Marketplace

The bailout plan and prospects for renewable energy

Sustainable thinking often requires the luxury of a long term perspective: If you don’t have fuel to prepare the evening’s meal, whether the firewood is harvested sustainably is likely not your first priority. In that context, our current economic meltdown could pose a threat to recent gains in public support for renewable energy and efforts to address climate change.

However my home state of Michigan, an economy with extensive experience in the economic meltdown arena, has been making measurable gains in renewable energy investment and green collar jobs support in spite of (or maybe because of?) our long-term economic challenges. There’s an attitude that the State has to do something to resuscitate the local economy after steady outsourcing of manufacturing jobs. And renewable energy and energy efficiency are viewed as solutions that provide inherently local jobs, while also addressing the larger issue of our dependence on foreign energy.

Michigan just passed a renewable portfolio standard (10% by 2015), installed its two largest wind turbines (2.5 MW turbines installed by Heritage Sustainable Energy), and the governor continues to be an outspoken proponent of green collar jobs.

It will be interesting to see how this plays out with the national bailout (excuse me, “rescue”) plan. The version just approved by the Senate includes about $17 billion in energy incentives; however in addition to renewables, the Senate’s energy incentives include oil shale coal-to-liquid projects that were previously resisted by the House and appropriately deemed “fuels from hell” by Thomas Friedman.

Speaking of Friedman and energy energy, with the election just over 4 weeks away, I’m reminded of his words from Hot, Flat, and Crowded: “It’s much more important to change your leaders than to change your light bulbs.”

• October 2, 2008 by Jim Nicolow
• 1 comments

• tags: bailout Michigan renewable energy

Response post: renewables can't be stopped

It looks like Michigan and Washington are closely aligned with their renewable portfolio standards of 10% by 2015 and 15% by 2020, respectively. But with all due respect Jim, I think Washington is kicking Michigan’s renewable derriere. We have 39 geothermal, solar, wave energy and wind projects in some forward marching phase, with 18 fully operational.

Gifted with massive coastal wave energy, the windy (and thankfully sunny) eastern part of Washington and geothermal deposits, we are using a suite of public policy tools, including the dreaded Initiative process, to move inexorably towards a clean energy economy in the Pacific NW.

Abyd Karmali from Merrill Lynch was right on target when he said “the carbon crunch is a multi-generational challenge that will significantly outlast the credit crunch.” Long-term success for renewable energy will come to fruition, even with the massive belching from Wall Street and its run for cover.

When we collectively stop quaking in our boots and recognize that financial outcomes are within our control, and when…

• Congress renews the renewable tax credit (and we know dirty fuels will come along for the ride, or no deal)
• We adopt a “recovery/bailout/Mr. fix-it” plan that substantively changes banking regulation
• Shareholder action and common sense reign in the obscenity of rewarding incompetence with golden parachutes
• Citizens realize the returns from clean energy will create family wage incomes for many areas, critically more rural locations
• Clean energy is a national security strategy and a human health imperative
• We act on the recognition that a slash and burn, 1950s retrograde emphasis on inelegant technologies, scale and pollution, is not a pathway to economic success; and
• Everyone follows the progressive lead of states and municipalities that just refuse to wait any longer for federal intelligence on this issue…

…the world will look a little brighter (and cleaner).

The credit markets will re-emerge, a certain number of venture capitalists will continue to fund renewable investments and when the dust settles over the nation, I’ll be glad I live in Washington (State that is). Washington also passed Green Jobs legislation not long ago, the objective of which is to increase the number of green jobs to 25,000 by 2020.

The positive returns for everyone from parents (with kids breathing good air quality), R&D, manufacturing, specialty trades, construction, legal, engineering and governments is just too enticing to let fall. If you disbelieve, just ask the U.S. Conference of Mayors who just released their green jobs report (link opens PDF). Communities everywhere will benefit from continued and increased investments in clean energy and cleantech overall, and it’s a good, forward looking story — just you wait and see.

• October 3, 2008 by Heidi Siegelbaum
• 0 comments

• tags: bailout renewable energy Washington

EcoBroker standards: got transparency?

Sarah Gardner reported on the EcoBroker Program this afternoon on Marketplace. The program attempts to address two critical issues in combating greenwash: 1) it defines what criteria an agent must meet to be a green real estate agent, passing an exam covering their 18-hour curriculum related to residential energy and environmental issues, and 2) it certifies agents who have met their criteria.

Unfortunately, the criteria are not that transparent at the moment. From what I could see on the EcoBroker website, you have to take their proprietary classes in order to see what criteria they’re using to define green expertise. I would like to see their criteria clearly articulated / published and open for peer review, similar to the approach taken with development and refinement of green building rating programs. I think that transparency and objectivity is critical to broad acceptance and adoption of the program.

That said, I think this is a great step in the right direction. I think it both signifies that there is a market for green homes, and the program itself can help grow that market.

Critical next steps are more transparency in defining the expertise required to become an EcoBroker (ideally, EcoBroker would publish this criteria and simply administer the agent certification test), and adoption of concrete standards on the property listing side (what does it take for a property to qualify as a green home).

• October 21, 2008 by Jim Nicolow
• 6 comments

• tags: EcoBroker green building standards

Economic downturn to bring change, not collapse to green sector

The economy is in bad shape, and green businesses will definitely feel it in the months ahead. But firms that deliver great products at competitive prices will come out of this downturn as leading engines of job and GDP growth.

My prediction? Green luxury falls, green necessity rises.

While sales of $100,000 electric cars, solar yachts, and green travel packages to Fiji will go down, the importance of lowering energy costs couldn’t get stronger. Thanks to the economic downturn, this week’s Oprah Winfrey Show discussed the heightened importance of thrifty ideas such as unplugging appliances when they aren’t in use to reduce people’s monthly electricity bill. Firms that have a sound business model to provide energy audits of houses and offices and/or that perform practical efficiency upgrades with quick paybacks will have big growth opportunities ahead.

As Sarah Gardner’s report on Marketplace yesterday mentions, taxation to achieve behavior change will be tougher to get passed over the next two years. But people are already changing their behavior in a more climate-friendly way. Oil consumption in the US has fallen more than 4% in 2008, with last week’s demand almost 9% below the same week in 2007. Since coal and natural gas consumption are expected to rise a slower than normal ~1% and ~2.4% this year, we will probably report a significant nationwide decrease in greenhouse gas emissions for 2008.

The renewal of federal tax credits for wind through 2009 and solar through 2016 guarantees a market as long as financial markets return to some sense of normalcy. One of the problems of the past three years in both wind and solar markets has been an overheating of demand that supply has struggled to provide, leading to higher prices. In 2009, increased supply along with somewhat tempered demand may help to bring much lower prices to green electricity installers. I believe that wind and solar will begin to replace the market share of fossil fuels in electricity next year.

Cleantech companies have received big and growing capital flows over the last few years. If they put those resources to good use and provide energy at increasingly competitive prices, then they will likely continue to grow — even if the rate may be slower than the recent 30+%. New coal, nuclear, and natural gas power plants have huge construction costs that will also struggle to get financing — so more flexible distributed generation systems of wind and solar may end up at an advantage in a capital-constrained world. Time will tell.

Many predict consolidation in the solar sector as lower prices put downward pressure on profits next year. But even if there are fewer companies, continued innovation will guarantee them a growing role in our energy future — especially as the marginal cost of oil production continues to rise over time.

A greener lifestyle that includes more bicycling, public transit, carpooling, and efficiency and less fossil fuel consumption will become a critical element of economic recovery. It will be a tough ride for everyone, but the green sector can come out of it stronger than it’s ever been before. And, perhaps most importantly, the health of the Earth can begin to be restored for all its employed and unemployed creatures to enjoy.

• October 9, 2008 by Dennis Markatos
• 3 comments

• tags: economic downturn efficiency green biz solar wind

Both candidates tout "Clean Coal" -- but it doesn't exist!

Holy crap. Is the onslaught of “clean coal” internet ads driving anyone else nuts? You can’t open a news website without being subjected to greenwash about the benefits of coal. “It’s what powers America.” No duh! Coal is responsible for a majority of carbon emissions. That’s the problem! It’s like touting grain alcohol as a cure to alcoholism.

Talk about lipstick on a pig. “Clean Coal” is apparently an oxymoron that both party’s candidates can support. Saying it’s clean doesn’t make it clean. Come on Barack, come on John. Can one of you show some leadership on this issue and stop parroting the coal industry’s coal-is-great message? Coal mining is an environmental disaster and coal burning is a climate change disaster.

The technology simply doesn’t exist. We’re decades away from Carbon Capture and Storage (CCS). The Energy Department just pulled the plug on the $1.8 billion FutureGen project, previously slated to be the first coal-fired plant with CCS.

Architecture 2030’s report, “The 2030 Blueprint, Solving Climate Change Saves Billions,” reveals that our buildings are responsible for three quarters of our electricity use. The report calculates that building energy efficiency can “produce” electricity (by reducing demand) at 1/6th the cost of Coal with CCS (and one fifth the cost of nuclear).

While coal with CCS is at least 20 years out and a single nuclear plant takes 8 to 12 years to get online, energy efficiency measures can be implemented today - at today’s prices with off-the-shelf materials, appliances and equipment.

• October 27, 2008 by Jim Nicolow
• 8 comments

• tags: 2030 Blueprint clean coal

Does production cut make OPEC green?

When I heard the news this morning that OPEC will cut its production by 1.5 million barrels per day next month, I thought they made a good decision. Such a cut should slow down the rapid decline in oil prices without making prices shoot back up to record territory. While they made the cut to maximize oligopolist profits, I was interested in the consequences of such an action. I felt that a $65+ oil price per barrel is crucial to keep consumers from flocking back to over-sized, inefficient vehicles and to keep renewable energy competitive with its fossil fuel counterparts. I then realized this logic begs the question: does the production cut make OPEC’s action green?

Let’s start by looking at the immediate effect of the action itself…

1. Withholding 1.5 million barrels of oil from the market daily prevents ~150 million tons of carbon dioxide in combustion emissions on an annual basis. In other words, OPEC seems to have in one fell swoop cut global emissions by .6% (equivalent to 3% of US emissions). Any environmental organization would dream of achieving such a significant and quick reduction in a one day meeting like OPEC’s Vienna rendezvous today. I think the action in itself gets four green stars.

2. But of course OPEC is not the only source of oil. So, if the cut keeps oil prices above $60 instead of falling to $50 during the recession then non-OPEC oil that can be profitably produced between $50 and $60 will be shipped to consumers, thus increasing greenhouse gas emissions. But non-OPEC fields are usually more expensive than OPEC ones (such as some Canadian tar sands reservoirs that can require $80+ to be profitable), so the increase in non-OPEC production will probably only offset a fraction of OPEC’s production, let’s say 1/4. That seems to warrant the reduction of one green star.

3. And oil is not the only source of greenhouse gas emissions. If oil costs more and is less available then there will be a mix of conservation, efficiency, and substitution to cope with that change. The conservation and efficiency is an unambiguously positive development for the environment. But the substitution can include energy from dirtier coal along with the cleaner burning natural gas and renewables. The oil used for heating can be directly replaced by natural gas and sometimes coal. The small amount of oil that generates electricity can switch to natural gas, coal or renewables. But for renewables like wind and solar to replace the bulk of oil that goes into transportation, the production and infrastructure for plug-in hybrid electric vehicles must ramp up and that will take at least two more years. Since most substitutes are cleaner than oil and efficiency/conservation are definitely climate-friendly, I’m gonna say this aspect of the change earns them one green star.

4. But OPEC is a major producer of oil, one of the leading causes of environmental destruction our Earth has faced over the last 150 years. Almost as big a global climate culprit as coal and a contributor of horrific local pollution from spills like the Exxon Valdez in Alaska to regular environmental degradation in the Niger Delta, oil has done serious damage to our ecosystems. To me, that means OPEC loses three green stars.

According to my arbitrary review, that makes OPEC’s move a tepid green move that earns them a green star. By keeping oil from getting too cheap in global economic downturns, I believe OPEC is helping the environment.

It will take a serious investment of hundreds of billions of petro-dollars into renewables and a shift of focus to those power sources for me to see OPEC earning more than one green star. But with the gigantic solar resources in Middle Eastern and North African deserts, that may just be a good move for key OPEC producers like Saudi Arabia, Iraq, Libya, and Algeria to consider.

Do you think OPEC’s production cut raises their green-cred?

• October 24, 2008 by Dennis Markatos
• 2 comments

• tags: green biz oil prices OPEC sustainable energy

Bizarre ad: greenwash, or just a guy in a bear suit?

I’d skipped this article when skimming Slate today, but directed toward it, I watched the HSBC ad on YouTube with the same puzzlement that both the article’s author John Swansburg and Joellen Easton, the editor of this blog, expressed.

Neither of them can see how the ad’s story and banking are related. I almost can if I squint really, really hard.

Accepting that there’s no connection between banking and the storyline here, what is HSBC trying to say about itself?

The ad shows no allegiance to the logging protesters, nor to the loggers, nor the police. And it does an incredible job of maintaining absolute neutrality about the “issue” addressed.

Maybe HSBC is saying that their value is to not judge?

But if that’s the case, then aren’t they also saying they don’t have any values, but they’re tolerant of the values of all their customers? Plausible — and they just lost me as a customer. I use my economic choices to reinforce actions — which stem from values — that I think should be widespread. I want a bank that hires from the neighborhood, that serves all communities and customers regardless of income, that invests locally, that recycles and sources environmentally preferable office supplies.

Here’s another possible interpretation — it’s a stretch, but in a void as large as this, why not argue something outlandish?

Maybe they know people view stories through their own lens, and hope that when we watch we’ll “see” them mirroring back our own values. If that’s the case, they’re trying to tell me that they’re a fan of environmental protection (while also maintaining respect for local economic activities).

In this interpretation, they’re actually abdicating all values, while trying to appeal to the values of potential customers. One of those interpretations is a sustainable one. If this is their game, it’s greenwash, because by the very nature of this scenario, the other values they’re transmitting (law and order, local economics trump the environment) are opposing values.

What *are * they trying to say about themselves?

• October 28, 2008 by Janne K. Flisrand
• 15 comments

• tags: HSBC values