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Agriculture The Climate Corporation website screenshot.

Published on July 19th, 2012 | by Guest Contributor

18

Climate Change Adaptation Tech vs Climate Change Abatement Tech

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July 19th, 2012 by  

 
This is a very interesting post on adaptation tech and funding versus abatement tech/solutions (i.e. some stuff we typically don’t write about vs. the kind of stuff we typically do write about). The post has a bit of dry, fun humor in it, as well. Thanks to Tim for passing it along. Check it out:

by Tim Whitley

The Climate Corporation website screenshot.

One startup that recently caught my eye is The Climate Corporation, which offers weather-related crop insurance, targeted to U.S. farmers.  Crop insurance, and insurance in general, are good things and neither is anything new.

But one thing even the untrained eye will immediately notice is the company’s URL, www.climate.com. Over here at COTAP.org, we’ve had countless bottom-feeding cyber-squatters out there trying to sell us “COTAP.info” and the like.  Climate.com was likely quite valuable, was probably registered by such a squatter patiently waiting for a payout, and sure enough somebody came along with a lot of money and paid them for it.  That’s the first tip-off that someone sophisticated and with some long-term plans might be involved with TCC.

Then it dawns on you that the pretty and approachable homepage is just proper marketing engineered to fit TCC’s target, the American farmer, and that innocent little startup is the one thing this is not.  Formerly known as “Weatherbill,” The Climate Corporation is headquartered in the heart of San Francisco’s South of Market district (SOMA), which is pretty much the heart of Silicon Valley.   Per LinkedIn, they’re rounding the corner on 100 employees, many of them ex-Googlers.  And there’s the de rigueur addition of former public official Senator Dorgan to its board, to keep up with the likes of C3 Energy’s Condoleezza Rice, lest all other things appear equal as the tech giants shop for their next acquisition.

TCC’s mission is to “help the world’s people and businesses adapt to climate change.”  While making lots of money off of weather insurance.  Per their CrunchBase profile, they’ve gotten $58.9 million in funding back in February 2011, most notably from Khosla Ventures and Google Ventures.  VC’s expect big returns and over fairly short time spans.  That means they expect this company to generate lots of cash.  Lots of cash from an insurance entity means lots of premiums, so in other words that means lots and lots of farmers rushing to TCC in search of weather-related crop insurance.

It’s one thing to hear James Hansen or Al Gore talk about what’s in store.  It’s quite another to watch the most sophisticated VC’s in the world place a $60 million bet on it.  TCC and their investors understandably view climate change adaptation as a very, very large business opportunity and they’re simply going after it.  And TCC is just one example of many such bets.

TCC’s backers are doing their best to spin themselves as some sort of innovative play in “Big Data.” That’s not untrue, but make no mistake, what’s also happening here is a new category of startup that should be referred to as “Adaptation Tech,” a mutation of “Clean Tech” but where climate change and its consequences are a forgone conclusion and the next big opportunity, to some, is solutions which treat the symptoms but not the root cause.  There’s money to be made off of climate change in this way, in the same way there’s money to be made off of borrowers in payday lending schemes.  They might as well be a construction company specializing in sea walls.  It’s definitely not illegal, but it’s not right, either.  If TCC and their backers aren’t doing it, others eventually will.

Carbon abatement startups like C3 Energy, Silver Spring Networks, and of course COTAP, are much more my style.  I’d much prefer that instead of untold millions being pumped into “Adaptation Tech,” that our society point that money towards abatement in general and, wherever possible, into the pockets of the poorest people in the world.  They’re already proving themselves by doing a great job of getting rid of the surplus CO2 that’s the root cause of this problem, as opposed to some of the already-rich whose mission is to “help the world” adapt to the problem’s symptoms. Through COTAP, you can be their VC.

Tim Whitley is founder and CEO of Carbon Offsets To Alleviate Poverty (www.COTAP.org), a 501(c)3 nonprofit startup and crowdfunding platform based in Oakland, CA.  COTAP empowers individuals to address both climate change and global poverty by connecting their unavoidable carbon footprints with accredited forestry projects in least developed countries which create wages for the world’s poorest people.  COTAP’s initial project portfolio in Mozambique, Uganda, and Nicaragua is poised to generate over $890K for poor rural communities, an amount COTAP seeks to scale to $30M annually by 2015.

You can address your CO2 emissions while improving livelihoods for the world’s poorest people at COTAP.org/donate.

And, if you’re interested, here are more ways you can get connected with COTAP:
COTAP e-newsletter signup
COTAP’s Facebook page
COTAP on Twitter

 

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  • Derek Bolton

    If the VCs expect to make a lot of money out of climate insurance, doesn’t that mean they think the farmers are more worried about the weather impacts than they need to be?

    • Bob_Wallace

      Insurance companies are like casino operators.  Take collect the bets and pay off the winners (losers, in the case of insurance).

      Each hand played, the house rakes off a percentage.

    • http://www.COTAP.org/ Tim Whitley

      That’s an excellent point and an excellent question, enough for a whole ‘nother blog post (or more) from someone who knows the inner workings of crop insurance. I should have framed it more like “VC’s expect lots of profits (cash from premiums minus loss-related payouts) in a way that out-competes current crop insurance offerings” etc.  I wonder how the recent drought and crop failures have impacted their outlook.

  • Ross

    I think this mainstreaming of AGW mitigation efforts into the commercial sector is a positive.

    The fossil fuel shills, anthropogenic global warning deniers and fellow travelers like Bjørn Lomborg will of course be out in force saying we should put the cart before the horse and concentrate on mitigation efforts.

    But the more serious commercial analysis is likely to highlight the 
    long term cost advantages of controlling green house gas emissions above adapting to them. 

    • Tim Whitley

      Thanks Ross.  One of the things that troubles me is that mankind’s ability to successfully adapt to global warming seems like a reasonable assumption, it’s an untested one.  I’ve discussed this a little on the COTAP blog in a piece called “The Emissions and The Damage Done”  http://cotap.org/2012/06/emissions-and-the-damage-done/.

      • Ross

        I was a bit loose with my use of terms above. Pure adaptation looks like a road to disaster as it doesn’t prevent AGW.

        Mitigation efforts to cool the planet or remove CO2 by seeding the oceans carry risks of failure and unintended negative consequences.

        Abatement projects don’t have these problems.

        Crop and Climate Insurance is definitely an interesting area as it could be important to the goal of consolidating support for a move to sustainable energy and food generation. 

        The cost of the insurance premiums and adaptation measures which carry the risk of not working would I hope increase support for renewable energy and abatement.

  • OJHB-E

    Tim,

    I really can’t understand why you’re 1) surprised by this and 2) not over the moon that finally someone is providing farmers with relevant insurance to deal with climate change related crop losses.

    As I’m sure you know, the UNFCCC process has for a long time had TWO aspects of negotiations – mitigation AND adaptation (along with others, but these were key topics). Why the hating on the fact that the business community is finally getting into the act and providing insurance to where its needed most? Its far better than all the capital being injected into dubious and toxic derivatives.

    I’m all for optimism that we can slow climate change, but its stupid to bury your head in the sand and think that we’re going to get all the nations of the world to agree all of a sudden to binding and drastic mitigation efforts. They’ve been doing that since Rio 1.0 and I don’t need to tell you that they’re making inadequate progress.

    • Bob_Wallace

      There is no need for all the nations of the world to agree to binding and drastic mitigation efforts.

      What is needed is for the worst per capita offenders such as the United States and Canada to get busy on their solutions.

      Many of the countries of Europe are already working hard to reduce theirs.  China is working harder than we are, and their per capita output is dwarfed by ours.

      Blaming our failure to clean up our act on the lack of every other country to sign a piece of paper is a nasty cop out.

      • OJHB-E

        Hi Bob,

        I’m certainly not blaming our failure to clean up our act on the fact that there isn’t a global framework for action. 

        I’m just outlining that its ignorant to think that with the rise of the rest of the world that mitigation alone is going to save us. Because its not. 

        I was railing on Tim because the reality of the situation is that mitigation is a very very hard thing to do, and given political progress on this issue, its not going to happen fast enough. Knowing that, we’re stuck with having to adapt. Its therefore natural, even ‘good’, that companies are popping up wanting to provide services in this space.

        That is all I wanted to point out.

        • Bob_Wallace

          I think you’re assuming that the ‘rest of the world’ is doing nothing.

          Much of the rest of the world is working on climate change, a good portion of the world is working harder than the US and Canada – the two largest offenders.

          “Knowing that, we’re stuck with having to adapt.”

          Think about what you’re saying here.  You’re saying that we can’t stop climate change and our only option is to adapt.  Adapt to a 12C/54F rise in global temperature?  Adapt to 80 feet higher sea levels?  

          • OJHB-E

            What I’m saying is that I don’t think its politically feasible to halt climate change at the rate that is necessary to avoid all effects. Believe me, as someone who an NGO delegate in Copenhagen, I wish this were different.

            Other countries are, indeed, making progress on this – I agree. But there is a difference between working on it, and reducing emissions. Unfortunately, emissions are currently tied to energy, and energy generation and use are growing in most developing countries. Check out the energy generation plans for most of Africa at the Africa Infrastructure Knowledge Programme to see what I mean. (http://www.infrastructureafrica.org/) There isn’t a single country in there that is saying they have sufficient energy generation. Most of the new capacity is going to be built to exploit resources in these countries – a lot of solar, yes, but moreso coal and (where found) oil/diesel.

            Even with the current buildout of planned projects, we’re on route to a changing climate. I completely agree that the US and Canada need to get on the bandwagon and make it a top priority. But I also know that that’s not going to stop the effects of climate change.

            Thus, I shall re affirm:”Knowing that, we’re (still) stuck with having to adapt.”

          • Bob_Wallace

            Obviously we will not move fast enough to avoid all the effects of climate change.  We are already being hit with global warming weather events.

            We will have to adapt to what is already “in the pipes”.  But we cannot adapt to runaway climate change which is likely to bring 12C/54F increases in temperature and ocean level rises which will cover our coastal cities.

    • http://www.COTAP.org/ Tim Whitley

      Hi OJHB-E.  I’m disappointed, but not surprised by this.  Crop insurance has been around, the point and angle of the article is that it doesn’t sit well with me that VC’s are moving mega millions into adaptation tech when small scale agroforestry that has the reach and ability to empower the poorest people is also being relatively neglected by the commercial carbon markets. 

      But I do agree that abatement and adaptation are both necessary, and within each realm pretty much all hands need to be on deck. 

      • OJHB-E

        Hi Tim,

        Completely agree that there are probably options for VC money that would have a wider, more positive benefit to the world’s poorest. But since when have VC’s invested for social good?

        The reason that they’re not investing in small scale agroforestry is that there isn’t the money, scale or exits available in that sector. Its not only carbon markets that do this though. I can list hundreds of examples where markets don’t engage with the world’s poorest for a range of reasons. 

        I’m just pushing you because as you outline, we need all hands on deck, and there are better ways to make your point than expressing dismay at the success of someone providing climate adaptation resources.  

  • JMin2020

    I have to agree with you. We will have to adapt to Climate Change to live long enough to successfully Abate Climate Change. The downside to this approach is we have to survive the Climate Change Tipping Point cruch. This will be no small feat as very few if any are truely prepared to do so. This is Irony at its’ best I suppose.

  • dygituljunky

    My guess: at this point, we’ll need BOTH adaptation and abatement. Therefore, I’m not as offended by this as you are.

    • http://www.facebook.com/people/Shecky-Vegas/1380703171 Shecky Vegas

      dygituljunky – I agree with you. We need both adaptation and abatement solutions.
      That being the case, I was wondering if you’d be interested in a little “future oceanside” venture I’m establishing in the Sierra Nevada’s? It’s only at the 4,000 seafoot level, but I figure once the Big Tide comes and the San Andreas Fault splits and slips half of California into the sea, we’ll be sitting pretty.
      What’cha think?

      • dygituljunky

        LOL.

        I think that’s a little far out in the future for my investment window. (While we’re seemingly at the tipping point, now, I think it will take a while for the ripple to play out.)

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