By Annie Snider
Published June 16, 2010
On the heels of President Obama’s Oval Office speech marrying the BP oil spill with American’s fossil fuel dependency, energy cognoscenti gathered in Washington Wednesday to discuss the state of play on the most near-term, cost-effective step the country can take to cut that dependence -- energy efficiency.
Efficiency has been the “duh” of the energy world for decades. Yet, despite the fact that many investments in improved efficiency pay for themselves in just a few years, and even with a handful of federal and regional incentive programs and public education campaigns in place, there remains tremendous unrealized potential.
“Energy efficiency is the fifth fuel,” said retired Senator Timothy Wirth, who was a key author of the 1990 cap-and-trade program for sulfur dioxide and is now president of the United Nations Foundation and Better World Fund. “Efficiency is one of the things that unites people and that we can and must get done now.”
The conversation at the 21st annual Energy Efficiency Forum centered on two key ways of seizing the potential of efficiency: government leadership and behavioral science.
“This is a new Sputnik moment -- not only because of what’s happening in the Gulf, but because of what’s happening in China,” said Rep. Steve Israel, D-N.Y. His call for an ambitious presidential vision akin to President John Kennedy’s 10-year plan to put a man on the moon was a refrain among both political and industry leaders.
“We’ve had 30 years of half-steps, back-steps, missteps, no steps,” Israel said. “In that time we’ve doubled oil imports and slashed the R&D budget by 87 percent.”
Aside from the kickstart that an ambitious national goal could give the field, financing remained the focus of proposed federal programs.
Israel, a former member of the House Armed Services Committee who casts clean energy squarely as an issue of national security, is a proponent of PACE (Property Assessed Clean Energy) bonds. The program, which would finance the upfront cost of efficiency measures in commercial and residential property through an annual assessment on the property tax bill, is part of the House-passed climate bill. Israel says PACE bonds would fill in what he calls “the three missing words” -- return on investment.
Meanwhile, Senator Jeff Merkley, D-Ore., who rolled out a report with the American Council for an Energy Efficient Economy on Tuesday calling for increased efficiency measures in pending energy legislation, emphasized the importance of low-cost loans and grants.
“If I can pay off the cost of new (efficient) windows with savings from my energy bill, then it’s truly a win-win,” Merkley said.
But economics are not enough, according to Robert Cialdini, a Ph.D. social scientist who specializes on consumer energy choices.
He did a three-year study in which a door tag encouraging energy conservation was placed on the front knobs of 1,000 Californians’ homes encouraging them to conserve energy.
Some of the tags emphasized the environmental benefit of conservation, others exhorted homeowners to think about future generations, another group laid out the potential to reduce power bills, a fourth set simply told homeowners that most of their neighbors were taking conservations measures, and a fifth, control tag encouraged energy savings without making a case for why.
What did Cialdini find?
“We found that just exhorting people to save energy was the same as doing nothing at all,” he said. The environmental, ethical and economic arguments prompted a small savings. But positioning energy conservation as the social norm was the clincher -- it snagged energy savings three times the size.
“People follow the lead. They want to know what people as similar as possible to them are doing,” Cialdini explained. “We think, ‘If people like me are doing it, then it’s probably the thing to do.’”
Capitalizing on the potential of the efficiency piece of the energy puzzle will take a combination of behavior change, improved business models and new technology (more on the technology piece in an upcoming post). It may sound like an enigmatic formula today, but more than one speaker drew a parallel to the speed with which cell phones penetrated the market. In 1990, few would have dreamed that the high-priced brick would become the pocket-computer necessity that it is to many today.
“We have too many companies, too many investors sitting on the sidelines now,” Commerce Secretary Gary Locke, recently returned from a clean energy trade mission to China and Indonesia told the forum. “Our challenge is to write a different story.”
Annie Snider is an environment reporter based in Washington, D.C. You can follow her on Twitter @AnnElizabeth18.
Thursday, 17 June 2010
Warming Up to Climate Change
Schools Work With Companies to Develop Strategies on the Environment and Sustainability
BETH GARDINER
Business school faculty and students are applying their management skills to one of the world's knottiest problems: climate change.
IMD Business School worked with conservation group WWF on case studies about how companies reduced greenhouse-gas emissions.
.Several years after global warming first became a big topic in B-school classrooms and cafeterias, schools are now digging into the issue in a far more detailed way. There are new faculty posts dedicated to environmental concerns, case studies highlighting companies that have succeeded in shrinking their carbon footprints and a slew of student consulting projects on cutting emissions. Norwich Business School in England recently launched what it says is the world's first M.B.A. in strategic carbon management.
"This has gone from what 10 years ago, when I started, was kind of a novelty to something that is a core part of our business, because it's a core part of business," says Gail Whiteman, who holds a newly created chair in sustainability and climate change at Rotterdam School of Management, Erasmus University, in the Netherlands. "As opposed to a few years ago, the legitimacy within the business school has climbed significantly."
Dr. Whiteman says her school's corporate advisory board, composed of executives from large corporations, had recently told her sustainability and climate concerns should be one of the institution's three key focuses.
"There was something like €300 billion worth of responsibility in that room which was saying 'This is not decorative,'" she says. "They're strongly committed to doing something on climate change and they need staff who know something about it."
Like many business school faculty working on climate issues, Dr. Whiteman emphasizes that it goes beyond corporate social responsibility. Retooling for a low-carbon economy must be a central concern for businesses, they say, particularly since governments around the world are likely to eventually require it.
At IMD business school in Switzerland, professors worked with the conservation group WWF to write 13 case studies on companies that had taken innovative steps to cut greenhouse-gas emissions. A representative of the school joined WWF in distributing them at the Copenhagen climate summit in December, says Aileen Ionescu-Somers, director of IMD's Center for Corporate Sustainability Management.
Topics included the Tetra Pak packaging firm's decision to site a new Chinese plant near sources of renewable power and an internal finance mechanism at Johnson & Johnson intended to facilitate funding for long-term carbon-saving projects, Dr. Ionescu-Somers says.
She argues that business schools have a big role to play in showing future managers the importance of sustainability, noting that IMD's research indicated the biggest obstacles to companies working in a more environmentally friendly way were not external issues but their own executives' mindsets.
"Integrating this as part of how you think as a business leader will definitely allow more opportunities to be perceived, as opposed to only risks, in the area of sustainability," she says. IMD is starting an executive-education program on sustainability this fall, also in collaboration with WWF.
At the China Europe International Business School in Shanghai, students in a new, mandatory M.B.A. course on sustainability and responsible leadership work jointly with companies, non-profit groups or government agencies on a broad range of social and environmental problems, many of them with climate implications, says Richard Brubaker, a sustainability consultant and visiting professor who teaches the course.
"For China these issues are very real," says Lydia Price, the school's M.B.A. program director. "There's just no way that China can continue its economic growth without confronting (sustainability) issues very seriously, and that means they will have a very strong impact on our students in their careers."
Whether through regulation, government investment in clean technologies or consumer demand for environmentally sensitive practice, "if they're working in China, they're going to be affected by this in a big way, sooner rather than later," she says.
Sustainability, the consumption of natural resources at a rate that doesn't deplete the planet, now cuts across the curriculum, Dr. Price says. "We're starting to get into the finance field, we're talking about sustainable investment, we're seeing it emerge in all the functional areas of business, sustainable marketing, sustainable supply chain."
At the University of Cambridge's Judge Business School, policy modeling expert Chris Hope designed a model policymakers and businesses can use to estimate the social cost of carbon, using their own assumptions about temperature changes and their economic impact. It's been used by the U.S. Environmental Protection Agency and the authors of the influential Stern Report on the economics of climate change, commissioned by the U.K. government.
The model lets policymakers see what the long-term costs of different decisions on carbon cutting might be, by putting a price on the damage done by every additional ton of carbon in the atmosphere. That figure varies depending on the assumptions used, but Dr. Hope puts it at around $80. Whatever amount policymakers come up with is exactly where they should set a carbon tax, he argues.
"That's a really useful number, both for governments who might be thinking of using these kinds of financial measures and for businesses who are thinking 'What might we be asked to pay in the future?'" Dr. Hope says.
He's also shared his model with Britain's Committee on Climate Change, which advises the government on carbon limits, and international bodies including the Asian Development Bank, he says. And big corporations are increasingly seeking his help as they consider plans to shrink their carbon footprint.
"Business schools should have a practical focus; we're interested in results in the real world," says Dr. Hope. "And so we would certainly be a good place to move beyond the complex science and see what the implications of that science might be for businesses and for government."
Ms. Gardiner is a writer in London. She can be reached at reports@wsj.com
BETH GARDINER
Business school faculty and students are applying their management skills to one of the world's knottiest problems: climate change.
IMD Business School worked with conservation group WWF on case studies about how companies reduced greenhouse-gas emissions.
.Several years after global warming first became a big topic in B-school classrooms and cafeterias, schools are now digging into the issue in a far more detailed way. There are new faculty posts dedicated to environmental concerns, case studies highlighting companies that have succeeded in shrinking their carbon footprints and a slew of student consulting projects on cutting emissions. Norwich Business School in England recently launched what it says is the world's first M.B.A. in strategic carbon management.
"This has gone from what 10 years ago, when I started, was kind of a novelty to something that is a core part of our business, because it's a core part of business," says Gail Whiteman, who holds a newly created chair in sustainability and climate change at Rotterdam School of Management, Erasmus University, in the Netherlands. "As opposed to a few years ago, the legitimacy within the business school has climbed significantly."
Dr. Whiteman says her school's corporate advisory board, composed of executives from large corporations, had recently told her sustainability and climate concerns should be one of the institution's three key focuses.
"There was something like €300 billion worth of responsibility in that room which was saying 'This is not decorative,'" she says. "They're strongly committed to doing something on climate change and they need staff who know something about it."
Like many business school faculty working on climate issues, Dr. Whiteman emphasizes that it goes beyond corporate social responsibility. Retooling for a low-carbon economy must be a central concern for businesses, they say, particularly since governments around the world are likely to eventually require it.
At IMD business school in Switzerland, professors worked with the conservation group WWF to write 13 case studies on companies that had taken innovative steps to cut greenhouse-gas emissions. A representative of the school joined WWF in distributing them at the Copenhagen climate summit in December, says Aileen Ionescu-Somers, director of IMD's Center for Corporate Sustainability Management.
Topics included the Tetra Pak packaging firm's decision to site a new Chinese plant near sources of renewable power and an internal finance mechanism at Johnson & Johnson intended to facilitate funding for long-term carbon-saving projects, Dr. Ionescu-Somers says.
She argues that business schools have a big role to play in showing future managers the importance of sustainability, noting that IMD's research indicated the biggest obstacles to companies working in a more environmentally friendly way were not external issues but their own executives' mindsets.
"Integrating this as part of how you think as a business leader will definitely allow more opportunities to be perceived, as opposed to only risks, in the area of sustainability," she says. IMD is starting an executive-education program on sustainability this fall, also in collaboration with WWF.
At the China Europe International Business School in Shanghai, students in a new, mandatory M.B.A. course on sustainability and responsible leadership work jointly with companies, non-profit groups or government agencies on a broad range of social and environmental problems, many of them with climate implications, says Richard Brubaker, a sustainability consultant and visiting professor who teaches the course.
"For China these issues are very real," says Lydia Price, the school's M.B.A. program director. "There's just no way that China can continue its economic growth without confronting (sustainability) issues very seriously, and that means they will have a very strong impact on our students in their careers."
Whether through regulation, government investment in clean technologies or consumer demand for environmentally sensitive practice, "if they're working in China, they're going to be affected by this in a big way, sooner rather than later," she says.
Sustainability, the consumption of natural resources at a rate that doesn't deplete the planet, now cuts across the curriculum, Dr. Price says. "We're starting to get into the finance field, we're talking about sustainable investment, we're seeing it emerge in all the functional areas of business, sustainable marketing, sustainable supply chain."
At the University of Cambridge's Judge Business School, policy modeling expert Chris Hope designed a model policymakers and businesses can use to estimate the social cost of carbon, using their own assumptions about temperature changes and their economic impact. It's been used by the U.S. Environmental Protection Agency and the authors of the influential Stern Report on the economics of climate change, commissioned by the U.K. government.
The model lets policymakers see what the long-term costs of different decisions on carbon cutting might be, by putting a price on the damage done by every additional ton of carbon in the atmosphere. That figure varies depending on the assumptions used, but Dr. Hope puts it at around $80. Whatever amount policymakers come up with is exactly where they should set a carbon tax, he argues.
"That's a really useful number, both for governments who might be thinking of using these kinds of financial measures and for businesses who are thinking 'What might we be asked to pay in the future?'" Dr. Hope says.
He's also shared his model with Britain's Committee on Climate Change, which advises the government on carbon limits, and international bodies including the Asian Development Bank, he says. And big corporations are increasingly seeking his help as they consider plans to shrink their carbon footprint.
"Business schools should have a practical focus; we're interested in results in the real world," says Dr. Hope. "And so we would certainly be a good place to move beyond the complex science and see what the implications of that science might be for businesses and for government."
Ms. Gardiner is a writer in London. She can be reached at reports@wsj.com
Disaster is making US think again about cleaner energy
By Michael McCarthy, Environment Editor
Thursday, 17 June 2010
The Deepwater Horizon oil spill is making Americans think more about a clean energy future – but not yet to the extent of having to pay for it, or to tackle climate change, one of the leading US thinkers on global warming policy said yesterday.
US citizens are "horrified" by the pollution in the Gulf of Mexico, and are starting to think more about cleaner energy sources such as wind and wave power, said Eileen Clausen, president of America's foremost climate think-tank, the Washington-based Pew Center on Global Climate Change.
However, she said, when consumers are asked by pollsters if they would be willing to pay more for such a future, they say no, and say the government should pay. Furthermore, Ms Clausen said, the Gulf disaster was giving US energy policy "a nudge rather than a shift" in the direction of clean energy, but it would probably not be enough to bring forward legislation to curb carbon emissions, at least for the present.
The BP spill has certainly helped to focus minds in Washington on energy policy, and the climate and energy bill put forward by Democratic senators John Kerry and Joe Lieberman, which is currently stuck in the Senate for want of bipartisan support.
Among much else the bill would commit the US to reducing its carbon emissions by 17 per cent on 2005 levels by 2020, which would be brought about by establishing an emissions trading system. Republicans characterise this as an "energy tax" and will not vote for the bill, which cannot pass without some Republican support.
However, the chances of "doing something" on energy this summer were probably greater as a result of the spill, Ms Clausen said, suggesting that clean-energy measures might be agreed upon which did not specifically tackle global warming, or set a price for carbon.
Thursday, 17 June 2010
The Deepwater Horizon oil spill is making Americans think more about a clean energy future – but not yet to the extent of having to pay for it, or to tackle climate change, one of the leading US thinkers on global warming policy said yesterday.
US citizens are "horrified" by the pollution in the Gulf of Mexico, and are starting to think more about cleaner energy sources such as wind and wave power, said Eileen Clausen, president of America's foremost climate think-tank, the Washington-based Pew Center on Global Climate Change.
However, she said, when consumers are asked by pollsters if they would be willing to pay more for such a future, they say no, and say the government should pay. Furthermore, Ms Clausen said, the Gulf disaster was giving US energy policy "a nudge rather than a shift" in the direction of clean energy, but it would probably not be enough to bring forward legislation to curb carbon emissions, at least for the present.
The BP spill has certainly helped to focus minds in Washington on energy policy, and the climate and energy bill put forward by Democratic senators John Kerry and Joe Lieberman, which is currently stuck in the Senate for want of bipartisan support.
Among much else the bill would commit the US to reducing its carbon emissions by 17 per cent on 2005 levels by 2020, which would be brought about by establishing an emissions trading system. Republicans characterise this as an "energy tax" and will not vote for the bill, which cannot pass without some Republican support.
However, the chances of "doing something" on energy this summer were probably greater as a result of the spill, Ms Clausen said, suggesting that clean-energy measures might be agreed upon which did not specifically tackle global warming, or set a price for carbon.
Coalition to announce support for new nuclear power
Government will ease the way for extra plants but not provide subsidies, energy minister Charles Hendry to tell industry chiefs
Press Association
guardian.co.uk, Wednesday 16 June 2010 11.05 BST
Energy minister Charles Hendry will today set out the government's support for new nuclear power, in the face of opposition from the Tories' coalition partners, the Liberal Democrats.
Hendry will tell the Nuclear Industry Forum that there is a role for new nuclear plants, provided they do not require public subsidies.
In one of the key differences between the two coalition parties, the Tories back a new generation of private sector-funded nuclear power stations while the Lib Dems have long opposed new nuclear build.
The Tory junior minister, who works under Lib Dem energy secretary Chris Huhne, said conversations he has had with companies suggest they are willing to invest without being subsidised.
But the government will take steps to remove "unnecessary" barriers to building new nuclear power stations.
Government support is likely to include a strong floor price for carbon, which could be introduced in next week's emergency budget. This would push up the price of allowances for polluting and incentivise investment in low-carbon power such as nuclear.
Hendry is expected to tell the forum in Westminster: "The coalition agreement clearly sees a role for new nuclear, provided that there is no public subsidy.
"We are clear. It is for private sector energy companies to construct, operate and decommission new nuclear plants.
"It will be for us to ensure the appropriate levels of safety, security and environmental regulation."
He will also tell industry leaders: "From the commitment I've seen from the nuclear industry, I have no doubt that you can rise to the challenge.
"Nuclear power can have a key role in our energy mix. But I appreciate clarity from us is essential if new investment is to happen.
"I am pleased that some of those most interested in new nuclear, such as EDF, have welcomed the coalition's position on nuclear."
Under the coalition agreement between the Tories and Lib Dems, the government will bring forward a national planning statement to parliament that will pave the way for new nuclear build.
Lib Dems will be allowed to speak against the plans but the party's MPs will abstain from the vote.
Press Association
guardian.co.uk, Wednesday 16 June 2010 11.05 BST
Energy minister Charles Hendry will today set out the government's support for new nuclear power, in the face of opposition from the Tories' coalition partners, the Liberal Democrats.
Hendry will tell the Nuclear Industry Forum that there is a role for new nuclear plants, provided they do not require public subsidies.
In one of the key differences between the two coalition parties, the Tories back a new generation of private sector-funded nuclear power stations while the Lib Dems have long opposed new nuclear build.
The Tory junior minister, who works under Lib Dem energy secretary Chris Huhne, said conversations he has had with companies suggest they are willing to invest without being subsidised.
But the government will take steps to remove "unnecessary" barriers to building new nuclear power stations.
Government support is likely to include a strong floor price for carbon, which could be introduced in next week's emergency budget. This would push up the price of allowances for polluting and incentivise investment in low-carbon power such as nuclear.
Hendry is expected to tell the forum in Westminster: "The coalition agreement clearly sees a role for new nuclear, provided that there is no public subsidy.
"We are clear. It is for private sector energy companies to construct, operate and decommission new nuclear plants.
"It will be for us to ensure the appropriate levels of safety, security and environmental regulation."
He will also tell industry leaders: "From the commitment I've seen from the nuclear industry, I have no doubt that you can rise to the challenge.
"Nuclear power can have a key role in our energy mix. But I appreciate clarity from us is essential if new investment is to happen.
"I am pleased that some of those most interested in new nuclear, such as EDF, have welcomed the coalition's position on nuclear."
Under the coalition agreement between the Tories and Lib Dems, the government will bring forward a national planning statement to parliament that will pave the way for new nuclear build.
Lib Dems will be allowed to speak against the plans but the party's MPs will abstain from the vote.
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