World must put its faith in technology

The Sunday Times
March 29, 2009

Green investor Vinod Khosla believes that merely cutting energy use will achieve little
Dominic Rushe

THE technology guru Vinod Khosla is a billionaire but the walls of his office are grubby. Black, green and red smudges cover one of them as if someone has been playing squash in his office. Within minutes of the green investor’s arrival it becomes obvious who is responsible for the mess as Khosla begins to scribble his vision of the future all over the wall.
A Silicon Valley legend, Khosla made his first fortune as a co-founder of Sun Microsystems. He has since become one of America’s top venture capitalists, first at Kleiner Perkins, which funded Amazon and Google among others, and now at his own Khosla Ventures, one of the biggest investors in green technology.
Khosla’s commitment has put him at the forefront of the green tech revolution. He is an adviser to President Barack Obama and Tony Blair’s Climate Group, which aims to cut greenhouse-gas emissions.
Some environmental champions are gloomy about the future, but Khosla is not. He believes we are on the verge of a revolution. With money and talent pouring into green technology like never before, firms offering solutions to the energy crisis are about to break through, he said.

Khosla went to the wall to illustrate his thoughts. First he drew a chart of share prices in the dotcom bubble. It was the classic Matterhorn-shaped peak. Then he drew the growth of internet traffic. It went up and up and up. A similar scenario was likely to play out in green technology as new solutions go mainstream even as some companies fail.
Khosla, who was 52nd in the Sunday Times’ first Green Rich List of eco-barons investing in alternative technology, is a big fan of Nassim Nicholas Taleb’s book The Black Swan. This takes its name from the discovery of black swans in the 18th century. Before the Australian birds were found, all swans were assumed to be white. The story, Taleb claims, illustrates the fragility of knowledge and the limits to learning from experience. In reality, he argues, it is the “impact of the highly improbable” that shapes our world. The invention of the wheel, penicillin, Google, The Beatles. Black Swans can be good as well as bad.
But while green technology is hot, much of the debate on climate change is ill thought out, said Khosla. “The environmentalists are wrong. We don’t need to use less energy. We need to find new solutions.” Nor is Khosla a fan of what he sees as “silly” solutions to climate change. His favourite is singer Sheryl Crow’s suggestion that people cut back on loo roll to “only one square per restroom visit, except, of course, on those pesky occasions where two to three could be required”. He also dismissed “green” light bulbs, wind power and electric cars as niche products, too expensive or unreliable to become truly mainstream.
There are “only” four main problems that need solving, according to Khosla — oil, coal, cement and steel. Between them they are responsible for 75% of greenhouse-gas emissions. Those who want to save the planet (and make money doing it) would be better off concentrating on the big picture rather than fiddling at the edges, he said.
For technology to save the planet it must reach what he calls the “Chindia” price — a level at which a new product can compete fairly with existing products and can be adopted without adding extra cost by India and China, two fast-growing countries whose energy needs rival those of America. No matter what the environmental costs, Indians won’t buy a $22,000 Prius hybrid electric car when Tata makes the Nano for $2,000. “Where is the electricity for those cars going to come from? Coal. Do we want coal-powered cars?” said Khosla.
Governments as well as ecologists are just as guilty of backing the wrong solutions, he said. He pointed to Germany’s championing of solar power. “Germany has the same solar profile as Alaska. It’s encouraging the wrong technology,” he said.
Khosla, too, has been accused of backing false solutions. His firm is one of the biggest investors in corn ethanol, a substitute for petrol. The American government backed corn ethanol with heavy subsidies, but using corn as fuel has been partly blamed for soaring food costs in the developing world. His critics are “Luddite jokers”, said Khosla. “Bio-fuels are the single most important tool we have so far for alleviating climate change.” Corn ethanol is far from perfect but it is only a “stepping stone” for future fuels that will be made from non-food crops. without big subsidies.
All these arguments are healthy, said Khosla: “Let the best technology win.” When it does, the speed of change is going to catch many by surprise, he added. “In 1990 when I put my e-mail address on my card, people laughed. The speed of change seems improbable before it happens. The only way to predict the future is to invent it.”