However, is it changing its stance out of international moral pressure or a major financial incentive (recent deal) in the US? And who is to benefit the most from this shift?

Read more of this story »

Life, Money and Illuision: Living on Earth as if we want to stay (New Society, 2009) by Mike Nickerson is a driving tome that reconciles how our economy operates in relationship to the ecological and social systems on which we all depend.

In this second revised edition of Life, Money and Illusion, Nickerson explains that “Life” refers to the biological processes by which living things maintain themselves over time. “Money” represents our economic ideology that claims that as long as the volume of money changing hands increases, all will be well. “Illusion” refers to the fact that these two perspectives are directly opposed in terms of how they would solve current problems.

As one might imagine, a book of this stature and ambition — if providing meaningful analysis and argumentation (which it does superbly) — is not a cursory or a casual read. Running 448 pages, Life, Money and Illusion is meticulously fashioned in easy-to-understand language that makes Nickerson’s arguments and ideas both compelling and provocative. It draws from numerous fields, including ecology, psychology, philosophy, mathematics, and, of course, economics.

Read more of this story »

Chaired by President M. Nasheed, the Government of Maldives recently concluded the world’s first ever underwater cabinet meeting. The small island nation of Maldives will perhaps be the first country to go under water, if predictions based on climate change models come true.

The underwater meeting was called to raise this concern and put pressure on the West to act NOW, and for a fair deal at COP in Copenhagen this December. A day after the event, extensively covered by the media (View on: CNN | BBC), the Government of India has announced the setting up of a National institute for long-term research on climate change.

Read more of this story »

This post contains additional media. Click here to view the full post.

Clean tech has passed biotech and IT as the top venture capital (VC) investment category in the world. This is after investments in leading clean tech markets increased by 10% in the third quarter of this year.

Cleantech Group released findings on Wednesday showing that the cleantech sector “accumulated $1.59 billion across 134 companies” and this was 10% more than the $1.2 billion it had accumulated in the second quarter.

Read more of this story »

John Rowe, Exelon CEO, said yesterday that climate change legislation is an urgent issue. At the same time, he announced that the nation’s largest utility would not be renewing its membership with the US Chamber of Commerce because of the Chamber of Commerce’s opposition to climate legislation.

Read more of this story »

A new report released today says that if we shift our economy — to a greener, low-carbon economy — we will have more jobs, not fewer.

Earlier this week, Tony Blair (former prime minister of the UK) and the Climate Group reported that if we worked to avoid climate change we’d create 10 million new jobs by 2020 — worldwide. Another recent study by Greenpeace and the European Renewable Energy Council says that such a shift could increase employment in the EU by 2.7 million jobs by 2030.

One more report, released today by the Global Climate Network (an alliance of nine influential think tanks) comes to similar conclusions.

Read more of this story »

Climate Action Will Pay for Itself, and More.

The United Nations (UN) stated earlier this month that the cost of avoiding climate change was at least 1% of global GDP — $500-600 billion dollars. Despite this major cost, Tony Blair, former Prime Minister of the UK, and The Climate Group, presented a report to the UN yesterday saying that a strong climate deal will “boost growth in all major economies & create millions of new jobs.”

Read more of this story »

181 of the world’s largest investors say that the climate agreement in Copenhagen needs to be strong and binding.

This is from companies managing over $13 trillion and is the largest such statement to date. Their proposals are even stronger than what most activist organizations are asking for.

Read more of this story »

Big portions of these funds need to go to India, a large developing country that includes about one sixth of the world’s population. A new study shows what is needed to significantly cut growth in greenhouse gases in this top country.

Read more of this story »

Even a year gone since the failure of Lehman, fundamental questions remain regarding the core underlying assumptions of our financial system. Though currently derivatives trading and black boxes appear out of favour, what will replace them in terms of helpful and productive uses of capital still has yet to be determined. This question was what the Conference on Social Capital Market’s, or SoCap09 tried to give some structure to; while the trend towards sustainable investments and long-term ROI seems to have taken the place of actively managed funds seeking 20x returns.

Read more of this story »

Even a year gone since the failure of Lehman, fundamental questions remain regarding the core underlying assumptions of our financial system. Though currently derivatives trading and black boxes appear out of favour, what will replace them in terms of helpful and productive uses of capital still has yet to be determined. This question was what the Conference on Social Capital Market’s, or SoCap09 tried to give some structure to; while the trend towards sustainable investments and long-term ROI seems to have taken the place of actively managed funds seeking 20x returns.

So what does this world presently look like? For one, It is not as easy to quantify as the Deloitte’s of the world would want it to be. In fact, Christopher Park from the company referred to standard accounting metrics as “a warm blanket” when compared with the confused and nascent metrics which provide assessment in this space.  Secondly, these markets are not as tested as traditional investment options. The oldest of these players, Calvert Foundation has only been around for ten years in it’s current form. The new-kid-on-the-block-phenomenon is both Social Capital’s largest asset, since apparently Wall Street pre-2008 logic wasn’t exactly perfect, as well as being it’s biggest challenge. Though the perception of Social Capital investments as a novelty, coupled with a palpable unfamiliarity with the valuations make this space seem unlikely to attract traditional capital, maybe ‘Social Investing’ is just a new word for a very old idea.

From the start of capitalism there have been players whose goals were multiple. From the massive endowments of the Rockerfellers and Carnegies to the educational scholarships committed by what today are called ‘high net-worth individuals.’ These acts of philanthropy were the yin to the yang of free-market capitalism. The question now is whether metrics and forcastable, and market-rate ROI can be properly delivered by such investments. Fittingly, Rockerfeller Foundation and Deliotte among others are behind the current push to bring the metrics of high finance down into the social sphere. One such project, called IRIS for ‘Impact Reporting and Investing Standard’s’ goal is to set agreeable metrics so comparing between these investments will be simpler. These metrics will require reporting of data such as: job’s created, revenue, etc., and are the underlying piece to developing the GIIRS, or ‘Global Impact Investing Rating System’, which will be similar to rating agencies in other asset classes. These new elements will undoubtedly smooth the road between capital and investments, if only just through the process itself introducing these actors to one another. There will have to be strong deliberative processes since the space constitutes of everyone from hedge funds to single social entrepreneurs.

While metrics and ratings are one solution to the problem of moving capital into the social sphere, other problems remain. One refrain at the conference was that investors feel comfortable either maximizing their investment returns or giving away money to charity. Oddly enough investors who were asked to invest in these blended value products had so much difficulty bridging these two worlds that they often wanted to  offer the money as a charitable donation. Though there are some reasons for making donations above proper investments due to tax laws, by-in-large this kind of response is nonsensical. Social funds not only infuse money towards inherently sustainable models, which need seed or growth funds, but they can often provide returns on the investments which in some cases exceed market-rate.

To combat this cultural wall, members of the Social Capitorati made the case that in order to attract capital, would-be ambassadors must use only the language of traditional finance. Jed Emerson of Uruhu Capital, who has espoused such social investments for many years discussed how at his fund he only speaks in phrases like ‘risk management’ and ‘qualitative assessment’ which, while they might seem euphemistic, could succeed in bringing down the barriers present for capital infusion into the space.

What is unclear still is how these investments will fit into the traditional investment paradigm-if they eventually are seen as being reasonable options for investors. One way to frame this comes from Skoll Foundation’s Dan Chrisafulli, who said that small and medium enterprises are “durable assets which are very good as part of a blended portfolio.” This seems to be the view of many with regard to the micro-finance space already. What was said as a goal for the sector at the conference is an eventual infusion of between 5 and 15 percent of total assets under management. My question is, what are the distinct borders of the space? As companies large and small begin to analyze more of their unintended consequences, and non-profits find that relying on grants limits their growth possibilities, aren’t we all moving closer to the middle by default?

Lastly, more capital will not mean that social entrepreneurs will have any less challenges- quite the contrary. Just as venture capital creates a few winners (in the neighborhood of ten percent of funded companies really find those 20x returns which fuel the industry), so too will social ventures find challenges along the road to high impact. Juggling multiple goals makes reaching each one infinitely more complex, and without the simplicity of singular attention on profits, running either a business or social enterprises now will  be a much more multifaceted endeavor. This hearkens true for the supply-side of capital as well. While old investments really could boil down to ROI over the short-term, liabilities are everywhere for companies making an impact ( which is inherently larger at scale). The days of only focusing on the bottom line are done. The flip side is that we are no longer living in a bifurcated world where money and meaning are painted as mutually exclusive. While definitions of value will have to become hammered out through intense deliberative processes, only two eventualities could possibly exist: either irreconcilable challenges will emerge, or reasonable fusions are going to be found.

One thing is sure, when the convener of the conference Kevin Jones called Social Markets “the intersection of money and meaning” a year ago at the first SoCap conference, a nebulous middle-path emerged which could-with enough work-make the science of economics just a little less dismal.

Image courtesy Flikr user Sociate via creative commons licensing.

By most accounts, the Obama administration’s “Cash for Clunkers” program is a resounding success. You’ve heard the sound bytes: “good for consumers, good for dealers/the auto industry/the economy, good for the environment.” There was some embarrassing attention focused on the program during its second week as consumer response overwhelmed everything from the dealer interface system to the rebate financing that the government initially allocated.

As the program’s future hung in the balance, some dealers were left holding clunkers without a guarantee that the rebates would ever be paid, and as administration officials promised a hollow-sounding “good faith effort” to pay off all the deals already made, those dealers began to call customers to claw back the new cars or request cash payments to offset the rebate.

Read more of this story »

One quarter billion dollars is a lot. An awful lot. Most people will never even come near that amount of money, but that’s what the U.S. Environmental Protection Agency said Americans saved this past year by switching over to energy efficient homes.

In the EPA’s announcement on July 3, it was reported that 17 percent of all single family homes built across the nation in the year 2008 received the EPA’s Energy Star approval rating, which means that a homes are at least 15 percent more energy efficient than homes built to the 2004 International Residential Code (IRC), and include additional energy-saving features that typically make them 20–30 percent more efficient than standard homes. The percentage of Energy Star homes was up from 12 percent in 2007.

The increase in Energy Star rated homes shows that home builders and home buyers are investing in homes that save money and the environment. “Every year more Americans decide to cut their energy bills and help keep the air clean in their communities by buying a new home that has earned EPA’s Energy Star,” said EPA Administrator Lisa P. Jackson.

Read more of this story »

Washington is starting to wake up to something that’s been obvious to marine scientists for years. The winds blowing off U.S. waters could be a key to a national clean energy and green jobs revolution.

On Tuesday, the federal government awarded five leases to three companies that want to develop wind turbines off the New Jersey and Delaware coasts for the production of renewable energy.

They’re the first such leases the Department of Interior has ever issued for the Outer Continental Shelf. If this official statement is any indication, they won’t be the last:

“We made the development of offshore wind energy a top priority for Interior. The technology is proven, effective and available and can create new jobs for Americans while reducing our expensive and dangerous dependence on foreign oil.”

The declaration comes as the U.S. Congress is in the midst of a debate over a proposal that would create a costly long-distance “transmission highway” to carry land-based wind energy (among other clean and dirty sources) from the Great Plains to the power-hungry cities of the American East.

Read more of this story »

Elevated global temperatures bring a number of threats, including rising seas and more crop-withering heat waves. Higher surface water temperatures in the tropical oceans also provide more energy to drive tropical storm systems, leading to more-destructive hurricanes and typhoons. The combination of rising seas, more powerful storms, and stronger storm surges can be devastating.

As noted in my most recent book, Plan B 3.0: Mobilizing to Save Civilization, just how devastating this combination can be became evident in late August 2005, when Hurricane Katrina came onshore on the U.S. Gulf Coast near New Orleans. In some Gulf Coast towns, Katrina’s powerful 28-foot-high storm surge did not leave a single structure standing. New Orleans survived the initial hit but was flooded when the inland levees were breached and water covered everything in large parts of the city except for the rooftops, where thousands of people were stranded. Even in August 2006, a year after the storm had passed, the most damaged areas of the city remained without water, power, sewage disposal, garbage collection, or telecommunications.

With advance warning of the storm and official urging to evacuate coastal areas, 1 million or so evacuees fled northward into Louisiana or to neighboring states of Texas and Arkansas. Of this total, more than 200,000 have not yet returned home and will likely never do so. These storm evacuees are the world’s first large wave of climate refugees.

Katrina was the most financially destructive hurricane ever to make landfall anywhere. It was one of eight hurricanes that hit the southeastern United States in 2004 and 2005. As a result of the unprecedented damage, insurance premiums have doubled, tripled, and even in some especially vulnerable situations gone up 10-fold. This enormous jump in insurance costs is lowering coastal real estate values and driving people and businesses out of highly exposed states like Florida.

Read more of this story »

Much of what I assumed to be climate consensus has been turned on its head since I moved to the Midwest from New York. Meaning, there a lot of people here in the Middle who care about environmental issues but are not convinced climate change is related to human activities and/or is as dire as predicted. I believe it is. . .and I also believe that in order to get buy-in from such diverse constituents, it’s imperative that we engage in dialog with those who hold differing opinions.

Read more of this story »

Editor’s Note: The is a guest contribution by Ian Rogoff, Chairman of the Nevada Institute for Renewable Energy Commercialization, and Chairman and CEO of The Helio Group (parent company to HelioPower). This is the sixth post in a series from the CEO’s of major solar companies. You can follow the complete series here.

There is a long overdue debate underway in industry and political circles regarding the merits of federal funding for renewable energy (RE) commercialization.

Distinct from RE projects and RE deployments, commercialization involves identifying specific technologies and entrepreneurs based on their perceived commercial potential and financing the respective project teams along a vector towards commercial success.

The types of commercialization activities typically funded include scaling benchtop prototypes to meet market requirements, characterizing technologies to understand performance and limits, testing boundary conditions, designing for manufacturability, testing for real world conditions, scaling refinery processes, among others.

• » See also: Property tax solar energy financing coming to San Diego
• » Get Ecopreneurist by RSS or sign up by email.

Commercialization is quite distinct from basic research, and expressly does not seek to fund pure science or unproven claims. Typically, commercialization funding stops at a point where the private sector steps in and either assumes the next funding milestone or market acceptance/rejection obviates the need for additional financing entirely.

Two types of barriers exist today in the commercialization of renewable energy technology: the “valley of death” and the “mountain of death.”

Renewable Energy’s Valley of Death

Basic RE research is being conducted at numerous institutions around the world and much of this technology remains trapped in labs for want of commercialization know-how and funding. Basic and applied research is likewise being conducted in commercial enterprises, but much of that research is often constrained through short-term return on investment requirements.

In addition, renewable energy technology often fails to garner the resources and funding needed in order to reach commercial viability as a result of existing regulatory and fiscal regimens that bias markets towards incumbent technologies. Absent investment and institutional know-how, the commercialization of renewable energy will continue to be hampered in its application and hindered in its ability to cross the so-called “valley of death.”

Renewable Energy’s Mountain of Death

What makes renewable energy different from many other technology-based industries, however, is not just the valley of death which is common to many technology-based industries, but more the “mountain of death,” or specifically the amount of capital and time required to take promising but nascent energy technologies to widespread deployment. The energy industry tends to be an asset-based industry, and those assets are usually expensive. Early stage private capital tends to shun capital intensive businesses, and unlike information technology, for example, the energy industry does not generally provide some highly desirable “must-have” new capability, but simply supplants an existing commodity, be it the flow of electrons, or a transportation fluid, or whatever.

Unfortunately, even in good economic conditions, there is limited funding available for pilot and demonstration phases for scaling renewable energy technology. Add to this the lack of resources required to create and implement commercialization roadmaps and it becomes clear why half-hearted attempts at developing this industry have stalled.

Given the uncertainty, costs and times frames involved in overcoming the mountain of death, there needs to be a very strong enabler in order to stimulate renewable energy commercialization on a large scale. Absent regulation, market signals (like pricing carbon), or specific incentives, there are simply no compelling economic reasons in the short term for the incumbent industry leaders to switch from existing feedstocks to renewable sources. As mentioned above, in other technology-based industries, early-stage capital funds innovative disrupters, but there is simply not enough equity financing available to stimulate the early stage energy companies in such a capital intensive industry, and start-ups simply do not have the balance sheet strength typically required for project finance and other sources of financing.

The renewable energy industry is different from other technology-based industries. Granted, it is slowed by the valley of death, but widespread deployment is truly hampered by the mountain. If we are committed to the potential of renewable energy as a solution to many of our climate, economic and national security concerns, we need to recognize the need for strong federal and state support for commercializing renewable energy technologies or we run the risk of looking back on this period and wondering why (to paraphrase Rahm Emanuel) we wasted a crisis.

Image Credit: clownfish via Flickr under Creative Commons License

San Francisco’s zany Bay to Breakers race brings out not only world class runners but crazy costumes as well. Some companies took advantage of the crazy and healthy atmosphere to promote various items (energy drinks, anti pain patches) but we had to question the Foster Farms “Say No to Plumping” race team.

Sure, everyone seemed to enjoy having their photo taken with the plump Foster Farms chickens but the brightly colored 16-person Foster Farms race team seemed bent on raising awareness of a little-known food fact: “plumped” or saltwater-injected chicken that costs consumers their health and money.

Read more of this story »

Solar photovoltaics (PV) in the UK will be as cheap as grid-sourced fossil fuels much sooner than expected, a new study by Solarcentury finds.

For homeowners, PV will cross the “grid parity” mark in 2013. For commercial customers, it will occur around 2018. The magical parity date for PV is generally assumed to be 2020 in the UK. Says Solarcentury:

“The proximity to parity heralds the prospect of PV being a compelling investment for the individual, without subsidy, in only a few years time.”

The 14-page report by the UK’s largest solar firm is described as the most “up-to-date and accurate analysis on the investment case for PV in the UK.”

Its main point is that solar PV has precisely what it takes to move beyond a British niche and into the energy mainstream: Its energy potential is massive. It’s getting cheaper all the time. And it’s fast-approaching the holy grail of the solar sector, grid parity.

Time to tap it.

• » See also: Solar Panel Community Bargaining in Sonoma County, CA
• » Get Sustainablog by RSS or sign up by email.

The resource potential from mounting PV on every UK building is huge, around 460 terrawatt hours (TWh) each year. That’s more than the country’s current electricity consumption of 400 TWh. Solarcentury says harnessing just a fraction of that absolute potential:

“would represent a substantial contribution to the UK energy mix and to addressing renewable energy and carbon targets”

On top of that, the price of solar PV is falling “rapidly,” while the costs of fossil fuels are rising. The long-term prognosis for the technology is more of the same, significant cost reductions. That prediction, writes Solarcentury, is “driven by the nature of the manufacturing process for crystalline silicon PV.”

Other research supports this claim. According to a recent report by New Energy Finance, polysilicon prices could fall as much as 43 percent in 2009 compared with 2008 levels.

With substitution to thin film, PV prices could drop even more. (See In a League of Its Own: First Solar Breaks the $1-a-Watt Barrier).

There’s another major factor that will surely drive down PV costs in Britain – the nation’s proposed feed-in tariff, which is expected to be implemented in April 2010. The tariff would guarantee an above-market price for commercial and residential customers selling solar power back to the grid. The plan would boost demand for solar panels and substantially cut costs in the long term.

Jeremy Leggett, executive chairman of Solarcentury, called it an absolutely “vital” measure to help accelerate consumer adoption of solar panels. It will also help the nation achieve its 2020 target to source 15 percent of its electricity from renewables, which it is struggling to meet.

“A burst of premium-pricing for solar energy, of the kind now on offer in 18 European countries, will stimulate a very fast-growing market.”

This isn’t your average energy subsidy, he explains:

“The feed-in tariff will be ramped down over a few years. This is not like nuclear, where the market has to be underwritten with public money essentially for ever.”

The PV market has been exploding in recent years, particularly in Europe, thanks in large part to generous feed-in tariffs. The world’s solar PV installations increased by 110 percent in 2008 to 5.95 GW, according to Solarbuzz’s annual report, Marketbuzz 2009.
Europe accounted for 82 percent of world demand last year.

The UK made up just a tiny fraction of that growth. It could snatch up a much bigger slice.

It’s a bet worth taking for Britain, and for any government, for the jobs potential alone. Don’t forget: Solar PV is one of the biggest job-creating industries on the planet. The striking numbers, from Solarcentury’s report:

“UNEP estimate PV job creation at 7 to 11 per MWp installed; this figure is supported by the German solar experience, where over 50,000 jobs have been created since 2000.”

See also:

• In a League of Its Own: First Solar Breaks the $1-a-Watt Barrier
• Germany’s Coal Boom Highlights Nation’s Big Energy Dilemma
• Why Isn’t the U.S. Embracing Feed-in Tariffs?
• Polysilicon Price Plunge Provides a Ray of Hope for Solar Industry

Image credit: Dominic’s pics at Flickr under a Creative Commons license

Renewable Energy’s Mountain of Death

What makes renewable energy different from many other technology-based industries, however, is not just the valley of death which is common to many technology-based industries, but more the “mountain of death,” or specifically the amount of capital and time required to take promising but nascent energy technologies to widespread deployment. The energy industry tends to be an asset-based industry, and those assets are usually expensive. Early stage private capital tends to shun capital intensive businesses, and unlike information technology, for example, the energy industry does not generally provide some highly desirable “must-have” new capability, but simply supplants an existing commodity, be it the flow of electrons, or a transportation fluid, or whatever.

Unfortunately, even in good economic conditions, there is limited funding available for pilot and demonstration phases for scaling renewable energy technology. Add to this the lack of resources required to create and implement commercialization roadmaps and it becomes clear why half-hearted attempts at developing this industry have stalled.

Given the uncertainty, costs and times frames involved in overcoming the mountain of death, there needs to be a very strong enabler in order to stimulate renewable energy commercialization on a large scale. Absent regulation, market signals (like pricing carbon), or specific incentives, there are simply no compelling economic reasons in the short term for the incumbent industry leaders to switch from existing feedstocks to renewable sources. As mentioned above, in other technology-based industries, early-stage capital funds innovative disrupters, but there is simply not enough equity financing available to stimulate the early stage energy companies in such a capital intensive industry, and start-ups simply do not have the balance sheet strength typically required for project finance and other sources of financing.

The renewable energy industry is different from other technology-based industries. Granted, it is slowed by the valley of death, but widespread deployment is truly hampered by the mountain. If we are committed to the potential of renewable energy as a solution to many of our climate, economic and national security concerns, we need to recognize the need for strong federal and state support for commercializing renewable energy technologies or we run the risk of looking back on this period and wondering why (to paraphrase Rahm Emanuel) we wasted a crisis.

Image Credit: clownfish via Flickr under Creative Commons License