The Time Value of Carbon

Why Accelerating Net Zero Matters

The “time value of carbon” is a phrase that started appearing in the climate change literature after being coined by Project Drawdown executive director Jonathan Foley. Here’s a nice explanation of it from Generation:

"The Time Value of Carbon (TVC) is the concept that greenhouse gas emissions cut today are worth more than cuts promised in the future, due to the escalating risks associated with the pace and extent of climate action...The Time Value of Carbon arises from the ruthless maths of climate science. We need to think in terms of carbon stocks, as well as flows, because carbon dioxide (CO2) continues to warm the planet for many decades after it is released.”

A molecule of CO2 emissions saved today is a molecule that won’t be contributing to global warming for the next 300 or so years, unless we somehow find a way to take it out. While the climate tech community is working on creative ways to capture and store carbon, they are far from ready for mass scaling on the time frame we would need to stabilize the climate before a lot of damage has been done.

The linked article uses this to outline the considerations of different investments for investors, and Project Drawdown uses the concept to encourage focusing on the technologies that are “ready to scale” vs. future technologies that won’t start making a difference in time, so that we can accelerate adoption of the proven solutions we have. Here are three more implications of the Time Value of Carbon:

The Value of Individual Action

First, we can’t say that our individual actions make no difference. With 300 years of compounding impact, even the small emissions reductions we can make right now will make a difference.

So for me, it is important to be mindful of how much time I spend on airplanes and how I spend that time. It’s important to adopt a plant-based diet, eat as locally as possible, and reduce food waste as much as possible. It is important to insulate my home, convert to heat pumps and induction cooking, add solar panels the next time I re-roof my house.

Every ton of CO2 that I personally avoid is a ton of CO2 that won’t be hanging around long after my life is over. These choices will be easier when the technologies we need are poised for mass adoption.

The Value of Accelerating the Adoption of Technology

The premise behind the Accelerate Net Zero project is that when we accelerate the development and adoption of a climate solution, we shorten the “time from idea to impact” — and, as a consequence, significantly increase the impact a given solution may have.

Project Drawdown focuses on the technologies that are “ready to scale” and ranks them by their potential impact. As engineers know, it actually takes a lot of design and engineering work to take something from “could scale up” to “can scale up” and then to “has been scaled up”, which means that even these proven technologies benefit from everything we know how to do to accelerate product development.

In fact, the methods I’ve used personally to accelerate coffee brewers and hearing aid components are especially helpful here. Because, at this stage, technology development looks a lot more like physical product development, with the need to focus on answering questions about product / market fit, manufacturability, reliability, performance, and cost, alongside technical feasibility.

For a technology to break out of its first early adopters and move into the mainstream, it has to be embodied in a product that the target customers want to buy — not only because the customers want to be seen as climate champions, but because the products are better products than their high-carbon competitors.

As a source of demand generation, corporate sustainability goals pale in comparison to superior Total Cost of Ownership and performance. For the average mainstream customer, the product attributes that will win them over to EVs will be a combination of lower acquisition cost, lower cost of ownership and greater convenience.

For mass adoption, these technologies need to be packaged into products that have been designed from the ground up for the customer that doesn’t factor climate impact into the equation just because it’s the right thing to do. Instead, they purchase these products because they are better products.

But even then, Project Drawdown’s roadmap recognizes that this won’t be enough, and estimates that some technologies we’ll ultimately need won’t be ready until 2040 or later. What if we could accelerate that technology, too?

The Value of Accelerating the Development of New Technology

It took decades for solar and wind power to achieve cost parity with coal-fired power plants. We don’t have that kind of time for other forms of renewable energy like next-generation nuclear or green hydrogen. We don’t have that kind of time for carbon capture and storage, or sustainable replacements for petrochemicals that go into so many of the products we use on an everyday basis.

Scientists and engineers are still working on these solutions at lab scale, or in technology demonstrations with even the First-of-a-Kind (FOAK) commercial pilots years in the future, if they follow the typical development timeline.

What if we can accelerate the development of those technologies, to shorten the time-to-impact we need to reach Net Zero faster?

We need to use everything we know about how to accelerate.

Here are the top three things my clients do to accelerate their development:

First, understand the reasons why technology development takes so long, what a preventable “dumb failure” looks like, and how to prevent one from derailing your project.

Over the coming weeks and months, I’ll share what we’ve learned about this, and why our clients do so much better than average once we’ve eliminated the root causes behind these “dumb failures.”

Second, understand your own major areas of uncertainty and risk.

We call these “NUDs” — what’s New, Unique or inherently Difficult. NUDs look different inside a research lab or a technology-driven startup. These are the areas that are the most likely to lead to “dumb failures” that cause project delays, cost overruns, and disappointing results.

Third, make plans to mitigate the risk around these NUDs by pulling learning forward, and giving your team as much time as possible to make these decisions without affecting your overall high-level timeline.

When you do all three of these things, you’re poised to accelerate the time from idea to impact, so that your technology can help your customers lower their cost-of-carbon faster.