📊 EV’s Charts of the Week #87

Catalytic governance, CHIPS and Tweets++

Aug 24, 2022

Hi, I’m away with my family, so today we have an abbreviated edition of Charts of the Week. Enjoy and share with your friends.

But first…

In a recent briefing for paying members of Exponential View, I shared my perspective on deep tech’s future. My quick take is that we’ll be underwhelmed in the short term, but surprised by deep tech’s development in the long run. We already see that teams are deepening as milestones are met among quantum hardware startups; while in fields like nuclear fusion, commercial entities are exceeding their technical goals.

Share this chart

Dimensions of governance

The Inflation Reduction Act (IRA) is trying to do many things. It covers health policy, drug access, taxation, and climate investment. In parallel, President Biden’s administration put together the CHIPS Act, an attempt to mitigate the risks to the supply of semiconductors and further invest in climate research and technology.

These two acts are a good illustration of what I think is currently replacing neoliberalism: catalytic government. This form of government is directional and catalytic, but remains market-oriented. Its goal is to focus on national goals, accelerate the development of industries rather than individual technologies, and redistribute this development geographically. More on this in future newsletters.

In this edition of Charts of the Week, I want to explore some dimensions of the IRA and its accompanying developments. See EV#385 for further resources to understand different perspectives on the IRA’s impact.

Stacking up

As you probably already know, the IRA is not the only new bill designed to boost the green economy in the US. The CHIPS and Science Act should direct about a quarter of its total funding, $67 billion, to the growth of zero-carbon industries and climate research. In total, strategic investment into climate change mitigation should triple over the next decade.

Variable X

Lots of government investment, but still market-driven. This is what we can expect from catalytic governments in the Exponential Age. The combination of these strategic investments along with market forces (amongst others) means that the actual impact on decarbonisation is — however — far from guaranteed.

Carbon capturomics

The IRA could help make technologies such as CO2 capture and green hydrogen cheaper — and crucially accelerate their research and development. Some research suggests the IRA “could increase the use of carbon capture 13-fold by 2030 relative to current policy”. This is good news as deep decarbonisation will require trusted, tested and permanent carbon capture systems in place, especially in hard-to-abate sectors like industry.

And finally…

New and emerging fund managers have a track record of strong performance over a 12-year period. High motivation, strong focus, and alignment with investors are cited as some of the reasons behind this.