Tony Blair's Next Act

May 24, 2010: 12:50 PM ET

A silent cement factory on the Northern California coast is not where you would expect to find a former British Prime Minister on a Sunday afternoon. But there was no mistaking a blue-blazered Tony Blair hopping down from a black SUV as it rolled to a stop in a cloud of dust in front of a series of construction trailers. The reason for Blair's visit to this windy stretch of the Pacific just north of Monterey was also immediately recognizable in the next person to be disgorged from the vehicle: Vinod Khosla, arguably venture capital's leading green technology investor.

Blair, the consummate politician, has joined Khosla, the relentless technologist, at his eponymous venture capital firm as a senior advisor. Like Al Gore before him with VC firm Kleiner Perkins Caufield & Byers, Blair will be a rainmaker for Khosla Ventures, making introductions and helping match technologies with geo-politics and policy to fight climate change. Britain's roving diplomat will be compensated, but that is not the main driver, both men are quick to say. So it's not fair to label Blair a venture capitalist – yet.

"Let me be absolutely clear," Blair, says flashing his megawatt smile,  "I am not a financial expert or a technology expert. There are two things I can help with: Understanding what the trends are in government policy and regulations. And there is a global set of connections that I may be able to help him make."

The cement factory that Blair toured is operated by Calera, a startup in which Khosla has invested, whose idea is to take carbon dioxide gas from any source – in this particular case of from a neighboring power plant – and with the addition of sea water and some fancy processes turn it into aggregate for cement or cement itself.  The process is a high-tech (and high-volume) version of what happens when so-called "hard" water forms those white calcium deposits in your shower head. In the bathroom, it's called a nuisance. At the industrial scale Calera is testing, it's called carbon sequestration.

Khosla, who is never shy about stating the correctness of his opinion, is clear about why he needs Blair's help to bring technologies like Calera's to the world. "Energy and climate change involves more complexity, more nuances, more politics, and more policy influences than Silicon Valley has ever been involved with via say a website, a semiconductor company or a search engine," Khosla says. "There is a lot I don't know as a technologist, and frankly I worry a lot about what I don't know. That is where Tony can help."

Blair and Khosla are of the same mind that tackling climate change is perhaps the most important problem facing the globe. "If the science is correct, we will end up facing an uncertain future, not just in environmental terms but in economic terms," Blair says. "It's one of those things that illustrates most critically the clash between short-term political interests and  the long-term interests of the public."

Both men also agree that any solutions must be rooted in business. Markets must drive the adoption of technologies, and profit must be a possibility if real change is to occur, Blair says. "My view of climate change is very simple. We are going to have to come up with solutions to tackle climate change that allows our economies to grow. From a practical point of view we have to make a low-carbon future business-friendly. "

That friendliness must extend to the developing economies of the world if any efforts are to stand a chance of success. "China, India and other parts of the developing world are not going to sacrifice everything because we tell them they must," Blair says. "We need solutions for the developing world, and for the rest of the planet that change the way we consume and the way we grow. What government can do is create a framework of incentives that business and industry can go out and develop the technologies to take advantage of."

What Blair won't be doing is hammering out term sheets with prospective startups. "I don't expect him to get deals done," Khosla says. "But I would I ask him his advice on a technology before entering Europe with it. I want his opinions on which geographies are best suited to what technologies, and what we should do first in the U.S., in Europe and in China, Africa and the rest of the world."

Still, watching Blair plunge his hands into a drum filled with the gooey cement-like product of the Calera factory, it's clear he will get his hands dirty both literally and figuratively. Though he has plenty on his plate, including negotiations in the Middle East, Blair seems genuinely excited about the chance to bring new technologies to bear in the fight against climate change. He says he and his team will jump in on individual companies if they can offer some help. And should everyone involved do well financially, by doing good for the environment, so much the better.

"This next phase of action over environment will be taken only if it is seen as part of an enlightened self-interest," Blair says. "That is how we can make efforts toward combating climate change effective, and that is what this partnership is really all about."

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About This Author
Michael Copeland
Michael Copeland

Michael V. Copeland joined FORTUNE as a senior writer in September 2007. Copeland has covered everything from electric cars to e-readers. He is a creator of Tech Mate, an irreverent video series in which he debates (and skewers) digital issues of the day. Before joining FORTUNE, Copeland was a senior writer at Business 2.0. Copeland graduated from the University of Pennsylvania.

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