Investors searching for the next Tesla or Amazon would do well to focus on the stocks of CDR companies.
With any luck, the visionaries who are building CDR companies will follow in the footsteps of corporate leaders like Elon Musk and Jeff Bezos, taking nascent ideas, changing the world, and along the way producing fabulous stock returns for investors.
CDR is an acronym for “carbon dioxide removal.” Given a clear eyed view about the magnitude of the climate crisis, there are, and continue to be, tremendous opportunities for CDR companies. These are the companies which hold the potential to reverse the excessive carbon dioxide emissions into the Earth’s atmosphere by human activity during the industrial age.
CDR is related to, but not exactly the same as carbon capture and sequestration. The latter mostly pertains to capturing carbon dioxide from human activities so that it does not enter the atmosphere. CDR actually involves removing excessive carbon dioxide which is already in the atmosphere, and storing it in a safe place.
The world needs successful CDR companies. Mainstream climate science literature clearly tells us that the current concentration of carbon dioxide in the Earth’s atmosphere is much too high. The sober truth is that even if the global economy miraculously achieved net zero emissions immediately, the long term climate prospects would remain bleak.
At between 410 and 420 parts per million (ppm), the concentration of carbon in the atmosphere is much too high. Stabilizing carbon ppm in this range is not good enough. In 1988, NASA’s chief climate scientist James Hansen testified in a Congressional hearing that we needed to stabilize around 350 ppm. If he is correct, and I have to say that the accuracy of most of his predictions over the last forty years strongly suggest that he is correct, then we need to get atmospheric carbon ppm down, and relatively soon.
Adversity creates opportunity. This maxim held true during the pandemic, in the case of companies such as Zoom and Amazon. There is every reason to expect that climate adversity will also create great business opportunities.
The Foundation for Climate Restoration (f4cr) is one institution focused on emerging CDR companies that hold the potential of creating breakthrough technologies capable of bringing atmospheric carbon concentration levels down to safer levels. I have found f4cr to be a great resource for identifying nascent CDR companies that have great potential. Another excellent source of information on CDR companies is OpenAir Collective, which offers webinars led by entrepreneurs working on innovative CDR ideas.
Those interested in intriguing CDR ventures would do well to become familiar with Blue Planet Systems, Noya, and Project Vesta. All three serve as examples of incredibly innovative ideas for removing large amounts of carbon dioxide from the atmosphere and storing it safely.
The good news is that there are many other CDR initiatives. Examples include Charm Industrial, Prometheus Fuels, Stripe Climate, ClimeWorks (see photo above), CarbonBuilt, and Brimstone Energy. All are worthy of investigation by investor seeking the next big thing.
At this time, carbon renewal technology is nascent and costly, just as solar panels and wind farms were nascent and costly just a few years ago. There is an expression, attributed to Bill Gates, to the effect that people overestimate how much can be accomplished in a year, but severely underestimate how much can be accomplished in a decade. Just think about what Amazon and Tesla managed to accomplish during their first ten years! There is reason to be hopeful about how CDR technology will successfully develop over the next decade.
There is a world to save and money to be made.
CDR brings hope, which is important, because there is a lot to fear about future climate catastrophe. There are also false fears, such as the fear of moral hazard. The moral hazard issue is that CDR activity will reduce the incentives to lower greenhouse gas emissions, thereby making matters worse.
There might be a grain of truth to the moral hazard argument. However, the sad fact is that the great threat posed by continued green house gas emissions is already well recognized by mainstream climate scientists. The thing is that the human community has been unable to overcome the strong psychological barriers that prevent a sensible response to this threat. It is time for climate skeptics, especially otherwise intelligent people promoting nonsense arguments about the state of climate science being unsettled, to face reality and deal sensibly with the enormous physical threat.
Climate skeptics have been successful at using public policy to inhibit a sensible global response to climate change. We have to hope that the profit motive will prove stronger than the cognitive impairment underlying beliefs in climate skepticism. If the profit motive is sufficiently strong, then we can expect to see major breakthroughs in all kinds of alternative energy technologies, such as the recent announcement about progress on making nuclear fusion economically viable.
Being clear eyed is crucial. Just remember that simply replacing fossil fuels with alternative sources of energy will not avert a future climate catastrophe. The world desperately needs to remove excess greenhouse gases from the atmosphere, in order to get concentrations down to sustainable levels.