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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

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

 

BusinessWeek

Can China Go Green? | BusinessWeek

Beijing has big plans to curb pollution and start a cleantech industry. But the global recession and looming trade frictions will test its resolve

The Sun-Moon Mansion, Himin Solar Energy's headquarters in Dezhou

China’s unprecedented growth in recent years has come at a terrible price. Two-thirds of its rivers and lakes are too polluted for industrial use, let alone agriculture or drinking. Just 1 in 100 of China’s nearly 600 million city dwellers breathes air that would be considered safe in Europe. At a time when arable land is in short supply, poisoned floodwaters have ruined many productive fields. And last year, ahead of most forecasts, China passed the U.S. to become the world’s largest source of greenhouse gases.

The immensity of these troubles has produced a result that may surprise many outside China: The nation has emerged as an incubator for clean technology, vaulting to the forefront in several categories. Among all countries, China is now the largest producer of photovoltaic solar panels, thanks to such homegrown manufacturers as Suntech Power (STP). The country is the world’s second-largest market for wind turbines, gaining rapidly on the U.S. In carmaking, China’s BYD Auto has leapfrogged global giants, launching the first mass-produced hybrid that plugs into an electrical outlet. “China is a very fast follower,” said Alex Westlake, a director of investment group ClearWorld Now, at a recent conference in Beijing.

GOVERNMENT SUPPORT

Understanding they are in a global race, China’s leaders are supporting green businesses with policies and incentives. Beijing recently hiked China’s auto mileage standards to a level the U.S. is not expected to reach until 2020. Beijing also says it will boost the country’s share of electricity created from renewable sources to 23% by 2020, from 16% today, on par with similar targets in Europe. The U.S. has no such national goal.

While most environmentalists applaud these developments, China watchers are voicing two very different sets of concerns. Some question whether China will really stand by its ambitious targets and are worried by signs of backsliding as the recession in China’s key export markets drags down economic growth. Another group, interested mainly in America’s own industrial future, fears that China’s growing dominance in certain green technologies will harm budding cleantech industries in the U.S. After all, China’s emergence comes just as the Obama Administration is trying to nurture these same types of ventures, hoping to generate millions of green jobs. Many of these U.S. businesses will have trouble holding their own against low-price competitors from China.

Beijing’s green intentions will soon be put to the test. China is in the midst of the biggest building boom in history. A McKinsey & Co. study estimates that over 350 million people—more than the U.S. population—will migrate from the countryside into cities by 2025. Five million buildings will be added, including 50,000 skyscrapers—equal to 10 New York Cities. And as quickly as new offices and houses multiply, they are filled with energy-hungry computers, TVs, air conditioners, and the like, sharply increasing demand for electricity, which comes mainly from coal-powered plants.

Environmental groups say it is therefore critical that Beijing promote rigorous, greener standards. And to some degree, that’s happening. A government mandate states that by the end of next year, each unit of economic output should use 20% less energy and 30% less water than in 2005. Portions of Beijing’s $587 billion economic stimulus package are earmarked for cleantech. On top of that, in March the Finance Ministry unveiled specific incentives to spark solar demand among China’s builders. Included was a subsidy of $3 per watt of solar capacity installed in 2009—enough to cover as much as 60% of estimated costs to install a rooftop solar array.

USING WASTE HEAT

Steps like these will help Himin Solar Energy Group in Dezhou, Shandong Province. Founded in 1995 by Huang Ming, an oil equipment engineer turned crusader against the use of fossil fuels, the company is the world’s largest producer of rooftop piping systems that use the sun’s rays to heat water. Its eye-catching headquarters, the Sun-Moon Mansion, showcases these heaters, which Himin cranks out in immense volumes—about 2 million square meters’ worth each year, equal to twice the annual sales of all such systems in the U.S. Because its water heaters sell for as little as $220, they are becoming standard in new housing complexes and many commercial buildings across the country.

Broad Air Conditioning, based in Changsha, Hunan Province, is also set to profit as Beijing pushes toward its green targets. By using natural gas and so-called waste heat from other machines and appliances instead of electricity, Broad’s big chillers can deliver two to three times more cooling per unit of energy than a conventional unit. In a similar fashion, Haier, headquartered in Qingdao, Shandong Province, combines low-cost manufacturing and a variety of advanced technologies to create affordable, energy-sipping refrigerators and other appliances. During the 2008 Beijing Olympics, Haier supplied more than 60,000 such devices for visiting athletes and tourists to use.

As these and other domestic players bump up against technological obstacles, they can draw on the expertise of many of the world’s top multinationals. In return for access to its domestic market, Beijing asks such companies as General Electric (GE), DuPont (DD), 3M (MMM), and Siemens (SI) to share their technology, help upgrade their China-based supply chains, and spread industrial processes to make manufacturing more efficient. These aren’t simply green practices, says Changhua Wu, Greater China director of the Climate Group, a consultancy in London that partners with companies to combat climate change. “They’re best practices.”

GE, for example, has transferred expertise to Chinese partners in everything from wind turbine construction to the building of low-pollution factories. At the Beijing Taiyanggong power plant, waste heat from the combustion process is recycled, resulting in around 80% efficiency, more than double the rate of most conventional power plants in the U.S. The bulk of GE’s sales of turbines for power plants in China are the ultra-efficient models. David G. Victor, a Stanford University professor who has studied China’s electric grid, says some of the coal plants being built there are “much more advanced than those we see in the U.S.”

Wal-Mart Stores (WMT), which buys some $9 billion worth of goods in China each year from some 20,000 vendors, infuses its supply chain with the latest ideas about energy efficiency. For example, Chinese factories that work with Wal-Mart are obliged to track vast quantities of data on energy use and make the information available for audits. “Many Western companies can’t track their own energy consumption,” says Andrew Winston, consultant and co-author of the book Green to Gold.

TORPEDOING U.S. SOLAR?

China’s early achievements in cleantech owe a lot to collaborations such as these. The benefits: China cleans up its own pollution, and the government-backed initiatives in solar and wind help drive down the cost of renewable energy systems in countries around the world.

But there is a downside. The rock-bottom prices for made-in-China green technology could make it impossible for cleantech ventures in the U.S., Europe, or Japan to compete. How, for example, will they go up against Suntech Power, based in Wuxi, Jiangsu Province, the world’s lowest-cost manufacturer of standard solar panels? The U.S. boasts plenty of advanced technology. But any efforts by Washington to nurture this sector could be quickly undercut by a flood of Chinese-made solar panels. Such a deluge is likely if there is a big increase in public subsidies for rooftop solar systems. “What [that would] do is create 10,000 Chinese jobs,” says Roger G. Little, chief executive of Spire Corp. (SPIR), a leading U.S. maker of manufacturing equipment for photovoltaics. “If we import all the [solar] modules, it will obliterate U.S. manufacturing” in this area.

A similar scenario exists in the much heralded area of electric vehicles. BYD, headquartered in Shenzhen, started selling its first plug-in hybrid, the F3DM, last year. It beat Toyota (TM) and General Motors (GM), both of which are developing such “plug-ins,” and hit the market with a price tag they probably can’t match: just $22,000. Henry Li, a BYD general manager, says the company will roll out a version of the car in the U.S. in 2011. Chevy’s answer to this car, called the Volt, is expected to cost about twice as much and won’t be out until next year.

How did BYD pull off this coup? Part of it is just being the new kid on the block. Today’s automobiles, with their advanced combustion engines, are the most complex mass-produced goods ever made, assembled from thousands of highly engineered parts provided by a web of suppliers. It’s difficult for a Chinese startup to compete on such a sophisticated playing field. But the emergence of a new, green-vehicle category clears the way. BYD was able to break in by leveraging its background as a battery maker. When it ran into technical hurdles, the company could draw on a deep pool of inexpensive, well-trained talent at China’s top engineering schools. BYD is also a leader in pure electric vehicles, the logical next step. The government is now putting some muscle behind BYD’s push. It is heavily subsidizing electric-car sales in about a dozen cities—in a stroke, making China the world’s biggest market for such advanced vehicles. Its goal is to boost domestic output of battery-powered vehicles to a half million per year in 2011.

How Washington and the beleaguered U.S. auto sector might respond to a wave of inexpensive electric vehicles from China is difficult to predict. And it is also unclear how China’s cleantech efforts in cars, energy, and other areas will be affected if key markets such as the U.S. and Europe don’t recover quickly from the recession. Chinese makers of solar photovoltaics, including Suntech, export about 98% of their production. They have been battered this year by a collapse in demand in Germany, Spain, and Japan, China’s top markets for solar gear. Suntech’s factories are currently running at half of last year’s capacity.

Even inside China, academics and business executives say Beijing needs to do more to bolster cleantech initiatives and make them recession-proof. For example, without better information on how such policies as the current Renewable Energy Law are to be enforced, “many of the terms are meaningless,” complains Himin’s Huang. And even when the terms are clear, companies don’t always adhere, says Zhou Weidong, the Guangzhou-based China director at the Business for Social Responsibility, a global consultancy promoting sustainable business practices: “Paying penalties is cheaper than complying with the law in many areas.”

At times, it seems as though Beijing is pedaling in the wrong direction. Late last year, China’s Environmental Protection Ministry loosened review standards on potentially polluting industrial projects. In an economic crunch, “environmental protection is downplayed to second, or third, or even fourth priority,” observes Guo Peiyuan of SynTao, a corporate social responsibility advisory firm in Beijing.

While acknowledging there has been some backsliding, most China watchers say the government is unlikely to stage a full-throttle retreat. Too much of its export growth is contingent on meeting strict environmental regulations. And Beijing recognizes that Chinese society can’t tolerate much more environmental degradation. The World Bank estimates damage from pollution—everything from decimated fisheries to premature human death—saps nearly 6% of China’s gross domestic product each year as well. For economic reasons alone, it will be difficult for China to turn back the clock.

with Charlotte Li and Pete Engardio

~

Check out the original story here: http://www.businessweek.com/magazine/content/09_21/b4132040805185.htm

BusinessWeek

Book review – Hot, Flat, and Crowded By Thomas L. Friedman | BusinessWeek

Enlisting Father Profit to Save Mother Nature — Tom Friedman makes a gripping political, environmental, and economic case for green innovation

Hot, Flat, and Crowded: Why We Need a Green Revolution— and How It Can Renew America. By Thomas L. Friedman. Farrar, Straus & Giroux; 438 pp; $27.95

When the U.S. Marines, General Electric (GE), and even China—an energy-poor, environmentally challenged industrial giant—are betting on green innovation to gain a competitive edge, you’d think U.S. policymakers would pay attention. Not yet, though, says Thomas L. Friedman in Hot, Flat, and Crowded: Why We Need a Green Revolution—And How It Can Renew America. It is urgent, he says in this cri de coeur, that we unleash U.S. creativity—and capitalism—on the challenges of energy and climate change. “There is only one thing bigger than Mother Nature and that is Father Profit, and we have not even begun to enlist him in this struggle,” he writes.

Expanding his horizons beyond globalization, the subject of The World Is Flat (2005), the three-time Pulitzer Prize winner argues that a trio of powerful dynamics is shaping our future. The “hot” of the title refers to global warming, or “global weirding,” as he calls it, referring to the bizarre climate effects we are encountering. “Flat” refers to globalization, enhanced here with a look at how trade growth fuels energy use and hurts the environment. “Crowded” refers to humanity’s relentless expansion and its perilous effects on biodiversity and the planet’s finite resources. The only solution to these ills, he forcefully asserts: innovation in the form of a green revolution.

Of course, these topics have been addressed by others: If Fareed Zakaria and Al Gore met and co-authored a long-winded book, this would be it. Many sections were first explored in Friedman’s New York Times column, and with over 400 anecdote-chocked pages, Friedman asks a lot of the reader.

Stay with him, though. Surprising material is scattered throughout, and the final sections may be the book’s most rewarding. Its very sprawl emphasizes the scale of these problems and allows the author to make a strong case for the possibility and necessity of addressing them. With a tone of urgent hopefulness—or “sober optimism,” as he says—he beseeches voters, executives, and politicians to get on with it.

SUCCESS STORIES

Friedman hops across the globe to document the intimate interplay of the three trends. In the jungles of Sumatra, he visits a conservation activist who worked with an energy developer and with villagers to create an economy that fosters rather than destroys the rainforest. Then Friedman is on to Iraq, where a U.S. general on the front lines installs solar panels to reduce the need to transport diesel to fuel electric generators. Cut to Connecticut, where CEO Jeffrey R. Immelt (a recurring character) talks up how tougher environmental standards have made GE’s high-efficiency locomotives best-sellers and a leading export to China.

Innovation, whether the result of policy or entrepreneurialism, is the key to these success stories. Unfortunately, America remains caught up in what Friedman calls a “dumb as we wanna be” mindset, where “drill, baby, drill” is an easier sell than long-term, comprehensive energy policy.

This has security implications. There’s a simple, negative correlation, says the author, between oil and democracy: As oil prices rise, petrodictators grow rich and democracies weaken. Conversely, as oil prices fall, petro-dictators grow weaker and democracies flourish. Think of the reforms of Russia and Iran in the 1990s, when oil prices were low, compared with the countries’ troublemaking in the era of $100-per-barrel oil.

What’s more, he notes, petro-states tend to undereducate their youth, fueling unemployment and creating a breeding ground for terrorism. How to reverse this pattern? Radically cut energy demand and invent fantastic substitutes.

Which brings us to China’s green ambitions—and the U.S.’s failure. If you read only part of this book, let it be the final chapters, in which Friedman explores how China could emerge as a green prodigy. Sure, Chinese leaders unleashed two decades of environmental turmoil by replacing communism with “GDPism.” But increasingly, Friedman says, those leaders are recognizing that environmental harm threatens not only the land, water, and air but also their political future.

So they’re acting. China’s voluntary goal of decreasing carbon emissions, for example, would result in five times more greenhouse-gas savings than the targets set by Europe under the Kyoto Protocol. China also has higher national targets for renewable energy than the U.S. (where there are none) and tougher mileage rules for its burgeoning fleet of vehicles.

If China’s leaders see the necessity of this approach, Friedman wonders, why can’t ours? Despite the scale of the challenge, he is optimistic that the political, technical, and economic means are at hand to spark a U.S. economic revolution. From windmills to advanced batteries, the results could mean new exports and jobs.

When Friedman completed this book in July, he may have been encouraged by the green leanings of the men who eventually became Presidential contenders. If so, he has good reason to worry now. John McCain, the author of some of the Senate’s most progressive climate proposals, is now promoting offshore drilling as a fix. And Barack Obama, having argued the potential of green innovation to jump-start economic growth, has become less vocal.

Yet, Friedman is certain the public can tackle the challenge. He criticizes articles that offer “205 easy ways to save the earth.” Such pandering implies that the revolution will be painless. It will not be: It will demand ugly political battles, the fall of dirty industries, and the rise of new, clean ones. “I am convinced,” he writes, “that the public is ready; they’re ahead of the politicians.” For now, though, the petro-dictators are surely the only ones smiling.

URL for original story: http://www.businessweek.com/magazine/content/08_38/b4100099481532.htm

 

BusinessWeek

Book review – “The World Without Us” By Alan Weisman | BusinessWeek

Save The Planet: Disappear — Weisman presents a curiously refreshing vision of the apocalypse

THE WORLD WITHOUT US By Alan Weisman. Thomas Dunne Books/St. Martin’s Press — 324pp — $24.95

The extinction of humankind is a grim topic. Yet in The World Without Us, journalist Alan Weisman invokes this ancient specter as the jumping-off point for a refreshing, and oddly hopeful, look at the fate of the environment. His central question: What would earth be like if humanity just vanished? Weisman’s answer is as fascinating as it is surprising. It turns out, from towering bridges to sprawling cities–not to mention delicate books or masterly artworks–precious few of man’s creations would last long. The author richly documents the damage done by industrial civilization, providing further momentum for business to go green. But his explanation of just how all of our methodically built cities, factories, and temples would implode under the slow assault of rot, rain, plants, and critters is the most compelling aspect of the book. The winners in Weisman’s tour de décomposition are the very flora and fauna that today are under pitiless assault from humanity…

More here: http://www.businessweek.com/magazine/content/07_31/b4044089.htm

 

 

BusinessWeek

Here comes lunar power | BusinessWeek

Think windmill, but underwater. In 2006, six of Verdant Power's 10-foot-tall turbines will spin in New York’s East River, supplying a supermarket.

Moon-driven tides, ocean currents and waves generate more oomph than wind, are more consistent that solar

A drama is unfolding in New York City’s East River. This summer the Popsicles at a Gristedes supermarket on Roosevelt Island, midstream between Manhattan and Queens, will be kept icy by power generated just a stone’s throw from the riverbank. Anchored 30 feet down, six underwater turbines will turn day and night, driven by the tidal flows in the channel. At a fish-friendly 35 rpm, the propellers will crank out up to 200 kilowatts of clean power, or roughly half the peak needs of the supermarket.

Projects like this one are still small fry. But hydropower, the granddaddy of green energy, is making a comeback. Think Hoover Dam, but less visible and a whole lot easier on the environment. This born-again breed of clean energy isn’t yet on the agenda for George W. Bush, who is out barnstorming the nation on behalf of renewable power. The President is pointing to the earth for plant-based ethanol, to the sky for wind power, and to the sun for photovoltaics. But he should also be pointing to the moon, say fans of the new hydropower, and to the seas that lie below it. Tugged by lunar gravity and stirred by wind and currents, the oceans’ tides and waves offer vast reserves of untapped power, promising more oomph than wind and greater dependability than solar power.

The appeal of next-generation hydropower is hard to miss. “It’s local, reliable, renewable, and clean. Plus, it’s out of sight,” says Trey Taylor, president of Verdant Power LLC, the Arlington (Va.) startup developing the East River site. Adds Roger Bedard, ocean energy leader at the Electric Power Research Institute (EPRI), the industry’s research-and- development arm: “Offshore wave and tidal power are where wind was 20 years ago, but they’ll come of age faster.” By 2010, Bedard predicts, the U.S. will tap about 120 megawatts of offshore wave energy — enough to power a small city — up from virtually zero today.

GROWING DEMAND

The planets are certainly in alignment for hydro. Prices for natural gas and coal are high, making renewables more cost-competitive. And in an effort to halt climate change and cut energy imports, 19 states have mandated that a share of their power come from green sources. Demand for alternatives is soaring: U.S. wind capacity surged by nearly 2,500 megawatts last year, up 35%, and solar is sizzling.

Wind and solar won’t be able to satisfy all the green-power mandates. So more than two dozen companies worldwide are developing systems to unlock the power of waves and currents. The first to sell devices to a commercial project is Edinburgh’s Ocean Power Delivery Ltd. Its Pelamis system is a snake-like steel tube that floats, semi-submerged, in the ocean.

In its Scottish factory, OPD is putting the finishing touches on three of these 400-foot-long machines. This summer they’ll be towed to a site three miles off Portugal’s northwest coast and hooked into the power grid. Lying low in the water, the snakes are invisible from a distance, unlike offshore wind farms that are causing “not in my backyard” complaints across the Atlantic, in Cape Cod. Initially the project will supply 2,500 kilowatts of juice, enough to run 1,500 Portuguese homes. OPD hopes to have 30 units at the site by 2008, pumping out enough current to power a town of 15,000 homes.

With its vast stretches of shoreline, the U.S. has some 2,300 terawatt-hours of potential near-shore wave power, estimates EPRI. That’s more than eight times the yearly output of the nation’s existing fleet of hydroelectric dams — “a very significant resource,” says Bedard. What’s more, since water is heavier than air, marine systems pack a bigger punch than wind power. Because they work not by impounding rivers behind costly bulwarks but by tapping water’s energy as it ebbs, flows, rises, or falls, upfront costs are lower than for dams. Maintenance to keep away barnacles and similar “biofouling” generally runs higher than for wind. Still, on balance, wave energy will evolve to be cheaper than wind was at similar levels of development, Bedard believes.

The power is more predictable, too. Unlike dam-based hydroelectric generators, which depend on rain or snowpack to keep current flowing and which shut down during droughts, newer “hydro- kinetic” systems exploit less capricious natural forces. “Lunar power” is the term offered by experts such as George Hagerman, a senior research associate at Virginia Tech and co-author of a recent EPRI marine-energy study. “You can’t know if the wind will be up in an hour,” he says, “but you can predict the tide 1,000 years from now.”

Hydropower already propelled one revolution in the U.S. Starting in the Great Depression, the government erected thousands of dams, spreading cheap power across many states. Today they supply 7% of U.S. demand, some three times the combined share of wind, solar, and other renewables. Yet even as existing dams are being upgraded, environmental concerns thwart new building.

EUROPEAN EMBRACE

Before the U.S. fully taps tidal power, it will have to play catch-up. Marine-energy R&D was born in the energy programs of the Carter and Reagan eras, but these experiments lost their funding in the 1980s. “We were the leaders when I started out. Now Britain is entreating us to set up there,” says Verdant’s technology director, Dean Corren. He dreamed up the East River project in the mid-1980s while investigating alternative power at New York University. But then “power got cheaper, and research stopped,” he says.

Across the Atlantic there is a long history of subsidies for renewable energy. For example, the EU-backed European Marine Energy Center Ltd. in Orkney, Scotland, is a one-stop shop for lunar startups. Entrepreneurs can get a test rig in the water and get hooked up to the grid quickly, says EMEC managing director Neil Kermode.

Ocean Power Technologies Inc. in Pennington, N.J., opted for a London stock listing because of stronger interest from European backers, says CEO George W. Taylor. Both the U.S. Navy and Iberdrola, a utility in Spain, have signed contracts to test OPT’s PowerBuoy, which generates energy by bobbing up and down.

In the U.S., last year’s energy bill raised hopes in the hydropower community. By unifying the licensing of offshore wind- and marine-energy projects under the jurisdiction of the Interior Dept.’s Minerals Management Service, “it sets the stage for faster approvals,” says Carolyn Elefant, co-founder of the Ocean Renewable Energy Coalition. But the bill failed to recognize ocean energy as eligible for the sorts of production tax credits that jump-started wind power investment in the ’90s.

At the East River, Verdant is confident its compact submarine turbines are ready for the long haul. Once an 18-month trial is completed, Verdant hopes to get the O.K. to install up to 300 turbines. That would generate enough power to supply some 8,000 New York homes. “It’s our flight at Kitty Hawk,” says Taylor.

Click here to see the original story at BusinessWeek.com: http://www.businessweek.com/magazine/content/06_10/b3974056.htm

BusinessWeek

The Race Against Climate Change — How top companies are reducing emissions of CO2 and other greenhouse gases | BusinessWeek

On Nov. 21 power company executives from all over the country gathered in the Pit, a spacious General Electric () auditorium in Crotonville, N.Y., to meet with GE CEO Jeffrey R. Immelt and his team. The day was overcast and cold, but the discussion was about the warming climate. At one point in the meeting, David J. Slump, GE Energy’s chief marketing executive, asked for an informal vote. How many of the 30 or so utility and GE business executives thought that, once President George W. Bush was no longer in office, the U.S. would impose mandatory curbs on the emissions of carbon dioxide and other greenhouse gases linked to global warming? Four out of five of them agreed. “Forget the science debate,” says Cinergy Corp. CEO James E. Rogers, who was at the meeting. “The regulations will change someday. And if we’re not ready, we’re in trouble.”

The world is changing faster than anyone expected. Not only is the earth warming, bringing more intense storms and causing Arctic ice to vanish, but the political and policy landscape is being transformed even more dramatically. Already, certain industries are facing mandatory limits on emissions of carbon dioxide and other greenhouse gases in some of the 129 countries that have signed the Kyoto Protocol. This month representatives of those nations are gathering in Montreal to develop post-Kyoto plans. Meanwhile, U.S. cities and states are rushing to impose their own regulations.

A surprising number of companies in old industries such as oil and materials as well as high tech are preparing for this profoundly altered world. They are moving swiftly to measure and slash their greenhouse gas emissions. And they are doing it despite the Bush Administration’s opposition to mandatory curbs.

This change isn’t being driven by any sudden boardroom conversion to environmentalism. It’s all about hard-nosed business calculations. “If we stonewall this thing to five years out, all of a sudden the cost to us and ultimately to our consumers can be gigantic,” warns Rogers, who will manage 20 coal-fired power plants if Cinergy’s pending merger with Duke Energy is completed next year.

One new twist in the whole discussion of global warming is the arrival of a corps of sharp-penciled financiers. Bankers, insurers, and institutional investors have begun to tally the trillions of dollars in financial risks that climate change poses. They are now demanding that companies in which they hold stakes (or insure) add up risks related to climate change and alter their business plans accordingly. For utilities like Cinergy that could mean switching billions in planned investments from the usual coal-fired power plants to new, cleaner facilities.

The pressure is forcing more players to wrestle with environmental risks, even if the coming regulations aren’t right around the corner. As the debate over climate change shifts from scientific data to business-speak such as “efficiency investment” and “material risk,” CEOs are suddenly understanding why climate change is important. “It doesn’t matter whether carbon emission reductions are mandated or not,” explains David Struhs, vice-president of environmental affairs at International Paper Co. () “Everything we’re doing makes sense to our shareholders and to our board, regardless of what direction the government takes.” The nation’s biggest paper company, with $25.5 billion in sales, IP has upped its use of wood waste to 20% of its fuel mix, from 13% in 2002. That’s cut both net CO2 output and energy costs.

REALITY DAWNS
Adding to the pressure on CEOs, the public has largely accepted global warming as reality. And as in the case of IP, the economic logic can be compelling. Far from breaking the bank, cutting energy use and greenhouse emissions can actually fatten the bottom line and create new business opportunities, while simultaneously greening up companies’ reputations. One company that has hiked its visibility on this changed landscape is GE. It formed a new Ecomagination division last May to offer everything from more efficient locomotives to advanced, low-emitting coal power plants.

Scores of companies have already taken action to fight climate change. Who are the leaders? In this special report, BusinessWeek has teamed up with the Climate Group, a British organization that serves as a clearing house for information on carbon reduction, and Innovest Strategic Value Advisors, a leading Wall Street green investment research firm. Together with a panel of expert judges drawn from academic institutions, we have identified and ranked the companies that have shown the greatest initiative in cutting their greenhouse gas emissions. We have also identified best practices, effective policies, and what kinds of results to expect.

Details about how the judges made their selections and a wealth of material on the companies and individuals in the rankings can be found at businessweek.com/go/carbon. The lists feature some gold-plated names: Citigroup () is working with Fannie Mae () to encourage sales of energy-efficient homes. IBM () saved hundreds of millions of dollars by cutting energy use, while Unilever managed to slash its greenhouse gas output by more than 10% in a single year.

Topping the company ranking is an experienced hand at making the most out of changing regulations, DuPont (). Back in the mid-1980s, DuPont created a profitable business selling substitutes for chlorofluorocarbon (CFC) refrigerants that were destroying the earth’s protective ozone layer. Tackling climate change was a natural extension of that experience. After studying the data, “we came to the conclusion that the science was compelling and that action should be taken,” says DuPont Chairman and CEO Charles O. “Chad” Holliday Jr.

BEATING GOALS
In 1994, DuPont committed to cutting its gas emissions by 40% by the year 2000 from its 1990 levels. By 2000 the company had met its original target and set an even more ambitious one — a 65% reduction by 2010. But the gains have been so dramatic that DuPont has already hit that goal too. It also uses 7% less energy than it did in 1990, despite producing 30% more goods. That has saved $2 billion.

Saving money and reducing risks are both powerful incentives, and they help explain why investors and insurers are pressuring CEOs to tackle climate change.

Insurers in particular are staggered by their mounting bills for hurricanes, floods, fires, hailstorms, disease, heat waves, and crop loss. Many scientists agree that higher temperatures are causing more powerful storms and perhaps intensifying extreme weather events, ranging from drought and wild fires to ice storms.

Even tiny weather changes bring awesome costs. A slight uptick in intense storm activity could boost annual wind-related insured losses, to as much as $150 billion a year — an increase equivalent to two or three Hurricane Andrews in an average season, according to a 2005 study by the Association of British Insurers. Indeed, insured losses from catastrophic weather events have already increased fifteenfold in the past 30 years. “Risk of climate change is real. It’s here. It’s affecting our business today,” says John Coomber, CEO of insurer Swiss Re.

Rising temperatures aren’t the only factor in the increasing toll from weather-related disasters, of course. Development along coastlines and other high-vulnerability areas is surging, concedes Evan Mills, an energy scientist at the U.S. Energy Dept.’s Lawrence Berkeley National Laboratory. But overall, “weather-related losses are becoming more erratic and growing much faster than such shifts can explain,” he says.

The insurance exposure extends beyond weather events to management decisions. Corporate directors and officers are protected from personal liability for mismanagement by so-called D&O policies. If executives at companies that hold the policies don’t take stock of their environmental risk exposure, they could be on the firing line for mismanagement — with insurers picking up the tab. Says Chris Walker, managing director of Swiss Re’s Greenhouse Gas Risk Solutions: “Property. Life. Health. Crops. D&O — you name it. It’s the perfect storm for insurers.”

That’s why climate change is causing insurance companies to ally with institutional investors, banks, and rating agencies. Together they are pushing companies to start thinking about greenhouse emissions as a material risk, just like other forms of financial risk that can impair future earnings. JPMorgan Chase & Co. (), for instance, is helping analysts and bankers model the impact of carbon on the banks’ clients. “Global warming is on the radar screen of a lot of financial institutions,” said Denise Furey, senior director of Fitch Ratings Ltd., at a recent climate conference.

The specter of new regulations on carbon emissions has already galvanized executives at Alcoa Inc. (), another company on the BusinessWeek/Climate Group list. To reduce its greenhouse emissions and save energy, too, Alcoa improved a key step in the aluminum production process, helping to cut total greenhouse gas output by 25%.

A handful of big coal burners have also leaped to the forefront. American Electric Power (), Cinergy, and TXU () all did detailed studies of the risks posed by climate change — and by expected new rules. Their biggest challenge: planning new power plants for an uncertain future. At some point in the next 40 years — the operating life of a plant — the U.S. is certain to join in a round of international greenhouse discussions, says Michael G. Morris, CEO of AEP, the nation’s biggest coal consumer: “That’s clear in my mind, and in our board’s mind.” If the U.S. rules are similar to Europe’s, where it already costs a company more than $20 to release a ton of CO2, utilities and rate payers could face billions in expenses.

That would force utilities to invest more in lower-carbon alternatives such as wind power, “clean” coal, or natural gas, which emits one-third as much carbon per kilowatt as coal. But executives need to know soon what rules they will have to meet. That’s why many are in favor of mandatory limits — though they hesitate to say it publicly because of the opposition in Washington.

ISOLATED
The President remains opposed to any policy that would require carbon cutbacks. Instead, the White House asserts that climate change can be tackled with voluntary action and with major investments in alternatives to fossil fuels, such as hydrogen.

Yet the White House is growing increasingly isolated. U.S. public opinion is shifting. In October, a Fox News poll found that 77% of Americans believe global warming is happening, and of those, 76% say it’s at least partly due to human activity. That’s making greenhouse gas reductions trendy: The 2006 Super Bowl in Detroit, for one, aims to offset all of the new CO2 the championship generates by planting thousands of trees in the hills and towns near Ford Field.

More substantively, states are stepping into the breach with their own regulations. Nine Northeastern and Mid-Atlantic states have formed the Regional Greenhouse Gas Initiative (RGGI). By 2009 the initiative aims to set up a “cap-and-trade program” covering carbon dioxide emissions by nearly 200 power plants operating in Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. Companies would be given an upper limit on greenhouse gases they may release. If they can cut their emissions below that level, they can sell the unused allowances to companies that are emitting above their cap level.

This initiative could bring a major change in the politics of global warming. First, state action will compel more companies to seek nationwide regulation from Congress, explains Eileen Claussen, president of the Pew Center on Global Climate Change. “Companies don’t want to see a patchwork of state regulations. As more states get involved, it ups the ante.”

Plus, two likely candidates for the 2008 Republican Presidential nomination are on board. New York Governor George E. Pataki launched the regional initiative in 2003, and Massachusetts Governor Mitt Romney backs it in principle.

Meanwhile in Washington, the Republican-led Congress is opposing the Administration’s hard line. On June 22, over the objections of the White House, the Senate voted 54-43 for a resolution calling on Congress to “enact a comprehensive and effective national program of mandatory market-based limits and incentives on emissions of greenhouse gases.”

Some evangelical Christian groups, traditional allies of the Bush White House, have joined the call for action. “This used to be seen as just the passion of a few environmentalists on the left,” says Jim Jewell of the National Association of Evangelicals, which includes 52 denominations serving 30 million parishioners. “But support on the issue has broadened. God’s call on his people is to care for his creation.”

In the battle in the nation’s capital, it will help that some people believe God is on the side of greenhouse gas reductions. For most business executives, though, the real driver is the bottom line. Often, the best way to slash emissions is simply to reduce energy consumption. Because carbon is basically a proxy for fossil energy, cutting carbon equals cutting costs, argues energy guru Amory B. Lovins, head of the Rocky Mountain Institute (RMI), a nonprofit energy and environment policy think tank: “Efficiency is cheaper than fuel.”

That approach is what landed Geneva’s STMicroelectronics, the world’s No. 6 chipmaker, on the BusinessWeek/Climate Group ranking. Lovins and the RMI helped cut the company’s energy use by 5% per year. Many changes were surprisingly low-tech, such as putting in larger air-conditioner ducts. That enabled air-circulating fans to do their job at half speed, using just a seventh of the energy. Last year, with $40 million in improvements, the company saved $173 million.

When mandatory regulations are issued they essentially put a price tag on carbon emissions. That obviously makes cleaner, more efficient projects more financially attractive, spurring new business opportunities. GE, for one, is seizing the moment with its new Ecomagination division. And scores of small companies are bringing new clean-technology innovations to market. Massachusetts Institute of Technology chemical engineer Isaac Berzin started GreenFuel Technologies Corp. to harness the power of algae to grab CO2 from the exhaust of a gas-fired power plant. At a pilot site atop MIT’s on-campus power station, the GreenFuel device cuts CO2 by 82% on sunny days and by 50% on overcast days.

How far can this effort go? Some economists say cutting emissions and boosting efficiency will spur economic growth this century. The engineering challenges are immense and will require research and development investment in fields that have been relatively neglected until now: alternative energies, carbon sequestration, higher efficiency engineering, new lightweight materials for buildings and vehicles, and rebuilding old industrial and energy infrastructure with clean gear.

Yet despite the claims of the global-warming skeptics, the cost can be affordable. As the examples of companies in the BusinessWeek/Climate Group ranking show, there often is a boost to the bottom line. Far more substantial cuts are needed to make a real dent in the global-warming problem. And clearly, the developing nations need to be on board with cleaner technologies as well. But the news is that many companies are energetically tackling this growing environmental challenge.

By Adam Aston and Burt Helm, with Michael Arndt in Chicago, Amy Barrett in Philadelphia, and John Carey in Washington