also saves you money should be pursued, and there should be a lot of them out there.

> Efficiency and cost savings that just happen to reduce emissions? That's where the focus should be.

Isn't that where the focus has already been for decades? Which has pretty definitely proven itself insufficient for curbing emissions at anywhere near the scales that we need?

Yes I would agree with that, but that doesn't mean we should stop trying. As an example, the NZ government is currently funding grants to reduce carbon emissions in livestock by 10%, which is an easily achievable target with current technology but the knowledge of how to do it isn't widespread.

A lot of this progress is unfortunately going to fall to governments and grants like this, which is probably where any carbon mitigation company needs to concentrate rather than venture capital. Once the claims about cost reduction can be proved, agriculture will follow soon enough.

Other industries will have similar grant schemes.

IMO that's exactly the argument why wee need a carbon tax. The status quo is that the only people who are really doing anything at all are some governments and the wokest part of the population. That's not nearly enough - we need all the companies and the whole population too. We don't just need to incentivize doing something else, but simultaneously disincentivize doing a lot of what we currently do, so everyone actually starts looking for alternatives. We can't just make emissions illegal without shutting down society, but we can (and should) make them painful.

The issue with a carbon tax is that it is unpopular for a plurality of voters. There are other types of policies that don't engender the same type of aversion. For example incentivizing banks to make carbon negative projects easier and cheaper to finance.

> Failure to pick problems that are relevant for both will result in increased decision making complexity at all levels of the organisation: do we optimise for impact (the environmental problem) or for revenue (the customer’s problem)?

I've been an climate tech entrepreneur for the past 7+ years, and the most reliable way I've found to accomplish the combo viable-business + climate-impact:

1. Get a job at a revenue generating climate-change-fighting company (solar, EVs, policy/regulatory consulting, etc.).

2. Keep your eyes open for pain points that your company (or especially you in your position) would pay money to solve.

3. Quit and start a company solving that pain point (or if you're not the founder-type, go work for a company trying to solve that pain point).

I suppose this kind of strategy would work in many other industries, but it's especially effective in climate tech, because:

(a) As OP mentions, the pain points are very hidden to the general public, so you really need to be actually working inside the industry to find and understand them (since energy often has very complex business models and regulatory constructs).

(b) By focusing on finding pain points for already climate-change-fighting companies and solving them, your impact goals are already built-in, since you're enabling more impact by default. So you don't have to worry as much about finding the magical combo of viable-business + impact.

(c) The climate-change-fighting sector is so young that many of the pain points are still major issues and don't have many viable solutions yet. In other more mature industries, many pain points already have established companies solving them, so there's less of green field for new companies.

Anyway, for people looking to fight climate change, by far the biggest thing you can do is join the industry and make a career out of it. There's so much ceiling here!

Any chance of mentioning a few of those issues from point 2 that lets someone skip point 1?

I think thread parents point is that the problems are obtuse and plentiful enough that in order to understand them you need to be involved in point 1, which is arguably the hard part.

You need to do your own discovery.

@corradio - would be interesting to chat with you about your ideas/goals.

I don't work in climate tech but adjacent to it: property insurance. We spend a lot of time thinking about ways to mitigate losses from a variety of natural catastrophes. Some of the increased frequency/severity is increasingly thought to be from climate change. I won't go into that here.

There are a lot of contradictions. Insurers are paid to take risks but increasingly move away from those risks. But the actual events - wildfires, floods, etc. - affect people and businesses every year. Coastal property is at risk from sea-level rise, and sunny-day flooding is common in Miami and other places.

So, I wonder if what you might focus on instead is tech that helps fill some of those gaps. Offer products that help folks buy protection for things that an insurer might not cover unless you give them a lot of cash. Do it more cheaply with tech, if possible. Private flood already exists, but I still think there's a lot of opportunity and runway for other folks in that market. Floods and the other perils are increasingly climate-related problems that people can touch and feel. They cause damage. They upend lives and businesses.

Other folks are tackling wildfire insurance, tornado insurance, and etc. A couple of examples: https://solainsurance.com https://ourkettle.com

Hey Olivier, thanks not only for sharing your learnings, but for electricitymap. I believe it’s foundational for measuring and directing electrical climate change efforts, and wish you the best on this next part of your entrepreneurial journey.

Thank you for the kind thoughts. These kind of messages are what keep us going ;-)

Since I imagine there are a lot of interested people in this thread: is there a list or an index of companies that one could work at if one was interested to make a difference? Can't really find any on Linkedin.

Or maybe the opposite is needed - a list of companies one should be ashamed to work at due to their negative impact on the climate?

https://climatebase.org/ and https://jobs.urban.us/ are two good places to look for higher end and more nuanced career opportunities to help mitigate climate change.

Go to jobs under https://lowercarboncapital.com/

Having worked in the ClimateTech sector for a few years (and with no intention to stop) - I can definitely emphasize with the potential for burnout. It's really ease to start caring immensely about your work, which can be great - but also needs some sort of balance so that it doesn't hit too hard when it doesn't work out.

> Most people don’t see the large impact differences of actions they undertake in they everyday life (North)

Anyone ever used the app Joro [1]? It calculates your carbon footprint based on your credit card transactions (via Plaid integration) and provides convenient ways to offset. I've been on it for a few months and it's had a huge impact by way of behavioral nudges. Also, the carbon calculations are surprisingly solid.

[1] https://www.joro.app/

Hi Olivier, nice to read you here. I'm bootstrapping a climate tech related business in Mexico and would like to have a chat someday. Please get in touch! Email in my bio.

“In the end, you can’t fix the world if you’re not in a positive mindset.”

I can see how the shame of consumption can slow innovation. Especially when it gets to the point that you’re analyzing the best way to ship a laptop to your office to even get started...

Enjoyed the advice on burnout. Many tech companies now recruit on mission statements as much as on pay and when you fail to live up to that mission your employees will rethink staying put.

Tomorrow’s efforts have been creative and very interesting to follow. It was sad to hear that the demand is so weak for their solutions.

Nice read, thanks for sharing

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