The Fiscal Times

Investing in Clean Energy: A Sputnik moment for America? | The Fiscal Times

In balmy Cancun, at a U.N. conference on climate change, China and the U.S. remain the elephants-in-the-room of all discussions. Both are more focused on the commercial potential of climate-related technology than on any environmental goals that could impair economic growth. Such a focus should sell better in Washington, but it’s an area where the U.S. is lagging, and China’s lead is growing.

U.S. Energy Secretary Steven Chu, speaking at the National Press Club earlier last week called China’s mounting successes in clean energy a “Sputnik moment” for the U.S.

In 1957, a refrigerator-sized sphere transmitting a steady radio signal was lofted into orbit by the Soviet Union, sparking a generation of U.S. technical and scientific discovery. But it took decades for satellite technology to become a commercial market.

Now, in clean technologies, China is racing into well-established, fast-growing markets U.S. players are eyeing hungrily. Chu named the most vulnerable areas, where the U.S. must innovate quickly, or risk falling behind…

GreenBiz

GE’s Innovation Avalanche | GreenBiz

GE's Innovation Avalanche

In New York yesterday, GE announced two big steps in its Ecomagination Challenge program. The company unveiled 12 investments, totaling $55 million, as the first round of its goal to put $200 million to work in power grid technology startups over the next 18 months.

Second, GE announced five $100,000 “Innovation Awards” for still- developing technologies identified from its novel effort to crowd source innovative energy technology opportunities from the Web. This batch included two of my favorites: WinFlex, which is developing a collapsible wind turbine rotors, for easier assembly, and IceCode, which is electrifying wind turbine blades to prevent power-sapping ice build-up.

In the big money category, GE and its venture capital partners are putting up $55 million into 12 startups, established companies and one academic program. Winners get more than investment funds. They’ll also have the benefit of warp-speed product development with the help of GE’s engineering and sales troops. Plus they’ll get guidance and financial help from leading VCs, including Emerald Technology, Foundation Capital, Kleiner Perkins Caulfield & Byers, and Rockport Capital.

For GE, the key is cultivating innovation from beyond its four walls. “What do I do? I’ve got 45,000 engineers and innovators, and 45,000 sales people. I can drive innovation at a scale these guys can’t do,” said Jeff Immelt, GE’s CEO and Chairman, at the announcement.

For today’s winners, all those engineers and sales experts offer a huge leg up. “For a startup, capital is necessary, but it’s never sufficient to build innovation,” said Thomas Noonan, the CEO of JouleX, one of the winners, which is making advanced grid-monitoring technology. “The work we’re doing with GE though their energy research labs, with access to their network, testing our products, has been extraordinary for a small, early-stage company.”

As you’ll see in the list below, this first round of winners was long on smart grid plays. This is no accident. Smart grid complements GE’s own ambitions in advancing its in-house power distribution and grid management technology.

Smart grid also offers some of the best growth potentials in clean tech, too, as Steve Vassallo of Foundation Capital pointed out during the announcement. While many cleantech plays are focused on the supply side of the opportunity — whether it’s converting photons to electrons, or switch grass to fuel — they’re very capital expensive to take commercial.

Conversely, Vassallo added, opportunities to reduce demand are more capital-efficient, faster to deploy, and not as dependent on subsidies because the solutions can deliver such quick savings to customers.

via greenbiz.com

The Fiscal Times

Climate Change: Hotter, Wetter, Windier and Costlier — Insurers Tally the Potential Toll | The Fiscal Times

It’s not your imagination. The weather in lots of places is getting hotter, windier, and weirder. In September, New York City was hit by its third tornado in the past five years, unprecedented in more than a century of weather records.

For a few minutes on Sept. 16, a macro-burst carved a swath of tree-felling, roof-lifting destruction through Brooklyn and Queens. Remarkably, the storm killed only one bystander. Estimates put the cost of damage from the storm at over $27 million, not including the loss of thousands of city trees.

An unprecedented heat wave and severe drought conditions this summer fueled wild fires in Russia, causing hundreds of deaths and some $15 billion in property loss. Later in the summer, Pakistan experienced cataclysmic flooding, displacing millions and doing some $9.5 billion in damage to housing, infrastructure and farm fields.

Some say these events are part of a normal weather cycle, others say it’s a sign of permanent climate change. Either way, it’s a multi-billion dollar problem. Globally, insured losses from weather events have jumped to an average $27 billion annually from $5 billion over the past 40 years, adjusted for inflation. While rising property values account for part of the increase, a growing share is driven by the intensification and rising frequency of weather disasters, according to an assessment of insured property damage by SwissRe, a Zurich-based reinsurance provider…

More here: http://www.thefiscaltimes.com/Articles/2010/11/16/Climate-Change-Hotter-Wetter-Windier-and-Costlier.aspx

 

GreenBiz

The End Isn’t Near: A Better Way to Spur Action on Climate Change | GreenBiz

The End Isn't Near: A Better Way to Spur Action on Climate Change

From Al Gore’s An Inconvenient Truth, to emotionally wrenching visions such as this video shown at last year’s Copenhagen climate meeting, many climate change communicators opt for shock and emotional awe in their efforts to stir action. Given the scope of the fears, it’s an understandable tactic.

In fact, litanies of massive environmental disruption — often paired with images of imperiled children (here, here and here) — have become a sort of visual cliché used by even the most sophisticated messengers in this arena. Gore’s movie — despite being essentially a PowerPoint presentation on steroids — even won an Oscar. At their best, they can be educational, stirring visions meant to motivate the public.

At their worst, they do the exact opposite. Given the parlous state of climate efforts, it’s pretty obvious that these apocalyptic warnings aren’t winning over droves. I’ve seen it first hand: For every person moved to act by Gore’s work, I’ve observe others who respond with a fatalistic shrug asking, in effect, what could I possibly do about it? Still others have vaulted clear over ambivalence to outright antagonism, angered by the threat these visions suggest, and their implicit accusation of fault.

Now behavioral researchers at the University of California, Berkeley, have shed some scientific light on these unintended consequences of climate communication. The new study, which will be published in the January issue of Psychological Science, suggests that dire descriptions of global warming, in isolation, can backfire, causing viewers to shut off, before considering the problem.

In their paper, “Apocalypse Soon? Dire Messages Reduce Belief in Global Warming by Contradicting Just World Beliefs,” [PDF] researchers Matthew Feinberg and Robb Willer highlight the basic fact that fear and fatalism are poor motivators. The conclusion offers a reminder that, for all the billions being put into mitigating climate change, developing better understanding of human behavior could lead to more change at lower cost.

via greenbiz.com

GreenBiz

Is the US Losing the Leading Role in Smart Grid? | GreenBiz

Is the US Losing the Leading Role in Smart Grid?

When the World Economic Forum and Accenture launched their latest look at global progress of smart grid technology, the authors selected Tianjian, China, for the debut.

It wasn’t until nearly two months later that the analysis, “Accelerating Successful Smart Grid Pilots (pdf),” was formally unveiled in the U.S. — at a meeting of industry leaders today in Atlanta hosted by General Electric Energy.

The China debut caught my eye. Is it a signal that U.S. leadership in smart grid is giving way? There’s been much worry that the U.S. is losing its edge in clean technologies born here. It’s already happened with solar photo voltaic technology, which is dominated by China. Other sectors — such as e-car, battery and wind technology — are re-centering there, too.

In the smart grid space, the U.S. is a natural leader, given our huge energy appetites and how similar the smart grid is to the Internet.

“As the largest per capita consumers of energy in the world, the United States has both the opportunity and the responsibility to be at the forefront of this revolution,” said Bob Gilligan, GE Energy’s vice president of digital energy, in a statement as part of the WEF event.

Yet as its China debut suggests, the report makes clear that whatever head start the U.S. may have had, it’s being challenged by ambitious programs elsewhere. The report maps out the surprising scope of international efforts. For instance, while Washington committed $4.5 billion into smart grid as part of the stimulus, Beijing committed some $7.3 billion.

The question isn’t so simple as U.S. versus China, of course. China’s key focus isn’t to develop exports, at least not yet. Rather, it’s racing to build out its national grid to keep pace with rapid urbanization and economic growth. And it’s not alone. Newly wealthy India and Brazil, together with Kenya, according to the WEF’s report, are plowing funding into smart grid work to build infrastructure fast, as well.

That said, and unlike China, some other economies are more explicitly focused on developing smart grid technologies for export, the WEF found. These include South Korea, Japan and Singapore. Their plans dovetail nicely with domestic efforts to cultivate green technology industries and lower national energy use.

In Europe, billions are flowing into the sector as part of strong national commitment to build out renewables, roll out e-cars and lower the carbon intensity of the power grid.

To be sure, the sky isn’t falling. According to the WEF’s survey, the U.S. is tied with Europe as leaders in these technologies. Plus in fast-emerging markets like China and India, much of the money being poured into grid technologies is simply to deliver basic services, rather than cutting edge digital systems.

U.S. efforts are gaining speed too. While U.S. public funding in smart grid projects trails that of some other regions, private investment — led by utility spending — is slated to hit $7 billion this year, the WEF estimates. As much as South Korean and Singaporean players may hope to export smart grid gizmos to the U.S., big tech juggernauts here such as GE and IBM are already hustling to sell U.S. expertise into those and other markets too.

This context is worth remembering as the U.S. smart grid rollout goes through some early growing pains. We’ve already seen some barriers to early projects and anxiety is on the rise over the vulnerability of the smart grid to cyber-risks.  These problems aren’t unique to the U.S., of course, and by fixing them, the U.S. smart grid could yet set standards and define the technologies, others will emulate.

A video of the discussion on the report by the WEF and Accenture can be seen here.  The Q&A following the presentation is worth catching, given the caliber of attendees — including Duke Energy CEO Jim Rogers — and the thoughtful the discussion of the challenges facing the U.S. rollout.

The full WEF “Accelerating Successful Smart Grid Pilots” is available at www3.weforum.org/docs/WEF_EN_SmartGrids_Pilots_Report_2010.pdf

The executive summary is available atwww3.weforum.org/docs/WEF_EN_SmartGrids_Pilots_ExecutiveSummary_2010.pdf

Image CC licensed by Flickr users Vince Alongi and Marc_Smith.

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Check out the original article at http://www.greenbiz.com/blog/2010/11/10/could-us-lose-leading-role-smart-grid

GreenBiz

BSR 2010: What Will it Take to Feed the Future? | GreenBiz

BSR 2010: What Will it Take to Feed the Future?

Food production sits at the intersection of some of the most fraught concerns in the landscape of sustainability. Combining life-or-death issues of nutrition, with pressing concerns about the environment together with questions over the role of big industrial players in agricultural, food production sparks passions in boardrooms and dining rooms alike.

At BSR 2010, the tensions pulling at these issues surfaced in a standing-room-only session titled “Feeding the Future: What will it Take.”

World Wildlife Fund’s Jason Clay, who ran his family’s farm early in his life, laid out the challenge facing the world’s food production systems. Today, just 30 percent of arable land remains unfarmed. Yet over the last 10 years, that share of farmed land has grown by bout 0.6 percent per year. If this pace continues steadily, by 2050, all but 6 percent of untouched arable land will be put to use, meaning rain forests and other pristine environments will be imperiled.

“Suddenly there will be no biodiversity left. We will eat the planet. We have to figure out how to do more with less,” said Clay. To get there from here, without eating the planet, Clay estimates we’ll have to do about twice as much with every input — whether plants, or phosphorus, or water, or land.

Clay pointed out that water is another huge constraint. Today humans use half the fresh water supply on the planet, and of that, about 70 percent goes for farming. Put another way, he explained that it takes about 1 liter of water to produce each calorie of food we eat. So a person’s daily water consumption isn’t really the few liters they drink directly, but the 2,500 or 3,000 liters they eat each day.

Driving the food consumption is rising wealth. By 2050, Clay predicts, the world will have some 9 billion people, with 2.9 times more income on average than today. And in many of the largest, less developed countries, income could grow by 5 times per capita.

By practically any measure, wealth translates into healthier populations. But as newly wealthy populations boost their meat intake, the impact on food systems will be stressful, and enormous. A richer world will eat more protein, which demands much more energy, water and farming resources to grow. “We’re seeing it with pork in China and eggs in India,” said Clay.

To feed this richer, more populous world, Clay emphasized that no single strategy can do the trick, so we should be pursuing many at once. Reducing waste is among the best near term steps, he points out, given that one of every three food calories is wasted worldwide.

By simply eliminating wasted food, said Clay, “we could produce half as much additional new food we expect to need under the business as usual plan.” Sounds easy? But it runs against deeply ingrained practices in restaurants — where portion sizes are often too big — and shoppers’ love affair with fresh food. Transporting fresh food not only wastes about half the food, but uses more energy.

via greenbiz.com

GreenBiz

BSR 2010: The Push to Merge Financial and Sustainability Reporting | GreenBiz

BSR 2010: The Push to Merge Financial and Sustainability Reporting

For all the attention flowing into greener corporate practices, there’s scant agreement about how best to document these efforts. Standalone sustainability reports have become de rigueur for most multinationals, pressure is growing to integrate environmental and sustainability practices into a single annual report.

The push for such so-called “integrated reporting” was the topic of a meeting at the BSR 2010 conference, When CSR and Financial Reporting Meet: Integrated Reporting, where “AK”Adam Kanzer, managing director and general counsel of Domini Social Investments, emphasized that the issue is likely to end up on the “to do” lists for many boards of directors and investment relations offices as the SEC moves towards setting rules about treating the “materiality” of sustainability issues to earnings and reporting.

In advance of SEC rulemaking, Kanzer points out many companies are headed in the same direction for strategic reasons. Over 90% of CEOs, when polled, report that sustainability is critical to future success. “If it’s material to business, then it’s inadequate not to include it in the annual report,” Kanzer said. “The ultimate question is: why do separate reports?”

As yet, just a handful of companies — mostly European, such as Astra Zeneca — are producing integrated reports, and there is scant consensus on how to prepare such reports. And while guidelines remain hazy, Kanzer said, lawyers in investment relations offices are always likely to opt out until rules are set.

“The SEC definition of materiality is based on what a reasonable investor would need to make an investment or voting decision,” said Kanzer. “Take that broad interpretation, then put it in hands of corporate counsel, and you end up with boilerplate disclosure, something not very useful to investors.”

Investors should therefore be pressing for integrated reporting ahead of the rules, Kanzer argues. Mainstream financial analysts are more likely to integrate these issues into their recommendations when sustainability factors are presented along side conventional financial metrics in an same annual report. Left to an external report, Kanzer concedes, sustainability issues are more likely to be ignored.

Kanzer, who has served on an SEC advisory committee on sustainability reporting standards, explained that determining what is “material” to earnings is still more art than science, which complicates the decision about how to report such issues.

For instance, Kanzer recounted, Costco recently changed its seafood purchasing practices in response to pressure from Greenpeace and other NGOs. “If Bluefin tuna goes extinct, neither Costco nor its competitors will sell it anymore,” so they’ll be equally affected, plus sales reduction will be undetectable to the company’s bottom line, Kanzer explained. “So it’s hard to make a case that the decision is material to Costco’s financial reporting. But it is clearly material to our evaluation or the company as an investor.”

Photo CC-licensed by featheredtar.

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GreenBiz

BSR 2010: Conflict Mineral Supply Headed Toward a Crisis? | GreenBiz

BSR 2010: Conflict Mineral Supply Headed Toward a Crisis?

The use of “conflict minerals,” already a simmering issue at BSR 2009, shot up the agenda of the manufacturers attending this year’s meeting which are reliant on electronics.

Under a new U.S. Securities and Exchange Commission (SEC) rule, a key deadline to file information on corporations’ sources of these materials is approaching fast. And while industry is working with NGOs, governments and local miners to set up the necessary tracking rules, time may be too short to complete the work.

If not, supplies of these materials could be disrupted and the fragile war-torn economy of the African region where mining of these minerals is taking place could be grievously damaged, said Karen Hayes, director of corporate community engagement for the Africa region at Pact, a nonprofit trying to develop tracking processes for the material. Hayes participated in a panel at BSR 2010 entitled “Responsible Sourcing and Conflict Minerals.”

Corporations are already at work trying to meet the SEC standard, which requires companies to identify and publicize sources of key minerals. Formal reporting of this information is due in 2012, still more than a year away. But in April 2011 the new SEC standard calls for companies to produce a timeline describing plans to comply.

That’s just six months from now, very tight timing for large manufacturers who typically sign supply agreements years in advance. Corporations ranging from GE to Honda and Intel are already wrestling with vagaries of the new rule, and assessing the potential impact on their supply chains if supplies of these key minerals are disrupted. “Companies have an incredibly short timeline,” Hayes said.

The minerals in question are gold and the “three Ts” — tin, tungsten and tantalum — all widely used in electronics and mined in the war-torn Democratic Republic of the Congo (DRC). Embroiled in a decades-old civil war that has caused five million deaths and even more displaced persons, DRC is the largest producer of the three Ts, and a major gold producer. Army factions exploit countless small-scale mining operations — “taxing” material sales, as well as shipments — to fund war efforts

Alternative supplies of these minerals exist. There’s growing concern that by disrupting their export from the DRC, however, the SEC rules could have unintended tragic consequences by effectively embargoing all mineral exports from the region.

Hayes reported that “artisanal mining” jobs, while hard labor, were a critical source of income, as well as the DRC’s largest sector. Among the possible effects of ending formal exports: thousands of workers displaced, destabilization of the economy and formal government, in parallel with a strengthening of rebel forces.

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GreenBiz

BSR 2010: Maersk Slows Down to Go Greener | GreenBiz

BSR 2010: Maersk Slows Down to Go Greener
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Nearly two years after oil’s record pricing run-up, many consumers and businesses have at least softened some of the dramatic changes that $5 per gallon gasoline induced. SUV sales will never be what they were, of course, but big vehicles still rule U.S. roads. And shippers like FedEx and UPS have backed up fuel surcharges, which were tacked onto some shipments.

On the high seas, though, Maersk Line has stuck with the cost-cutting steps it instituted during the energy price spike. At the time, Maersk, the world’s largest operator of container vessels, broke with industry practice and proposed to its shipping clients that by slowing down its ships, Maersk could cut fuel use and lower shipping costs.

While 1,000-foot-long freighters may not have the same zip as a FedEx jet, the container industry has been subject to the same pressure to go “faster, faster, faster” in recent decades, so the move was a gamble, explained Jacob A. Sterling, head of climate and environment sustainability at Maersk Lines, at a BSR 2010 panel yesterday titled Extending Sustainability into the Transportation Sector.

“We’ve always known a minor reduction in speed could deliver energy savings,” said Sterling. A 20 percent reduction in speed can cut fuel use and CO2 emissions by up to 40 percent, the ship operator found. “But for decades, the price of fuel has been so low, shipping costs didn’t factor into companies analysis. The speed from factory to market mattered much more, so we kept pushing to go faster.”

Today, the practice known as slow-steaming has been adopted by many shipping lines, but isn’t the rule on every run. “On a given route — from Asia to Europe, for instance — we’ll run the ships from Hong Kong to Rotterdam at normal speed, or a little slower, because of the high value of the electronics and manufactured goods onboard justifies the expenditure.” But on the return trip, when the ship sails loaded with scrap metal and paper waste headed for Chinese recyclers, slow-steaming makes more sense. “The goods are worth less, and they’re not as time sensitive,” said Sterling. Over 18 months, the shift has cut company CO2 emissions by 7 percent. Maersk has committed to reducing its CO2 footprint by 25 percent by 2020.

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Technology Review

China’s Rare-Earth Monopoly | Technology Review

An attractive material: Neodymium (shown here) is one of the rare-earth elements that are key to making very strong magnets for compact electric motors.
Credit: Hi-Res Images of Chemical Elements  

 

Energy —  China’s Rare-Earth Monopoly

The rest of the world is trying to find alternatives to these crucial materials.

  • By Adam Aston | Friday, October 15, 2010

For three weeks, China has blocked shipments of rare-earth minerals to Japan, a move that has boosted the urgency of efforts to break Beijing’s control of these minerals. China now produces nearly all of the world’s supply of rare earths, which are crucial for a wide range of technologies, including hard drives, solar panels, and motors for hybrid vehicles.

In response to China’s dominance in production, researchers are developing new materials that could either replace rare-earth minerals or decrease the need for them. But materials and technologies are likely to take years to develop, and existing alternatives come with trade-offs.

China apparently blocked the Japan shipments in response to a territorial squabble in the South China Sea. Beijing has denied the embargo, yet the lack of supply may soon disrupt manufacturing in Japan, trade and industry minister Akihiro Ohata told reporters Tuesday.

Rare earths include 17 elements, such as terbium, which is used to make green phosphors for flat-panel TVs, lasers, and high-efficiency fluorescent lamps. Another of these elements, neodymium, is key to the permanent magnets used to make high-efficiency electric motors. Although well over 90 percent of the minerals are produced in China, they are found in many places around the world, and, in spite of their name, are actually abundant in the earth’s crust (the name is a hold-over from a 19th-century convention). In recent years, low-cost Chinese production and environmental concerns have caused suppliers outside of China to shut down operations.

Alternatives to rare earths exist for some technologies. One example is the induction motor used by Tesla Motors in its all-electric Roadster. It uses electromagnets rather than permanent rare-earth magnets. But such motors are larger and heavier than ones that use rare-earth magnets. As a rule of thumb, in small- and mid-sized motors, an electromagnetic coil can be replaced with a rare-earth permanent magnet of just 10 percent the size, which has helped make permanent magnet motors the preferred option for Toyota and other hybrid vehicle makers. In Tesla’s case, the induction motor technology was worth the trade-off, giving the car higher maximum power in more conditions, a top priority for a vehicle that can rocket from zero to 60 mph in 3.7 seconds. “The cost volatility going into the rare-earth permanent magnets was a concern,” says JB Straubel, Tesla’s chief technology officer. “We couldn’t have predicted the geopolitical tensions.”

More manufacturers are following Tesla’s lead to shun the rare-earth materials, although the move means sacrificing space and adding weight to vehicles. A week after the China dust-up began, a research team in Japan announced that it had made a hybrid-vehicle motor free of rare-earth materials, and Hitachi has announced similar efforts. BMW’s Mini E electric vehicle uses induction motors, and Tesla is supplying its drive trains to Toyota’s upcoming electric RAV 4. Given the volatility of rare-earth supplies, and the advantages induction motors offer in high performance applications, “It makes sense for car companies to give serious thought to using induction motors,” says Wally Rippel, senior scientist at AC Propulsion. Rippel previously worked on induction motor designs at Tesla and GM, where he helped to develop the seminal EV1…  Continue reading at technologyreview.com

 

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