Our Investment Focus and the Long, Hot Summer
As I write this, Britain is sweltering under the hottest temperatures in its history, wildfires speckle Europe, storms ravage the southern US, and extended heat waves and drought are predicted for the rest of the summer.
We see these, clearly, as effects of global warming, and we think the heating and weather destabilization of the planet will continue and worsen in the months and years ahead.
These shifts in the world around us ratify three of our core investment beliefs, so it seemed a natural time to review those.
1. Food must be decoupled from land and sea. When the land burns, drowns, and swelters; when traditional weather patterns break, it becomes impossible to predict agricultural output and deliver food to a growing human population reliably. To feed future populations, food must come from some other source than soil-based agriculture and fishing-based seafood acquisition. The physical footprint of new food production sources must be smaller and more under human control than today’s methods. They must have a less negative environmental impact. The food products produced must be healthy and remain tasty, so people actually want them. This is why we have invested so actively in both vegetable and lab-based proteins. We also remain deeply interested in systems that allow individuals to grow their own food at home. We have limited time to make this transition, or the extreme human misery and the chaos that comes from hunger will rise.
2. It is essential to get pure water to individuals reliably and non-traditionally. Already, parts of the western US are worried that they don’t have enough water to meet their needs for this summer. The Colorado River is, essentially, drying up. Water is life, and being able to deliver potable water where it is needed is critical for human survival. Lakes, rivers, and wells cannot carry the load as a changing environment challenges them. We are on a hunt for systems that produce and deliver pure water in radical new ways, e.g., from the air or from new catalytic processes. We need a new Odin’s cup, which was never empty, no matter how much he drank from it. Water will increase in value more than any other commodity in the years ahead — we quite literally can’t survive without it.
3. New sources of creating — and more importantly, storing — energy will dramatically increase in value. As heat rises, the need for air conditioning comes to places (like the UK) that haven’t needed it before, and in places (airport runways) that never needed to be cooled in a calmer environment. That creates the need for more energy, which of course increases pollution and that accelerates the engine of climate change. It’s a dreadful spiral. To escape this weir, we must find new ways to produce power that doesn’t pollute. In particular, we need to find ways to produce small amounts of clean power close to their point of use. Even more importantly, we need to find new and broadly usable ways to store power captured from all sources. Today, almost half the power in the grid never makes it to the point of impact; solar power captured at home is overabundant at some times and absent at others. The wind comes and goes. We need new batteries, new energy capture, and new retrieval methods. And these shouldn’t follow the patterns of the past — no more creating all of our power in big, polluting plants. We can imagine generating power in new ways at the regional, city, and household levels. The world is going to require it, and we believe scientists and entrepreneurs are poised to respond to that challenge.
Maintaining human living standards in the face of global warming won’t be easy. But humans are a deeply clever and capable species. We made it through the Ice Age with axes and furs — we can make it through this difficult period as well. As investors, we’ll do all we can to help make that happen.
By Managing Partner Mike Edelhart
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