The mining industry lacks capacity for the green transition, emphasizing the need for alternatives to lithium like potassium and sodium batteries.
The Biden Climate and Taxes Act symbolizes progress in making green energy competitive globally, but concerns persist about rising energy consumption and fossil fuel dependency in growing economies.
Deep dives
The Global Mining Industry's Insufficiency for the Green Transition
Current global mining industry configurations do not have the capacity to provide enough raw materials for the required green transition. Lithium, crucial for green initiatives, is highlighted as dramatically insufficient. Jeremy Grantham explains that even with innovations like extracting more lithium from brine, the industry falls short. The necessity to find alternatives to lithium, such as potassium and sodium batteries, is emphasized. Grantham underscores the need for a fundamental redesign to overcome the limitations of lithium.
Climate Legislation Impact: Biden's Climate and Taxes Act
Grantham views the Biden Climate and Taxes Act as a significant step forward for climate initiatives. While acknowledging potential personal benefits due to investments in green tech, Grantham praises the bill for sending a crucial message globally. The Act's role in making green energy more competitive is highlighted, but concerns are raised about the potential for increased energy consumption and the dependence on fossil fuels by growing economies.
Challenges of Green Energy Transition and Energy Intensity
Grantham discusses the energy-intensive nature of transitioning to green energy, citing examples like the labor and material intensity in building renewable infrastructure upfront. The shift towards green energy faces intermittency challenges, requiring backup from traditional energy sources like gas. Despite these challenges, the low marginal cost of green energy sources like wind and solar presents a promising future for phasing out fossil fuels.
Escalating Concerns on Climate Change Havoc and Urgency of Action
Grantham expresses grave concerns regarding the increasing severity of climate change impacts, such as coinciding severe droughts and floods globally. He highlights the urgency for mitigation efforts, criticizing the lack of proactive spending on climate mitigation. Grantham stresses the need for immediate action to address escalating climate crises, underlining the potential catastrophic consequences if bold steps are not taken soon.
When it comes to fighting climate change Jeremy Grantham is optimistic about technology – but worried about timing. Known widely for his acuity in identifying bubbles, the British investor contends that the one created by our dependence on fossil fuels is about to pop. He’s on a mission to make green energy cheaper, faster and is well on his way. After a lifetime spent thinking about resources, he’s using his to power the development of green technology. The Grantham Foundation has invested into 45 early-stage green projects, such as improving the efficiency of lithium extraction.
He joined Tyler to discuss the most binding constraint on the green transition, why we need an alternative to lithium, the important message sent by Biden’s Inflation Reduction Act, the marginal cost basis of green energy, the topsoil crisis in the Midwest, why estimates of the cost of global warming vastly underestimate its effects, why he distrusts economists, the overpricing concentrated in the US stock market, the consequences of Brexit, the revolutionary tactics of Margaret Thatcher, how his grandparents shaped his worldview, why he’s optimistic about American venture capital, the secret to Boston’s success in asset management, how COVID changed his media diet, the political difficulty of passing carbon taxes, and more.