Oct 8, 2022

- Advertisement - Zachary Bogue, co-founder of Silicon Valley venture capital firm DCVC, doesn’t invest in companies that rely on carbon offsets to make their business models work. This is not an indictment of thought. The bogs want a carbon credit market to exist, but right now, they don’t have the kind of regulation and verification in place that needs it. Finnish non-profit and startup compensation found that 90 percent of carbon capture projects analyzed for the 2021 white paper were ineffective. - Advertisement - Silicon Valley Venture Capital Firm DCVC Invests in all kinds of climate tech companies, including geothermal energy, aerial methane imaging, advanced nuclear fission reactors, fabrics made from mycelium, wastewater filtration technology – to name a few. - Advertisement - But there is a category of climate tech scenarios that Zachary Bogue The co-founders of DCVC do not invest in the following: Carbon offsets. “We don’t really underwrite or like to see companies using carbon offsets,” Bogg told CNBC in an interview at the Palo Alto office in late September. “We don’t see companies that need to use carbon offsets to make their business models work.” - Advertisement - a carbon offset A certificate or voucher that a company or organization purchases that represents a reduction in carbon dioxide emissions by a metric ton, or 2,205 pounds. If a company or organization is unable to eliminate the release of greenhouse gases in their operations, they can purchase carbon offsets to compensate for their emissions. “There have been some studies showing that up to 90% of carbon offsets are completely ineffective – with no impact – which is a tragedy of our time, as large Fortune 500 companies are paying millions of dollars for these carbon offsets, and continues to emit in the meantime,” Bogg told CNBC. “And these offsets are really having zero impact.” The effectiveness of carbon offsets is a controversial issue, but at least a white paper Published in April 2021 from Finnish non-profits and startups Compensate It was found that 90 percent of carbon capture projects were ineffective. Indemnity has a non-profit advocacy arm and a company that sells high quality carbon offsets. For the white paper, Compensate analyzed more than 100 nature-based carbon offsets certified by third-party validators in space. Of the carbon offsets, which compensation considered a failure, 52% were guilty of what was termed “excess” – for example, offset credits sold to protect trees that were never in any danger of being cut down. . Another 16% of the projects analyzed were considered compensation failures because their sustainability was considered to be at risk. For example, coastal restoration projects for mangroves in Bangladesh were put at risk when floods ravaged the country, the compensation said. So, said Bogue of Local California Projects. “There were some forests to the north of here that were the subject of carbon offsets where someone paid millions of dollars not to cut down the forest and – whether it’s legal or not, we can leave that aside – because those forests burned, Bog said. , “So they actually released the carbon that the company was paying to not release and the company emitted.” DCVC does not invest in companies that currently use carbon offsets, but that is not an indictment against the idea. “To be clear, I want them to exist,” Bogg told CNBC. “I want a carbon tax, I want a carbon credit, a carbon offset.” But there isn’t enough transparency or accountability in the industry, Bogg said. According to Bogue, for the industry to stand properly, an agency similar to the United States Food and Drug Administration (FDA) would be needed. “There’s a very set and rigorous process that you need to go through to take a molecule from discovery to and until you’re dosing a human with it: you need to prove that it’s effective. Well, you need to prove it’s non-toxic,” Bogg said. “I would say that the imperative to reduce CO2 is as much as a human health imperative, putting smaller molecules in our bodies. Full stop.” Until then, the industry is uncertain of being a safe place for the money that DCVC invests on behalf of its limited partners, the likes of college endowments and hospitals. “It should be rigorous, and apples to apples and, and verifiable and documentable,” Bogg said. “It’s not where it is today. That’s where we need to get to, but that’s why it’s not worth investing in.” Credit: www.cnbc.com /