Climate Compass Blog
In our previous posts, I described some of the benefits to national security and the environment with the use of plug-in electric vehicles (PEVs). This final post takes a look at what is often the most important issue to Americans: their wallets. PEVs are not cost-competitive with conventional vehicles in most situations yet, but there are some considerations that could be compelling for consumers to consider this winter when the first PEVs hit the market.
A small company finding it hard to sell its residential energy usage monitoring devices starts a “parent-teenage contract” marketing campaign. The teenager gets the parents to buy the device, and then they both sign a contract stipulating that the teenager will keep half the money saved on reduced energy usage. As the savings start to roll in, the teenager becomes more motivated to improve the household’s energy efficiency as do the parents, while the company points to this positive experience as it seeks additional customers for its monitoring device. This model has achieved success on a small scale, but could it be adopted on a wider level as it is driven by a business case, contains ingredients for cultural transformation and taps into incentives that appear to be driving action?
This was one of the many thought-provoking anecdotes shared at the ninth Green Innovation in Business Network (GIBN) Solutions Lab held in Boston where the 90 or so participants spent the day coming up with solutions to barriers faced by companies pursuing energy efficiency. The Pew Center on Global Climate Change was a co-sponsor of the event, along with the Environmental Defense Fund, Ashoka, Microsoft, Net Impact Boston, and many other partners. (For more information on GIBN Solutions Labs and the topics discussed at this specific event please click here.)
The GIBN Solution Labs are one-day workshops structured in an “unconference” format where participants are divided into small groups of about eight or less. Each group brainstorms solutions to a specific issue or barrier and reports back to the whole group at the end of the day. With the umbrella theme of overcoming barriers to energy efficiency, the Boston GIBN Solutions Lab focused on 14 specific topics, such as financing, making the business case and motivating the public on energy efficiency. Participants including companies, consultants, academics, and non-governmental organizations spent the morning exploring a variety of topics and then chose one in the afternoon to focus on in depth through a problem identification and solution design process.
Peter Senge, founding chair of Society for Organizational Learning and senior lecturer at the Massachusetts Institute of Technology, kicked off the workshop with a thought-provoking speech that emphasized the need for a comprehensive vision for energy efficiency instead of piecemeal solutions. By the end of the workshop some pieces of the vision had emerged: establish energy efficiency as a social norm; create business models that support energy efficiency investments; and design methods to more effectively communicate the benefits of energy efficiency.
The day was filled with a constant buzz of conversations out of which emerged some “out of the box” ideas as well as best practices. The group tackling the issue of motivating the public on energy efficiency proposed a K-12 energy efficiency curriculum that would result in children passing along the learning to their parents. Interestingly, the group on improving energy efficiency of buildings also saw children as key players. It proposed student projects involving energy audits and efficiency implementation measures for school buildings. A “just do it,” results-oriented approach was suggested to get senior management buy-in for energy efficiency projects: do the energy audit (which many utilities will provide free of charge) and then use the results of potential energy savings to convince senior management to implement the energy efficiency measures. Creative employee communication methods were also suggested such as distributing figures on how much paper and printer toner is being used by the office or putting up a sign next to the printer asking “Do you really need to print this?” There were also some “out of the box” topics: one group looked at the water-energy nexus and noted that understanding the relationships between water usage and energy could spur new technical innovations such as water-less laundry systems.
Discussions also emphasized known best practices, which were useful to participants just getting started on energy efficiency and sustainability issues. For example, developing a detailed work plan and timeframe when proposing an energy efficiency project to senior management was essential in getting their approval to move ahead. Additionally, continuous monitoring and progress reports are critical in maintaining momentum and receiving the okay to pursue more projects in the future. Recommendations for embedding energy efficiency within corporate supply chains included clearly communicating energy efficiency expectations to suppliers; helping them find the right resources to implement energy efficiency measures; and auditing suppliers to ensure implementation and maintenance.
The end-of-day presentations highlighted that while each group was tackling different topics related to energy efficiency they struggled with some common barriers. For example, financing and communicating energy efficiency were issues that almost all groups found necessary and yet difficult to overcome.
In terms of specific solutions, not everyone went home with sure-fire answers to how they were going to fund their energy efficiency projects or convince senior management to make energy efficiency a priority. However, most participants did leave with at least a few new ideas to try out and the understanding that in order to be an effective component of the effort to reduce greenhouse gas emissions, energy efficiency required a comprehensive, system-based approach.
Aisha Husain is an Energy Efficiency Fellow
The United States is at a crucial crossroad in its stance on clean energy policy. Once the leader in emerging clean technology markets, the U.S. now trails European nations and China in the research, development, and deployment of many new energy technologies. Financial analysts and industry insiders presented a stark choice at a standing-room only hearing hosted by the House Select Committee on Energy Independence and Global Warming last week: either we can adopt and extend policies that promote domestic growth of clean energy industries, or we can continue to fall further behind other countries around the world in our ability to compete in the markets of the 21st century. Chairman Ed Markey (D-MA) echoed the experts in saying that without clear long-term and short-term incentives, companies will invest clean energy dollars in other countries, most notably China. In effect, we will be trading our addiction to Middle Eastern oil for an addiction to Asian clean energy technologies.
Clean energy technology markets are already substantial in scope and are likely to grow in the coming decade. According to Bloomberg New Energy Finance, global investments in new forms of clean energy have already surged from under $50 billion in 2004 to more than $170 billion four years later. And as mentioned in our brief on Clean Energy Markets, annual investments in global renewable energy could reach $424 billion a year in 2030.
The panel of expert witnesses advised the Committee that if the United States wants to be a leader in clean energy, it needs to foster innovation by extending successful programs like tax credits, loan guarantees and grants, and adopt a renewable energy standard (RES). Tom Carbone, Chief Executive Officer of Nordic Windpower, said firms like his need clear market signals, such as a price on carbon or a RES, so they can respond to market demand.
Michael Liebreich, Chief Executive of Bloomberg New Energy Finance, emphasized the importance of market signals. Under an RES, the government would require that a certain percentage of utilities’ power plant capacity or generation come from renewable sources by a given date, and mechanisms such as credit trading would allow flexibility in meeting this requirement. However, the RES needs both to be ambitious and to have stiff penalties for noncompliance in order to be successful. Such a policy solution could help create the market demand clean energy firms need to establish footholds and ultimately achieve significant, self-reinforcing growth.
Mark Fulton, Global Head of Climate Change Investment Research at Deutsche Bank, urged the adoption of policies that are transparent, have longevity, and have certainty (TLC) in order to ensure the United States has a competitive advantage in global energy markets. Investors want transparent policies that clearly define the rules and create a level playing field. So to attract private funding, these policies should be in place for the length of the investment and should not be subject to the kind of frequent and uncertain renewal that has stymied the production tax credit and investment tax credit.
In addition to their environmental benefits, Ravi Viswanathan, General Partner at New Enterprise Associates, believes that these policies are exactly what are needed at this uncertain economic time. Mr. Viswanathan argued that clean energy investments can lead to job creation and energy independence. If we have the right incentives, clean energy jobs would be created domestically rather than abroad. Innovation has long been a source of our competitive advantage. Other countries, such as China, have speed, capital, and scale, and they are exercising their manufacturing advantage. Now, these countries are beginning to do something that investors had not anticipated: foster innovation. Once other countries start innovating in earnest, unless the United States takes action, the economic benefits associated with these technologies will go elsewhere.
In his closing statement, Chairman Markey highlighted the role government has played in fostering innovation and developing new markets, citing examples from the Manhattan Project to the internet. In all past cases, the United States showed leadership in developing a national plan that incentivized private investment. We need a similar plan today in the energy sector that incorporates Fulton’s principles of TLC and harnesses the power of the markets to spur innovation. As mentioned in our Clean Energy Markets brief, well-crafted climate and clean energy policy can give nascent clean energy industries a foothold by creating domestic demand and spurring investment and innovation. The time to act is now: through policy leadership at home and abroad, the United States can position itself to become a market leader in the industries of the 21st century.
Several of my previous posts have examined the remarkable weather of the past year, including the unusual U.S. East Coast snowstorms this winter, the wide array of floods and heat waves this summer, and how these can help us understand our vulnerabilities to climate change. The average land surface temperature this summer (June-August) was the warmest on record globally and the fourth warmest on record in the United States.
Now that northern summer has come to a close, we can take stock of just how warm it was. Christopher C. Burt—weather historian, extreme-weather guru, and author—takes a look at temperature records set in the U.S. and around the world this summer in his blog at Weather Underground. Some of his findings include:
- Fifteen (15) U.S. cities recorded their warmest summer (June-August) ever.
- Only one U.S. city (Santa Barbara, CA) recorded its coldest summer.
- Seventeen (17) countries set new records for high temperatures, breaking the previous record of fifteen (15) countries set in 2008.
- No countries recorded a record low temperature.
- The Arctic country of Finland recorded a high temperature of 99°F at the Joensuu airport.
- A town in Pakistan recorded a record high temperature of 128.3°F.
- Los Angeles recorded its highest ever temperature of 113°F this Monday, in spite of an otherwise cool summer.
It’s important to put this single year into a broader perspective; if this warmth is just an aberration, then we might be wasting time talking about it. But it is clearly part of a much longer warming trend that has been going on for decades. A recent report from the National Oceanographic and Atmospheric Administration announced that 2009 was one of the ten warmest years on record (since 1880) and that the 2000s was the warmest decade followed by the 1990s and then the 1980s. If the first 9 months of this year are an indication, the 2010s appear poised to continue this upward march in temperatures.
(Figure Source: NOAA’s State of the Climate in 2009, Chapter 2)
Jay Gulledge is Senior Scientist and Director of the Science and Impacts Program
This month I joined John Donahue, the CEO of eBay, at a National Press Club event to discuss the climate benefits created by small, online retail businesses. The retail sector—and the private sector more broadly—has a huge opportunity to innovate and drive us toward a more climate-friendly clean energy economy, and we are encouraged that eBay is stepping forward to make this point.
Active business community engagement is fundamental both to achieving effective climate policy and to achieving real reductions in greenhouse gas emissions. Industry must work with their employees, their supply chain, and policy makers to make the case that addressing a changing climate is essential and can be good for business—providing policy certainty, leading to innovation and investment, and ultimately helping to move our economy towards a low-carbon future.
According to the new eBay-commissioned white paper, small e-retailers facilitate the reuse of products and eliminate the need for carbon-intensive brick-and-mortar stores, both of which are climate-friendly compared to big box retail. For instance, it suggests that since eBay’s founding 15 years ago, the infrastructure savings from its online marketplace alone have cumulatively displaced emissions equivalent to approximately 4 million tons of CO2 per year, or the annual output of 760,000 cars—roughly the number registered in the state of Kansas or West Virginia.
In our current period of policy uncertainty, one thing we do know is that energy efficiency matters and it works. We also know from the work we do on employee engagement that individuals and consumers are a huge untapped resource in the effort to seriously address our energy-climate challenges. It’s clear that the key role for retailers—both online and “offline”—is to connect consumers to low-emission/energy-efficient goods and services, and companies such as eBay and Best Buy, a featured case study in our recent report on corporate energy efficiency, are doing just that.
Eileen Claussen is President