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Is the U.S. consumption binge over? NYT reports “Sales of vegetable plants swelled fivefold in March over past years.”

Joe Romm — Thu, 03 Sep 2009 00:41:27 +0000

I noted a while back that the U.S. savings rate was on the rise, that it looks like U.S. carbon dioxide emissions peaked in 2007, that President Obama was making a big push toward making America a nation of creators as opposed to consumers, and asked in May, “Is the U.S. consumption binge over?” Well, I’m asking again:

Have you personally seen evidence of permanent behavior shifts or is this is just a small speed bump on the Autobahn to oblivion.

On Friday, a NYT piece, “Reluctance to Spend May Be Legacy of Recession,” made some similar points:

The Great Depression imbued American life with an enduring spirit of thrift. The current recession has perhaps proven wrenching enough to alter consumer tastes, putting value in vogue.

“It’s simply less fun pulling up to the stoplight in a Hummer than it used to be,” said Robert Barbera, chief economist at the research and trading firm ITG. “It’s a change in norms.”

Of course, it’s a long way from Hummers to John Stuart Mill’s “Stationary State.” Also, the “the savings rate dipped to 4.2% from 4.5% in June and from 6.0% in May,” and even the 6.0% was only a blip to the 50-year average (the figure below is the 3-month centered average of the personal savings rate).

Still, the NYT notes:

On Friday, the Commerce Department said spending rose 0.2 percent in July from the previous month. But most economists see this activity as short-lived, pointing out that incomes did not rise. Some suggest the recession has endured so long and spread pain so broadly that it has seeped into the culture, downgrading expectations, clouding assumptions about the future and eroding the impulse to buy.

And the piece offers this interesting factoid about gardening:

At a mall devoted to home furnishings, many storefronts were vacant, and survivors were draped in the banners of desperation: “Inventory Clearance,” “50% Off,” “It’s All On Sale.”

But at the Natural Gardener — a lush assemblage of demonstration plots that sells seeds, plants and tools for organic gardening — business has never been better.

Sales of vegetable plants swelled fivefold in March over past years. The company added a public address system and bleachers to accommodate hordes showing up for vegetable-growing classes.

Part of the embrace of gardening stems from concerns about the environment and food safety, says the company’s president, John Dromgoole. Momentum also reflects desire to save on food costs.

“People are very interested in shoring up against losing their jobs,” he said.

You tell me where we are on the binge-purge scale of 1 to 100, with the 100 (binge) being a Hummer in the garage of every 5,000-square-foot home and 1 (purge) being total collapse of the global Ponzi scheme and embrace of The Transition Handbook.

Andy Revkin at DotEarth has the comments of some economists at two posts, “An Upside to the Consumption Chill?” and “Are You On a ‘Hedonic Treadmill’?” Let me end with an excerpt (via Revkin) of one of my favorite thinkers, John Sterman, Director, MIT System Dynamics Group, Sloan School of Management, who lays out his own version of the global Ponzi scheme:

We have been consuming natural capital far faster than it regenerates, whether it’s fossil fuels, fish, forests, wetlands, or the capacity of the oceans and other sinks to take up greenhouse gases. Wackernagel et al. (originally in PNAS; see updates at footprintnetwork.org) document these dynamics, arguing that we have already overshot the global carrying capacity. Of course, carrying capacity is dynamic, partly endogenous, affected by technology as well as consumption, and a notoriously slippery notion to nail down. Nevertheless, a number of new studies are consistent with these results. In particular, the new “Planetary Boundaries” paper, forthcoming in Nature, makes the case that humanity has overshot the global carrying capacity in a variety of key areas, including GHGs [greenhouse gases], nitrogen, phosphorus, fresh water, land use, and biodiversity.Material consumption is critical to easing down below these limits and building a more sustainable society. And there’s tremendous scope for greater efficiency and de-materialization in our consumption. Through technological and organizational change, supported by proper pricing (internalizing the currently externalized costs and environmental risks of material consumption and waste production), we can almost certainly provide for the needs of the projected population, at a good standard of living. But of course that’s not enough. As long as the dominant ethos is the drive for more consumption per capita — ever greater accumulation and consumption of material goods, energy, etc., then no amount of efficiency will suffice. For example, improvements in the efficiency of water or energy use just let water- and energy-constrained regions grow further until some other limit is reached, or water and energy once again becomes the constraint. And so on. As long as everyone wants more — a bigger home, a bigger TV, a fancier vacation, more stuff, more consumption, more than they consumed last year, more than their neighbors — there can be no technological solution to the problem. As Herman [Daly] has long pointed out, there is an essential moral character to the dilemma in which we find ourselves.
The ironic thing is that the pursuit of more, so stunningly successful so far, has not increased our happiness. Again, this is a contentious arena, and the science of subjective well-being is still emerging. But many studies, including the great work Danny Kahneman and colleagues have done, show that, for the developed economies at least, greater consumption per capita is only weakly associated with greater well-being (happiness, utility, life satisfaction). Consumption per capita in the developed economies has increased dramatically over the past half century, yet reported life-satisfaction is no higher. People tend to base their “needs” on habitual consumption, and on the consumption of those they observe around them through their social networks, in their neighborhoods, and in the media, feeling greater satisfaction when they have bigger houses and more expensive cars than those around them, and feeling deprived when they have relatively less. Economic theory used to suggest that as people got richer, the marginal utility of income would fall, so people would naturally shift their energies away from material consumption and towards higher pursuits. This doesn’t seem to be happening, as Keynes long ago feared. Instead, through habituation and social comparison, we find ourselves in a no-win situation in which no level of income or consumption remains satisfying for long — the hedonic treadmill. The more people seek to boost consumption, the more income they require and the harder and longer they must work, undermining those activities that are actually fulfilling and satisfying: for example, Juliet’s work, and that of Kahneman, Krueger and Schkade (I hope I’m not overinterpreting) shows people spend far more time working, commuting, and doing other aversive, unpleasant tasks, while the time spent in satisfying activities such as building friendships and intimate relationships, athletics, spirituality, self-improvement, etc. is small. People move to distant suburbs far from their jobs so they can afford a larger house, thinking this will make them happier, but don’t adequately account for extra hours they must work to pay off the mortgage and the way their long commute erodes their happiness by stealing time they could be spending with their spouse and children, friends and community. Thus even if there were no environmental constraints to endless growth, even if the capacity of the planet to support material consumption where infinite, growth in material consumption, the never-ending quest for more stuff, is not taking us where we want to go.

During this economic crisis we have heard a lot about people getting back to basics. From gardening, to carpooling and bicycling, to swap meets and barter, to mending clothes and appliances instead of throwing them out and buying new, people are rediscovering traditional values of frugality and community. The unanswered question is how much of this will stick once the economy recovers and people find themselves feeling a bit flush. Will people keep riding the bus once they can afford gas again? Will they trade that Ford Focus they bought under Cash for Clunkers for a big new SUV? A cynical view suggests that all the talk about the recession fostering frugality, living within one’s means, and the virtues of helping and being helped by one’s community is just talk, and that what’s actually happening is that people are building up a deep well of perceived deprivation, a backlog of buying, such that when the economy recovers we’ll see another binge of overconsumption, carrying us farther still from a satisfying life and speeding the collapse of planetary life support systems. I don’t believe this is inevitable, but it will take a lot of work to shift our lives from the self-defeating path we are on to a more satisfying, sustainable path.

This piece originally appeared on climateprogress.org

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(Posted by Joe Romm in Bright Green Economy at 4:41 PM)

Money (And Jobs) On The Table

WorldChanging Team — Thu, 27 Aug 2009 23:10:34 +0000

by Roger Valdez

Millions for energy efficiencies available for Northwest states and local governments.

When the American Recovery and Reinvestment Act (the stimulus bill) passed in April it included $3.2 billion in bonding authority for states in Qualified Energy Efficiency Bonds (QECBs).

The QECB program was actually increased from the $800 million that was passed in October of last year. Most states and local governments in the Northwest haven’t yet figured out exactly how they are going to use this new capacity to borrow money for clean energy projects. But they know it’s a bandwagon to jump on for cost savings, energy savings, and job creation.

Here’s a quick review of how bonds work. Bonds are issued by government or a private entity and they are essentially financial instruments or loans of money based on conditions set by federal or local government. In the simplest terms they are debt, sort of like the debt you might take on with a home equity loan or a credit card. Like a home equity loan governments and businesses often issue bonds for improvements they can’t afford now but think will add benefit in the form of equity or increased ability to generate revenue. For governments there are specific requirements and stipulations about how much they can borrow using bonds and how they spend the money once they borrow it. Some bonds are issued with very low interest rates but they are also very low risk. Or the buyer (the party loaning the money) might get their return from their loan in the form of tax credits instead.

The QECB program allows state, local, and tribal governments to borrow money for energy efficiencies and renewable energy projects. But the legislation actually stipulates a lot of possible uses for the bonds. Section 54(D) is the sweet spot. QECBs can be used to pay for:

capital expenditures incurred for purposes of reducing energy
consumption in publicly-owned buildings by at least 20 percent;
implementing green community programs (including the use of loans,
grants, or other repayment mechanisms to implement such programs);
rural development involving the production of electricity from
renewable energy resources from any qualified facility including wind,
biomass, hydro, solid waste to electricity (excluding coal) and regardless
of when the project came on line;
research facilities and research grants to support research in
cellulosic ethanol or other non-fossil fuels, technologies for the capture
and sequestration of carbon dioxide produced through the use of fossil
fuels, increasing the efficiency of existing technologies for producing
non-fossil fuels, automobile battery technologies and other technologies
to reduce fossil fuel consumption in transportation or technologies to
reduce energy use in buildings;
mass commuting facilities and related facilities that reduce
consumption of energy, including expenditures to reduce pollution from
vehicles used for mass commuting;
demonstration projects designed to promote the commercialization
of green building technology, conversion of agricultural waste for use in
the production of fuel or otherwise, advanced battery manufacturing
technologies, technologies to reduce peak use of electricity, or
technologies for the capture and sequestration of carbon dioxide emitted
from combusting fossil fuels in order to produce electricity; and
public education campaigns to promote energy efficiency.

Now why would I take up so much space laying out all the possibilities? Because it is a pretty comprehensive list (the only thing off the list is coal) and the Northwest states together have been allocated (based on population) more than $132 million in bonding capacity for clean energy projects. That’s $15.8 million for Idaho, $67.9 million for Washington, and $39.3 million for Oregon. That is a lot of potential savings, clean energy and possibly a lot of green-collar jobs.

The great thing about QECBs is that they allow the funding of all sorts of programs as well as capital improvements. And the QECBs come with no interest charge to the borrower because the benefit to the lender is in the form of federal tax credits. So a city, for example, pays no interest but the buyer benefits from tax credits. That means less cost for the city and more profit for shareholders. All this makes this bonding tool incredibly versatile.

One clever way to engineer this kind of loan is to set it up so the energy savings created by the project is used to pay back the debt. For example, Representative Hans Dunshee introduced legislation last session in Washington State to retrofit schools and pay down the debt with cost savings. The legislation failed, but this idea–called Green Increment Financing-- has been embraced in other places like Wisconsin for retrofitting an entire city (Wisconsin’s senator Russ Feingold sponsored the QECB legislation).

So far Washington seems to have done the most to access these dollars with its Department of Commerce taking the lead. A conference was held in Bellevue at the end of last month to sort out which local governments and agencies might use these bonds. Washington's Department of Commerce has already determined local allocations based on the federal guidelines and have started the process of considering project proposals. Most of this money has to be tapped into by end of next year.

In a quick survey of Idaho and Oregon’s Commerce and Energy Department websites, I didn’t find much about QECBs. In fact, the only reference I have found to these bonds was in meeting minutes from the Oregon Facilities Authority. During the meeting it was mentioned that a trucking company wanted help making its fleet more efficient, just the kind of project envisioned by the QECB legislation. But a member of the committee pointed out the Authority’s legislative mandate wouldn’t allow them to participate in the program. This is evidence that, like in other programs, sometimes additional money and capacity call for more planning and innovation from states and local government.

Oregon has, however, made good use of the Clean Renewable Energy Bonds or CREBs. This program, though, has a much more limited volume allocated by Congress, and participants must first apply to the Internal Revenue Service for an allocation of authority to issue the bonds for use within a limited window of time. The CREBs program doesn’t include efficiencies in buildings, only renewable energy.

And often local governments worry about the obligation of too much debt or they struggle to find the right projects to fit a particular bond vehicle. Most communities in the region should jump at a chance to create local jobs, retrofit buildings for better energy efficiency, and stimulate local economies in the bargain. Washington State’s example of how to take advantage of this resource will be an important one for other states in the months ahead.

This article originally appeared on Sightline Daily

Related posts:
The Next 100 Days: Bring on the Sizzle
Obama Embraces Green-Collar Stimulus
A Low-Carbon Stimulus and Recovery Plan

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(Posted by WorldChanging Team in Bright Green Economy at 3:10 PM)

The GSBI Video Blog, Part 3: Yugandhar Mandavkar from the State of Gujarat, India

WorldChanging Team — Tue, 25 Aug 2009 21:06:07 +0000

by Francisco Noguera

Through his organization, GRASP, Yugandhar Mandavkar is providing an alternative and sustainable solution for environmentally degraded areas where wood logs are the main fuel used for cooking purposes.
Learn more about his model in this third installment of The GSBI Video Blog.

This piece originally appeared on nextbillion.net

Related posts:
KickStart: Solving Poverty with Business Opportunity
Ending Poverty
Conservation Agriculture and Global Warming in Africa

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(Posted by WorldChanging Team in Bright Green Economy at 1:06 PM)

Even With Economic Headwind, U.S. Still Adds 4,000 MW Of New Wind & And A Dozen New Factories

Joe Romm — Wed, 29 Jul 2009 20:13:27 +0000

The U.S. wind energy industry installed 1,210 megawatts (MW) of new power generating capacity in the second quarter, bringing the total added this year to just over 4,000 MW – an amount larger than the 2,900 MW added in the first six months of 2008, the American Wind Energy Association (AWEA) said today in its second quarter (Q2) market report [click here].

And this is after a record 2008 (see “U.S. wind energy grows by record 8,300 MW“), which in turn made this country the global wind leader. AWEA’s press release notes:

The state posting the fastest growth in the 2nd quarter was Missouri, where wind power installations expanded by 90%.
“Missourians know that in order for us to grow our state’s economy and create the jobs of the twenty-first century, we must embrace new technology and advances like the ones presented to us through renewable wind energy,” said Missouri Governor Jay Nixon. “So I’m proud that the American Wind Energy Association’s quarterly report shows no state has capitalized on these growth opportunities more aggressively over the last three months than Missouri has. But that isn’t enough. Missouri will continue to look for ways to enhance our energy supply and independence by using common-sense and cost effective expansions of clean, renewable wind power.”

Paging Sen. Claire McCaskill (D-MO) — your vote is needed on a climate and clean energy bill. As is the vote of members from other fast growing wind states:

Pennsylvania and South Dakota ranked second and third in terms of growth rate in the second quarter, expanding by 28% and 21% respectively.

With growth like this comes more than a dozen new and expanding factories around the country — and the jobs they bring:

AWEA explains what this means for clean energy jobs:

New installations will generate approximately 1,000 construction jobs in Q2 and a projected 4,500 construction jobs for 2009 in its entirety. The wind industry in the U.S. currently employs 85,000 people but could be cut by half without a strong RES in place, meaning a loss of more than 40,000 jobs in an already depressed economy.

And while EIA projects wind at 5% of U.S. electricity in 2012, all renewables at 14%, thanks to Obama stimulus, even that is not a sure thing in this economic and financial meltdown.

While the pace of new wind farm installations and manufacturing announcements is substantial, AWEA said it is seeing a reduced level of activity in manufacturing of wind turbines and their components, a development it termed troubling in view of the fact that the U.S. industry was previously on track for much larger growth and the global wind power industry is continuing to expand.

We need a stronger renewable electricity standard to remain competitive with China which has tripled its wind goal to 100,000 MW by 2020.

The U.S. is the only developed country without an RES in place. And if the RES as it stands in the House climate bill is not strengthened, the U.S. risks losing 75% of the global wind jobs overseas.

For now, though, let’s celebrate an industry that is adding jobs in these troubled times: It’s STILL braggin’ time for wind!
This piece originally appeared in Climate Progress.

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(Posted by Joe Romm in Bright Green Economy at 12:13 PM)

IPCC Chief: Benefits of Tackling Climate Change Will Balance Cost of Action

WorldChanging Team — Tue, 21 Jul 2009 22:54:42 +0000

by Damian Carrington

The cost of tackling climate change will be paid for by benefits that would come from better energy security, employment and health, Rajendra Pachauri says ahead of major announcement on 2013 reports.
Measures needed to tackle global warming could save economies more money than they cost, the world's top climate change expert said today.
Rajendra Pachauri, the head of the Intergovernmental Panel on Climate Change (IPCC), told the Guardian: "The cost could undoubtedly be negative overall." This is because of the additional benefits that reducing greenhouse gas emissions could bring, beyond limiting temperature rises.
Until now, estimates of the price of preventing dangerous climate change have all indicated significant costs. The most authoritative study, the 2006 Stern report, concluded that 1% of global GDP would be required, and he has since said 2% is now more likely.
Pachauri's comments came ahead of a press announcement in New York today about the IPCC's plans for its next series of reports in 2013. He said these would include a greater emphasis on the economics, as well as ethical and humanitarian concerns.
Funding for reducing and adapting to climate change in one of the most difficult issues in the negotiations towards a global deal at a UN summit in December in Copenhagen. But Pachauri argues that if the costs are negative, then "inertia and vested interests would be washed away. As the Americans say, it would be like dollar bills lying on the sidewalk."
Alex Bowen, one of the Stern report authors, said: "[Pachauri's] is a defensible position, not delusional. But I am more of a skeptic."
"My hunch overall is that it will be a little more costly than we estimated in 2006. But if well designed policies are put in place, we can still do it remarkably cheaply. And there is still no doubt that strong action now is much cheaper than no action," added Bowen, an economist at the Grantham Research Institute On Climate Change at the London School of Economics.
The associated benefits Pachauri pointed to include better energy security, protecting consumers from oil price spikes, new employment in green industries, more productive agriculture and lower air pollution, cutting health costs. He said one good example was insulating drafty homes and installing better energy control systems. "This can yield very high rates of returns, with pay back in one year."
The idea of co-benefits is also central to the "green new deals" promoted by the UN Environment programme, Lord Stern's group and others.
Bowen said: "Negative costs depends on assumption that policy design and implementation is sensible and very consistent across countries all over the world. But we have gone three years [since the Stern report] without global policies. Emissions have grown rapidly and a lot of people now think economic growth will be much higher later in the century." The faster you have to reduce emissions, he said, the more expensive it is likely to be.
Pachauri's comments came as he led discussions what the next set of reports from the IPCC should cover. Its last report in 2007 is acknowledged to have settled the argument over whether emissions from human activities were causing climate change.
In the next series, due in 2013, Pachauri said the focus would change. "The IPCC cannot address the issue in purely scientific terms. For adaptation and mitigation, we need to put euro or dollar values on those. But there are also some costs you can't quantify. For example, take Hurricane Katrina. You can put a value on property losses, what about psychological, sociological, and institutional costs. I would not like to try to quantify those."
The IPCC meeting raised a range of further issues that it believes need more attention, including extreme weather events, new greenhouse gases, the full impacts of aviation and global scale geo-engineering.
The reports take between five and seven years to complete, but Pachauri argued that this is their strength: "The IPCC process of regular peer review means the reports are far more defensible than anything else. Comments received are posted on our website as are actions."

This article originally appeared on www.guardian.co.uk.

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(Posted by WorldChanging Team in Bright Green Economy at 2:54 PM)

IPCC Chief: Benefits of Tackling Climate Change Will Balance Cost of Action

WorldChanging Team — Tue, 21 Jul 2009 22:54:42 +0000

by Damian Carrington

The cost of tackling climate change will be paid for by benefits that would come from better energy security, employment and health, Rajendra Pachauri says ahead of major announcement on 2013 reports.
Measures needed to tackle global warming could save economies more money than they cost, the world's top climate change expert said today.
Rajendra Pachauri, the head of the Intergovernmental Panel on Climate Change (IPCC), told the Guardian: "The cost could undoubtedly be negative overall." This is because of the additional benefits that reducing greenhouse gas emissions could bring, beyond limiting temperature rises.
Until now, estimates of the price of preventing dangerous climate change have all indicated significant costs. The most authoritative study, the 2006 Stern report, concluded that 1% of global GDP would be required, and he has since said 2% is now more likely.
Pachauri's comments came ahead of a press announcement in New York today about the IPCC's plans for its next series of reports in 2013. He said these would include a greater emphasis on the economics, as well as ethical and humanitarian concerns.
Funding for reducing and adapting to climate change in one of the most difficult issues in the negotiations towards a global deal at a UN summit in December in Copenhagen. But Pachauri argues that if the costs are negative, then "inertia and vested interests would be washed away. As the Americans say, it would be like dollar bills lying on the sidewalk."
Alex Bowen, one of the Stern report authors, said: "[Pachauri's] is a defensible position, not delusional. But I am more of a skeptic."
"My hunch overall is that it will be a little more costly than we estimated in 2006. But if well designed policies are put in place, we can still do it remarkably cheaply. And there is still no doubt that strong action now is much cheaper than no action," added Bowen, an economist at the Grantham Research Institute On Climate Change at the London School of Economics.
The associated benefits Pachauri pointed to include better energy security, protecting consumers from oil price spikes, new employment in green industries, more productive agriculture and lower air pollution, cutting health costs. He said one good example was insulating drafty homes and installing better energy control systems. "This can yield very high rates of returns, with pay back in one year."
The idea of co-benefits is also central to the "green new deals" promoted by the UN Environment programme, Lord Stern's group and others.
Bowen said: "Negative costs depends on assumption that policy design and implementation is sensible and very consistent across countries all over the world. But we have gone three years [since the Stern report] without global policies. Emissions have grown rapidly and a lot of people now think economic growth will be much higher later in the century." The faster you have to reduce emissions, he said, the more expensive it is likely to be.
Pachauri's comments came as he led discussions what the next set of reports from the IPCC should cover. Its last report in 2007 is acknowledged to have settled the argument over whether emissions from human activities were causing climate change.
In the next series, due in 2013, Pachauri said the focus would change. "The IPCC cannot address the issue in purely scientific terms. For adaptation and mitigation, we need to put euro or dollar values on those. But there are also some costs you can't quantify. For example, take Hurricane Katrina. You can put a value on property losses, what about psychological, sociological, and institutional costs. I would not like to try to quantify those."
The IPCC meeting raised a range of further issues that it believes need more attention, including extreme weather events, new greenhouse gases, the full impacts of aviation and global scale geo-engineering.
The reports take between five and seven years to complete, but Pachauri argued that this is their strength: "The IPCC process of regular peer review means the reports are far more defensible than anything else. Comments received are posted on our website as are actions."

This article originally appeared on www.guardian.co.uk.

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(Posted by WorldChanging Team in Bright Green Economy at 2:54 PM)

Community Post Stations, Robot Sailboats, and the Future of Product Delivery

Sarah Kuck — Tue, 21 Jul 2009 19:30:00 +0000

Today's delivery system is sub par, at best. Each link in the system uses more energy and resources than it should and results in a oversupply of cheap goods that, in the end, only benefits a few. Products are shipped, flown, trucked, picked up and driven home, requiring seemingly endless amounts of fossil fuel. But innovators everywhere are working to create a more efficient and effective delivery model, and are succeeding in changing the system at lots of points along the supply chain.

Some of the biggest inefficiencies come from transporting goods long distances. Studies show that carbon dioxide emissions from shipping are double those of aviation. New innovations are popping up to combat this and to make long-distance freight delivery carbon neutral. Sail-powered shipping, for example, could dramatically change an industry that relies on huge amounts of diesel fuel. Another idea that inventors are tinkering with is the robotic sailing vessel. One day, Ships like the Roboat could replace the place of diesel-run ships, reducing air and water pollution (If you are in or near Portugal, you can check out the Roboat at the World Robotic Sailing Championship later this month).

For ground shipping, a delivery method showing lots of potential is renewable energy powered light rail. Using light rail trains to deliver goods could dramatically change our transportation system for products and people. One promising, but defunct concept for inner city delivery was Amsterdam's CityCargo. The company planned to use existing rail systems (when not full of people) to carry cargo from distribution centers on the city fringe to urban hubs, where their fleet of electric vehicles would transport cargo a short distance to its final destination. The company estimated that this system would have cut the number of freight trucks in the city by half, reducing pollution and congestion and making the streets safer.

Some innovations for shipping products from maker to retailer, retailer to buyer, have become increasingly popular in the last few years. Take video rental company Netflix, for a familiar example. This home product delivery system saves time and money, and reduces the number of times people get into their cars to drive back and forth from the store.

Home delivery has become quite popular, and if you live in a dense enough neighborhood, you can get just about anything delivered. But even that system can be tweaked to be more efficient. One small change some clothing retailers are exploring is moving online shopping from your living room back to the street. To limit the amount of clothing they need to have in stock, retailers are investing in Webfronts. Shoppers test and try on clothes in the store, but when they're ready to check out they order their purchases online at an automated kiosk, usually for a discount. Then the goods are delivered from a central warehouse directly to the shopper's home. One retailer that tried this model is innovative clothing store Nau. Although they have moved mostly online, they were the first to experiment with this store/webfront idea. This model is still developing, and appears like it would work best in dense neighborhoods where you could walk to the storefront, thus truly eliminating the many drives between home and store.

Home delivery can be inefficient, however, if the delivery company has to make multiple trips to deliver your package. One solution to this is Deutsche Post's Packstation, a personal product delivery system. We've described them before as "neighborhood parcel ATMs": they hold packages which couldn't be delivered to you directly, and you claim them with a swipe card and a PIN. These centrally located stations work best in dense urban neighborhoods, where you can use foot power to get to your station. There are still some kinks that need to be worked out, but from what we hear, most people love their Packstation.

These examples are important pieces of evidence that show how the shift is happening. Some are small ideas that fill a niche right now, while others shine light onto what our system could look like in the future. To create a delivery system that is efficient, just and clean, we'll need to build off ideas like these to entirely change our current delivery model. And we'll also need to create our own ideas of how we want the system to function. Here's one scenario I came up with of how things might look in the future:

After browsing the web, you find a local hemp farm that has a Community Supported Fiber program. You invest, and soon the amount and color of fabric you ordered is waiting for you in your centrally located mailbox. You excitedly charge up your recently rented fabrication machine and enter the design code you purchased off of a collaborative, community design site (like Etsy). After about an hour, you have a locally grown outfit to wear to dinner.

This is a fictional story but the components are real: Community Supported Fiber programs exist, as do fabber machines (although only in their earliest stages). And product service systems, that let you communally rent instead of own, are already in use.

As people gain more control over how they create, use and receive materials and goods, emerging methods of sustainable, efficient delivery will hopefully become widespread enough to link all these new systems together seamlessly.

How would you like to receive/find/create products in the future? Please share your own ideas in the comments.

Image credit: Shipping Containers: JAXPORT, CC License

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(Posted by Sarah Kuck in Bright Green Economy at 11:30 AM)

British Gas To Create 2,600 Green Jobs

WorldChanging Team — Thu, 02 Jul 2009 23:51:08 +0000

By Terry Macalister

Recruits will be needed to help introduce 'smart meters' to help people see exactly how much energy they are using in their homes.

British Gas today promised to create 2,600 green jobs over the next three years by rolling out "smart meters" and installing wind turbines on peoples' homes.

The move should help ministers meet targets of cutting carbon emissions through lower use of power, especially that generated by gas or other fossil fuels.

About 1,700 of the recruits will be new to the industry, while 900 are expected to be brought in from rival metering organisations in time for a government-backed roll-out programme due to start in 2012. Earlier this year the company unveiled plans to take on an additional 1,500 staff to work in the clean technology sector.

"Today's announcement of 2,600 new jobs by 2012 shows we are creating skilled green jobs in Britain and training the experts who will help customers become more energy efficient in the future," said Phil Bentley, managing director of British Gas.

The new workers, to be trained at the company's growing network of energy academies, will install smart meters and help homeowners understand how the devices could reduce energy use, save money and end the practice of estimated monthly bills. Anecdotal evidence suggests savings of up to 25% can be made.

In May energy secretary Ed Miliband launched a consultation process on smart meters that is planned to run to September. The government would like energy suppliers to be responsible for meters with a new third-party body handling the data, but the companies want to do it all themselves.

Britain plans to replace all existing electricity and gas meters – often clunky objects hidden away in cupboards – with easily viewed devices that show consumers exactly how much energy they are using, and even see the energy demands of individual appliances.

It is hoped that people will change their behaviour to save money. The meters will also help homeowners sell electricity from green technologies such as solar panels or rooftop wind turbines back to the grid, while improving energy demand forecasts and network management.

Smart meters are seen as a first step toward creating "smart grids" where consumers can adjust electricity use to benefit from cheaper energy at times of low demand, including charging electric cars, and reduce consumption at peak times.

The British government estimates that smart meters could deliver net benefits of between £2.5bn and £3.6bn over the next 20 years.

In April, the government set a 2020 target to cut Britain's greenhouse gas emissions by 34% compared with 1990 levels but the necessary renewable energy growth and efficiency improvements have so far been small.

• This article was amended on 2 July 2009. The original projected net benefits from smart meters of between £2.5m and £3.6m. This has been corrected.

This piece originally appeared in The Guardian.

Photo credit: Flickr/Dominics Pics, Creative Commons License.

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250,000 Jobs And £70bn Revenue – The Forecast For A Thriving UK Renewables Sector

WorldChanging Team — Thu, 02 Jul 2009 23:34:20 +0000

By Alok Jha

Study from the Carbon Trust warns that potential of renewables sector will only be realised if government invests in research and removes regulatory barriers.

The UK could benefit from 250,000 jobs and up to £70bn in revenue from offshore wind and wave technologies by 2050, according to a study by the Carbon Trust. This potential will only be realised, however, if the government gives clear signals to industry, so that investors know where to put their money, rather than leaving new technologies to face the market alone.

The Carbon Trust, a government-backed agency that studies ways to promote low-carbon technologies, carried out economic analyses in six areas of low-carbon industry including offshore wind, wave, solid-state lighting and micro combined heat and power.

The studies, published today, looked at the current status and costs of the technology, how these would develop and what research and development costs there might be in the coming decades.

The studies for offshore wind and wave power showed these technologies could provide at least 15% of the total carbon savings required to meet the UK's 2050 CO₂ reduction targets. "The UK's greenhouse gas targets mean that by 2050 We must reduce our emissions to just one-10th of today's levels, per unit of output," said John Beddington, the government's chief scientific adviser.

"This is a formidable challenge, requiring step changes in the rate at which we improve our energy efficiency and in low-carbon innovation.The Carbon Trust's proposals recognise the need for us to be smarter in focusing our investments, including to help businesses seize the economic opportunities of the transition."

According to the new analysis, published just a few weeks ahead of the forthcoming government white paper on energy, the UK could attract 45% of the global offshore wind market by 2020, delivering £65bn of net economic value and 225,000 total jobs by 2050.

This would only happen with an investment of up to £600m into research, the removal of regulatory barriers and incentives to increase the deployment of the turbines. In the UK this means installing around 29GW of wind by 2020 and upwards of 40GW by 2050. A large part of the economic benefit would come from exporting technology developed here.

For wave, the outlook is more modest. Around a quarter of the world's wave technologies are being developed in the UK and the Carbon Trust said Britain should be the "natural owner" of the global market in this area. It could generate revenues worth £2bn per year by 2050 and up to 16,000 direct jobs.

"These technologies are not green 'nice to haves' but are critical to the economic recovery of the UK," said Tom Delay, the chief executive of the Carbon Trust. "To reap the significant rewards from their successful development we must prioritise and comprehensively back the technologies that offer the best chance of securing long-term carbon savings, jobs and revenue for Britain. Rather than following in the footsteps of others, this new analysis shows it is an economic no-brainer to be leading from the front."

In addition to the direct jobs in these in industries, there would be further benefits to the economy. "The UK's also very good at the secondary service industries - things like the financing of wind farms, the legal documents, environmental assessments," said Paul Arwas, a consultant who wrote the new Carbon Trust report. "Those jobs would be in addition - for offshore wind, it would be another 70,000 by 2050."

None of this will happen, though, without government support. Arwas said that when encouraging new industries, authorities tended to swing between two poles - either direct state funding or allowing markets to decide. "Either the governments didn't intervene at all or, if they did they did it by market mechanisms which are totally undifferentiated by technology. There you end up with a situation where, to take a footballing analogy, you've got the under 21s playing the under 12s."

Instead the Carbon Trust has proposed a new, semi-interventionist, model where the government chooses a family of technologies to invest in, for example wave power, and tells developers there will be subsidies or long-term help available to develop the sector as a whole but without backing individual technologies.

John Sauven, Greenpeace's executive director, welcomed the Carbon Trust's proposed approach. "Every country now needs a decarbonisation plan to help solve three of our greatest challenges - climate stability, energy security and economic prosperity. The UK has an enormous untapped supply of clean, green renewable energy and a world class engineering industry well placed to develop it."

Martin Rees, the president of the Royal Society, said the UK had little choice but to develop these new technologies, given the dwindling supplies of fossil fuels: "In the past we have let opportunities to capitalise on our scientific leadership slip through our fingers. The US and others are investing heavily in low carbon technologies; we must not fall behind and waste the scientific expertise that we have in the UK."

This piece originally appeared in The Guardian.

Photo credit: Flickr/phault, Creative Commons License.

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Green Jobs Sector “Poised for Explosive Growth,” Study Says

Yale Environment 360 — Thu, 11 Jun 2009 22:33:38 +0000

The green jobs sector, buoyed by private investment and an infusion of federal stimulus dollars, is among the fastest-growing sectors in the U.S. economy and is poised for increased growth, according to a study published by the Pew Charitable Trusts. The clean-energy economy generated 777,000 new jobs from 1998 to 2007 — a 9.1 percent increase. Overall jobs grew only 3.7 percent during that time, according to the study. Several trends have contributed to this growth, including a surge in venture capital investment and a bump in clean-energy generation, said Lori Grange, interim deputy director of the Pew Center on the States. In 2008, for instance, the clean-energy sector received about 80 percent of venture capital investments. Meanwhile, the $787 billion American Recovery and Reinvestment Act, signed by Preisdent Obama in February, includes about $85 billion in spending and incentives for energy- and transportation-related programs. “These jobs are driving economic growth and environmental sustainability at a time when America needs both,” Grange said.

This post originally appeared in e360 Digest.

Photo credit: Flickr Creative Commons/goa entranced.

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Clean-Energy Stimulus

WorldChanging Team — Thu, 28 May 2009 22:50:00 +0000

by Alan Durning

A whole lot of money . . . or not?

“It’s about to be raining money.”

That’s how Terry Oliver of the Bonneville Power Administration described the federal economic stimulus’ clean-energy provisions. He was speaking earlier this month to nearly 1,000 people from the growing clean-energy business in a packed Seattle conference hall. (You can actually watch him say this—praise be to the YouTube impulse—along with everything else that any plenary speaker said on this state website.) The turnout—possibly the largest for a conference on energy efficiency and renewables in Cascadian history—was largely a testament to how widely held that sentiment was.

(Undiscliplined aside: The spectacle of hundreds of swarming clean-energy enthusiasts reminded me of the punch line about how to herd cats: you move the food. They clearly smelled food—er, money—in that conference hall. [Second undisciplined aside: The smell of food is not the premise of my favorite cat-herding video.] And, all irony aside, the fact that clean energy now smells like money is exceptionally good news, because nothing mobilizes human enterprise like the confluence of enthusiasm and profit-seeking.)

The whole US federal stimulus—almost $800 billion total, $78 billion of it for clean-energy nationwide, as much as $2.9 billion just for clean-energy projects in the state of Washington alone in the next two years, with as much as another $2 billion in Oregon and Idaho—is also a paltry sum when set beside the enormity of the challenge we face. The Cascadian energy economy drained more than $28 billion from the economies of the Northwest states last year alone.

This chart shows that Idaho, Oregon, and Washington together commonly see changes in energy spending far in excess of the (up to) $2.5 billion per year that the stimulus is injecting. From 2007 to 2008, for example, spiking fossil-fuel prices increased the burden on our regional economy by $6 billion—more than twice the annual value of the federal stimulus.

Fortunately, stimulus funding is not the end of the story where federal clean-energy budgets are concerned. The federal budget adds substantial increases for clean-energy programs. On the other hand, state, county, and city energy-program budgets are under the knife, and private investment in energy—as in just about everything else--has fallen off a cliff.

So if Mr. Oliver is right that it’s about to be raining money, it’ll be a gentle Northwest shower, not a deluge. And it’s falling during a severe drought.

Still, any money-rain brings opportunity. The opportunity for Cascadia’s leaders is to invest federal funds in programs with lasting dividends: programs that move us off the fossil-fuel roller coaster, stimulate profitable new clean-energy businesses, melt barriers to private-sector investment in energy efficiency, correct market failures, train a new generation of clean-energy workers, buffer working families from economic meltdown, and trim climate-disrupting emissions.

The challenge for Cascadia’s leaders is to avoid the fate of many crash programs—crashing. Fortunately, in Washington at least, state leaders appear to be making excellent decisions about stimulus investments.

Economist Daniel Malarkey, a clean-energy entrepreneur and a new advisor to the state on energy efficiency, has summarized how much clean-energy federal stimulus Washington would receive, if it won its “fair share” of federal funds in each category. (The stimulus includes funds distributed by formula to states and cities, funds distributed by competitive grant, and funds distributed to federal agencies. I have yet to find a similar analysis for British Columbia, Idaho, Oregon, or other Cascadian jurisdictions. If you do, please share! Jennifer posted one video overview.)

The single largest increment is $1.3 billion in new borrowing authority for the Bonneville Power Administration. BPA, because it’s a government agency that runs transmission lines and markets electricity from public dams, is an unusual corporate entity. Its ability to borrow private capital to expand its infrastructure—such as transmission lines for new wind farms—is restricted. The stimulus essentially gives BPA a bigger line of credit at the US Treasury. I hope BPA will use that credit to invest in transmission infrastructure for dispersed renewables and to invest directly in energy efficiency, recouping its investments through its rates.

Excluding BPA’s line of Treasury credit, as this second chart from Mr. Malarkey does, makes clear that the federal renewable energy tax credit is the second largest increment, with a “fair share” value in Washington of $378 million. But the largest increment that Washington is receiving automatically – regardless of private actions and without competing for grants – is the $250 million energy efficiency funding (in red on the chart).

This quarter-billion-dollar energy-efficiency stimulus budget is broken in three equal parts, according to Tony Usibelli, assistant director for energy policy at the state Department of Community, Trade, and Economic Development. About $60 million is going to the state’s low-income weatherization program, which is managed by 26 existing community action agencies and housing authorities. Chuck Eberdt of one of those agencies, the Opportunity Council in Whatcom County, Washington, estimates that these funds will double the budget for low-income weatherization in the state for two years. That’s a large boost, but it’s just half of the increase—for one-fifth of the period—I recommended here.

Another $60 million (roughly) will flow to cities (and tribes) under the new Energy Efficiency and Conversation Block Grants program. They will use it for the kinds of programs we’ve described in Portland and Seattle.

The remaining $60 million (roughly) will go to a portfolio of innovative initiatives, including about $15 million to be divided among three local pilot projects of my favorite neighborhood-retrofit-green-collar-jobs model SustainableWorks. Almost $40 million will capitalize a revolving loan fund for efficiency businesses, with another $5 million to help financial institutions invest in efficiency, too—both streams of funding will help with financing more retrofits. Good stuff!

Green-collar job training funds in the federal stimulus—the bottom bar on Mr. Malarkey’s chart—are far from ample, considering the surging demand for clean-energy training at Cascadia’s community and technical colleges, as reported by the Oregonian. On the other hand, the $23 million to which Washington is entitled by federal formula (in red on the chart) is the second largest increment (after efficiency funding) to which it is entitled. So that’s something.

Stimulus spending works as stimulus just so long as it gets spent. (As Keynes said, during a severe recession such as we’re enduring, the government could bury money in the ground, then pay people to dig it up, and it would stimulate the economy.) To work as a path to a clean-energy economy, it needs to establish new patterns that endure when the money runs out. So far, I’m optimistic about Washington’s approach to its clean-energy stimulus.

This piece originally appeared in Sightline Institute's blog, The Daily Score.

Photo courtesy of Flickr photographer Steve Wampler.
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The Clean Energy Bank: Financing the transition to a low-carbon economy

Joe Romm — Tue, 26 May 2009 22:26:25 +0000

Last week House Energy and Commerce members approved by 51-6 an amendment to the Waxman-Markey bill offered by Rep. John Dingell (D-MI) to create a clean energy bank . As Greenwire explained, the amendment would “create an autonomous Clean Energy Deployment Administration (CEDA) within the Energy Department” that would “provide a suite of financing options, including direct loans, letters of credit, loan guarantees, insurance products and others” for “energy production, transmission, storage and other areas that could reduce greenhouse gases, diversify energy supplies and save energy.” CEDA must adopt a “portfolio investment approach” and “ensure no particular technology receives more than 30 percent of the total funding available.” John Podesta and Karen Kornbluh explain why we need a clean energy bank in a post first published here. The picture is of a worker makes adjustings before a section of a wind turbine is put into place at Energy Northwest’s Nine Canyon Wind Project near Finley, WA, the kind of clean energy project the bank could help accelerate.

The United States is falling behind in the space race of our generation—building long-term economic prosperity powered by low-carbon energy. China’s stimulus package invests $12.6 million every hour in greening its economy, for a total of $220 billion, twice as much as similar U.S. investments. Meanwhile, during the most recent economic expansion the average American family paid more than $1,100 a year in rising energy bills for U.S. policies that favor fossil fuels.

The choice is clear: continue with more of the same energy policies or transition to a clean-energy economy that creates millions of good jobs here in the United States and moves us off our dependence on foreign oil.

The creation of a new Green Bank could lead to the steady and reliable creation of clean-energy jobs and would be a crucial element of the transition to a clean-energy economy.

Working in partnership with the private sector, a well constructed, public Green Bank would open credit markets and motivate businesses to invest again. It would enable clean-energy technologies—in such areas as wind, solar, geothermal, advanced biomass, and energy efficiency—to be deployed on a large scale and become commercially viable at current electricity costs.

Designed along the lines of the proposals in this memo, a Green Bank is a critical part of an integrated strategy that would begin to build a strong foundation for broad-based economic growth and prosperity while allowing our nation to lead the world in the transformation to a global economy powered by low-carbon energy. An integrated clean prosperity strategy requires several elements that other nations are successfully pursuing, among them: putting a price on carbon, requiring utilities to replace some of their carbon-based energy resources with renewable energy, and jumpstarting investments in clean energy and efficiency.

Currently, both Congress and the American public are focused on proposed caps on carbon emissions and requirements that utilities increase their use of renewable energy and invest in energy efficiency. But far less public attention has been paid to the specific policies that will drive new capital investment into clean-energy technology. A Green Bank would facilitate the flow of private capital into renewable energy and efficiency projects on the drawing boards today. The hurdles a Green Bank would overcome are:

The still debilitating credit crunch.

The need for large-scale, predictable financing.

The lack of a financing track record for new clean energy.

The lack of scalable and standardized finance models for existing energy-efficiency technologies.

The lack of a fully built-out and tested transmission infrastructure.

The risk resulting from fluctuating fossil fuel prices.

Existing federal loan guarantees and tax incentives are critically important, but they are not enough given the scale of the clean-energy transition ahead of us and the financing obstacles in our path. Because loan guarantees and tax incentives are subject to extensions and appropriations by Congress, and have been allowed to lapse in the past, they lack the certainty that medium- to long-term debt financing requires.

Moreover, these guarantees and tax incentives require agency rulemakings that, once established, are difficult to change to meet changes in market conditions. Amid the current economic downturn this lack of flexibility is especially troubling. Companies losing money can no longer fully use the available tax incentives, and developers are struggling to find investors who can capitalize on the tax benefits from their projects. Neither loan guarantees nor tax incentives have the flexibility a Green Bank would enjoy in addressing critical barriers to investments.

Other countries are already deploying policies to create standards and financing to help transform their own economies with clean energy. The European Union launched its Emission Trading System in 2005, thereby encouraging efficiency and clean energy by putting a price on carbon. Germany used “feed-in tariffs,” requiring utilities to pay above market rates for renewable energy, to become a leader in solar energy. The European Investment Fund’s top priority is supporting Europe’s energy objectives. And the World Bank recently issued “green bonds” to raise funds for low-carbon programs in developing nations.

In Asia, China is investing $220 billion of its economic stimulus package in green programs—over 3 percent of its total gross domestic product of $4.4 trillion. South Korea is investing 1.2 percent of its total GDP, or about $30 billion, into new green strategies to drive their own economic recovery. Meanwhile, the United States is investing less than one half of 1 percent of our GDP on clean-energy stimulus programs.

Today, we have the opportunity to make the same choice that we have made throughout our history—to spur investments in critical new technologies and enjoy the broad-based economic growth that has made us the envy of the world. At each key juncture in our history we found a way to move forward and enjoy the resulting benefits that vastly exceeded the short-term costs. Cases in point:

Government support for private canals and railroads in the 19th century allowed products to find markets and knit together the new national economy.

The Tennessee Valley Authority, a government-owned entity created in the 1930s that developed the infrastructure to deliver electricity to and drive economic development of rural Appalachia.

Government spending during World War II created industrial technologies and manufacturing capacity that helped create the postwar economic boom.

The space race in the latter half of the 20th century led to new technologies and services that power our economy today, including robotics, new materials, and computer command-and-control systems that led directly to the invention of ARPANET, the precursor of the Internet.

Similarly, the Green Bank would allow the United States to ramp up investment in new renewable and efficient energy, using smart public policy to prime the pump for private investment into the growth of an entirely new industry while increasing U.S. competitiveness and enabling us to lead the transition of the global economy to a low-carbon energy platform.

Congress is already considering a number of proposals for a clean-energy financing mechanism. Senate Energy Committee Chairman Jeff Bingaman (D-NM) and Rep. Jay Inslee (D-WA) introduced the 21st Century Energy Technology Deployment Act, which would create a Clean Energy Deployment Administration, or CEDA, in the Department of Energy. The Senate Energy Committee has added Chairman Bingaman’s amendment creating a CEDA to its energy bill and the House Energy and Commerce Committee has added an amendment offered by Chairman Emeritus John Dingell (D-MI), Rep. Inslee, and Rep. Bart Gordon (D-TN) creating a CEDA to the American Clean Energy and Security Act. Separately, Rep. Chris Van Hollen (D-MD) introduced the Green Energy Bank Act creating an independent bank. It is critical that a financing mechanism for creating sustained private-sector financial support for our nation’s transition to a clean-energy economy be included in the final bill that the president signs. As President Barack Obama stated:

“The choice we face is between prosperity and decline. We can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy. We can allow climate change to wreak unnatural havoc across the landscape, or we can create jobs working to prevent its worst effects… The nation that leads the world in creating new energy sources will be the nation that leads the 21st-century global economy.”

Principles for establishing a Clean Energy Bank

The Green Bank’s mission should be to marshal a variety of well-established financial tools to work flexibly with the private sector. The purpose: To rapidly and affordably develop and deploy clean energy and energy-efficiency technologies that allow Americans to live, work, and produce using less energy and cleaner energy, creating new jobs and spurring economic growth while holding U.S. consumers harmless.

The Green Bank should prioritize projects that provide the fastest, cheapest, cleanest reduction in greenhouse gases and oil use—projects that today face market barriers in accessing debt financing or credit enhancement. Projects should be selected on a competitive basis according to the amount of carbon-emissions reduction or avoidance achieved but also including consideration of long-term market transformation benefits by supporting emerging technology categories.

The bank should support a diverse set of technologies and safeguard taxpayer funds. Concerns that capital-intensive investments in nuclear power could come to dominate the portfolio should be addressed by limiting the Green Bank’s investment in any single technology. The bank’s maximum leverage for an individual project as well as total government exposure should also be capped. In addition, the Green Bank should cover its own operating costs through fees charged for its services, and require that all parties to a transaction share some risk on every single deal. Finally, the Federal Credit Reform Act and Budget Enforcement Act should apply to ensure the bank’s accountability to Congress and provide assurance that the bank will not be taking on excessive credit risk whose potential losses could be borne by American taxpayers.

All projects should meet strong underwriting standards and appropriate risk management metrics. The Green Bank should take a portfolio approach to investing in projects, targeting projects that are riskier than the portfolio average, as well as projects that are less risky, for an overall return that is positive but below that required by the private sector.

The Green Bank should also facilitate private-sector investments, not crowd out private investors. The bank should work closely with private banks to provide loan guarantees, credit enhancement, and other financing tools to stimulate private-sector lending and investment in projects that cannot access commercial financing on economically feasible rates and terms. Additionally, by working with the private sector, the Green Bank should foster the development and consistent application of various financing-related standards and data, such as underwriting standards, measurement and verification standards, performance data for energy efficiency projects, and financing products that will be needed to enable more effective risk management and support primary and secondary investment markets for such projects.

Funding for the Green Bank should be on the order of an initial $10 billion, with additional capital provided of up to $50 billion over five years. This capital could be leveraged at a conservative 10-to-1 ratio to provide loans, guarantees, and credit enhancement to support up to $500 billion in private-sector investment in clean-energy and energy-efficiency projects.

The Green Bank should ideally be structured as an independent, tax-exempt corporation, wholly owned by the U.S. government—similar to the Overseas Private Investment Corporation or the Export-Import Bank—and governed by a board of directors of relevant Cabinet members and additional members with relevant industry and finance experience appointed by the president with staggered terms. This will give it both the flexibility and accountability it needs.

Download this memo (pdf)

This piece originally appeared on Climate Progress.

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Obama Praises Climate Deal, Sierra Club Vows To “Strengthen This Bill,” House GOP Vows To Kill It

Joe Romm — Fri, 15 May 2009 01:21:34 +0000

President Obama praised House Democrats today for "extraordinary progress" in their negotiations on global warming and energy legislation at the center of his domestic agenda.

So reports Greenwire (subs. req'd) today:

"I want to take a moment, before I start talking about health care, just to congratulate Chairman [Henry] Waxman and the Energy and Commerce Committee Democrats, who've made such extraordinary progress in reaching a deal on comprehensive energy reform and climate legislation," Obama told reporters at the White House.

"This is a major step forward in building the kind of clean energy economy that will reduce America's dependence on foreign oil," the president added.

Obama repeated his clarion call for action:

"I once again call on Congress to send me legislation that places a market-based cap on carbon pollution, which will then drive and incent for the kind of innovation and dynamic, new, clean energy economy that can create jobs and new businesses all across America," he said. "So this is an example of the extraordinary productivity that we're seeing over in the House right now."

Joe "regulating CO2 could ‘close down the New York and Boston marathons’ " Barton declares war on it:

Rep. Joe Barton (R-Texas), the ranking member of the House Energy and Commerce Committee, predicted a fierce battle during next week's markup. "We will never surrender on any cap-and-trade proposal," he told reporters today. "If they take cap and trade off the table, everything else is negotiable."

And Sierra Club Executive Director Carl Pope issued this statement:

Chairmen Waxman and Markey have done heroic work in reaching agreement on the Energy and Commerce Committee around a comprehensive clean energy and climate plan, a critically important milestone that has faced seemingly insuperable obstacles. Their leadership has been truly remarkable. But it is clear that Big Oil, Big Coal and other polluters are still holding out for a Congressional bailout. They will continue to try to riddle this legislation with loopholes, water it down, and load it up with hundreds of billions of dollars in giveaways. They don't want it to deliver a recovery fueled by the clean energy jobs that America needs.
"These polluters are trying to strangle the clean energy economy in its cradle, steal the benefits of the clean energy future from the American people, and keep us addicted to oil and dirty coal. As this bill moves through the many remaining steps in the legislative process, we will work to strengthen this bill, so that it meets President Obama's challenge to Congress and the American people. Only a bill which accomplishes these three things can really jumpstart the green recovery, build the clean energy future, and end our addiction to oil and coal:

Dramatically ramp up America's transition to cleaner, cheaper energy sources like wind, solar, biomass, and geothermal

Close the carbon pollution loophole and make polluters pay for the carbon pollution they emit

Slash energy waste in order to cut emissions quickly and cheaply, while saving consumers money on their energy bills

I hope the final bill is one that Sierra Club can support.

This piece originally appeared in Climate Progress.

Photo credit: flickr/jared, Creative Commons License.

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Obama Praises Climate Deal, Sierra Club Vows To “Strengthen This Bill,” House GOP Vows To Kill It

Joe Romm — Fri, 15 May 2009 01:21:34 +0000

President Obama praised House Democrats today for "extraordinary progress" in their negotiations on global warming and energy legislation at the center of his domestic agenda.

So reports Greenwire (subs. req'd) today:

"I want to take a moment, before I start talking about health care, just to congratulate Chairman [Henry] Waxman and the Energy and Commerce Committee Democrats, who've made such extraordinary progress in reaching a deal on comprehensive energy reform and climate legislation," Obama told reporters at the White House.

"This is a major step forward in building the kind of clean energy economy that will reduce America's dependence on foreign oil," the president added.

Obama repeated his clarion call for action:

"I once again call on Congress to send me legislation that places a market-based cap on carbon pollution, which will then drive and incent for the kind of innovation and dynamic, new, clean energy economy that can create jobs and new businesses all across America," he said. "So this is an example of the extraordinary productivity that we're seeing over in the House right now."

Joe "regulating CO2 could ‘close down the New York and Boston marathons’ " Barton declares war on it:

Rep. Joe Barton (R-Texas), the ranking member of the House Energy and Commerce Committee, predicted a fierce battle during next week's markup. "We will never surrender on any cap-and-trade proposal," he told reporters today. "If they take cap and trade off the table, everything else is negotiable."

And Sierra Club Executive Director Carl Pope issued this statement:

Chairmen Waxman and Markey have done heroic work in reaching agreement on the Energy and Commerce Committee around a comprehensive clean energy and climate plan, a critically important milestone that has faced seemingly insuperable obstacles. Their leadership has been truly remarkable. But it is clear that Big Oil, Big Coal and other polluters are still holding out for a Congressional bailout. They will continue to try to riddle this legislation with loopholes, water it down, and load it up with hundreds of billions of dollars in giveaways. They don't want it to deliver a recovery fueled by the clean energy jobs that America needs.
"These polluters are trying to strangle the clean energy economy in its cradle, steal the benefits of the clean energy future from the American people, and keep us addicted to oil and dirty coal. As this bill moves through the many remaining steps in the legislative process, we will work to strengthen this bill, so that it meets President Obama's challenge to Congress and the American people. Only a bill which accomplishes these three things can really jumpstart the green recovery, build the clean energy future, and end our addiction to oil and coal:

Dramatically ramp up America's transition to cleaner, cheaper energy sources like wind, solar, biomass, and geothermal

Close the carbon pollution loophole and make polluters pay for the carbon pollution they emit

Slash energy waste in order to cut emissions quickly and cheaply, while saving consumers money on their energy bills

I hope the final bill is one that Sierra Club can support.

This piece originally appeared in Climate Progress.

Photo credit: flickr/jared, Creative Commons License.

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(Posted by Joe Romm in Bright Green Economy at 5:21 PM)

I Predict U.S. Carbon Dioxide Emissions Peaked In 2007!

Joe Romm — Wed, 13 May 2009 23:36:43 +0000

I am predicting that U.S. energy-related carbon dioxide emissions will never exceed 2007 levels. We have peaked.

The United States appears to be in the process of breaking its long-standing link between economic growth and global warming pollution. I am, of course, assuming in my prediction that the United States will enact into law serious energy and climate legislation, along the lines of Waxman-Markey, sometime soon.

What would have been almost impossible to imagine even a year ago is now, I think, a pretty safe bet thanks to a unique confluence of factors. Indeed, the main reason I'm able to make this prediction with such high confidence is the Energy Information Administration's remarkable, if little noted, report from last month, Updated Annual Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Changes in the Economic Outlook. It was Figure 3 that blew me away:

Yes, the EIA itself, which is incredibly conservative from a forecasting perspective, doesn’t foresee CO2 emissions returning to 2007 levels until 2024! But, of course, that post-2020 return to steadily rising emissions is exceedingly unlikely to happen -- thanks to peak oil and action by President Obama and Congress on energy and climate legislation.

Remember, EIA only models the "no further energy and climate policy" case and the "no peak oil" case, so the only thing one can say for certain about an EIA forecast is that there is no chance whatsoever it will come true. Indeed, the main drivers for the EIA's latest forecast change are just:

The energy-specific provisions of ARRA [the stimulus bill] that were represented in some fashion in NEMS [the EIA's major economic-energy forecasting model] include:
Weatherization and assisted housing

Energy efficiency and conservation block grant programs

State energy programs

Plug-in hybrid and electric vehicle tax credits

Updated tax credits for renewables

Loan guarantees for renewables and biofuels

Other major changes in NEMS to reflect changes in energy markets, laws, and
regulations since the development of the AEO2009 reference case include:

Update of macroeconomic assumptions

Update of near-term fuel price projections

Update of Corporate Average Fuel Economy (CAFE) standards.

But to give you an idea of the kind of forced myopia EIA has in its modeling, their analysis notes "wind capacity growth is projected to slow significantly after the expiration of the Federal tax credits in 2012." Yes, well, anyone want to bet me that the wind tax credit will be allowed to expire permanently in 2012 as EIA models? Didn't think so.

And, of course, the EIA simply does not accept the reality of peak oil. They project that in 2020, imported crude oil will cost $114.50 a barrel and gasoline will cost $3.62. In 2030, crude oil will cost $124 a barrel and gasoline, $3.82. All figures are in 2007 dollars. Hope springs eternal, even for the green eye shades at EIA. In the real world, however, for oil to be significantly below $200 a barrel and gasoline to be significantly below $5 a gallon in 2020 would take a miracle — or rather 6 miracles see “Science/IEA: World oil crunch looming? Not if we can find six Saudi Arabias!” and “IEA says oil will peak in 2020“). See also “Merrill: Non-OPEC production has likely peaked, oil output could fall by 30 million bpd by 2015“).

I think that peak oil plus inevitably stronger and stronger action on fuel economy standards, tailpipe greenhouse gas emissions, plug in hybrid electric vehicles, and low-carbon fuel standards will keep oil consumption trends flat for quite some time, followed by a steady decline post-2020ish.

And of course I am assuming in my prediction that the United States will enact into law serious energy and climate legislation, along the lines of Waxman-Markey, sometime soon, which will lead to steadily declining coal emissions post-2015.

So you see, what looks like a bold prediction is not terribly bold at all. I think this is much more of a sure thing than, say, my standard bet that the Arctic will be 90% ice free by 2020.

Still, it would be a very big deal for the richest country in the world, the one with by far the greatest cumulative greenhouse gas emissions, to break the economic growth - carbon dioxide link. And assuming that as many conservatives vote for comprehensive energy and climate legislation as voted for the clean energy stimulus bill, this achievement will be due primarily to the American public, progressive politicians, and, of course, the large and growing clean energy private sector.

This piece originally appeared in Climate Progress.

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(Posted by Joe Romm in Bright Green Economy at 3:36 PM)

Cool Companies, Part 1: How the best businesses boost profits and productivity by reducing greenhouse gas emissions

Joe Romm — Fri, 08 May 2009 00:07:48 +0000

[Please send me any case studies of companies, buildings, and factories in the last 10 years that have cost-effectively reduced and carbon emissions. I am, as always, looking for well-documented cases where a systems approach to energy and carbon achieved deep savings and productivity gains.]

Ten years ago next month I published the first collection of detailed case studies, some 100 in all, of how businesses were cutting energy use and boosting productivity while reducing pollution: Cool Companies.

The few times that I have posted case studies here, many people have been surprised by the savings that real companies have achieved (see for instance the Dow Chemical energy contest results in “Energy efficiency, Part 2: The limitless resource” or "Car plant cuts energy costs $627,000 with 2-month payback (!) — with DOE help").

The myth that reducing greenhouse gas emissions has a high cost for U.S. businesses is one of the greatest impediments to strong climate action. Yet all of the major economic studies of climate understand and model large potential savings (see "Intro to climate economics: Why even strong climate action has such a low total cost — one tenth of a penny on the dollar") — although they haven’t modeled savings as large as the best companies have achieved. That macroeconomic analysis needs to be bolstered by more microeconomic success stories in order to be as compelling as possible.

In short, I think it is time once again to start publishing case studies. I ultimately plan to publish a number of new case studies. But for now let me start with some old ones. Sadly, the overwhelming majority of companies, buildings, and factories have still not done what the best did a decade ago as documented in my book. So the stories and strategies remain relevant. Let’s start with an overview of some the best cast studies:

Every company can significantly reduce its emissions of gases that contribute to global warming. A “cool” company will cut its emissions by 50 percent or more while reducing its energy bill and increasing productivity, with a return on investment that can exceed 50 percent and in many cases 100 percent.

Corporate carbon dioxide emissions come almost entirely from using energy generated from the burning of fossil fuels. About one-sixth of the nation’s carbon dioxide emissions come from energy used in commercial buildings. About one-third comes from energy used in manufacturing. Almost any company can reduce its emissions in two ways:

Energy efficiency–achieving the same output of goods and services while reducing total energy consumption, and

decarbonization-using energy that has lower emissions of carbon dioxide (what I call “cool” power.

Combining these two approaches will sharply reduce not only your carbon dioxide emissions. It will also drastically cut your emissions of sulfur dioxide, oxides of nitrogen (NOx), and particulates-primary components of urban air pollution, which inflicts serious harm to human health and the environment. These pollutant emissions have a market value. So, here is another good reason to become a “cool” company: You may be able to make money reducing these harmful air pollutants.

This book provides you with the strategies you need to boost profits and productivity while reducing greenhouse gas emissions. Each chapter begins with a discussion of the key components of the strategies and at least one representative case study.

CHAPTER TWO presents the case of Toyota Motors, a company that is obsessed with reducing waste and increasing productivity:

One Toyota plant in California cut its total energy consumption by one-third while more than doubling its output with technology that helped reduce its defect rate from three per hundred to zero.

Defects were once accepted as inevitable and quality was viewed as expensive, but that changed in the 1980s and 1990s as U.S. manufacturers responded to the Japanese manufacturing challenge. Defects are now seen as a measure of inefficiency, and the goal is to prevent them from occurring in the first place. So, too, pollution is seen by our coolest companies as a measure of their inefficiency, rather than an inevitable by-product of production. The goal is to prevent pollution from occurring in the first place.

What is perhaps most striking about Toyota’s remarkable strategy for eliminating waste is that it has its origins with Henry Ford, who pioneered many of the best practices in both lean production and pollution prevention. I discuss Ford’s and Toyota’s thinking about lean production to explain why systematic efforts to reduce greenhouse gas emissions so often lead to productivity gains.

Lean thinking focuses on process improvement and prevention-oriented design strategies to reduce waste systematically. In this book, you will learn how to apply lean thinking to offices, buildings, and factories to minimize wasted energy. With this “cool and lean” strategy, your company will increase productivity at the same time as it reduces greenhouse gas emissions.

CHAPTER THREE begins the step-by-step “How To” for becoming cool. Since every company-service sector or manufacturing-has buildings, we begin with the proven strategies for making any building energy efficient. Cutting energy use by a quarter has been achieved in thousands of buildings. Hundreds of buildings have broken through the “25 percent savings” barrier. Cool buildings that cut energy use-and hence greenhouse gas emissions-in half are increasingly commonplace, as many of the examples in this chapter demonstrate:

One small business in Seattle reduced the energy consumption in its two office buildings by 55 percent with a 1.5-year payback, and expects to raise that to 65 percent.

The Ridgehaven office building in San Diego cut its energy consumption by 70 percent, saving $80,000 a year, using a “low-bid” contractor. Utility financing of the efficiency improvements turned a 3-year payback into an instantaneous payback.

BlueCross BlueShield of Oregon cut energy use by 61 percent at its Portland headquarters. BlueCross did not have to put up any money for the project, which was financed by the local utility, but instead is paying for it entirely from the monthly energy savings.

A good rule-of-thumb for what a comprehensive efficiency upgrade can achieve today is an annual energy savings of $1 per square foot with a simple payback of two to three years-a return on investment (ROI) of 33 percent to 50 percent. (In this book, a one-year simple payback means a $1 investment that generates $1 in savings each year, which equates to a 100% ROI. If it generated $0.50 in savings each year, that would be a two-year simple back or a 50% ROI.)

By following the strategies in this book, you may be able to finance some or all of the cost of your upgrade off-balance-sheet-letting you achieve savings without adding to your overall debt.

Stop thinking of energy efficiency as mundane. Whether you are a service sector or manufacturing firm, your employees work in buildings designed by people who probably had little understanding of the work that would be done in the building, and even less understanding of how to design a building to maximize their performance. We now know how to design a new building or upgrade an old one to reduce energy use and other operating costs, while at the same time reducing absenteeism and increasing worker productivity.
CHAPTER FOUR examines more than a dozen office and building designs that have boosted productivity from 5 percent to 15 percent, providing measurable benefits that can dwarf reductions in operating costs. While an upgrade that cuts energy use in half can save $1 per square foot in annual energy costs, it can generate more than $10 a square foot in new profits every year if it boosts productivity even 5%. Productivity gains have made it possible to achieve deep energy savings with paybacks of under two years-returns on investment (ROIs) exceeding 50 percent:

VeriFone, a California manufacturer, renovated and daylit one of its buildings. The improvements that saved 60 percent of the energy would have paid for themselves in 7.5 years. The productivity rise of more than 5 percent and absenteeism drop of 45 percent brought the payback to under a year-a return on investment of more than 100 percent.

A Georgia carpet manufacturer moved into an extensively daylit building and worker’s compensation cases dropped from 20 per year to under 1 per year.

Researchers at Carnegie Mellon University’s “Intelligent Workplace”–a must-see building for anyone designing a new or upgraded office-have begun to quantify these productivity improvements. They have systematically analyzed a large post-occupancy database of new buildings and retrofits. The researchers then estimated the benefits of design improvements for a 100,000-square-foot workspace with 500 employees. They concluded, for instance, that while improved lighting design would add $370,000 to the initial cost of the workplace, it would add $680,000 in value in energy savings and other reduced operating costs. Far more important, Carnegie Mellon has calculated that efficient lighting could provide a productivity benefit of $14.6 million.

Productivity-enhancing design requires a shift in your corporate thinking. Companies underinvest in their workplaces in part because they tend to see efficiency improvements as simple cost-cutting, which rarely motivates much management attention or capital spending. A key purpose of Chapter Four is to help managers see these investments as strategic productivity-enhancing investments crucial to their company’s long-term survival.

CHAPTER FIVE examines the work of two of the best energy-efficiency experts in the business: Ron Perkins and Lee Eng Lock. It explores how Perkins, Facilities Manager for Compaq in the 1980s, helped break down the traditional corporate barriers to strategic investment in buildings, and, with Lee Eng Lock, helped Compaq become one of the coolest of companies. We will then follow Perkins to Supersymmetry, an energy consulting company founded by Lee in Singapore, the benchmark for reducing energy consumption in semiconductor manufacturing.

An integrated circuit factory outside of Manilla upgraded its lighting, heating and cooling system and cut the electricity usage per chip by 60 percent.

In Malaysia, Western Digital built what is now considered the most efficient disc drive factory in the world, cutting energy consumption 44 percent with a one-year payback. These cuts were achieved even though plant floor space increased by more than 10 percent and air filtration requirements increased 1000-fold!

CHAPTER SIX looks at “cool” power. Just as every business from the service sector to manufacturing can improve the energy efficiency of its workplaces, so too can everyone choose energy sources that have lower emissions of greenhouse gases.

Part 2 will start with the “cool power” case studies and then go on to look at the best cases in the industrial sector.

This piece originally appeared in Climate progress.

Photo credit: flickr/llawliet, Creative Commons License.

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(Posted by Joe Romm in Bright Green Economy at 4:07 PM)

Greener Companies “More Crunch-Proof”

Green Futures — Tue, 05 May 2009 21:51:35 +0000

By Claire Baylis

New report tracks value of sustainability commitment during recession

Businesses with a ‘true commitment’ to sustainability are weathering the downturn better than their rivals, according to a new report. Green Winners: The Performance of Sustainability-Focused Companies in the Financial Crisis looked at 99 companies on the Dow Jones Sustainability Index and/or the Goldman Sachs Sustain focus lists. And it found they were outperforming their industry peers – by an impressive average of 10% over three months and 15% over six. Far from being seen as a luxury, sustainability spending is a tool to beat the recession, concludes the report.

The study, by management consultancy firm A.T. Kearney, warned that green initiatives need to be truly embedded in the company’s value chain; it finds scant justification for efforts made “simply to improve public relations or catch up with industry leaders”.

The most surprising finding, says the report’s co-author Louis Besland, was the consistency between industries: in 16 out of 18 of them the companies on the sustainability lists came out ahead financially as well.

“It’s those companies who understand that the world is really changing – and have maybe anticipated it – who are the winners,” says Besland. He adds that such businesses have realised that when you look at sustainability issues, “you are more resource-efficient” too.

Sally Uren, Deputy Chief Executive of Forum for the Future, says these latest findings reflect what she’s been seeing. But in terms of investments in sustainability, she has discerned a slight emphasis shift. “Companies are focusing more on those investments and initiatives geared to deliver shorter-term paybacks,” she explains. So they are investing in greener energy and energy efficiency, for example, rather than in R&D to innovate new products.

Uren believes that, within the next year, we will see a divided outcome. Companies that have worked out that addressing climate change will really benefit their bottom line will still be “doing sustainability”. That won’t be the case for “companies that just had a set of tactical, reactive responses to this agenda, that have largely ended up in their branding [alone]”.

Of course, Uren continues, companies may well survive the recession without really embracing sustainability, thanks to good business planning. “But if they haven’t looked at sustainability, how will they fare in a low-carbon world? You might survive the credit crunch, but you’ll not survive the climate crunch.”

This piece originally appeared in Green Futures, published by Forum For The Future.

Photo credit: flickr/Hamed Masoumi.

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(Posted by Green Futures in Bright Green Economy at 1:51 PM)

Is Managed-Price Cap And Trade Different From A Carbon Tax?

Eric De Place — Thu, 30 Apr 2009 21:57:24 +0000

Evaluating a hybrid approach to carbon pricing.

When I examined the managed-price approach to cap and trade I asked: “if managed-price cap and trade is basically just a carbon tax, why go to all the trouble of developing the apparatus of a cap-and-trade system? Why not just have a plain old vanilla carbon tax instead?”

Recent testimony from Douglas Elmendorf, director of the Congressional Budget Office (CBO), considers the possible ways that managed-price differs from a carbon tax. (All inset quotes below are from this CBO testimony.) As it turns out, there are not many important differences.

According to CBO, here’s one possible way that managed-price differs from a carbon tax:

It would allow policymakers to distribute a share of the allowances to firms for free if they wished to do so. For example, they could give allowances to coal producers, electricity generators, or to dislocated workers in the coal industry.

Okay, so managed-price cap and trade would allow free allocation of permits to polluters. Fair enough. But in reality this is only a very subtle difference from a carbon tax. There's no good reason to believe that a carbon tax would prevent policymakers from giving things away for free. It's no small secret that federal and state tax codes are riddled with loopholes and tax exemptions for favored industries.

Here's another possible way that managed-price differs from a carbon tax:

It would allow firms to meet a portion (specified by policymakers) of their requirement for allowances by purchasing “offsets,” which are credits for qualifying emission reductions in areas not subject to the cap. For example, individuals or firms not subject to the cap might generate offsets through biological sequestration… and then those offsets could be available for purchase by firms subject to the cap.

So managed-price would allow offsets. But, again, this is really no different from a carbon tax. A carbon tax regime could easily include an offset program: firms could choose to either pay a carbon tax or purchase certified offsets. In fact, it would be precisely the same choice that firms would have under auctioned cap and trade with offsets: purchase a permit or purchase an offset.

And here’s another way that managed-price might differ from a carbon tax, in its basic design:

Regulators would establish a path of rising prices for allowances, with the goal of complying with the cumulative cap that legislators set. That path would be adjusted periodically if new information indicated that future compliance costs were going to be higher or lower than anticipated or if progress in meeting the cumulative cap was less than expected.

Again, this is only a phantom difference. A carbon tax could be set to gradually increase over time. (In fact, virtually every carbon tax proposal I've heard of has a tax rate that increases over time.) What's more, even a fixed carbon tax rate can easily be adjusted by policymakers or regulators, just as virtually every tax in existence is adjusted. If a carbon tax extends until, say, 2050 it's almost impossible to imagine it going untouched over that period, for good reasons or for bad.

But there are a couple of real differences between managed-price and carbon tax:

Firms could sell any allowances that they were given but did not use.

Okay, fair enough. I suppose this is a legitimate difference from a carbon tax, though it’s probably a minor one. Under a managed-price system, firms could sell unused allowances to other firms. Even so, there would likely be a limited market for these permits because under managed-price the government is agreeing to sell an unlimited number of permits at the fixed price, so presumably no one would pay more on the secondary market than they could pay to get the permits directly from the government. It is, however, possible that some firms would pay less on the secondary market in the event that other firms ended up holding permits that they had purchased and found that they didn’t need. Being able to sell unused permits at a discount would help firms manage risk.

Interestingly, Congressman McDermott's version of managed-price cap and trade actually does not differ from carbon taxes in this respect. (Bill is here.) McDermott’s plan disallows sales on the secondary market, though it does allow firms to return any unused permits to the government for a full rebate. So in this respect too, McDermott’s plan is much like a carbon tax: firms only pay when they emit; and there’s no trading.

So that’s one legitimate difference. And here’s another:

It would allow firms to reduce uncertainty about their future compliance costs by entering into futures contracts. For example, firms subject to the cap could agree to buy allowances at fixed prices in the future from traders that were willing to absorb the risk that the price of allowances would turn out to be higher or lower than anticipated.

Under managed-price, firms could use derivatives products like futures contracts to manage their exposure to price changes. I know that derivatives are supposed to be a four-letter word these days, but they do play an important role in stabilizing the economy. And managed-price will allow polluters to hedge their risk, much as they might in an ordinary cap and trade program.

What’s the final tally? Despite CBO’s claims, a managed-price approach to cap and trade is different from carbon taxes in only two important respects: 1) there will be some limited trading on a secondary market; and 2) firms can use derivatives to manage their risk. (Congressman McDermott’s managed-price legislation has only this second difference from carbon taxes.)

There is, however, one more difference that the CBO testimony doesn’t mention. Managed-price sets up a bigger and more complex policy apparatus than a carbon tax likely would. It will design a permit and auction system, as well as a published price schedule and regulatory guidelines for adjusting prices.

All things considered, I’d rather just have either ordinary cap and trade or ordinary (adjustable) carbon taxes. (Or both.) It’s hard to see how the managed-price approach to cap and trade accomplishes much that can’t be done more simply by the plain vanilla carbon pricing policies that are already in wider circulation.

This piece originally appeared in Sightline Institute's blog, The Daily Score.

Photo credit: flickr/Paul J. Everett, Creative Commons License.

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(Posted by Eric De Place in Bright Green Economy at 1:57 PM)

Green Jobs: Door-To-Door Energy Savings

WorldChanging Team — Wed, 22 Apr 2009 22:43:43 +0000

By Jennifer Langston

How green-collar jobs can save you money.

For anyone wondering how a green jobs revolution might look in their neighborhood, here’s a new video that explains the Switch Project already up and running in Seattle. It’s a relatively simple idea that creates jobs, saves people money on utility bills and strengthens community connections at the same time.

Crews of trained young adults have been knocking on doors in lower-income neighborhoods, offering to install compact fluorescent light bulbs and low-flow showerheads along with other basic home weatherization tasks. They do it on the spot, but also connect renters with programs to save even more through additional conservation projects. It may come as a surprise that people are willing to open their doors, bedrooms and showers at the drop of a hat. But that’s the beauty of a homegrown program that employs people who live in a community to talk to their neighbors, while benefiting everyone involved.

This piece originally appeared in Sightline Institute's blog, The Daily Score.

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(Posted by WorldChanging Team in Bright Green Economy at 2:43 PM)

Forbes: “The Best Country For Business In The World” Is One With A Very Strong Carbon Cap And A 20% Renewable Standard For 2011

Joe Romm — Sat, 18 Apr 2009 01:55:35 +0000

Well, Forbes magazine has given progressive advocates of climate action a terrific talking point: The "best country for business in the world" -- for two years running -- is uber-green Denmark (photo below courtesy of Forbes).

Denmark has one of the strongest cap-and-trade commitments in the world -- 20% below 1990 levels by 2008-2012. And it has a requirement that 20 percent of its overall energy mix be renewable by the end of 2011. And its efficiency measures are such that Energy Minister Connie Hedegaard said last year, "In 2025, (Denmark's) total energy consumption will not have risen in 50 years."

And Forbes says that's great for business!

Last month, Forbes magazine published its "The Best Countries For Business, 2009." Swiss climate change expert Nicolas Müller e-mailed me that buried inside was an attack on cap-and-trade -- and a delicious irony, which gives us the talking point.

Forbes' #2 country for business is the good-ole-USA, but the blurb on our fair country contains this absurd warning:

The biggest economy in the world and third-largest population, the U.S. continues to support business-friendly economic policies, despite a recent move in the balance of power from Wall Street to Washington. Broad policy shifts such as Cap and Trade, though, threaten to damage its economic competitiveness, particularly in industrial sectors.

Be afraid of cap and trade!

Or maybe not. I have argued that a strong leadership on energy and climate is crucial to competitiveness (see Why the United States REQUIRES a strong climate bill to remain competitive, Part 1 and Part 2: When the global Ponzi scheme collapses (circa 2030), the only jobs left will be green].

Now Forbes has made an even better case. Completely lost on Forbes is that their #1 country for business -- "for a second straight year" -- is heavily capped, uber-green Denmark!! Indeed, Müller notes the "big irony" in his email:

The country N°1 in their list is Denmark which has spent plenty of money in renewables, is covered by a cap and trade system, has one of the most stringent emission targets, taxes cars 100% or more, and has globally one of the most constraining environmental regulatory framework.

Here is how Denmark's government looks at clean energy, from a February 2008 article:

Denmark aims to increase its use of renewable energy to 20 percent of its overall energy mix by the end of 2011, up from 15 percent today, the government said Friday.
Prime Minister Anders Fogh Rasmussen's liberal-conservative government [!], along with most other parliamentary parties, agreed late Thursday on the new target, the Climate and Energy Ministry said in a statement...

The deal was reached less than a month after the European Commission set a renewable energy target for Denmark at 30 percent by 2020 as part of an EU-wide scheme aimed at reducing dependence on fossil fuel.

The Danish agreement calls for better subsidies for developing energy from wind, biomass and biogas, and for two new wind parks to be built off the Scandinavian country's coast by 2012.

Cars running on hydrogen fuel will be exempt from taxes while the tax-free status of electric cars will be extended until 2012, according to the statement.

"The creation of a stable framework for investments in renewable energy is in everyone's interest," Hedegaard said, adding that Denmark would also try to slash its overall energy use by two percent by 2011 compared to 2006 levels, and by four percent by 2020.

When it comes to reducing energy use, "Denmark is a world leader and we intend to continue in the same mode," Hedegaard said, pointing out that "In 2025, (Denmark's) total energy consumption will not have risen in 50 years."

Glad to see that someone at Forbes realizes aggressive government action on renewable energy, energy efficiency, and carbon caps are good for business.

[Yes, I'm aware that Denmark's carbon commitment is so strong it will require complementary measures to meet. That is the nature of the EU approach.]

This piece originally appeared in Climate Progress.

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(Posted by Joe Romm in Bright Green Economy at 5:55 PM)