Elon Musk’s $100 Million XPrize & the Catalytic Role of Climate Philanthropy: Happy Earth Day

This Earth Day, April 22, 2022, I planned to launch a video and a website to inspire and invite visionary philanthropists to fund underdog, unsexy, shovel-ready climate solutions — ready to be deployed or scaled.

The launch video was not perfect but it was done (scroll to the bottom of this post to watch it). But due to some factors beyond my control, the launch was delayed. Suddenly with no launch…and no meetings scheduled, my calendar became strangely empty. I decided at the last minute to attend an event I had signed up for — a Twitter Spaces Session with the XPrize Carbon Removal team announcing the 15 companies selected in the first round to receive $1 million each.

At the end of the session, Marcius Extavour was kind enough to take a question that’s been on my mind ever since I heard about the $100 Million Carbon Removal XPrize sponsored by the Musk Foundation — one of the most visible acts of climate philanthropy in the recent past.

The ensuing dialogue between Marcius and Dr. Jonathan Foley was so good that I thought it would be valuable to reproduce it below.

After advising climate and regenerative entrepreneurs over the past three years, I’ve seen so many ‘shovel-ready’ projects with immediate climate impact struggle to find funding. Meanwhile, my climate tech founders find angel and VCs relatively quickly.

Every day, it seems there’s a new climate VC in town looking for deal flow. And while I celebrate and welcome that, it makes me wonder… who will be the philanthropists, willing to make big and bold bets in climate — the way MacKenzie Scott has on the social services side?

“Marcius Extavour: This [question] is by Neesha Mirchandani. Hello, Neesha.
”Where do you see a gap in climate philanthropy -  that the XPrize isn’t designed to fill - but needs the same level of innovation and scale?”

And maybe I’d add on to that question, Jonathan, by saying, you know, are there other particular drawdown solutions or other types of climate actions that you think are underfunded and could be supported by philanthropy that maybe aren’t or that are outside of the XPRIZE model? What do you think?

Dr. Jonathan Foley: Oh, my God. Yeah, absolutely. There’s little to no correspondence. In fact, I think they’re anti-correlated. The amount of money in philanthropy, venture capital, and government spending on climate solutions has nothing to do with the size of those climate solutions. In fact, I think they’re almost designed to be the opposite. So yeah, I think we’re doing a very bad job of aligning dollars with gigatons.

We have so many big climate solutions to get like no attention and no money at all.

Food waste. Where’s the X Prize for food waste? A much bigger solution than CDR will be in the next 30 years. 

How about deforestation? 

How about insulating buildings? Fuel efficiency standards — not just electric vehicles — but making things better for electric bicycles. 

What about public transit?

You know, just basic, simple things that could work right now. 

We’re in a race for time, too. We need solutions if we’re going to cut emissions in the next decade, that means we’re going to cut them by 25% in the next five years, roughly.

What do we have on the table that can do that?

We have — finding methane leaks. That will be a huge area for philanthropy. Thankfully, that area is getting more attention, deforestation. Those are the two most rapid climate solutions I can think of: stopping deforestation and plugging methane leaks.

Thankfully after COP 26, there was a lot more attention paid to deforestation and methane. But I think we need to ramp up considerably more philanthropy and corporate and technical innovation in these spaces… a lot more venture capital.

I think we need a lot more attention paid to those issues. So yeah, absolutely — If we can align the dollars, the people, and the brainpower to the carbon opportunities we see in climate solutions. Drawdown being one estimate, the IPCC publishing others — but they’re pretty consistent.

You see some big wins that need big money right now and a lot of them aren’t getting it. Also, we have to look at not just the amount of carbon, but the speed of that solution. 

Think of the time value of carbon, like the time value of money, which you know, a gigaton today is worth a lot more than a gigaton in 2040.

So a lot more because it’s going to be warming the planet in the meantime. 

So what can we do with fast carbon wins versus ones that would be out the decades for the future? That would change philanthropy. 

So I would love to put the money with a one to one line, the dollars against the time value of carbon solutions. Unfortunately, that’s not what’s happening. 

People buy into fads, what’s popular, what’s exciting, what speaks to their own values.

That’s great, too. But as a whole, I think we could do a bit better job of aligning the dollars, whether it’s philanthropic, government, venture, private equities, sovereign wealth funds, whatever against climate solutions, we definitely can do better. And that’s something I’m very passionate about, and we should do a lot more thinking about.

Marcius Extavour: Yes, I mean, I like how you’re reframing that — aligning incentives, aligning the capital of various flavors, you know, different colors of money and support with where we see solutions that can have impact. We were emailing last night a bit about the balance between innovation and deployment. 

We get a lot of inbound ideas — do a prize on this, do a prize on that — we thought carbon removal would be a good selection for a prize because it’s not the first thing we need to deploy today. It’s something that we are going to need over decades, and it’s going to take time to get there. But so many things you mentioned, we don’t even need a prize for. We don’t need innovation — just have to do them.

Dr. Jonathan Foley: Right? I think you said something really important here. I want to emphasize here — there’s deployment, and there’s development. 

We have to deploy climate solutions like crazy right now, the ones that we have in our hands this moment. And then we also need to develop additional ones and that’s where you know — CDR and that’s where XPrizes are wonderful because you know XPrizes are great at developing new solutions. But we also need another kind of prize or something — about the speed of deploying solutions at scale fast. 

A friend of mine, Ibrahim AlHusseini at Full Cycle Fund had a great phrase once, “if your house is on fire, you grab the hose, you don’t worry about disrupting the fire suppression business. That’s tomorrow’s job.”

So we need to deploy what we have in our hands today and develop solutions we’re going to want in our hands in 2030 and 2040, and 2050, and that’s where XPrize and other things are fantastic. 

And again, I think we all agree — all of the above. 

But keep thinking about time, folks — the time value of carbon. 

If I have a solution that can stop a gigaton from going in the atmosphere today and somebody else’s solution that could pull it back out again 30 years from now, which one affects the atmosphere more? 

The one today. 

Just like money, the time value of money, the time value of your life, the time value of carbon. Now is better than due.

Time is more important than tech. 

Those are really important things to keep in mind. But we need to be thinking about 2040 and 2050 as well…. Just make sure we’re also thinking about today and tomorrow. At the same time. It’s all the above — all the timescales — we just gotta get the mix right.

**I edited the dialogue to make it more readable. I take responsibility for any errors, so let me know if you see any.

Here’s a sneak peek at what I’m working on…