Monthly Archives: August 2011

NRDC OnEarth

Green Pinstripes: Wharton School of Business Dean Thomas Robertson Talks About Sustainability | OnEarth

Stroll through practically any business school in the country — or any of the fast-multiplying U.S.-style B-schools overseas — and there can be little doubt that an MBA remains a hot commodity. With the start of classes now upon us, business schools are prepping for another near-record year. During this recession, as in past downturns, applications have surged, with candidates looking to use the slowdown to upgrade their credentials.

Just a couple of years ago, this bumper crop might have seemed unlikely. In 2009 the financial meltdown exposed the outsize role played by financial MBAs and math-whiz PhDs in crafting the house-of-cards investment vehicles that all but crashed Wall Street.

Critics pointed to another, deeper cause: a culture of profit at all cost that had been incubated in business schools. “The really grim news for the MBA…is about more than short-term trends,” wrote Matthew Stewart in Slate back in March 2009. “The economic crisis has exposed long-standing flaws…in the very idea of business education.”

If the recession hasn’t dimmed the prospects of B-schools, the crisis of confidence has spurred a flurry of curriculum makeovers at top institutions. Ethics, of course, have come into greater focus. In parallel, there’s been a rising appetite on the part of students and faculty alike to study more sustainable approaches to business. The number of programs emphasizing social, environmental, and ethical issues has been rising steadily in recent years, according to Beyond Grey Pinstripes, an independent, biennial survey of business schools managed by the Aspen Institute.

For a look at how sustainability and post-crash ethics are evolving at an elite business school, there’s no better laboratory than the University of Pennsylvania’s Wharton School of Business, one of the nation’s oldest and largest B-schools and an important nursery for Wall Street talent.

Thomas Robertson took over as dean of the school in August 2007. As the dust from the financial crisis has settled, he has worked to boost the profile of sustainability in Wharton’s curriculum and among its staff. To be sure, Wharton remains strongly focused on finance, even as highly ranked competitors such as Michigan’s Ross School or Berkeley’s Haas School have made sustainability a core commitment. Notably, none of the nation’s top three B-schools — Chicago’s Booth, Harvard Business School, and Wharton, according to Bloomberg Businessweek’s latest rankings — appear in Beyond Grey Pinstripes.

Robertson says Wharton is hoping to change this. Adam Aston, a freelance writer and former energy and environment editor for BusinessWeek, spoke recently with him about sustainability and the greening of Wharton at his office on the school’s leafy campus near downtown Philadelphia.

Sustainability as a business strategy is still the exception, and there haven’t been many successful, mass-market “green” brands. Why do you think that is?

Green business is still quite young. Yet even in that fairly short time, there are some serious questions about whether you can brand green any longer, because the public is so suspicious. To some extent it has reason to be. It’s easier to recall fallen green champions who have failed terribly than it is to come up with green success stories. BP is a poster child for this. The company emphasized for years how green it was, even as the environmental concerns about its operations were mounting, and then the problem spiraled out of control with the Gulf oil spill. Companies have to be careful. They should first ask, do green claims really differentiate our product, and should we be emphasizing that? If so, are those claims credible? Will consumers believe us? There’s a lot that can go wrong, so it’s no surprise that companies remain shy.

Are you hesitant to brand Wharton as a greener business school? You don’t appear in the Beyond Grey Pinstripes rankings, for example.

Wharton has had a funny love/hate relationship with rankings in general. A predecessor of mine, along with the deans at Harvard and a few other institutions, decided some years ago to stop participating. But the ranking services rate us regardless, using information from outside sources. Beyond Grey Pinstripes is among the most demanding, because it requires that we survey the content of individual courses to identify which ones have green content. However now we’re cooperating again for the first time in a long while, and we have full-time people substantially dedicated to answering these requests. The Aspen Institute is probably the most reputable place out there ranking green initiatives in schools. It’s a good place for us to be, whether someday we come in first or thirtieth.

Did you pick up any shift toward greener goals since the financial crisis?

The aftermath of the crisis has reinforced one of the longest-standing strategic pillars of the curriculum at Wharton: social impact. From environment to labor and other social dimensions of business, there’s very much a belief here that business schools must be a force for good in the world. Even so, this is the biggest school in the country. We have 4,900 graduate students plus a few hundred undergrads. And some of our alumni do still go astray.

Do you have any star faculty members working on green issues?

One is our vice dean of social impact, Len Lodish, who also leads Wharton’s Global Consulting Practicum. Among other things, this sends groups of MBAs overseas to apply business skills to solving social and environmental problems. One team recently went to Botswana, for example, to help develop a sustainable funding model for a health partnership. I’d also mention Eric Orts, the director of Wharton’s Initiative for Global Environmental Leadership. Eric is a lawyer and tends to come at these issues from that perspective. He argues that business as usual is quite likely to lead to major environmental catastrophes, and he’s pushing for Wharton to get ahead of the curve on these issues. It’s clear that sustainability is here to stay. I think it has come into its own as a business priority. We all realize that we’re going to destroy the planet if we don’t get on board.

In many business schools, the interest in sustainability is coming from the bottom up, from the students.

It’s true. A lot of student efforts are bubbling up here. Emily Schiller graduated with an MBA from Wharton in 2009 and chose to stay here to become the school’s first associate director of sustainability and environmental leadership.That role grew out of her involvement, when she was a student, as co-chair of Net Impact’s North America Conference, one of the nation’s largest nonprofit events focused on sustainability. She also works with our Student Sustainability Advisory Board, which takes student suggestions and so far has turned them into real savings of more than $100,000. One of their ideas now is to switch to natural cooling of our data center in winter, rather than using air-conditioning. If it’s cold outside, why not take advantage of that?

Sidebar: NRDC FOCUS — Peter Malik, Director of NRDC’s Center for Market Innovation

If business schools could choose one thing to enhance their focus on sustainability, what would it be?
Mortgages. The housing market has to be one of the drivers of economic recovery, but it’s still under severe pressure. Unsound lending practices were partly responsible for the mess, and we need to scale down the role of government-sponsored enterprises like Fannie Mae and Freddie Mac in underwriting private-borrower risk. Banks should also incorporate sustainability criteria into mortgage scoring and pricing. Live in a mansion and drive a Hummer, and you’ll pay more. Live in an energy-efficient apartment and walk to work, and you’ll pay less.

Learn more about Location Efficient Mortgages.

GreenBiz

Are We Entering Cleantech’s Dark Ages? | GreenBiz

The budget brinksmanship that, amazingly, lasted all the way into the first days of August pushed me over the edge. Whether a willful choice, or some kind of subliminal denial, I opted for a partial mental vacation in recent weeks, trying to tune out from the mostly dismal news about elections, energy and environment.

But all vacations must end, and as distasteful as the political process has been for the last few weeks, the late-summer news cycle holds potentially big impacts for the world of cleantech.

From policies enacted and planned to electoral and financial developments, all signs suggest we’re moving from relative boom times for cleantech into what will almost certainly be dark days.

Cleantech’s “Age of Austerity”

Let’s start with the fallout from budget deal, known officially as the Budget Control Act (BCA) of 2011. Scanning a few weeks’ worth of news releases from Bloomberg New Energy Finance (BNEF), the prospects for cleantech finance are nothing short of grim.

“For the clean energy sector, the Act heralds an era of austerity in which current subsidy programmes may not be extended beyond their current funding,” wrote Stephen Munro, a policy analyst at BNEF, in a research note on Aug 5 titled “An age of austerity for clean energy?”

The BCA agreement requires cuts of $917 billion in discretionary spending. Clean energy programs aren’t named specifically, but they fall under the discretionary spending portion of the budget, Munro points out.

Programs are likely to become vulnerable as they come up for renewal. First up is the Treasury Department’s “1603” cash grant program for early-stage project investment, which expires at the end of this year.

For solar and wind developers formerly dependent on tax equity finance — which evaporated as a result of the mortgage-backed security crisis — these 1063 grants, which can cover 30 percent of a project’s upfront costs, have been a lifesaver. Last December, the Solar Energy Industry Association estimated that the grant program had made possible more than 1,100 solar projects in 42 states, with a total investment value $18 billion.

Similarly, the 100 percent bonus depreciation incentive for new equipment and property purchased for renewable energy projects sunsets soon. Known by the unwieldy acronym MACRS (short for Modified Accelerated Cost-Recovery System), the federal program allows businesses to accelerate deductions for the capital investments to five years, or just one, for certain bonus projects.

Renewal looks “unlikely” for either of these programs.

There’s some stirring that the tax-equity market — which the 1603 cash grants were established to replace — will rise again. ClimateWire’s Joel Kirkland recently wrote that a return to tax equity financing may be nigh (via the NYT). Given that corporate America is sitting on mountains of cash, it follows that they’ll seek higher returns than are available through Treasury bills.

Kirkland’s central example is Google, which has made seven green energy investments totaling $700 million over the past few years. Although it would be encouraging if those investments marked the start of a rush to market, that’s not the sense I’m getting from my review.

Further out, the bipartisan committee of 12 created as part of the BCA boondoggle is required to come up with another $1.5 trillion in cuts over the next decade. For wind, solar and geothermal projects, tax credits end as early next year, and deadlines continue through 2016.

What’s more, the fisticuffs aren’t over. The Act doesn’t make adjustments to the overall budgets for the Energy Dept. or Environmental Protection Agency or any of their sub-programs, such as ARPA-E. Yet these budgets, Munro points out, will be among the first to be addressed when lawmakers return from their summer recess on Sept. 5. Given the bludgeoning GOP presidential aspirants have lately been administering to the EPA, it’s likely the EPA and DOE budgets could be especially tortured in the next couple of weeks.

“The debt agreement, which is focused on cuts only and not revenue increases, makes it more likely that this infant sector gets strangled before it matures,” said Daniel Weiss, a senior fellow at the Center for American Progress, a Washington policy group that advises Democrats, in an interview with Bloomberg Government.

Subsidies for renewable energy are expected to decline beginning this year, and will fall 77 percent by 2016 from their peak in 2010, according to Bloomberg News, citing data from the White House Office of Management and Budget.

Cleantech VC Investment Ebbs

Well maybe the private sector will step up and fill the gap — maybe Google’s investments are a sign of things to come, right? Probably not.

Second-quarter venture investment in early-stage cleantech startups decelerated, according to the Cleantech Group’s preliminary data for the quarter, released in early June.

Global funding hit $1.83 billion, a 33 percent retreat from the prior quarter ($2.75 billion) and 10 percent down on 2010 ($2.03 billion). Quarter to quarter VC numbers are notoriously volatile, but behind these numbers are other signals that the U.S. cleantech ecosystem is not generating a lot of new companies: Most of the deals — 66 percent by deal number, and 87 percent by value — were B-series or later stages. Funding retreated more sharply in the U.S. than Europe or Asia-Pacific.

A Dearth of IPOs

A close cousin of cleantech venture capital funding is the rate of initial public offerings of shares by young, fast growing companies. By this measure too, the climate in the U.S. is growing more anemic by the week, just when it should be offering a vigorous exit path for smart, small companies.

While the Cleantech Group data reflected a “robust” global IPO market through June, the bulk of the listings have come in China. Here in the U.S., the swooning stock market is reinforcing a sense that much-anticipated listings are likely to hold back. At GigaOm.com, Ucilia Wang captured this snapshot:

“…companies that have filed papers for IPOs (but not yet traded) include solar equipment developer Enphase Energy, smart grid tech companySilver Spring Networks, biodiesel producer Renewable Energy Group, and solar power plant developer BrightSource Energy. VentureWire reported that electric car company Fisker Automotive, and biofuel company Genomatica had also hired bankers to investigate the IPO process. But it’s seemed apparent to some of these companies that the IPO window has been slowly closing.”

Oil Prices Falling

With the economy teetering between neutral and reverse, oil prices are falling. West Texas Intermediate (WTI, the U.S. benchmark) fell to around $80 per barrel early in the month, presaging a fall of 40 cents per gallon at the pumps, if the price signal follows through.

Lower fuel prices are salve to an ailing economy, of course. But they’re trouble for companies looking to sell innovative transportation technologies, whether they’re century old automakers pushing advanced EVs or algal biofuel startups targeting their production price for $100 oil. More broadly, low energy prices dilute public urgency on energy efficiency and alternative energy.

In its Aug. 8 research note, Bank of America’s Global Energy Weekly pointed to threat of a double dip recession. By its models, a mild recession would draw Brent Crude (Europe’s North Sea reference blend) to $80 per barrel, and (more importantly to U.S. buyers), WTI to $50-60 per barrel.

While these two blends typically trade within a dollar of one another, in recent weeks their prices have diverged to record levels, with Brent trading at over $25 per barrel more than WTI. The gap reflects unprecedented levels of uncertainty with Europe’s fiscal outlook and worries the U.S. is about to tip back into recession.

Is It Darkest Before the Dawn?

If all these harbingers from the political and economic arenas weren’t enough, we’ve also had one of the most extreme and disaster-filled weather years ever — with 2011 already bringing more billion-dollar catastrophes than in any other year, according to NOAA.

And to top it all off comes news from the Energy Information Administration that U.S. carbon emissions rebounded by more than 3.9 percent last year, the sharpest uptick in more than 20 years, as industrial activity, power generation and travel volumes returned to norms depressed by the Great Recession.

It’s enough to make anyone want to go back on vacation, at least until Labor Day, or maybe Groundhog Day, or … anytime after November 6, 2012.

But perhaps I’m overly pessimistic — I’d love to know if you’re seeing anything out there in the world that offers some hope for a resurgence of cleantech’s potential?

Photo CC-licensed by Samuel Stocker.

Global CCS Institute

Can Skyonic combine chemical production and pollution mitigation to transform carbon capture into a profitable business? | Global CCS Institute

I recently caught up with Skyonic, an Austin (Tex.)-based carbon capture startup that is expanding a demonstration unit into a production-scale facility at a cement plant in San Antonio, Tex. Due to come on line in 2012, Skyonic’s new deployment is designed to snare 75,000 metric tons of CO2 per year from the cement kilns’ exhaust and convert it into saleable materials.

Founded in 2005, Skyonic has attracted plenty of buzz for its SkyMine process which transforms the CO2 in smokestack exhaust into a buffet of industrial chemicals – including chlorine, hydrogen, magnesium carbonates, sodium bicarbonates, and sodium carbonates – at lower costs than today’s commodity chemical manufacturing methods, according to Joe Jones, Skyonic’s CEO and founder.

Versatile as its technology promises to be, Skyonic’s business model could prove to be as important. That is, if Jones can get the finances to work. With a solution that promises to generate revenue from both pollution reduction services and chemical production, Jones argues that Skyonic is on track to deliver carbon capture services cost effectively without the need for a regulatory price on carbon.

Notably, Skyonic’s recipe also pulls SOx and NOx and heavy metals such as mercury from flue gases. This scrubbing process is, of course, one that big power plants have used for many years. Jones says Skyonic’s SkyMine process can remove these pollutants more cheaply and at smaller scales than today’s methods.

The Environmental Protection Agency has been ratcheting up pressure for power plants to cut emissions of criteria pollutants, which is in turn driving demand for treatment technologies. Last May, the EPA officially recognized the SkyMine process as a “multi-pollutant control” to help power plants comply with the tougher new rules for hazardous air pollutants (known by the acronym, NESHAP, or also as the “utility air toxics rule”).

Jones ran through the numbers for SkyMine for me when we spoke. According to the company’s Jan. 2011 announcement: Current wet-limestone and SCR scrubbing is only scalable for large (400 megawatt or greater) facilities and costs US$400–650 per kilowatt of generating capacity. The SkyMine process can operate down to the 10 megawatt equivalent level and costs less per kilowatt. Additionally, Jones said, current scrubbing technologies release CO2 as they capture acid gases; SkyMine does not.

Skyonic’s technology impressed Department of Energy researchers sufficiently that in July last year, the company was awarded $25 million – the lion’s share of a $106 million tranche of DOE funds distributed to a half dozen U.S. companies all focused on productizing CO2 .

The DOE monies are the second dollop that Skyonic scored from Washington, coming on top of a $3 million grant at an earlier stage of the technology’s development.

“If carbon capture and sequestration policy is going sideways right now,” Jones told me, “demand for technologies that cut conventional pollutants is moving forward.” Their appeal is they can offer a market viable way to develop technology that can in time be focused on CO2 capture, should a cap and trade program emerge.  “This is a neat little key that fits into the public policy hole right now.”

Writing in GreenTechMedia.com last December, Eric Wesoff rightly points out that that the chief question mark hanging over Skyonic’s ambitious claims is whether the technology will be truly economic and CO2 negative at an industrial scale.

Jones believes SkyMine bests CCS because of his technology’s superior economics. “Mineralization is the way to get rid of CO2. You don’t have to do open-heart surgery with the plant.” Since Skyonic’s approach is a post-combustion process, existing facilities can be retrofitted relatively easily, he said. Nor does the process require pipeline transport or geological storage and may therefore be more saleable to policy makers and the public.

Putting some numbers on his claims, Jones told GreenTechMedia that Skyonic’s current “carbon penalty” is 43 per cent, less than what he estimates is the range for CCS, if one includes the full energy toll posed by CO2 capture, compression, transportation and injection. Jones added: “The DOE’s assessment of our process is the most important and the DOE says the process has a negative carbon footprint. It consumes CO2 . Period.”

Jones told the Austin Statesman that the construction of Skyonic’s pilot facility is slated to conclude in 2012 with a total project cost in the neighborhood of $135 million. Funding in addition to the government’s share has come from venture investors.

Turning carbon capture into a profitable business, rather than a costly regulatory hurdle, seems like a smart path here in the U.S., especially as the budgetary outlook continues to darken for continued, let alone heightened, research subsidies for carbon capture and other clean technologies.

Enhanced oil recovery, which I wrote about last month, looks to be one of the biggest potential markets for carbon capture and use. And in coming posts I aim to profile the other companies pursuing carbon capture and use technologies backed by the DOE in its July 2010 funding announcement. In addition to Skyonic, these include Alcoa, Calera, Novomer, Phycal and Touchstone Research Laboratory.

Read or comment on the original post here:
http://www.globalccsinstitute.com/community/blogs/authors/adamaston/2011/08/17/can-skyonic-combine-chemical-production-and-pollution-m

GreenBiz

Cisco Quietly Shuts Down Building Energy Management Program | GreenBiz

Another one bites the dust. At the end of June, the names Google PowerMeter and Microsoft Hohm were chiseled on the grave marker of casualties in the race to build smart grid-linked software and gizmos. To this list of famous fallen, Cisco Systems adds its name, with an announcement yesterday that it will exit building management software services while also retreating from the home energy management market.

You could be forgiven if you missed the announcement. The news was tucked into Cisco’s fiscal fourth quarter earnings call. Amidst the perilous rollercoaster-ing of the markets of the past few days, Cisco showed signs of recovering from recent missteps, solidly beating expectations — a performance rewarded by antsy investors with a 17 percent stock price runup.

Almost lost in the din was the news that Cisco is unwinding its investment in the energy management market. Cisco entered this market almost two years ago to the day, with an ambitious announcement of a new product, dubbed Mediator, that would tap into Cisco’s deep networking skills to hook up the many and disparate software networks used to heat, cool, and otherwise operate big commercial buildings.

The precise fate of these business lines remains to be seen, but prospects look dim. At her Cisco blog site, Laura Ipsen, senior vice president of global policy and government affairs, expanded on Cisco’s thinking in a company blog post, although the jargon is tough going. She writes:

“Over the past two years the home and building energy management markets have evolved in such a way that we believe we can provide more value to our customers and the industry by enabling interoperability through our core networking products and solutions (for example, EnergyWise) as part of our integrated architecture within the broader smart grid effort.”

Based on this rationale, it appears that Cisco will likely sell its building management software suite, Mediator. Ipsen writes: “For building energy management, this means we are actively pursuing several strategic options for Cisco’s Network Building Mediator and Mediator Manager product line, with an emphasis on minimizing the impact on current customers, partners and employees.”

The outlook for home energy management systems is less clear — the jargon reaches fever pitch here — but it looks like Cisco is simply going to pull the plug on household offerings, instead focusing on utility and other B2B markets: “For energy management in the home, we will transition our focus from creating premise energy management devices to using the network as the platform for supporting innovative applications and architectures that will improve our customers’ value proposition in the consumer energy management market.”

For close watchers of the smart grid space, the retreat comes as no surprise. At Greentech Media, Michael Kanellos predicted Cisco would retreat last week, pointing out that the company’s earlier success tempted it to overreach into unknown markets, even as its core networking technologies were under intense competitive pressure.

A harbinger of Cisco’s exit was the early-retirement of Ed Richards, an original developer of the software behind Mediator, a system which Cisco acquired in the acquisition of Richards-Zeta back in 2009.

As Google and Microsoft found in their forays into energy management, Cisco’s market expectations went unmet. The market has been slow to develop, utilities have proven hard customers to develop, and consumers have been all but indifferent to the hype around home energy management software, points out Katie Fehrenbacher at GigaOm.

Cisco’s been riding through a winnowing reorganization in recent quarters. In July, the company shed 9 percent — or 6,500 employees — of its staff, part of a plan to lower costs by $1 billion. And in April, the company killed off its consumer business, including the Flip video camera, which it had bought just two years earlier.

Photo CC-licensed by John Brennan.