21 December 2008

Energy Efficiency May Be the Best Alternative...For Now

Energy conservationImage via WikipediaClean tech investments have been hammered lately, driven down by the economic depression and demand-destruction prices for oil. Less green to spend; less incentive to spend it on green.

It will take a while to recover. And, even though the oil price spikes of last summer are a fading memory; people do remember the impact they felt.

But one area stands to gain from both the presidential turnover and shifting of focus to infrastructure to stimulate the economy: energy efficiency.

No, I'm not talking about Jimmy Carter's sweater and I'm not asking you to turn down your thermostat.

Rather, I'm talking about using technology so that your energy consumption is monitored, even transferred to when it is not peak; where so-called smart meters can help you regulate your home's energy consumption over the Internet. You may never have to adjust a thermostat or ponder whether you turned off this or that light again.

New technologies are needed, but also old technologies. As Van Jones likes to say, the tool of the new green economy is the caulking gun. Forget "Drill, baby, drill," now the mantra is "Caulk, baby, caulk"?

And best of all, it may in fact lead to job-creation.

As Stephen Cowell, CEO of Conservation Services Group, said, "A $3 billion investment in energy efficiency will immediately produce 50,000 jobs. The multiplier effect of lower energy costs could lead to as many as 100,000 additional positions, resulting from increased products and services that have become unburdened by staggering bills."

McKinsey & Company would seem to agree, according to a recent studied cited by Karim Salamatian, a partner and chief investment officer of Viresco International Capital Management. Salamatian reports that "US$170 billion in annual global Energy Efficiency spend for the next 13 years will generate US$900 billion in annual savings beyond 2020."

An added benefit, according to Salamatian, is that it can "deliver 50 percent of the CO2 abatement required to cap greenhouse gases in the atmosphere at 500 parts per million.

But will the American investor embrace energy efficiency? Or will they simply ignore the issue for as long as we have cheaper oil? Only time will tell.

The important thing is to demonstrate how energy efficiency projects can make a difference, be implemented quickly, and to make money.

And this is true not just in the states, but in remote locations as well.

"In markets such as China, Vietnam and India," Salamatian recently wrote in FINalternatives.com. "CO2 emission abatement is an afterthought, so there needs to be solutions where it is a by-product."

In other words, the conversation needs to get beyond global warming to creating jobs, saving money, and building the future -- today.