Tuesday, November 18, 2008

Stop talking. Start acting.

Last week, I took my show on the road once again, this time to Washington, D.C. for the Carbon Market Insights Americas 2008 Conference. The event was well worth the money I was fleeced, er, billed for (seriously, if you want to make some quick cash, organize a conference and put the word "green" or "carbon" in the name, people will come Ray, oh yes, people will come). As with the REFF West renewable energy conference, it was great to see the innovation, both financial and technological, that is being created to solve the global warming crisis.

One of the highlights of the CMI Americas Conference was having the privilege to hear Thomas L. Friedman speak. For those of you not familiar with my good friend Tom (OK, so I wasn't all that familiar with him either, but isn't that why wikipedia was invented, so I can look smarter using unchecked facts?), he is an award winning journalist, op-ed writer for the New York Times, and author of several leather-bound books (e.g. Hot, Flat, and Crowded, The World is Flat, The Lexus and the Olive Tree, etc.). Mr. Friedman's speech was based primarily on his book Hot, Flat, and Crowded that discusses the need for a global green revolution and how Americans (or U.S. Americans per Ms. Teen South Carolina, http://www.youtube.com/watch?v=lj3iNxZ8Dww) should take a leadership position in this budding movement. While he has his detractors and he can be a bit melodramatic (and the speech, albeit a good one, was basically an infomercial for his book), Mr. Friedman's overall message of American action and leadership was inspiring to hear and, in my opinion, was right on the money. I could not possibly convey all the facets of his speech properly so I suggest you either check out this link, http://www.ryanallis.com/friedman-hot-flat-crowded-2/, or purchase his book as I will soon do (I guess infomercials work after all).

Almost as interesting to hear were the varying view points of when to act on global warming. Some would prefer to act sooner (Thomas L. Friedman, Obama's environmental adviser, the World) and some would prefer to act in varying degrees of slowness, I mean cautiousness (U.S. Senator Jeff Bingaman, D-NM, various financial industry executives). The fact of the matter is the world is literally waiting on us. There was a session during the conference in which the Vice President of the Pew Center on Global Climate Change, who is an American, stated his skepticism regarding any meaningful agreement being achieved at the Copenhagen global climate change meetings in 2009. Then, U.N. environmental negotiation representatives from Brazil, Japan, Norway, and Mexico (yes, that Mexico, home of the pollution loving maquiladoras) proceeded to scold the Pew Center representative on his pessimistic view point and to basically plead with the U.S. to take a leadership role next year in setting global carbon standards. That session, more than any other, drove the point home that the U.S. is THE global Superpower (minus the ability to fly, shoot webs, etc. although we do have our Robin, right Canada?) and with great power, comes great responsibility. Yes, there are other factors to be worked out (e.g. what to do about the evergrowing China and India, cap and trade vs. carbon tax, effects on current industries, Al Gore's waistline, etc.), but our children's children (who will hopefully be better looking than us) depend on action sooner rather than later.

Some additional thoughts, green and otherwise:
  • Mr. Friedman spoke of redefining what it is to be "American." We love our stuff (I know I do, especially stuff with chocolate on it). Globalization has allowed others to buy and love stuff too. But as everyone in the world is starting to love stuff like we love stuff, we've started some stuff that is going to cause us to be in for some stuff. Americans always set the bar high. Whether it is innovation, freedom, or gluttony, we strive to be number one, but the world is catching up to their role model (strange tangent time, I love how some athletes have such large egos that they think you choose to be a role model, but I digress) so unless we redefine what that role model should be, we will need to start investing in some speedos, cause it's gonna get a little hot in here.
  • Senator Bingaman stated that Congress may not be able to act on creating a cap and trade policy due to their having to deal with the credit crisis. Pardon me for saying, but last I checked, there are 535 members of Congress. Couldn't they spare one or two hundred members and still have enough hot air in both debates?
  • Today, the Senate put a proposal on the table for rescuing the auto industry. It does not contain any significant strings attached (e.g. reorganization, innovation demands, new cars for every Oprah viewer). Can someone explain to me why we keep throwing money at these industries without demanding improvements? It couldn't be that their workers are unionized and those unions have money, could it? Yes, I know, those industries affect millions of workers, but couldn't a portion of that money be used not for the floundering leviathans, but for retraining the workers who lose their jobs from the restructuring demands that should be attached to this bailout. Then those retrained workers could go work in green industries, problem solved, no need to thank me.
  • One other thought on the auto industry issues. Why is it that when 52,000 Citigroup employees lose their jobs as they did today (http://www.reuters.com/article/hotStocksNews/idUSTRE4AG3JD20081117), we hardly bat an eye. But when the same amount of autoworkers lose their jobs, all H-E-double hockey sticks break loose? For comparative purposes, there are 250,000 hourly auto workers in the Big 3.
  • As always, if you are interested in any of the presentations from the CMI Americas conference, shoot me an email. Don't forget to tip your waiter and leave a Comment below.

Wednesday, November 5, 2008

The Wild, Wild West

Last week, I attended the REFF (Renewable Energy Finance Forum) West in Seattle, WA. The event was very broad reaching and very detailed, covering every possible part of the renewable energy industry including technology, policy, venture capital, financing, etc. Several "big dog" speakers gave talks including Senator Maria Cantwell (D-WA), Mayor Greg Nickels (mayor of Seattle), and Chuck Norris (ok, he didn't speak, but if he did, can you say best conference ever). I learned too many things to possibly list (including that beer is not allowed on the elevator in the Space Needle), but will share a few items that I thought were interesting.

  1. The Western portion of the U.S. is light years ahead of the rest of the U.S. - The West has dealt with limited resources (e.g. water, electricity, silicon, etc.) for quite some time now. In addition, they have plentiful natural resources (and some very unnatural resources) that also contribute to a tendency towards conservation. It is no surprise that San Francisco, Portland, and Seattle are becoming major hubs in the green movement. Further, the tax incentive structures (http://www.dsireusa.org/) of the western states, on average) are much more conducive to the development of green technologies. I understand that other parts of the U.S. do not have the resources to make some renewable technologies viable, however, incentives for manufacturers and other parts of the value chain could go a long way in "de-rusting" some of the rust belt's economies. After all, if the U.S. is going to become the world leader, we have to all work together (my country tis of thee...sorry, got a little patriotic there, my bad).
  2. The credit crunch will have only a short-term impact on the move towards "greener pastures" - There may be some consumer movements away from the green movement in the short run. Lower gas prices and the limited liquidity for all involved will be the main causes (kind of like after a night of partying, you eat White Castles because they're cheap and available, but afterwards, you want something better for you than cheap burgers and jagerbombs). Even T. Boone Pickens (what does that T stand for, is it like the P, in P Diddy?) is feeling the crunch http://www.enn.com/business/article/38555. However, venture capital is currently pouring into this industry movement at a rate not seen since the early 90s tech boom (http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20081001005167&newsLang=en). All this money should feed innovation and as technologies are perfected, costs will fall and demand should continue to increase with the resulting prices. The real question is how will the price of oil affect the rate of innovation adoption? (Oh, I just blew your mind, didn't I?)
  3. The renewable energy industry is still riding on training wheels - Tax credits are the name of the game when it comes to renewable energies. Without these programs, many of the current projects underway in the U.S. would not be. Obviously, innovation and efficiency will decrease the need for other sources of cash. Further, once a regulated carbon market is established, these credits could be rolled back due to the alternative benefit source. However, tax credits are a double edged sword. They stimulate this new green economy and drive renewable energy prices down. At the same time, the industry could become dependent on them to be competitive (sort of like HGH, only without the giant foreheads).
  4. What's old is new to solve the energy crisis - There are a variety of amazing technologies under development. From algae to solar concentrators to various forms of biofuel, innovative individuals are hitting this crisis from a variety of angles. However, much of this "new" technology was invented in the mid to late 20th century. As early as the 1950s, scientists thought we may be causing global warming (http://www.pbs.org/wgbh/pages/frontline/heat/view/2.html, about the 43 second mark, cheesy science shows rule. I highly recommend you watch the entire Frontline episode, it is very informative, http://www.pbs.org/wgbh/pages/frontline/heat/view/). Then, in the 1970s, the OPEC energy crisis stimulated energy innovation, because, wouldn't you know it, no one likes expensive gas. For the sake of my mortgage payment, I hope we do not continue to procrastinate with renewable energies, although gas is $1.99, so...

I wanted to mention just a few other items.

  • During my flight, I listened to the book Freakonomics (reading is for people without Ipods). If you haven't listened to (or, if you have to, read) this book, I highly recommend it.
  • If you would like to see copies of any of the presentations, let me know, I'd be happy to share.
  • It was very obvious last night that one group of individuals in America was overjoyed that Obama was elected as President...and that was the renewable energy industry. From discussions with individuals from both sides of the aisle at the conference, it was obvious he was the clear choice for leading the U.S. into the green economy. Huge questions on whether he can deliver when facing such minor issues as two wars, a bad economy, a huge budget deficit, falling oil prices, etc. Yes we can...hopefully.
  • Finally, please be sure to click-on and read the comments sections after each of my blogs. I assure you their authors are much more insightful than me.