future clean tech

No. Absolutely not. And yet the conservative Wall Street Journal yesterday implied that America should, in a column entitled, “Down Under: Can the US Learn From Australia’s Emissions Plan?”

It’s easy to see why the Journal is pumped about Australian Prime Minister Kevin Rudd’s “Carbon Pollution Reduction Scheme” (that’s what they’re calling the Aussie ETS): it’s a sop to heavy polluting industry and the conservative opposition that supports it. The amended legislation gives a free ride to the carbon mafia, delaying really significant cuts in CO2 and passing on the residual costs to the average punter. The minimum “guaranteed” reduction is 5% by 2020 – talk about rearranging the deck chairs on the Titanic. Only this time there won’t be an iceberg in sight.

Interestingly, conservative Opposition leader Malcolm Turnbull chose to lay his leadership on the line over this issue. His Liberal Party is severely divided over the legislation and the Liberals’ usual political bedfellows, the Nationals, are united against it.

Turnbull is an ideological descendant of the old, pre-John Howard Liberal Party: liberal on social issues, and to a greater or lesser extent conservative on economic issues. Global warming is a social issue with serious economic repercussions (and, what conservatives tend to discount, serious opportunities) and so it is no surprise that an old-school Liberal like Turnbull would support a sort of diluted version of action on climate change – but action nonetheless.

Turnbull’s dilution of the CPRS bill is worrying enough, but the really interesting thing is that much of his party thinks he’s gone too far. Former Prime Minister John Howard was almost singlehandedly responsible for the conservatisation of Australian politics, and the conservative rump of the party Howard left behind is about to commit collective suicide by declaring war on Turnbull for being too progressive. Turnbull, whose leadership is in serious trouble, is probably the best hope the Opposition has of breaking through the Government’s approval numbers anytime before 2013.

There is no lesson for America here. Australia’s electorate is overwhelmingly in favour of action on climate change, whereas the American electorate is somewhat more divided. I’d like to be able to say that Australia offers a warning to conservatives overseas not to oppose climate change action, but it seems like the Liberal Party, much like the Republican Party, is trending rightward.

From a policy perspective, Australia’s recent experience is a total disaster. It represents a triumph of politics over policy. The US and the EU are both looking at 17% and 20% cuts respectively by 2020, which is nowhere near enough. We need to cut 80% by 2020. Australia’s promising 5%. No lessons here.

China’s Suntech today announced plans to set up shop in Arizona. This seemed to be suspiciously timed following the storm in a teacup of a couple of weeks ago that Senator Schumer (D-NY) set off – he was trying to block stimulus funds for a wind farm in Texas because, it was said, the lion’s share of the cash was going to end up in China.

Of course, this ignored the fact that China’s stimulus money earlier in the year had been benefiting American companies. No outcry over that.

The wrinkle in the story is that China has been enacting protectionist policies specifically to benefit its burgeoning clean energy industry.

Hence today’s announcement: the Chinese want to counter the nativist/protectionist sentiment like that caused by the Texas wind farm earlier this month. The jury’s out on whether or not it’s more of an elaborate and expensive PR exercise than anything else. It sounds great that China’s creating jobs in Phoenix, Arizona, but at this point it’s just going to be 75 new places:

ThinkEquity analyst Colin Rusch said that [between] six and 12 Chinese solar companies are “seriously considering” establishing small manufacturing in the United States to raise their profile in the country and gain market share.

“It’s a brand exercise,” Rusch said.

Great article in the Kansas City Star yesterday – “Lack of power lines a blow to wind energy“. One of the most crucial prerequisites to the transition to a GHG-free economy is a modern, national power grid:

Driving through western Kansas, you’ll see hundreds of whirling wind turbines. But you won’t see lots of people — or high-voltage power lines.

And that is the big obstacle to realizing the wind-energy potential of Kansas and the Midwest: You can put up all the towers and turbines you like, but without more transmission lines, the added electricity won’t get to the cities that could use it.

Those lines will take years to build and cost tens of billions of dollars — if they are built at all.

“It’s a showstopper for renewable development,” said Ralph Cavanaugh, co-director of the Natural Resources Defense Council, an environmental group with 1.3 million members.

The national power grid is a mishmash because much of it was built to serve utilities’ individual territories. That left the country with high-powered lines serving big populations in the East and West — but not connected to the windy corridor from the Dakotas to Texas…

Read the rest in the original article.

Yesterday, I attended the New York Society of Security Analysts’ “Future of Energy Investing: Exploration, Production and Clean Technology Conference.” The email reminders advertised it as simply NYSSA’s “Energy Conference: Exploration and Production,” which was indicative of the fact that this is the first time NYSSA has included cleantech as part of its energy mix. To my knowledge, anyway.

After the oil and gas players presented in the morning, Sanjay Shrestha of Lazard Capital Markets gave the lunch presentation. He gave a basic overview of the history of the clean energy space to a crowd which mostly seemed to be composed of fossil fuel types. He noted that meaningful growth began when Germany passed its renewable energy law, and went through the growth of each sector, expressing doubt about the efficacy or clean-ness of “clean coal”, a position I identify strongly with and on which more in a post next week. Sanjay regards grid services opportunities as where the big growth will be in coming years. Overall, he says that he remains “bullish” on the prospects for the sector which he believes will be the “next industrial revolution.”

The three cleantech companies that presented were Juhl Wind (a community/distributed wind energy firm), PureSpectrum (lighting/energy efficiency), and Axion Power International (lead-acid batteries). Community wind seems to me to be more of a hassle than it’s worth – too many landowners to negotiate with, and for limited return. I am also unexcited about compact fluorescent lights (CFLs); PureSpectrum seems to be very excited about “a dimmable CFL that works” but, honestly, I can’t stand CFLs and I can’t imagine a scenario in which I’d install one that needed to be dimmed, short of the government forcing me.

On the other hand, energy storage seems to be a sector that will be increasingly important. I don’t know whether Axion’s technology is particularly special – something about eliminating lead from the negative electrode, which means about as much to me as it does to you – but its customer list is impressive. In the automotive market alone they have BMW, Fiat, Ford, Renault, Suzuki, Toyota and VW – and then there’s the industrial/motive power market, wind energy storage, utility grid support, PV storage, and other markets. It’s a huge area, and the growth in it will be explosive. The electric vehicle market is about to explode, and grid energy storage support will inevitably be one of the big winners in the growth in grid services opportunities that Sanjay Shrestha predicts. I can’t see any player in this sector losing.

It was interesting to see clean technologies dispassionately put in the context of the broader energy sector to which they belong. This was not a conference designed to drum up interest in some new snake oil industry; NYSSA has no reason to talk up cleantech for its own sake. If any further proof were needed that clean energy will remain a serious part of the energy mix, inclusion at a conference like this is it. But it was also clear that renewables are still a very small part of the sector, and that it will take some time to entrench them as serious rivals to oil and gas.

At least, that seemed to be the view of some of the attendees I spoke to when we broke for lunch. The oil and gas people were confident and brash, but I saw no real reason for them to be – if anything, the way oil and gas are explored for and dug up is a less attractive business proposition than the intermittency and other issues surrounding renewables. Oil and coal and gas are relatively cheap today because they’ve been around for so long and because the government subsidises them simply for being the incumbent technologies. But if fossil fuels were dispassionately compared with clean energy without the former having the advantage of incumbency, I see no reason, with today’s technology, why cleantech wouldn’t win an easy victory.

NYTimes carried this story in its greeninc blog today: Solar Industry Takes on Coal and Oil Lobbies. Highlights:

A solar industry leader smacked down the oil and coal industries on Tuesday, calling for renewable energy proponents to open their wallets to level the playing field in Washington. [...]

Oil and coal interests “are spending millions of dollars on lobbying, P.R. and advertising, and much of it is financing a deliberate effort to discredit our industry,” Mr. Resch added. “At the end of the day in Washington, good intentions won’t stand a chance against millions of dollars and intense political pressure. We have relied on good will long enough, and if that’s the only arrow in our quiver, we will lose.” [emphasis added] [...]

But Mr. Resch said fossil fuel industries received $72 billion in federal subsidies between 2002 and 2008 while the solar industry scored less than $1 billion. “Taxpayers are forced to subsidize companies like ExxonMobil, companies that are the richest in the history of the world,” he said.

His solution: Start playing the influence game, raising big money for politicians and mobilizing constituents to pressure Congress to support the solar agenda. “In 2008, the oil industry contributed $22 million to political candidates, the utility industry $21 million,” said Mr. Resch. “The solar industry: $138,000. We cannot compete with the entrenched energy interests unless we step up our game.”

Having spent a great deal of time observing the campaign financing system that governs Washington DC, I tend to agree with this analysis. Why are supremely profitable fossil fuel companies receiving $72 billion in federal subsidies over a six-year period? The answer is not good public policy, of course, but the influence of money.

The public interest does not necessarily prevail in American politics. Well-financed “special interests” win. The only way the public interest can possibly win, alas, is if it is equally or even better-funded than narrow special interests. The public interest needs to clothe itself as a special interest.

While campaign finance reform remains a noble and necessary goal, even the powerful Senator and former presidential candidate John McCain has been unable to slow the burgeoning supremacy of money over good public policy.

I have observed and voluntarily assisted one particular Beltway lobby whose cause I believe strongly in, and I saw firsthand how, as the Green Inc article states, no amount of good intention could possibly achieve anywhere near the kinds of policy outcomes that are achievable through well-funded public affairs work.

19th-century industries like burning fossilized plant remains (that’s what coal is!) still receives billions in federal funding because the entrenched fossil fuel lobby knows how to do politics.

The cleantech industry needs to very quickly learn how to effectively fundraise and target that funding into appropriate, powerful, game-changing campaign financing.

In today’s America, the best ideas will not win unless they are better-funded than the very bad ideas. A viable, contemporary, professional, well-funded and politically-savvy cleantech lobby is urgently required in this country. The fossil fuel dinosaurs must be beaten at their own tawdry “special interests” game.

EDIT 11/11: This from the Center for Public Integrity:

If the public is unaware, more than 1,150 companies and advocacy groups are very tuned in, and they have deployed about 2,810 climate lobbyists to Capitol Hill, an increase of more than 400 percent from six years earlier, according to an analysis of disclosures filed with the Senate Office of Public Records. Spending on the lobbying this year so far in the United States is at least $47 million. Senate advocates aim to build support much as it was achieved in the legislation that narrowly passed the House this summer — by giving a boost to businesses that fear they’ll be hurt by measures raising the cost of the coal that supplies half the nation’s electricity. But the concessions have not won over opponents like Don Blankenship, chief executive of Massey Energy, the largest coal producer in central Appalachia, who forcefully disputes the science of global warming. Although that makes him an outlier in the public debate, his argument that the bill will cost jobs at the same time “it will increase global pollution by moving production to unregulated countries like China” causes worry on Capitol Hill.

Blankenship is just one of the business opponents who have worked to rally citizen ire — a campaign that has resulted in hundreds of alarmed phone calls to Senate offices. Given the power of industry lobbying in Washington, advocates see the best hope for the legislation’s passage as the competing U.S. businesses that support action, ranging from power companies that want predictable energy policy to high-tech firms that aim to market climate solutions.

More here.

It is good to see companies vying to qualify for NGO certification, like the Rainforest Alliance’s green frog seal (pictured). Much is made of the issue of government regulation – the “stick” approach – but corporate “carrots” can also be effective. The profit motive is the cornerstone of our economic system, and we might as well use it to good effect.

This week, the Sydney Morning Herald was gushing about corporate uptake of the seal: companies are eager to qualify for the logo by meeting, in this case, Rainforest Alliance’s 10 criteria for sustainable farming (set by the Sustainable Agriculture Network).

This is certainly a good thing, just as the idea behing “Dolphin Safe” products was and remains a good thing.

My only concern is the phenomenon of greenwashing. In New York, I see it every day at the supposedly earth-friendly super-grocer, Whole Foods, where product after product is packaged in green and other earthy colours and marketed as “organic” (”organic” is the new “natural” in corporate branding terms). All kinds of tricks are used; companies know that savvy customers prefer plain cardboard packaging and certain types of simple fonts that hark back to an idyllic age without industrial-sized tractors, artificial animal growth hormones and tumour-inducing chemical pesticides.

In the case of the green frog certification, my only concern is that only 30% of a company’s product needs to come from SAN-certified farms. (Mother Earth News complained about this earlier in the year.) The trouble, of course, is that if a higher percentage were mandated by the Rainforest Alliance, fewer firms would join the program, and less overall produce would be sourced from certified farms. I get it – they’re trying to find the sweet spot.

My personal preference is that, when such programs become reasonably successful, the government ought to step in and set up strict mandates. The increase in price for the consumer would be negligible compared to the benefit it would provide, and a mandate would level the playing field for all firms.

Of course, this would remove the competitive advantage from firms who were early adopters of the certification – but, in my view, the huge advantage of being an early adopter is more in the bragging rights than anything else.

Green Inc reports that New Jersey will double its solar power through small-scale, telegraph pole-mounted solar PV installations. This will “maintain New Jersey’s position as the nation’s second-ranked state for solar photovoltaic installations, behind only California.”

$515 million for 80 megawatts, however, sounds a bit rich to me. I mean, seriously? The peak power output of this project is likely to be more like 24 megawatts. $515 million? Surely there are better things to do with ratepayers’ hard-earned cash, particularly during this downturn.

The Wall Street Journal reports that California is “spending $3.3 billion on subsidies, hoping to get 3,000 megawatts installed.” Now that’s more like it. Of course, that means that Sacramento isn’t footing the bill for every megawatt.

Still, the NJ utility’s chief executive, Ralph Izzo, makes a good point: “We’ve got to stop pretending solar power will lower the cost of energy. It’s going to increase the cost, and people have got to understand why it’s worth more.” The WSJ continues: “He listed the names of pollutants produced by coal or gas incineration that don’t occur with solar technology.”

Two excellent clips showing the contours of the debate going on in the US. Note that even the “skeptics” are simply querying the viability of raising capital during the GFC – they are not questioning the value of switching to clean energy. Particularly, as is referenced, in the wake of December’s disaster at a Tennessee coal plant (which only goes to prove that eliminating coal is an imperative whether or not climate change science turns out to be accurate).

Can Wind and Solar Replace America’s Coal Plants?

Clean Energy – Wind vs Coal

It would be hilarious if it weren’t so tragic: the Republican House Minority leader, John Boehner, told George Stephanopoulos that the idea that CO2 is harmful to the environment is “almost comical”.

George, the idea that carbon dioxide is a carcinogen that is harmful to our environment is almost comical. Every time we exhale, we exhale carbon dioxide. Every cow in the world, you know, when they do what they do, you’ve got more carbon dioxide… The question is how much does man have to do with it, and what is the proper way to deal with this?

Stephanopolous could barely believe it himself – that a top elected official could still espouse such views just has to be seen to be believed:

Boehner: It’s ‘comical’ to say carbon dioxide is dangerous

The good news is that there’s seriously positive action happening where it matters. As David Niebauer writes at Cleantechblog.com, congressmen Waxman and Markey introduced a cap-and-trade bill in late March that would enable reduced deforestation in tropical rainforests -anywhere in the world – to be purchased as carbon credits. The EPA reckons that the scheme will cost just “pennies a day”.

It seems that finally public policy is catching up with the necessity that I’ve blogged about before – for us to price the externality of rainforest depletion into the economy. And it proves the point that it is virtually irrelevant what the skeptics say: the paradigm shift to the clean economy has reached an inflection point. It’s only going to snowball from here.