“What we really need is the kind of mobilization we had in WWII. We could decarbonize the grid in 5-10 years.”
Albert Wenger and Sarah Sclarsic highlight the urgent need for climate solutions as the window for action closes. They discuss the scale of different technology innovations and inventions needed to not only stop, but also reverse, carbon emissions. Wenger and Sclarsic then talk about ways to reshape society that marry economic incentives with altruistic motives and some of the most exciting areas of investment.
Albert Wenger is a managing partner at Union Square Ventures. Before joining USV, Albert was the president of del.icio.us through the company’s sale to Yahoo and an angel investor (Etsy, Tumblr). He previously founded or co-founded several companies, including a management consulting firm and an early hosted data analytics company. Albert graduated from Harvard College in economics and computer science and holds a Ph.D. in Information Technology from MIT.
Sarah Sclarsic is a Managing Partner at Voyager, a venture capital firm she co-founded that invests in early-stage climate technology companies. A long-time operator and investor in sustainability-oriented technology companies, Sarah cofounded Getaround in 2009, prior to work with pioneering biotechnology company Modern Meadow. She currently serves on the public boards of XL Fleet (NYSE: XL), Pivotal Investment Corporation (PICC.U) and an early-stage industrial process technology firm that remains in stealth.
SPEAKERS
Albert Wenger
Managing Partner
Union Square Ventures
Sarah Sclarsic
Co-Founder & Managing Partner
Voyager Ventures
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darsie: (00:07)
Hello everyone. And welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy. SALT Talks are a digital interview series that we started in 2020 with leading investors, creators and thinkers. And our goal on these talks is the same as our goal at our SALT Conferences, which we were very excited and proud to have hosted our first SALT Conference in New York two weeks ago at the new Javits Center expansion, which went very well. And we're proud to say didn't also result in much COVID spread that we saw. So sort of a win-win on that front. We were very excited [crosstalk 00:00:49].
Anthony Scaramucci: (00:49)
That you know of.
John Darsie: (00:51)
That we know of may. We may or may not have it [crosstalk 00:00:55] the SALT Talk. But our goal at these conferences and our goal on these talks is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And in my mind, there's no bigger topic for us to discuss than the climate crisis.
John Darsie: (01:13)
And we're very excited today to convene what I think is a fantastic SALT Talk coming up on. How do we address the climate crisis, not just for altruistic reasons, and not just with altruistic motivations, but how do we invest in technologies that are going to help us solve this crisis and take us through a better future as it relates to climate and our planet? And our two guests today are Albert Wenger from Union Square Ventures and Sarah Sclarsic from Voyager.
John Darsie: (01:38)
I'll read you a little bit about each one of our guests, and then I'll let Anthony have them explain their backgrounds in their own words. But Albert is the managing partner at Union Square Ventures. Before joining USV, Albert was the President of Delicious through the company sale to Yahoo and an angel investor in many companies, including Etsy, Tumblr. He graduated from Harvard College with a degree in Economics and Computer Science and holds a PhD in Information Technology from MIT.
John Darsie: (02:06)
Sarah Sclarsic is a managing partner at Voyager, which is a venture capital firm she co-founded that invests in early stage climate technology companies. She's a longtime operator and investor in sustainability oriented technology companies. She co-founded Getaround in 2009. And prior to work with pioneering biotechnology company Modern Meadow. Sarah graduated also from Harvard College with a focus on bioethics. And I know she studied at MIT about atmospheric carbon removal, and she holds that master's degree from MIT and today lives in New York City along with Albert.
John Darsie: (02:42)
Hosting today's talk is Anthony Scaramucci who's the founder and managing partner of SkyBridge Capital, which is a global alternative investment firm. Anthony is also the chairman of SALT. And with that, I will turn it over to Anthony to begin the interview.
Anthony Scaramucci: (02:54)
Oh, first off, John, thank you. Sarah and Albert, thank you so much for joining us. And the work you're doing is so important. So I want to start with your backgrounds if you don't mind. Let's start with Sarah first. Tell us a little bit more about your background, Sarah, and your passion. Why you took your career in this direction. And then obviously the same question for you, Albert.
Sarah Sclarsic: (03:19)
Certainly. So, I am a climate tech entrepreneur-turned investor starting off with co-founding Getaround, which is a pioneering company in the sustainable transportation space. And then working as the founding business director for Modern Meadow, which was the first lab grown meat in lab and leather company. So really working on, how do we reduce emissions from livestock production and the materials [inaudible 00:03:44]. Double-digit contributor in terms of percentage overall of greenhouse gases to climate change.
Sarah Sclarsic: (03:49)
And for me, this work is really about recognizing that now is the time where we either change course for the planet, or we don't. We don't have another shot at this. And so really [inaudible 00:04:06] came about as a recognition that this is what I'm going to spend the rest of my life on. And a recognition that scalable technology companies can have a tremendous impact on solving all the problem necessary. Solving these problems. So, not everything that we need to do on climate is a technology problem. There are government regulatory, social components to solving all these problems, but we also can't do it without technology.
Anthony Scaramucci: (04:33)
Albert, I want to ask you the same question.
Albert Wenger: (04:37)
Sure. So, units we have interest historically, we've invested in all things digital. But because we've been thinking so much about the digital transformation, I've been thinking about what does the digital transformation mean for the world at large? And so I've been writing a book you can read online. It's called the World After Capital, and it is focused on this idea that the biggest scarcity today in the world is attention. Like, what is it that we're paying attention to? And I would get up on stage and say, "Attention is scarce. Attention is scarce. And example number one is the climate crisis. It's huge and not enough people are paying attention to it."
Albert Wenger: (05:11)
And then at one point I was like, "Well, yeah, and I should be listing myself as exhibit A. Like, here I am on an investor. I'm investing all these things digital and I'm not paying enough attention to the climate crisis. And so, once I started to dig in, I was like, "Oh my Lord. We are so much deeper into this." It's so much more imminent and it's so much more dramatic than anybody seems to think. And sometimes people make fun of like Greta Thunberg saying the world's going to end. No, the world's really going to end. The world as we know is going to end.
Albert Wenger: (05:42)
And so, as Sarah put it, we have one more shot at this. I mean, we've been talking about this since the '70s and people have been ignoring it and now we've got sort of a last ditch effort and I think there's going to be tremendous investment opportunities coming out of this. That's why we started to raise a fund and we now have a dedicated climate thesis fund. And it's also going to require [inaudible 00:06:05] efforts, not just by the private sector, but also by government. But it's exciting. It's scary and exciting at the same time.
Anthony Scaramucci: (06:12)
Well, my personal bias is I believe the fund is the right way to go, frankly, because we can put money into non-for-profits and we can do things like that. But I think the four of us know that when people are incentivized by profit to solve something, you seem to get the greatest efficacy. So I have absolutely no problem with that. So let's talk a about the fund. So Sarah, tell us about the genesis of the fund and the focus of the fund. And then obviously, I have a curious question. Can we remove carbon from the atmosphere in a fast enough rate to save the planet?
Sarah Sclarsic: (06:55)
Yeah. Question. So first I'll start by talking about the origin of the fund. So Voyager is a 70 million early stage fund investing in North America and Europe looking to back the 30 best climate [inaudible 00:07:12] next years. Our Co-founder in the fund is Sierra Peterson who brings a tremendous background, an economist and a policy designer, specifically climate policies through her work at the Obama White House, the International Energy Agency, and on through deploying billions of dollars in different renewable energy projects.
Sarah Sclarsic: (07:34)
Carbon removal. So that is in my mind the toughest unsolved part of the picture of how we decarbonize. So the world needs to get to net zero by 2050. Ideally, sooner. Frankly, we need to get there sooner. And the job doesn't start there. We actually have to go net negative. We have to remove some of the historical emissions and actually a lot of the historical emissions up to a trillion tons of CO2 over the next 80 years, which is a really massive amount of carbon, is a huge amount of material. This challenge has been described as running the oil and gas industry in reverse.
Sarah Sclarsic: (08:17)
And what that progression looks like is we start now. There's a couple companies that are in the space. There's not many companies operating at any sort of meaningful scale. And we see what works and we advance those learning curves. And we work up through larger and larger commercial scale so that in maybe 10 years, we can be at cumulatively, removing a gigaton. That's a billion tons of CO2 per year up to what the IPCC want to achieve, which is 10 to 20 gigatons per year by mid century.
Sarah Sclarsic: (08:52)
And this is something I think a lot of people don't recognize about stabilizing the atmosphere. It's not a set of actions we take for the next 10 years, and then we stop or a set of actions we can start in 30 years. This is a crisis. The climate is unstable. It will continue to get less stable until we intervene enough to stabilize the atmosphere and solve the problem. So there's no partial solution that will work, and there's no solution. There's really no credible path to stabilizing the atmosphere at this point that does not involve large amounts of carbon removal.
Sarah Sclarsic: (09:32)
Now, as Albert said, it's scary, but it's all so exciting. This is a massive business opportunity for all the entrepreneurs out there. This is a chance to save the world and a chance to build an incredible business. This is projected to be a trillion dollar a year industry that is net new. There are almost no companies operating at scale right now. So this growth in this industry will come from companies that are being formed now or are yet to be formed.
Albert Wenger: (10:04)
There's a bunch of different ways we can tackle the removal part, right? So, there's what people [inaudible 00:10:12] direct air capture where you sort of building physical machines. Then of course, there's also nature. So, trees are going to be removing carbon. So if we grow more trees, if we stop chopping down to the one we have, that's a way there's additional, fast growing biomass algae. We're looking at a deal right now with a company that grows algae in the desert using seawater.
Albert Wenger: (10:36)
So, it's going to take a lot of shots on gold to get this right. I think it's very important though to say that just because there's work happening on carbon removal, it doesn't mean we don't need to work on emissions. We need to work really, really hard on emissions. So, it's one of those. It's and not, or. We need to drastically cut emissions and we need to do removal. So I think that's important.
Albert Wenger: (11:03)
And I wanted to come back for a moment just to the role of government on some of these things, right? So, I do believe very much that the private sector will develop amazing technologies, but the rate of adoption of these technologies will depend largely on what government does. And so if you look at China, for example, they basically said, "Look, you can't put an internal combustion engine on the car period on the road." Right? You're not going to get it registered. End of story.
Albert Wenger: (11:29)
So that gets a massive tilt to EV, and we need to do the same. We have to set a date and should be a soon date and be like, "Buy this date, you will no longer get a license or registration for this kind of car." And that's going to get the EV industry going really, really, really fast. So it's one thing to be excited about [inaudible 00:11:47] getting its funding and Tesla. And I have several Teslas and I love it. But the rate at which these technologies are going to get adopted will be a direct function of government policy. And so we're going to need both.
Albert Wenger: (11:57)
And to me, this sort of, is it one or the other on tech versus in private entrepreneurship versus government is I think really boring and distracting. If you think about the car, right? Early car regulation was like, oh, you have to have somebody with a red flag while in front of the car and a car can't go faster than the horse drawn carriage. And that was obviously aimed at slowing the whole thing down.
Albert Wenger: (12:18)
But we wouldn't have cars today and they wouldn't have had such a massive impact if we didn't have good regulation, like let's all agree that we're going to drive on the right side of the road. Or maybe if you're some weird country on the left side of the road. Like certain things need government to get done. And so, I'm going to leave you with one more analogy to this. What we really need actually is the kind of mobilization that we had during World War II, because that's really what it's going to take. Like we could decarbonize the grid in the US in a 5 to 10 year span. And that's not crazy, but it would require government to really step up.
Albert Wenger: (12:51)
And it would actually be awesome, right? Because who wants to be inhaling all that stuff that comes out of coal fire power plants? Nobody wants to do that. Who wants to be smelling the cities like when the taxis go by? Like, it's nice to have EVs. So like, to me, the thing here is, people are always like, "Oh, but this is going to be costly, what not." Like the alternative is the thing that's really costly. And the future that we could would have is like this awesome future. So why aren't we stepping on the gas? Like what's preventing us from stepping on the gas?
Anthony Scaramucci: (13:20)
So, I'm going to answer it as a lay person that's not scientifically gifted. In fact, if anything I would call myself scientifically incompetent. I think there's a lack of awareness. I literally think that you're at the tip of the spear. Both of you, frankly, we at the tip of the spear, but the average person, they grew up in a carbon-admitting car, in a carbon emitting house. They turn on their television. The electricity is coming from some level of carbon emission. And so they think it's okay. They think it's part and parcel of life, and they're not fully understanding the long term consequences.
Anthony Scaramucci: (13:57)
So I guess it's a question for both of you. How do you wake those people up? You both have had eureka or aha moments in your life where you've said, "Okay, whoa, this is way bigger way deeper of a problem." Aaron Sorkin always tries to lace it into his plays and into his screenplay. The damage that's out there. And I mean, I'm bringing my mom. She's 84. I think she was watching Jeff Daniels on one of Aaron Sorkin's television series. She's like, "I think the carbon situation is like really bad." I'm like, "What are you talking about?" She got it from Aaron Sorkin. The point is, how do you get it into the mainstream?
Albert Wenger: (14:42)
It's a really important question. Sarah, what's your take on this?
Sarah Sclarsic: (14:46)
Yeah. I mean, different people respond to different ways. [inaudible 00:14:52]. Let me learn the facts and come to my conclusion. For a lot of people, maybe most people it's storytelling. It's understanding how this is affecting other people and how it's going to affect me. So, I would love for more Aaron Sorkin's to step up and tell these stories. But the climate crisis is rapidly shifting from something that affects some people somewhere to all people everywhere in a very real intangible way.
Sarah Sclarsic: (15:17)
I mean, California is now on fire permanently Australia saw levels of fire. Large parts of the country are now flooding. 100-year floods every two to three years. So there are stories to tell and I think more and more people will have a personal, firsthand [inaudible 00:15:40] unfortunately of the fact that the planet is no longer stable. That's the world we're in. Aside from storytelling, I think people are going to recognize that the systemic impacts of an unstable climate are also affecting them personally. And there are again, stories to be told about the systemic level impacts.
Sarah Sclarsic: (16:03)
So, everyone who has a house by the beach, I'm sorry, your house won't be able to get flood insurance anymore because the floods are just inevitable at this point. Nobody will be able to build new things [inaudible 00:16:14], for example. We all need to wake up and step up because this is a world with a need for that.
Albert Wenger: (16:27)
So, the thing that I always do is when I have a group in a room, whether it's students or investors or anybody I talk to is, I do this little mini survey right on the spot. I sort of say, "Look, you all know what greenhouse gases are, right? What they do is they trap heat here on earth that would otherwise go back into space." And I say, "Let's go. We're going to try and estimate how much heat that is. Right?" And the technical term would be to express it in [inaudible 00:16:54], but nobody knows what a [inaudible 00:16:55] is. So I'm like, "Let's express it in Hiroshima size nuclear bombs. Right?" Okay. It's a bomb that leveled the city, put out a huge amount of heat.
Albert Wenger: (17:02)
"Like how many Hiroshima size nuclear bombs worth of heat do you think we're trapping now that we've put up all these greenhouse gases? Do you think it's a one per year? Do you think it's one per month? Do you think it's one per week one per day, one per hour, one per minute?" And I sort of put that up there and you'll have a room of 70 really smart investors and the numbers will start trickling in like it's a realtime survey and they'll congregate like around one per hour or something like that. And I tell people it's four per second. And there's like, spit silence. Right? Every second of every minute of every hour of the day of every day it's as if we were exploding four Hiroshima size nuclear bombs in the atmosphere. And now picture for a moment, like we have alien space that's hovering above earth. Right? [crosstalk 00:17:51].
Anthony Scaramucci: (17:51)
So are you confirming that we do because a lot of people [crosstalk 00:17:54]?
Albert Wenger: (17:54)
Yeah, exactly. Yes, yes. That would be great because if it were that we'd be doing something about it, right? But it's not like it's not. If it were alien space ships dropping four nuclear bombs in the atmosphere, we would drop everything we're doing. It's called Independence Day. It's a pretty good movie, right? But it's not aliens. It's us. And it's not these bright explosions. It's just all the molecules weakling a little harder.
Albert Wenger: (18:16)
And most of this stuff has been going to the oceans. Like 95% of that heat's been going to the oceans. That's why we don't really feel it yet. But the physics of this makes the physics like of COVID look like a walk in the park. Because there we have all the tools and it's a small thing that we know how to do something about. But here the physics are, it's like aliens trying to annihilate us except it's us ourselves, so.
Anthony Scaramucci: (18:41)
I think it's well said, so we got to get more of that information out there. I don't want to hog up all the air time. John is dying to ask a question. But I got to ask you both one final question before I turn it over to John. And again, I want you to leave because I'm too short Sarah to see the glass anything other than half full. So when I'm looking at the glass, even if there's a drop of water, it looks pretty full to me. So leave me with something optimistic about where we you are and what we can do to change this. And then we'll finish off with you, Albert, and then I'll let John answer. But just do me a favor. Don't say, "Oh, that's a great question, John Darsie," or something like that. Like when I'm done talking, I don't want to hear that. Okay. I'll put both of you on mute, but go ahead, Sarah. Leave me with something optimistic.
Sarah Sclarsic: (19:29)
So the optimism is we are living in this sort of alien invasion scenario that Albert described in that the fate of the world's at stake here. And we're all alive at this time, but the future's not inevitable. We can change it. We can turn the ship around and we know what we need to do. It's not a mystery. How scary would it be if the world was heating up and we had no idea how to stop it? We know how to stop it. We decarbonize systemically every machine that runs on fossil fuel.
Sarah Sclarsic: (20:00)
So that's exciting, right? We all have the ability to literally save the planet. And if you're an entrepreneur, what better time to build an impactful business that also so can capitalize on the fact that there will be trillions of dollars of new infrastructure built and new products and services that are better, are more sustainable, are healthier, are cleaner, and are safer. That's the world I want to live in.
Albert Wenger: (20:29)
Yeah. Lots of stuff to be optimistic about cost of battery storage down by 90% of the last 10 years. Cost of [inaudible 00:20:37] takes down by 90% of the last 10 years. We know how to build nuclear reactors. We just need to have the political to build them. We should be exploring geothermal much more. We have a ton of incredible entrepreneurs coming to the space. 10 years ago. When I was talking to people who had a success, what they were wanted to do next, they wanted to work on online education, online healthcare. Today, successful people, they want to work on climate.
Albert Wenger: (21:02)
And then there's lots of money coming to the space. Look, you've got the early funds like [inaudible 00:21:09], but then you have General Atlantic with a four billion dollar climate fund. TPG with a five billion dollar climate fund. Brookfield with 11 billion dollar climate fund. So, there's a lot of capital coming. We welcome everybody who's coming to the space because it will take a lot more than is currently pointed at it. And as Sarah said several times, this is going to be a trillion dollar market. And it's going to be a trillion dollar global market, which is an extraordinary entrepreneurial opportunity. So if you put all this together, we have the technologies, we have money coming in. We have talented entrepreneurs. That's lots of reason to be optimistic.
Anthony Scaramucci: (21:46)
All right. I'm turning it over to John.
John Darsie: (21:49)
All right. Time for the good questions portion of the program.
Anthony Scaramucci: (21:52)
I feel Sarah's going to weaken and say, that's a good question, but Wenger, I'm looking right at you. You're a baby boomer. Don't do that to me. Okay. Go ahead, John.
Albert Wenger: (22:01)
Okay. Deal. There you go.
Anthony Scaramucci: (22:03)
I can feel Sarah weakening in solidarity with her generation.
John Darsie: (22:08)
All right. Let me start with you, Albert. And it's a question that you've... I've studied a lot of your interviews and writings in preparation for this podcast. And one thing, you talked about sort of earlier in the show, that debate between government or private sector, which one is going to really drive change? And it really has to be a concert between the two of them. But also, I think your commentary around profit motive and things like that is interesting and an economic self interest.
John Darsie: (22:36)
I think there's a lot of skeptics and cynics around ESG. Around is it really going to be this big movement that people are anticipating or is most of the investment decisions related to climate related to economic self-interest in some way. How much of it is economic self-interest from, whether it be large institutions or investment firms whose portfolios might be affected by climate change? And how much is it just an awakening of altruism and ESG orientation from people around the world?
Albert Wenger: (23:06)
Well, I think this is a massive commercial opportunity and we raised our fund as a straight up venture fund. So we don't even do any ESG reporting. I guess personally, I'm actually a bit of an ESG skeptic. I think there's a lot of people like, "Oh, here's a new way of asset gathering. Let's set the ESG label on it and we'll get a bunch of new assets." So, to me I think people are going to want to build big businesses here in part, because it's a big opportunity to be part. They want to make a lot of money. And I think that is totally okay. That's great. I think that's wonderful.
Albert Wenger: (23:40)
I'm a little nervous about the return of various forms of greenwashing and the various forms of like let's put the ESG label on it and then don't care what we actually invest in. And there's a way of measuring anything if you want to measure it. If you're incentivized to measure it in a particular way you could get results.
Albert Wenger: (24:02)
So, I think we have to look out for that and we need to set clear standards of what actually is considered a reduction in carbon, and that can't be very hand wavy. That really has to be carbon that's not going in the atmosphere or carbon that's coming down from the atmosphere and staying in the ground for a while. So, I think there's a bunch of cleanup required of the sort of methodologies and we have to make sure that people aren't incentivized to essentially lie about what they're doing.
John Darsie: (24:30)
Right. Sarah, do you have a take on sort of performative ESG and greenwashing and how much excitement there is around potential profits for investing in early stage climate tech?
Sarah Sclarsic: (24:42)
Yeah. Well, no surprise. I'm not a fan of greenwashing. I don't think it does anyone any good. But yeah, I mean, there's no question for tracking of carbon reductions, gold standard verification and ongoing monitoring, right? If we don't have that, then we're all sort of out in the weeds, out in the wilderness. But if I could extend Mark Andre's [inaudible 00:25:08] that software is eating the world declaration a little bit [inaudible 00:25:14] is eating the world.
Sarah Sclarsic: (25:14)
So, these are no longer niche markets and niche applications. Every company that has pledged to go net zero and actually means it is going to have to go net zero. They're going to have to fundamentally [inaudible 00:25:29] their business. How they make everything, how they buy everything, how they sell everything, how they track everything. And for anything that they can't ultimately get out of their supply chain, they're going to have to purchase additional verifiable carbon removal.
Sarah Sclarsic: (25:42)
And again, this is a massive [inaudible 00:25:45]. I mean, these are trillion dollar markets. So transportation and food and materials and what will be one in carbon removal. And so, for folks building businesses right now, really thinking critically about how do we do monitoring and tracking is a great opportunity. We're seeing incredible entrepreneurs and folks leaving great jobs at Googles and Facebook and other companies like that who want to build in climate. And they're taking their [inaudible 00:26:18] how databases work and how supply chains work and they are building these solutions. So that's something to be both very optimistic about as a person in the world today. But certainly as an investor in the space, the talent wants to work on climate to be founder of a billion dollar company who exited his company, they IPO, and what he wants to work on Nexus Climate.
Albert Wenger: (26:42)
To pick up on this point for a moment that Sarah just made. I don't think enough investors recognize that the commitments that have already been made add up to a huge demand for this technology. Whether it's the commitments that countries have made as part of the Paris Accord or the commitments that individual companies have made. Now, you could be a total cynic and believe that they're all going to [inaudible 00:27:06] on their targets. And I guess that's a fair position to take. But if you believe that they're going to implement a fraction of the commitments they've already made, the markets for these companies are phenomenally large.
John Darsie: (27:19)
Right.
Sarah Sclarsic: (27:20)
Just to add to that. These are better products and services. Decarbonized products and services are better. Fossil fuels are tremendously inefficient. In addition to being toxic polluting, they waste 40% of the energy in a combustion process on waste heat. People prefer electric vehicles. And so, you're seeing companies like Ford make the largest... They just announce an $11 billion investment into Evs. The largest investment they've ever made, because they understand that this is the future. Big companies may not be first. Startups generally will be first. Tesla's a great example there, but the inflection points are being reached in [inaudible 00:28:01], in environment, in energy production where better products and services will also have their own momentum in transitioning to a decarbonized economy.
John Darsie: (28:11)
A lot of times when you engage with people who are skeptics of climate change, or the urgent need to cut emissions, they point to the fact that the United States really isn't the biggest or most egregious polluter out there yet countries like India, China, that we don't have control over that are polluting. So, why are we going to so aggressively cut emissions when really maybe the house is already on fire and the horse is out of the barn, whatever saying you want to use. And we should really just be focusing on how can we roll back the clock? How can we engage in sort of moonshot technologies like carbon capture or other things to sort of create a better climate using technology? How would you respond to that Sarah about whether we should just focus on the technology piece or also focus on cutting emissions? I imagine we should do both, but how would you respond to skeptics?
Sarah Sclarsic: (29:04)
Yeah. So mean I don't spend my time trying to convince like hardcore climate [inaudible 00:29:09]. I think that's not a good use of my time. I'd rather build solutions. But in response to your question, this is a policy and technology path forward. There's really no way to get where we need to go with just pulling one of the levers we have. [inaudible 00:29:28] everybody pulling all the levers, bringing all of our ingenuity to the table, all of our resources table. And if we do that, we get a shot. The us to step back because other countries aren't stepping forward, I think would be a huge mistake. I think in the better moments this country has defined itself by global leadership. What more significant problem to take global leadership on than the future of the planet?
Sarah Sclarsic: (29:56)
And frankly, it's good business to do that. Moral questions aside, and also the practicality of the fact that we all breathe the same air. We all live by the same ocean in our toxic. Like we're going to suffer the consequences too. And that the practical time we have does not allow us to wait 10 or 20 years and see what China does. But also, it's a business opportunity. If we wait on building out the forefront of technology on electric vehicles, on batteries, on charging stations, on grid storage, on nuclear power on enhanced geothermal. If we wait on that, we will be left behind.
John Darsie: (30:36)
Right. Albert let me switch. Go now.
Albert Wenger: (30:40)
No. I want to stick with this for a moment, because I think there's two really important things to recognize. One is of course, China today is a bigger polluter than the US, but 50% of the carbon up there was put us up by US. This is a cumulative problem. This is not a point in time.Problem. That's number one. Number two. This is a huge emerging market. Why would we cede this market to other countries? I mean, one of the strangest things to me are how people can be trying China Hawks and also be like, oh, the climate thing we shouldn't worry about.
Albert Wenger: (31:05)
China is the global leader in providing the enabling technologies on climate. They make more than half the world's TVs. They make more than half the world's batteries, like by a wide margin. They have one of the largest rare earth mining operations in the world. I mean, to me, it's a completely crazy idea. Like, you could be completely not believing that any of this is real and you could be still be like, "Oh my God, we do not want to be left behind on this." Like, even if you didn't believe it was true. So it's just a completely incongruous position in my mind that some people take here.
John Darsie: (31:38)
Right. Albert, I want to follow up with you. You've written a lot about universal basic income and this idea of the job loop, which I think is fascinating. And it's something that I've always felt, but I couldn't exactly express it as eloquently as you have in some of your writings, which is the idea that a lot of this hamster wheeling that we do in society is to create products that people can consume for the sake of it. And it just creates this cycle of that's not really productive for humanity, and doesn't really make us happy as people.
John Darsie: (32:08)
Well, you're a fan of uni universal basic income in part because it removes that economic incentive in terms of how people spend their time, which I think is counterintuitive to the way a lot of people think about universal basic income, or at least the detractors say that, "Oh, if people are getting a living wage from the government, they're not going to be incentivized to do work." They're going to sit on their couch and they're going to eat potato chips and not contribute to society, whereas you believe, and I believe that it'll actually free people up to focus more on things they're passionate about and more mission oriented projects.
John Darsie: (32:41)
When I think about myself. I have four young kids. My real goal financially for myself is to create a life for my children where they can focus on things that aren't profit driven, which is what you're talking about on a mass scale for society. How does eliminating that sort of economic incentive and economic help create a better economy and a better world?
Albert Wenger: (33:03)
Well, I mean we have some people who are essentially UBI recipients today. They are people who have retired, right? So people who have retired and who have a nice pension, they can do what they want. And what do we see? People, A, they move places they want to live. Also, they move to place where it's cheaper to live. And B, they often get engaged in community. They get engaged in passion projects that could be helping restore the environment that could just be being active in the local community.
Albert Wenger: (33:27)
So we already see how this works for some people, right? And so the idea behind UBI is just, let's reap the benefits of automation broadly. We just invested in a new robotics company at USV. We want more robots. Like there's so many jobs that a robot will do great including eventually driving a truck, but putting stuff on the shelf in the supermarket or harvesting or working in a nuclear facility where you don't want a human because you can't touch the stuff. Right?
Albert Wenger: (34:00)
So we want those benefits. Automation's been good to us. It's been great to us. If it weren't for automation of most of the agricultural processes, we wouldn't be having this conversation. We'd be working the fields just to barely feed ourselves. Right? So, the point of this is I think we need forward looking policies, right? We don't to be trapped in a system that worked wonderfully. By the way, don't get me wrong. That was a great system. It got us a huge amount of progress, but it's kind of like, it's run its scores. And so it's time to invent something new and be bold about the new thing that we're inventing not be incremental.
Albert Wenger: (34:37)
I think a lot of this what people call populism. And why is populism happening? Because the benefits of a lot of the stuff that's come around has accrued to very few people. And a lot of people are feeling, I think, rightly left behind. And then they hear politicians talk about, "Well, we are going to make this little incremental change here and this little incremental change over there and all will be good." And people are like, "What are you talking about? You've been saying that for 20 years, and it's only getting better for you." So we need bold, forward looking policies. And we got to stop worrying about like some of the old stuff. And just, I think that's an exciting opportunity for all of us.
John Darsie: (35:12)
Right. Yeah. I think nuance is lost a lot in the commentary today related to what people deem as socialism versus capitalism. Whereas you need to infuse elements from each system that work well, even though I think that...
Albert Wenger: (35:26)
I go further. Both of those systems are fundamentally tied to the idea that we live in industrial age. We no longer live in an industrial age. And as long as we are tied to this idea, we will be grinding ourselves down in endless discussions of capitalism versus socialism. It's destructive and boring and prevents us from inventing the new thing, which we desperately ought to be doing and where we have all the technology to go invent the new thing.
John Darsie: (35:51)
Right. Sarah, you are on the board of XL Fleet, which is a leader in fleet electrification for commercial vehicles and municipal vehicles. You founded, did around another mobility company. So I want to talk specifically about mobility for a little while, and I'm sure Albert will want to weigh on this as well. But how successful have we been to this point in electrifying some of these fleets and making progress in greening our mobility a little bit more.
John Darsie: (36:17)
Anthony was teasing me in the opening of this about the fact that I'm working from home and he is in the office today. But he took his Cadillac SUV into the city and emitted carbon. Whereas working from home during the pandemic, we've certainly experienced a reduction in carbon emissions. But in general, what kind of progress have we made on mobility, on having greener mobility solutions, both commercially and for consumers?
Anthony Scaramucci: (36:43)
Sarah, before you answer the question though, have him tell you about his ranch in Montana, that he's got like carbon emitting horses and all kinds of things going on out there. Go ahead, Sarah. Sorry.
Sarah Sclarsic: (36:56)
Well, the ranch sounds lovely and my approach is less to carbon shame people and more to focus on how we actually solve the problem.
John Darsie: (37:03)
There we go.
Anthony Scaramucci: (37:06)
Thank you, Sarah.
Sarah Sclarsic: (37:07)
[crosstalk 00:37:07].
Anthony Scaramucci: (37:07)
Thank you. Because I'm a carbon hypocrite. I want to fix the environment, but I just visited my kids in LA and I board that commercial aircraft. I feel guilty about it, but I still want to see the kids. So, I am carbon hypocrite, but go ahead. I'm sorry.
Sarah Sclarsic: (37:21)
Well, so as long as you vote for candidates who support climate action and can decarbonize us. [crosstalk 00:37:25].
Anthony Scaramucci: (37:24)
It's a big thing. And I was actually with Governor Schwarzenegger, and said we no longer have a party. I was with Governor Schwarzenegger this week because the Republican Party is out to lunch when it comes to the environment, which is the existential crisis. The real crisis for that matter of our time. They got to get with it. But I'm sorry. Go ahead, Sarah.
Sarah Sclarsic: (37:46)
Yeah, absolutely.
Anthony Scaramucci: (37:47)
You could try to feather the ranch into your answer though too, if you don't mind. Go ahead.
Sarah Sclarsic: (37:53)
So yeah, on transportation, we have not made the progress that we ideally would've made by now. EVs are still a tiny percentage in the US of vehicles sold per year. We're ballpark around 1%. The number is climbing steeply. So the trajectory forward is very exciting. Automakers have really announced the last time [inaudible 00:38:22] internal combustion engine and these dates are reasonably soon. So the writing is on the wall for the death of the internal combustion engine.
Sarah Sclarsic: (38:32)
Some countries have actually announced that after certain dates, some of these, as soon as four years from now, no new ICEs vehicles can be sold. So, the industry knows it has to shift and that shift is already happening quickly and it's going to accelerate. So that part is very exciting. XL Fleet is I think a great example of how we can push that date of when get to entire fleets of non emitting or lower emitting vehicles sooner.
Sarah Sclarsic: (39:01)
So, their technology can work with existing vehicles and new vehicles, even if those vehicles are not otherwise electric vehicles, which is very exciting. Getaround was an early leader in more efficient transportation through car sharing. So, the statistics are, if you share cars rather than own your own car, you actually use it less. You really only use it when you need it and you walk or bike the rest of the time.
Sarah Sclarsic: (39:26)
And there's tremendous opportunity in this sort of non vehicle space as well, shifting to e-bikes electric three wheelers. There's actually a lot of rapid advancements happening in the developing world, given the reliance on bikes and three wheelers there towards electrification. It's a tremendous opportunity around the vehicles, the batteries, the recycling, the charging, the fleet management. There's software companies to be built. There's hardware companies to be built.
Sarah Sclarsic: (39:57)
Aviation, we're nowhere where we need to be. There's virtually zero non emitting planes. But we have, I think reached the point where the technologies for light sort of short haul electric aviation are becoming economically feasible and even advantageous, and that the maintenance and cost of ownership is less for an electric aircraft versus a combustion engine aircraft. And then for the long haul, we need to look at solutions like hydrogen fuel cells and renewable fuels, but we know these things are possible.
Sarah Sclarsic: (40:35)
So it's a great time to be on entrepreneur in the space. We're not where we need to be, but we are starting to get line of sight there, and some parts of sustainable transportation are moving very, very quickly. So it's a tremendously exciting time to be an investor in transportation and specifically around vehicles and fleets.
Albert Wenger: (40:53)
Something really important that Sarah just said is TCO. Total cost of owner is already lower for EVs in most applications today. So fleet applications, for example, like think local delivery fleets. You want EVs today for strictly economic reasons. And that's again you asked earlier, Anthony, what makes me optimistic? The fact that we are at that point makes me optimistic because it means that adopt is going to get driven and it doesn't even require government action. Now, I would love government action to speed it up significantly, but the TCO alone will drive this today.
John Darsie: (41:31)
So Albert, what are some other examples of technologies that you guys are excited about both in terms of their impact and potentially being lucrative from an investment perspective that you guys are investing in at an early stage?
Albert Wenger: (41:43)
Well, I'll pick up on something else Sarah said, which is the vehicles in place like India. So we just announced an investment in an Indian company called Revus. And what they do is they make an operating system that makes it easy to build electric two wheelers and three wheelers. Because if you think about it, those are really kind of like moving computers. You've got a computer that controls the power flow from the battery to the engine and regenerative breaking and all those things. And they require both hardware and excellent software, and they're also building the fastest growing charging network in India, for two wheelers and three wheelers.
Albert Wenger: (42:15)
So, EV adoption generally I think, is a big opportunity on which a lot needs to be done. We have invested in various draw down things. So better forest monitoring, for example. So you can incentivize forest owners to not cut down that trees and ideally plant new ones. A company called NCX. We have recently invested in a nuclear reactor company that makes a guaranteed safe by design reactor. And so, we are building a broadly diversified portfolio of technologies and approaches for emissions reduction in products.
John Darsie: (42:56)
Right. It's all fascinating. Sarah, I want to talk about animal products for a second. And just to clarify on the ranch. It's in Southwest Colorado. We raise our own meat. We try to do things sustainably there. So, don't listen to Anthony's slander. But animal products in general account for a huge volume of carbon emissions. And especially as the global population becomes more affluent, certainly there's more meat eaters on the planet and that's a sort of a crisis that we're encountering-
Anthony Scaramucci: (43:26)
Just so you know, that was like a very elitist alibi, and neither of these two people bought it, but it's fine. Okay. But what I like about Sarah, though she's not into carbon shaming, but I've already flattened you. So, I don't know. What was the question? John, go ahead.
John Darsie: (43:41)
So the question is whether it be from meat for consumption, whether it be leather products you talked about earlier, Sarah, there are a lot of exciting projects in the field of programmable biology if you will, that are helping wean us off of animal products. We had several speakers at our SALT, New York conference talking about programmable biology, including somebody like Jason Kelly from Ginkgo Bioworks who's doing research, everything ranging from industrial uses to things like food. But what does the future hold in terms of the future of food, the future of industrial and consumer product and how we can wean ourselves off of relying on animal products for everything?
Sarah Sclarsic: (44:20)
Yeah. So, animal products are a big part of global emissions. So livestock is responsible for ballpark 18% of global emissions, both directly and indirectly. Leading cause of deforestation of places like the Amazon is people cutting down trees to grow more feed for cattle or grazing land for cattle. So it's not a part of the problem that we can ignore. I don't think the world will completely stop eating animal based meat in the timeframe in we have on climate, ballpark the next 80 years. But I think we can dramatically reduce the amount of animal products that we get from animals and the carbon emissions intensity of those products.
Sarah Sclarsic: (45:04)
And I think we can provide alternatives in some cases, biologically identical products. The exact same product that just did not come from the suffering of an animal and the destruction of the planet. And that seems like a good thing. That [inaudible 00:45:20] seems like something we're doing. I think a great example there is, there is an alternative dairy company called Perfect Day. They actually just announced a big round. And I think some investment from Leonardo DiCaprio. Some brilliant, very young founders that I've been privileged to know since basically day one in that company.
Sarah Sclarsic: (45:38)
That company does a microbial fermentation process, similar to brewing beer. But instead of making beer, you produce exactly the same milk proteins that a cow makes, except you make them in a big tank, not in a cow and not in a feed lot in a factory farm. And so they can make products like ice cream and cream cheese and all the things we love because frankly they're delicious without suffering and environmental harm. And there's a potential to make anything we get from the natural world or from animals through [inaudible 00:46:08]. Right.
Sarah Sclarsic: (46:10)
It's really just technology plus biology. We can make all the things. It's a question of when can we make them at unit economics that makes sense. And that's my job as an investor is to really look at when are we reaching the inflection points. But frankly, it's [inaudible 00:46:26] amazing time. Synthetic biology and biotechnology have really benefited from these falling cost curves and increasing capabilities and advances like [inaudible 00:46:36] genetic engineering in a build out of an ecosystem of services, like the ones Ginkgo provide.
Sarah Sclarsic: (46:43)
So there are contract manufacturers, there are organism designers. There are companies that do very cheap genetic sequencing and synthesis. And just like somebody building an IT company, right? Doesn't necessarily want to build the computer hardware and operate the servers, right? They depend on an ecosystem of other partners and service providers, synthetic biology and biotechnology are rapidly approaching that sort of more mature ecosystem where people can actually build efficiently companies that make really, really valuable products.
Sarah Sclarsic: (47:16)
Things like leather and meat and dairy are massive global markets and really valuable beloved products. Why not make them better and healthier. And also, "Hey, we can explore even more capabilities." So potentially if you make leather from scratch, you can make a piece 100 feet long or ultra stretchy. You're never going to be able to get that from a cow. So, we actually do have a path here to make really more exciting products that are better suited to what people actually want and what people actually use. And I think that's fantastic. A good small example is [inaudible 00:47:53] used to be strong with cat gut. I don't know anyone who's bemoaning the fact that [inaudible 00:47:58] are no longer strong with cat gut because now-
John Darsie: (47:59)
not the same, Sarah without the cat gut.
Sarah Sclarsic: (48:02)
I mean, if it's not an original cat gut. So we've done this throughout history. We've always manufactured better products that are more efficient, that work better for what we want. And I certainly think there's a clear path and a clear need to do that for animal products.
John Darsie: (48:20)
Yeah. And just a note on Perfect Day. We are a big fans of the company, investors in the company, Ryan [inaudible 00:48:27] as a member of the SALT Young Leaders Circle. So we are extremely bullish on what they're doing and are actually working with them. And Anthony's son, AJ who worked at Google and Tesla before becoming sort of his own venture capitalist is helping to incubate a company that's leveraging some of the technology that Perfect Day has pioneered in terms of creating sort of biologically created dairy products. Like you said are molecularly identical to the product, but don't rely on the animal to produce them.
Albert Wenger: (48:58)
And there's yet another benefit too when we get this right, which is, so much of our landscape today is planted with things like corn and soy that are boring to look at and bad for the soil, take up a huge amount of space solely to feed animals to then make the milk and to make the beef, right? So once we move the beef and milk production into these synthetic biology processes, imagine a future where you go to the Midwest for a safari, right? Because there'll be follows and there'll be this huge landscape and there'll be just...
Albert Wenger: (49:34)
So we have this incredible future. And again, one way to accelerate this is by taking the existing carbon footprint that is attributable to beef and to dairy and actually taxing it into the product, right? Because we would look at one thing is, one thing is to bring the cost from the other thing down. The other is to say, "Look, these products actually need to be more expensive based on what they do." And by the way, we should be redistributing these taxes, right? You don't want to collect those taxes and make it just more expensive for people who already don't have enough money. Right? But the point is, the product itself, you can tilt the balance between the new product and the incoming product significantly towards the new product.
John Darsie: (50:14)
Right. Well, we could have a whole episode on things like nuclear that you touched on Albert and a variety of other topics we talked about. Maybe we should make this [crosstalk 00:50:22].
Albert Wenger: (50:22)
I'd thrilled to do that. That'd be good.
John Darsie: (50:23)
Yeah. I would love to do that. And maybe we make this a series. I really enjoyed having you and Sarah on. And this is a topic we sort of have themes that we like to focus on for our conferences, for our SALT talks and from an investment perspective as well at SkyBridge. So, we'd love to do more with you guys, and it's been a pleasure having you on.
Albert Wenger: (50:41)
Yeah. It's been great. And you've been asking all the good questions.
John Darsie: (50:44)
Thank you very much, Albert. You heard that Anthony?
Anthony Scaramucci: (50:48)
I've tried not to hear it. I do have to recognize that you do ask very good questions, John Darsie. Okay. Okay. And Sarah let you off the hook for the carbon emitting ranch that you have and the seven acre estate that you're living on. She left you off the hook on those things.
Albert Wenger: (51:06)
It's the cows John. It's cows on the ranch. The cows are the problem. [crosstalk 00:51:10].
Anthony Scaramucci: (51:09)
I'm sitting here. When I get off this SALT talk, I'll be riding a bicycle here to generate the electricity in the room, but it's fine, John. You're doing just fine.
John Darsie: (51:17)
All right. Well, thanks again, Sarah and Albert for joining us again, we hope to do more with you in the future. And thank you everybody for tuning in to today's SALT Talk with Albert Wenger from Union Square Venters and Sarah Sclarsic from Voyager. Just a reminder, if you miss any part of this talk or any of our previous talks, you can access them all on demand on our website at salt.org/talks or on our YouTube channel, which is called SALT Tube.
John Darsie: (51:42)
Our YouTube channel will also hosts all the panels from our recent SALT conference. If you weren't able to attend or you missed any of them because you were busy roaming the halls networking. We're also on social media. Twitter is where we're most active @SALTConference. Albert is an early Twitter investor, I might add. But we're also on LinkedIn, Instagram and Facebook as well. And please spread the word about these SALT talks especially around issues related to the climate crisis that we think are extremely urgent and important. But on behalf of Anthony and the entire SALT team, this is John Darsie signing off from SALT Talk for today. We hope to see you back here again soon.