The race to save Mother Earth in 8 years
We have until 2015 to reverse global warming, experts warn. Business 2.0 Magazine's Chris Taylor looks at which business opportunities will meet that deadline -- and which ones won't.
(Business 2.0 Magazine) -- Dr. Samuel Johnson said it best: nothing so concentrates the mind as the sight of the gallows. In other words, to get stuff done, we humans need a deadline.
Today we're facing the mother of all time constraints: it seems we have no more than eight years to avoid a major planetary catastrophe.
Earlier this month, scientists on the United Nations Intergovernmental Panel on Climate Change released the third of their devastating reports on greenhouse gas emissions. We have until 2015, it said, to roll back emissions and limit global warming's effects to a relatively manageable 4-degree rise.
Believe it or not, there's a silver lining to that grim prediction. The fight against climate change has, until now, lacked a firm timetable to spur businesses and governments into thinking smarter about solutions.
As Jim Connaughton, chairman of the White House's Council on Environmental Quality, told reporters after the UN report came out: Americans need deadlines. "[They] say 'tell me how much I need to achieve in a specific sector by when," he said.
Well, now we know: eight years. A short time? Perhaps. But a lot can be done in eight years if we set our minds to it. Consider that the Internet had 16 million users in 1995, and three quarters of a billion users in 2003..
There is every sign that a similar growth spurt is about to take place in the world of clean energy. Today, wind power, solar power, and biofuels are all sizable sectors, with yearly revenue ranging from $16 billion to $21 billion.
In the next decade, all of them will pass the $60 billion mark, according to research firm Clean Edge. Biofuels alone may be an $80 billion industry by the time we reach the UN scientists' deadline in 2015.
The momentum to take action is gathering fast. In a CBS/New York Times poll before the UN report came out, a record 78% of respondents said steps should be taken "right away" to combat global warming -- and the topic could easily become a hot button issue in the 2008 presidential race.
One likely outcome: a cap-and-trade system whereby polluters are granted tradeable permits to emit carbon. The United States doesn't have such a system yet, but Congress is likely to consider soon whether the time has come to create one. Oil giant Chevron (Charts, Fortune 500) and automaker GM (Charts, Fortune 500) signed on to the cap-and-trade idea two weeks ago.
Carbon trade systems in other countries were worth a total of $30 billion last year. That's double the 2005 number and half what it is expected to be by year's end. This benefits companies that are actually doing something to reduce the amount of carbon in the atmosphere.
But there are plenty of other opportunities that businesses are just starting to exploit.
In the June issue of Business 2.0, for instance, we wrote about Planktos and Climos, two startups that are planning to seed the oceans with iron, which helps carbon-dioxide-sucking algae bloom. The companies were able to turn a healthy profit before they began their experiments simply by selling the promise of future riches to large carbon polluters.
Perhaps Planktos, Climos and other startups like them will turn into cash cows. But all that matters now is that they do it before 2015.
The recent UN report was surprisingly specific about the easy opportunities to reduce carbon emissions in established industries. A process called carbon capture and storage (CCS), for example, is useful not only in coal power plants, but also the businesses of making cement, iron and ammonia.
Interestingly, one new technology that the deadline may rule out is hydrogen fuel-cell cars. Their production is simply not feasible in the next eight years. Electric cars, however, are a different story. Tesla Motors, the Silicon Valley electric-car startup funded by PayPal founder Elon Musk, has already sold out its first run of the $100,000 Tesla Roadster, out this summer.
Not only that, but this week Tesla launched a side business making electric-car batteries -- and instantly received a $43 million order. Tesla expects to ramp up to a $50,000, 4-door sedan in 2008, and a $30,000 car by 2010.
By the time we reach the UN deadline, Musk expects to have more than 100,000 Tesla cars on the road. That's the kind of achievable change that the deadline on climate change should promote.
Give us a few thousand more entrepreneurs with that kind of zeal (not to mention that kind of funding), and we should have global warming licked -- just in time.
Chris Taylor, a senior editor at Business 2.0 Magazine, blogs about the next big business opportunity.To send a letter to the editor about this story, click here.