Immaculate Combustion
“The privilege of absurdity; to which no living creature is subject, but man only.” – Thomas Hobbes
The environmental, social, and governance (ESG) movement has, directly and indirectly, upended nearly all aspects of modern life. It has hatched entire new industries, starved others of much-needed capital, directed domestic and international politics, reshaped the way our youth view the accomplishments of the generations that preceded them, and, at least in part, catalyzed the rolling series of energy, food, and supply chain crises unfolding today. The notion of interrupting our “drive to zero” with a thoughtful cost-benefit analysis or two is either dismissed with scorn or ignored until it is too late, at which point our bureaucratic overlords disembark from their private jets and gather in plush conference rooms to blamestorm where the fault for the crisis du jour should lay. For an excellent example of such gaslighting, we turn to a recent tweet from Christine Lagarde, President of the European Central Bank. Despite having nearly 740,000 “followers” on Twitter (wink, wink), this little gem of a tweet has garnered less than 300 likes as we write this piece:
The infusion of the ESG mindset into our culture has predictably led to an avalanche of new regulations, as governments grab the steering wheel of commerce with an ever-tighter grip. A second-order effect of these tectonic shifts is the realization that you can’t regulate what you can’t measure, and the outlook for professional measurers has never been brighter. To wit, the Securities and Exchange Commission recently dropped a bombshell set of proposed rules that would mandate new reporting standards for carbon emissions on par with reporting financials. The proposal runs a staggering 490 pages, foreshadowing yet another layer of required corporate overhead and lucrative consultancy contracts for the firms that install them. One wonders what the carbon footprint of that ever-growing, rent-seeking population will ultimately amount to. Here’s how CNBC describes it (emphasis added throughout):
“The Securities and Exchange Commission on Monday released a proposal for new rules that would require companies to disclose their risks related to climate change and their greenhouse gas emissions. It will be a while until the proposal becomes law, but if it does, the implications will be sweeping.
Standardization of climate disclosure will spawn its own industry of professionals and technology solutions to track, validate and report those risks. Companies that are already voluntarily tracking and disclosing their emissions data could gain an advantage over their peers.”
Like the arrow of time itself, regulatory bureaucracies are unidirectional in their growth. Modern government agencies may often be born out of crisis, but securing ever-larger operating budgets soon takes over the primary mission. It will be no different with Big ESG Measurement™, and the situation is already bordering on the ridiculous. One chief sustainability officer of a prominent manufacturer told us, “I have more people measuring emissions than I have researchers studying how to abate them.”
With so many people measuring and remeasuring the same industrial processes for their carbon intensity, one would think that demonstrably absurd proposed elixirs to our environmental ailments would no longer get funded. And yet, the news cycle is filled with fawning stories of “innovative” startups with magical solutions to climate change, most of which are either recycled versions of terrible ideas, cynical grifts, or contraptions so preposterous one wonders what the venture capitalists who funded them were thinking when they torched their capital.
For a prime example of one that checks at least the first and third of these boxes (we’ll give the players involved the benefit of the doubt on the second), we turn to a remarkable story that appeared in Ars Technica last week:
“The world's first ammonia-powered zero-emissions tractor successfully completed its first demonstration run at the Advanced Energy Center at Stony Brook University in New York last week. The midsized John Deere tractor had its diesel engine replaced with an "ammonia to power" system developed by a startup called Amogy. The system converts the energy-dense chemical into hydrogen, which then powers a 100 kW hydrogen fuel cell…
…Amogy's system can power the tractor for several hours on a 60-gallon tank of ammonia. But it's not used directly in the fuel cell; instead, the ammonia is cracked in a reactor to make hydrogen on-demand, which is then used to power the fuel cell. While there are inefficiencies in the system, Amogy says that the higher energy density of ammonia in the first place means you can easily carry enough fuel to compensate, coming out ahead of a normal hydrogen fuel cell in terms of both energy and power density.”
“Surely this can’t be real,” we said to ourselves. A quick glance at the calendar verified that no, it wasn’t April 1st, and looking Amogy up on Crunchbase revealed that not only does it exist, but it is funded by Amazon’s Climate Change Fund! How absurd is this concept and why is it almost assuredly doomed to fail? Let’s smooth out our ruffled feathers and do some measuring ourselves.