Grumpy old man gets happy--how can this be? Isn't the U.S. economy hopelessly doomed?

I'm a grumpy old man. It's very easy to get really angry or completely depressed blogging about cleantech, or the need for it.
Written by Harry Fuller, Contributor

I'm a grumpy old man. It's very easy to get really angry or completely depressed blogging about cleantech, or the need for it. From the global warming arguments to whole nations--like my own and China--stubbornly refusing to move to new technologies, this seems to be an era of ultimate human folly. Instead we Americans borrow money from other countries to buy oil from other countries. We know the problems, we know where there are possible solutions, we choose not to.

But today I spoke with a young, energetic man who made me feel positively hopeful if not down-right exuberantly optmistic. I was on the phone with Deron Lovaas, the oil and gasoline guy with the Natuiral Resources Defense Council. And he sees some very positive and useful things in our not-too-distant future. As I've previously blogged the current Lieberman-Warner Climate Security Act is not likely to pass the Senate this election year. There's no companion bill in the House, Lovaas points out. Even if one were to pass Congress, the current President would veto it. In the face of this the NRDC is supporting this bill and Mr. Lovaas is hopeful, almost confident. What gives?


First, Lovaas pointed out that cleantech laws are almost inevitable now in the U.S. Politicians realize the current state of affairs, what our Texas President himself calls our "addiction to oil," isn't sustainable. It permeates the building trades now as well. That's what I just heard from one CEo who sells green poroducts for construction. Greenness is a decision-altering quality.

Both Repub and Dem Presidential nominees have committed to facing global warming and getting new energy use laws passed. Then Lovaas quoted the single most positive factoid of our talk: 85% of the U.S. trade deficit is from the importation of petroleum and cars. So if we Yanks really do get on the stick and move to more efficient energy use and gradually convert to alternative cleantech sources we will, simultaneously make the American economy healthlier and more self-sufficient.

Lovaas would like to see a law sooner rather than later, but he's assured it's coming. His job includes demonstrating how important it is economically, not just environmentally, for the U.S. to start producing its own efficient cars and alternative energy. The proposed changes in federal law would encourage all manner of cleantech initiatives, said Lovaas:

Quicker introduction of plug-in and other electric vehicles.

Incentives and cash for individual states to encourage energy conservation and innovation programs that are appropriate...wind in Kansas, solar in Arizona, tidal in Maine, etc.

Any new law would likely lead to a retrofitting boom for millions of energy wasting buildings, over half of all energy use in America now goes into making and operating buildings.

A rebuilt electricity grid. Sounds like lots of jobs and manufacturing needed for this one.

Conservation, conservation, conservation. Less oil imported. Less money borrowed by the U.S. Lovaas sees biofuels from diesel to gasoline being produced from non-food stocks.

Carbon caps and trading system. This would make carbon emissions valuable and encourage reuse of CO2. Lovaas sees it being used more and more to push more oil up from existing or formerly abandoned oil wells. The oil comes up, the CO2 stays in the ground, "sequestered" being the term now in vogue. I've blogged about one company, Serious Materials, that sees CO2 becoming cleantech wallboard for all those retrofitted buildings.


The first couple years after the law is passed will be consumed on the federal level by oragnizational and regulatory planning. Meanwhile, in Lovaas's sceanario, states could immediatley begin to take advantage of the provided incentives. Many states already give rebates or tax breaks to people or businesses using energy saving measures and tech. Presumably the next generation of the EPA would administer this new law, and might even allow some states to raise their auto emission standards.

Ten years out Lovaas sees a completely restructured energy market and electricity grid. Widespread use of solar, wind, cellulosic ethanol. Numerous jobs in the building retrofit business and manufacturing the needed products. Imagine, he posited, if Detroit made cars we wanted to buy, and the energy we used was coming from inside the U.S.? Is this man a hopeless dreamer? At least he gave this grumpy old man some hope. My generation--the greatest-waste generation--messed this up, maybe the next can turn it around.


I had to ask what future the NRDC favors for nuclear energy. Lovaas cited cost, waste storage and security issues as three factors that make nuclear not a favorite at NRDC. The current federal bill, he said, has little encouragement to increase nuclear power generation in the U.S. He said the models of Japan and Germany, increasing use of wind and solar, have more appeal than the model of nuclear-powered France.

McKinsey and Co. on Greenhouse Gas Reduction

McKinsey recently released a report "Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?" You can see a little of the report's findings here, for free. McKinsey says cleantech businesses aimed at energy efficiency and conservation are going to continue to be fine investments.

McKinsey summarizes their overall energy market assessment thus: "MGI finds that global industrial sectors need just under half of the total capital required to capture the energy productivity opportunities we have identified—$83 billion a year. Residential sectors around the world need some $40 billion a year, roughly one-quarter of the total. The capital needs of commercial and transportation end-use sectors are smaller at $22 billion and $25 billion a year, respectively. Breaking down capital requirements geographically, developing regions represent two-thirds of the incremental capital needed, with China alone accounting for $28 billion or 16 percent of the total $170 billion annual requirement. The United States accounts for $38 billion or 22 percent of the total.

"A wide range of energy-market failures currently discourage consumers and businesses from embracing higher energy productivity, and they deter investors from making the capital outlays that would help end users to overcome initial financing barriers. These market failures include fuel subsidies that directly discourage productive energy use, a lack of information available to consumers about the kinds of energy productivity choices that are available to them, and agency issues in high-turnover commercial businesses."

The words are from McKinsey and these guys are front-row capitalists just trying to see through a global problem. "Energy market failures," man I'm sure glad I didn't say that, it would set off those screams of "eco-socialist-nazi-do-gooder." Seeing such a statement from a mainstream gang of capitalists sure makes me smile. A little less grumpy now.

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