Dear Reader,
The topic of electrification and reducing carbon emissions has been getting a lot of coverage in the last couple of months. As the public has largely grown tired of the pandemic narratives, as well as the conflict in Eastern Europe, “electrification!” is all the rage.
It’s presented like a magic wand we can wave and instantly become “emissions-free.” Yet it always surprises me how the narrative misses one critical detail… what’s the source of the electricity?
And this is why electrification and carbon dioxide emissions are so tightly linked. Of course, an electric vehicle is emissions-free… but more than 80% of U.S. electricity production now comes from coal, natural gas, and nuclear fission reactors (from which radioactive waste is a byproduct).
Ironically, the Inflation Reduction Act of 2022 has nothing to do with inflation, but it does have a lot to do with electrification.
A massive $62 billion has been allocated for grants, loans, and subsidies for electrification (primarily batteries, electric vehicles, etc.). But what about baseload power generation required to fuel our electrical grids… the same power that goes into an electric vehicle? And are we to believe the media when we hear that carbon dioxide (CO2) emissions are increasing at a frightening pace?
I’ll save the discussion on EVs and the implications of the current targets for another day. But for now, let’s turn to the numbers, which I hope that we’ll all see are actually encouraging…
As we can see above, total CO2 emissions have been on a sharp decline since 2007. The fastest decline during those years occurred in 2019–2020 as the U.S. shifted quickly away from coal towards natural gas, with a smaller contribution from solar and wind in some states.
The reality is that we haven’t seen these levels of CO2 emissions since 1986, about 36 years ago. That’s major progress.
Moreover, emissions per capita show an even more dramatic improvement:
The U.S. hasn’t seen these levels since around 1950, more than 70 years ago. It goes without saying that the population of the U.S. has certainly grown dramatically in that timeframe. But the dramatic reduction in CO2 emissions per capita on par with 1950 is impressive, nonetheless.
The major concern is that in the last 18 months, the U.S. has increased its use of coal for the production of electricity. Coal now represents an unfortunate 25% of all power produced in the U.S., the same power that fuels these emission-free devices and electric vehicles.
I certainly hope this shift is just temporary. When the 2021 and 2022 numbers are released, we’ll likely see a move higher in the total emissions.
To be direct, the focus on electrification is wrong. If we’d like to continue to reduce total CO2 emissions, we’ll have to shift our primary focus to clean energy production, the kind that produces clean electricity on a scale capable to power cities, neighborhoods, and factories regardless of the time of day or night, or whether or not the wind is blowing.
Energy, and its cost and production, is about to become a headline story as we enter the cool fall months in Europe.
Germany, like the U.S., has reverted back to the use of coal for the production of electricity, given its shortage of natural gas and shuttered nuclear fission plants. The solution proposed by the German government for this fall/winter is to recommend that indoor thermostats be set to 19°C (or 66°F). I don’t know about you, but that’s a temperature that’s too cold for the summer, let alone the winter.
I think I’m going to go get my axe and split some wood…
Editor’s Note: Jeff means it. Here he is preparing for a recent winter at his home.
Amazon just announced that it will acquire consumer robotics company iRobot for a cool $1.7 billion. While that’s not much money for Amazon, it is a strategic move.
For context, this is Amazon’s first major robotics acquisition since Kiva Systems in 2012. As we have discussed before, Kiva became the foundation of Amazon’s robotics division.
iRobot makes the popular robot vacuum cleaner known as Roomba. I suspect many readers are familiar with this product. It’s a small, circular robot designed specifically to vacuum carpets and wood floors on a single level.
Roomba Vacuum
Source: iRobot
Here we can see the Roomba taking care of some spilled popcorn. It’s incredibly functional and convenient.
Yet iRobot struggled to expand its business beyond robotic vacuums. The company just hasn’t been able to invest enough into new product development to come up with additional mass-market products. It has been a great business… but was never able to build enough scale.
If we look at Amazon, though, it has a virtually endless war chest to dedicate to research and development. Plus, Amazon has the largest e-commerce business and distribution network on the planet. It could scale Roomba sales easily and tie the product into other home offerings.
The media looks at this and thinks it’s a perfect match… But there’s something they are missing. Amazon’s motivations here are much bigger – and much more cunning.
The Roomba system is very good at mapping out rooms inside a consumer’s home. That’s how the robots can clean autonomously with just the press of a button.
What’s more, a simple upgrade could enable the Roomba to recognize specific objects in the house. Furniture… décor… kitchen items… even toys. The Roomba could identify the specifics around everything in a consumer’s home.
Pair this with square footage and floor plan information, and there’s a lot of other intelligence that Amazon could extrapolate from all this data.
This would allow Amazon to produce even more targeted ads and product placement when we visit Amazon. Each ad or recommendation would be tailored to what consumers already have, what complementary items they are missing, and how much space they have in their homes.
That’s the story behind the story.
I could even envision Amazon slashing the Roomba’s cost dramatically just to get more robots into homes to accelerate data collection. The Roomba could be a loss leader with a very quick return on investment from additional product sales.
So this acquisition should absolutely make us a bit wary.
Amazon appears to be drifting closer to Google and Meta (formerly Facebook) territory, with regard to its data collection and advertising. And the Roomba is very much Amazon’s Trojan Horse.
That said, Amazon makes most of its money with its Amazon Web Services (AWS) cloud business and, of course, its massive e-commerce platform. So I don’t think Amazon is going to be as aggressive with selling access to our data in pursuit of advertising revenue… which currently amounts to less than 7% of total revenues.
But for those who are concerned about privacy, it may be smart to think twice about using a Roomba and connecting it to your Wi-Fi network. Once that’s done, the Roomba can send data and information back to the “mothership.”
And think about this – there are now over 19 million Wi-Fi-enabled Roombas in consumer homes. Once this acquisition is complete, all of the data previously collected from these devices will belong to Amazon.
Our next scientific development is going to be a controversial one. Reader, be warned – this one may be very uncomfortable.
A group of scientists in Israel just created the world’s first synthetic embryo. It’s a mouse embryo. And the scientists “grew” it in a lab using only stem cells.
That means they created the embryo without a mother or father. They didn’t use a fertilized egg or artificial insemination… Nothing like that. We’re talking purely synthetic life.
And here’s where it gets heavy…
The embryo has a heartbeat. And it has neural folds that are developing into a brain. Here’s a look:
Synthetic Mouse Embryo
Source: The Weizmann Institute of Science
As we can see, the synthetic embryo is developing just like a natural embryo would.
And that’s the purpose of this research. Scientists think this will give us tremendous insight into the earliest stages of development, such as how the heart and brain develop, or how organs form. These are areas that we still know very little about.
Of course, there are very serious implications here. If a scientist can do this for a mouse, they can also do it for a human.
Many in the industry think that would very clearly cross the ethical line. But if it can be done, someone will almost certainly do it.
And in fact, just days after the research was released, an Israel-based company, Renewal Bio, announced that it wants to do exactly that.
Renewal’s goal is to build on the latest breakthrough and create artificial embryos, to extend life, by “growing” organs for eventual harvesting.
We’ve had a look at organ harvesting before in The Bleeding Edge, but it was in the context of xenotransplanation, which is harvesting organs from an animal for transplantation in a human.
This would be the first time harvesting human organs from artificial human embryos, for transplantation into a human, has been considered. For some, this would be heresy, and for most, it is a deeply uncomfortable idea. One of Renewal Bio’s ideas to address any ethical concerns is to potentially create these artificial embryos without a heart, lungs, or brain.
This is such a complex issue, and a haunting one at that. We now have the technology to do things that we just couldn’t do even five years ago. But that doesn’t mean we should do them.
Where do we draw the line? How do we self-regulate these issues? Will countries around the world all adhere to some form of ethical principles… Or will the use of powerful technology devolve into a patchwork of “guidance”?
We better start coming up with these answers sooner rather than later. We’re behind on addressing these concerns, and the recent breakthroughs are going to become a forcing function to stimulate a starting framework.
Last May, we had a look at how Meta was gearing up to enable non-fungible tokens (NFTs) across its social media platforms.
Well, NFT functionality is now live on Instagram. That means the platform’s two billion monthly active users (MAUs) will have access to NFTs – many for the first time. This is incredibly bullish for the industry.
As a reminder, NFTs are a brand-new class of digital assets. In their simplest format, they are a form of digital art and collectibles.
Here’s an example of an NFT on Instagram:
NFT on Instagram
Source: Instagram
Here we can see a simple piece of digital art that somebody created. Instagram tags it as a digital collectible… And NFT functionality can go so much further.
In the case of art, NFTs can enable artists to automatically receive royalties every time their work is sold (or resold). In that way, great work is rewarded and can generate more income for the artist.
Additionally, we’re increasingly seeing NFTs represent physical assets or provide real-world benefits. We’ve written about this “digi-fizzy” trend many times in The Bleeding Edge.
This can look like a band’s new album release being linked to an NFT, as well as special VIP fan perks for NFT holders. Or it can appear as luxury brands like Gucci and Prada using NFTs to sell limited-edition merchandise like sneakers or handbags.
NFTs also enable the play-to-earn trend, where NFT games pay out incentives for players as well. And back in February, a real estate startup even used an NFT to sell a house in Florida at auction.
The possibilities are nearly limitless. And that’s why I’m so excited about this development at Meta.
It started with Instagram. Next, Meta will roll out NFTs across Facebook and WhatsApp as well. Instagram is a smart platform to start with, as it is a largely visual, creator-based social media application that has very simple-to-use connections to payment platforms – like Shopify, Apple Pay, Google Pay, and their international equivalents.
At that point, the majority of the world’s population – billions of people – will have easy access to NFTs. This is a huge step for the entire industry.
So I’m not concerned about the broad pullback we’ve seen across the NFT market this year. This move by Meta is a big infrastructure play that could drive billions of people into the NFT space. We can think of Meta as a Web 2.0 crossover into Web 3.0.
Regards,
Jeff Brown
Editor, The Bleeding Edge
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
