THESIS: IT’S WORTH FIXING THE PLANET
Where some see a 50 billion tonnes problem, we see a multi-trillion dollar opportunity.
Our global annual emissions stand at about 50 billion tonnes of greenhouse gases. Most of them — roughly 70% — can be attributed to the energy our society consumes in the form of electricity, fuel and heat. Another 20% is emitted in the process of making food and the way we use land, forests and oceans. The rest is almost equally divided between industrial processes — producing cement, steel, and chemicals — and the waste we dump.
Source: Our World in Data
Historically our economic growth has been linked to carbon consumption. This growth has led us to planetary boundaries. To get to net zero by 2050, we will need to reduce the carbon footprint of all these sectors. This means pretty much reinventing our entire economy. Green growth is the only way forward. In order to continue to grow, we need to find ways to uncouple our growth from carbon consumption.
And that’s not all! We also have to figure out how to undo decades of pollution. At least a trillion tonnes of CO2 (that’s 1000 Gt) will need to be removed from the air over the next few decades.
AVOIDING EMISSIONS IS SIMPLY GREAT FOR BUSINESS.
While many low-carbon technologies are already on the market today, like solar panels, wind farms and electric vehicles, they are vastly insufficient for the scale of the problem. We still need bold innovations from visionary founders to invent, develop, and scale new affordable solutions to get to net zero by 2050. Think green hydrogen, low-carbon cement or sustainable aviation fuel. This is where we play a role.
At Extantia, we focus on companies that make a significant dent in reducing future and past carbon emissions. And since carbon has a price, we believe a company’s success is directly linked to its emissions reduction potential. Framed in our nerdy way:
Carbon Total Addressable Market [Gt CO2] => Total Addressable Market [$]
If you’re still not convinced it’s a mega opportunity, then have a look at the multi trillion dollar market cap of the companies that currently supply fossil fuel-based energy. Generating renewable power, low-carbon fuels, and clean heat will replace these outdated methods and create a lot of wealth, novel business models and new category kings.
Decarbonisation is just the biggest business opportunity since the internet revolution, perhaps even 100x bigger than that revolution. So imagine the Googles, Amazons, etc., we’ve seen— we’ll see more in climate tech.
Read more about our two investment vehicles, Extantia Flagship and Extantia Allstars.
