Good Morning
What we’re reading this week:
How a Paradise Became a Death Trap (NYT)
Oops, we stopped geoengineering (S)
$1.1B CDR Startup Acquisition (BBG)
The Greendicator
Top Deals of the Week
![Ilectra Motor Group Perkenalkan Motor Listrik Alva One - OTOBLITZ.NET | OTOBLITZ.NET Ilectra Motor Group Perkenalkan Motor Listrik Alva One - OTOBLITZ.NET | OTOBLITZ.NET](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Feafd4d36-723e-4327-9a55-18dd760d4e28_1200x675.jpeg)
Redwood Materials, a lithium-ion battery recycling and remanufacturing company, raised a $1B Series D at a $5.25B valuation led by Goldman Sachs Asset Management, Capricorns Technology Impact Fund, and T. Rowe Price (FN)
Redaptive, a Denver-based energy-savings-as-a-service company, raised $125M in financing from Deutsche Bank (FN)
Indonesian electric mobility startup Ilectra Motor Group raised a $50M Series B led by Horizons Ventures (FN)
CH4 Global, a startup producing more sustainable cattle feed, raised a $29M Series B led by DCVC, DCVC Bio, and Cleveland Avenue (FN)
Solar-as-a-Service startup UrbanVolt raised a $28.3M round led by Verdane (FN)
Green hydrogen company Advanced Ionics raised a $12.5M Series A led by BP (TC)
Fusion energy startup Novatron Fusion Group raised a $5M seed round led by Climentum Capital (FN)
Solar energy startup Allume Energy raised a $1.5M seed round from Elemental Excelerator and the Schmidt Family Foundation (FN)
Green Theory
Selling Away Emissions: The Capitalization of Carbon
For hundreds of thousands of years, the human population survived fluctuations in atmospheric carbon dioxide. But the 12 billion people born in the past century share an experience unmatched in the history of all of our ancestors, the other 105 billion humans who have ever lived. Everyone reading this newsletter is living through through never-before-seen levels of atmospheric carbon.
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The last time atmospheric carbon dioxide matched 1950 levels, there were no homo sapiens, yet. Now, we all live with an atmosphere that’s over 400 parts per million carbon dioxide. This concentration of carbon dioxide, among other emissions, is the direct outcome of human choices, and direct cause of global warming.
Even if we flipped a magical switch to an upgraded grid, replete with nuclear, hydro, solar, wind, and batteries, tomorrow—and decarbonized all industry, transportation, heating, and everything else—we’d still need to reckon with hundreds of billions of tons of excess historical emissions, mostly created by the US and Europe.
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Because of our desperate need for a quick fix to our slow-burning, but ever-accelerating emissions, some have turned to carbon capture and sequestration as a salient, sellable solution. Today, carbon offsets are only supported by voluntary markets, but carbon markets are growing in other contexts, too. What’s the difference?
The world of carbon capitalization has varying schemes, with vast differences in implementation, impact, and imagination. Before we explore carbon capture, sequestration, removal, and offsets, let’s start with the carbon tax, and the leading model for a real carbon market.
Carbonomics
Even conservatives in the US can agree, a key “solution to climate change is simple accountability.” The repuplicEn policy group aims to hold “all polluters accountable for the impacts of emissions by putting a price on those impacts.” Triumphant, and generous in nationalism, they zero in on a carbon tax as the most effective accountability mechanism for US emissions, and beyond:
“The [emissions] tax would be applied to imports coming from countries that didn’t have the same price on carbon dioxide, making it border-adjustable. Since countries around the world want to sell products into the American market, the whole world would follow America’s lead.
There would be no need for an international agreement; no bowing and scraping at the United Nations; no prolonged negotiations; just a bold move by the United States.” —Climate Change, repuplicEn
Across the Atlantic, Europe has actually implemented a carbon market. Covering more and more emissions sources in more countries over time, the European Union’s Emissions Trading System (ETS) sells or allocates emissions allowances from the annual carbon budget to firms such as utilities and airlines. This step is called the cap.
Then, emissions are closely monitored, and firms sell allowances to one another to stay under the collective budget. This step is called the trade, and it combines with the cap to form the cap-and-trade system.
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The Emissions Trading System lets the market set the price of these allowances, while the oversight committee controls the total availability. Over time, the price on pollution will increase, as regulation of emissions expands across more categories, and the total carbon budget is brought lower and lower.
Carbon markets may be accidentally conflated with carbon capture, offset markets, or voluntary carbon markets, since various carbon markets (such as India’s blueprint) involve carbon capture, or self-imposed taxation by firms.
Bucking these associations, the ETS has promisingly curtailed emissions at scale, from a government mandate, unlike voluntary offset markets—proving a carbon market can stand outside of carbon offset markets and carbon removal, as its own category of climate solution.
Catch and Release
Absent from the carbon tax, the ETS, and the entire list of Drawdown solutions to lowering emissions, is the need for carbon capture or carbon offsets. With such extensive historical emissions, however, carbon capture and removal will be essential to meeting global climate goals, according to experts from the Intergovernmental Panel on Climate Change. Still, the role of carbon offsets complicates the space, and skews incentives.
Why have these capture and offset schemes generated over $2 billion in commitments, between private money and the federal government? Next week, we’ll dive into carbon sequestration, removal, and the murky accounting of negative emissions and offsets, at the uncertain frontier of climate experiments.
The Closer
“Northern stargazers have a face only a mother could love. They're also found in the lower Chesapeake Bay and will sometimes wash ashore at places like Back Bay National Wildlife Refuge in Virginia. Their name comes from their sky-facing eyes that let them burrow in the sand and lie in wait to ambush prey, but they also pack a dual punch - venom and electricity!
Their venom comes from two large spines above their pectoral fins, while their electricity comes from modified muscle tissue behind their eyes, called "sonic muscles," that can produce up to 50 volts. While the stargazer venom and electricity won't kill humans, both are dangerous, and the fish should be handled with caution.” - USFWS