How Climate Philanthropy Spends Its Billions

Transcript

Greg de Temmerman

If you think of it, our energy system is 80% based on combustion. So we just burn stuff, the same thing we have been doing for 10,000 years. Of course, we are getting much better. All those things are getting more efficient, but at the end of the day, we are still burning stuff. So electrification is such a huge opportunity. And I don't think we discuss that enough. / And you typically will re-onshore your energy system, which used to be offshore, because you buy fossil fuels or oil and so on, which are produced somewhere else. Now your energy is going to be much more electric, and electricity has to be produced more locally. So unless we start tackling those things, you will always get a lot of opposition, because probably people don't realize that all those externalities were happening way worse, but somewhere where you don't see them.

Bryony Worthington

Hello, I'm Bryony Worthington, and this is Cleaning Up. My guest this week is Greg de Temmerman, Deputy CEO of the Quadrature Climate Foundation, plasma physicist and long distance runner. Quadrature Climate Foundation was established in 2019 and has already pledged over $1 biion in grants to organizations and projects around the world. They're also a member of the Cleaning Up Leadership Circle. Greg has spent over a decade working on the world's largest nuclear fusion project, before switching to philanthropy via a climate tech think tank in France. In the episode, Greg shares his experiences in the world of fusion, some of the theories of change the foundation is exploring, and his thoughts on how to get first of a kind projects financed. We also touch on the primary energy fallacy and the content of his recent TED Talk, comparing long distance running to the climate fight. Please join me in welcoming Greg de Temmerman to Cleaning Up.

Greg, thanks for joining us on Cleaning Up. It's really great to see you.

Thanks for having me.

I'm going to kick things off, as we always do, with the first question, which is, could you introduce yourself in your own words?

Sure, I'm Greg de Temmerman. I'm currently Deputy CEO and chief scientist at the Quadrature Climate Foundation in London. I come from the research world. I spent about 15 years working on early stage research. My background is mainly nuclear fusion. I also did some work on hydrogen generation and ammonia, so early stage things. I currently lead the programs work at Quadrature, which is basically animating a great team of people, and trying to look at where philanthropic capital can accelerate the transition or remove bottlenecks? And I guess we'll talk about that later. I did work on the ITER project in the south of France, I was scientific coordinator there, which is currently the biggest scientific project in the world, also the most delayed and probably the most over budget, but that's another topic. I left research in 2020 to start a small think tank, and basically I wanted to have a bit more impact. I was working on something great, but I wanted to have a bit more impact on climate, so I led a think tank based in Paris for two years, working at climate tech and early stage technologies. We did a lot of work on carbon removal. We did a lot of work on the primary energy fallacy, for example, and those things. And then I joined Quadrature at the beginning of 2023.

Great, fantastic. And so just taking a step back, then, what led up to you becoming a plasma physicist, was this childhood passion for physics? Tell us a bit about that origin story.

By chance, more or less. So I graduated as a chemist. Actually, I'm a material scientist by training. I wanted to do a PhD, because I had a very great experience in researching my studies. And I wanted to do two things. I wanted to have some impact in the world. I mean, at my scale, obviously, but I also wanted to have a multidisciplinary topic, so I started to look for a PhD. After my graduation, I found a great project in Switzerland, in Basel, which was about looking at how a certain specific element of the ITER project was going to last for a long time, and that was at the boundary between material science, plasma physics, surface science. It was great because I was really going into a multidisciplinary world, and I stuck there for a long time. But it's also great because it was all about collaboration with many groups. So I learned a lot. Did experiments on the biggest experiments in the world. So yeah, kind of random route, in a way, random work diffusion, as a physicist would say.

And having worked then for over a decade in the field of fusion, what were your impressions? Because, of course, you know, there's an awful lot of interest now in fusion, because if it can be cracked, it'll be a fantastic solution. But what were your impressions? What can you share?

Well, a lot is happening. I know the joke is that fusion is in 30 years, and will always be, but a lot of things are happening. So I started in fusion in 2003, so a long time ago now, and we have seen a lot of progress. Seen in both computation — we have now access to much more powerful computers. Fusion is a very complex problem, so if you want to simulate a fusion plasma, or a fusion hot gas, it's really complicated. You have to deal with a lot of non-linearities, and it really requires some of the most powerful computers in the world. So in 15-20 years, we have seen big progress there. What is interesting is, as you know, for any technology to actually make it, you usually need a couple of bricks to come together, right? I mean, we used to say that we innovate on the shoulders of giants, and that's exactly there. So for a long time, we kind of missed different parts of a puzzle, and they seem to be now getting together. I mean, one example, for example, we would not have an iPhone now, if we didn't have a transistor, if we didn't have lithography to actually do small chips and so on. Fusion is also the same kind of building on decades of research and progress, and a couple of breakthroughs have happened in the last 5, 10, 15 years. High temperature superconductors, which is basically what limits fusion, is the ability to generate strong magnetic fields. So now we can get much more powerful magnets, which makes those things more powerful, giving much better performance. It also allows us to have smaller machines. If you look at the ITER project, it's a gigantic project which is really hard to industrialize and to build. So this is the first one. 3D printing, or additive manufacturing, is another one where you can start building things with very complicated shapes and slightly easier engineering. So it opens a lot of opportunities in how you can do that. And I don't like AI as a word, but machine learning has been something transformational in trying to understand better how things are going. Machine learning is about looking at huge sets of data, which is typically what we get in a fusion experiment, analyzing them and trying to progress faster in different things. The other thing which happened is also private investors coming in the last 10 years. Although the first startup is actually really old, was founded in 1998 but recently, in the last 5-10 years, with the likes of Bill Gates coming, a lot of money has been raised by companies. And the field went from the 70s where people were looking at a lot of different concepts in parallel and things narrowed down because money became scarce, experiments became more and more expensive. And now we see another expansion, where people are starting to look at ideas which were looked at on paper, but nobody actually looked at in detail, or just things that were abandoned because there was no funding. So you see kind of a flurry of things happening, a new generation of people coming in. So it's quite exciting. Does it mean it's going to work soon? That's another question. But I think we are getting close to a point where we can envisage that power production from fusion will become a reality. And also, what happened two years ago is for the first time in history, we demonstrated in the lab that we could produce more energy from fusion than we actually needed to generate it. And this is something we have been running around after for about 70 years. It's a huge breakthrough, far from what you need from a reactor, but it does show that we actually understand it and we can do it.

And that kind of breakthrough is hugely important, right? Because there's a lot of energy going in at the moment, and how long were we able to sustain that positive output relative to the energy going in?

So the experiment, which was done in California, was only a few nanoseconds, so typically a billionth of a second. But that's fine, because that's the way it works. These are small implosions that you do like 10 to 20 times a second. So that's by principle. And then it all depends on what kind of principle you use as a reactor. Some reactors will work 24/7, some will work with impulsion coming regularly. But I think what is important mainly is that once you start producing more energy than you inject, you enter a new area of physics, where the reaction is heated by itself. And that's a whole new thing that we never could study before experimentally. So now we get much more data. We show that we can actually understand much more about what is going on. We produced two years ago, also a record of how much energy — so instead of power, just the quantity of energy produced — was in an experiment. And for the first time in history, we're able to predict that within 20 to 30%. So we are getting way better at understanding the physics and now it's more about engineering and building things. The ultimate question being, how cheap can you make that? And that's, of course, a long term question.

And I suppose this is because although it doesn't have the same characteristics as nuclear fission... I mean, there's a lot going on, and it's pretty extreme physics, right? And there are other concerns about material damage and neutron bombardment, and these are all going to be expensive things to crack, right?

Yeah. So, I mean, my experience is in trying to understand how materials are going to sustain those conditions. Basically, the type of conditions you're expecting are way worse than anything reentering the atmosphere. If you remember all those, I mean even Starship, when Starship comes back into the atmosphere, it's all red. It's glowing. The kind of heat flux is like 10-20 times lower than the ones we had to deal with in a fusion reactor. And Starship does that for a few minutes. You need to do that for hours, for even years and decades. So it's a big challenge. There are a lot of innovations coming there. Also, for example, using liquid metals, because then they don't get damaged, they get replenished by themselves. There's a lot of things going on in neutronics and trying to make materials more resilient, but also in trying to separate the functions. So the materials being exposed to neutrons are actually not load bearing, which means the thermomechanical constraints are different, and then you can engineer them differently. So there's a lot of things that you can do. It's not cracked for everything, but it's getting there, and we have more tools and material science is actually an area where there is a lot of innovation right now. AI is great in trying to test many different things that we could not test before, or not at the same speed. So there's a lot of opportunities to get better there.

But having done that for a long time and having a ringside seat on this amazing development area, you decided to sort of change tack and move into the think tank world. What's behind that? You mentioned that you wanted to have more impact. Was that meaning more near term impact?

Yeah, so fusion is great, and I had the chance to work on the biggest project in the world, which is quite rewarding. You do learn a lot because it's a gigantic project. 35 countries are involved, so there's a lot of engineering, I learned a lot of project management and so on. At the same time, it's a very long endeavor, and I was not getting younger by the year. So there was a key question for me. Do I want to continue there and potentially have a very big impact, but long term, or do I want to try and use my skills for something else? I was doing a lot of outreach on climate and energy. I had the chance to go to many forums, so I knew I could do something there. I also was versed in a very technical topic. I was used to actually trying to make it simpler for people, so I just took the dive. I said, 'Look, I'm kind of at a stage where if I leave research for a couple of years, research does progress, but not that fast.' So if I lose two to three years, I can probably come back somewhere and find a job. So why not try that and see what can happen? I got in touch with an entrepreneur who was looking at creating a think tank, and we kind of teamed together and started that. And quite early on, we looked at climate tech for many reasons, because France, at that time was — still is — a bit of an anti-tech movement. And we wanted to make sure that people were having a science-based approach, or looking at those with a rational eye, trying to look at what are the promises that things could bring? but also what the difficulties are. Because scaling a technology from scratch is extremely complicated. You need to start navigating something complex. You need a lot of innovation investment into that, and then you need to think about the whole chain. So that's what we were trying to do. And the great thing about that is trying to get a bit closer to impact, although we are still learning, talking about early stage tech, this was kind of near-term compared to fusion.

And give me a couple of examples... but firstly, you mentioned there that there was an anti tech sentiment creeping in. Would you characterize that as particularly French, or was it more... I mean, we've seen it everywhere, right?

Yeah, it is everywhere. I might be biased, I will admit that. But I think the movement in France was perhaps more powerful, or perhaps earlier. And there are a lot of different variants, but you have the kind of degrowth movement which kind of wants to oppose anything, then the traditional green movement in France was kind of against a couple of things. Also we see that right now in the discussion about a train line, right? People don't want a train line even though it's something you would want. So there were a lot of different things, and it really started to take over after COVID, for many reasons. There was also a very influential book published in 2019, I think, in France, about collapse. So people were starting to think about the collapse of society. What does it mean? And you had the huge influence of the kind of green movement in France. So a couple of things. The problem is that it was starting to creep into the public debate, also into policies. And we wanted to just rebalance the discussion. Not that tech is going to change everything, but there are many things we just don't know how to do yet. And you need tech, and you need new things to actually do. So it's like finding that balance between a lot of the solutions that exist, yes, they need to be scaled. There's probably a lot to be done in terms of being more efficient and consuming less. But there is also a lot of need for new technologies, because things as simple as doing iron or cement, which we haven't mastered yet without fossil fuels.

I mean, it's similar to how when Cressida and I were setting up Quadrature Climate Foundation, but originally we wanted to take a very science led, pragmatic approach. Would you say that's the continuing ethos of the foundation that it's informed by science and is trying to be non ideological about its approaches.

Yes, that is and perhaps let me define what I mean by science-led when I say that. For me, being a scientist is knowing what you know and knowing what you don't know, and then trying to understand better what you don't know. So I think the way we try to work is by testing our assumptions over time, looking at the best data. I guess we'll talk about that. There's a lot happening in the fields, and people don't necessarily look at that. A lot of impressive things happening, a lot of things which are not happening also. So it's very important to look at the latest data and try to find those trends, but also recognizing what we know and what we don't know, because then you can start taking decisions on the right level. Or also just make some assumptions and then test them later on. So this is the way we are trying to work, or we are working. It's just being strongly evidence based, but also making sure we always test our priors because it's easy to fall into a bubble, right? I mean, you talk to people who think like you, and then you easily get trapped into something, so always having this ability to get out of that and look at the system as a whole and think, Okay, what is it that we are trying to do? And I think the thing we're also trying to do as much as possible is making sure we don't focus only on one thing. I mean, solving climate change is going to require kind of pulling all the levers that we can, and then combining different things together to actually induce change, which, again, kind of relies on you understanding how the system works. What are the signals you need to look at, and which things do you need to push on?

That focus on being kind of evidence-led. It does mean that certain times, you know, difficult conversations that have to be had, right? I suppose it's a bit of a tragedy that climate has become somewhat politicized, right, that the identity politics of the left versus the right about climates is kind of being grouped into one side, unhelpfully. And so how is the foundation thinking about overcoming that? That polarization that's crept in, I suppose. That there's now a backlash in certain quarters against even the concept, even the science of climate change is being questioned.

I mean, there are many levels there... I think the first one that I need to just lay out is that when I say science, this is all across the board, right? It's not only hard sciences, social social sciences are also really important for trying to get change happening. So I know sometimes people put things into boxes, but we have a white tent approach around that. And indeed, everything kind of leads into a political world, which is making our life more complicated. There are a couple of things, I think. The first one is to understand where information is being used and how it's used, and where misinformation is actually propagating, which is quite interesting. If you look at climate, and you talk about climate science, yes, people still challenge climate science, but less and less in proportion. But then you see a lot of things happening around the idea that solutions don't work, or people trying to push really strongly on the externalities that some solutions can have and, of course, everything has externalities. So if you try to find the perfect solution, you'll never get anywhere. I mean, electric vehicles require materials, does require something. The question is, are you actually going in the right direction, knowing that, again, nothing is perfect. So it's kind of trying to keep that in mind and making sure people... You have to kind of bring that data up and up, again, which is difficult because it's easy to say an electric vehicle doesn't work or doesn't reduce emissions. It's harder to actually prove everything through a life-cycle analysis. The other thing is, as you said, political polarization is very difficult for a couple of reasons. First of all, we are living on short-cycles, now where things can change from one election to the other, sometimes for the good, sometimes for the bad, so you have to kind of navigate that. The other thing is also trying to find the places where people agree on climate, even if they don't agree on something else. So trying to find arguments for the right and the left to actually understand that they both need to act on climate. Although they don't necessarily share the same motivation for that, they probably don't agree on the solution. So it's trying to find a bit of a trans partisan approach, which is hard, and it's getting harder and harder. And there are also some, probably some kind of red lines you don't want to cross, because there are some topics which are difficult. I'm not pretending to have a solution, but it all has to be considered whenever you want to do something, which is why you have to try and play with different instruments as much as possible and kind of engage with different partners.

You hinted that there might be some conversations that are too difficult to be had, but you've been quite bold in having conversations about geoengineering. I mean, carbon removals is not really seen as controversial anymore. I don't think so, but there's a debate about how much you can rely on it, how effectively it can scale, and then on geoengineering, for some people, that's jus beyond the pale. Can't go there, but the the Foundation continues to support that those conversations, right?

Yeah, I think it's so. Yes, our theory of change relies on the fact that climate is changing fast, and the reality we kind of thought of 10 years ago has evolved. Emissions keep increasing. We just got the latest numbers now, impacts are increasing really quickly. So we also have to start being a bit pragmatic about what can happen and what needs to happen. Carbon removal 20 years ago was probably not thought of as something necessary. Now this is seen as necessary. We can discuss how much, nobody really knows, and it depends on what scenario you take and so on. But I think people kind of realize that you need it. But you start from zero, so you need to start scaling that up. And what does that mean? What does that mean to have actually permanent removals, which are also quality. So, yeah, there are a lot of questions there. And our approach is to provide the basis. Then let's allow for those innovations to actually happen. And a lot of those things are actually not really high tech. I mean, enhanced rock weathering is about putting some...

Sorry I missed that, enhanced?

Yeah you can't say that as a French person [laughing]. Enhanced rock weathering.

Enhanced rock weathering, yeah sorry.

Or using oceans, in some cases, not necessarily high tech, but there's still a lot of science to try and understand which we push, which is basically do we understand the carbon cycle? How long does something trap carbon for, and can we actually claim that this is compensating fossil fuel emissions. There are a lot of things happening there, but also there are two other topics you have to consider now. One is adaptation, which is still something that many people don't want to talk about, but climate impacts are there. A lot of people are suffering from climate migration. Migration becomes a topic, so you need to tackle that. And we think philanthropy has a role to play there. And the other one is, yeah,geoengineering is a topic which becomes more and more popular in the media, although there's still not much money going into it. And our approach is ‘well, if it is going to become more popular, and people are going to look at it, because it might sound like a silver bullet, although it's not. What can philanthropy do to actually make sure that this is done and that we are crowding money?’ So our approach was, we don't have an opinion on deployment because we think we can't have it now, the science is not there. So what do we need to actually take a decision? We need to improve the science. We need to also start thinking about governance. How will it actually work if you decide to do those kinds of things? So we decided to fund the research, fund the governance work, and mainly trying to go there early to convince governments that this is their role. At the end of the day, this is something which should be publicly funded. Philanthropy is there to help catalyze, but it should not be relied on in the long term. So it's the question of making sure governments at some point realize that this is important, and in their interest to do it, so that the money goes there, and we can go somewhere else. But that is difficult, because as soon as you start touching those topics, people think, 'well, you are a tech bro. You just want to inject particles in the atmosphere to solve climate change.' Which is by far not the point. So you have to remind people that there's nuance in there. And the worst thing you can probably do is actually let things happen without even trying. Because if in 10 years from now, things are getting really bad and people start thinking about those things 'oh, let's do them.' Well, we don't have any other evidence. We need to actually say: is that a good thing? Is everybody going to benefit from that? How do we actually do that? Does it have any side effects? And you can only do that if you start from scratch and from the science and thinking about how it would be implemented.

Yeah, well, we did a really interesting episode with Kelly Wanser of Silver Lining, where we went into some of this. And another episode we did was with Anand Gopal from Energy Innovation. And you know, those two episodes combined really convinced me that this is a topic that's going to require a lot more attention. And yet, there is almost a consensus amongst some parts of the movement that this should be off the table, and we shouldn't even do the scientific research. And the absorption capacity, or the capacity in the movement for people to take a slightly different view, I don't know if you found this too, but when we were looking to grant into this space, there weren't that many people, right? It's a very under-resourced area. There's academics working on it, but it's that task of philanthropy to sort of take what's in academia and then try and translate it either into the public or into policy and help achieve that. So how have you found granting into this space?

So the first one I'd like to come back on, if you don't mind, is there's always an interesting debate as soon as you talk about carbon removal and geoengineering, about if you start thinking about this, you won't be doing the emission reduction, which is interesting, because if you really think of it, you cannot compensate 40 gigatons of CO2 being emitted per year. So you have to actually reduce emission as much as possible. And it is always going to be more expensive to try and take carbon out of the air rather than reduce emissions. So this kind of moral argument, or more or less arguments, saying, 'if you do that, then you have a social license to operate for fossil fuels, and you will never do anything.' It actually doesn't work. Nobody is going to pay so much to actually keep burning fossil fuels. So there's an interesting thing about trying to bring that to a debate and say, nobody's actually proposing to compensate for all emissions by removal. It's just impossible. The volume is so big, there's just no way of doing it. Same thing with solar geoengineering. You can actually show that if you do that in a context where emissions keep rising, it is actually going to make your task more difficult. So you're dealing with a climate which is changing, and you're trying to change it back. It's not the situation you want to be in, and you're not doing anything about things like ocean acidification. So you're only dealing with one problem. So I think it's always interesting to try and remind people that this is not one or the other. You probably need to do everything. Solar geoengineering we'll see. They are not mutually exclusive. Same thing with adaptation. It's not because you start doing adaptation, that actually you're not doing emission reduction, because, again, climate is changing. If you don't do anything about emissions, adaptation is going to be more and more difficult. So it's an interesting thing that keeps coming back.

What's interesting there is, what's the role of philanthropy versus other sources of capital, right? Because, as you said, governments have got a kind of natural tendency to respond to near-term risks. So in terms of adaptation, if you've got the wherewithal, and not all countries do, but if you can try to mitigate or change responses to impacts today, politicians tend to take notice, but it's these long-range risks that just build up over time that they're really not very geared to delivering. So I guess the role of civil society and philanthropy is to just try to keep balancing back to the 'Let's prevent this,' rather than try and fix it after it's happened.

Yeah. So I think philanthropic capital is interesting because it doesn't expect any financial return. So it's extremely patient. You can take a lot of risk. You do expect some impact at the end of the day. So you're only looking at that, but you can take things which are more risky, or longer term than anybody else would do at the same time. It's a very small amount of money, if you think of it. I think in climate this year, we are about $10-12 billion of climate philanthropy, which is nothing compared to what is needed. So it's a drop in the ocean. But what you can do is try to be catalytic. So try to plug a gap when there is one. Empower civil society, make sure that advocacy is actually funded, to try and make sure that the actors which in the end need to act, either private finance or governments, are actually doing it. But as you said, you need to sometimes plug this gap and ensure that governments also, in some countries, get the technical support they need. So all those things that are not going to happen naturally or will take a long time, are areas where philanthropy can actually navigate, but it's always going to be a very kind of surgical instrument. The way I like to describe it is some grease in the wheel, so you're trying to make things happen a bit quicker. We've reduced some friction, but at the end of it, you're only going to be a small actor. But it's extremely important to make sure that civil society has something to say, and then you empower it. There are many countries where it's not the case, and then you create the conditions for dialogue. Also sometimes it's just as simple as that, making sure people are put into a room and can discuss those things and you do a plan together. So it's trying to see where there are some gaps, where nobody else is going to step in, at least in the short term, trying to get there and act as quickly as possible, and hopefully unlock much more later on.

I interrupted you when you were about to describe the granting scene, because the other thing is finding new actors who are prepared to take a slightly different view. Because, I mean, the climate movement really emerged out of the environment movement, right? It was the big green logos who kind of raised the alarm. And then, over time, people have been realizing this isn't actually an environmental issue at all. It's a complete, societal wide issue. It's an economic issue. And it's actually, you know, arguably, now we're entering into the space where there's a lot of financial opportunity involved. So the actors who need to engage with this have changed, I think, since the early days. But how have you found the deployment of philanthropic capital? It requires there to be someone to accept it, like someone on the other end, to be ready to do the work. And we always found that was an interesting challenge, incubation of new approaches.

Yes. So I think there are two sides to that one. In some areas, you could pour much more money and the field could absorb it, but at some point it's a question of whether philanthropic capital is the right source of money, which was going to something. And in many more niche areas, at the beginning, yes, it is a question of finding the right partners, encouraging them to create initiatives, but also helping them, because it's hard to actually start an NGO, and does require a lot of support and sometimes being very mindful about how much you fund something. Funding too much at the beginning doesn't really help. Startups have the same issue. It's not because we get a giant check that it's easier to get through. And it's this question of, how do you create ecosystems, and how philanthropy can help kind of accelerate the creation of those ecosystems, making sure people have some chance to get platformed and so on, while not flooding something and thinking the solution is there. So there's this kind of balance between creating initiatives, and you also probably want to — not limit — but you have to kind of think really carefully about how many initiatives should actually be working on something, because in some cases, you don't want people to necessarily compete or kind of backlash at each other. So I think there's something about the kind of dynamics which you are creating once you're a big funder, I think there's a question of being responsible also, which is, whenever you create initiatives and you support them financially, they become dependent on the source of funding. So how sustainable is that in the long term? How long should initiatives actually go, depending on what their targets are? So it's kind of an interesting dynamic, which I'm still learning, to be totally honest, but there is a lot there. The great thing about it is you meet brilliant people who have great ideas and who are actually really trying to do something in the world, and that part is really inspiring.

I guess there is always this tension between backing something bigger in the hope that that will get you some kind of scale, or backing a number of things, being more Darwinian about it, as you would if you were doing a venture investment, you know, you would back several to see which one emerges as the winning one. But, yeah, these are all the fun things you get to spend your time thinking about now. And I'm guessing you take quite a scientific approach to it, right? So how are you applying your science brain to the challenge of philanthropy?

It's interesting because there is a part which is a science, and a part which is an art. What I mean by that is, if I look at our theory of change for foundation, we work on emission reductions. We know it's extremely important. We also think carbon removal needs support. And then we want to work on adaptation. And you can spend decades trying to find what is the right metric to decide how much money you put in one side or another one, but you won't get anywhere because you're comparing apples and oranges. So that part is kind of an art. Depends on how big of a leverage do you think you can have? How catalytic are you? What is the absorption capacity for a given field? How many other funders can you bring with you? So that part is the art part. On the science part, it's more, what is the theory of change that people have? What are the assumptions they are basing it on? Which, to me, is the most important one. What are the assumptions? Are they spelled out clearly? Can we test them, and can we learn from them? As in a startup, basically, you try something, you might have to pivot. That's fine, as long as you understand what has gone wrong and you can adapt from it. And when you're looking at the scale of a possible impact, knowing that it's hard to really know what is attributable to you, right? I mean, you know what you have contributed to at the end of the day, because you are never the only funder of something, so you kind of see what is going on in the world. But many other things are happening at the same time. Attributing anything to your dollars is hard, and we have actually backed down from doing that. We think it's not necessarily the best use of our time, because it will be at some point become a bit artificial, or also perhaps not necessarily align with our philosophy. So it's kind of trying those things, but questioning people all along in a way of helping them, not trying to be a judge or trying to think we know better than anybody, but just making sure that we go to the bottom of the theory of change and the assumptions, and once we are convinced, we have been backing people who need it.

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So Greg, you and I were both at a very interesting conference recently on the west coast of California, where we were with a group of investors. We were having a conversation about the valley of death. How does the financial sector help companies through that, and, first of a kind costs. How are you thinking about this area as a philanthropic organization?

So the interesting thing about climate tech is, in many cases, you try to solve a problem, right? You're not developing a new gizmo, or something which is going to try and capture a new market. You're trying to replace something which is working, and in many cases, has been developed over decades. So in many cases, you will come with something which is more expensive at the beginning and sometimes even less efficient than what you're trying to replace. So by nature, the market itself will never take it by itself. So it's something about how you shape a market to try and compensate for that and find people who are willing to pay the green premium, which might be also just pricing carbon. And what we see now is that many projects are coming to the stage where they need their first big factory. So the first of a kind is when you are getting into a commercial stage. You have been going through a lot of innovation stages, cycles, and when you need to demonstrate that you can produce something at scale. But this is quite an interesting challenge for climate tech, because, again, you're coming with something which the market doesn't take by itself. You need a lot of money. In many cases, you're talking hundreds of millions to actually build your first factory. So there is this kind of place where people think it's still too risky, or many people still think it's too risky, it's getting too big for venture capitalists to invest into that. So you're kind of in a gap where you're not fitting exactly in the investment ecosystem. Now, what can we do about that? There are many things. First of all, philanthropy is way too small to solve that issue. We have many projects coming up the pipeline. If you're always talking about hundreds of millions, I mean, you're going to be dwarfed by that. But the question is, how do you inspire more trust or de risk some of those projects? To first show that you can actually do industrial projects, which are changing or kind of trying to replace some big projects we have now. Think about iron or producing steel. How do you develop new technologies? There are many startups trying to do that. So the way we think of it is, okay, 'what can philanthropy do?' Well, you're trying to build a big factory. So you're probably going to have to engage local communities, make sure that people actually are happy to have such a big factory on it. So philanthropy can help in shaping that and making sure you engage with the communities. You can also do a lot of advocacy, making sure those projects are actually supported. They get visibility, they perhaps sometimes even get some tax rebates at the beginning to be installed. That they get access to the grid because you need a lot of power in many cases. So you can do a lot of advocacy at different levels. You can also try and find different ways to make sure that demand is materializing, so market shaping. So all those things that the entrepreneurs themselves could do, investors are perhaps less likely to do. But philanthropy could have a role in doing something there and facilitating. So we don't know exactly how it looks yet, but we think there is a role to be played in greasing the wheels and making sure you show that some of those projects are not as risky as people thought. Because if you just make sure that projects are not delayed while you're decreasing the perceived risk, and if you do that, and if you see those big projects appearing, it does instill more trust. If there is more trust, more capital is coming at a lower rate, and then you're into a virtuous cycle if everything goes well.

And you're specifically there thinking about, sort of almost like a concierge service at a plant level, as a test of how this works. Because I can imagine capital would be used up very quickly, and you couldn't do every single one. So is it trying to find lessons you can draw out and make more general provisions for first of a kind?

Yeah, so concierge is one possibility, which is basically centralizing the needs. And our thinking currently, is if you focus, if you can fundraise a bit and gather a bit of philanthropic capital into 10 projects or 15, sure that it works, then there is probably a model to be discussed about what else should be funding that. Perhaps investors actually can put a little bit of their fees into such a structure, because it helps them a lot and increases their return. So this is the perfect example for us. Philanthropy, can try something for a few years, for a few projects, show whether it works or not, adapt from it, and at some point, find an economic model where it can actually be sustained on itself and not rely on philanthropy. Because, as you said, you'll always be limited in the number of projects you can assess. But again, if you go after 15 projects, you can show that there is progress on six, seven of them. That's probably worth having a lot of discussions about how this model can work on a larger scale.

Yeah. I mean, it's an interesting question, isn't it, and one of the things that might emerge, I'm just conscious about when we say, for example, if we're going to be putting new nuclear facilities into landscapes. It's actually probably sensible to put them into pre-developed brownfield sites, maybe, than try and take on a green field site. And it might be interesting to do a test of both right. See which one moves fastest. What could be the grease in the wheels that helps, that philanthropy could support. And then extract that as almost like an axiom for people going forward. I think the other thing that often emerges is with new things, insurance becomes very important. Like, the insurance industry is very good at analyzing risk, but it tends to look backwards. And so if it's a first of a kind, it really struggles. And then from insurance, then you've got the cost of capital flowing from that. So this kind of change to dealing with climate change is going to affect everything. It doesn't mean everything has to be completely rebuilt, but the service industry is going to have to change as well, right?

Yeah, exactly. And you have to think about the economics and make sure people understand things will get cheaper with time. So you have to take the blunt at the beginning and then increase your scale and the number of those projects that things are actually flowing to. So you cannot only look at the first project and make up your mind. You have to look down the chain. And it's going to require some patience, and also just understanding that the reason things are going to be more expensive at the beginning is probably because you don't price the alternative enough. So it's kind of a balance there, and when there is a question of trade, because you can probably implement, some of us implement some of those projects in areas where energy is cheaper, which is then opening a whole lot of discussions.

And in all of this, the assumption is, and I think this is probably correct, given the current political climate, that making new things happen faster, like embracing new ideas, making new things happen more swiftly and more economically, is going to be easier than making the things we currently do more expensive. I'm phrasing that as a question, I guess, but I can see how, at the moment, we've spent an awful lot of time trying to sort of price out fossil fuels in various ways. And I get the feeling we're hitting some headwinds, right, on that approach?

Yeah, I think there's a lot to be said about showing that you have an alternative. So I mean, electric mobility is the one where now there's an alternative. It is credible. It is now eating into other sectors. Because now trucks are also probably going to be electric because you have something. Now for steel people, yeah, talk about it. But we don't yet have a steel plant producing green iron or green steel. Cement is the same, so it's kind of a question of showing that there is an alternative. Once there is one, then hopefully it's easier for people to switch, although it's not going to be easy in any case. You have to face fossil fuels and phase them out as quickly as possible, but making sure there is always an alternative in front of it is probably interesting. The other thing which is interesting is we have to accept failure. I mean, this is just going to be like that. Whenever you try something new, it's never going to work on the first try. Now, of course, you have to limit the number of failures, because otherwise it's another issue. But that means you have to try different things in parallel. You have to accept that. You have to learn and perfect things. I mean, the battery industry in Europe is a good example. It takes time to get a battery factory up and running and running really efficiently. So you have to just be patient enough to actually go there.

Yeah. And the reason we're emphasizing factories here more so than upstream mining, or minerals, or any other parts of the supply chain, is because as you shift to an electrified economy, more and more your energy is being manufactured, rather than a constant throughput of fossil fuels, which have to be dug out and shipped and burned continually. You're putting in infrastructure, really, aren't you, and that infrastructure could be a factory, it could be cables, it could be grid connections, but we're moving into a sort of era of manufactured energy, not fuel-based energy. So these site-based battles become much more interesting, I guess.

And this is one of the paradoxical things about the energy transition. You need to build a lot, you need to rebuild an infrastructure and energy system, and you have to accept that. This means putting pylons, because you need electric transmission, you need new plants, you need to have wind turbines close to your place, probably. So this is something that yeah, we can't shy away from that. There's something to be rebuilt. And you typically will re-onshore your energy system, which used to be offshore, because you buy fossil fuels, oil and so on, which are produced somewhere else. Now your energy is going to be much more electric, and electricity has to be produced more locally. So unless we start tackling those things, you will always get a lot of oppositions, because probably people don't realize that all those externalities were happening way worse, but somewhere where you don't see them, and

it's interesting as well. So I wanted to move on to your TED talk, because I think around the time this comes out, or maybe a bit later, your TED talk will be published. Do you want to, just for our listeners, tell us what your TED is about, and what you said?

Yeah. So I wanted to talk about what we call the mid transition or the messy middle.

The messy middle, yeah.

Which is the fact that when we look at transition graphs, they're always nice S curves and so on. The reality is going to be more messy. And I wanted to try and find a way to represent that. The reason I think it's important is because we have to accept trade offs and compromises all along the way. Sometimes we will have to do one step back to do two steps forward. And unless you start grappling with that, it's never going to be accepted. So I thought a lot about, how do you represent that? And I happen to be a long distance runner. So I do trail running. I run in the mountains for hundreds of kilometers and for long times. And actually, I figured this was an interesting analogy, because trail running is a very long distance thing. Takes 20-30 hours to get to your objective, and you just have to have a plan, which is step by step, and accept that sometimes you feel bad and you slow down, and then you accelerate on the next one. And then you go up and down and up and down, and you face a lot of difficult conditions. So I try to make the parallel with that, to try and make sure we could discuss those traders. I mean, nobody wants to actually take a step back on anything. That's fine. That's fair, but in many cases, you don't have a choice, so it's trying to kind of grapple with the complexity of a transition, which I think we are not talking about enough. And I'm not trying to say this is too hard and we will never get anywhere. What I'm trying to say is we need to have a plan, and this plan needs to evolve regularly. We need to look at how much progress are we making? What if we are facing way too much opposition on something? How do we deal with that? Are we just forcing our way through? We have seen in France that that's not the way to go, so probably trying to step back and do something else. And, yeah, this is exactly what you do in long-distance training. You adapt all the time but you keep your eyes on the prize. You always keep your eyes on 'this is where I want to go. This is the finish line, trying to go there as quickly as possible. And I'm trying to do it by taking all those compromises into account.'

So you were kind enough to let me have a little sneak preview of it. I thought it was a lovely analogy. One thing it struck me, though, as I was listening to that description, was, it is a little bit more difficult than just you and your backpack and your shoes running off into the landscape, because there are active people who are going to stand to lose from this transition. And a bit like there's a popular cartoon called the Wacky Races, where your plucky contestants are trying to get to the finish line, but there's all sorts of people around trying to put deviation signs, up come this way and take you down false roots or throwing tacks in front of you to puncture your tires. And that feels to me like the analogy that we're in at the moment. We're in the middle of the Wacky Races. And, you know, there are diversion signs being put up. There's active disinformation. And I do think, as a movement, we've got lots of great things in our favor, but that forcing factor of narrative chaos, you know, active disruption of the transition, I can't see that going away for a while yet. I think it will subside as the alternatives become more obvious. But we're probably at the heat of the debate right now, aren't we?

Yes, and I think it's one of the things I tried to talk about in the talk, which is, there are a lot of paradoxical situations. For example, if you look at mining, you will need to do mining which has a lot of impact locally, but this is to try and solve something globally. So how do you deal with those things? And then, as you said, there's the question of losers and winners, which is why I'm always getting a little bit uncomfortable with the discussion that everybody will win from the transition globally. Perhaps on average, perhaps everybody will win. But we know that in many cases, industries will close in some areas and then you will reopen them in other areas, and people cannot necessarily move. So yes, I think this is the hard part, which we are starting to see, because people start to see their jobs disappearing. And the US is a good example, right? The coal power plants are not where you are going to install clean energy projects. So how do you deal with that? And I'm not saying I have the answer, but I think you have to really be mindful of that and really think of it. And especially policy makers should really think about, how do we actually deal with that? I come from the north of France where industry has kind of disappeared in a decade or so, and it has been really hard for the region to just recover. I mean, England has a lot of examples like that, too.

What was the industry that was lost there, Greg, which one?

So there was a coal industry, first, and then the textile industry was basically all moved to China to do synthetic textiles. And now the region is kind of bouncing back with really high-tech products and so on. But it took like 20 years, and for 20 years, people suffered a lot. And so what I'm trying to say is we have seen that in action before, that some industries can disappear, not one day from another, but within 10 years, because of competition, because of different things. So we know what it is to actually lose that. So we should really start thinking about how we deal with that. Because if we don't, then you get more and more opposition. And in a way, it's kind of, yeah. I mean, I can understand why people will not... You can tell them that this is for the global good, but at the end of the day, their jobs are disappearing.

But this is where, as you said, it becomes more of an art than a science, right? Because what might be economically or technically the most logical thing to do, which might be we're just going to overbuild renewables in all parts of the world which are sunny, and then put massive cables in. And that's the most logical, perhaps, outcome. But in reality, it might not look like that. And there are some technologies where you're probably going to be wanting to develop them because of their social return. So if it's an old coal mining area, maybe geothermal or heat storage, or anything that involves putting things back into the community. It won't be the full replacement, but actually at this point in the transition, the number of people employed in the fossil industry is probably at an all time low just because of mechanization and centralization. So if we can crack the sort of social dimensions and the politics, it would be an insurance policy to allow the more logical economic system to also flourish, right?

And as you said, in this kind of Wacky Race, we know that some automakers have a hard time catching up, because they started from later. They were extremely good at optimizing ICE engines, and then suddenly they want to make electric cars. So it's really hard also to move against the target, which is moving really fast. I mean, think about batteries. It's going to be really hard to catch up with China on some technologies, because they are 10-15 years ahead, and they are doing a lot of research and development, so it's kind of a moving target, and you're trying to run after something which is running really quickly.

No doubt. And that is where, you know, you just just saw some numbers coming out of China now, or global EV sales... there are Chinese manufacturers who weren't even producing cars last year, who are now producing more than BMW in one year. I mean, the scale of it is going to catch a lot of people out in terms of how fast that Asian-focused new source of car manufacturing is coming. And it makes sense, right? If you don't have any oil and your balance of trade is negative because you're importing a lot of oil for transport, if you can electrify, you will, right? So all of those Southeast Asian and China markets, it's in their interest to electrify, and obviously, then they'll use domestic coal for some of that. So that poses challenges, but you mentioned at the very start, the primary energy fallacy, and I think that's something that as we really get to grips with the fact that electrification saves you overall, you can still have half of your electricity coming from coal, and it will still make sense to electrify a car, because the electric car is so much more efficient than the combustion alternative. And once we get our head around that, I think that the signposts that are trying to take us off in different directions cease to be really that important, because it will be so clear the path we should be on.

Something very interesting is how high-tech we are in some regimes. But if you think about it, our energy system is at 80% based on combustion. So we just burn stuff, the same thing we have been doing for 10,000 years. Of course, we are getting much better. All those things are getting efficient, but at the end of the day, we are still burning stuff. So electrification is such a huge opportunity, and I don't think we discuss that enough, showing how this is the right way to go. This is way more efficient. Our energy system is by far not efficient. Almost two thirds of the energy gets lost from primary energy to useful energy, which means we are burning a lot of things for nothing, which is kind of mind blowing, if you think of it.

Yeah, totally mind blowing. Listen, we could probably carry on this conversation for another hour, and I would love to do that over a drink maybe sometime. But for now, I'm just going to wrap up and say thank you Greg for joining us. I know it's your evening in the UK, at the moment. I will let our listeners and viewers know that Quadrature is now a supporter of the Cleaning Up podcast, and you're a member of our Leadership Circle. I don't even know if you want to say why? What inspired you to become a supporter?

I think my main reason is that we believe strongly in creating space for discussing with as many people as we can, so trying to engage all parts of the puzzle. We know everybody has a role to play. It's going to be difficult for some areas. I mean, we talked about private companies, in some cases, transforming your company to net-zero, whatever it means, is going to be very difficult. So I think what we are very interested in is getting those people on air, trying to make sure that they can be heard, and we can not greenwash, but can be quizzed on what they are trying to do, and making sure that you are having as wide an audience as possible, but also as wide a range of speakers, so that people understand this complexity, and the fact that there are some people trying to do something. Some people are bad actors. Some people are really good actors. So trying to create that and making sure that people understand those complexities is at the core of what we are trying to do.

Well, to the extent that we're able to help you do that, then we're very pleased to be working with you. Thanks again, Greg. We will look forward to seeing you in person soon.

Thank you very much for your invitation.

So that was Greg de Temmerman, deputy CEO of the Quadrature Climate Foundation. The capital requirements to mitigate, respond and adapt to climate change are vast, but philanthropy can play a pivotal role alongside public and private finance, especially if it finds highly leveraged points of intervention. And, as Greg points out, it's going to be essential for all sorts of capital to revisit assumptions, adapt strategies, and accept that some failures are unavoidable. We can't, however, afford to take too many detours down technological cul-de-sacs that the purveyors of today's fossil fuels might wish us to. Some solutions like electrification are so clearly winners, we should be running in that direction as fast as we can. As usual, we'll put links in the show notes, including to episodes 177 with Kelly Wanser and Episode 168 with Anand Gopal, where we explore geoengineering and carbon removals. My thanks as always to Oscar Boyd, our producer, Jamie Oliver, our editor and the rest of the Cleaning Up team, and the Leadership Circle who make this podcast possible. Join us next week for another episode of Cleaning Up.

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