I began this series of articles with a passionate endorsement of Artificial Intelligence (AI) in healthcare, the result of seeing AI used in a lifesaving heart procedure years ago. I also pointed out the use of AI today in the rapid development of medicines and the coronavirus vaccine. But I am even more passionate about AI and other issues, especially climate change and sustainability. What COVID-19 did to the world in one year, climate change can do every year for a century.
Kairos is an ancient Greek word meaning the right, critical, or opportune moment. Tech has been marked by a series of kairos moments, when the amount of change, and the increasing rate of change, meet to generate a wave-like exponential effect that disrupts and dramatically rearranges the world. We live in such a time today, as technology, the pandemic, and the existential threat of climate change combine to unleash a wave of creative destruction.
The world has finally begun to pivot to address the challenges presented by climate change, bringing along a massive shift in government and corporate spending toward sustainability. Many nations are finally beginning serious efforts to address the climate crisis, while corporations have begun committing to meaningful environmental investments.
The EU has adopted a Green New Deal. The U.S. is considering an infrastructure plan that includes $500B in green technology. The U.K. has banned gasoline-only cars by 2030, and California has mandated all-electric cars by 2035. GM, Jaguar, Volkswagen, and Volvo have announced plans to discontinue gasoline-powered vehicles within the next ten years. Many large corporations have pledged to become carbon neutral within a decade.
Such changes require financing. JPMorgan Chase (JPM) recently said that it would finance or facilitate investments of $2.5 trillion over ten years to support initiatives that focus on combating climate change and enhancing sustainable development. The announcement is the latest addition to a long list of environment-focused pledges from financial institutions. This one is believed to be the largest of its kind by a major bank.
Impact investment is a multi-trillion-dollar asset class intended to address problems such as climate change, health, hunger, and social inequality. The primary driving force today is climate. The scramble to combat the coronavirus pandemic was a wake-up call, demonstrating how unprepared the world is overall for any major disruption.
The volume of capital needed to finance the economic pivot to sustainability is mindboggling. The Organization for Economic Co-operation and Development (OECD) estimates that $6.9 trillion a year is required between now and 2030 to meet agreed upon climate and development objectives. This amount requires an increase by a factor of five in low-carbon energy and energy efficiency and an increase by a factor of two in low-carbon R&D. This surge of financing will generate more innovation and impact than any force in history.
For impact investors, it will be the stuff of dreams. Mark Carney, former Bank of England chief, speaking at a conference in late 2020, called the transition to a net-zero-carbon economy “the greatest commercial opportunity of our time,” while urging institutional investors to join in private initiatives. Not just for altruistic reasons but for the huge potential profits involved.
The pandemic has illustrated how quickly a worldwide natural event can take lives and stagger the economy. The pandemic also showed how quickly the world can respond in crisis mode. Our challenge is to respond forcefully now, preemptively, with the environmental crisis bearing down upon us, rather than waiting for it to overwhelm us, as happened with COVID-19.
What this means is that it is not enough to pivot to sustainable solutions. What is needed is a set of radically new sustainable solutions. Unfortunately, almost all investments today are based on current technology and are of a “remedial” nature. The state of California, for instance, is making about $2 billion in climate-related investments annually on such things as cap-and-trade plans, insulation, and credits for energy-efficient equipment and vehicles.
Mitigation, offsets, and wide deployment of existing clean tech such as solar and wind: All of these are important. But by themselves, they do not come anywhere close to solving the carbon problem. These are tentative, incremental steps when we require entirely new strategies to deal with existential dangers.
Bill Gates, who has morphed from a computer guru to a climate guru, has criticized President Biden’s climate investments for not being bold enough. The U.S. needs to find radical new approaches, he says, not just to deploy more of what we already have.
Having run down the clock on conventional solutions to our sustainability challenges, the world requires, as Gates insists, wholesale change — and now. We call such technology exponential: innovation that creates sudden, asymmetric positive change. The most obvious example, and likely one of the most difficult, would be a new fuel source such as hydrogen. Transportation alone produces 28 percent of all U.S. greenhouse emissions. A fix here would go a long way to solving the overall problem. And would no doubt generate huge public momentum and investments for other sustainable solutions.
Exponential innovations will not come easy. They will almost exclusively be based on deep technology (deep tech). By definition, deep tech solutions require substantial research and development by highly educated technologists tackling major scientific or engineering challenges. They require major investments for commercialization.
As discussed specifically last time with healthcare, the only deep tech likely to address our existential threats will incorporate Artificial Intelligence (AI), sophisticated software that is capable of analyzing much more data than humans and of making better, faster decisions. By searching for and discovering knowledge and by making accurate predictions solutions to the complex problems that affect our existence, AI will dramatically accelerate ideation and innovation for sustainable solutions.
What COVID-19 did to humanity is nothing compared to what climate change will do. I have the confidence that humanity, armed with AI tools and solutions, will have the will and the courage to act on our foresight and deploy deep tech applications before the worst is upon us, rather than after.
Believing that deep tech can deal with our great perils is only the first step. As noted, deep tech requires significant investment. We must find a way to connect the consumers of technology — investors, buyers, and end users — with the solutions themselves. With, that is, the people and companies producing the applications, who are scattered all over the world. Discovering these startups and connecting them with consumers is enormously complicated. Fortunately, AI itself will be a major contributor to the answer.
We will explore this topic in depth next time.
Exscientia : Announces Closing of $510.4 Million Aggregate Financing, Consisting of $350.4 Million Upsized Initial Public Offering With Full Exercise of Underwriters' Option to Purchase Additional ADSs and $160.0 Million Concurrent Private Placement