Dumping Iron

(Fortune) -- "Give me a half tanker of iron, and I will give you an ice age."

So said a scientist named John Martin, after he discovered that sprinkling iron dust in the ocean could set off plankton blooms, suck carbon dioxide out of the air and cool a warming planet.

This was 20 years ago, and oceanographers have debated what's called "ocean iron fertilization" ever since. Never mind that Martin, who died in 1993, later said he was only half-serious. The debate rages on, as a startup company called Climos prepares to build a business by fertilizing the ocean with iron.

Climos raised $3.5 million last month from venture capitalists, including tech investor and PayPal co-founder Elon Musk. The firm intends to make money by selling carbon offsets, similar to those generated by tree-planting projects today. With concern mounting over climate change, Climos has to be taken seriously.

"This is no silver bullet," says Dan Whaley, the founder and CEO of Climos, which is based in San Francisco. "It's not going to fix the problem of climate change. But it's a significant lever."

You might guess that environmentalists would cheer on a potential solution to a problem that most agree is the most serous facing mankind. Guess again.

The enviros raise two objections. One is that ocean iron fertilization may not effectively sequester carbon. The other is that its side effects are unknown, without engaging in large-scale, real-world tests, after which it could be too late to fix any damage that's been done.

"It's not a great time to increase the risk to ocean ecosystems," says Rob Fujita, a marine ecologist with the Environmental Defense Fund, who notes that so-called dead zones caused by the growth of algae are already hard to control.

Emily Pidgeon, an oceanographer with Conservation International, is another skeptic. The chemistry and biology of creating plankton blooms are "incredibly complex," she says, and there's no one recipe for fertilizing the oceans because conditions differ. About 12 small-scale studies of ocean iron fertilization have been done since the early 1990s. We'll spare you the details but among the unanswered questions is just how long the carbon dioxide captured by plankton stays in the ocean.

On the horizon for Climos are legal and practical problems, too. An international treaty called the London Convention governs the open ocean, and regulators will have to decide whether sprinkling iron amounts to "fertilizing" or "polluting" the sea. To generate carbon credits, Climos will need to measure the CO2 it sequesters, which is no easy task. So long as environmentalists oppose what's been called the Geritol remedy for climate change, Climos will have difficulty selling its credits. Another startup that also wanted to fertilize the oceans with iron, Planktos, recently ceased operations, blaming "a highly effective disinformation campaign waged by anti-offset crusaders."

Whaley, a 39-year-old a former Internet entrepreneur, is undeterred. He sold an online travel company called GetThere for about $750 million to the Sabre Group (the electronic reservations people) in 2000. Several years later, took a road trip from his home in San Francisco to Buenos Aires, Argentina, trying to decide what he would do next. He found an answer back home. His mother is Margaret Leinen, a well-respected oceanographer and, at the time, Director of Geosciences for the National Science Foundation. She had known John Martin, and talked with Whaley about ocean iron fertilization. He dug into the research on his own, and came up with a business plan that involved selling carbon offsets.

"Basically, the business model hinges on the price of carbon and the efficacy of sequestration," says Whaley, who will be speaking next week at Fortune's Brainstorm Green conference on business and the environment. "We think the business is profitable at $5 a ton." Right now, unregulated or voluntary offsets sell for between $2 and $20 a ton; carbon credits that can be used to comply with mandatory controls on greenhouse gas emissions in Europe and Japan are worth much more.

But before Whaley gets to test the economics of his plan, he will have to win over scientists. He has met with ocean experts at the big environmental groups, and assembled an advisory board that includes such respected scientists as Thomas Lovejoy, president of The H. John Heinz III Center for Science, Economics and the Environment.

Last fall, the prestigious Woods Hole Oceanographic Institute convened a meeting of about 80 experts to discuss ocean iron fertilization. Ken Buesseler, who helped organize the meeting, said afterwards that there's no scientific basis yet for issuing carbon credits for ocean iron projects. But a statement signed by Buesseler and 15 other scientists recommends more study, provided the society is "willing to acknowledge explicitly that it will result in alternation of ocean ecosystems and that some of the consequences may be unforeseen." You can read a lively series of articles about the Woods Hole discussions here.

Like other potential solutions to the climate crisis that carry risks-think nuclear power or the idea of burying CO2 in the ground near coal plants-ocean iron fertilization deserves a close look.