Accountability Central Featured Commentator - Richard Barr: The Future Of Green Tech, Part II

Nov 28, 2011 1:30 PM ET

The Future Of Green Tech, Part II

In August I posted The Future Of Green Tech, Part I, and since I know you all have been sitting on the edge of your seats since then waiting for Part II, I decided my wonderful extended summer vacation just had to end at some point. But seriously, if you read Part I it may have been seen as just one more piece of depressing news. Now, I’m here to cheer you up. I’ll repeat part of the introduction for those of you who are reading this without having seen Part II -- but if you have the time, by all means, check it out.

Link to Part I:

If you’re a regular reader of my commentary you know that our energy issues and the closely-linked climate change threat of are great interest to me. When I heard of a live webinar featuring two of the industries leaders, of course I faithfully attendeded.

The program was hosted by the Stanford Social Innovation Review (SSRI), an extremely important on-line journal with content on strategies for nonprofits, foundations and socially responsible business. Link: The scholarly work this journal does is worthy of another column in itself.

The webinar -- “The Future of Green Tech” -- was presented by L. Hunter Lovins, President, Natural Capital Solutions, and Clayton M. Christensen, the Robert and Jane Cizik Professor of Business Administration, Harvard Business School.

The preview indicated that Christensen would argue that unless clean tech follows well-established rules of innovation and commercialization, the industry's promise to provide sustainable sources of energy would fail. Lovins would present findings from her just-published book – “Climate Capitalism” -- which argues that innovators, entrepreneurs, and companies are proving profit can come from sustainability.

For your convenience, the Amazon link to book:

The webinar preview went on to say that “Corporate executives, entrepreneurs, environmentalists, and concerned citizens alike know that the key to solving societal problems rest on the success of green tech. But which green energy technologies will harness power from renewable, sustainable sources or reduce adverse human impact on the environment? Will solutions come from solar, wind, geothermal power, biofuels, smart power grids, hydrogen, or electric vehicle propulsion?”

Meet Hunter Lovins – Thinker, Innovator, Teacher

L. Hunter Lovins is an author and a promoter of sustainable development for over 30 years and founder and President of Natural Capitalism, Inc. She was a founding professor at Presidio Graduate School's MBA in Sustainable Managementprogram (2002-2010), she has taught at various universities, consulted for many citizens’ groups, governments and corporations.

She co-founded (with her then-husband) Amory Lovins the Rocky Mountain Institute (RMI) which she led for 20 years. (I did a workshop there 15 years ago – a fascinating place.) In great demand as a speaker and consultant, she has addressed the World Economic Forum, the U.S. Congress, the World Summit on Sustainable Development, and hundreds of major conferences.

Named millennium "Hero of the Planet" by Time Magazine, she has received the Right Livelihood Award, the Leadership in Business Award and dozens of other honors (Source: Wikipedia). I have personally worked with Hunter Lovins as a conference organizer and have heard her talks several times. She’s smart, funny, and hopeful and is an amazing woman.

My Key Message: Don’t Despair

Having now digested Christensen’s talk thoroughly I must say that I don’t think the future of green tech is quite as bleak as he painted it although he does have a very clear grasp on the historical evolution of commercial technology. But I’ll let Lovins do my talking. After thirty minutes Christensen had yielded the floor and their presentations couldn’t have been more different. The major difference is that Christensen’s talk dealt with what has happened. Lovins' talk dealt with what could happen based on what is happening.

What could happen is decidedly more upbeat than what has happened -- and Hunter Lovins uses real world examples of how we can turn the energy crisis and climate change around on a dime.

Look to Entrepreneurs and Innovators

In fact, entrepreneurs and innovators, she says; those who are working to solve climate change are making a lot of money. Of course, it helps to believe in climate change -- but even if you don’t you’ll make a lot of money if you engage your company in Lovins’ energy smart systems and the problem of climate change will be on the path to being solved in spite of what you might think. And if there is no climate change you’ve still made a lot of money. Sounds like a no lose situation. The name of Lovins’ business is appropriately namedNatural Capital Solutions. If you know her you would expect nothing less than a solution and, yes, she is making a few bucks doing it.




Energy Efficiency Market Opportunity

Speaking of bucks, the cheapest approach to our energy problem is energy efficiency (EE) -- and no public policy without it is worth pursuing. Lovins opens her talk with this salient fact. It makes sense to me that you begin with what you’ve got and what you can do immediately. A combination of off-the-shelf technology and changing human behavior can go a long way. Here are a slew of eye-popping facts from Lovins’ Power Point presentation.

The energy efficiency market over the next several years should reach US$35 billion for commercial/residential EE technologies and $30 billionfor industrial EE technologies. This one area of the economy contains many solutions to our rabid energy consumption.

US companies waste $2.8 billion a year on 108 million unused PCs. In 2009, these unused PCs emitted 20 million tons of carbon dioxide emission which is equivalent to the impact of four million cars. (I can understand car analogies. Most countries don’t even have four million cars on the road!) Lovins mentions this because PC power costs are the largest single factor of IT energy costs -- and can account for a quarter of the costs in a modern office building.

Lighting is another area where companies can save big and Lovins has hundreds of stories gleamed through her consultation business.

While Ford Motor is saving US$1 million a year from turning off computers, Mi Rancho, a Mexican restaurant chain, replaced 200 overhead lights with efficient fixtures at a cost of US$14,000. The savings? A dramatic US$32,000 per year. Who wouldn’t do something like this for their company or home? Yet there are so many that aren’t which is why I said behavior modification is a big part of the EE approach.

USA: How Can We Compete?

It shouldn’t come as a surprise, Lovins says, that American businesses require twice as much energy to produce a unit of GNP as do our European and Asian competitors.

I would ask, how could we expect to compete on the global stage if we are using so much more energy? This is not rocket science, folks. Japanfigured this out 30 years ago. Scarcity can be a wonderful thing. I would think that shareholders of public companies would demand that the company they own be pursuing an active EE strategy. But then sometimes I put too much faith in the people.

Around this time Lovins’ presentation transitions into renewable energy -- and how we can get our energy costs down (yes, down) and our energy supply sustainable. The cost of renewable energy is the most cited reason for not doing it. Republicans love to cite statistics on how expensive it is -- but they’d be loathe to admit the true cost of oil. It’s not just the cost of exploration, development, refinement, marketing, and selling. It’s also national security costs, health costs, and make up your own doom-and-gloom costs from the effects of climate change. This makes oil the most expensive fuel on earth!

It’s Solar Baby (it just sounds good)

I know the solar manufacturer Solyndra has been in the news lately -- but it has nothing to do with the potential of solar power around the planet. Solar deployment and policy really matters and it’s unfortunate that one bad apple ruins the barrel and is ruining our chances of catching up with that country known for it’s blazing sunlight throughout the year. Algeria? Yes, but… Afghanistan? Have you ever seen a cloud in the unfriendly skies of Afghanistan? Maybe Brazil? They’re becoming an energy giant and it’s got to be sunny down there, too. No it’s Germany! This would be just a bad joke if it weren’t true. Listen to this.

· California receives 70% more sunlight for producing solar energy than Germany -- but Germany installs fifteen times more solar electric capacity every year!

At that rate they will be 100% renewable by 2050. If that’s a time in the future you can’t relate to just think how old your kids will be in 2050. My daughter will be 49. Hardly half her life will be over. And I want her living, not only on a smart grid, but also in a smart world.

The Nation That Innovates…Rules

You know, the world is an organism (Gaia) and therefore has an intelligence of its own. Its native intelligence is genius. Its natives can be really stupid. It has been said, “The nation that innovates rules the world.” If Hunter Lovins didn’t say that someone else surely did but when you Google that phrase do you know what two countries come up the most? America and China. And unfortunately it’s about America’s refusal to innovate and China’s determination to innovate. But don’t listen to Obama-skeptical voters. Keep listening to the Koch Brothers. Note here I am currently trying to restrict my outbursts to several sentences.

What’s driving Germany’s solar industry -- a country that receives 70% less sunlight than California? FIT is an acronym that stands for Feed In Tariff. It’s how Germany pays for its solar energy.

FITs actually drove a German economic regeneration during a time of global recession, enabling Germany to pay its own citizens to produce, install and maintain their own renewable energy systems, instead of buying imported fossil fuels.

America currently borrows a cool billion dollars a day from China and Middle East sovereign Wealth Funds to …think about this…buy oil from the Middle East. (Really -think about that seriously for a moment.) The FITs program has added about two to three Euros a month to the average German’s electricity bill. That’s about US$50 a year per consumer for a total of €8.6 billion.

Had customers bought electricity from conventional generation and paid the costs of fossil fuel generation Germans would have paid over €9.4 billion. Remember, fossil fuel energy is a lot more expensive in Europe and should be here to (if one could generate an energy credit for the poor). If it were, renewables would be more competitive and we’d be innovating and creating jobs.

Who do you think installs and maintains solar panels, solar power plants, wind turbines and energy efficient systems? Those jobs can’t be given away to low-cost producer countries and if we were a little more innovative we could figure out a way to manufacturer these things too.

Let’s Hear it For Green Energy Jobs

I was ready to segue from solar to when I noticed in my notes that Deutsche Bank reported that FITs gave Germany the lead in renewable energy production in the world. In four years it created 350,000 new jobs. (Once again,President Obama is mocked for his green job’s theory. This isn’t a pipe dream.)

FITs further cut the unit cost of solar panels 30% in 2009 so that they could pay for themselves within five to seven years and reach grid parity (costing the same as grid electricity) by 2013. As we leave this analogous tale look up FIT in Wikipedia to see how far reaching it is.

While you’re at it do a Google search for Sonoma Energy Independence Program.

Yes, the nation can be stupid but counties can be smart and California’s AB32, fought so bitterly by the Koch Brothers (who lost their campaign), makes this all possible (actually it was AB811). The program is just what it sounds like and between January 2009 and September 2009 Sonoma County had an 8.4% increase in construction-related jobs against a 3.0% overall decline in Napa County, right next door. In just one two-month period in the summer of 2009 there was US$5.6 million in SCEIP projects generating 500 new construction jobs.

Lovins showed a great slide called Jobs per megawatt of electricity produced. Here are the results:

· Coal – 11 job-years

· Natural Gas – 11 job-years

· Wind -100 job-years

· Solar -121 job-years

Let’s look at it this way. Southern California is building a 250 MW Solar power plant. 121 job-years are about 3 full-time jobs for life (life being, you work 40 years and retire). 250 x 3 means that power plant will employ 750 workers for life. Using the same chart above a coal mine of the same size (producing enough coal to generate 250 MW per year) would employ about 81 workers and one of those workers might die in a cave in and many others would have their life expectancy shortened due to mine related health risks. And I’m being charitable with those assumptions. Get the picture?

Here’s another statistic from Lovins’ presentation. In 2009 Colorado reported that each US$1 million investment in energy efficiency created 17 jobs and US$675,000 in additional wage and salary compensation to the economy. Extrapolate these kinds of statistics out to the national stage and you have a nation getting back to work.

President Barack Obama has not fought anywhere near hard enough for green jobs -- but the Republicans sure have fought hard against them. Putting party before country is a sure way to disaster -- but Lovins is here is tell us how much better off we could be if we only took advantage of the energy opportunities waiting for us right now.

Blowin’ In The Wind

Let’s end this commentary with some of Lovins’ wind facts. Christiansen analyzed the future of green technology using his disruptive innovationtheory and while it’s all very interesting and has more than a kernel of truth, Lovins is here to tell us it’s happening right now!

And I’m here to be the old crank in the basement saying politics and money is the only thing stopping us from realizing the future of green tech. And you know what politics and money translates into? The thing no one will say (except Bill Maher and myself). Americans are stupid.

I made it bold because, in a way, it’s a bold statement. Not because there’s anything inherently bold about it. It’s because no one will say it. Politicians won’t say it because they want your vote. Corporations won’t say it because they want your dollars. Pundits won’t say it because they want their jobs.

And while it sounds elitist and mean I’ve got nothing to lose which is the kind of leader this country currently needs: A person with nothing to lose.

Needed Now: A Person Who is Bulworthy

We need a person who is BulworthyBulworthy is a term I made up based on the film, Bulworth, starring, written, and directed by Warren Beatty. The character is running a losing senatorial campaign, shows up drunk to a campaign event, and starts telling the truth to voters. He becomes an instant sensation and I won’t reveal the rest because it’s a little known great film that you should see. And here I turned my wind segue into a full paragraph rant on what ails this country when all I wanted to talk about was wind. Just between you and me I need to rant. It keeps me in the game.

Did you ever drive through a big wind farm? It can happen by accident like it did to me just making my way home from summer vacation on the interstates from Toronto to Santa Fe. I drove through a big one in Oklahoma (ironic: home state of the standout climate denier in the US Senate) and it was breathtaking. For some it might be an eyesore as in Cape Cod, but one thing’s for sure. Wind is the second fast growing energy supply technology in the world. But last year China passed the United States of America in total installations of wind turbines. Think about that for a moment.

So it’s not a matter of technology, it’s a matter of will. In fact I’d venture to say will is the answer to all our environmental and energy problems. When said like that it can be depressing or uplifting. Depressing because it’s so damn hard to manufacture will. Uplifting because will is free! That’s why they call it free will.

And why has China become the leader in wind? Will, of course -- but what is driving that will? China has also replaced the US as the world’s leading consumer of most basic commodities, like oil, grain, coal, and steel. If China’s economy grows at its prior rate and were to use resources as inefficiently as the U.S. it would need 99 million barrels of oil a day by 2030. Every day.

Let’s put that in perspective. Total global daily output just prior to the last recession was 84 million per day. Total current proven global reserves are now 120 billion barrels and many think 25% of that is speculation.

· In the year 2030 the entire world supply of oil would be just a 120 days of oil for China, leaving none for the rest of us…forever. Wrap your head around that. China certainly has.

And that’s what’s driving their will to be the leader in wind power and every other renewable. And that’s pretty much all Hunter Lovins had to say about wind. What more can you say? It’s here. It’s reasonably cheap. We need it and we’re losing out to China.

China’s Green Revolution

China’s State Administration of Energy (SAE) has created a new energy blueprint. It calls for total investments for renewable energy by 2020 of US$146 billion for wind, US$44 billion for solar, and US$3 billion for energy conservation. That’s not nearly enough, by the way, but it’s a start -- which is more than you can say for the United States of America today.

In Rizhao, China, a city of 3 million, 99% of the population uses solar hot water. Surprise - the city also contains 5,000 manufacturers of simple solar water heaters. I don’t know how many workers are at each facility but if the number were 20, that’s 100,000 workers. Those are green jobs and they are now looking at exporting their solar hot water heaters. I bet you Flint, Michigan could make a far better heater for just a few bucks more, stamp it “Made in America,” and do quite well. Michigan would do well. The USA would do well.

Mayor Yu Quin of Baoding, China said, “Polluting first and cleaning up later is very expensive. So we chose renewable energy to replace traditional industry. They now have 200 renewable energy companies and have replaced the auto and textile industries. The mayor is Bulworthy.

Can America Make The Shift?

Author Tom Friedman recently said, “China understands that it cannot pollute its way to prosperity because it would choke to death. That is the most important shift in the world in the last 18 months. China has decided that clean-tech is going to be the next great global industry and is now creating a massive domestic market for solar and wind, which will give it a great export platform.”

Imagine now how important it would be for America to make that shift. While Obama has been a disappointment in some areas, when he echoes the need to do what China’s already doing he is mocked by Republicans who bleed his proposed programs dry and voters look at him with a glazed-over look. What’s it going to take? Another oil crisis? A nuclear meltdown? A 500-year weather event? The nation just plain running out of oil at some point?

This is not a left or right issue -- and Lovins made a point of telling us that in her presentation. R. James Woolsey, former CIA Director, runs a solar powered plug-in-hybrid which has a bumper sticker reading: “Osama bin Laden hates my car.”

By the end of Lovins’ presentation you realize the world of green tech is already here. It’s just waiting to be used. And she makes a point of quotingBuckminster Fuller at the end who said, “The best way to predict the future is to invent it.” The late Steve Jobs knew that. In fact I’m surprised he didn’t say it. Too bad we didn’t have another Steve Jobs in the energy industry. Imagine how life would be in America today.

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Postscript: This is a good place to end my summary and also a good place to honor a great CEO who recently passed away. No, not Steve Jobs although he was certainly one of the greatest. The person I want to honor is much less known to the world than Steve Jobs. Ray Anderson, Chairman of Interface, Inc. lost his battle with cancer on August 8, 2011. Anderson was the most vocal proponent of environmentalism’s role in business. He founded Interface, a producer of free-lay carpet tiles, in 1973, and it grew to be a US$1 billion company and the world’s largest manufacturer of modular carpet.

Anderson set a seemingly impossible goal for his company. Calling it Mission Zero, it was a commitment to eliminate any environmental impacts from Interface products by the year 2020. Shortly before his death, he estimated that the company was more than halfway towards this vision. Interface says that in the past 17 years, it has reduced greenhouse gas emissions by 24 percent, fossil fuel consumption by 60 percent, waste to landfill by 82 percent and water use by 82 percent, while avoiding over US$450 million in costs, increasing sales by 63 percent and more than doubling earnings.

Anderson spent the last ten years like Steve Jobs might have spent his last ten if had he known it was his last. Anderson wrote two books -- Mid-Course Correction and Confessions Of A Radical Industrialist -- and, as a champion of the business case for sustainability, he gave over 1,000 speeches (one of them at our annual conference SRI In The Rockies).

In 2008 Anderson co-chaired the Presidential Climate Action Plan for the Obama administration, and in the Clinton administration he served as co-chair of the President’s Council on Sustainable Development. Anderson was also named on of Time Magazine’s Heroes of the Environment in 2007.

In a recent column for Environmental Leader, Anderson wrote:

“The industrial system takes too much, extracting and frittering away Earth’s natural capital on wants, not needs. It wastes too much. It abuses too much. It takes stuff and makes stuff that very quickly ends up in landfills or incinerators—more waste, more abuse, more pollution…

“I believe that a sustainable society depends totally and absolutely on a new mind-set to deeply embrace ethical values. Values that, along with an enlightened self-interest, drive us to make new and better decisions.

“I also believe that it doesn’t happen quickly … it happens one mind at a time, one organization at a time, one building, one company, one community, one region, one new, clean technology, one industry, one supply chain at a time … until the entire industrial system has been transformed into a sustainable system, existing ethically in balance with Earth’s natural systems, upon which every living thing is utterly dependent.”

For those who know Anderson’s story it is well known that he underwent a conversion process after reading Paul Hawken’s 1993 book, The Ecology of Commerce, which inspired him to abandon business as usual and strive for true sustainability within his carpet company, Interface.

It was fitting that Paul Hawken eulogized him and I leave you with that eulogy:


We, who were so fortunate to know Ray Anderson, were in awe. He was many people -- a father, executive, colleague, brother, speaker, writer, leader, pioneer -- but I am not sure any of us quite figured him out. On the outside, Ray was deceptively traditional, very quiet sometimes, an everyman, all-American, down-home. He was so normal that he could say just about anything and get away with it because people didn't quite believe what they heard. He could walk into an audience and leave listeners transfixed by a tenderness and introspection they never expected or met. Business audiences in particular had no defenses because they had no framework for Ray. Was he really a businessman? Yes. Was he a conservative southern gentleman with that very refined Georgia drawl? Yes. Was he successful? For sure. Well, then where did these radical statements come from? Ironically, because people could not connect the dots, he was extraordinarily credible. He was also courageous. He stood up again and again in front of big audiences and told them that pretty much everything they knew, learned, and were doing was destroying the earth. He meant every word he spoke, and those words landed deeply in the hearts and minds of the hundreds of thousands of people he addressed. There was no one remotely like him, nor will there ever be.

People called Ray a dreamer. To be sure, he was, but he was also an engineer. He had definitely seen the mountain, but he also dreamed in balance sheets, thermodynamics, and resource flow theory. He dreamed a world yet to come because dreams of a livable future are not coming from our politicians, bankers, and the media. For Ray, reimagining the world was a responsibility, something owed to our children's children, a gift to a future that is begging for selflessness and vision.

Proverbs reminds us that though all good people die, goodness does not perish. The metaphoricalspear in his chest was not an injury but an awakening that led Ray to give talks all over the world and in so doing he became a great teacher. He used business as a means to educate and transform, but his life was not about money or carpets. Ray's life was about the sacred. His covenant was with God; the marketplace is where he labored. He gently laid down that spear this Monday morning, but his teachings are a lineage that will live for centuries to come.

To we who remain, Ray's passing is startling, a summons, maybe even a provocation. Before we die, may we know that to be alive is astounding, inconceivably precious, a privilege beyond reckoning. When we know and cherish this existence, the rest of our life is a shimmering field of light because we have come to recognize one unalterable truth -- that we are one with all living entities and beings, and that we are never alone. The consciousness of interdependence and connectedness, and its attendant responsibility to do no harm, was Ray's epiphany. Seventeen years ago, he had a realization. At that time, Ray came home. He rediscovered a sacred earth with all its complexity, beauty, and mystery, free from the constraints of this or that ideology, free from narrow-minded thinking, and he was freed to reimagine the relationship between humanity and nature with Interface as the model. No longer were there human systems and ecosystems. They were one system and he understood that the laws of physics and biology prevailed. He believed in Emerson's words, that there is an innate morality in the laws of nature: I have confidence in laws of morals as of botany. I have planted maize in my field every June for 17 years and I never knew it to come up strychnine. My parsley, beet, turnip ...,acorn, are as sure. I believe that justice produces justice, and injustice injustice. Ultimately, Ray's work was not about making a sustainable business, it was about justice, ethics, and honoring creation. Zero waste was the path to 100 percent respect for living beings.

Like Ray, when we become literate in the sweet treasures of creation, there arises a sense of awe, wonder, and gratitude for one's very existence and the swirl of living beings around us. Do you remember the videos of the Chilean miners coming out of the elevator shaft one by one from the San Jose mine in Copiapo, Chile, last October? The miners arose from a half a mile below the earth after being trapped for 69 days, and when they emerged they danced, they sang, they kissed the earth, they kissed their wives, kissed their mistresses -- sometimes both -- and they were ecstatic. They knew what they had nearly lost: the sun and the moon and the stars, cool air made sweet by plants and trees, the succulent foods that come from the soil, the sound of a child's voice; they were rapturous and joyful and deeply grateful. Although it was a real event, the San Jose miners are metaphors for being reborn in this life to what we overlook and take for granted. Ray woke up and saw what we will lose unless we change.

We don't know exactly what happened to Ray in 1994. Yes, he read a book. But something remarkable was already there within his being that came to life. What we do know is that from that point 17 years ago, Ray could see. He saw benevolence and beauty, the tightly knit longleaf pine forests, the undulant riverine corridors of the Chattahoochee, the tantalizing pure light of life reflected on bracts and fronds, the drifting silvery spider silk that takes tiny passengers to new forests.

Once your eyes open to the magnificence of creation, you cannot unsee. Ray never looked back. He did not ponder long. He went to work. He was not satisfied by being able to see, he was destined to do one thing only, and that is serve life itself, for what else is there to do once you see how phenomenally we are stitched together by the living world? He did not see nature as an abstraction to be worshiped but as the matrix of reformation, the source of goodness, the architecture of our spirit, the template of a future delineated by people who know that business has no purpose lest it serve and honor all of life, that our lives rely upon the kindness of strangers and the damp forest floor and spirited grasses and on you, his family, friends, and fiercest admirers who loved this man. He loved us all. His life is a testament to that love. He passed on Monday morning but it is up to us as to whether he will die. Actually, that is not even a question. He will live. His physical presence has vanished into a mystery we will all follow but never fully understand. His dream, his yearning for commerce that regenerates life and does no harm, his intention to reconceive what it means to be a manufacturer, to bring industry and biology together into one entity, burned in him, a flame that never seared or ceased, and it will live on in his company and thousands more. Ray has now traveled to a new forest. We who gather know that the greatest man of industrial ecology, the businessman who defined and showed us how commerce will be for centuries to come if we are to continue our life here on earth, was our friend, patron, and teacher, and we are the most blessed people in the world for having known him.

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Richard Barr is a featured commentator for Governance & Accountability Institute and his work is featured in Accountability Central. He transitioned out of a 20-year career with First Affirmative Financial Network. An Accredited Investment Fiduciary, he advised clients of all sizes during his time with the organization. Barr is a Fellow of the Governance & Accountability Institute.