ClimateSmart: Why We Replace Fossil Fuels with Climate Solutions

Chapter 1: Overview

What technology would you rather invest in?

The only constant when it comes to technological progress is change. No technology lasts forever, no matter how big, or important to the status quo.

Inevitably, something better, cheaper, faster comes along and replaces it.

At first, the new thing isn’t actually better, cheaper, or faster. It’s more expensive, harder to use, and slower. But the potential is there. If it can escape velocity, avoid getting squashed by the status quo, and get adopted by enough early believers, the process of technological transformation has begun.

The new technology steadily gains adoption. The bigger it gets, the cheaper it becomes. New varieties emerge and social adoption takes off, while the old technology… gets its lunch eaten. Its margins get squeezed as demand drops. The economically weakest parts of the supply chain go out of business, leading to shortages and sudden price hikes. And this messy decline pushes more people to the new solution, faster.

We believe we’re at such an inflection point for multiple climate solutions. And we believe that, simply on their merits (cheaper, better, faster), they are poised to win.

We believe that if we skipped ahead to 2050 and got to ask ourselves that same kind of question: So would you rather have invested in?

That the answer is very clearly the second. And that the same is true for many climate solutions.

Here’s why.

Chapter 2: Renewables and batteries are the cheapest way to generate electricity and prices are still falling

If you wanted to buy something, what would you rather pay $1 or $2?

Would you rather get it tomorrow or the day after?

What if you’re looking to build a new electrical plant?

If you’d prefer the lower price and earlier delivery option, you would no longer go with coal or gas. You’d get a renewables plus battery system.

Don’t take it from us. This is from the March, 2025 presentation from NextEra Energy, one of the largest utilities and energy developers in the US:

Thanks to the falling costs of renewables, solar or wind plus battery storage is now the cheapest way to generate electricity in the US. And thanks to their modular nature, they are also much faster to procure and install than incumbent options like gas.

And this is not just a US phenomenon. In 2022, the International Energy Agency projected that solar plus battery systems would easily outcompete coal in India and China on price:

And that’s coming true. In 2024, China hit a milestone, with their cumulative solar and wind capacity surpassing coal with some analysts estimating that it no longer makes financial sense for China to build more coal capacity.

Why is all of this happening?

For many applications, renewables plus batteries are simply a superior technology for three main reasons:

  1. They don’t require inputs. You don’t need to worry about the logistics of securing a gas line or supply of coal. You don’t need to factor in accounting for volatile fossil fuel prices. You just need access to wind/sunshine and enough battery backup.
  2. They are modular. Meaning you can buy enough to power a building or a neighborhood. The base unit (solar panel, battery) is the same.
  3. Their cost has fallen dramatically. Unlike gas or coal where the main costs are fuel and operating the plant, the main costs for renewables plus storage is just buying and installing the materials. And costs have fallen dramatically as the industry has scaled up:

Solar panels:

Batteries:

Unlike fossil fuels, which get more expensive as the “easy to extract” deposits get exhausted, solar, wind, and batteries are manufactured forms of electricity production.

And humans (particularly the Chinese right now) are really good at optimizing manufacturing. Meaning the more these technologies scale, the cheaper they get. Why? Economies of scale yes, but also just experience. There is a learning curve that as companies build a thing more, they find new efficiencies.

This phenomenon in manufacturing, known as Wright’s Law, projects that every time global capacity doubles for a given manufactured good, prices fall about 20%. We’ve seen that happen for solar and batteries now to the point where they beat incumbents on cost. And, particularly for batteries, there’s no reason to think their advantage won’t just keep growing.

So, it’s no surprise that renewables represented a whopping 93% of electricity expansions in 2024:

And given how much cheaper solar and batteries can still become, it’s hard to see a future for electricity that isn’t moving away from the incumbent coal and gas and towards renewables and batteries.

But what about oil?

Chapter 3: The best cars in the world are Chinese EVs. Watch Out Oil.

It is shocking how quickly the Chinese car market has changed. And it cannot be understated how threatening this rapid evolution is to the status quo of both traditional auto-makers and traditional auto fuel: oil.

Just going back to 2015, Chinese car brands were kind of a joke. Here’s some quotes from an online car enthusiasts forum of that time discussing Chinese cars:

Jump ahead just 10 years later and the global sentiment has completely flipped. Here’s a selection of headlines:

What happened? How did Chinese car companies go from “2 or 3 generations behind” to arguably now “2 or 3 generations ahead?”

First, the Chinese Government, like Elon Musk and the Tesla founders, foresaw that electric vehicles are a fundamentally superior technology to Internal Combustion Engines (ICE). EVs are:

And second, China under Chairman Xi explicitly stated their goal in their 2021 5-year plan to lead the world in next generation technologies.

And it’s working. In 2025, BYD’s Chairman shared his belief that Chinese “New Energy Vehicles” (aka electric) are ahead of the rest of the world by three to five years.

The numbers back him up. In 2024, BYD surpassed Ford and Honda to become the world’s 4th largest seller of automobiles. They are selling way, way more EVs than American EV leader, Tesla:

So, why is BYD, a Chinese car company that nobody outside of China had heard of 5 years ago, emerging as potentially the #1 car company in the world?

Because unlike Tesla in the US, which enjoyed relatively little competition from other EVs, BYD had to survive and thrive in an extremely crowded, increasingly cutthroat Chinese automobile market.

The New York Times columnist, Thomas Friedman, made the analogy after visiting China in 2025 that Chinese EV companies are like athletes all training in the gym against each other.

The result is that top Chinese EV companies are able to offer much better cars at much lower prices.

The top selling BYD car, the Song, retails for $20k USD in China. For basically the same range and features, you can get its closest US competitor is the Tesla Model Y in the US at a base price of $48k.

That is simply way more car for your money.

And BYD is far from resting on its laurels. In the weeks before writing this article, they announced a major breakthrough in battery technology:

That’s pretty comparable to the time it takes to fill up a gas tank.

And while the US tariffs may keep such advanced cars out of US markets, there’s plenty of auto markets out there without domestic production to protect.

Chapter 4: China has a geopolitical incentive for solar, batteries, and EVs to take over

China has a tremendous lead already in these fields. China controls:

And just like the US does with its domestic fossil fuel industry, the Chinese government has not been shy about massively subsidizing their companies in these spaces to undercut international competition and claim market share.

Chapter 5: AI’s voracious electricity appetite will scale solar + batteries even faster

Electricity demand is rising around the world.

In developed nations, a period of relatively flat electricity growth has ended as the rise of AI-data centers is projected to increase electricity demand by 20% by 2030.

Chapter 6: Water, heat, and metals: why efficiency climate solutions will win

Efficiency is simply the act of doing more with less.

Chapter 7: The wildcard of governmental climate action

How much more could meaningful government support push up the growth curves for climate solutions?

It could be a major difference.