When Social Enterprise Demands Mega Scale
The world is increasingly concerned with the need to solve our carbon dioxide problem. There are three basic solution paths. We can reduce the use of fossil fuels, mainly by passing laws to restrict or discourage it. We can spend billions in public funds after the fact to capture and store the CO2 that is generated. Or we can plant trees in Australia. You have heard much about the first two, and almost nothing about the third. The reason: it requires a multipart, large-scale solution that no one yet has assembled the funding to get off the ground. But if they did, the solution would be self-sustaining, the world's carbon dioxide problems could go away, and the billions could be spent on other problems.
Here is the opportunity. Next to the Sahara, Australia has the biggest deserts in the world. They are flat, dry, sandy, and useless. But that could change: if we built massive desalination plants on Australia's west coast, and pumped the fresh water to the deserts, we could cover this land with forests of Paulownias, the world's fastest-growing trees. Trees, of course, take carbon dioxide out of the air. We know that an acre of forest captures 11 tons of CO2 from the atmosphere every year. If 80% of the Australian deserts were provided with fresh water and planted with fast-growing trees, Australian deserts could reduce the CO2 in the atmosphere of the planet by 2.9 billion tons per year. How much is that? The Princeton University Carbon Mitigation Initiative reports that the worldwide carbon dioxide problems of the world could be solved by capturing and converting 8 billion tons per year.
This is an idea first suggested by Leonard Ornstein, Igor Aleinov, and David Rindnstein in 2009, but it got no immediate traction. The problem was that, when it was first proposed, the profit-making potential of the solution was not explored. Not only are Paulownias fast-growing, they produce the world's most valuable hardwood. The sales yield from one acre can reach $10,000 per year. Australia has 339 million acres of desert. If fresh water were pumped to 80% of these deserts and trees were planted, the result could be a world hardwood export business eventually worth $2 trillion per year. At low-enough desalination and distribution costs, this becomes a business opportunity highly attractive to private funding.
So let's look at the desalination cost. The Saudis and Israelis have plants that produce fresh water from the sea for 1/5 of a cent per gallon. Each acre of managed forest produces four tons of biomass (lumber) per year but uses 960,000 gallons of water to do this. Doing the math (assuming Australian desalination firms could equal the mid-east rate), it becomes clear that Australia could solve a third of the world's carbon dioxide problem while becoming the world's largest and most profitable hardwood exporter. At the same time, managing the forests would provide tens of thousands of new jobs. If you think about what this project could do for Australia, it is similar to what happened to the Western US after 1865 when the US had acquired millions of acres of basically uninhabited land from Mexico. As with the development of the US West from 1865 to 1900, thousands will be drawn to Western Australia by the chance to earn a better living. The economy of Australia could double before the project is completed.
The logic is clear, but how do we turn such a massively ambitious vision into reality? The turning point will come when we are able to demonstrate to four key groups involved—the tree planters, harvesters, and sellers; the fresh water manufacturers and sellers through pipelines; the road builders; and the Australian Government—how much they have to gain. We're taking the classic approach of using a pilot project to provide proof of concept, then scaling up from there. We have outlined a 125-square-mile area near Perth that, even at such small scale, we know can turn a profit. From there, we'll proceed gradually to create forests in the other 10 Australian deserts, one 125-square-mile section at a time.
This must be an Australian project. No international body or outside multilateral group should have any participation. It's the Australian government that can acquire the land using compulsory acquisition, do surveys to break it into 800-acre tracts, plan the layout of the roads, pipelines, the living, and commercial areas. The government can lease or sell the land, and grant necessary permits—including work permits for foreign contractors and personnel.
Once the value of the concept has been demonstrated to everyone, the Australian government can draw up competitive contracts for the water and pipeline companies, the tree planters, and the road builders. Contracts could be open to all including non-Australians. It should hold open bidding. The Australian government can maintain law and order and the sanctity of contract. It can be fully reimbursed for its work through land leasing and taxes.
The Australian government will get the ball rolling when it passes enabling legislation and publishes the contract process throughout the world. Our role in the meantime is to build up an organizing group of people with relevant knowledge to share—parties such as the largest tree-planting firm in Australia, and the former head of the world's largest desalination plant. We are making speeches, writing articles, and holding meetings throughout Australia and the world. Right now, unfortunately, a lot of people in the world worry that CO2 levels will not be reined in, and damage to the planet is inevitable. If we can instead create a sense of inevitability about this solution, the pieces will come together, the concept will be proved, and the forests will rise. And our world will be better for them.
Insights from HBR and the Bridgespan Group