At the launch of the Gigaton Throwdown in DC last week, entrepreneurs and investors adopted a new metric for cleantech businesses other than internal rate of return – something called gigaton scale. The herd mentality that has characterized cleantech over the past three years continues today. In 2007 it was biofuels, in 2008 it was solar, and this year it appears to be smart grid and efficiency (which is ironic because for the longest time investors swore up and down that energy efficiency didn’t fit the VC model). What is so captivating about the Gigaton Throwdown is that it challenges businesses, investors and policymakers alike to focus on the technological pathways that have the potential to abate one gigaton of carbon or GHG equivalent per pathway per year by 2020. And executives with vision appear to be buying in. The CEO of Novozymes, Steen Riisgaard, for example told me during a recent conversation: “Thinking at gigaton scale is helping us identify our ultimate potential. Novozymes has the aim to help our customers achieve a 75 million tons reduction in greenhouse gases by 2015. But we actually believe the potential is much, much higher if you look at the entire industrial biotech space, where we think can reach gigaton scale within 10-20 years.” Similarly, Marty Lagod of Firelake Capital referenced one company, EOS Climate, in his investment portfolio that he bet on precisely because it has the potential to reach gigaton scale. Marc Porat, who has founded three cleantech building companies (Serious Materials, CalStar and ZETA Communities) has focused on building materials and building efficiency for the same reason. In his typical candor, he said that a lot of cleantech businesses in Silicon Valley are “vanities, which will not make a difference”. He’s absolutely right. And while businesses and entrepreneurs seem to be getting it, according to Cathy Zoi, the newly confirmed assistant secretary of energy for energy efficiency and renewable energy, policymakers in DC “don’t fully understand the potential scale of clean energy”. If the Gigaton Throwdown is successful it will change that, and bring all parties involved in the clean economy to the common realization that gigaton scale – besides meaning the possibility of climate stabilization within the necessary timeframe – also means gigadollar scale.
I’ve spent a lot of time in building technology since starting work with concrete innovator Hycrete. This sector screams business opportunity. In part because of what US groups like Healthy Building Network are developing with the Pharos Project and Bill McDonough and his crew are doing with Cradle to Cradle. Other groups are also in the space, such as UK-based The Green Standard. These groups, although taking somewhat different approaches, have one goal in mind — to ensure that building materials are safe for humans and the environment, which often means more energy and water efficient as well. Pharos is essentially a graded scale identifying what range of sustainability and health various products fall within, while C2C is a more transitional approach that gets companies that are manufacturing to buy in to a “back to the soil” design methodology and work to gradually improve their process. The Green Standard is very focused on International Organization for Standardization (ISO) life cycle assessment. Either way, this new type of thinking and the standards that are sure to emerge will force suppliers to the building industry to come up with alternative solutions or go the way of the dodo. Perhaps an even bigger red flag for suppliers – leading architecture and design firms are working independently and with the various emerging standards to come up with their own list of supplies that are deemed bad for human health and the environment. The number of young companies in this space is growing quickly, you might say as quickly as a mushroom (one of the most fun companies is Ecovative Design, who just won the2008 PICNIC Green Challenge for their mushroom-derived Greensulate product). A resource for other materials that has received some attention is an online database and book called Transmaterial. All of these initiatives will surely further ruffle the feathers of the Vinyl Industry and other powerful lobbies in the building sector. But if the incumbent suppliers buck the trend, they will be missing a huge business opportunity for the creation of new markets for more sustainable supplies. Just think what will be needed to replace PVC? It’s not about ideology, it’s about business opportunity.