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Climate Money S2 E4: Cheap oil's last, best job
Every climate VC post-Trump has said it: we don't invest in companies that rely on subsidies.
But the entire climate transition has been living off the biggest subsidy in human history — 200 years of cheap, abundant fossil fuels that funded low interest rates, scalable manufacturing, global trade, and the financial architecture of the transition itself.
In this Season 2 essay, Susan Su makes the case that energy is upstream of capital, capital is upstream of everything else, and the window is closing faster than the models assume.
We walk through the petrodollar system, why Bitcoin, aluminum and green hydrogen (among other products) are all just energy repackaged, and what it means that 40% of the world's solar polysilicon is manufactured with captive coal in Xinjiang.
The 15:1 debt-to-equity ratio at the heart of climate finance assumes stable energy pricing across a 20-year horizon. That assumption is about to get tested. The Gulf States used their fossil surplus to build sovereign wealth funds. The US used it to subsidize consumption.
Which path the climate finance community takes from here — scenario planning over point estimates, auditing exposure on the energy-repackaged hierarchy, treating energy politics as alpha — will decide who navigates the volatility with options and who navigates it with debt.
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By Susan SuEvery climate VC post-Trump has said it: we don't invest in companies that rely on subsidies.
But the entire climate transition has been living off the biggest subsidy in human history — 200 years of cheap, abundant fossil fuels that funded low interest rates, scalable manufacturing, global trade, and the financial architecture of the transition itself.
In this Season 2 essay, Susan Su makes the case that energy is upstream of capital, capital is upstream of everything else, and the window is closing faster than the models assume.
We walk through the petrodollar system, why Bitcoin, aluminum and green hydrogen (among other products) are all just energy repackaged, and what it means that 40% of the world's solar polysilicon is manufactured with captive coal in Xinjiang.
The 15:1 debt-to-equity ratio at the heart of climate finance assumes stable energy pricing across a 20-year horizon. That assumption is about to get tested. The Gulf States used their fossil surplus to build sovereign wealth funds. The US used it to subsidize consumption.
Which path the climate finance community takes from here — scenario planning over point estimates, auditing exposure on the energy-repackaged hierarchy, treating energy politics as alpha — will decide who navigates the volatility with options and who navigates it with debt.