Paying attention to the climate crisis

Co-authored with Albert Wenger

In March of this year, the IPCC reported that global surface temperature for the years 2011-2020 had reached an average of 1.1°C higher than pre-industrial levels. This unequivocally came as a result of human activity, principally through the emission of greenhouse gasses. 

In this report, the IPCC stated it had high confidence that global warming would exceed the Paris Agreement’s 1.5°C goal sometime this century. This then proceeded to happen (temporarily) just a few months later when the World Meteorological Organization reported that July 2023 was the hottest month on record and about ~1.5°C warmer than the pre-industrial average.

The IPCC has stated that, under a likely scenario, the year 2100 would see the planet reach a median global warming of 2.8°C above pre-industrial levels (with a range of 2.1 to 3.4°C). The last time the planet experienced a similar temperature was over 3 million years ago.

3°C of warming will render the earth inhospitable for the many ecosystems that depend on it. Certain parts of the globe will experience fatal levels of temperature-humidity conditions for more than 300 days a year. Some regions will see 100% of local species exposed to life-threatening temperature conditions (with much more of the world hovering around the 5-20% range). Food chains will become increasingly insecure, with production of food like maize and fish declining by as much as 30% in certain areas.

The global water cycle will have intensified to the point where severe droughts, heatwaves, wildfires, and other extreme weather events are commonplace. ‘Once-in-100-year’ storms will occur annually and sea levels will rise by several feet. Whole communities will be wiped out, creating a mass population of climate refugees.

As highlighted by the temporary crossing of the 1.5°C threshold in July, things have only deteriorated further since the IPCC published its findings. The acceleration of the climate crisis can be visualized by a series of charts:

1/ Global air temperatures in the summer of 2023 were the hottest on record, and remain significantly above 2022 levels

Remaining gray lines show the years 1979 through 2021. Source: Climate Reanalyzer.

2/ Sea surface temperatures also broke records this summer and show a significant departure from historical trends

Remaining gray lines show the years 1981 through 2021. Source: Climate Reanalyzer.

3/ Southern hemisphere sea ice extent, the area of ice covering the Antarctic Ocean, peaked at just shy of 17 million km2 this summer (over 1 million km2 less than in 2022)

Remaining colored lines show the years 1978 through 2021. Source: Climate Reanalyzer.

4/ In the northern hemisphere, the Greenland ice sheet has experienced peak melting at an unprecedented degree and frequency this year

Source: National Snow & Ice Data Center.

5/ Due to melting ice sheets and warming sea waters, 2023 saw sea levels rise to the highest on record (~8 inches above 1880 levels)

Source: National Oceanic and Atmospheric Administration.

6/ And atmospheric methane (a powerful heat-trapping gas) has continued to accelerate over the last few years, reaching 1,922 parts per billion in May 2023

Source: National Oceanic and Atmospheric Administration.

Despite the progress that has been made in combating the climate crisis, it is getting worse and not better. And these charts tell us it is getting worse more rapidly than previously anticipated.

This decade will largely determine whether these alarming trends can be curbed. Limiting warming to 1.5 or 2°C and avoiding the most catastrophic effects of climate change requires urgent and deep GHG reductions across all sectors and geographies.

For investors, the IPCC predicts that private and public sector finance will need to increase 3-6x current levels in order to limit warming to 1.5 or 2°C. This funding gap is particularly prevalent in developing countries and at Series B+ stages of capital.

USV remains committed to our thesis of investing in companies and projects that provide mitigation for or adaptation to the climate crisis. We urge investors across the capital stack to join us so that we may avoid the very worst of the climate disaster, the indications of which are already making themselves known.

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AI Learning Summit

Last week USV and Reach Capital co-hosted the AI Learning Summit. We welcomed over 75 builders, founders, educators, students, and policy makers into our library for a day of demoing fresh projects and discussing the ways in which learning and AI will intersect.

This dialogue was a continuation of one USV has been having for years about the education transformation, and we think recent advancements in AI will unlock fresh opportunities to drive value and broaden access to education.

As we hoped for, the event raised more questions than it did answers, and so we’d lay some of these questions out here in hopes of spurring further dialogue around them.

Should students show their work?
While demoing Pressto, a platform teaching writing composition to students, Danny Stedman and Kieran Sobel pointed out that hand-held calculators first faced scrutiny when brought to the mainstream market in the 1970s. Educators feared calculators would harm math instruction. Today history would show that calculators were a step change in enabling students to engage with advanced mathematics. After some period of ambiguity over how they should be used, the biggest difference in education post-calculator was a focus on showing the work. More white space appeared on worksheets and the expectation grew around students not just providing answers, but showing the steps to get there.

It remains to be seen whether calculators are a fair analogy for AI. If so, it would suggest that students, in the same way that they are required to show their working in the white space of math tests, may also be required to show a record of their interactions with AI to produce an assignment. We are curious what a record like this could look like and how it would engender trust with educators.

What will differentiation look like in AI learning?
Many of the builders we have met are building learning tools on top of existing LLMs like ChatGPT. We question whether market power is more likely to sit with the infrastructure layer or application layer of AI, and therefore what differentiation in AI-based learning will look like.

Given the obvious preference for chat-based learning tools, we wonder whether user experience will be one of the greatest opportunities for differentiation. Duolingo stands out for its gamification and Quizlet for its quick and simple flashcard format. As the space continues to develop, we are looking forward to seeing what new innovations await in making learning more delightful. It makes us think about a return to USV’s thesis 1.0, first tweeted by Brad in 2011: “invest in large networks of engaged users, differentiated by user experience, and defensible through network effects.”

If making mistakes is key to learning, does the same stand for AI hallucinations?
Educators are rightfully concerned that AI hallucinations could be harmful to students. For example, ChatGPT has been shown to occasionally hallucinate false information if prompted about a minor historical event with relatively sparse coverage. If a model does not fully understand the question asked it risks inventing false material, which is then misrepresented as fact to students. One might counter that, in the same way that we don’t have 100% accurate teachers, we should extend a similar grace to models. We question whether we’ll have to accept at least some hallucinations if we want to accept AI-based learning. For now, hallucinations seem to be providing a great learning opportunity in and of themselves.

What role does emotion play in learning?
During the demo of Amira Learning, a tool that teaches elementary students how to read, Fred raised a question that can be paraphrased as: “In what ways is it helpful for an AI tutor to have more patience than a parent in teaching a student to read, and in what ways could this patience have unintended consequences?” This question gets at a larger point that the relationship between a teacher and a student is an intimate experience.

Students are not just learning math or english, but how to be a human in the world. As a result, we must approach learning as an emotion-laden process and exercise AI accordingly.

Can AI-integrated learning exist without a paywall?
USV is particularly excited about companies working to bring down the cost of education. However a repeated comment during our Summit was the costliness of running LLMs today. This suggests that AI learning tools may necessitate at least partial paywalls to be offered sustainably. We are at an interesting moment where learning is both getting far more accessible through scalable technology but the cost is, at least temporarily, significant to deliver in this way.

Despite the paywalls, these tools are a huge advancement when compared to the cost of personal tutors today. However paywalls still render the tool inaccessible to a significant number of students. How can we create broad access to these tools so that we do not end up with more inequities in education than we do already?

Please get in touch if you are building in this space, have thoughts on these questions, or are asking questions we have not yet have thought of.

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Joining USV – Grace

I’m excited to be joining Union Square Ventures as an analyst. I started out my career at Bain, where I spent a significant amount of time running investment diligence on a range of growth-to-late stage technologies across consumer, enterprise, fintech, and healthtech. Interested in the intersection of private capital, technology, and societal returns, I completed a short-term externship at Silver Lake Partners working on their ESG strategy. This work reconfirmed the urgency of the climate crisis, and I am continually inspired by the scale at which climate tech and talent has mobilized to provide much needed solutions.

A liberal arts major and essay-enthusiast, I immediately identified with the thesis-driven generalist approach of USV. I studied a mix of politics, philosophy, and economics in college and sought to better understand modern challenges (like income inequality, housing reform, and healthcare access) through the models articulated by social theorists and historians. On reflection, I like to think this lends itself well to a career in VC, which in itself is an education in observing how our world works, theorizing what drives it, and backing entrepreneurs who make it work better. During college I was lucky to be able to complete coursework in England, India, Brazil, and South Africa, and I hope to continue USV’s history of supporting founders not just in the US but also abroad.

I’m looking forward to working with entrepreneurs pursuing all kinds of creative disruption while at USV. In addition to contributing to our Thesis 3.0 more broadly, I have already begun researching novel approaches to mental health, the financialization of climate tech, and the implications of AI on education and wellness.

Outside of work, you can catch me watching documentaries about musicians and music-making, learning how to surf, or reading the Sunday Times newspaper when feeling homesick for my hometown, London. 

Please reach out to [grace at usv dot com] or (@gracekcarney) if you’re working on something that aligns with the USV theses and want to chat.

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