Bret Kugelmass [00:00:57] We're here today with Clay Dumas, who's a general partner at Lowercarbon Capital. Clay, thanks for joining me.

Clay Dumas [00:01:02] Thank you so much for having me on. It's good to be with you, and excited to catch up.

Bret Kugelmass [00:01:08] Before we get into the subject matter, we always love to learn about the person themselves. So, why don't you start us off and just tell us where did you grow up?

Clay Dumas [00:01:17] Yeah, I'm dialing in from Los Angeles, which is where I was born and raised. I grew up in Venice Beach. And after a bunch of stops all across the country, I've navigated my way back.

Bret Kugelmass [00:01:28] That's cool. Tell us about some of the either moments in your career or just parts of your life that you feel shaped your trajectory.

Clay Dumas [00:01:39] Sure. Well, I'll start off by saying that when growing up and even early in my career here in LA, I never thought of this city as a center for climate work. But the reality is, I'm discovering that of a city of 20 million people with the largest container port in the Western Hemisphere, its own utility, and generations of aerospace and manufacturing know how makes this one of the best places to build a climate tech company, and it's one of the reasons why I'm here and Lowecarbon is building an office out here.

Clay Dumas [00:02:09] Climate has always been my North Star, but I didn't chart a course to working in venture. Back in 2008, when I was getting ready to pack my bags and move to Wuxi in China to work for what was then one of the biggest manufacturers of solar panels in the entire world, a company you may know, Suntech, I was called in a very different direction. I was always a close follower of politics and very interested in policy, and it felt like the country was on the precipice of a really big change, one way or another. I felt very called to go work for Barack Obama. So, instead of traveling across the Pacific, I packed up a car and drove a couple thousand miles to northeastern Ohio to work on the Barack Obama campaign in 2008.

Clay Dumas [00:02:57] And that started off a 10-year journey for me that led through many different parts of the country, back onto the reelection campaign in 2012 where I was working in Chicago, and ultimately to DC, where I spent four years in administration in the white House. And while climate and conservation and energy was a part of that work, it was never the sole focus.

Clay Dumas [00:03:21] And so, coming out of the administration in 2017 was for me personally sort of an existential moment because on the one hand, everything I'd worked for over the course of 10 years felt like it was sort of a risk, but it was also an existential moment professionally because thinking of working in climate, it wasn't clear where you could get some traction. It was not exactly a moment where you felt like we were going to get a lot of policy movement in the right direction from a climate standpoint. Philanthropy felt really slow. And based on my own experience with Clean Tech 1.0 and the prevailing beliefs that so many people had, it didn't seem like starting a company or working in the early stages of building what we now think of as climate tech was a path forward. So, I was honestly a little bit lost and confused on where to start. But I knew that climate is what I wanted to work on.

Clay Dumas [00:04:26] And that's when I met Chris and Crystal Sacca. We're at a very similar inflection point, I'll say that, but very different life stage. They'd just spent a decade building Lowercase Capital, which is one of the most successful early-stage venture funds of all time.

Bret Kugelmass [00:04:41] Crazy.

Clay Dumas [00:04:45] We were in a similar life stage and that they were also thinking about how to start working on climate and what shape that should take. And Chris had his own brush a decade plus before with Clean Tech 1.0. He was at Google; he was one of the biggest buyers of energy in the United States and had a lot of experience thinking about scaling up solar so that he could get clean energy for as many hours of the day as possible. And then as an investor building Lowercase, he'd gotten pitches for countless, clean tech startups. And we know how that played out. As some people will show you, the numbers... It ended up returning capital, but just not in the timeframe that most investors were looking for. We both had some pretty deep biases we had to overcome about what investing in climate tech could look like.

Clay Dumas [00:05:39] And so, we just started spending time with entrepreneurs. We were in the labs; we were speaking to researchers. And it didn't take very long for us to figure out that some things have fundamentally shifted from where we had been before. That building these companies didn't require $1 billion of CapEx right out the gate. That you didn't need policies to change before the business models could pencil out. But actually, that you had these huge changes in the cost of renewable energy, big advances in electrochemistry, literally a 1,000,000x reduction in the cost of reading, writing, and editing DNA, which is going to transform the face of biology. Everything getting accelerated by cheap compute. A lot of the drivers for what you're doing in fission. And so for us, that was like a wake up call. And while we didn't talk about it very openly, that was what now, six years ago, really what led us to start... Chris, Crystal, and I, Lowercarbon Capital.

Bret Kugelmass [00:06:39] Wow. Okay, well, there's a lot there. I want to get into Lowercarbon Capital and hear that story about how your thinking began and where it evolved to, but let's rewind a little bit also. Just one more thing on you to learn a little bit more about. Your time in the White House, before, through and after. Do you feel like there was a fundamental transformation in how you thought about problem solving more broadly that experience gave you?

Clay Dumas [00:07:11] Yeah. Look, I think that working in government teaches you a lot of things. I think on the positive, it breeds an addiction to working on problems that matter. By definition, when you're thinking about problems at the federal government level, you are working on problems that no one else has solved before, and you're trying to fix, literally, the biggest systems that underpin our entire society. And trying to work on something small after that, for me at least, wasn't in the cards.

Bret Kugelmass [00:07:49] Can we take that lesson more broadly? Do you think that there's something that can be done to give... Because not everyone has the opportunity to work in a setting like that. I think that is such an important takeaway, one that I experienced also. I can't attribute it to when or where, but I also feel the same way that you feel. So, how do we take that idea and put it in the head of a million budding young adults who are at that precipice of where they might take their path, their career, their resources, their efforts?

Clay Dumas [00:08:24] Look, I can tell people my story. I think it's a really hard thing to engender in someone else. You have to come to believe that about yourself and about how you want to spend your time. The only thing I can say is that whatever path you choose, have the destination in mind. This is actually a really important lesson from Barack Obama that he spoke to a bunch. It was not actually from his own experience. It was the story of Thurgood Marshall very early on in his career, deciding that he was going to work on civil rights and starting a law firm. And it was not on anyone's radar. But that path that he set himself on led him to the Supreme Court and in a position to write the opinions on some of the most consequential civil rights decisions in our country's history.

Clay Dumas [00:09:27] And so, it's recognizing that it's not about the next year or two. [00:09:32]It's not about what your title is going to be when you're five years down the line. It's really about having a destination in mind, setting your course, and then working inexorably toward that end. And having trust that if you work really hard and you try to create opportunities for yourself, things are going to work out. Not for you personally, but for the cause that you're trying to solve. [22.4s] And I think that was a framework and a way of thinking about my own career that I can't say that I went into the Obama administration, the Obama campaigns with, but it's certainly something that I came away from it feeling very deeply about.

Bret Kugelmass [00:10:11] That's cool. Is that something you look for in entrepreneurs, or is that not a total overlap between that idea of having a North Star and maybe some of the more shorter-term goals that a good entrepreneur needs to produce?

Clay Dumas [00:10:26] No, I think it's really important. I mean, you're in a lot of ways a living example of it. One of the questions that we ask ourselves... It's baked into our memo, it's something we've talked a lot about with founding teams. Does everything in their life that they've done up to this point lead them to this moment? To go found a company, it's going to be really hard to build. It's going to take 10 years, at least, to really bear fruit. And it's going to have a lot of ups and downs between now and then that are going to be extremely trying. And when you're talking about building a nuclear fission company, hypothetically, if you haven't been committed to that vision for a long time, it's hard for me to believe that when the going really gets tough, you're going to be just as deeply committed as you were on day one. And that's really important.

Clay Dumas [00:11:21] Here's a good example. We have a team we backed Seabound. And Alicia, the CEO, just a couple of months ago came off of an ocean freighter that she had been on with her team for two months testing out their new carbon capture model for ocean freight. Like, that's a ship that, by the way, was traversing some of the most hotly-contested waters in the entire world. The living conditions were not particularly awesome. Certainly not what would you become accustomed to if you were living in a big city. And it was tough. Things didn't always work. But that was your window to try to figure out, "Is this technology that we've built going to pan out." And it was a really successful trip for them.

Clay Dumas [00:12:10] But that's not the experience that most founders who are building a software company have. If you're building in the Bay Area, you have hard days. It's not to discount any of that, but it's a very different experience which you have to go and build. And the lengths you have to be willing to go to, the ways in which you're willing to put your life on hold. Because you can't have that experience from the Bay Area. You literally have to go take a flight to Ankara, board a ship, and travel around the world to do it and to know that it's going to work. And so, that mentality is necessary, I think, to build the kinds of companies that you and so many others in this generation of climate tech entrepreneurs are slowly, brick by brick, putting together.

Clay Dumas [00:12:53] And I think the same is true, by the way, just to connect the dots. I think the same is true for people in government. One of the things that was really frustrating about working in government... And that's a whole other conversation, but I'll just point out one thing. A lot of people who got into office, ran and sought public office or went to go work for an elected official had a sense that they were the kinds of people who would seek elected office. That's their self-vision. And that's not sufficient. In the same way that having a self-vision of yourself as the boss of a startup, to me, is not sufficient. It's not a believable driver that you're going to stick with it when the going gets tough.

Clay Dumas [00:13:35] The people who are really successful in office are the ones that are chipping away at a hard problem or a collection of problems for a very long time, who have the expertise and the know-how that actually brings something to the table. To the extent that I was frustrated at times in government, it's because there were too many of the first group of people and not enough of the second.

Bret Kugelmass [00:13:55] And when starting Lowercarbon, was that actually one of the differences between Lowercase and Lowercarbon? Did Lowercase do run-of-the-mill software startups, but Lowercarbon had to be these like big vision type things?

Clay Dumas [00:14:08] Look, I don't want to say that Lowecase was doing run-of-the-mill software startups...

Bret Kugelmass [00:14:13] No, I know, because it was very successful, but...

Clay Dumas [00:14:14] And not just very successful, but they were the very first investors in Uber, which transformed the landscape of transportation. Chris was one of the very earliest investors, and by the time it went public, one of the biggest investors in Twitter, now X. Which in retrospect, obviously has had a very different impact on the planet and all of our attention spans than we expected at the outset. But it had really grand designs on democratizing access to publishing. And it had those impacts.

Clay Dumas [00:14:50] But to your point... And I'm going to borrow a phrase that Chris sometimes uses as he talks about this experience... Lowercase was born of necessity. He needed to make that work. But Lowercarbon is something that he and Crystal came to by choice. This is where they wanted to leave their mark. We hear this story from a lot of founders in climate tech. You look at people like Peter Reinhardt, who was the founder of Charm, Matt Rogers at Mill, and many others who have had big successes in their previous life. And now they're starting companies that on their face look very different and are going to be very challenging.

Clay Dumas [00:15:32] People sometimes have a hard time computing, like, "Well, you've already been super successful. Why don't you just like retire and live on a desert island for the rest of your life?" And their mentality is the opposite. It's like, "Hey, I was very successful, but the thing that I'm building now is going to be the previous company a footnote in my Wikipedia entry." And II think the same is true for Chris and Crystal, where Lowercase was an incredible achievement and it's going to be a part of their legacy for a long time. I think it changed the face of early-stage venture capital in a lot of ways. But it is ultimately a prelude to the much bigger project that we're engaged in now in building Lowercarbon Capital.

Bret Kugelmass [00:16:19] So with Lowercarbon Capital... I'll assume that the vision as you've articulated it was part of it's foundation when you guys came together, or at least within the first few months. Is that right? That you guys were able to articulate it as you articulate it now?

Clay Dumas [00:16:37] Yeah. It hasn't changed that much.

Bret Kugelmass [00:16:39] That's what I was going to ask. Has there been like a major update or modification or learning or realization now that you've been through it and you've been focused and you've gotten the real-life practice throughout these companies that has led to some adaptation of strategy that must occur? That you only could have experienced after you started looking for companies with this vision in mind?

Clay Dumas [00:17:05] Sure, a lot's adapted. And the big one is that we started out as a family office and we were pretty quiet about what we were doing, and now we're a fund that has more than $2 billion under management and writing bigger checks and following on in significant ways in the companies that are hopefully going to have a measurable impact on CO2 in the atmosphere. So, there are definitely parts of the strategy that have evolved.

Clay Dumas [00:17:26] What hasn't changed is that when we started Lowercarbon Capital, it was with a belief that if we were going to have a material impact on the challenge that we're all working towards here, it was going to be by building companies that simply offered their customers, whether they were consumers or other businesses, products that were better, faster, cheaper, more performant, had better supply chains, that they were tastier, that they were healthier. They were going to win on those bases alone, and that being lower carbon was a perk. That hasn't really changed for us.

Clay Dumas [00:18:01] If you take a step back, what underlines all that is the idea that there are a few hundred million people around the world, if we're being generous, who are going to be willing to pay more, go out of their way, suffer some sort of inconvenience to do something that's right for the planet. I suspect that you and I are in that bucket, and probably most of the people listening. That's great. We are the first market for a lot of these products. But again, if we're going to solve the actual problem, which is keeping this planet safe and habitable for us, our progeny, and the countless species that we share it with, then we have to have ambitions that go beyond that. We need to turn the other 7.8 billion people, wittingly or unwittingly, into hippies. And how do we do that? We have to play into human nature.

Clay Dumas [00:18:55] I mean, there's this vision for climate for a long time, for climate solutions, which asks people to do more with less. Live in smaller homes, change your diet, drive a smaller car, don't get on planes. And while those types of behavior changes would undoubtedly have an impact, they cut against the grain of everything we know about human beings, how we live, and what we do when we get access to new technologies. Certainly, you could look over the last few hundred years and tell yourself like, "Well, that's not really a strategy." We need to give them options that allow people to live in bigger homes, use more energy, travel further, improve their diets. Not just in the United States and in Europe, but in all the parts of the world where people are still catching up economically. And so, that was foundational for us at the outset. That's what made us believe that we could build Lowercarbon Capital as a profit-seeking enterprise, rather than just a pool of philanthropic capital. And that hasn't changed.

Bret Kugelmass [00:19:59] Okay, I love that, and I love how you articulated that because I think that is so important. The one thing I'll disagree with you is when you said, "the other things would undoubtedly have an impact." I actually don't think the other things have an impact. I think that unless you able to perfectly align a growth mentality and a more prosperity, more consumption mentality, all of the other things that are simply from a scarcity-driven mindset or reducing impact actually have no impact because of the other forces that just move things forward with them.

Clay Dumas [00:20:30] I'm with you. I mean, if people actually gave up flying planes, it would have an impact. It's just that's not a realistic vision of human behavior.

Bret Kugelmass [00:20:38] And it certainly wouldn't even have an impact scientifically on the momentum of heat systems in the planet. It's just not enough to move the needle.

Clay Dumas [00:20:46] Sure.

Bret Kugelmass [00:20:48] But I guess that really narrows the pool of ideas that are worth investing in. Investing just sounds so money-driven. Let's come up with another word. Engaging in, let's say. How many entrepreneurs are there actually out there who are willing to give 10 years, that are willing to, after they've already made enough money, deal with everything that has to do with entrepreneurship? How many actually are out there?

Clay Dumas [00:21:25] I think if you just look at the formation of new companies that are trying to do really hard things in climate over the last few years, you would conclude that the number is already big and it's growing. There are a lot of people who feel called to this work. Not just in the United States, but literally all over the world. And that reflects the size of the problem. I mean, just in some ways, the size of the opportunity.

Bret Kugelmass [00:21:47] Opportunity. I was going to correct you.

Clay Dumas [00:21:49] Right. So much of tech as we think it... Like software, whether it's for enterprise or consumers that's founded in Silicon Valley or the San Francisco Bay Area, really has that as its epicenter. But when you think about climate, you're really talking about like every industry everywhere in the world. In the same way that technology is not a niche sector but it wraps around everything else, climate very much wraps around everything else. And so, we see people, not just in the Bay Area, who are making that transition from software into the real world. But it's happening in major cities all across the United States. Not just the traditional epicenters of startups in venture capital like Boston and Los Angeles, but in places where we need the talent and resources and know-how to build these companies.

Clay Dumas [00:22:51] Companies like Solugen are being built in Houston. We have huge companies that are being built in Colorado, in parts of the Midwest, because they're serving the agricultural sector. In the Southeast, where there's a lot of energy infrastructure. And it's also happening in Europe, where you have big research universities that have driven forward a lot of the breakthroughs that we're going to need to develop and commercialize in order to this very complex set of climate challenges. They're also getting built in places like India and Latin America and East Africa where you have a lot of people and huge industries that need to find a path forward that allows them to grow while they're also reducing their overall emissions. So, this is very much a global phenomenon.

Bret Kugelmass [00:23:39] And when it comes to that idea of discovering breakthroughs, how much do you think either the climate problem or other problems that we have... Air pollution, poverty, clean water, whatever it is. How much do you think is going to be improved by continued incremental improvements on existing processes and technologies versus fundamental breakthroughs that are going to change the output of one of these systems by an order of magnitude or two?

Clay Dumas [00:24:12] So, it's a complex question. I think it really depends on the sector and specific industry we're talking about. Overall, I think there's sort of a spectrum. And I'd probably sit on the side of the spectrum that's going to call for more transformative breakthroughs that lead to order of magnitude improvements. But let's break the problem set down in a relatively simple format. This is the way I like to think about it. The very first thing we need to do is get our 50 billion tons of annual human emissions of greenhouse gases down to zero as fast as possible.

Bret Kugelmass [00:24:47] I want to come back to that because I've got another perspective. But go for it.

Clay Dumas [00:24:51] That's Step One. That's going to happen. I think a lot of the pieces are already in motion. It's not going to happen fast enough to keep the planet below really dangerous levels of warming, but we are on our way to doing that.

Clay Dumas [00:25:07] Step Two is we also need to remove CO2 that's already in the atmosphere and put it back underground, store it in the oceans, in soils, or in other durable materials that keep it locked up because we've already committed ourselves to very dangerous levels of warming.

Clay Dumas [00:25:24] Step Three, which doesn't get nearly enough attention, but it is an area we think a lot about, is how do we buy time for the people and the places that will be affected by rising temperatures in the very near term? Because like I said, we are going to get to zero; it's going to happen, but just not on a timeline that's going to keep a lot of people safe.

Clay Dumas [00:25:46] Carbon removal is well on its way to becoming a multi-hundred billion dollar industry, which is very exciting if you're investing in carbon removal, but it's going to take decades to scale it up into something that's having a measurable impact on atmospheric CO2. In the meantime, we have already committed ourselves to levels of warming and ocean rise and all kinds of other degradation of ecosystems that is very dangerous for literally billions of people all around the world today.

Clay Dumas [00:26:14] I mean, back in 2018, when we were really just getting off the ground, the IPCC released this report that said, "Hey, there's like a greater than 50% chance that between 2032 and 2050, we're going to hit 1.5 degrees of warming." Well, unfortunately, I have bad news for everyone who's listening today, which is that last year, in 2023, depending on which research you're reading, we either crossed or got very close to hitting 1.5 degree in temperature rise. And the data suggests that 2024, when you take into account many factors from reduction in sulfate aerosols on the one hand, to El Nino conditions across the Pacific on the other, we're going to surpass that number. And that's happening way sooner than anybody expected.

Clay Dumas [00:27:03] And so, by just taking a step back and realizing that we have not just this century long problem we have to deal with, which is actually reducing our emissions to zero, figuring out how to pull literally trillions of tons of CO2 out of the atmosphere, but this much more immediate problem of helping people adapt to what are going to be very dangerous conditions in many parts of the world, extreme weather events, droughts, floods, and forest fires that make it very difficult to live in places where tens of millions of people live today. But we might need to take it a step further and figure out how to actively cool the surface of the planet so that those problems are easier to manage.

Bret Kugelmass [00:27:47] Okay, it's so funny because I agree with the contents of what you're saying, I just disagree with the order. I think it should be Three, Two, One instead of how you laid it out, One, Two, Three. Because to me it seems like... First, yes, we do have billions of people who could potentially be at risk from these adverse events, and it's relatively cheap for the next couple of decades to be able to mitigate the adverse effects of climate change. I'm saying relatively; I'm not saying...

Clay Dumas [00:28:10] Sure.

Bret Kugelmass [00:28:11] Okay, so that to me should be first and foremost. And then Two should be the one of, "Okay, how do we effectively remove carbon from the air?" We have to do it anyway. I 100% agree with what you're saying. But the reason that Two should come before One is because if you figure out how to do Two, on net you can get to zero, but on gross, we could actually be burning more than ever, which I think would actually aid Three, which is the mitigation stuff. I believe in a world where we increase our fossil fuel burning every single year almost as much as possible, so long as on net, we are reducing CO2 from the air.

Clay Dumas [00:28:57] That's an interesting take. I think we are starting from a lot of the same premises. I have some doubts about whether radically increasing our fossil fuel consumption is something that we would actually be able to ever reverse. And while I'm very optimistic about carbon removal, I think it's going to take us a while to get to a point where we could actually counteract an increase in the burning of fossil fuels. But I guess the broader point here is... I'm not even making an argument about how these things should be tackled sequentially. I think they all need to happen, and I think they all kind of need to happen as fast as possible.

Bret Kugelmass [00:29:39] And by the way, everything I said is against my own economic interests. I want to make that clear. I'm not pushing agendas. As a matter of fact, I'm almost hurting my commercial agenda by saying what I said. But just, that's how I feel. We live in a world of limited resources. Like, Bjorn Lomborg... Have you read any of this stuff?

Clay Dumas [00:29:58] Sure.

Bret Kugelmass [00:29:58] He had a real impact on me. Like, he reversed my thing. I used to be like anti oil and gas and anti all that stuff. And then, I read his book and like my mind... Because I realized that it's not as simple as, "Hey, we should just throw at everything." We live in a world of limited resources, so when it comes to how do we allocate... You know, governments are allocating hundreds of billions of dollars, maybe trillions of dollars for this. Does it make sense to put $1 trillion into installation of today's technology? Let's say more solar panels, more wind turbines. We know not only do they not actually reduce the amount of carbon in the air, they add to it. They have carbon footprints too. Whereas $1 trillion into maybe fundamental R&D... And once again, against my economic interests. My company is not doing that. But $1 trillion into getting every smart undergrad a free grad education, funding all the laboratories, doing genetic engineering so a bacteria can just solve this problem for us in a five-year period, whatever it is. Doesn't that make more sense from an allocation of resources perspective?

Clay Dumas [00:31:05] Maybe, but that also is rooted in a hypothetical world that we don't actually occupy. I think one of the reasons... And going back to a foundational thesis for lower carbon, that we believe that we're going to get to zero is because finally profit motives are pointing people in that direction. The reason that solar is growing as fast as it is isn't just because of a bunch of government incentives. It's because in most parts of the world, it is now cheaper to set up a new solar array than to continue burning coal. That's a big driver.

Bret Kugelmass [00:31:38] I know, but unfortunately... I mean, just because I spend so much time internationally I've seen the impact of what this is. Yes, on its surface, the price might look like that, but the system costs that it has that are being buried right now, oftentimes without the policymakers realizing it, are leading to runaway inflation in certain countries. They're leading to all these trade issues and other industrialization issues, and they're leading to higher system-level costs as the component-level costs come down in terms of delivering clean energy. And I'm telling you right now, what I see in Europe is a wave of nationalism that is coming out in the next five years that is going to undo every single pro-climate policy. Whereas I am predicting five years from now is the end of the pro-climate change prevention movement, and it'll have to shift towards mitigation only. Because the nationalists are on the verge of taking over as the average person's costs and economic pressures increase due to the policies that have been made in order to encourage the distribution of all these, quote unquote, "cheap renewables."

Clay Dumas [00:32:50] I would say I have a slightly more optimistic view of where European politics are trending, but I will not contest the fundamental premise that we cannot do climate policy or climate venture capital or anything related to big energy systems in a vacuum. That we have to think about how they interact with big cultural, political, and civilization level forces. And I think in particular on issues of mitigation, when we think about sunlight reflection, the people who have historically informed a lot of those debates, and especially the climate scientists, have failed to take some of those other things into account.

Clay Dumas [00:33:33] My personal view is that along with AI, sunlight reflection is going to be probably the dominant geopolitical issue for the rest of our lives. And today, very few people even know what we talk about when we talk about sunlight reflection. The idea of applying a big coat of sunscreen to the entire planet. I think if people knew that was a potentially viable pathway to keep the world from heating up too much while we figure out how to zero out our emissions and capture a bunch of CO2, there would actually be a lot of willingness to explore and amp up our R&D budgets and potentially start deploying sulfur aerosols or other types of molecules into the upper atmosphere. Or, I think there's actually a New York Times story in the paper today about the idea of having a giant parasol, essentially, up in the sky to reflect a very tiny part of the sun's radiation. Nothing that anybody would miss, but that would keep the places where people live a little bit cooler.

Bret Kugelmass [00:34:44] Okay, so you're pro these ideas, right?

Clay Dumas [00:34:46] Absolutely. Well, when I say pro these ideas, I think they are inevitable. I want to be very clear. I wish we were not in a position to have to think about reflecting the sun.

Bret Kugelmass [00:35:01] Why? Why not? Why is that morally any different than having to install electric cars? I don't understand. Why do you wish you were not in that position?

Clay Dumas [00:35:09] It's not a question of of morals, but it's that all of a sudden we're introducing a lot of risks and unknowns. I wish that we hadn't gotten down this path whereas a planet, our survivability, hinges on sci-fi, right? I wish that we had been a little bit more thoughtful a few decades ago about this transition and that we could all just live happily ever after and dealing with all the other bullshit that makes life complicated without having to worry that rising sea levels and droughts and rising temperatures are going to make life on this planet in many parts of the world very inhospitable for people and animals and plants. So, that's the part I wish that we weren't dealing with.

Clay Dumas [00:35:54] That being said... That being said, it is inconceivable to me that once people start actually dealing with the consequences of many decades now of putting this problem off and punting the ball down the field that they're going to look at an option like sunlight reflection and conclude, "We shouldn't even try that." Especially if it can be pulled off for a couple of orders of magnitude less than transitioning the entire global economy to zero-carbon sources of energy and pulling carbon out of every other industry that emits it today.

Bret Kugelmass [00:36:39] It's so funny. I guess different experiences have formed your perspective even though I think we think almost fundamentally the same thing. But then, just like our lens of how society is going to interact with these is different. Because the on-the-ground truthing that I do every time that I'm in Europe is that the drive towards zero is creating extreme economic hardship for people.

Clay Dumas [00:37:00] In places like Berlin, you have a bunch of farmers that show up with their tractors.

Bret Kugelmass [00:37:05] Yes, yes. And in the UK and in France. And it's just one country after another after another, so it just seems to me that this is going to... If we're just doing this from socio perspective, this is going to trip our backlash where they want the parasol. Where the nationalists are going to say... Or, whoever it is are going to say, "They tried to force a solution on you that made them buy Spanish components or Chinese solar. I'm going to give you the cheap, easy solution. Let's just put a parasol up there." And I think people are going to rally behind that.

Clay Dumas [00:37:39] I don't want to characterize this the wrong way. I would say I'm a little bit less pessimistic about how it's going to play out. I think that in a lot of parts of the world, people are going to see some strong financial incentives to decarbonize. At this point this is a well-known statistic, but there are more people working in solar and wind in Texas than oil and gas. And as that trend continues and more people are employed and directly benefiting from these technologies, it's going to reshape the politics of a lot of this. It's not to say that it's going to be easy everywhere...

Bret Kugelmass [00:38:17] Yeah, it already has. I think what you're saying already has happened, and that's why there's such a strong lobby right now, both in the US and in Brussels. Because we've created so many jobs, we've created such a powerful voting constituency. But I think there is an underlying pain that is building and building and building as we install more of these systems because of the system-level costs that people are having to take on that it's going to totally flip. I think your perspective is the right perspective for the last five years up to the next five years. I'm just predicting a total 180 on it.

Clay Dumas [00:38:52] Well, I don't have a crystal ball. What I will tell you is that I think in the pipeline right now, we have a lot of really exciting breakthrough technologies that are going to...

Bret Kugelmass [00:39:02] Let's hear about them. I actually want to hear about them.

Clay Dumas [00:39:05] Exactly. Step change improvements in a lot of these systems.

Bret Kugelmass [00:39:08] Let's talk about them. I want to hear all about them.

Clay Dumas [00:39:11] So, let's take one of the very first investments we made and I think in a lot of ways, a prototype for how we see the world. I mentioned this company before, Solugen, which is based in Houston. I don't know how familiar you are with them, but the basic idea was, "Hey, rather than make all the industrial chemicals that our civilization relies on for basically every material and industrial process from fossil fuels, what if we replaced a lot of those mechanisms with enzymes and biological processes? And what impact would that have?" And for them, it's had the impact of creating a whole class of commodity industrial chemicals that have software-like margins and are drop-in replacements for the fossil versions.

Clay Dumas [00:39:54] And what we loved about this company, in a lot of ways, it was not just validating of some of the presumptions that we had made as we were getting Lowercarbon started, but really illuminating about how quickly the transition would take place. Their first buyers are not people who are going out of their way to pay more for something because of the climate impact. In fact, I don't know if their first buyers even realized that the products they were buying had 90% to 95% fewer embedded carbon emissions. They were people in the oil and gas sector who had two questions. "Is it hydrogen peroxide or is it glucaric acid? And does it cost the same as what I'm buying today? Oh, it costs less and you make it down the road so don't have to import it? Sign me up."

Clay Dumas [00:40:38] And so in that industry, chemicals, which is a multi-trillion dollar global industry, if you can build a business that has software-like margins, you're going to be very successful. And for me, Solugen is one of the early movers in this new generation of climate tech companies that reflect what is coming.

Clay Dumas [00:40:56] Another one is Antora. It's a really exciting company that's developing energy storage technology that takes renewable energy, stores it in thermal batteries... They store it as heat. And they can dispatch it either as heat for process applications or back into electricity at the cost of natural gas. And that's before you take into account some of the very, very rich tax credits that are generated by the IRA. That makes this a no-brainer for basically every ethanol and biofuel refiner, every dairy producer in the United States, and in the fullness of time is going to scale to countless grid applications and lots of other energy storage applications.

Clay Dumas [00:41:43] These types of companies, while we can't plan on them being operational in the next 12 months, are going to have a substantial impact on our outlook by the time that we get to the end of this decade because they are already beginning to scale. I think that is a part of the puzzle that too few people take into account.

Bret Kugelmass [00:42:04] I couldn't agree more. I mean, that's the perfect template. I mean, that's what I want to hear, not just from you, but I want to hear from all investors. It has to be drop-in-place, and it has to have some performance improvement. It doesn't necessarily have to be cost, but some improvement on their existing solution while across most metrics being identical from a usability perspective. To me, those are the qualifying criteria for any solution that we invest in. I think any one that asks someone to change the way that they go about their life should be automatically thrown in the garbage. It's just not realistic.

Clay Dumas [00:42:41] I think widescale behavior change is going to be very, very hard if that's all that we're depending on. I think people are willing to engage in some behavior change when the behavior is better or more convenient. It helps if it costs less.

Bret Kugelmass [00:42:55] A performance improvement, yes. You can't ask someone to sacrifice.

Clay Dumas [00:42:59] No, you cannot ask people to sacrifice because there are too few people who are willing to do it and you can't build a huge business in the process. And sometimes people ask me, "Why does everything have to be about making money or building a huge business?" Like, it doesn't. But if you want to have an impact that is going to result in a measurable difference in the amount of CO2 in the atmosphere, there is no choice but to build a big business that encompasses the entire world. Otherwise, you might as well call it philanthropy.

Bret Kugelmass [00:43:27] Yeah. No, I agree. Yeah, if someone asked you about that, "But why does this have to be about making money?" I wouldn't say it doesn't have to be about making money. I would say something like, "Money is the lubricant of productivity and advancement." You might be thinking of money on your personal finances basis, but there are other definitions to money about how infrastructure and society self-organizes itself to get big things done that aren't so emotional in the way that you think about money.

Clay Dumas [00:43:51] No, that's right. And ultimately, unless and until someone has a good replacement for the capitalist system, this is the primary framework through which our civilization is built and resources flow. You look at a company like Antora, the reason it's attractive is because they can go to large pools of capital and offer them a higher return than the technologies that they're replacing. And ultimately, that's what we need, right? It's not even on the individual level. It's being able to offer more capital in return for diminishing risks than the other guys. And when those technologies are all climate tech... And it's going to happen. Again, it's going to take some time, but it will happen. You will see the biggest industries on the planet be made. Transportation, energy production, storage.

Bret Kugelmass [00:44:49] Way bigger than software.

Clay Dumas [00:44:51] Right. It's like John Doerr who so many of us owe all the credit to for getting this started.

Bret Kugelmass [00:45:03] Tip of the spear, year.

Clay Dumas [00:45:03] Tip of the spear. He makes this point all the time. When he made it, I think search ads was like a $80 billion industry. Maybe now it's a $100 billion industry. But the batteries for EVs are growing into a half a trillion dollar a year industry. We're talking about order of magnitude larger opportunities. And not just one or two of them, but literally dozens.

Bret Kugelmass [00:45:26] Yeah. Okay, I think this is a great note to leave it on. We're about out of time. There's so much more I want to talk to you about. Hopefully we can get together soon about fission, fusion, and all the other topics that I know that you...

Clay Dumas [00:45:38] I can't believe we got through a whole 50 minute podcast and we didn't talk about fusion and fission. I feel like this was a failure on our part, but it's not.

Bret Kugelmass [00:45:46] No, not a failure. Listen, people can hear us talk about those things on a million other podcasts. This was a chance to have a different, more interesting kind of debate, I think.

Clay Dumas [00:45:54] It's fair. Really good to see you again, Bret.

Bret Kugelmass [00:45:56] Yeah, awesome. Thank you.