Giving Thanks & Getting

anksgiving isn’t typically a time for making investment decisions . . . but it should be.

Americans give thanks in many ways, notably through the national holiday we call “Thanksgiving.” We celebrate the abundance of the land we inherited centuries ago by feasting on turkey and other delicious indigenous foods, which sustained our existence as pilgrims. The holiday of Thanksgiving has survived  generations of tumult, crisis and even war relatively unchanged.  But we’ve arrived at a point at which we must recognize that humanity’s current path—dumping fossil fuel waste into the atmosphere that is rapidly heating our climate—is disrupting those same ecosystems which have long supported us. Thus, it might be time to consider celebrating Thanksgiving both by honoring the bounties of nature that we have enjoyed and by working to save the ecosystems that have always supported human life and reverse the damage that we are doing by investing in climate solutions.

Given how large the climate problem is, the personal actions we might take, such as turning down the heat or even buying an electric car, will not make sufficient difference. Sadly, scientists tell us that the whole world must reduce emissions by a matter of gigatons in rapid fashion and we are running out of time to act, so our modest personal actions won’t make enough difference. We must seek to find things that we can do which provide greater leverage. It turns out, investing in innovation is one of the ways that small individual actions can accumulate to make a big difference.

Why innovation? We know that climate change is caused by humanity’s use of fossil fuels. While we want to stop burning of coal, oil, petroleum and natural gas, at the same time, no one wants to have to go without reliable sources of electricity, heat or transportation. Thus, the dilemma we face is that clean renewables like wind and solar don’t provide a direct, reliable replacement for the widely available sources of fossil fuel energy.

What we need are better clean energy alternatives. We are forced to burn these dirty, carbon-emitting fuels to  have comfortable, warm, well-furnished homes and functioning societies because we don’t have better options available. We don’t want intermittent lights, intermittent refridgeration, intermittent heart monitors or even intermittent Youtube videos. This is what makes addressing climate change so challenging for Americans: we’re not willing to go cold turkey on the quality of life that we have enjoyed as a result of the abundance of fossil fuels. This is why we desperately need better options!

Investing in innovative ventures can accelerate their success in commercializing better energy alternatives. We have very few clean energy options and they all have significant downsides—such as intermittency—and there simply is nothing that is a runaway winner in terms of competing with natural gas or petroleum fuels. Which is why it is time for investors to step up and invest in those ventures innovating to create these improved technologies. These may be risky investments but if they can produce a broader set of clean energy options that enable us to maintain our lifestyles while reducing emissions, they will be very successful investments.

This is what Nucleation Capital is doing. Providing an investment vehicle that allows more investors to invest in some of the most exciting, most competitive clean energy alternatives coming out of the advanced nuclear sector.  For many, investing in solar or wind power is appealing because they think “renewable” energy is what’s needed. In fact, wind and solar power will always be intermittent—and that will never compete directly with fossil fuels. What’s needed to replace fossil fuels is clean, reliable, dense energy and many energy experts see next-gen nuclear as our best option.

Nuclear energy may not yet be as popular as renewables but what’s popular doesn’t necessarily translate into great investment returns. Even winning consensus investments don’t beat winning contrarian investments.  Which is why, for those looking for impactful investments that are off the beaten path and which, by their nature, can produce extraordinary returns, nothing can beat nuclear energy innovation, which we believe will be the black swan of clean energy.

The advanced nuclear sector is the most under-appreciated clean energy sector that is innovating as fast as conceivably possible. This sector, more than any other, holds out tremendous promise for a technological solution to our climate dilemma, yet these innovators need access to more capital. Next-generation nuclear innovators are solving safety, scalability, cost, construction time and all the other issues we have long associated with traditional nuclear and making it into the energy source of our future. They are, for example, developing reactor designs that won’t require water cooling or siting next to bodies of water. Innovators are also working to solve other problems that have held back the growth of nuclear, namely closing the fuel cyle and providing safe, permanent waste storage, among other things.

So, if you’d like to do more than just give thanks with your turkey, consider allocating some of your discretionary investment capital to a fund investing in the innovations that would allow us to end our dependence on fossil fuels. We expect that, over the next decade, the nations of the world will begin deploying any number of advanced designs to power cities, factories, campuses, ships, industry and homes without emissions, thereby maintaining energy security and grid reliability without needing fossil fuels. We’ll even use nuclear to generate synthetic hydrocarbons (for where liquid fuels are still needed) and power carbon drawdown so can begin to reverse global warming.

Yes, investing in advanced nuclear is high risk. Yet it only poses the risk of losing your money (so allocate accordingly). Not solving climate change, however, risks losing everything we hold dear. Our propery, our children, our traditions. Which is why more investors are considering allocating a portion of their investible capital to investments that can meaningfully reduce demand for fossil fuels. Whether they can invest a lot or little doesn’t matter so much: they will still get the satisfaction of knowing that they are using their money to make a difference in the final years that we have to rescue our future.

*  The “Th” image above is the period table symbol for the element Thorium, and comes curtesy of the Thorium Energy Alliance, which advocates for the use of thorium along with uranium as a fuel for nuclear energy. 

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