There is a looming battle over the cost of energy between the ‘green at any cost’ versus the ‘green enough at a reasonable cost’ where wind/solar forces will battle natural gas—you can sense the fog of war ahead as the battle is being set up. The graphic above from a recent GTM Research report shows the reality in clear focus.

The policy landscape has been designed to drive toward clean energy policies sometimes without much regard to the cost. It started with environmental groups challenging our polluting ways. Over time those views gained mainstream acceptance and today there is broad public support for the goal of a clean environment, protecting air quality and water quality for the future.

We’ve supported the growth of regulatory requirements since the 1960?s to reduce contaminants and pollutants imposing environmental impact review procedures ahead of new construction of virtually anything today. Congress and the states have passed environmental protection laws that continue to advance this policy agenda. In the ‘good old days’ before our economy crashed business complained about the cumulative cost of these rules, but the public view was conditioned to see it as whining since it rarely affected us directly and we knew from looking around us that things needed to be cleaned up.

We needed this process of redemption to change our ways and correct the mistakes we have made from the days when the air was truly dirty and we dumped all manner of wastes into our waterways. We sinned badly against our environment and it was time to repent, clean up our mess and our act.

That repentant view, however, gave way to a continual push for even more environmental ‘remediation’ not to fix things broken but to impose a view of the way things should be that came to be a tipping point in the battle brewing today. It began building slowly as public support for environmental protection grew. Politicians took notice and jumped on board. Laws were passed to score ‘greener than thou’ points, regulations were adopted to pursue green agendas. Environmental impact statements were required and the process of getting building permits, operating permits and other regulatory approvals moved beyond reasonable mitigation to turn our regulatory permitting process into regulatory extortion.

Congress did not help by approving laws so vague that it essentially gave government agencies vast power to write rules so onerous, prescriptive and intrusive they bore little resemblance to their underlying enabling act. This corruption of the legislative process has led to a corrosive regulatory kudzu covering everything with unintended consequences.

At some point in the process of environmental reformation and repentance we moved from seeking redemption for our past environmental sins and righting those wrongs to pursuing a ‘greener is required’ agenda that tilted the balance and transformed the message into a ‘green at any cost’ prescription. Times were good, business was making money, the economy was solid, people were comfortable so we all were swept along by this greener is better consensus view.

We lived comfortably in that greener is better world for the past decade or so, but stuff happened.

It wasn’t the great recession although that was as close to ‘rapture’ that any of us wanted to get. It wasn’t the loss of jobs, the erosion of our manufacturing base, the rise of China as the production factory of the world, the volatile price of imported oil. Each of these things had a logical explanation.

Something happened that opened our eyes and showed us that we had eaten of the fruit of the tree of regulatory life in the center of the garden and realized we were now naked. The great recession had the effect of breaking all of our comfortable cycles. It changed the rhythm of life for everyone. It forced us to confront reality or face our economic rapture. And when we opened our eyes and saw that we were naked—we were ashamed and afraid.

Oh, Brother! I know, you must be thinking where is this rant going?

Look around you, we still care about our environment. We still believe in protecting the quality of our air and water and leaving this planet a cleaner, healthier place for our kids that we inherited. We do. But our eyes have been opened to the reality that our willingness to accept this cumulative cost of greener is better has turned into regulatory kudzu. You know kudzu, it is that coiling, climbing, trailing plant that grows along roads and forests covering trees with a shroud of dense foliage. It eventually kills its host plant by blocking out the sunlight. Efforts to eradicate it have proved difficult because of its relentless growth and insidious twining structure—and because environmental rules prevent spraying herbicides for fear we might threaten some endangered species.

Regulatory kudzu may be the existential threat to both our economic growth and our environmental sustainability. And that is what the looming battle is shaping up to decide. Will we spray some common sense herbicide on this regulatory kudzu before it chokes the life out of us?

What is the reasonable and appropriate balance between ‘greener is better’ and ‘green at any cost’?

• Has our regulatory kudzu made it so costly, so time consuming, so much of a hassle to build, manufacture, or drill anything in America that our businesses and our jobs go elsewhere to stay in business?
• Must we sacrifice our economic competitiveness in order to have reasonable environmental quality?
• Are these regulatory policies counter-productive in a global competitive market where renewable portfolio standards and solar subsidies in America and the EU are used by China to fund its excess production for export growth causing PV prices to fall so much that they drive domestic US and EU producers out of business to assure global market share dominance?

The coming battle over the cost of energy is being framed by unintended consequences. The forward movement on these separate fronts revolves around energy choices or energy impacts on our economy. But one unintended consequence is that regulatory kudzu is now being forced to compete with global economic competitiveness, the rebirth of manufacturing, domestic energy production growth, energy security and the need for reliable low cost energy to create sustainable jobs and restore America’s global economic competitiveness. The flashing red light of regulatory kudzu overreach is being exposed not just in our environmental regulations but in financial and market rules, health care and labor and other areas as well.

The Battle for Low Cost Domestic Energy Security

The Rebirth of American Domestic Energy Production is Sustainable. After decades of growing American dependence on imported oil, America turned the corner using American technology and quiet American persistence the growth of unconventional oil and natural gas using horizontal drilling and hydraulic fracturing to unlock the previously uneconomic energy treasure under our feet. With that technology America turned back imported liquefied natural gas (LNG) as a replacement fuel for declining conventional natural gas supplies. American became a net exporter of energy in 2010 for the first time in decades. The growth of domestic energy production and its rippling effect in job creation across places we scarcely imagined possible is changing our attitudes. When North Dakota, West Virginia, Ohio, Pennsylvania can join the traditional big energy producing states of Texas, Alaska and California in benefiting from this rebirth of domestic energy production we have a genuine Spindletop on our hands.

The American War on Coal is a both an Economic and Regulatory Failure. The tsunami of new regulations designed to undermine the economics of coal fired generation as a power supply source in America is a failure. Despite all the proposed new regulations pancaking on top of our already strong laws, the US EIA says that coal will still be a significant contributor to America’s power supply mix through at least 2035. But guess what? All that coal we have decided not to use in America is being exported to China where you can be assured it will not likely be used in as an environmental responsible manner as we would have used it. Do you see the point? We have elected to impose on ourselves the cost consequence of shutting down more than 80,000 MW of low cost coal fired power generation to reduce greenhouse gas emissions in America to reduce global warming or moderate the climate crisis (in Al Gore speak du jour) so that China and other emerging countries can buy that coal now exported by US companies unable to use it at home. The US Court of Appeals has now stayed the Cross State Air Pollution Rule implementation, one of the most onerous of these new rules, meaning the court found the opponents of the rule are more likely than not to prevail in their appeal. How do you spell S-T-U-P-I-D again?

The Holy Grail of Grid Parity has Arrived. For years we have been told that wind and solar energy would come down in cost and when they reached grid parity (able to compete head to head without subsidies with natural gas combined cycle power generation) we would be victorious in energy transformation. Grid parity has arrived. Thanks the massive expansion of export production of photovoltaic panels and wind turbines in China designed to suction up all the renewable energy subsidy monies in markets where state regulators imposed renewable portfolio standards forcing utilities to buy renewable energy—many times above the market cost of alternatives—the price of PV panels and wind turbines are at or near grid parity in many markets. In Europe, the costs of these above market feed in tariffs are unsustainable and being cut back. In the US subsidies of any kind are increasingly suspect by a public that fearing rising federal debt and deficits and many states will soon reach their RPS goals and declare victory—except California which upped the ante to 33%.

Grid Parity is Our Friend. Not only will grid parity pricing of solar and wind energy reduce the need for subsidies and thus restore the domestic market for the next generation of wind and solar projects using America’s best technology rather than China’s least efficient, grid parity pricing will more effectively undermine the economics on new coal and new nuclear power projects than anything the government regulators can imagine. Faster, better, cheaper and with none of the regulatory kudzu overreach in the current war on coal. The long term sustainable impact of this reliance on market forces is America will get both more clean renewable energy using the best technology, it will get less dirty coal and more clean natural gas generation. It will accelerate the transition from large, hugely expensive baseload nuclear power to smaller, safer, modular small nuclear projects.

And then there is this, an epiphany is coming to light even in California.

In California in December 2011, the California Energy Commission released its draft 2011 Integrated Energy Policy Report, the biennial statement of California’s energy policy strategy. The reaction of the utilities was decidedly skeptical. In filing after filing they pointed out the cumulative cost of California’s energy policies are going to result in substantial rate increases. They worry about the flight of business out of state to avoid the burdens in a fragile economy. They worry about losing their opportunities for growth sufficient to cover the costs of all these regulatory burdens.

It was not a fierce battle but it was a shot across the bow. The time of economic reckoning or rapture draws near. Get back to a reasonable balance fast is the plea. Fight regulatory kudzu. Resist being so green that everything turn brown from disuse. We are searching for a new energy and environmental consensus—one that is balanced with environmental quality and economic competitiveness given equal weights.

Amen!

Article by Gary L. Hunt, appearing courtesy oilprice.com. Find the original post on oilprice.com.

Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a disruptive innovation software collaborative of high tech companies focused on the energy vertical. He served as VP-Global Analytics & Data at IHS/CERA; global Division President at Ventyx, now an ABB company; and Assistant City Manager-Austin Texas responsible for Austin Energy and Austin Water.

photo: Peter Heilmann

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White House Council on Environmental Quality Chair Nancy Sutley visited Los Angeles to discuss the Obama Administration's commitment to harnessing clean energy opportunities to create American jobs on Friday, July 22.  She met with business leaders, city officials and top educators from UCLA and other institutions for a lunch and tour of the new LA Cleantech Incubator (LACI), at the future site of LA Cleantech Corridor. It was a wonderful opportunity for us to connect with Chair Sutley, for her to hear from the founding members of LACI personally about our work.

Years in the making, Los Angeles has launched its new cleantech business incubator to accelerate development of startups focused on sustainable solutions that can create both efficient clean technologies and green jobs. The incubator offers flexible ready-to-go office space, lab facilities, and a supportive environment where startup teams can share ideas with other entrepreneurs and fuel innovation. LACI also gives each startup the chance to work with a dedicated mentor, as well as access to a growing network of cleantech and business experts and introductions to prospective investors. LACI is the business equivalent of baseball’s farm system: it identifies local talent, nurtures it, and helps it get to market, resulting in more jobs and a bigger green economy in Los Angeles and beyond.

LACI is a non-profit organization funded by the CRA/LA and the DWP for the City of Los Angeles. In partnership with the City's exceptional educational and research organizations – UCLA, USC, Caltech and Jet Propulsion Laboratory – LACI will help accelerate the commercialization of clean technologies in addition to championing and nurturing the growth of local entrepreneurs who can effectively take on the many challenges we face in creating a more sustainable society. LACI is a result of the CleanTech Los Angeles (CTLA) alliance, which includes the Mayor's office, the City's universities, the Los Angeles County Economic Development Corporation, the Los Angeles Business Council, the Los Angeles Area Chamber of Commerce, LADWP and the CRA/LA.

Los Angeles is committed to leading the charge toward a new green economy, and it is our mission to support that growth and be a central resource for the cleantech sector. LA is currently the largest market for electric vehicles and solar installations. Moreover, with state and city policies supporting this transformation, Los Angeles will create thousands of local family-supporting jobs in green sectors in the years to come.

LACI offers its portfolio companies three game-changing services: (1) Fully built-out, furnished, and equipped office/lab space at flexible terms; (2) CEO coaching and mentoring from highly accomplished, senior advisors who have built "been there, done that"; (3) Access to our growing network within the city and greater business community for introductions to customers, financing and expertise.

Statement of Support from Alexandra Paxton, Project Manager, Downtown Region, Community Redevelopment Agency of the City of Los Angeles:

It was very gratifying to have Chair Nancy Sutley visit LA's new Cleantech Incubator on the eve of its launch, as she had been part of the original vision of making Los Angeles a capital for cleantech back when she was our Deputy Mayor for the Environment. As a redevelopment agency, our vision is that the young companies fostered here will move into the surrounding industrial area, revitalizing the district as a place to live, work, innovate, and manufacture.  In this way, partnering with education and workforce development, we will be able to build opportunities and jobs for the people who live in our communities, as well as solve our environmental problems. Ambitious? Yes. Achievable? Absolutely!

To find out more about Los Angeles Cleantech Incubator, please visit http://www.laincubator.org/.

Article by Fred Walti, Chief Executive Officer of the new Los Angeles Cleantech Incubator (LACI)

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Related posts:

• How Many Jobs are Truly Created in a “Green Economy?”
• UN Report Says Economic Growth and Sustainability Critically Linked
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• Geothermal Heat Pumps Face Strange Barriers to Adoption

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Over the past year or so, I’ve written a few pieces on the levels of job creation that can be expected as we “go green,” i.e., move to greater levels of energy efficiency, renewables, electric transportation, etc.

Last week I met Tom Konrad, one of the world’s most visible proponents of the green economy, at a conference in NY City. During one of our numerous conversations, I learned that he and I had been trying to get to the root of this very issue – and through very similar analyses. In particular, we had both investigated the work of Political Economy Research Institute at the University of Massachusetts, Amherst (PERI) and one of its most senior people, Robert Pollin.

Here’s an article Tom wrote on green job creation that breaks some of this out. Note, however, that both this article and PERI’s work seem to reduce the question at hand to this: For each million dollars in spending, how many jobs do we get – and of what kind and duration?

While this is interesting, to me, it misses some central issues. Consider the following line of thinking:

A million dollars? Who’s doing the spending? The federal government? Are we proposing a kind of New Deal program? Why? Why can’t this spending come from the private sector?

But what are the conditions under which that will happen? Private money isn’t going anywhere at all right now, and most certainly not into unproven technologies (of which clean energy represents several).

So what would stimulate private sector spending? How about real economic opportunity?

OK, what’s standing in the way of demonstrating real economic opportunity? It’s the nature of the playing field. Depending on how one does the accounting, fossil fuels receive between five and six dollars in subsidies for every dollar going to renewables. That’s fundamentally a matter of corruption; it’s a simple transfer of wealth from an impoverished taxpayer to an extremely rich oil company. And of course, essentially no attempt is being made to force oil and coal companies to pay for the externalities their industries produce (e.g., lung disease and long-term environmental damage).

Trust me, once this inequity is rectified, you’ll have private capital coming into clean energy in torrents, and we won’t be asking questions like “How much further in debt does the federal government have to go to build green jobs?”

In other words, we’re simply asking the wrong question. It’s like asking, “How can I improve my reading comprehension while I’m beating myself on the head with a hammer?” The answer is this: “Just stop beating yourself on the head, and the issue will disappear.”

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For the past 40 years, Denmark has been synonymous with world-class green high-tech solutions. It began with wind technology as a solution to the 1970s oil crisis, but since then the Danish cleantech sector has evolved and now offers technologies within all types of sustainable energy, climate-friendly solutions and energy saving products to individuals as well as to businesses. And it is a first-mover market for many cleantech sectors for foreign companies. Many countries have devised strategies for future clean energy and green economy glory but few have created as concrete and tangible plans as Denmark.

1) Denmark’s goal of becoming fossil-free country in 2050. Since 1980 Denmark has increased its GDP by 80% while keeping its gross energy consumption stable and reducing carbon emissions. But now Denmark is ready to jump to the next generation of clean energy economy. Thus the government of Denmark has unveiled its ‘Energy Strategy 2050’, which calls for the country to be completely independent from fossil fuels by 2050. According to a government release, Denmark is aiming to reduce its use of fossil fuels in the energy sector by 33% by 2020 compared to 2009. The strategy calls for a significant increase in renewable energy obtained from wind, biomass and biogas which over the next decade will increase the share of renewables to 33 percent of energy consumption. The initiative also calls for the wind power production capacity to double to 42% by 2020 where around 62% of electricity generation will come from renewable energy sources.

2) World leading exporter of energy technology. Danish exports of energy technology and equipment have more than tripled since 1989. This is due not least to early demand and ef¬forts within research, development and test¬ing of new energy technologies. Green energy technologies today hold a prominent position in total Danish exports of goods and two-thirds of green energy technologies come from the wind turbine sector. For more than a decade Denmark has topped the EU list of exporters of energy technologies and equipment.

3) First-mover market for EVs. Denmark’s pursuit and investments into EVs and the needed infrastructure will lead to one of the first-mover markets in the world. This is due to the unique situation of having a well-developed grid infrastructure, a very high share of wind power into the grid and the largest market for electrical energy in the world. Denmark aims to be the global leader in developing a national electric vehicle charging network that uses the cars’ batteries as a storage reservoir to balance the intermittency of wind. For example, Renault, Citrôen, Nissan, Peugeot, Mitsubishi, Volvo and Daimler have all announced imports of EVs to Denmark. Together with its partner Renault, Better Place have just opened Europe’s first Better Place center in Copenhagen.

4) A prototype for European Smart Grids. While many other countries are talking about smart grids as a future focus area, Denmark has for the last 20 years had to cope with handling a large share of renewable energy input to the energy system. Denmark is now on the forefront of having a state-of-the-art electrical grid system that is a) connected to the surrounding countries, b) in the global top 2 regarding highest security of supply, and c) the world’s highest percentage of renewable input to the electrical grid from distributed generation. Having the upstream electrical grid up-to-date enables project initiatives around downstream smart grid solutions to have much more concrete value in a Danish context. For foreign smart grid companies Denmark is a playground for R&D and test- and development before the larger markets are ready in the future. (see world’s largest intelligent grid tested in Denmark).

5) Large Cleantech Cluster. Denmark is home to the Copenhagen Cleantech Cluster, one of the largest cleantech clusters around the globe. Today, CCC counts more than 200 members, all engaged in a wide range of cleantech related activities ranging from Smart Grids, recycling of waste to sustainable urban development. CCC serves as the unifying umbrella for all the members and provides them with services within networks, events, knowledge-sharing activities among many other activities. CCC works to create increased growth in the Danish cleantech industry, attract and assist more foreign companies and talent and improve the business conditions of cleantech companies.

6) Large Number of Cleantech Businesses. There are a large number of cleantech businesses that reside in this country – from the largest global players to small startups with global reach. You can find large industrial conglomerates Siemens and IBM, smart grid companies Powersense, Green Wave Reality and Gridmanager, global water group DHI Group, biofuel companies Inbicon and Biogasol, and recent Cleantech Open category winner Abeo. An increasing number of foreign cleantech companies choose to establish a business entity or form partnerships in Denmark. Recently, the US-based EV manufacturer Tesla and smart grid company Spirae Inc. Established their presence in Denmark.

7) From pioneers in wind energy to a global hub for cleantech. Anyone who visits Denmark cannot miss the numerous windmills speckled throughout the country, providing electricity needs to numerous communities and farmers. For many, windmills have become the unofficial national symbol. Denmark uses wind energy to provide a majority of renewable energy. Currently, wind provides 20 percent of electricity needs in Denmark – the highest worldwide. By the end of 2009, the 5,000 windmills provided adequate electricity needs for more than one million households and the goal is to reach 50% wind power of the total electricity production in 2025. Denmark is home to many of the global premier wind power companies. Vestas, Siemens Wind Power, Gamesa, Suzlon, and many other wind turbine manufacturers have R&D offices. An interesting fact is that Danish companies account for 90% of the European market for offshore wind – a market projected to amount to DKK 75 billion per year until 2020 (source The Danish Wind Industry Association). In April 2012 the EWEA conference will be held in Copenhagen.

8 ) Access to Funding for Renewable Energy Research, Development and Commercialization. Denmark provides a number of opportunities to assist businesses in getting the necessary funding for research and development projects. Energinet.dk offers funding for energy research and development projects that assist in developing renewable power production. The Danish Energy Agency offers the EUDP program, which provides funding for the development and demonstration of new innovative energy technology. The Danish National Advanced Technology Foundation offers private companies and universities with the funds to develop and commercialize new technology.

9) Biomass and biofuels. In Denmark, biomass currently accounts for approximately 70% of renewable-energy consumption, mostly in the form of straw, wood and renewable wastes, while biogas accounts for less. Consumption of biomass for energy production more than quadrupled between 1980 and 2005 and further increases are expected in future – primarily for heat supply at district heating plants and in small-scale installations in households, at enterprises and institutions as well as large-scale power plants. Danish companies have developed efficient methods of combustion, gasification, and liquefaction of biomass for biofuels and biogas and have pioneered enzyme technology and other ways to maximize the efficiency of biofuels. Two of the world’s leading manufacturers of enzymes, Novozymes and Danisco Genencor, are located in Copenhagen and are important industry players.

10) Denmark’s 100% Renewable Energy Island. Off the coast of Denmark’s mainland rests the island of Samso, an island that is completely run by renewable sources of energy. These 112 square kilometers of land is just east of the Jutland peninsula and is home to a bit more than 4,000 residents. It is the first island in history to supply 100 percent of all electricity needs from renewable sources of energy, chiefly, the Samso offshore wind plant. Aside from the turbines, the 22 villages on the island are heated using wood chip and straw-run power plants and large solar panels.

Article by Shawn Lesser, Co-founder & Managing Partner of Atlanta-based Watershed Capital Group – an investment bank assisting sustainable fund and companies raise capital, perform acquisitions, and in other strategic financial decisions. He is also a Co-founder of the GCCA Global Cleantech Cluster Association ”The Global Voice of Cleantech”. He writes for various cleantech publications and is known as the David Letterman of Cleantech for his “Top 10″ series. He can be reached at shawn@watershedcapital.com

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The United States is at a precipice with respect to public motivators for the green economy. Essentially, the carrot of public incentives or investment and the stick of potential mandatory regulation of carbon emissions are slated for elimination at the same time. 

Although we cannot know what this two part challenge to the green economy will do, it will certainly change its trajectory for the foreseeable future. 

First, of course, are the proposed revisions to the 2011 budget.  With respect to green building, slated for cuts are most programs that promote green building or which invest Federal dollars in green buildings directly:

• $3 billion of EPA funding overall
• $1.6 billion (nearly 20%) of the Federal Building Fund at the General Services Administration (GSA)
• $786 million (over 35%) of the Energy Efficiency and Renewable Energy (EERE) office at the Department of Energy (DOE)
• $250 million in funds for the Department of Housing and Urban Development (HUD) HOPE VI program, which leverages private sector dollars to transform existing blighted public housing into vibrant and livable communities.
• $10 million for the Energy Star program at the Environmental Protection Agency (EPA).

With respect to renewable energy, the proposed Republican budget bill slates for reduction or elimination over $900 million in investment. Among the programs slated for cuts or elimination is the Department of Energy Loan Guarantee Program for clean energy start up companies, established during the George W. Bush administration.  According to Forbes, DOE officials have said that eliminating this program would do away with 20,000 jobs, along with the benefits for the environment.

In addition to the direct cuts, at least four different proposals are pending (potentially up for a vote this week) restricting or eliminating EPA’s ability to regulate greenhouse gases.  If the EPA is restricted in its ability to regulate greenhouse gases, one of the most potent motivators for investment in reducing carbon emissions through renewable energy, green buildings and other carbon reduction techniques will be eliminated.  

 The question will become not whether renewable energy and green building can compete without government subsidy, but rather whether renewable energy and green buildings can compete in the face of continuing subsidy to competing technologies like coal, oil, etc. 

According to the Center for American Progress, the proposed Republican budget will make few changes with respect to the $40 billion+ Government support of these technologies through tax incentives and other mechanisms. Fox News was unable to get a commitment from House Budget Committee Chairman Paul Ryan (R-WI) that tax breaks for oil and gas companies would be eliminated:

WALLACE: A lot of Democrats that are already saying, even before they’ve seen your budget, that you do all of this balancing of the budget on the spending side, and unlike the President’s debt commission, you don’t do it on the revenue side. Do you eliminate tax breaks? Do you bring in new revenue by eliminating, for instance, tax breaks for oil companies?

RYAN: We don’t have a tax problem. The problem with our deficit is not because Americans are taxed too little. The problem with our deficit is because Washington spends too much money. … So we’re not going to down the path of raising taxes on people. […]

WALLACE: But for instance, you will not eliminate tax breaks for Big Oil and Gas?

RYAN: Those are the kinds of details that we’ll come out later with, that the Ways and Means Committee will work on. We’re not going to go into the little details of which tax expenditure goes and which tax expenditure stays.

 [You can watch this portion of the interview on You Tube]

The next few weeks will be historic ones with respect to America’s green future.  For better, worse or otherwise, these are interesting times which will mean changes for everyone in the green sector in the United States. 

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California’s energy-efficiency policies will create over 200,000 jobs by 2020, but the state could be creating more and better-quality jobs.

The Don Vial Center on Employment in the Green Economy, part of the University of California-Berkeley’s Institute for Research on Labor and Employment, released a report last Thursday, March 17, examining green jobs and policies in California. The report, California Workforce, Education, and Training Needs Assessment for Energy Efficiency, Distributed Generation and Demand Response at the State Capitol, provides recommendations to the California Public Utilities Commission and other agencies regarding “workforce strategies needed to achieve the state’s ambitious energy efficiency goals.” The study was mandated by the California Long Term Energy Efficiency Strategic Plan.

Over 200,000 Jobs to be Created, but…

One key finding from the report is that California’s energy efficiency policies will stimulate approximately 11.2 billion dollars of public and private investment and create 211,000 jobs by 2020.

Other key findings, however, are that two-thirds of expected jobs directly related to energy efficiency work will be in traditional construction fields and only a tiny fraction of the jobs will be in new, specialized, higher-paying “green jobs.” As the Vial Center reports, unless certain systemic improvements are made (see below), this unnecessarily and significantly limits the environmental progress that is made and the worker benefits created:

“Poor quality installation of energy efficient equipment some sectors, is undermining the achievement of energy efficiency goals and is directly linked to low wage labor markets which do not reward workers or businesses for investments in training.”

Policy Recommendations

One of the simple but clear recommendations the Vial Center makes is that California continue and expand its energy efficiency policies. Such policies will create more jobs and improve the economy, and, of course, help protect the environment. More specific key recommendations are as follows:

• “Green” existing training programs for traditional occupations by incorporating energy efficiency skills and knowledge into curricula, rather than promote stand-alone, narrowly focused green training programs.

• Use our public and ratepayer investment to promote high quality work and good careers for Californians by:

• Setting high quality skills certification standards for workers.

• Enforcing building codes and requiring other strong quality standards for contractors.

If California, which is already considered to have the second-best energy efficiency market amongst U.S. states, follows these recommendations and shows the country what is possible on this front, hopefully more states or the nation as a whole will implement such policies and programs.

More on the Vial Center report is available here:

* Executive Summary
* Part 1
* Part 2

Article by Zachary Shahan, appearing courtesy ecopolitology.

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Michigan is quickly looking to make its position as one of the frontrunners for cleantech. Through numerous initiatives, investments, tax incentives, various research and development firms, and the creation of clean technologies, it is obvious that cleantech has had an impact on the way Michigan looks at renewable energy. Michigan is quickly becoming a frontrunner in the cleantech industry in part by leveraging its preeminent position in global manufacturing to revitalize innovation for clean energy manufacturing. The new green economy provides Michigan a dynamic opportunity to rebuild the state’s job base, attract new investment, and diversify the state’s economy.

1) Incentives and Policies for Renewable Energy and Efficiency. To promote the use of renewable energy as well as energy efficiency, the state of Michigan set up a number of different financial incentives at the state and city level that would make the switch to renewable energy a lot more beneficial for homes, businesses and institutions. Michigan provides industry recruitment and support, PACE financing, performance based incentives, personal tax credits, property tax incentives, state grant programs, and three year utility rebate programs.

2) Michigan GREEN. Michigan GREEN (Group for a Renewable Energy Efficient Nation) is comprised of energy companies, energy consultants, various government agencies, universities, and schools that are looking to advance not only the installation but as well the implementation of renewable energy and energy efficiency technologies, raise awareness on these technologies and about energy conservation in all settings, including residential, industrial, and commercial, and provide access to funding opportunities for projects related to these technologies. This nonprofit was created to increase knowledge and awareness of new energy technologies and possibilities to save money over the long run..

3) Michigan Alternative and Renewable Energy Center. Also known as MAREC, Michigan Alternative and Renewable Energy Center is part of Grand Valley State University. MAREC’s mission is to become a business accelerator, development catalyst, and center for research and development to connect government, business, and education resources for the development, commercialization, and advancement of new technologies that put emphasis on renewable and alternative energy. Some of the objectives to add to the overall impact include bringing together parties that allow for the development and promotion of alternative energy technologies, enable research and development on these technologies, and allow for educational tactics to prepare an understanding of alternative and renewable energies.

4) Michigan Renewables Energy Program. Created by Michigan state legislature, the Michigan Renewables Energy Program was implemented by the Public Service Commission of Michigan for the further promotion of renewable energy. Currently, this program oversees five different technology committees to increase the usage of renewable energies – biomass, wind, solar, geothermal, and hydroelectric.

5) Overseas Collaboration. Michigan has been working along China to boost the creation of clean technologies. Numerous delegations travel between these two locations to explore options including investment opportunities, technology transfers, and manufacturing opportunities. Michigan believes that through Chinese investment and manufacturing, Michigan can place itself at the center of the United States cleantech revolution. It is a two way street because China sees the opportunity for entrepreneurship and business development in Michigan. Between the two locations, partnerships through clean energy technologies research and development are formed.

Here I think we should include the University of Michigan’s U.S.-China Clean Energy Research Center (CERC), which will advance technologies for clean energy vehicles. Valued at $25 M. (with a $12 M grant from the Department of Energy), the University of Michigan will lead that consortium that includes Ohio State University, Massachusetts Institute of Technology, Sandia National Laboratories, Joint BioEnergy Institute, Oak Ridge National Laboratories, General Motors, Ford, Toyota, Chrysler, Cummins, Fraunhofer, MAGNET, A123, American Electric Power, First Energy and the Transportation Research Center.

6) Energy Works Michigan. The future is very important when it comes to cleantech, and Energy Works Michigan works to educate individuals and businesses on how to create equitable, sustainable, and prosperous energy. Energy Works Michigan Energy Efficiency Program, for example, works with public and private K-12 schools to provide them with an energy assessment that is detailed and how to improve savings in the future. The Renewable Energy Program assists with schools looking to implement educational solar as well as wind systems.

7) Businesses Begin to Go Green. Because of the increase in clean technologies and the need to save money due to the current recession, many businesses are looking into energy efficient, renewable energy sources. No better example can be thought of other than Ford. In 2009, Ford made an announcement to invest more than $500 million in converting a plant into a factory that specializes in fuel-efficient cars and would also create the first electric vehicle – the Ford Focus Electric Car and Plug-in Hybrid. Ford is one of the first companies to offer individuals a selection of vehicles with fuel efficient drive systems. Not only is it affordable to maintain, but it will also lower the overall CO2 levels. By capitalizing on the impact of cleantech, Ford is beginning to turn its company green.

8 ) Tapping into Unused Energy Sources and creating more Jobs. Michigan has a wide number of sources it can use for renewable energy. Michigan is currently trying to lose the title of the twelfth largest global warming polluter in the United States. By increasing renewable energy sources, not only will inexpensive, reliable, and clean energy be provided, but it will also create a number of new jobs. For example, by 2030, just the wind industry alone would create more than 30,000 new jobs. Whereas Michigan is utilizing wind energy and plans to increase its use by expanding existing wind energy facilities, there are a number of untapped renewable energy sources. Waste is one untapped form of renewable energy. It has been advised that biomass power plants be erected by farms and disposal sites. Per megawatt of biomass energy, 10.5 jobs would be created. Diving into solar power, which is largely untapped, will create 500 more jobs if one plant goes from 180 to 300 megawatts.

9) Renewable Energy Legislations. Numerous bills have been passed through Michigan legislation to promote energy conservation and renewable energy. The “Clean, Renewable, and Efficiency Energy Act,” created an Integrated Renewable Portfolio Standard (PRS) of ten percent by the year 2015. These standards must be adhered to by energy providers via renewable energy generation, energy optimization schemes, and renewable energy credits. Potential areas of renewable energy, including solar, geothermal, wind, hydroelectric, and biomass are recognized. The Energy Efficiency Resource Standard demands energy savings for electricity providers.

10) Reaching Energy Goals. In early 2011, the Michigan Public Service Commission states that through its cleantech initiatives, Michigan is close to reaching its portfolio standard of 10 percent by the year 2015. This means that close to ten percent of all generated electricity is coming from renewable sources. The chairman, Orjiakor Isiogu stated, “The state’s utilities are taking steps to build wind farms, promote solar energy and net metering, and purchase renewable energy credits.”

Article by Shawn Lesser, president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies and M&A. He is also a co- founder of the GCCA Global Cleantech Cluster Association, and can be reached at shawn.lesser@sworldcap.com

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A new report by the United Nations Environment Program says that moving towards a green economy is the most effective way to reduce worldwide poverty

The United Nations Environment Program (UNEP) released a report last week arguing the risks we face today are much different from what they were 50 years ago. The report, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, concludes that a shift to a green economy “has the potential to achieve sustainable development and poverty eradication on a scale and at a speed not seen before.”

Greener Economy Focus Means Job-Creation and Economic Growth

Public and private investments aimed at increasing and enhancing natural capital (i.e forests, water, soil and fish stocks) creates new economic sectors and new technologies. Investing in clean energy, energy efficiency, recycling, sustainable agriculture, and waste management technologies and infrastructure, as well as human capital related to these, will create jobs, income, and economic growth. By both traditional measures of economic growth and vitality as well as more holistic measures that take the value of natural capital into account more, the report finds that by 2020, taking a green economy route rather than a business-as-usual route will result in better economic results.

In agriculture, buildings, forestry and transportation, a green economy approach would create jobs in the short-term, the medium-term, and the long-term. In other sectors, a green approach is needed for medium- and/or long-term economic sustainability.

Public Sector Needed to Jump-Start Shift to a Green Economy

The private sector, of course, needs to invest in a greener economy in order for the world to achieve these benefits, but the public sector has a clear role to play as well.

It must help “in overcoming distortions introduced by perverse subsidies and externalized costs,” the report remarks. “And public investment will be required to jump-start an effective transition to a green economy.”

To read more about how, exactly, a green economy approach is better for the economy, or the governmental policies needed to lead us into this economy, read the full report.

Article by Zachary Shahan, appearing courtesy ecopolitology.

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To attract or to grow? That may not have been Hamlet’s question, but it is the question of the dozens of states trying to build clean tech clusters across America today. As Governor’s offices, Mayors, Chambers of Commerce, and other economic development organizations try to turn their regions into the economic engines of the green economy, they must figure out the right mix of programs and policies to grow, attract, and retain clean tech companies.

While tax credits and other financial incentives to lure green tech company headquarters and manufacturing facilities have been successful in some states, they may not be enough. As demonstrated by the story of Evergreen Solar, who decided to move its operations to China despite $58 million in tax credits and direct grants from the Massachusetts government, incentives can’t be a state’s whole game plan for economic development.

Given that roughly 95 percent of annual job gains in an average state come from the expansion of existing businesses or the birth of new establishments (Brookings), one would think that state economic development practitioners’ focus would be on clean tech entrepreneurship development, technology transfer and commercialization, providing forums for networking and best-practice sharing, and technical assistance to the companies already creating green jobs. But while these types of activities have all shown promise in increasing the growth of existing businesses and the start of new ones, they are often left to other underfunded agencies of state government or independent and siloed efforts by research universities, incubators, community non-profits, or public-private partnerships at the regional level.

The traditional approach: tax credits for business recruitment

The way many states are pursuing clean tech industry growth mirrors the traditional approach toward economic development: a primary focus on tax incentives and marketing for clean tech business recruitment. In fact, 21 states offer corporate tax credits for renewables, with more than a handful including credits for renewable energy equipment manufacturing in addition to project development and generation. Further, several states offer specific tax credits for new companies creating green jobs, such as Virginia’s Green Jobs Tax Credit, where a company can earn $500 per year (up to five years) for every green job created that pays an annual salary above $50,000.

These more traditional policies have accomplished a lot. Oregon’s 50% Business Energy Tax Credit (BETC) for renewables is largely to thank for the state’s attraction of several solar equipment manufacturing facilities and the U.S. headquarters for wind energy giants Vestas and Iberdrola.  Further, an Oregon Department of Energy study showed that BETC (along with its residential component, RETC) generated a statewide economic impact of $576 million, created 1,700 jobs worth $42 million in wages, and delivered $22 million in new state and local tax revenues. All that for a cost to the state of only $244 million during 2007 and the first 10 months of 2008.

In Tennessee, the Department of Economic and Community Development is sure their Green Energy Tax Credit and incentives for clean energy technology contributed to the state’s ability to land three new solar manufacturing facilities (Confluence Solar, Hemlock Semiconductor and Wacker Chemie, AG) during the Bredesen administration.  The former Governor acknowledged the impact on the state’s economy: “Two years ago, we set upon a strategy to make Tennessee a significant player in the solar industry. Since then, we’ve seen more than two billion dollars in capital investment, more than a thousand jobs created, and the development of the [West Tennessee] Solar Farm.”

And in Arizona, the Chinese company Suntech Power Holding Co. was not alone in selecting Arizona for its new facility due to the state’s renewable energy manufacturing tax credits for job creation. Other companies, including Tower Automotive and Gestamp Solar Steel USA have been lured by AZ state tax incentives geared towards renewable energy manufacturing.  First Solar Inc., the world’s second-largest manufacturer of solar panels, is also considering building a factory in Mesa, which would bring about 600 new jobs to the Phoenix area.

Moving towards comprehensive industry growth

While tax breaks and credits have a role to play in business attraction, they will only go so far as U.S. states find themselves unable to compete with the massive subsidies, low-interest loans, and heavily subsidized land provided by the Chinese government.  Further, as Republican governors take office and state legislatures scramble to balance their budgets, we should expect continued cuts to state-led economic development. As these agencies find themselves with limited funds for wooing clean energy companies, it will become more important that they try innovative approaches to economic development, centered around identifying the region’s unique competitive advantages and leveraging existing assets and resources (known in the field as “cluster development”).

During a U.S. Economic Development Administration-sponsored webinar on “Exploring New Ideas for Rural Wealth Creation Strategies,” the RUPRI Center for Rural Entrepreneurship’s Deb Markley explained how this cluster approach could work for rural Arkansas:

“When Cotton Plant, AR began thinking about new ways to create wealth, they identified two assets the Arkansas Delta had in abundance: sunlight and land.  This led to a natural interest in fleshing out the solar value chain and exploring the opportunity to use local political leadership, existing solar installers, technical expertise at the State Energy Office, and the transmission systems of the Arkansas Rural Electric Cooperatives to make solar projects a driver of the regional economy.”

While the project is still just a proposal, Markley believes that this kind of long-term, multi-stakeholder approach to economic development will be best suited to helping low-income regions create sustainable, values-driven pathways out of poverty and economic decline.

Meanwhile, the Oakland Partnership, a public-private partnership of former Oakland Mayor Ron Dellums and the Oakland Chamber to build “a thriving, innovative, equitable, globally competitive regional economy that creates 10,000 new jobs in the next five years” also used a “cluster approach” to growing the East Bay green economy. While the City of Oakland couldn’t outcompete on tax incentives or corporate grants, by leveraging the resources of local green tech entrepreneurs, marketing experts, policymakers, training centers, non-profits, and universities, they did come up with a robust strategy for growing the region’s “Green Industry Cluster.”  Today, the university-city-industry collaboration continues through the East Bay Green Corridor Partnership.

And in Ohio, the state’s effort to build a clean energy manufacturing cluster based on its existing base of industrial suppliers, central location and transportation infrastructure, and academic institutions with world-class capabilities in polymers, nanotechnology and engineering has created 9000 jobs in the wind and solar energy manufacturing industries. The combination of Ohio’s internationally known manufacturers, state green collar education and training programs, university collaboration through the University Clean Energy Alliance of Ohio (UCEAO), and the Ohio Third Frontier state initiative to support applied research and commercialization, entrepreneurial assistance, and early-stage capital formation, have led renewable energy manufacturing to be one of the “fastest-growing business sectors for job creation in the state.” (Environmental Law and Policy Center)

Further, in a recent analysis plotting the Global Cleantech 100 list of most-promising clean tech start-ups with top-ranked doctoral programs in energy and environmental research, Brookings Institution researchers found that there was a strong correlation between the two.  Thus, there is some legitimate evidence to believe that universities, not just government economic development agencies, have a key role to play in clean tech economic development.

A new way forward

Granted, not every region has an abundance of sunlight for solar energy or a top-tier university to spin off clean tech companies.  But with more emphasis on mapping and leveraging their existing regional assets and tapping the brainpower of local green tech entrepreneurs and clean energy researchers, states have a better chance of building lasting clean tech clusters. Trying to compete with each other, and moreover our competitors to the East, on tax incentives and business costs alone, may not be enough to win the prize of clean tech jobs.

Elizabeth Redman is the Founder of Cross Sector Strategies, a consulting firm that specializes in collaborative economic development strategies and policies to promote sustainable business growth.

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(Reuters) – Channeling 2 percent, or $1.3 trillion, of global gross domestic product into greening sectors such as construction, energy and fishing could start a move toward a low-carbon world, a report launched on Monday said.

The investment would expand the global economy at the same rate, if not higher, as under present economic policies, said the report by the U.N. Environment Program (UNEP).

“Investing 2 per cent of global GDP into 10 key sectors can kick-start a transition toward a low-carbon world,” the Nairobi-based agency said in a statement.

“The sum, currently amounting to an average of around $1.3 trillion a year and backed by forward-looking national and international policies, would grow the global economy at around the same rate if not higher than those forecast, under current economic models.”

UNEP’s Executive Director Achim Steiner said in the statement: “With 2.5 billion people living on less than two dollars a day and with more than two billion people being added to the global population by 2050, it is clear that we must continue to develop and grow our economies.

“But this development cannot come at the expense of the very life support systems on land, in the oceans or in our atmosphere.”

Agriculture, buildings, energy supply, fisheries, forestry, industry, tourism, transport, waste management and water are sectors that could do with more greening, the report said.

Buildings are the single largest emitter of greenhouse gases because of inefficient heating in offices and homes, according to the study entitled “Toward a Green Economy.”

Threefold Increase In Recycling
The sector’s footprint could nearly double by 2030, or 30 percent of total energy-related carbon dioxide.

The report suggests investing $108 million in the waste sector annually could increase recycling threefold by 2050 and reduce landfill contents by more than 85 percent.

In Brazil, recycling already makes $2 billion a year while avoiding 10 million tonnes of greenhouse gas emissions, UNEP said.

Greener policies would still grow economies while reducing the ecological footprint by nearly 50 percent in the next 40 years, but some jobs would be lost as a result in sectors such as fisheries, the report said.

Investment in more sustainable productive activities would, however, offsets those job losses by developing sectors such as renewable energy.

Government subsidies in the fishing industry amount to about $27 billion a year and have created excess capacity and depleted fish stocks globally.

Greening agricultural with practices such as efficient use of water or organic nutrients would offer a means of feeding a global population of about 9 billion by 2050 without damaging nature.

Farming practices currently use more than 70 percent of freshwater resources and contribute more than 13 percent of greenhouse gases.

“Governments have a central role in changing laws and policies, and in investing public money in public wealth to make the transition possible. By doing so, they can also unleash the trillions of dollars of private capital in favor of a green economy,” said Pavan Sukhdev, head of UNEP’s Green Economy Initiative.

Article by Helen Nyambura-Mwaura, appearing courtesy Reuters.

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