Episode 25 Transcript: Surviving when the Water is Rising

Molly Wood Voice-Over:

Welcome to Everybody in the Pool, the podcast for the climate economy. We dive deep into the climate crisis and come up with solutions. I'm Molly Wood.

This week … at long last … we’re talking about the topic that actually got ME interested in covering climate solutions … about six or seven years ago now … which was climate adaptation … basically … as I called the series that came out of it … how do we … SURVIVE?

I’ll talk about this more with my guest today … but to set things up and put it simply … in the climate conversation … MOST of the talk and spending is on what we call mitigation … reducing greenhouse gas emissions to slow the rate of global warming.

Adaptation … also called resilience … is pretty much what it sounds like … how do we harden infrastructure and grow different types of food and build houses and buildings differently to adapt to extreme weather.

This is a VERY under-resourced part of the climate fight … and my guest today … is trying to change that.

Emilie Mazzaccaretti:

Hi, Molly. I'm Emily Mazzaccaretti. I'm an entrepreneur and an investor. Adaptation and Resilience. I'm the co-founder of Tailwind. Tailwind is a new organization that we recently created to help accelerate the deployment and development of innovation in adaptation and resilience solutions.

Molly Wood Voice-Over:

Emilie has been in this space for a long time … All the way back in 2012 … she founded a company that gathered data about financial risk for investors … companies … and governments … which was eventually sold to Moody’s. Since then … she’s been advising companies and governments and investing … and now with Tailwind … she’s putting all of that work … in one place.

Emilie Mazzaccaretti:

So what we're talking about here is how do we do things better, faster, cheaper when it comes to preparing for the impacts of climate change. How do we get better at dealing with floods, with extreme heat. Um, and so we do three main things with Tailwind. One is we are running innovation programs focused on adaptation and resilience. So, for example, the first program we'll run will be on the construction industry and how do we improve conditions for workers, but also support corporations in being able to continue to run construction sites in extreme heat events or during or after floods.

We also are looking at setting up a fund for catalytic investing. So supporting early-stage startups and innovators who are bringing solutions that need that little extra help until they can get into venture funding. Um, and then a lot of sharing what's going on in the space. There's a huge knowledge gap. People don't really understand where the opportunities are, how adaptation and resilience is a great opportunity for the private sector, for innovators, for investors across the capital stack, um, for corporates to understand how they can leverage innovative solutions to get better, more protected, support their workers, help protect the communities where they're set up as well, and local governments also where so much work is going to happen on adaptation and resilience. We want to make sure all this work takes advantage of the latest developments in science and other innovations that are going to help us do better.

Molly Wood:

I want to start with the knowledge gap like let's go to adaptation and resilience, which is a long misunderstood somewhat controversial and definitely under-invested in part of the climate conversation. So tell us what you mean by that. Like, you know, what? What is it?

Emilie Mazzaccaretti:

So adaptation as defined by the UNFCCC, the UN Framework Convention on Climate Change, is how do we change the world around us so that we are better prepared for the impacts of climate change. Resilience is also similarly, how does a system recover from shocks and we cover both. There are some discussions around which word needs to be used. We don't think the discussions around the word in the lexicon is really what matters. What matters is we are seeing a lot of impacts of climate change. We're going to see a lot more. Even with the best efforts to reduce greenhouse gas emissions, we're still going to see a lot of these impacts over the coming decades. Some of them are so-called runaway impacts. It might be very hard to reverse track, reverse course. And so we want to make sure that we, as society, including the most vulnerable communities, can thrive in that environment.

There's a range of things. Of course, there's a lot of policy development and a lot of public investments that need to happen to make our infrastructure more resilient. But there is also a lot of work that the private sector can do. Both on the quote-unquote supply side, in terms of bringing solutions and technologies to the market that help us deal with those impacts, and those can be simple things or things that are already fairly widespread, like precision agriculture and smart irrigation. It can be things around heat-resistant materials. There's personal cooling devices or radiative heat technologies to help cool people in the middle of extreme heat events. It could be a range of things. Every part of the human economy and the Earth is going to be affected. We're focused on where people live and work and move and how do we keep them safe in that environment.

Molly Wood:

Let's talk about the history of the conversation about adaptation and resilience and the fact that we're even having this fight about what to call it. Um... Where are we in sort of the trajectory of the realization? You know, for a long time it was considered almost a moral failing to talk about adapting because the goal was to mitigate, to stop emitting, and now it's more obvious every day that extreme weather and fire and floods and sort of all of these impacts are here and are going to get worse.

Emilie Mazzaccaretti:

Very much so. So if you sort of rewind looking back at the, a lot of the climate science that came out around 2010, 2011, where scientists with a greater degree of confidence said we are locked into a number of climate impacts, regardless of what we do. We've just reached that threshold, scientifically speaking. And so for me, that's the moment where I switched from mitigation to adaptation.

But that is not a discourse that was audible, I think, or even acceptable for a lot of people, whereas now that we've had a decade plus of terrible disasters, weather-related disasters that again, scientists with increasing confidence say this was exacerbated by climate change, and it will be more frequent and we will see more of those very intense events.

This has helped shift the conversation around the fact that we need to work and chew gum, and we need to do mitigation and adaptation and it's not an either or.

Molly Wood:

Um, and then finally, before we talk more specifically about what you're doing about this, there's also this, um, so far, I think there have been conversations about adaptation in the context of risk, right?

That got some money moving, at least. Like, oh, okay, you have to adapt and become more resilient to this because there's a lot of risk. You could lose your house, business, investment. Talk to me about the shift to thinking about it as opportunity.

Emilie Mazzaccaretti:

Well, it's still a shift in progress, realistically, and that's one of the things we're working on.

There's two sides of the coin, right? For every person that needs to adapt, they're going to need something that may or may not require a new product or service. Some of it may be simple. Some of it may be really leaning in nature-based solutions or traditional methods. Some of it may be a way of life, but some of it may be enhanced by new technology or business models or services that help make this process better.

And this is where the opportunity is, to a large extent, for developers, corporates, innovators of any kind who want to help and want the market to be a provider of solution for adaptation. This is an opportunity for investors, who can help finance those solutions. And there's a more complex opportunity around.

We need a lot of work in infrastructure. Some of these could be monetized, as we say, in a way that it's not just local governments and public monies funding those infrastructures where we can get private capital. And the reason we want private capital is because there's a lot more private capital than public capital.

And so if we just rely on public funds, we're not going to get as much done. If we can crowd in, as we say, and blend public and private capital, then we can do a lot more done.

Molly Wood:

Okay, so now, let's talk more about Tailwind. So, when did you found it and what are kind of the primary products so far? We've gone through sort of the approach. How does that come into practice?

Emilie Mazzaccaretti:

So, we're more of a fund than a product startup type. My background is in climate risk adaptation and resilience. I've spent the past 10 years working with investors and real estate investors, corporates, helping them understand the risks in their portfolio of real assets and their facilities. 

And getting a lot of okay. Thank you for helping me understand my risks. Thank you very much. And now what? Now what do I do? And I've been struck by the lack of move from understanding the risk to actually investing into adaptation solutions. There is a missing link there. Um, and so the goal here is, first to help meet the, help connect the dots between demand and supply. So what's demand here? Demand are governments, local governments in particular, local agencies, things like your transportation agency, your water agency, your local utility, as well as more standard corporations, anyone who has physical operations, logistics, manufacturing, health, you name it. 

Any one of those need to prepare for potential impacts in some of their facilities. And we know that needs to happen, but that hasn't translated into a clear market signal for I need a type of material that will have such and such performance under such and such condition.

I need a type of tool that will help me accomplish those things even when it's extremely hot or that will help my building recover after an event. And so the first part, we're really going to start from the demand work from those demand owners or tech doctors, however you want to call them, to help them turn this, oh, I have this problem, I've done my risk assessment into it, and now I need things that can accomplish those goals and send that out. So innovation, uh, challenges, uh, XPRIZE type, uh, programs, and then, um, targeted supports for the solutions that emerge from those innovation challenges to help those that are recognized by the would-be buyers as something they're interested in and help them graduate.

Molly Wood:

Then, says Emilie, they might introduce those companies and solutions to existing investors or … Tailwind hopes to raise its own funds … to invest in companies that might have a longer time horizon than traditional venture capital might want to fund … or might just be a different type of company that is more mission-driven and less about pure profit.

Then there’s this part …

Molly Wood:

Talk to me about that kind of education piece of it.

It sounds like that's a big part of it is filling this knowledge gap and helping people understand that this market, it's almost like it seems so absurd to say this market exists when people are literally dying of heat and their buildings are burning

Emilie Mazzaccaretti:

There's a lot of bringing people together.

There's people who have been working on adaptation and resilience for decades, in particular in developing countries or at the local government level. You have the American Society of Adaptation Professionals. There are some research and think tanks. We know a lot about what works and what doesn't.

We know a lot about maladaptation and how we avoid taking adaptation actions that in fact make things worse because they look good in the short term, but they're having a worse impact down the road or for other people in the communities or in the region. So we're really not starting from scratch, but that body of knowledge does not live in a place where venture capital firms are operating and it's not necessarily, you have to go look for publications by the World Bank or other development finance, institutions, or maybe obscure think tanks that you've never heard of. And so really bringing those things together is where we think a lot of positive impacts can happen.

I think convenings are really important in many different forms. It can be large, it can be like this workshop we just had, with a smaller group of people, but very diverse and really excited to meet each other.

There's not a lot of places for folks who work, or worry about adaptation and resilience to get together and talk about that with other folks who understand.

And we know that creating those peer networks where people can have a safe space to exchange ideas and agree to try to move peers in a certain industry at the same speed.

So everybody's in the middle of the pack, but the pack moves. Folks don't necessarily want to be ahead. So sometimes you need to take everybody if you want to move forward.

Molly Wood Voice-Over:

Time for a quick break. When we come back, how adaptation … can have NEGATIVE impacts … and what’s hot … in the resilience space.

Molly Wood Voice-Over:

Welcome back to Everybody in the Pool. We’re talking with Emilie Mazacuratti … co-founder of Tailwind … an organization designed to encourage … incubate and fund … solutions that help us survive and adapt … to the climate crisis. She said a word earlier that I asked her to expand on … maladaptation … which means … this kind of thing.

Emilie Mazzaccaretti:

So if you adapt to extreme heat by putting a lot of inefficient air conditioning around you, that is not helping because guess what? You're increasing greenhouse gas emissions a lot. And while we need air conditioning, there's also ways that we can keep people cool in a way that doesn't make the problem worse at the same time. It could be things that keep people in places where they are not safe.

So, earlier in this workshop we were talking about incentives to rebuild after a wildfire or disaster, for example, to rebuild in place when, in fact, you know, this is a dangerous place and we need to get people to rebuild or relocate. So have incentives that align with that rather than incentivizing people to stay in a place where it's just not safe for humans to live anymore.

Or it could be things like if you build a seawall around a limited part of a region or even a town, then you're going to make flooding worse for the parts around that. There's been research showing that around the Mississippi, there were some towns or cities that were protected with dikes and flood protections, and that actually made flooding worse for the other ones downstream.

Maybe their assets weren't worth as much. And so when the Army Corps of Engineering did their cost-benefit assessment, they protected the higher-value assets and they made things worse for everyone else. And so there's a lot of examples, and adaptation is by essence about, it's about humans, it's about society, it's about how we all live better, and it's very interconnected.

And so if you have organizations, public or private, or agencies who make decisions with a very narrow lens, you might be making things better hyperlocally for a subset of people for a certain amount of time and then in fact, it's going to be worse. So it's also that messy complexity. We're mentioning impact metrics but that messy complexity exists across the board when it comes to adaptation and that makes people hesitant because they're not sure if they're gonna do the right thing.

But we all need to engage and make progress. And again, we're not starting from scratch. There's been a lot of thinking and literature around what are some of the manifestations of maladaptation and how we can think ahead so we make sure that we're not making things worse inadvertently.

Molly Wood:

What are the other, what are kind of the hot topics in adaptation and resilience? Like you, I think, you know, have mentioned water scarcity, certainly heat, like the hot topics and then also kind of the technologies that are coming that we, you know, like, look, we're going to have to have stillsuits like Dune. It's just... Give me the sci-fi part right now. Like, what are people working on that is interesting?

Emilie Mazzaccaretti:

Well, the tongue-in-cheek answer, what's the hot topic, is what month of the year it is. Because it's very seasonal, depending on what kind of events happen. So we're just rolling off hurricane season. Actually, there's a hurricane barreling down Mexico today, Category 5. So people are talking more about that.

And then soon it will be over, and people will forget hurricanes exist until August next year. We're also... fire season. I mean, in California, it's not been as bad as other years. It's been horrible in other parts of the countries and North America and other parts of the world. Floods have been everywhere over the summer.

Now we're gonna get into winter storms and blizzards, which can also be exacerbated by climate change for a range of complicated reasons. So the conversation topic is very driven by the weather. Literally, don't you love talking about the weather? It lacks stickiness. It lacks the ability to continue the conversation past the immediacy of what you read about in the news.

In terms of technologies where we are seeing activity right now is in things that are again related to very active investment verticals and markets so resilient grid. Resilience is a big deal and that has been embraced and it's owned by folks who work on. Grid in general, a lot of decarbonization and a lot of resilience happens.

There's Department of Energy funding, like, there's a lot going on there. I think to your point, water, for folks who work in water, they've been aware of water scarcity and it's worsening for a long time. But it still feels like there's a lot of work that could be down, done outside beyond the expert investments.

Agriculture, of course, is big. And then what's hot, but not quite hot enough, again, heat. I think it's starting to really sink in physically how bad heat is. I don't think people have yet completely thought about, again, how things could be made better through technological innovation, through better construction and design, and acknowledging the...

really widespread impacts that it has across the board on humans, on systems, on infrastructure, power line, transmission line sagging, and railroad buckling, and bridges buckling, like, there's a yeah, you're laughing, it's bad!

Molly Wood:

I'm laughing, but in that I'm gonna start crying away. I mean, roads are melting, people, like was it in London, I think, that the runway melted in London?

Emilie Mazzaccaretti:

Guess what? Surely we can find something else to put on roads that won't melt. And maybe even that will help with water permeability. Or maybe that will help with reflecting heat back into space. Oh, you want the Star Trek stuff? Radiative heat! Give it to me! Give it to me! Yeah, the radiative heat is fascinating.

Molly Wood:

But at the basic level, like, I want that for my windows. But also, could we have that for... parts of the planet. And should we?

Emilie Mazzaccaretti:

Yeah. Yeah. And you said it very well earlier. Right now we're focused on the United States because we think there's a lot of capital there and therefore there's the ability to innovate and lower the price point of technologies, products, and solutions.

Prove things out in a way that can then be deployed in a much broader market globally. There's also a lot of innovation happening in a lot of countries around the world where local entrepreneurs are rolling up their sleeves and finding solutions that works for them for their current problems and in their market given just willingness to pay, ability to pay, and the nature of how certain markets are set up. And there's also a few organizations doing really interesting work there. And we think connecting the dots is going to be really helpful because there could be some really great innovation coming from those markets that can be scaled and be immediately accessible to a lot of other countries and more developing country or emerging markets.

Molly Wood:

Right. I mean, certainly where the urgency is worst, the imperative to innovate is probably the strongest. And then, let's talk about, I know we don't like to do this on the show, we like to talk about solutions, but let's talk about some of the challenges, because I do think adaptation and resilience is in such an interesting, and by interesting I mean somewhat frustrating bucket, in that it embodies a thing that humans hate, which is to prepare in advance for a problem, as opposed to react to a problem.

And it's hard to prove a negative. It's hard to prove, you know, disaster averted, as opposed to measure the disaster that occurred. How do we continue, with optimism in mind, how do we overcome kind of those two things?

Emilie Mazzaccaretti:

So you said it yourself, right? But a success story is a story of something that didn't happen and so that makes it really hard.

It also makes it very hard to prove that you had an impact because again, you need sort of a counterfactual of how bad things could have been, had you not prepared adequately. There's even a little bit of a first mover sort of backlash. If you look back at Hurricane Sandy, Goldman Sachs had done a lot of preparedness for their downtown building.

And so when you look at pictures of Manhattan, darkened skyline, except for the one building that was lit up, that was Goldman Sachs. And they took a big backlash for that because they were like, well, the fact that Goldman Sachs, you know, building is up and the hospitals are down, is everything that's wrong with this country?

Okay, but at the same time, like, we should be grateful for the folks who are actually thinking ahead. Yes, it needs to happen across the board, and we need more resources, obviously, for hospitals not to be evacuated in the middle of a hurricane. But you can't punish the ones who are being smart about it.

So, how do we, how do we tell that story better? This is where I think we have a lot to learn and yet, yet again, a piece to take from the climate tech space, where there is a very dynamic, positive thinking community and it can be a little irritating for the outside sometimes to see, feel that great enthusiasm and sometimes it can be a little excessive, but also you need it's for something to be exciting to get to attract more people like people don't want to work on the doom and gloom all day.

It's depressing. Take it from me. There's a lot of professionals who deal with climate anxiety. It's a thing, right? And so looking at the positives of how we can actually help solve the problem, even small pieces of the problems is really important. Having more case studies around things that are being done and that work.

And we also need more basic research around what are the things that work well, how can we prove that they work well, so that we're not feeling paralyzed by fear and anxiety, but rather we see concrete things that everybody at their own level can do to make the problem better. And again, right, this is behavioral techniques that have been used for years by environmentalists, in general, sustainability, like, you can't overwhelm people.

So you have to show some very concrete things that can be done. And it's such a green field for adaptation and resilience. A lot of those techniques and thinkings and interventions need to take place to get people to take action in a positive way.

Molly Wood:

I mean, personally, I love, I mean, I love this topic because I, I just, it appeals to some sort of northern plains farmer background in me.

Like, it's very practical. Just figure out how to not die. And there's something very satisfying about that. If you can help a lot of people figure out how to not die, that's a win. Where can people find you?

Emilie Mazzaccaretti:

So, um, Tailwindclimate.com, just one word. If you're an entrepreneur, or just a researcher scientist with a great solution, reach out.

Maybe we can help connect you. Down the road we might have capital. If you are looking to build resilience for your organization, local government, corporates, and you don't know how to get there, we want to talk to you and see what it's going to take to sort of get that demand signal out. Investors, of course, always welcome, we need capital, and we need a lot of goodwill and we need to get the word out.

Molly Wood:

Emily, thank you so much for the time.

Emilie Mazzaccaretti:

Thank you, Molly, pleasure being here.

Molly Wood Voice-Over:

That's it for this episode of Everybody in the Pool. Thank you so much for listening.

Email me your thoughts and suggestions to in at everybody in the pool dot com and find all the latest episodes and more at everybody in the pool dot com, the website. And if you want to become a subscriber and get an ad free version of the show, hit the link in the description in your podcast app of choice.

Thank you to those of you who already have. See you next week.