Archive for March, 2009

Last week on the Green Economy News, hosts Don Millar and Grant Draper explored the emerging world of cleantech.  In addition to sustainability headlines, green entertainment news, and our weekly climate change update, Grant and Don interviewed Josh Becker and Sean Todd.  Josh is a partner at New Cycle Capital, a venture firm focused on the green economy and emerging domestic markets.  Sean is the president and CEO of Fox Potomac Resources, a federal advocacy and lobby firm with expertise on energy and environmental policy.

Green Economy News can be heard Thursdays at noon on The Green Talk Network.

Tim Woodall at FD Element

GreenBiz.com reports that non-hydro renewable energy increased 17.6 percent in 2008 compared to the year before, according to new figures released this week by the Energy Information Administration.  In comparison, electricity generation from coal and natural gas declined by 1.1 percent and 2.2 percent, respectively. Overall electricity generation declined 1 percent in 2008, most likely due to the economy.  Non-hydro renewables, which includes wind, solar, geothermal and biomass, accounted for about 3 percent of total generation, up from 2.5 percent in 2007.

Rebecca Smith in The Wall Street Journal looks today at another kind of water war out West — between thirsty power plants and environmentalists worried about dwindling water resources. In some cases, power companies are pulling back from plans to build traditional power plants that require steady streams of water to operate. In others, renewable-energy projects such as wind farms or solar arrays are gaining momentum because their water needs are minimal. A utility in Colorado, for example, delayed plans for a new coal-fired plant in part because of worries about water consumption:  Tri-State Generation no longer is sure what it might build in southeast Colorado but it is going ahead with plans to build a 500,000-solar-panel project in northeast New Mexico in partnership with First Solar Inc. “There’s no water requirement with solar,” said Mac McLennan, senior vice president for Tri-State, based in Westminster, Colo.

The NY Times blog Green Inc. reports that this week the Union of Concerned Scientists weighed in with a report that said that a national “renewable electricity standard” set at 25 percent by 2025 would translate into 297,000 new green jobs.  A “renewable electricity standard” refers to the objective of producing a certain percentage of the nation’s electricity from sources like wind power, solar panels, wood chips and dams. President Obama has endorsed a 25-percent-by-2025 standard, and the issue is expected to be included in forthcoming energy legislation.

Tim Woodall at FD Element

One would think that eco-friendly products, with their slightly higher price tags, would be taking a hit in this economic downturn.  but it’s simply not the case.  But a recent report found that even when the family pocketbook is tighter than a year ago, customers are taking environmental considerations to heart before they make a purchase.

This report found that between 61-72% said they were influenced by socially responsible or environmentally friendly elements of a product, and 15-18% would still pay extra for each respective type of product.

“Despite the fact that nearly one in five U.S. consumers thinks that the “green” movement is just a fad, the portion of consumers who will pay for products and buy from companies that are environmentally and socially responsible is not trivial,” writes Sally M. Cohen, the report’s author.

“What’s more, these consumers are a lucrative group, both in the short term — they are willing pay more for green and ethically produced products — and in the long term, as they are brand-loyal shoppers and will stick with companies that continue to support their own ethical agendas.”  As she explains, putting green at the top of product requirement lists — as well as marketing materials — can lead to product differentiation, incremental revenues from those customers paying a premium for green products, and brand loyalty who identify with products that share the same values of those shoppers.

Tim Woodall, at FD Element in New York

At Zero Carbon Canada, Tzeporah Berman tackles the unusual backlash against renewable energy in British Columbia. Her point is that this is all the more bizarre considering it is only a couple of years since B.C. Premier Gordon Campbell was awakened by climate scientists to the approaching catastrophe.  Campbell launched a partnership with California’s Schwartzenegger, broke with Ottawa and Washington and decisively ended North America’s lackluster performance on climate change. Yet today, even as the Obama team is studying and adopting the Schwarzenegger-Campbell template (the Western Climate Initiative, the BC carbon tax), airwaves and public meetings in BC abound with calls to reverse conservation measures and freeze renewable energy projects.

Finally some good news. Green Biz reported that he amount of toxic chemicals released into the country’s air, water or on land shrank 5 percent in 2007, according to the latest data from the U.S. Environmental Protection Agency’s Toxic Release Inventory Program.

SustainableBusiness.com reported that the National Association of Insurance Commissioners (NAIC) this week adopted a mandatory requirement that insurance companies disclose to regulators the financial risks they face from climate change, as well as actions the companies are taking to respond to those risks.  All insurance companies with annual premiums of $500 million or more will be required to complete an Insurer Climate Risk Disclosure Survey every year, with an initial reporting deadline of May 1, 2010. The surveys must be submitted in the state where the insurance company is domesticated.

Tim Woodall, at FD Element in New York

Governor David A. Paterson and New York State Department of Transportation Commissioner Astrid C. Glynn recently announced the release of the 2009 New York State Rail Plan.  This plan provides for the first comprehensive update of the state’s rail strategy in 22 years and fulfills a prerequisite for federal funding for rail capital improvement projects. The Plan outlines priorities for funding consideration from the $9.3 billion dedicated for intercity rail in the president’s American Recovery and Reinvestment Act.

“With the 2009 New York State Rail Plan,” Governor Paterson said, “…we have prioritized investments to improve intercity passenger rail service and strengthen our freight rail system, while helping to promote the state’s economy and protect the environment by reducing energy use, emissions and congestion on our highways and runways.”

A single freight train can carry hundreds of cargo containers, removing as many as 280 trucks from roadways while using significantly less energy than highway travel. Trains can move a ton of freight an average of 435 miles with each gallon of fuel. Furthermore, intercity passenger rail uses 20 percent less energy per passenger mile traveled than automobiles and 17% less than airline travel.  About one-third of New York’s share of climate pollution comes from moving people and products along our highways and roads.

“It is a key component of upstate New York’s economic development and will spur job growth throughout the state,” U.S. Senator Kirsten E. Gillibrand said. “The development of high-speed rail throughout New York will create an economic development engine for decades.”

Echoing this, New York State Comptroller Thomas P. DiNapoli said, “When it comes to high-speed rail, the rest of the world is miles down the track, Governor Paterson’s plan will help New York catch up. High-speed rail is the kind of infrastructure investment that New York needs to bring back the economic and bring back jobs.”

This announcement comes on the heels of a January announcement by the governor of the creation of a new $5 million job training program that is designed to create up to 50,000 new alternative energy-based jobs in New York state.

Grant Draper, at FD Element in New York

A great new business blog from Slate, The Big Money has a piece from the executive director of sustainability at Aspen Skiing Company.   Auden Schlender’s article, “Losing Money Through the Walls,” discusses the importance of building insulation retrofits in cutting greenhouse gas emissions.

Don Millar, FD Element CEO

The Gigaton Throwdown, launched in 2007 at the Clinton Global Initiative by Sunil Paul, is a project to encourage entrepreneurs, investors and policy makers to plan to grow companies to a scale that they change the climate. The project is evaluating a portfolio of cleantech pathways that could lead to 1 gigaton per year of CO2-equivalent reduction by 2020, and the implications for capital, policy, and industry.  The pathways currently in analysis are solar PV, solar thermal, wind, biofuels, nuclear, geothermal, plug-in hybrid electric vehicles, and buildings.  Over 20 individuals from cleantech companies and investment firms participated in the original Gigaton Throwdown study, including: Firelake Capital, DFJ, Virgin Green Fund, Suntech Energy Solutions, AES, PG&E, MissionPoint, NEA, Rockport Capital, MMA Renewable Ventures, and Vantage Point.

SC Johnson has started listing all of the ingredients in products on a new website, and is also making the ingredient lists public on product labels and through a consumer hotline.  The ingredient website  launched this week and so far includes ingredient lists for Nature’s Source cleaners, Windex outdoor spray, Shout wipes and Glade candles and sprays. The company will continue to add products over the next three years, aiming to have all ingredients for air care and home cleaning products public by January 2012.  Additionally, SC Johnson is listing not only the product ingredients, but providing explanations of what the ingredients do.

Yesterday, more than 2,500 leading environmental experts agreed on a statement that called on governments to act before the planet becomes an unrecognizable – and, in places, impossible – place to live.  At an emergency climate summit in Copenhagen, scientists agreed that “worst case” scenarios were already becoming reality and that, unless drastic action was taken soon, “dangerous climate change” was imminent.  In a strongly worded message that, unusually for academics, appealed directly to politicians, they said there was “no excuse for inaction” and that “weak and “ineffective” governments must stand up to big business and “vested interests.”

Tim Woodall, at FD Element in New York

With reports of a new coal plant being built in China nearly every week, stories regarding the country “going green” are rightly met with some skepticism.  However, there is a great deal of progress being made on the sustainability front by the country which now holds the distinction of being the world’s largest greenhouse gas emitter.

Many of these efforts were driven by China’s hosting of the 2008 Olympic games.  While much attention was paid to the air quality over Beijing and other regions, the projects and programs that were enacted signal a much larger commitment in the months and years ahead to sustainability.  From the banning of plastic bags in grocery stores, to suggestions that the country is open to discussions regarding an international climate treaty, environmentalists have a few bright spots to point to in an otherwise tainted landscape.

What really stands out is that China’s 7th largest trading partner, Wal-Mart, announced last year that it will be dropping Chinese suppliers if they do not adhere to the company’s new supplier code of conduct.   This is the first public commitment by a major company to punish suppliers for failing to live up to corporate environmental standards, and is a welcome sign of changes ahead.

China is also making inroads is in the adoption of cleantech.  In 2008, Chinese cleantech companies raised $430 million in 18 disclosed rounds, up 22% from 2007.   Solar accounted for 60% of this total, reflecting the continuing migration of solar module manufacturing from Europe and the US to China, as well as the opportunity of a large domestic market for solar water heating.

Jonathan Woetzel, director of McKinsey & Company’s Shanghai Office (which recently released the report “China’s Green Revolution”) thinks that with a combination of solar, wind, and nuclear energy, plus greater energy efficiency, technologies commercially available today could help China to reduce its projected oil imports by up to 30 to 40 percent, cut demand for coal by 40 percent, and reduce greenhouse gases by up to 50 percent in 2030.  From now until then, an additional €150-200B per year would be needed to effectively achieve the substantial improvements they cite in their study.

But, to temper our exuberance over this report, David Moulton, director of Climate Policy and Conservation for the Wilderness Fund – and a longtime Washington veteran – noted: “The report deals with what is possible; it doesn’t really deal with what is likely.” He thought the report gave short shrift to “the behavioral and institutional barriers to realizing the technology’s full potential.”

While China is making good strides with regard to cleantech, sustainability, and greenhouse gas reductions, it should be of no surprise to anyone that we still have a long road ahead.

Grant Draper, at FD Element in New York

With the need for clean, carbon-free energy on one side, and the destruction of wildlife habitat and our fragile climate on the other, Canadians are faced with a conundrum.  Energy needs are growing faster than plants are getting built, but bringing these to fruition in a carbon-constrained world will not be an easy task.

While there are lots of conferences on cleantech and climate change these days, very few actually offer an invitation to view a vigorous debate between panelists.  At the Green Economy conference next month in British Columbia, attendees will be able to do just that.

This one day dialogue in Vancouver will bring together members of the public with opinion leaders, decision makers, leading academics, and journalists for a frank and engaging dialogue on building a low carbon green economy in British Columbia.  The forum will address growing controversy over independent power producers, run of river projects and carbon pricing in the province.  To achieve this, there will be a cross sector dialogue to create a solutions space for innovative approaches to moving forward.

Speakers include the mayor of Vancouver, members of the Haida Nation, the executive director of PowerUp Canada, the author of Hot Air, and others.  Case studies will be presented by the Haida Nation, NaiKun Wind, Klahoose First Nation, and Plutonic Power.

To visit the the conference website, please click HERE

Grant Draper, at FD Element in New York

In the run up to the Green Economy Conference next month in British Columbia hosted by PowerUP Canada, Tzeporah Berman of Zero Carbon Canada takes on the number of environmental challenges facing the country.  From the largest global warming protest in North America, to the Cape Wind project off of Cape Cod, she writes on the difficulties in building a new generation of environmentalism.

Kohlberg, Kravis & Roberts (KKR) just announced a pilot program with the Environmental Defense Fund that yielded an initial $16 million in savings in three of its portfolio companies.  By reducing truck fuel usage (US Foodservice), cutting paper consumption (Primedia), and using more recycled feedstocks (Sealy), the companies were able to generate significant savings in their operations. One of the promising things about the KKR effort is that the firm plans to apply its results across its diverse portfolio companies.

Yesterday, Treasury Secretary Timothy Geithner told Congress that oil companies should not receive massive governmental subsidies because they contribute significantly to global warming.   Secretary Geithner said, “We don’t believe it makes sense to significantly subsidize the production and use of sources of energy that are dramatically going to add to our climate change. We don’t think that’s good economic policy and we think changing those incentives is good for the country.”

As reported in Green Biz, one in three global suppliers believes climate change poses no risk to their operations despite the increasing amount of attention being paid to supply chain greenhouse gas emissions. At the same time, nearly three dozen companies — including Johnson & Johnson, P&G, Johnson Controls, Boeing, and Dell — called on thousands of their major suppliers to disclose emissions and reduction strategies through the Carbon Disclosure Project.

Legislation on the management of electronic waste, signed into effect this week by China’s cabinet, mandates the establishment of centralized funding for enlargement and improvement of safe electronic recycling facilities in China.

Grant Draper, at FD Element in New York

We’ve all heard the stories of public companies responding to investor and NGO pressure to address climate change and sustainability.  But what is interesting is that private equity firms are looking at their portfolio companies to do the same.

For example, Kohlberg, Kravis & Roberts (KKR) just announced a pilot program with the Environmental Defense Fund that yielded an initial $16 million in savings in three of its portfolio companies.  By reducing truck fuel usage (at US Foodservice), cutting paper consumption (at Primedia), and using more recycled feedstocks (at Sealy), the companies were able to generate significant savings in their operations. One of the promising things about the KKR effort is that the firm plans to apply its results across its diverse portfolio companies.

And this is not an isolated case.  Companies in all industries are finding that the business case for sustainability is strong.  Reasons for addressing environmental performance include the following:

Risk mitigation - Climate change and a future price on carbon is leading companies to pro-actively address greenhouse gas emissions that will no longer fall under the category of “non-financial performance”

Cost savings - Reducing waste streams and improving energy efficiencies contribute straight to the bottom line

Market share - As people become more conscious of their purchases, companies are finding that sustainability initiatives help create a loyal customer base

Drive innovation - From smart appliances to biofuels, the global push for cleantech is creating markets for innovative products that never before existed

Employee engagement - Studies have shown workers to be more productive, stay with their jobs longer, and are more likely to identify opportunities for savings if they feel that their firm is a responsible entity

The partnership between KKR and Environmental Defense is just the beginning as institutional investors adjust to realize the opportunities from doing good and addressing sustainability in their operations.

Forward thinking companies that invest today in sustainability initiatives that unlock savings and identify waste at a time when their portfolio companies need it most will find themselves well positioned for outsized returns in the years ahead.

Grant Draper, at FD Element in New York

It seems like things are afoot in the retail world.

I was in Duane Reade the other day, and noticed that there’s a big bin in the front of the store full of plastic bags.  I asked one of the employees about it, and they said it’s a new law that all stores had to recycle plastic bags.  I looked into this a bit more, and was intrigued about all the activity going on in the plastic bag world.

One of the main drivers behind these efforts appears to be that when these bags are not recycled, they tend to take up landfill space, litter roadways, and have a disastrous impact on fish and wildlife. And since they’re made of plastic, these bags take hundreds of years to decompose.  It is becoming a quality of life issue for people, and legislators are beginning to take a bead on this very visible reminder of our consumer culture.

Here in New York, the city council passed a bill in January that requires large stores and retail chains, such as CVS, Duane Reade, Rite-Aid, and Wal-Mart, to recycle plastic bags prominently in their establishments.  Mayor Bloomberg, in his effort to make New York the “greenest city in the U.S.,” also announced plans in November to implement a 5 cent tax on the 2.8 billion plastic bags distributed in the city annually.  He estimates this program has the potential to bring in $84 million in new revenue for the city.

This is all well and good from 30,000 feet, but if a city is considering a tax on plastic bags, it really comes down to how this money collected is going to be spent.  For example, money collected by states that have bottle deposit laws typically spent on anti-littering awareness campaigns, but rather directly into the state general fund for a number of unrelated projects.   Let’s make sure that if we are going to be adding yet another tax, the monies should go towards solving the problem.

Grant Draper, at FD Element in New York

As many companies are tacking the environmental footprints of their companies, there is an increasing push to streamline the efficiency of a huge energy sink that others may be overlooking: IT data centers.

Last month, the Uptime Institute announced the corporations selected for its Global Green 100 list that highlights the significant energy efficiency achievements of global corporations operating major data centers. It includes Fortune 500 and other companies which have demonstrated a board-level policy and governance commitment to increasing energy efficiency and reducing the carbon footprint of their enterprise IT and data center operations. The Uptime Institute is a research think-tank and adviser to owners and operators of the world’s largest enterprise data centers on the technical and business issues of computing reliability, sustainability and energy efficiency.

These corporations will officially be announced on April 15th during a Green Enterprise IT Awards ceremony (co-sponsored by the U.S. Department of Energy with a keynote by Tom Friedman) at the 4th Annual Institute Research Symposium: “Lean, Clean, and Green” in New York City, April 13-16, 2009.

Elements of a “green” data center include:

- Minimizing the electricity used by servers

- Reducing the energy used by the data center facilities

- Conserving fresh water by using recycled water instead

- Reusing or recycling all electronic equipment

- Engaging with peers and stakeholders on best practices

“Only 1 to 2 percent of total energy consumed in a data center produces useful computing. The rest covers overheads and inefficiencies tied to technology choices, service level agreements and the way the IT is managed,” said Kenneth G. Brill, Executive Director of the Institute.   “In an era of increasing energy scarcity and escalating costs, corporations cannot afford to ignore these losses. The companies included in the Global Green 100 have showed an exemplary commitment to improving their data center operations, not only reducing their carbon footprints, but also realizing significant financial savings.”

Among those companies recognized in the report are:  Allstate, Bank of America, Bank of New York Mellon, Dow Chemical, FedEx, Google, HSBC, Johnson & Johnson, MGM Mirage, Microsoft,  Southwest Airlines, and TimeWarner

Tim Woodall, at FD Element in New York