A Crystal Ball for 2013

Happy new year everyone.  As we reflect upon the year now past us, it’s also that time of year to look ahead.

For the cleantech sector, Dallas Kachan from Kachan & Co. recently put his neck on the line with his “Predictions for Cleantech in 2013”.  It’s a good read, well-reasoned.  The sound-bite version:

  • Cleantech venture capital may never again reach the heights (at least in terms of dollars invested) of 2011.  As Kachan notes, and I concur, that’s not necessarily a bad thing.  It just means that capital-inefficient deals that used to attract VC dollars won’t so much in the future.  And, it means that a lot of ineffective cleantech VCs will be washed out of the sector.  Moreover, other sources of private finance – especially corporates, but also family offices and sovereign wealth funds – will step in.
  • The solar and wind sectors face increasing challenges because grid-scale energy storage technologies aren’t coming to the fore as expected.  Dispatchable power sources with lower emissions will gain ground.  This is especially the case for natural gas, but Kachan controversially also sees a growing role for new nuclear technologies.
  • Clean-coal technologies become less oxymoronic.  Great quote here:  “No, clean coal doesn’t exist today.  But that doesn’t mean it shouldn’t.”  Kachan claims to have visibility on some promising new technologies in this realm.  Personally, I’m a little skeptical – I’ve heard such things many times before – but I’d be glad to be wrong.
  • Significant improvements are afoot for internal combustion engines, further stifling the advent of electric vehicles (EVs).  I agree with Kachan that a lot is being undertaken to improve the old piston engine.  Those innovations being pursued by tier one auto suppliers have a fair chance of quick adoption.  However, a lot of the potential breakthroughs I’ve heard about are being explored by venture-backed start-ups or garage-tinkerers, and I am less optimistic than Kachan appears to be that these companies can make large inroads into the incredibly demanding automotive supply chains within a year.
  • Mining and agriculture will become more important segments of the cleantech sector.  Especially with respect to agriculture, I agree with Kachan wholeheartedly, as increased corporate venture activity is beginning to burble in such stalwarts as Monsanto (NYSE: MON), Syngenta (NYSE: SYT), and Cargill.

Though I haven’t gone back to review his track record, Kachan claims a good history of prognostication from recent years.  I think many of his views for the near-future are justified and hence likely (if not for 2013 then more generally for the next couple of years), but he’s thrown in enough unconventional wisdom to make things interesting.

Let’s make 2013 a good one, shall we?

A Dose of Lithium

For those who want an overview of the current state of the lithium-ion (Li-ion) battery sector, the fall 2012 issue of Batteries International is just the thing.

It’s not a pretty picture that’s painted.  Beyond the well-publicized bankruptcies of A123 and Ener1, the general sentiment espoused is that players in the Li-ion sector face tough days ahead.  The technology is not improving rapidly enough, its costs are not coming down fast enough, and markets for its adoption are not growing as robustly as expected.  Meanwhile, too much capital has been invested in too much manufacturing capacity.  Inevitably, one must conclude that further shakeout is ahead.

The most data-laden article in the issue concerns the prospects for Li-ion batteries in electric vehicles (EVs).  In “The Battery Revolution That Stalled”, author Lynnda Greene summarizes four recent research reports – from McKinsey & Company, Pike Research, Lux Research, and Bloomberg New Energy Finance – that all provide projections for a long and slow (rather than short and steep) glide path of cost declines.  For EVs to make good economic sense, it is generally held that batteries need to be in the $150/kWh range.  It had been hoped that Li-ion would reach those levels by 2020, fed in part by the considerable funding frenzy the Li-ion sector received from private investors and government subsidies in recent years.  Alas, the shared perspective of the four research reports is that those cost levels won’t be achieved for well more than a decade, and perhaps two.

The near-term prospects for Li-ion in grid-scale power storage are not much more promising.  This is partly also because of costs, but also because of reliability – some of the Li-ion grid-scale test programs have resulted in fires, and risk-averse utilities are not keen on adopting a technology until it’s been thoroughly proven to work well under almost every conceivable set of conditions.

The challenges facing Li-ion cause some observers to wonder whether too much attention is being paid to Li-ion and not enough on other battery chemistries – including the old-fashioned lead-acid battery extensively used over the past century.  Some of the commentators that Battery International quoted are more subdued in their criticisms, offering modest glimmers of optimism here and there.  But, the inescapable sense from the issue in its totality is that li-ion won’t see happy days for quite awhile – if ever.

In a lengthy profile of his views, battery blogger John Petersen compares lithium-ion batteries to centerfold models:  “They’re glamorous, sleek, sexy and hot; the building blocks of pubescent dreams and mid-life crises.  But they’re expensive, temperamental, potentially dangerous and scarce.”  As several pages more of his analysis and quips indicate, Petersen is very pessimistic about li-ion – and about EVs in general, for that matter.  He thinks that the case for EVs based on li-ion technology has consistently been oversold, and never had the chance of achieving the naïve promises that were made.

MIT Professor Donald Sadoway may sum up the long-term fate of li-ion best:  ”It shocks me that 99% of the active battery community is working on lithium-ion improvements.  We’re not getting there though.  It’s like looking for your car keys underneath the street lamp because that where the light is shining.  But you didn’t drop your car keys there!  What’s next is beyond lithium; in fact, it’s a lithium-free chemistry, which has to date received almost no attention.”

It used to be that “lithium” was known primarily as a treatment for depression.  For those in the cleantech sector, lithium may be coming to be known better as a cause of depression.

Cap and Trade for Traffic

Great article today on a study suggesting that traffic congestion is created by the marginal driver, and more interesting, from the marginal driver from specific and predictable locations.  Maybe 1% of commuters leaving from specific neighborhoods have a big increase on traffic congestion and commute time for everyone. The link to the study is here.

We dealt with this in the demand response market for energy.  With regulators 10-15 years ago creating free markets enabling companies to sell a reduction of energy demand to the power companies instead of increase generation.

We dealt with this in the carbon, Renewable Energy Credit, and Acid rain sphere by creating cap and trade style mechanisms enabling the rest of the market to pay some marginal actors just enough for them to drop out first.

There are bars that change the price of beer based on demand.

The stock market handles real time demand pricing every day.

Why not for traffic?  Hammer congestion and air pollution.  Create localized markets where the transit or roads authority, like Caltrans, TexDOT, or the local air district, instead of spending my tax dollars only on new roads, infrastructure, or regulations, used cellphone apps to pay a few dollars to commuters who would drop out of the critical commute paths at the right times.  Perhaps credits on your toll road account?  The more who apply, the less each make? Compliance tracked against your cellphone GPS?  A thousand ways to address the myriad technical issues with payments, tracking, compliance, verification, and additionality.

Small investment, massive social, environmental and economic benefits.

Cleantech Venture Investing: On the Deathbed or Merely Resting?

Two weeks ago, I sat on a panel of eminent (that is, other than myself) cleantech venture capitalists at the New England Venture Summit to discuss our sector as we approach the end of 2012.

The basic theme being explored was whether we should be optimistic or pessimistic about the current state of affairs for cleantech investing.

As I noted in my opening quip:  “I have friends on both sides of this issue, and on this issue, I’m with my friends.”

Seriously, it’s easy to understand being pessimistic.  While the data on cleantech venture capital investing activity has been mixed and erratic over the past few years, the qualitative indicators have led to a plethora of articles during 2012 suggesting a cleantech “bust”.  True, the litany of woes is substantial.

  • Several high-profile venture capital firms have retreated from or at least strongly de-emphasized cleantech investing, and other cleantech venture firms are widely thought to be in challenging positions likely precluding a next fund for ongoing viability.
  • Valuations on cleantech investment rounds have experienced significant downward pressure.
  • While early-stage deals can get done, the trend is towards focusing on later-stage deals, and ventures with long histories but only limited customer traction and modest revenues (less than breakeven) will find it difficult to obtain the next round of capital at favorable terms.
  • The Solyndra debacle has been an excruciating black eye for venture-backed cleantech deals in general.
  • Very low natural gas prices from the shale bonanza make it difficult for many energy-related cleantech firms to compete economically with their products.
  • The Republican party has successfully made cleantech a political litmus test, which in turn means that roughly 50% of the U.S. population views the sector with a general sense of skepticism or disdain.

When you sum this up, it’s pretty tough to be a cleantech venture investor these days.   But, there’s also a strong case to be made for cautious optimism, too.

Taking the long view – which I can to a fair degree, since I’ve been playing in this sandbox in various capacities for nearly 15 years, far longer than most observers – the situation we face today is not as discouraging as it was in the late 1990s (when only ventures called ______.com could get funded) or in the 2002-2005 era (post-9/11, post dot-com meltdown, post-Enron, still-cheap oil).

A much-needed cleansing of the sector is going on, a case of Schumpeterian “creative destruction”.  I suspected then, and am pretty convinced now, that a significant cleantech venture investment bubble occurred in the 2006-2008 timeframe.  The confluence of rapidly rising oil and natural gas prices plus greater political consensus about climate change (recall that 2008 GOP Presidential candidate John McCain supported carbon-mitigation policies) drew in not only too-much capital, but also investment professionals that – in my opinion – weren’t applying a prudent set of commercial perspectives when making bets in the uniquely challenging cleantech space.

Simply put, venture capitalists drawn into cleantech from other sectors – either software or healthcare – because it was the “new new thing” employed many of the tricks they used (often successfully) in the past, but which don’t necessarily work so well in cleantech.  Combined with ever-increasing sizes of venture funds, which need bigger investments to “move the needle” (i.e., generate returns upon exit sizable enough to be noticeable), excessive quantities of capital were thrown at a number of cleantech ventures before they were ready to make productive use of such resources.

Using a pricelessly-wise idiom that I first heard from legendary venture capitalist David Morgenthaler:  “Getting nine women pregnant won’t get you a baby in one month.”

Not surprisingly, too many capital-intensive cleantech deals got funded, focused on a too-narrow set of investment theses, including thin-film solar, lithium-ion batteries, electric vehicles, and second generation biofuels.

Clearly, there will be a shakeout in cleantech investing.  More ventures will go bust.  More cleantech venture capitalists, and venture capital firms active in cleantech, will withdraw from the space.  Only the strongest will survive.

Yet, those that survive will almost certainly be better prepared to prosper in the next uptick in cleantech venture investing.  And, the deals will be more attractive:  valuations will be lower, business plans and models will be sounder, and leadership teams will be more seasoned.

Yes, there will be a rebound in cleantech.  I’m not going to predict exactly when it will become fully evident, but it must happen.  After all, the overall fundamentals in support of the cleantech thesis still remain:  growing populations and increasing standards of living worldwide who are demanding greater environmental protection while simultaneously competing for finite (in many cases, dwindling) essential resources such as energy, water and food.

The members of the panel on which I sat generally reiterated the same basic themes:  capital-efficiency of scale-up, clear technological differentiation and economic superiority, greater involvement of corporate venture capital as funders, working early with strategic partners (future acquirers) to accelerate market penetration, improved teams with relevant entrepreneurial experience from prior cleantech ventures.

Paraphrasing Mark Twain, the death of cleantech venture investing has been greatly exaggerated.  Although it may be “stunned”,  it’s not “just resting” or “pining for the fjords”, either.

The cleantech venture capitalists who will be successful in the future are today still working hard on their portfolio companies.  Most will not be noteworthy exits.  Some will need to be terminated, others “worked out” through turnarounds and restructurings, with a few winners coming out at the end of the process.  Not all the winners need to be “the next Google” or even “home runs”, but rather solid companies producing good (if not outrageous) rates of return to investors.

This restructuring of the cleantech venture sector will take time and be painful for pretty much everyone involved.  But it’s the price to be paid to stay in the game, and will surely separate those who are truly committed and capable from the “wanna-bes”.

I intend to remain engaged for the rest of my career, and will be working diligently to continue to earn the right to do so.

The Economics of Cleantech Investing

I drafted this memo in early 2003 for a venture capitalist friend of mine, well before the bubble in cleantech.  In light of the back and forth on the recent Solar City IPO, I thought it was worth revisiting.  Some of the points were pretty prescient, calling out many of the challenges cleantech investors and exits have faced,  nearly a decade before they faced them.

 

Risk Economics in Energy Technology Investing


We believe there is substantial economics to be made from venture capital investment in energy technology, especially focused on clean energy and high efficiency or environmentally friendly applications.

However, investors unfamiliar with the sector tend to under-price risk and overestimate stage in technology development and commercialization in energy technology.

Much of this miscalculation can be boiled down to the fact that adoption rates of new technology in the energy sector generally tend to be slower than more traditional venture capital industry sectors.  This tends to be true for a couple of reasons, and has a number of implications for venture capital investment in the sector.  We have tried to lay out a few thoughts for potential investors in the space, which though they by no means constitute an all-encompassing investment model, should be helpful in decision-making.

Integration / Customer Hurdle Issues – This is a sector that tends to be very risk averse in new product and technology acceptance, and does not tend to pay for technology before the product stage, with an attitude of “we as the customer are already taking a huge risk by simply changing our operating procedures or letting you have access to our mission critical, extremely expensive infrastructure, why would we pay you, too?”  This situation is often characterized by very entrenched channels and customers, with multiple levels capable of “saying no”, and a long process to “yes”.  As result the level of product testing is substantially longer than other sectors as well. One implication (also see “Cheap” Technology below) is that technology businesses that have access to customers or are in integration areas tend to be under-priced by investors relative to technology developers.  This under-pricing can be especially true if the business has a vision to acquire technology or IPRs from developers as a price of admission to a customer base.  This set of issues also raises a second set of implications in the engine industry, where the major engine manufacturers, while they are often under pressure for change, are not exactly adept at handling new technology adoption, in part since they sell almost entirely through low-tech dealer networks, and only partially touch the end customer themselves.  Another risk issue here is that investors in technology development have tended to underestimate the power of entrenchment in both customers and channels, and as discussed below, run a risk of being caught in a bind as a one-product wonder without the depth or breadth of solution to protect market share.

R&D vs. Product /Market Development Investments – Because of the slowness of adoption rates, the relative risk of R&D investment bets to product /market development investment bets tends to be substantially higher than in many other sectors.  The implication is that early stage investment (pre- purchase orders) should be done at lower valuations than the same stage in other sectors, while later stage (post purchase order) investment can potentially be done at higher valuations, while achieving the same risk adjusted IRR.  Another implication is that investors often should expect some level of public funding support for technology development as a prerequisite for investment, not as a driver of additional valuation.

“Eternal Pilots” – This industry tends to be under significant environmental and PR pressures and as a result companies in the space tend to make limited investment of resources and capital in numerous pilot programs and “evaluations” that do not have significant likelihood of moving forward in a major way, but may run for years.  This has been especially true of regulated utilities that could often in effect price through some of the cost, or were expecting to bear the cost anyway as part of a PR or ongoing market vision program, as well as major energy companies, who have huge margins, and tend to have massive and far-flung R&D programs.  This tends to obscure the vision of VC investors looking to bet on strategic relationship “traction” as a way to proxy potential product adoption.  In other words, one can easily overestimate “traction”, and investors often tend to overestimate the life cycle stage of a new technology.  The newer the technology, the higher the over-estimation risk would tend to be.

Political Process – This industry tends to be very politically sensitive.  And the entrenched leaders tend to be much better than the startups at managing this process.  One thing this means is that significant public/government backed or public/private capital is available to fund R&D in the area, and that government/military business can often be viewed as core customer base.  It also means that technology development requiring regulatory or legislative drivers can be much riskier than in other sectors.

“Cheap” Technology – Given the above, existing technology tends to be “cheap” on the venture capital scale, and contracted or visible business tends to be the driver of value. Part of this is because the technology is often developed with “cheap” public dollars. The other way to think about it is that if you have the market and access to customers, attractive, proven technology at the product development stage can often be acquired for essentially pure upside.  While this may not call into question a particular technology development investment program, it again does have implications for the value of that technology as opposed to the value of a going concern.

Make One Bet, Not Two – To follow on that point, one implication is that an effective investment strategy may be to accept either technology development risk, or market risk, but not both.  In that, an investment in technology development not be made unless there was a near certainty of obtaining public funding to offset substantial portions of the cost or customer purchase orders once product development is completed, or that investment in customer ramp or market development not be made unless the technology is proven and has extremely limited risk of failure.  Betting on early stage companies that neither have a “locked-in” customer or completed technology may tend to be an extremely risky bet, and should perhaps be done only at quite low valuations relative to other industries.

Gross Margin Ramp – Another area of typical miscalculation is in profitability of new technology.  The sector tends to be a bit more “custom” in its product demands than some industries, and one major bet that has caught investors is cost structure/timing of volume orders.  This is an area where it has proven extremely difficult for many companies to develop enough business to move gross margin positive, let alone operating profit.  A common mistake is to over build manufacturing capacity in an often desperate race to get a marginally cost effective technology to an acceptable cost point to achieve venture like growth projections, when a more effective strategy often might have been to build low volume, higher cost point premium solutions for a smaller market in order to maintain the business during the often long process of technology adoption.  Such a strategy, which tends to be ignored by venture backed startups until too late, can be a key element in reducing the timing risk in this sector.  Part of the issue also stems from technology companies misunderstanding the price point potential and impact on their net price to manufacturer from channel and integration costs, a particularly sore point now to many companies betting on distributed generation technology, as is the point below.

One Product Wonders – Unlike other sectors where large companies are quite adept at acquiring in new products and technology lines, this is a sector where major competitors tend to be more likely to make a build vs. buy decision.  This tends to be more true for high margin components of an overall solution, exactly where technology investors tend to play.  Often investors have found that their supposed channel is in fact their most successful competitor, even despite the fact that the channel may not very good at the solution.  The result is that investors often overestimate how far a single product company can go, and overestimate how badly a potential strategic partner or exit will view that they need a particular technology solution.

While none of these points are meant to invalidate particular investment strategies, they are meant to be points to consider when risk adjusting and developing pricing / valuation strategies for energy technology investments.  At the end of the day, we tend to feel that technology companies in this sector, when compared to many other venture capital investment sectors, should be priced much more closely on visible cashflows than value of technology or market potential, or by “stage”, where the risked economics may not be as easy for an investor to define.

Chicago: Battery Central

At the end of November, the U.S. Department of Energy announced that it had selected Argonne National Laboratory in suburban Chicago to host the Joint Center for Energy Storage Research (JCESR), and bestowed upon it a $120 million grant over 5 years, alongside a $35 million commitment for a new 45,000 square foot facility from the State of Illinois.

As noted in this article in the Chicago Tribune, the goal for the JCESR is to improve battery technologies by a factor of five — five times cheaper, with five times higher performance — within five years.

One of the nation’s Energy Innovation Hubs just being launched, the JCESR has an impressive list of collaborators.  In addition to Argonne, four other national laboratories – Lawrence Berkeley, Pacific Northwest, Sandia and SLAC National Accelerator – will also conduct research under the JCESR umbrella.  University research partners include Northwestern University, the University of Chicago, the University of Illinois at Chicago, the University of Illinois at Urbana-Champaign, and the University of Michigan.  A long list of the leading venture capital firms active in the cleantech arena – including ARCH Ventures, Khosla Ventures, Kleiner Perkins, Technology Partners and Venrock – will serve on an advisory panel to help focus the research on commercially-interesting opportunities.  Corporate titans Applied Materials (NASDAQ: AMAT), Dow Chemical (NYSE: DOW) and Johnson Controls (NYSE: JCI) have loaned their names to the effort.

Whether it was because the team didn’t want their influence or because they didn’t want to be involved, no corporate representatives from the automotive or electricity industries are part of the JCESR constellation.

Especially when paired with the Galvin Center for Electricity Innovation just 30 miles away at the Illinois Institute of Technology, where smart-grid research is a primary focus, the JCESR announcement arguably leapfrogs the Windy City into the top echelon of cleantech technology research clusters, particularly as it relates to electricity management.

Cleantech to “Backtrack” in 2013?

Our firm, Kachan & Co., has just published its latest annual set of predictions for the cleantech sector for the year ahead.

To our analysis, 2013 is shaping up to be something of a year of backtracking for the cleantech industry, a year that calls into question some of its traditional leading indicators of health, and one that surfaces long term risk to such cleantech stalwarts as solar, wind and electric vehicles.

Do we think cleantech is finished? Not at all. But much like young Skywalker learned in Episode V, cleantech is about to find out that the Empire sometimes gets its revenge.

In brief, (click here for long version) our predictions include:

Cleantech venture investment to decline –  Expect worldwide cleantech venture capital investment in 2013 to decline even further than it did in 2012, never to return to the previous highs it achieved before the financial crisis of 2007-2008, we believe. Among the factors: the departure of many venture investors from the sector because of disappointing returns, poor policy support worldwide and a lag time in the pullback of equity and debt investment.

But this doesn’t mean the sky is falling in cleantech. Family offices, sovereign wealth and corporate capital are now having more significant roles, filling gaps where traditional VC has played in recent years. It’s a sign the sector has matured, we believe. Fewer VC cooks in the kitchen may indeed impede innovation, but deep pocketed corporate capital should help clean technologies that are already de-risked reach more meaningful levels of scale.

Long term risk emerges for solar and wind – The solar and wind markets suffer today from margin erosion, allegations of corruption, international trade impropriety and other challenges. In 2013, we think poor progress in grid-scale power storage technology will also start to put downward pressure on solar and wind growth figures. Prices per kilowatt hour are falling, yes, but the cost of flow batteries, molten salt, compressed air, pumped hydro, moving mass or other storage technology needs to be factored in to make intermittent clean energies reliable and available 24/7. When also considering continued progress in cleaner baseload power from new, emerging nuclear technologies, natural gas and cleaner coal power, the growth rates for solar and wind appear increasingly at risk.

Clean coal technologies gain respect – We predict 2013 will be the year a new set of technologies will emerge aimed at capturing particulate and CO2 emissions from coal fired power plants and help clean coal technologies begin to overcome their negative positioning. The barrier to capturing coal emissions has been cost and power plant output penalties. Our research has identified encouraging new technologies without such drawbacks, and we think the world will begin to see them in 2013. China is expected to target domination of the clean coal equipment market, like it does already in many other cleantech equipment categories.

The internal combustion engine strikes back, putting EVs at risk – Important innovations quietly taking place in internal combustion engines (ICE) could further delay the timing of an all-electric vehicle future, we think. In 2013, unheard-of fuel economy innovations in ICEs will enter the market, including novel new natural gas conversion and heat exchange retrofits of existing engines aimed at dramatically lessening fuel needs. Some of these technologies, when combined, claim to be able to reduce fuel costs by 90%. That could push out the timing of EV adoption.

Cleantech adoption in mining – Notoriously conservative mining companies and their shareholders are starting to realize that the capital expenses of new clean technologies can be offset by reduced operating costs and the potential for new revenues. In 2013, we predict more adoption of cleantech innovation in mining, in areas such as tailings remediation, membrane-based water purification, sensors and telematics, route optimization software intended to lower fuel and equipment maintenance costs, and low water and power hydrometallurgical and other novel processes for mineral separation.

Big ag steps up and cleans up – We estimate that 2013 will be the year the world’s leading agricultural companies embrace new innovation in significant ways. Expect accelerated corporate investment, strategic partnership and agricultural M&A in 2013, as agricultural leaders race to meet consumer demand for cleaner, greener ways of producing food, having weathered intense consumer GMO-related and other backlash.

Want more rationale & data? Read our predictions for cleantech/greentech in 2013 in their entirety.

Agree? Disagree? Weigh in on our original article here.

Open Letter, Closed Minds

Last week, 129 signatories sent an open letter to the Secretary General of the United Nations, Ban Ki-Moon, that said in part:

“Current scientific knowledge does not substantiate your assertions” recently made that climate change is causing more extreme weather events (such as last month’s disastrous Hurricane Sandy), and that the cost of continued inaction on climate change will be very high.

The open letter continues:  “The hypothesis that our emissions of CO2 have caused, or will cause, dangerous warming is not supported by the evidence.  The incidence and severity of extreme weather has not increased. There is little evidence that dangerous weather-related events will occur more often in the future. ”

Moreover, “Policy actions by the U.N., or by the signatory nations to the UNFCCC (United Nationals Framework Convention on Climate Change), that aim to reduce CO2 emissions are unlikely to exercise any significant influence on future climate.”

I will leave it to others to opine whether or not the signatories to the open letter making these statements are credibly “qualified in climate-related matters”, as they claim for themselves.

For the record, a much larger body of people doubtlessly “qualified in climate-related matters” would surely strongly disagree with this letter.  Thousands of experts are quite confident that climate change is in fact a serious future threat to the planet (all species, not just humans), that its economic and social (and biological) costs will be high, and that effective actions can be taken to reduce the impacts.

Conclusions of this ilk come from the Intergovernmental Panel on Climate Change (IPCC), a massive peer-reviewed process of researchers around the world facilitated by the UN and the World Meteorological Organization (WMO) that — while imperfect — is nevertheless quite robust.

Here’s the rub:  it doesn’t matter that ten or twenty times as many experts of at least comparable quality can be amassed on the other side of the issue to outweigh the signatories of this open letter.

Notwithstanding the vast body of evidence concerning climate change, there are in fact certain elements of climate science that are admittedly unknown or not well understood.  Even the IPCC experts would agree.  And, because of that, it is in fact somewhat inappropriate to say cavalierly, as Ban Ki-Moon and others such as Al Gore have said, that “the science is settled.”

Even though assembling a vast quantity of data and analyses make for a damn persuasive case to most reasonable people, the science is not, fully, settled.  In fact, given the daunting complexity of the global climate system,  that will surely always be the case.

Those with closed minds — who for whatever reason choose to ignore the preponderance of evidence and focus instead on the exceptions — will not concede the likelihood of climate change.  To them, the outliers and unknowns mean that there could theoretically be a possibility that human-driven climate change isn’t really happening, ergo let’s not get worried about it until it can be proven (which, for them, will generally be never).

As a result, stalemate exists.  This is just fine for climate deniers and those who have a vested interest in maintaining the status quo — the former often being funded by the latter.

Extreme flip statements like “the science is settled” only harden the opposition.  It’s not the first time, and certainly won’t be the last, that too-strident environmentalists have harmed rather than helped the causes about which they care.

The open letter to Ban Ki-Moon does, however, have one notable redeeming feature.  It is found in the last sentence:  “Climate policies therefore need to focus on preparation for, and adaptation to, all dangerous climatic events however caused.”

This inarguable position in favor of improving our adaptation capabilities is an increasing focus of the climate debates.

The stalemate on climate change policy means that chances are growing that our time is shrinking to do anything meaningful to prevent significant future climate change.  Accordingly, the best we may be able to do is to agree to limit the impacts that more severe weather would create.

We can argue about whether weather severity is on the rise.  However, if we waste our time arguing about that (which we are), we will have less time to spend on actually preparing more prudently for the future — whether it’s as worrisome as many climate scientists think it will be, or it’s a “don’t worry, be happy” world just like today’s.