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Innovation Will Continue to Enable New Economies
By Anu (Part 2 of 3)
On Valentine's Day, CERES invited a small kasina team to visit the United Nations for the Investor Summit on Climate Risk. The summit attendees represented firms with over $12 Trillion in AUM. The related brainpower was equally impressive, yet one topic stood out to me.
The topic was innovation and delivered by Vinod Khosla, founder of Sun Microsystems and Sand Hill Road titan. He made the case for investing heavily in innovation to eliminate our country's foreign oil dependence. What floored me was his optimism and bold predictions. Khosla views the underinvestment in education as the limiting factor to reducing carbon emissions. His bold predictions included:
- Oil prices will have to drop dramatically to compete with bio-mass fuels in 3 to 5 years (in an unsubsidized world).
- Carbon-assuming cement will be a reality and in use within 5 years.
- First-generation food fuels (e.g., corn-based ethanol) will be irrelevant and should garner no government investment.
Bold predictions made in an important time period. That, coupled with Al Gore's message of fiduciary responsibility, made for an unforgettable day.
The five year expectation is perhaps optimistic but the concept is correct. We are at the tipping point where the "greening" of public opinion will accomplish what the political system ahs not.
Good Job, Anu
Carbon assuming cement sounds like a cure-all. How about the notion that we should consume less or travel by public transportation rather than drive individual cars? I hope that our behavior changes before scientific remedies are found. The U.S. consumes approximately 25% of the oil produced.
I don't understand the comment about 1st gen food fuels. It would APPEAR (and I concede that appearences can bedangerous) that the auto manufacturers and the gasoline companies are taking a pretty serious look at this.
As for the bio-mass fuels, does this refer to using bio-mass to fuel autos? Or is this for other uses (heating/cooling homes on certain power grids etc...)?
to me. the markets will drive this story. If there is a value prop for investing in bio-mass, food based fuel etc... coupled with consumer demand, then these seem like reasonable claims (although I think 3-5 years is a tad agressive). If there is a profit opportunity, then investors will pounce and "green-life" (trademark: Ami Heda) economics will prevail.
1. Education is a factor.
2. Innovation is a function of investment and timing.
3. We do not have a real comprehensive energy policy yet.