The Energy Collective Podcast: Cleantech, the Venture Capital Climate, and Policy

We had a lively and informative discussion about Cleantech Investing on The Energy Collective a couple of weeks ago, with Will Coleman of Mohr Davidow, Dan Shugar of SunPower and Solaria, and yours truly, moderated by Jess Jenkins, director of energy and climate policy at the Breakthrough Institute.

Here's how Amelia Timbers described it on The Energy Collective blog:

Will began with "cleantech investing 101", and explained how the macro economic situation and IPO backlog is affecting the venture capital world. He points to the patterns in cleantech venture capital as it matures as an industry of its own. He also points to the importance of large organizations getting involved in cleantech startups. Coleman discussed the complexity of technology risk and financing when startups are scaling from demonstration scale to commercialization.

Scott gave an example of corporate partnerships as a means of acheiving scale, and details the sophisticated 'balancing act' required by management teams in these situations. Scott also offers his insight on operating in China. 

Dan Shugar explains his experience in solar, from Sunpower to Solaria, and who remains a strong advocate of renewables. Dan emphasizes the need for growing companies to operate leanly and to operate on as much a cash basis as possible. 

And here are the slides and audio recording (about 1 1/2 hours long). You can also download the Podcast here: "How to Save the Planet on a Budget, Part 3"

How to Save a Planet - On a Budget: Cleantech, the Venture Capital Climate, and Policy

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And here is a video of the slides with audio recording:

Let me know what you think about our conversation.

Green Conflict at UN? The Green Skeptic Weighs-in on Fox Business

Questions about business connections of UN climate chief Dr. Rajendra Pachauri and potential conflicts of interest surfaced in the Telegraph earlier this week. The Green Skeptic talks with Elizabeth MacDonald of FoxBusiness:

Clean Tech: Wind Breaker; It's All About the Grid

The New York Times has a good piece this morning examining the major obstacle in switching to wind power: the outmoded electricity grid.

What's needed is an electricity transmission superhighway, says one Federal Energy Commission rep.

Read the full article:
http://tinyurl.com/5rjzkl

Clean Tech: WSJ-NBC News Poll Suggests Americans Want it All When it Comes to Energy

US voters want solar and wind energy, but that doesn't mean they are against drilling for more oil, according to a Wall Street Journal-NBC News poll released this week. 

According to a WSJ article by Stephen Power on Thursday, "72% of respondents said developing alternative energy sources could 'accomplish a great deal.'

"When the question was asked another way, 61% of respondents chose 'developing alternative energy sources' as the step that should receive the most emphasis from policy makers."

And yet, "twenty-five percent responded that 'exploring and drilling for oil' in the U.S. should get the most emphasis, and 12% picked 'having Americans conserve and use less oil.' 

"When asked whether expanding areas for drilling for oil off coastal states was a step in the right direction, 63% said it was, with 44% saying it would accomplish 'a great deal.' Only 27% said that allowing more drilling off coastal states was a step in 'the wrong direction.' 

"Asked about building more nuclear plants, 53% said it was a step in the right direction. Thirty-one percent said it was a step 'in the wrong direction.'" 

Congress will come back to Washington in a few weeks and head into a debate about continuing alternative-energy tax credits and lifting the 27-year drilling ban off US coasts.

The poll suggests a need for a balanced approach. Hope Congress is listening.

For more on the poll: http://tinyurl.com/5cf6go

(Composed on BlackBerry; links to come; updated 8/30)

Clean Tech: Paulson and Lugar Support Clean Tech Fund

Senator Richard G. Lugar, a Republican from Indiana and Treasury Secretary Henry M. Paulson Jr (left) have come out in support of the Clean Technology Fund (CTF), which was proposed by President Bush last September.

In an opinion piece in The Washington Post, Paulson and Lugar announce their support, claiming the CTF will "stimulate private-sector investment in existing clean technologies and speed the deployment of emerging technologies once they are market-ready."

Using a mix of loans, grants, equity investment and credit guarantees to finance this incremental cost, the CTF will "help make the choice between clean and dirty technologies economically neutral."

The US will contribute US$2 billion, which will be matched by up to US$8 billion from other donors to the fund, which is to be housed at the World Bank.

"The fund recognizes that addressing climate change presents economic opportunities, not just constraints, and that with advanced technology developing countries can curb emissions growth without limiting economic growth," Lugar and Paulson write in their Op Ed, concluding, "If we do not act immediately to help provide developing countries with the right incentives, their investments today may lock in a legacy of highly polluting, less efficient technologies."

Read the full piece here.

Global Climate Change: World Bank Says, Oil Will Come Down Hard; Sovereign Wealth Can Fund Climate Fight

So, this morning on CNBC's Squawk Box, the show that never met a bear it didn't like, Uri Dadush, the dowdy and drowsy chief of International Economics at the World Bank, told the lovely and smart Becky Quick (she's quick too) that oil will be at $95/barrel by end of year and $88/barrel by 2010.

Watch video: Squawk Box

But how does that jibe with what the World Bank's Latin America chief, Pamela Cox told Reuters today that, "essentially, emerging economies can help fund the fight against climate change through sovereign wealth funds, swollen by oil and other exports receipts"?

"'It would be great if some of these sovereign wealth funds started investing in alternative technologies, some of the climate change funds that are being put forward,' Cox said, but added that the World Bank could not tell countries how they should invest their sovereign wealth."

"Emerging economies control up to US$3 trillion in sovereign wealth funds," according to Reuters, much of which have been padded by skyrocketing oil and commodities prices," along with bulging trade imbalances.

But those sovereign wealth funds will be a lot less swollen at $95-88/barrel.

Meanwhile, CNBC reported that oil prices fell today, despite an earlier advance to $137 on greatly reduced oil consumption projections from the Energy Department.

"The Energy Department, in a monthly report, indicated that high prices are cutting oil consumption more than expected in the industrialized world," according to CNBC. "Consumption is now expected to fall by 240,000 barrels a day in 2008; last month, the department forecast consumption would be unchanged from 2007 levels."

Still a long way to go from $131/barrel to $95. And it remains to be seen what this news will have on investments in climate change initiatives and alternative energy?

Very little, it appears.

According to Reuters, some emerging economy oil exporters are already planning clean energy and other climate initiatives:

--OPEC is planning a US$750 million research fund into burying greenhouse gases underground and has committed about US$35 million so far.

--The United Arab Emirates has launched a $15 billion "Masdar Initiative" to help plan for an era of falling oil reserves by investing in low carbon-emitting energy like solar power.

--Tokyo will contribute US$1.2 billion to the planned US$10 billion of developed country Climate Investment Funds (CIF) administered by the World Bank.

--The United States has pledged US$2 billion to the CIF and the UK will add part of a 800 million pound (US$1.57 billion) environment fund to the mix.

--The CIF will invest roughly US$5 billion each in funds to help developing countries cut emissions of planet-warming greenhouse gases, and to plan for climate change.

But how much of this could materialize without oil prices being what they are? And what happens if the oil bubble bursts or tankers are sitting just beyond the Verrazano Narrows waiting for the signal?

Book Review: Power of the People: America's New Electricity Choices by Carol Sue Tombari

Imported oil, dirty coal, energy inefficiencies and waste, and truncated investment in alternative energy development have landed us in a quandary. Where do we turn for the power we need to run our wired and wireless economy and our increasingly mobile culture?

Carol Sue Tombari, former director of the State of Texas's energy efficiency and renewable energy programs and currently on staff at the US Department of Energy's National Renewable Energy Laboratory, describes some answers in her new book, Power of the People: America's New Electricity Choices.

Tombari provides a concise and cogent overview of how we got in this mess and a primer for how we can get out of it. Essentially, Tombari argues that we need a combination of vigorous policy agendas and massive investments in what we've called on this blog "The New Green Economy."

We are "sleepwalking toward disaster," argues the author, but she tempers her cynicism with equal doses of optimism and faith -- faith that we have the know-how and ingenuity to get us out of this mess.

If only we would wake up and change where we're going and what we're doing.

"I'm not talking about an overnight energy revolution, Tombari concludes. "Really, it's more like an evolution, incorporating both twentieth- and twenty-first-century technologies as we transition to the completely different, carbon-constrained reality in the coming years."

For anyone who wants a quick study of the path we've been on, as well as the good, the bad, and the balance of those choices, and the potential for alternatives, Power of the People is required reading.

"Renewable energy and energy efficiency can be expected to develop a larger presence in the marketplace," writes Tombari, "especially as the cost of twentieth-century fuels continues to go up and the capital costs of renewables continue to go down."

But our energy "needs remain humongous and continue to grow," Tombari argues. "Energy efficiency in particular will gain significantly greater market share because of its no-regrets nature and the fact that it doesn't require the investment of materials needed by utility-scale technologies."

While "we will continue to rely heavily on central station power plants, especially in the near- and mid-term," according to Tombari, "we as individuals, as neighbors, as citizens of our towns and states, can lead our government...Our roots as a nation are in the grass. We know how to do this."

Her optimism is infectious. Power of the People is a must-read for anyone concerned about the future of our nation and our planet.

Global Climate Change: Times' Kristof Challenges Bush and Candidates on Climate

Nicholas Kristof challenges President Bush's latest statement about climate change in today's New York Times. According to his Facebook page, he was inspired to write the opinion piece by a recent study in the journal Nature, titled "Dangerous Assumptions" by Roger Pielke, Jr, Tom Wigley, and Christopher Green.

"Imagine if President Bush announced a plan for Iranian and North Korean nuclear programs that declared: They will cease accumulating nuclear weapons by 2025. We will accomplish this through incentives and voluntary action, without mandates.

"Mr. Bush would be ridiculed, but in essence, that’s the plan he announced for climate change on Wednesday. He set a target for halting the growth in carbon dioxide emissions by 2025, without specific mandates to achieve that, and in the meantime he blasted proposed Senate legislation for tougher measures as unnecessary.

"Unnecessary? When scientists detect accelerating melting in the Arctic and confidently predict centuries of coastal retreats and climate shifts, endangering the only planet we have?"

Kristof closes his piece with a call for a new green economy, even if he doesn't call it that:

"So the next president should start a $20 billion-a-year program (financed by a pullout from Iraq) to develop new energy technologies, backed by a carbon tax and cap-and-trade system. Each of the presidential candidates favors some form of a cap-and-trade and would mark a step forward from President Bush’s passivity — although John McCain’s recent proposal for a summer holiday from the gas tax would be a deplorable step in exactly the wrong direction, unless he hopes to turn his land in Arizona into coastal property.

"The bottom line is that none of the candidates focus adequately on climate change, for this will be one of humanity’s great tests in the coming decades — and so far we’re failing."

Read the full opinion piece here: Kristof

Global Climate Change: Some Good News for a Change

So much of the news around climate change just seems dire. I know, I see it roll across my Google News Reader every day. And it can get kind of depressing.

But today, two news bits caught my eye because, well, because they were hopeful:

G7 Plans to Consider a Climate Change Fund

and

Coral Reefs May Be Protected By Natural Ocean Thermostat

As an investor and supporter of alternative energy, I am thrilled by the first bit of news. As a diver and lover of marine environments, I am delighted by the potential of the latter.

First, when the top finance officials from the Group of Seven industrialized nations (G7) meet in Tokyo this Saturday, it appears that Japan, Britain, and the United States will propose a new fund promoting clean technologies to combat climate change.

"The three countries will explain the content of their current discussions on the fund, and we'll see how the rest of the Group of Seven members react to it," a finance ministry official said on customary condition of anonymity.

In addition to climate change, the G7 is expected to discuss the worsening global economic outlook and recent market turmoil, ahem, correction.

Then Science Daily reported that "Natural processes may prevent oceans from warming beyond a certain point, helping protect some coral reefs from the impacts of climate change, new research finds.

"The study, by scientists at the National Center for Atmospheric Research (NCAR) and Australian Institute of Marine Science (AIMS), finds evidence that an ocean 'thermostat' appears to be helping to regulate sea-surface temperatures in a biologically diverse region of the western Pacific."

"Global warming is damaging many corals, but it appears to be bypassing certain reefs that support some of the greatest diversity of life on the planet," NCAR scientist Joan Kleypas says. "In essence, reefs that are already in hot water may be more protected from warming than reefs that are not. This is some rare hopeful news for these important ecosystems."

Encouraging news in the International Year of the Reef 2008. Let's suit up and get wet until the market improves.

Three years ago today I was diving here: Raja Ampat; some of the most amazing reefs I have ever seen. I'm dying to get back there.

Break Through: From Ashes of Environmentalism Comes Hope and Imagination?

Environmentalists have it all wrong.

We don't need no stinking limits, what we need is economic growth fueled by a massive investment in alternative energy that positively transforms the living standards of people around the world.

We need a new, new economy that is not based on what we can't do or shouldn't do, but on what we can do.

We need energy independence and ecological security. We need an agenda that puts investment, jobs, and economic growth front and center.

The spirit of possibility is at hand, we need only take it up -- and secure a front-loaded investment in R&D from the Department of Defense to get this thing moving.

Okay, I'll get off my soap box. Readers of The Green Skeptic are familiar enough with my thoughts on the matter.

Much of this kind of thinking runs through the pages of Ted Nordhaus and Michael Shellenberger's new book Break Through: From the Death of Environmentalism to the Politics of Possibility, which I've just finished.

You remember them? They got many pairs of green knickers in a twist with their essay calling for abandoning the environmental movement (and a few cheers from some of the more skeptical among us).

They've written an important book. Flawed, but important. And a little bipolar.

One the one hand, it's a much-needed critique of the way the environmental movement thinks and speaks of its issues. This follows logically on their original essay. And it is sort of in the vein of William Easterly and John Perkins' confessionals/attacks on their former selves.

I mean, these guys were strategists for some of the doom and gloomers; now they've seen the light and the error of their ways.

In terms of making change, their basic argument is that people rate the environment and global warming low on their list of concerns, relative to other concerns like economic security, terrorism, etc. And the enviros haven't been listening; they want to convince.

For example, Americans are more concerned by rising energy prices than the prospects of global warming. Yet the prevailing environmental messaging strategy calls for raising energy prices even higher through taxes and such. Certainly a disconnect there. Ya think?

But when it comes to providing hope beyond some flowery rhetoric, Nordhaus and Shellenberger offer very little new thinking.

A little pimping for their Apollo-style energy proposal, which was introduced into Congress by Representative Jay Inslee of Washington, and the authors are off on quite a few tangents about NIMBYism and facing the fact that we are now like Gods and we'd better get used to it.

The second half of the book could have used some heavy editing and shaping by the gang at Houghton-Mifflin. You can get by with a snarky attitude if you really have something to say, believe me. In the end, however, you have to bring your whole game.

I wanted a little more pragmatism in the chapter of that name. And what was the point of that attack on Francis Fukuyama in the final chapter? At times, such as in the clever analysis of how Tony Blair lost the war on global warming on the world stage, it seemed like a clever magazine article run amok.

The authors fall short in facing some of the realities of climate change. It is happening, will affect millions of people directly, and we will have to find a way to adapt and mitigate the severity, while making investments in technologies that will help us get there. (I felt they sold short the adaptation piece in particular, in the rush to push their investment agenda.)

That said, the authors rightly point out that to succeed in turning this around, we need remember what we're great at: "imagining, experimenting, and inventing the future."

We can imagine a better future if we set our minds to it. So what are we waiting for?

Energy: House Sends Bush Energy Bill to Sign

President Bush is to sign a compromise Energy Bill (HR6) this morning, which will help reduce US dependence on foreign oil and scratch the surface on climate change impacts by cutting about a quarter of greenhouse gas emissions that scientists say the US must slash.

Highlights of the Bill:

-New auto fleets must average 35 miles/gallon by 2020 -- a 40 percent increase in fuel-efficiency standards

-Mandate use of 36 billion gallons/year of ethanol and other biofuels by 2022, a six-fold increase over today's ethanol production.

-Phase-out conventional incandescent light bulbs by mid-teens, replaced with CFs and LEDs.

Those of us interested in alternative energy development were disappointed by the failure of congressional supporters to roll back US$13.5 billion in tax breaks for oil companies. The savings were to be used to create incentives for wind, solar and biomass energy development, as well as energy conservation.

The Bill actually represents the first increase in auto fuel economy since 1975 and the compromises made on both sides represents a true bi-partisan effort. So the House, Senate, and President Bush should be applauded for making this happen.

Global Climate Change: Bali Yields REDD, a Deal on Forest Conservation

Reuters reports that the Bali talks have achieved at least one positive outcome, and it has greens seeing REDD:

Reducing emissions from deforestation and degradation (REDD) is an indicator of the sense of urgency felt by developing nations in the face of global warming.

"The breakthrough might eventually allow poor but forested nations to turn conservation into a tradeable commodity, with the potential to earn billions of dollars selling carbon credits," according to the Reuters article.

"But," Reuters reports, "one of the scheme's key architects warned that, if successful, it will create such large emissions reductions that carbon markets could collapse unless rich nations take on more stringent reductions targets."

Forest destruction produces about 20 percent of human generated carbon dioxide emissions, and groups such as The Nature Conservancy have long argued that forest conservation, also known as "avoided deforestation," is central to reducing emissions globally.

"Deforestation had been left out of previous climate deals," such as Kyoto, "because of concerns about how to work out which trees were threatened, and that any scheme would reward countries destroying forests rather than those protecting their resources."

"'Forests have been the elephants in the corner of the climate change process,' said Andrew Mitchell, executive director of Global Canopy Programme, adding that markets were the only way to find the billions of dollars a year needed to protect forests.

"'We cannot expect philanthropy or governments to come up with this amount of money sustainably,' he said."

read the full story: Reuters

(Full disclosure: While with The Nature Conservancy, I was part of its Climate Change Strategy Team, which developed the strategy linked to above. I am no longer employed by the Conservancy.)

Global Climate Change: UN Summary Report, Dire Warnings

Associated Press reported this morning that the Intergovernmental Panel on Climate Change (IPCC) successfully completed its summary report yesterday.

That's the good new. The bad news is the panel concluded that we are in deep doo-doo.

"The Earth is hurtling toward a warmer age at a quickening pace," according to the Nobel-winning UN scientific panel, and heading toward a future of "inevitable human suffering and the threat of species extinction."

UN Secretary-General Ban Ki-Moon said climate change imperils "the most precious treasures of our planet."

The potential impact of global warming is "so severe and so sweeping that only urgent global action will do," Ban told the Intergovernmental Panel on Climate Change after it issued its fourth and final report this year.

The IPCC, following six days of sometimes tense negotiations, adopted a concise briefing paper on the science of climate change and the effects of human-produced greenhouse gases. It lays out various scenarios of future impacts, depending on how quickly and decisively action is taken.

The Summary for Policymakers, and a longer version called the synthesis report, distill thousands of pages of data and computer models resulting from six years of research compiled by the IPCC.

It will be a how-to guide for policy makers meeting next month in Bali, Indonesia, who will begin discussing a successor agreement to the Kyoto Protocol.

I'll be posting reactions to the Summary for Policymakers, which I've previously read in draft form, over the next day or so. Meanwhile, you can access the Summary here: IPCC Summary for Policymakers

Global Climate Change: Stuebi on New Scientist Climate Policy Poll

Polls can be meaningless. Sometimes its the sampling. Sometimes its untrustworthy respondents. Often, it's the interpreters who run roughshod over the results. It's easy to make a poll say what you want it to say: just ask the questions in a way that will give you the answers you want.

I'm skeptical about polls.

So is Richard T. Stuebi, the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and Founder and President of NextWave Energy, Inc:

"It seems to me that poll respondents give themselves far too much credit for being well-informed or magnanimous, relative to what they actually know or what will they will do when making real decisions that really affect them," Stuebi writes over at the CleanTech blog:

However, this past summer, a poll conducted and reported by New Scientist magazine did seem to shed some useful insights that policy-makers ought to consider. The reported highlights of the survey were that there was substantial public support in the U.S. for carbon limitations, that the public preferred outright standards to cap-and-trade or (egads!) carbon taxes, and that the desired focus of carbon reductions should be on the electric power sector than on vehicles (don't tread on SUV!).

In my view, the most illuminating finding was the weakness of support for carbon imitations if they induced any significant economic pain. In other words, respondents were fine with climate legislation -- as long as it really didn't cost much. On the other hand, when asked if they would support carbon emission requirements that would increase energy prices significantly -- which is likely to be the case to achieve the magnitudes of emission reductions that are widely viewed necessary to have meaningful impact in protecting the planet -- support evaporated.

But, Stuebi confesses, "This is one of the few instances where I actually believe what the poll results say, without any bias." The finding that changed his mind, Stuebi says, is "that -- to avoid catastrophic climate change during the balance of this century -- either we need to quickly develop a zero/low baseload carbon energy source that costs essentially no more than conventional coal generation, or that we quickly need to substantially increase U.S. political will and courage to endure economic sacrifice."

Stuebi's conclusion? "Either will be tremendously challenging. Failing on both counts could doom the planet."

Access the poll here: New Scientist