Stripe Is Paying to Remove Carbon from the Sky, Hoping that Others Will Follow

Last year, Stripe shared on their blog their commitment “to pay, at any available price, for the direct removal of carbon dioxide from the atmosphere and its sequestration in secure, long-term storage.”

Their reasoning was straightforward. Reducing carbon dioxide emissions will not be enough to resolve our climate crisis. We almost certainly need to remove carbon dioxide that is already in our atmosphere. The technology to do so is in a classic early stage conundrum. Because it’s so new, it’s both not good enough and too expensive to be viable. However, those who buy early help fund improvements to the technology, which drives the price down, which leads to more customers and investments. Wash, rinse, repeat. All the while, carbon is being removed from the atmosphere.

This is the promise all early stage technology makes. The question is, who’s going to buy early? For carbon removal, Stripe raised its hand, committing to spending at least $1 million a year. Their hope was that other companies would follow suit.

I thought this was awesome, but I wasn’t blown away by the dollar amount. A million dollars isn’t nothing, but Stripe is worth $36 billion.

So I was disappointed to read in this week’s The Atlantic that a million dollars turned out to be a big deal. The article quotes Stripe’s Ryan Orbuch, who said, “We got a positive response from the carbon-removal community, because the field is so starved for capital that a million dollars will raise eyebrows.”

I find this infuriating… and sadly, not surprising. With an estimated $500 billion a year being invested in climate change by companies, governments, and philanthropic foundations, how is it that a million dollars shook up a market that is so clearly necessary right now? My guess is it boils down to two things: Lack of leadership and lack of strategic action. The need to wait for others to make an obvious idea okay before being willing to jump in themselves is very, very strong in most people.

While I find this very sad, Stripe deserves even stronger kudos for recognizing this and doing something about it.

On Markets, Government, and American Exceptionalism

On Election Day, Carmen Medina outlined ten beliefs underlying her views on the world and on politics. Read her whole post. It’s short, sharp, and thought-provoking.

Here’s what she wrote about regulations:

1. More often than not government (all) regulations do not entirely achieve their intended effects. Their unintended effects can be positive or negative. This is due to the world’s and society’s infinite complexity. Thus, I am skeptical of most grand efforts to “fix a problem”.

and a few points later on climate change:

4. Climate change is real and it is currently driven by humans. Given that regulatory approaches are often flawed, solutions should be emergent and market and locally-based. (See point 1) Thirty years ago I was debating pollution and energy with a friend in an English pub. He was advocating a large government program. I asserted that the first successful electric car would be created by a private company.

I don’t know enough about public policy to know whether her first point — specifically, “more often than not” — is true, although Carmen, as a long-time civil servant, would know infinitely more about this than me. I’m curious, however, what she means by “market-based solutions” in this light.

All markets are regulated, in the sense that someone gets to define the rules by which a market plays. Those rules impact how those markets work and whom they benefit. We saw this play out on Tuesday. Elections are a kind of market that serve as the cornerstone of our democracies. All elections are also regulated. Someone decides who gets to vote, the mechanisms by which they vote, and how those votes are counted. Subtle differences in those rules can have massive effects on their outcomes. This is true of all markets.

This complexity plays out in her electric car example. I assume she’s talking here about Tesla, whose founder, Elon Musk, has loudly endorsed market-based solutions to climate change (such as a carbon tax) and opposed government subsidies. However, he also happily accepted a $450 million loan from the federal government in 2010, which enabled him to scale up production of Tesla’s Model S (and which Tesla paid back with interest three years later). I’m also willing to bet that a good portion of the scientific and technological foundations on which Tesla and other electric cars are based were funded by the government. One might argue that these are all examples of market-based interventions rather than regulations. I’m not sure that the distinction is that clean or that it matters at all.

I think the more important point is that there’s no such thing as the perfect structure. Whatever you put into place will have unintended consequences (a point that Carmen makes right from the start). Without alignment around the desired consequences and a fair, equitable system for making adjustments (i.e. regulations), that structure will fail. Therein lies the rub, especially when it comes to elections. Elections are supposed to be that fair, equitable system for making adjustments, but if they start off flawed (the way all intentionally-designed systems in a complex world do), we are now relying on a flawed system to fix a flawed system. Messy, right?

(This is also what galls me about the current capitalism / socialism rhetoric. Most of the time, when I hear someone railing about one or the other, I have no idea what they’re talking about. Is the U.S. capitalist or socialist? It’s both, and it always has been, although the degrees have shifted over the years. The challenge is in finding the right mix, whatever you want to call it in the end, not in replacing one with a more “pure” version of the other and calling it a day.)

Earlier this week, Stephen Bates published a piece in Lawfare on Reinhold Niebuhr, where he wrote:

For Niebuhr, [Charles] Merriam-style complacency is all too common in the United States. Americans like to ascribe their success to moral virtue rather than good luck. Thanksgiving, he once remarked, is a time for “congratulating the Almighty upon his most excellent co-workers, ourselves.” Americans smugly presume that they have the gold-standard democracy against which all others must be measured. The framers, they think, fashioned stable, incorruptible, self-correcting institutions. Whenever part of the system goes haywire, the other parts compensate, and constitutional homeostasis prevails.

Not so, according to Niebuhr. “There are no such natural harmonies and balances …[,]” he wrote in a Hutchins Commission memo. “Whatever harmony exists at a particular moment may be disturbed by the emergence of new factors and vitalities.” In his view, the price of liberty isn’t merely eternal vigilance; it’s also eternal trial and error. New solutions create new problems. Virtues in one situation become vices in another. Measures to suppress abuses of freedom can end up suppressing freedom. Reason advances justice in some circumstances and camouflages injustice in others. The expansion of knowledge sometimes fuels global understanding and other times fuels imperialism. A free society, Niebuhr believed, demands ceaseless recalibration of unity and diversity, freedom and order, mores and mandates, state power and corporate power. The challenge is “a perpetual one,” he told [Henry] Luce, “for which no single solution is ever found but upon which each generation must work afresh.”

In this vein, I enjoyed how Carmen reframed American Exceptionalism:

10. America is the world’s most multicultural nation. That is its only true exceptionalism. We will prove to be either a successful example or a tragic one.

How Effective Are Different Climate Interventions?

My friend, Mariah Howard, shared this CNN.com climate change solutions quiz today. It’s based on data from Paul Hawken’s excellent climate nonprofit, Project Drawdown. I took the quiz, and it nicely confirmed what I suspected: Other than the consequences of a mostly plant-based diet, I had very little clue about the actual impacts of most proposed climate interventions.

I’d like to see more exercises and visualizations that accomplish this for all sorts of problems. Skilled systems thinker don’t think in terms of binaries. They ask questions like, “How much?”, and, “In exchange of what?” Knowing that driving a Prius lowers my carbon footprint isn’t useful if what I actually care about is getting overall atmospheric carbon below 350 parts per million. (We’re currently at 412 and growing.) What matters is how much it lowers my carbon footprint.

That said, there were a few things I didn’t like about the quiz. First, the scoring system doesn’t make sense. (I scored 34.4 percent overall.) You’re asked to rank a set of interventions based on carbon impact. As my friend, Travis Kriplean, pointed out, if your three interventions are ranked 1-2-3, and you rank them 1-3-2, you’re penalized the same as if you ranked them 3-2-1, which is a more egregious error.

Furthermore, the rankings alone don’t tell the whole story. If intervention 1 will remove 10 gigatons of carbon from the atmosphere, intervention 2 will remove 2, and intervention 3 will remove 1, then mixing up 2 and 3 wouldn’t be egregious, whereas not ranking 1 first would be a huge miss.

Second, CNN.com tries to show which interventions can be implemented by individuals versus industries and public policy. For example, eating a plant-based diet is labeled as something that individuals can do, whereas investing in high-speed trains is something that requires policymakers. I don’t find this to be a helpful distinction. Sure, I could switch to a more plant-based diet, but policymakers could also end meat subsidies, which would raise the price of meat and consequently lower a lot of people’s meat consumption. On the flip side, the quiz labels more walkable cities as a public policy intervention, but it could just as well as have made it an individual intervention where a whole lot of people simply walked more.

This problem is exacerbated by the quiz attempting to make the impact more tangible by showing the equivalent number of gas guzzling cars taken off the road by each intervention. This is an admirable goal, but it makes no sense in the context of this particular exercise. For example, it claims that “driving an electric car” — an individual intervention — would be similar to taking 75.7 million cars off the road. No, actually, if I drive an electric car, that would be similar to taking one gas-guzzling car off the road. If you read Project Drawdown’s analysis, they make projections based on EV’s taking up 16 percent of total passenger miles by 2050. The details here matter.

All that said, the quiz caught my interest enough for me to go down a little bit of a research rabbit hole, something I’ve been wanting to do for a while but have never gotten around to doing. I also learned some surprising things. I’d encourage others to give it a try.

For more on these drawdown strategies, Travis recommends watching Chad Frischmann’s TED Talk: