Who Said It's Not Easy Being Green?
By Bill Moore
Last week, US Vice President Dick Cheney flew to Toronto, Canada aboard Air Force Two to deliver an address to a group of Associated Press reporters. During that 20 minute speech, he strongly intimated that the White House's special task force on energy policy was going to recommend that the United States increase its reliance on fossil fuels, in particular "clean coal" technology, more oil and gas exploration, and nuclear power. He also implied that there is little if any room in US energy policy for either conservation or renewable forms of energy.
Meanwhile, two thousand miles to the east on the volcanic island of Iceland, serious efforts are underway to create the World's very first, but hopefully not the last, hydrogen economy. Blessed (or cursed, depending on your point of view) with vast amounts of geothermal energy, Iceland plans to use its energy assets to make cheap hydrogen to run everything from its cars and buses to its fishing boats and ferries. Further south and east, Denmark, plans to power one-third of its energy needs from renewable sources, wind being the predominate form.
Iceland and Denmark aren't alone. Germany, France, the United Kingdom, all have made major commitments to meeting their future energy needs with clean, non-polluting, renewable energy, Clean Edge writes in its Clean Tech: Profits and Potential report. (Click here to display part one of EV World's interview with Makower.).
On the other side of the vast Euro-Asian continent, Japan has pledged to produce three percent of its energy needs from renewables, while China has promised to a 2% level. Certainly, these are not huge commitments, but they are commitments, nonetheless.
Joel Makower, the co-founder of Clean Edge, points out many other nations, including the US, has yet to go even this far.
"However you feel about the politics and however you feel about the environmental needs, the real base factor is, it is making the United States less competitive to not be playing in these (green technology) arenas. . ." Makower stated.
But taking politically correct postures on the global stage is one thing, meeting those commitments can be quite another. Makower, however, believes that the nations of Europe and Asia are since in their aspirations.
"I think that these (renewable energy commitments) are genuine aspirations, and it remains to be seen what kinds of resources will be put by the national governments behind them. But I think in the case of Europe, and I also believe in the case of Japan and probably also China, that these are real commitments and that there will be significant resources behind them."
"And frankly," Makower continued, "I think a lot of their commitments that they've made are pretty conservative. Ten percent of energy by renewables by 2010 is not really that big of a deal."
And Where's the US?
Lest the impression be left that the United States has abandoned renewables - - despite the Vice President's remarks in Toronto - - Makower also pointed out that the US currently gets 7.5% of its total energy from various forms of renewable energy including geothermal, wind and solar. "We are three-fourths of the way to the commitment the Netherlands and UK have made by 2010 and a third of the way towards the commitment the (European Union) has made for 2020," he said. "So we're not total laggards here, but it has little to do with federal government leadership."
Makower told EV World that much of what is happening with renewables in America is happening at the state and local level. But for renewables to truly flourish, he also said there needs to be support at the federal level, especially in the policy arena. In particular, he said these policies need to "level" regulatory and tax policy "playing field" so that renewables can fairly compete with what he calls the "dirty technologies."
There does appear to be a pronounced movement on the part of many US utility companies to invest in wind energy farms in Texas, Iowa, Minnesota, Oregon, Washington, California and Nevada, including federally-managed ones such as TVA and the Bonnerville Power Administration. "But it is not done with a national strategy in mind," Makower said. "We'll take that, but we could certainly be doing better."
Water, Water Everywhere But Fewer Drops To Drink?
While energy will be the predominate issue facing the United States in the immediate future, clean, potable water will also become a critical factor both in the US and especially abroad. Makower said that in the US alone $1 trillion will be needed over the next 20 years to upgrade the nation's aging treatment system. And although the US plans to spend $50 billion a year, this still represents a $23 billion-a-year shortfall in funding.
However, Makower concedes"a lot of these systems work fine" and that "the United States has a pretty good clean water availability and delivery system. It's less critical but we need to be paying attention. We can't let this fall by the way side."
The situation is different outside the US. Clean Edge reports with clean water becoming an increasingly scarce resource. Almost half the world's population lack basic sanitation facilities and 1 billion have no access to clean water.
A Need for Distributed Generation
Makower observed that in his view, the energy crisis facing the US this summer is more a problem of distribution than supply. "There's a huge infrastructure problem in terms of being able to ship it where it needs to be and that speaks very directly to the need for distributed energy sources where the best place to generate electricity is where and when you need it. And that's what we need to be looking at in a significant way."
Where To Put My Money?
While Makower wouldn't identify specific companies in which he would recommend investing, he was willing to discuss the type of questions investors - - both individually and collectively should be asking when considering where and when to invest in "green technologies."
He said there are many nascent, entrepreneurial-stage and pre-IPO stage companies that would be worth considering, but before doing so, he said investor need to examine their own goals and tolerance for risk. "There is no end of opportunities," he said, but as with any investment in new technology, there are risks.
"There is no question this is a risky area. It's a nascent industry. If we haven't learned anything else from the e-biz revolution we know there is even less of a sure thing than there was before. The similarities (between clean tech and ebiz) are there is going to be a lot of carnage. There are going to be a lot of companies that come up and some of them aren't going to make it. The difference is the Internet revolution was about creating new product and new business models that were of no proven value, no proven need."
"With clean technology we're talking about proven and very much needed product. Clean water, energy, transportation, materials. What more basic, fundamental things are there?" Makower thinks that because companies will be selling into an already existing market, there will be a lot less "carnage" then in the collapse of the Dot Com economy.
Overcoming Barriers to Acceptance
That doesn't mean, however, that "green technology" is a sure thing, by any means. There are plenty of obstacles standing in its way. Makower listed a few of them starting with marketplace acceptance.
"One of the daunting aspects of this has to do with education," he said. "Whether its consumers or B-2-B sales there's a tremendous amount of education that goes into it." He used the example of fuel cells, which can't be easily explained in a few sound bites. On the other hand, he added that consumers are more interested in buying the service than the technology. "We don't really care how fuel injection works. We just want to know that we're going to get good gas mileage and that the engine isn't going to stop in the middle of a highway." Makower said that some technologies haven't caught on because no one could explain to people the value proposition those technologies offered.
Another major issue is the need for significant changes to our infrastructure. "If hydrogen becomes the fuel of choice for fuel cell vehicles, how are we going to deliver that, what mode? Is it going to be something the Exxons and Shells and Union 76s and BPs who have the gas (petrol) station infrastructures, are they going to be taking it over the hydrogen business or is that going to be done some other way?
Also open to question - - especially in the US in the light of Bush Administration decisions and statements of late - - is the government's role in either helping or hindering green technology. Makower thinks governments need to get behind clean technologies as a way to help shore up the future foundations of their economies.
The state of individual national economies, which are becoming increasingly interlocked by globalization, can also help or hinder the adoption of green technologies. "If we go through a major economic slump, a lot of this is going to take a lot longer to materialize," Makower admitted.
"We don't know what is going to happen around environmental pressures. If even the perception of climate change grows quickly because of weather perturbations or other factors that are perceived that the weather is changing and we need to do something: droughts or heat waves. That's going to drive this that much quicker and accelerate. And if for some reason climate change drops percipetitously as being a public concern, that's going to adversely impact the acceptance of some of these as well."
"So we've got a lot of work to do. There are a lot of wildcards. There are also a lot of opportunities here to make this happen."
An Opportunity to Change the Future
Regardless of the wildcards and obstacles, Makower is very optimistic about the future of green technologies. "That's why we started Clean Edge. We believe this is the future, that this is the next huge wave of innovation, of investment opportunity, of business creativity."
"Aside from the fact that we need these technologies to overcome a number of growing problems in the world, from environmental ones to social ones, this a wonderful opportunity for business to step up to the plate to become a very positive force for change. And it is a very wonderful opportunity for the investment community to invest in something that has tremendous opportunity to change the way we live for the better, to change some of the environmental challenges that we're facing and to generate - - I hope - - some very healthy profits."
blog comments powered by Disqus