Investor Vinod Khosla says focusing on 2030 climate targets is the wrong approach

SEATTLE — Vinod Khosla, the founder of the Silicon Valley venture capital firm Khosla Ventures, says 2040 is the more important goalpost in combating climate change than 2030.

Khosla, who is currently worth more than $5 billion according to Forbes, made the claim at the inaugural Breakthrough Energy Summit in Seattle last week.

“If we try and reduce carbon by 2030, we will be much worse off than if we set the reduction target at 2040,” Khosla told an audience of conference attendees.

That’s because Khosla, who cofounded computer hardware firm Sun Microsystems in 1982 and spent 18 years at venture capital firm Kleiner Perkins, is interested in big bets. Relatedly, in July 2020, Khosla published a Medium post claiming that a dozen ambitious, catalytic leaders would transform the climate space more than a hundred less transformational leaders.

Khosla was on stage with John Doerr, another investor who, like Khosla, invested early in climate tech starting in the early 2000s and then watched as a fair amount of those so-called Clean Tech 1.0 companies flamed out. Collectively, venture capital firms invested more than $25 billion in climate tech companies between 2006 and 2011 and subsequently lost more than half their money, according to a paper from Massachusetts Institute of Technology. The investing bust discouraged investors and the sector all but dried up for a few years.

Doerr was more optimistic about the potential of iterative change than Khosla. “We need more of the technologies that are economic now deployed now,” Doerr said on stage.

But Khosla doubled down on his viewpoint that 2040 is the more consequential deadline.

“People who think we have the technology is wishful thinking. We can deploy the current technologies. I am not saying slow down, but we need the breakthroughs,” Khosla said. “And if we put a short-term window on all the breakthroughs and focus on 2030, we will be worse off in reality, even though I wish it wasn’t true… What we need and what we are likely to get is different. And 2040 is the right goal to set.

Khosla’s view is iconoclastic in the climate space.

In April 2021, President Joe Biden announced that the United States is aiming to reduce net greenhouse gas pollution by 2030 by 50 to 52 percent from 2005 levels, with the ultimate goal of having a net-zero emissions economy by 2050.

“We’re planning for a both short-term sprint to 2030 that will keep 1.5 degrees Celsius in reach and for a marathon that will take us to the finish line and transform the largest economy in the world into a thriving, innovative, equitable, and just clean-energy engine of net-zero — for a net-zero world,” Biden said in Glasgow, Scotland, in November at the COP26 summit.

The United Nations’ seminal Intergovernmental Panel on Climate Change released in April states that to have a hope of limiting warming to 1.5 degrees Celsius, the amount of global warming which has been codified in the Paris Climate Accord, greenhouse gases have to peak before 2025 and be reduced by 43% by 2030. Methane would need to be reduced by a third, the report said.

Nuclear fusion is one example of the kind of breakthrough technology Khosla considers critical, but which will not be commercialized by 2030. Khosla Ventures has invested in Commonwealth Fusion Systems, a fusion startup which spun out of Massachusetts Institute of Technology and is one of the frontrunners in the fusion space.

Fusion is the way the sun generates power and is the corollary reaction of nuclear fission, which is the way conventional and existing nuclear power reactors generate energy. Fusion has not been replicated at scale on Earth but if it can be, it offers benefits over nuclear fission, including no long-lasting radioactive waste.

Fusion “is an an exciting example,” Khosla told CNBC. “It’s far better than nuclear fission. It’s far better than coal and fossil fuels for sure. But it’s not ready. And we need to get it ready and build it.” (Khosla is not alone: The private sector fusion industry has seen almost $5 billion in private investment, according to the Fusion Industry Association.)

Khosla is 67 years old and he says “it’s likely while I’m still working — and I plan to work for a while, health permitting — will see every coal and natural gas plant in this country replaced with a fusion boiler. Every single one. That’s the goal. Within my working lifetime.”

Another transformative example is deep, advanced geothermal energy, which comes from the natural heat of the earth underground.

“But I’m not interested in today’s geothermal, because it is such a niche — it doesn’t scale,” Khosla told CNBC.

“We focused on the wrong problem, which is take existing geothermal and make it slightly more efficient, instead of saying create 100 times more sites where geothermal can be mined” by drilling much deeper into the earth where there are much hotter temperatures, Khosla said.

For example, Khosla pointed to the work deep geothermal company Quaise is doing. (Khosla was the company’s first financial backer.)

“A super hot rock well, like 500 degrees, will produce 10 times the power of a 200-degree well. And that’s what we need,” Khosla said. “If we can drill deep enough we can get to those temperatures — many, many — all of Western United States could be powered with just geothermal wells, because there’s geothermal everywhere if you go 15 kilometers, 10 miles deep.”