We need to invest less and compost more to start harvesting meaningful climate outcomes.
Financial investments into startups, including climate tech startups, expect a one-to-one return. Of course in terms of quantity they expect a one-to-many return but I’m referring to the kind of return: investing Euros should return Euros. Investors put money into a venture and expect to get money back, that money having ideally multiplied in the process. No VC firm invests money expecting to get back something else, such as goodwill, improved health, knowledge, or planetary regeneration. These are of course useful by-products that some investors prioritise but ultimately, if the money doesn’t come back, the exercise is considered a failure.
For many this is just a truism. Duh.
Yet this is the only system that works like this.
No other ecological or social system expects to put in one unit of something and get two (or more) identical units of that same something back¹. There is always a process of transformation. In many cases a very long process of several transformations which are hard to predict.
When you put banana peels into your compost heap you don’t expect to get a banana back. If you do things right you might get some tomatoes, strawberries, earthworms, and hedgehogs back. When you feed your children you don’t expect them to give you a meal back. You hope that what you get back are healthy and well-rounded adults who contribute to society. If your neighbour’s washing machine breaks and you do their laundry for a few days you don’t show up on their doorstep the following week with an equivalent amount of dirty clothes (plus some interest). When you pay for a book, or a degree², or a therapy session, you get back joy, peace of mind, knowledge, and education. And sometimes you transform your hard-work, time, and creativity into a paycheck.
Very often that transformation involves death. Sometimes the actual end of a life, as in the decomposition required for composting, and sometimes the end of an era, project, or phase of life.
But money isn’t designed to die. It is unique in this respect.
A unit of currency introduced into circulation doesn’t come with a shelf life. This is even truer now in an age of digital and fiat currency where financial value is decoupled from material value (ie:, a currency does not need to be backed by, say, gold). Nonetheless the value of money does degrade over time, and so we get inflation, resulting in new currency units being put into circulation. As new ones are put in, old ones aren’t taken out, and there is no difference in the value between the old and new currency units. The aggregate value averages out evenly.
This feature of money is closely intertwined with the notion of perpetual growth and accumulation embraced by most investors. If the amount of money in circulation was static, then there would clearly be a hard limit to its accumulation. If however the amount of money within an economy is constantly growing, then of course you can always keep accumulating more.
This leads to a lot mental gymnastics when it comes to investing in climate solutions.
An example.
Bananas are famously rich in potassium. Banana trees also require potassium in their soils to grow healthily. (This is how they end up with high levels of potassium in their fruits.) There are two ways of doing this. You can grow the trees using mixed and regenerative farming systems where natural decomposition and plant diversity refertilises the soil and you can also have, say, free-range chickens and goats whose manure is naturally rich in nitrogen and potassium.
Alternatively you can collect banana peels at scale and dry them out at 110°C. You then bake them at 400°C – 600°C and dissolve the remains in water. Jumping through some other chemistry hoops including chilling water down to 10°C and once again heating an output (Potassium perchlorate) to 400°C – 500°C you get some pure potassium. Ship it back to the plantation and you get some more bananas.
I hasten to say that this is just a thought experiment — I am not aware of anyone doing this. That said, let’s look at a few differences between the approaches.
The first approach (let’s call it the Chicken Poop Approach) has a number of advantages. You get healthy banana trees and lots of bananas. You get overall healthier soils and more biodiversity. You get eggs and goat milk and you can eat some of the chickens and the goats if you’re so inclined. (The chickens will control your slug and snail population too if you have those around.) You have fewer external costs for things like fertiliser making the farm more self-sufficient and consequently reducing poverty and improving wellbeing amongst smallholders. It also has no industrial-grade greenhouse gas emissions. These are often termed ‘co-benefits’, ‘spillover benefits’, or ‘cascading benefits’.
The second approach (let’s call it the Surgical Approach) however is “investable.”
It is a neat and linear process that masquerades as a circular solution and has the features of being scalable, centralisable, and optimisable. Some aspects of it might be patentable and it is a quantifiable, precise intervention.
Now while this example is hypothetical, it is not unrepresentative. There are in fact loads of examples ranging from engineering new microbes to fix nitrogen from the air faster, localised ammonia production with lower energy inputs, genetically enhanced trees that grow faster and capture more carbon, robotic bees for pollination, ‘optimising’ cows, ‘upgrading’ plants, and making ‘better’ insects.
These examples are not even a drop in the climate tech investment bucket. What they tend to share in common is that they are all highly targeted interventions that make one aspect of a system a tiny bit better. As a result their benefits tend to also be very one-dimensional. In other words, they don’t have the depth that a regenerative climate solution needs and they don’t exhibit a spillover of co-benefits onto their surroundings. A genetically modified tree that captures a bit more carbon faster will, for sure, capture more carbon. But it does not at the same time improve biodiversity, water use, poverty, socio-economic equality, indigenous land tenure, or soil health. In fact, it might even encourage the creation of monocultures, green deserts, and centralised ownership.
This is a problem because what we really need is more of the first approach. That is, the Chicken Poop Approach. But the money is going to the second approach.
To make this shift we need to change how we think about money and what we can get in return for it. To allow more of the regenerative solutions that we need to flourish we need to treat money (or at least much more of it than we do now) as a compostable material, bury it into different compost heaps, and allow it to decompose.
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¹ I am probably wrong that it’s the only system but I think I’m right that its a very small minority. Please let me know if you have other examples.
² Its true that university degrees and other educational services are billed as a way to get “better paychecks” but that’s a very narrow view of what education provides.
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Photo by Fabrizio Frigeni on Unsplash
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