Mobilizing the Private Sector on Climate Change

June 14, 2011

“The lesson for public policy here is the importance of structuring incentives and managing expectations to shape business models and channel corporate resources in a positive rather than counterproductive way. In the face of global policy uncertainty, a key task is to maintain momentum by creating a predictable business and regulatory environment.”

By David L. Levy

Originally published in Transparency International’s Global Corruption Report 2010: Climate Change, and reprinted by permission. This report explores risks related to tackling climate change, from international policy-making to national level mitigation and adaptation strategies,   with a special focus on the forestry sector.

A global transition to a low-carbon economy requires the large scale mobilisation of financial, technological and organisational resources, many of which are concentrated in the hands of large multinational corporations. Of the US$500 billion in annual global investment needed over coming decades to keep warming within a 20 C limit, more than 80% will have to come from private sources.[1]

Climate change presents a profound strategic challenge to business, however. Measures to control the emissions of greenhouse gases (GHGs) most directly threaten sectors that produce and depend on fossil fuels, such as oil, power and transportation. Managers in energy-intensive industries, including cement, chemicals, paper and metals, have also been concerned  with the regulatory risk of higher costs for fuels and lower demand for energy-intensive products.

After years of hostility to any carbon regulation, government incentives, competitive pressures and non-governmental organisation (NGO) campaigns have led many firms in the last decade to craft business models that exploit potential market opportunities in low-carbon products and services. This shift in corporate political and market strategy has created a virtuous cycle, in which strengthened business coalitions have grown supportive of more stringent climate policy and widened the political space for action.

This cycle is fragile, however, and the momentum of this corporate conversion is already in danger of stalling. Climate change creates considerable competitive risk, as changes in prices, technologies and demand patterns disrupt traditional business models. Investing in new technologies can be a treacherous business. Automobile manufacturers, for example, find that they are dependent on existing infrastructure, creating barriers for electric vehicles, which require a network of charging stations. Multiple clean energy technologies are in competition, such as solar thermal versus photovoltaics, and ‘thin film’ versus ‘crystalline silicon’ solar cells, making it hard to pick winners.

Moreover, companies successful in one area of business cannot easily transition to new products and markets. Corporate managers know that the key lesson of business strategy is to stick to your ‘core competences’. Exxon lost money when it tried to diversify in the 1970s energy crisis,[2] and now understands that its expertise lies in geology, hydrocarbon chemistry, extraction and distribution. Rather than embrace radical change, it has enhanced its capacity in related low-carbon technologies. In 2009 Exxon announced a US$600 million algae biofuels project with a biotech company, and a US$41 billion acquisition of a major player in the shale gas sector.[3] These investments represent a better strategic fit than solar or wind, though they entail cross-industry partnerships to acquire external capabilities.

Similarly, oil and gas companies have befriended the coal industry as proponents of carbon capture and sequestration (CCS) technology,[4] as the expertise to extract fluid fuels is closely related to that required to re-inject CO2 underground. Although many of these emerging technologies will have to be proved to be environmentally safe and financially feasible, the model for cross-industry collaboration is strong, allowing companies to share risks, gain capabilities and shoulder the fixed costs of research and development.

Climate change presents a host of strategic uncertainties regarding the unfolding science, regulation, technological developments and competitor reactions. Thus, when British oil company BP committed itself to investing in solar and wind energy in 2000, it was competing in the same global oil market as Exxon, but perceived the risks very differently. BP plotted a strategy for a world in which mandatory emission controls appeared inevitable, carbon would carry a price tag, and consumers would demand low-emission products. A decade later, though, with growing regulatory uncertainty and its solar business far from profitable, BP has pulled back from its renewable energy investments, instead increasing its investments in Canadian oil sands.[5]

National and regional authorities have a vital role to play by implementing policies that provide incentives for positive corporate action. Bolstered by tax policies in Denmark and Israel, the company Better Place is developing a national replaceable battery infrastructure for pure electric vehicles that allows consumers to pay according to driving distance.[6] The Vélib bike rental system in Paris and the US-based Zipcar car rental firm similarly engage business and government in partnerships that transform markets and overcome systemic obstacles in infrastructure, scale and incentives.[7]

These initiatives move towards a service- rather than product-based business model. Moreover, they trigger competitive dynamics with far-reaching effects. Better Place has signed a deal with Renault–Nissan to supply the electric cars, and other car companies, fearful of falling behind, are accelerating their own plans for plug-in hybrids and pure electric vehicles.

Major companies in the US power sector have adopted a more proactive position on climate change in recent years. Duke Energy, Exelon and PG&E have joined initiatives led by the US Climate Action Partnership and the Pew Center on Global Climate Change that aim at emissions reductions by deploying renewables, boosting generation efficiency and implementing demand-side management (DSM) policies.[8] These companies might anticipate a future national cap-and-trade regime and carbon price, but they face more immediate and local pressures, notably escalating renewable or alternative energy portfolio standards in more than 30 US states.[9]

US states are also attempting to restructure power markets to provide incentives for energy efficiency. Most frequently, this takes the form of small ‘benefit charges’ being added to bills, which are used to subsidise consumer efficiency upgrades.[10] Several states are also examining California’s experience with rate decoupling, which rewards utilities with higher power prices for implementing energy efficiency and DSM measures.[11]

The lesson for public policy here is the importance of structuring incentives and managing expectations to shape business models and channel corporate resources in a positive rather than counterproductive way. In the face of global policy uncertainty, a key task is to maintain momentum by creating a predictable business and regulatory environment.

Business realises the dangers of the proliferation of multiple regulations, standards and carbon trading schemes, and large firms are joining groups that press for clear, predictable and coherent climate policy. In 2007 more than 60 of the world’s largest companies, including BP, Siemens, GE and Unilever, launched Combat Climate Change (3C), with the goal of developing ‘a worldwide policy framework to replace the Kyoto Protocol from 2013 and onwards’.  In the absence of an international treaty, the onus falls on the private sector, along with local and national governments, to seek novel business models that stimulate the transition to a low-carbon future.

[1] International Energy Agency (IEA), World Energy Outlook 2009: Executive Summary (Paris: IEA, 2009), p. 14.

[2] Wall Street Journal (US) ‘Exxon chief makes a cold calculation on global warming’, 15 June 2005.

[3], ‘Exxon Mobil lays $600 million on the line for algae fuels’, 14 July 2009;, ‘Exxon to buy XTO in $41 billion deal’, 14 December 2009.

[4] See, for example,

[5] (UK), ‘BP shrugs off anti-tar sands shareholder resolution’, 16 April 2010.

[6] See

[7] (US), ‘Paris’ popular bike program may inspire others’, 15 September, 2009; (US), ‘City of Baltimore launches car sharing program’, 1 July 2010.

[8] See and

[9] Pew Center on Global Climate Change, ‘Climate Change 101: State Action’ (Arlington, VA: Pew Center on Global Climate Change, 2009).

[10] Ibid.

[11] See Pew Center on Global Climate Change, ‘Decoupling in detail’, available at

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Corporate Governance for Sustainability

April 30, 2011

pardee green governance 2011 coverThe Boston University Pardee Center recently released this report on Governance for a Green Economy: Beyond Rio+20: Governance for a Green Economy. The report was released at a recent UN meeting preparing for the 2012 Rio+20 conference. Below is an edited version of my chapter in the report.

by David L. Levy

A global transition to a sustainable economy requires the large-scale mobilization of our financial, technological, and organizational resources. Climate change is one of the major concerns of this century, and it has been estimated that annual global investment of more than $500 billion will be needed over the coming decades to keep warming within a 2 degs. C limit. The vast scale of these investments and the need to integrate sustainable technologies, practices, and products across the supply chains of every economic sector highlight the importance of creating governance structures that will redirect corporate resources toward sustainability.

Growing concern about an international “governance deficit” has fuelled this embrace of private resources and capacity. It is important, however, to recognize that large companies are already, de facto, highly engaged in the fabric of global environmental governance systems in their roles as polluters, investors, suppliers, buyers, innovators, lobbyists, and marketers. Private decisions over products and processes, technologies and research, and distribution and sourcing have vast environmental consequences with wide societal ramifications and broad geographic reach.1

The Complexity of Carbon Lock-In

It is our current governance systems over energy and transportation that produce carbon lock-in, the “interlocking technological, institutional and social forces…that perpetuate fossil fuel-based infrastructures in spite of their known environmental externalities.”4 Lock-in is more than an economic and technological phenomenon. Institutions such as the mass media, unions, government agencies, and professional certification bodies generate standards, rules, norms, routines and cultural practices that stabilize the dominant technologies. The automobile, for example, is intimately connected to our patterns of work, leisure, and shopping. Organizations with vested interests associated with existing technologies, such as industry associations and unions, become powerful actors who perpetuate the status quo. An understanding of the complexity, interdependencies, and inertia of the current system highlights the challenges of a sustainability transition.

Against this background, what governance institutions and mechanisms could generate change? Here we must heed Machiavelli’s warning to avoid wishful thinking and start with the world as it is. It is pointless to preach to consumers to abandon their cars and plane travel, or to admonish companies to give priority to sustainability. Economic activity is deeply embedded in economic and social institutions, and companies are constrained by corporate governance, capital markets, competition, and the wider consumer culture. It is naïve to simply specify “ideal” governance institutions that would, for example, create a high global price for carbon, mandate clean production systems, and empower non-financial stakeholders. Meaningful change requires careful study of the contested terrain of corporate environmental practice and governance, and a long-term strategy to win new allies, reframe the issues, shift norms, realign economic incentives, and craft new rules and oversight mechanisms. What we need is a strategic approach to building governance for a green economy.   (more…)

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Arguing with Rocks

April 17, 2011

Review of: Challenged by Carbon: The Oil Industry and Climate Change, by Bryan Lovell. Cambridge University Press (2009)

This review was first published in International Affairs Volume 87, Issue 2,pages 467–520, March 2011

By David L. Levy

You cannot argue with rocks. This is the crux of Bryan Lovell’s argument in Challenged by Carbon, a book that combines a geological case for taking climate change seriously with an insider’s tale of the evolution of the oil industry’s stance on the issue. Lovell is a renowned geologist with degrees from Oxford and Harvard, and after a fifteen year career working with BP, is currently a senior research fellow at Cambridge and President of the Geological Society of London. The oil industry is, of course, responsible for emission of vast quantities of greenhouse gases and the major US-based companies have historically anchored corporate opposition to regulating carbon. After presenting the ominous evidence inscribed in the rocks about the severity of our climate problem, a more optimistic Lovell argues that the oil industry can also be part of the solution, by deploying its political prowess, financial resources, and technological expertise. He makes the case that sequestration, or Carbon Capture and Storage (CCS), is a feasible and cost effective solution for a significant portion of emissions.

Lovell explains how recent progress in geological science enables relatively high-definition dating of rock to within timescales of thousands, rather than millions, of years. Analysis of these long-buried rocks has revealed a dire warning for our industrial civilization. Around 55 million years ago, over 1000 gigatonnes of carbon (GTC) were released into the atmosphere during a short period, geologically speaking, of around 10,000 years. This coincided with an unprecedented warming of the planet, the Paleocene-Eocene Thermal Maximum. Ocean temperatures rose by 4-5 degrees Celsius, , mass extinctions of animal and plant life occurred, and it took nearly 200,000 years for the climate to settle down. We humans have already added about 300 GTC to the atmosphere in the last two centuries, and currently add about nine more every year.

You cannot argue with rocks, but you can argue with the interpretation of data encoded in them. For those like myself already convinced of the science of climate change, based atmospheric science and simulations, the geological evidence is further proof, if any was needed. Lovell sets out the scientific case in a reasonably accessible way, though I suspect there is much more intriguing story to be told about the evolution of the science, the debates amongst the geologists, and the realization of the dramatic import of the secrets in the ancient rocks. Lovell’s treatment of the evidence, however, is neither a compelling narrative nor particularly persuasive. Exploring the subject in the authoritative blog, I found that there are still large areas of uncertainty in the data and their interpretation.[1] Ten thousand years is a long time in climate politics. The total carbon released might have been up to 3000 GT, and with the higher levels of atmospheric CO2 at the time, even this represents less than doubling of the level. We don’t know enough about other influences on climate at the time, especially the more complex feedback effects among clouds, forests and ice cover.

In the most original section of the book, Lovell traces the role of geologists in BP in shifting the direction of the company. In January 1997, David Jenkins, BP’s Director of Technology and former Chief Geologist, sent a memo to BP’s managing directors emphasizing both the scientific and business case for climate change. This process culminated with CEO John Browne’s historic speech at Stanford University in May 1997, in which Browne broke ranks with the industry by acknowledging the reality of climate change and pledging to take steps to address it. Lovell makes the case that BP was particularly open to the influence of geologists because of the centrality of the discipline in the oil business and the consequent respect for their expertise, especially from internal corporate scientists. This resonates with findings from my own research (together with Professor Sandra Rothenberg) on industry’s response to climate change, which points to the importance of the organizational channels that filter and legitimize particular perspectives. At Exxon, Brian Flannery, a respected atmospheric scientist and a climate skeptic, led a highly centralized strategy team that left little room for debate. European companies, by contrast, lacked internal expertise in atmospheric science, and so relied more on outside scientists who hewed to the mainstream consensus.

Geologists also feature as Lovell’s heroes in finding ways to bury carbon back underground. The same technological expertise that is used to locate and extract oil and gas can be applied toward long-term storage in underground reservoirs, giving companies an economic interest in developing the process. Lovell the geologist points out that storage in existing oil and gas reservoirs is relatively straightforward but limited in potential scale. Far greater capacity is available in saline aquifers, though he acknowledges that the permanence and side effects are uncertain. If Lovell’s strength is geology, he falters, however, in making a clear business case for the commercial viability of CCS. He cites one study showing that CCS might add 1 to 5 cents per kilowatt hour to the cost of coal-fired power, which might be viable at the low end but more than doubles the cost of electricity at the high end. Various cost estimates for CCS are given, from $6 to $10 per tonne, though he notes that a carbon price of $50 per tonne would be needed to make it viable. Aside from the confusion of numbers, Lovell doesn’t comment on the political challenge of securing a carbon price this high, at least in the US context.

Lovell could be a very influential player in the climate debate as an oil industry expert and former inside. Despite his knowledge of the rocks, this book unfortunately suffers from uneven and inelegant style and structure, wandering from a fifteen page verbatim report on a public BP-Exxon debate to Edinburgh South election results and Hertfordshire Puddingstone, complete with pictures in case readers are unfamiliar with these rocks. Notably, Lovell recognizes that industry needs a push to take action.  Proclaiming that “Earth is not for negotiation”, Lovell advocates passionately for climate Keynesianism, stronger governmental policies and international institutions to create the incentives and regulations to steer corporate strategies. Climate policy is in disarray, however, and even a rock solid case does not seem to overcome the political obstacles to action.

[1] See, for example,

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Fukushima’s silver lining

March 19, 2011

By David Levy

If the triple catastrophe in Japan has any silver lining, it’s the boost to non-nuclear renewables such as wind and solar energy. Japan faces immediate power shortages in the wake of the earthquake, tsunami, and nuclear meltdown, and as Geoffrey Styles observes:

As of the end of 2009 Japan already had the world’s third-largest installed solar power capacity at 2,600 MW, to which another 1,000 MW or so was apparently added last year. For Japanese businesses suffering from rolling brownouts, solar power is one of their few options other than diesel generators for becoming more self-sufficient fairly quickly.

The Japanese nuclear disaster is already having global repercussions, as other countries review their nuclear energy strategies. “The industry could enter another two-decade global freeze like the one that followed the Chernobyl disaster in 1986”, according to the Financial Times. In the US, concerns about safety could rekindle the anti-nuclear movement and slow down development of new projects. The Swiss reacted first, suspending approvals for three new reactors. The German government announced a nuclear moratorium and that it is indefinitely shutting the oldest seven of the country’s seventeen plants. China announced that it was suspending new approvals for nuclear reactors, though Russia and France have declared their continued commitment to nuclear technology.

It’s possible that memories will fade and the world will get back to business as normal, putting the nuclear revival back on track. But the severity of this crisis in an industrialized country with an advanced nuclear industry and strong safety culture suggests that there could be a long term impact. Charles Perrow, Professor Emeritus of Sociology at Yale University, and author of the classic book Normal Accidents about Three Mile Island (and guest blogger on Climate Inc.), has argued that even with the best safeguards, occasional accidents are inevitable, or “normal”, given the extreme complexity of some technological systems combined with human fallibility, pressures for profits, lax governmental oversight, bureaucratic inertia and organizational hierarchy. For nuclear reactors, the outcome can be catastrophic. The prospect of even one Fukushima-style meltdown every few decades, or the cost of even more elaborate safety features, is likely to severely curtail new nuclear investment.

In the short term, closing nuclear capacity will raise CO2 emissions as utilities restart gas, coal, and even oil and diesel fired generation capacity. These old mothballed plants tend to be inefficient and expensive, however, and capacity is limited. The need for a short-term fix will also increase demand for fossil fuels, raising prices and further spurring interest in renewables and efficiency. Not everyone is sanguine about the impact on renewable energy, however. John Peterson, writing for, notes that:

The nuclear reactors that have recently gone off-line in Japan and Germany accounted for roughly 125 TWh of electricity production last year. In comparison, global electricity production from wind and solar power in 2009 was 269 TWh and 21 TWh, respectively. In other words, we just lost base-load power that represents 43% of the world’s renewable electricity output. The gap cannot possibly be filled by new wind and solar power facilities.

While it’s true that wind and solar are still in their infancy and cannot completely fill the gap, they can be deployed far more quickly than conventional power plants due to their flexible scale. Of course, there are constraints on total production capacity, and large scale installations can be delayed by siting and permitting issues, but the prospects for renewables are suddenly a lot brighter, after a year in which the momentum toward carbon regulation and pricing appeared to have stalled and the clean energy train was in danger of being derailed.

The reaction in the markets to events last week supports this view. While nuclear stocks and ETFs plummeted, clean energy investments reacted positively even as the overall market declined. The chart below shows the jump in price (blue line) of PBD, a global clean energy ETF from PowerShares since the disaster hit Japan March 11.

PBD post fukushima

It’s interesting to note that PBW, an ETF with greater focus on US-based firms and less exposure to a broader array of cleantech technologies such as energy storage and controls, has not performed nearly as well. This is perhaps unsurprising in light of the challenges faced by the US clean energy sector, particularly solar energy. In January, Evergreen Solar, Inc. announced that it would be shutting its doors on its Devens, Massachusetts plant despite receiving $58 million in grants and tax incentives to open the facility, according to the Boston Globe. Now, the company is shifting production to a facility in China by the end of the first quarter of 2011. If the disaster in Japan has a silver lining for the clean energy sector, it’s important that the US not let the opportunity slip away.


The Promise of Carbon Capitalism?

February 2, 2011

carbon capitalismReview of Climate Capitalism: Global Warming and the Transformation of the Global Economy by Drs. Peter Newell and Matthew Paterson, Cambridge University Press (2010).

Can capitalism effectively respond to climate change? This is the timely and critically important question posed by Peter Newell and Matthew Paterson at the beginning of their book, Climate Capitalism. It’s the same question that motivated me to focus my own research on the topic of business and climate change nearly fifteen years ago.

Unlike other environmental issues, such as ozone depletion or acid rain, climate change represents a far more systemic challenge to the contemporary path of capitalist development, which is premised on ever increasing production, consumption, use of natural resources, and disposal of waste. The development of modern industrial societies has relied on fossil fuels as cheap sources of energy for their transportation, manufacturing, and energy systems, and a host of important economic sectors from agriculture to chemicals and construction are also heavily dependent on these fuels. In the last decade, rapid growth in China, India, Brazil, and elsewhere has brought a carbon-intense lifestyle within reach of several billion of the world’s population, who aspire to own cars and electronic appliances, live in spacious  homes with heating and cooling, and fly on vacations.

Climate Capitalism examines whether capitalism can survive the challenge of addressing global warming induced by emissions of greenhouse gases (GHGs). Can the market and private capital develop new governance mechanisms, such as carbon trading, and deliver new low-carbon technologies that will decarbonize the economy while ensuring growth and full employment? As the authors note, these are complex, ambitious questions. Given the scale of the economy-wide transformations required and the absence of a simple “silver bullet” solution, major institutional innovations are necessary. But capitalism is not going to quietly disappear. Indeed, the system has historically demonstrated remarkable resilience, flexibility, and pragmatism in responding to past challenges, from wars to the Great Depression. The impacts and responses to climate change will have differential impacts across economic sectors, countries, and labor markets, so the issue raises “questions of strategy, politics, and power” (preface: ix).

Posing these questions leads the authors to adopt a political economy approach that locates climate change as a problem rooted in the way our production is organized, our economy is structured, and our patterns of growth and consumption. Overall, the result is an excellent review of the shifting business response to climate change and the emergence of market-based efforts to address GHG emissions. It does so in a style that is lucid, informative, and relatively free of jargon, though with enough detail (and comprehensive glossary) of the multitude of organizations and initiatives that it can serve as a guide to “speaking carbon”. Colorful vignettes, such as the climate awakening of parcel delivery company TNT’s CEO Peter Bakker, help make the book more accessible and lively, breaking up the sometimes dense description of market instruments. Though there is not a lot new here for those already steeped in the topic, it’s a valuable contribution to the sparse literature on the political economy of climate change and would be very appropriate for undergraduate or graduate university classes. In fact, I will assign it for my upcoming MBA course on Business and Climate Change.   (more…)

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Google’s Dan Reicher speaks at UMass-Boston

December 5, 2010

Dan Reicher, Google’s (former) Director of Climate Change & Energy Initiatives, spoke this week at UMass-Boston’s launch of its professional education programs in clean energy and sustainability.

reicherDan Reicher, until last week Google’s Director of Climate Change & Energy Initiatives, told a UMass-Boston audience of several hundred people that the US needs to do much more to “invent the future of clean energy”, using a combination of smart policy, technology, and finance.  Reicher told the Wednesday night gathering, “We’re not going to get to where we want to go without taking a more integrated view.  Otherwise we’ll miss the biggest economic opportunity of the 21st century.” In an interview with the Boston Business Journal at the event, he noted that “even when there are good technological advances, there aren’t policy signals or adequate capital to make changes.”

Reicher’s appearance celebrated the launch of UMass-Boston’s new interdisciplinary  professional education programs in clean energy and sustainability, which include an MBA track, a graduate certificate, a Professional Science Masters, and an undergraduate certificate and minor. These programs have been developed by the Center for Sustainable Enterprise and Regional Competitiveness (SERC) with funding from the Massachusetts Clean Energy Center, and represent a collaboration between the College of Management and the Department of Environmental, Earth, and Ocean Sciences (EEOS). These programs will equip “green and white collar” professionals, policymakers, and business managers with the skills and knowledge needed for the transition to a clean energy economy.

Reicher’s presentation emphasized the need to address systemically and comprehensively the global energy and climate challenge—which means advancing energy efficiency, developing and deploying renewable energy, addressing economic and financial barriers, aligning policy goals, and preparing a highly skilled workforce. “We welcome Dan Reicher to UMass Boston because he understands deeply the interrelated dimensions of the transition to a vibrant clean energy, low-carbon economy,” said Prof. David Levy, Chair of the Department of Management and Marketing and SERC director.  “Success depends on developing partnerships among government, business, policymakers, and universities in promoting the clean energy economy.”

Reicher is now leaving Google to become Executive Director of Stanford’s new $7 million Steyer-Taylor Center for Energy Policy and Finance, a collaboration of Stanford Law School and the Graduate School of Business. Reicher plans to continue his life’s mission from this new position. “U.S. and global energy systems are plagued by serious economic, environmental and national security problems”, said Dan Reicher. “In their resolution lie vast opportunities for job creation, pollution control, and reduced international tensions. The successful integration of policy and finance is key to addressing these problems and seizing the unprecedented opportunities. We need smart policy to set the stage for fundamental change in our energy systems and innovative finance to make things happen – from early stage innovation to the broad-scale deployment of clean energy technologies.”

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US Lagging in Green Jobs

November 10, 2010

New Clean Edge  jobs report shows the Boston region is doing relatively well, but the U.S. is lagging in green jobs

by Joshua Rinaldi and David Levy
Joshua Rinaldi is a first year doctoral student in the McCormack School of Public Policy and Global Studies at the University of Massachusetts, Boston.

A recent Clean Tech Jobs Outlook Report estimated that in 2009 there were more than 3 million jobs in the renewable energy field globally. The report indicates, however, that the US is falling further behind in this field; the bulk of these jobs are now in China and Brazil.

The CleanEdge report points to several trends that suggest that, while the world is moving toward a green economy, the United States may be lagging. Solar panel production is expanding in Mexico where some U.S. companies have outsourced manufacturing for the lower wages. In the automobile and other sectors, Mexico has been a very attractive destination for outsourcing because its proximity to the U.S. enables logistical integration of supply chains, and because of the NAFTA free trade area.

About 70 percent of hardware and technology used in U.S. clean-energy installations are constructed overseas, according to the report. “Essentially, clean-tech manufacturing has run up against the same economic realities as countless industries that came before, from clothing to computer chips to cell phones: it’s very hard for the U.S. to compete with overseas labor costs, particularly in the developing world.” For example, BP Solar closed its Frederick, Maryland, PV plant in March 2010 and moved most of the 320 jobs abroad. This is also a sign of the surprisingly rapid maturation of the industry, as solar panels rapidly become low-value added commodities.

If this trend holds true, then the main non-exportable jobs in renewables will be related to project  planning, finance, permitting, installation and the maintenance of solar panels and wind turbines. While that is encouraging, the report cites the Renewable Energy Project, a think tank in Washington D.C., as saying that maintenance and installation makes up only 30 percent of the total labor involved with these projects. Of course, numerous early-stage clean tech firms are conducting their R&D and initial manufacturing in the U.S., but many of these look to manufacture overseas as soon as products enter large-scale commercial production.

Based on the report, China is the most likely destination for the roughly 60 percent of jobs related to manufacturing in clean tech supply chain: “No other country comes close to matching the active role being taken by China to supercharge its clean-tech initiatives.” China, the world’s second largest economy behind the United States, now outspends both the U.S. and the European Union in terms of clean tech research dollars. Its $34.6 billion in clean energy investment in 2009 was just shy of double the $18.6 billion in investments in the United States.   (more…)

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The Green Skyscraper

October 9, 2010

This is a guest post by Joshua Rinaldi, a first year doctoral student in the McCormack School of Public Policy and Global Studies at the University of Massachusetts, Boston.

skyscrapersMassive monolithic figures that cut across horizons, skyscrapers have been symbols of a city’s wealth, prosperity, and architectural ingenuity since their inception. Now, some skyscrapers are taking on another symbolic venture: a green one. New York City is home to one of the most sustainable skyscrapers in the world. The Bank of America Tower is 1,200 feet of green architecture at its finest. The second tallest building in New York City earned LEED “platinum” status in May 2010 as testament to its energy efficiency, and was the first skyscraper to receive platinum status. The $1 billion tower comes with a gray-water system that captures and re-uses rain and waste water that saves 10.3 million gallons of water annually, a crystalline design that allows for maximum use of daylight, and an onsite 4.6-megawatt generator that provides an efficient, clean power source for part of the building’s energy needs. However, energy efficiency isn’t limited to new, green skyscrapers. Some of the tallest skyscrapers in the United States are now aiming also to become some of the greenest.

In April 2009, New York City Mayor Mike Bloomberg announced plans to invest $20 million to make the 79-year-old Empire State Building, which was the first building in the world to top 100 stories, more energy efficient. With the installation of 6,500 energy-efficient windows, extra installation around radiators, and a more efficient lighting system, the improvements are expected to save the building’s owners $4.4 million annually in energy costs when renovations are complete in 2013. The renovations are also expected to reduce the building’s carbon emissions by 105,000 tons in the next 15 years. In April 2010, the John Hancock Tower in Boston was given gold certification by the U.S. Green Building Council for instituting measures to cut water use and carbon emissions.

Almost 800 miles to the west, the owners of the tallest skyscraper in the United States were also lining up to go green. Owners of the Willis Tower (formerly the Sears Tower), announced plans to invest $350 million dollars to renovate the 36-year-old tower.  The 5-year plan will require upgrades to the lighting system and the replacement of more than 16,000 single-pane windows. The building will add solar power and, possibly, wind power, which is expected to provide all energy needs for an adjacent hotel project. Architects had considered changing the building’s trademark black exterior, which attracts heat, with more energy-efficient silver, but such plans have since been discarded.  (more…)

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Climate Wars in the New Social Media

October 7, 2010
This is a guest contribution by Professor Maxwell Boykoff, Center for Science and Technology Policy Research at the University of Colorado, Boulder. This post is in response to my previous post about the cultural politics of climate change and corporate funding of climate denial.

Thanks for your thought-provoking post, It’s The Real Thing: The Power of Koch. I wonder about the value of new and social media that groups such as ‘Energy Citizens’ are taking to influence public opinion, versus traditional media approaches. Saffron O’Neill at the University of Melbourne and I have been exploring this, and have a chapter called ‘The role of new media in engaging the public with climate change’ in a book she’s co-edited with the title Engaging the Public with Climate Change: Communication and Behaviour Change.

In the last decade, there has been a significant expansion from consumption of traditional mass media – broadcast television, newspapers, radio – into consumption of new and social media, such as various uses of the internet and mobile phone communication. This has changed how people access and interact with information, who has access, and who produces content. At present, new/social media offer a platform for people to more democratically shape the public agenda.

But for US readers primarily, it is important to note that there are current challenges to such democratic equality or ‘net neutrality’. US legislation sponsored by AT&T, Verizon, Comcast and TimeWarner proposes to create a tiered system of access speeds based on what a consumer pays and whether they use content and services from these companies or from competitors or third parties. The loss of ‘net neutrality’ could have a detrimental impact on the ability of new/social media users to access a variety of sources and perspectives on climate science and governance.

In January 2009, the Pew Center Project for Excellence in Journalism (PEJ) began monitoring the content of the weekly ‘news hole’ in the US, distinguishing between traditional coverage (television, newspapers, radio), and new/social media (Internet weblogs, Twitter). Through weekly content analysis, PEJ has shown how topics involving global warming have earned a much greater share of the news hole in new media: the topic has been one of the top five blog stories ten times since their monitoring began, but did not figure nearly as prominently during that time in traditional media.

So does increased visibility of the issue translate to improved communication, or just more noise? Do these spaces provide opportunities for new forms of deliberative community regarding questions of climate mitigation and adaptation? Or has the content of this increased coverage shifted to polemics and arguments over measured analysis? In this democratized space of content production, do new/social media provide more space for contrarian views to circulate? And through its interactivity, does increased consumption of news through new/social media further fragment a public discourse on climate mitigation and adaptation, through information silos where members of the public can stick to sources that help support their already held views? Many questions such as these remain open at present, especially as they relate to climate contrarians amplifying their views through mass media.

Journalist Matt Ridley has argued that blogging on climate change represents a positive development for public understanding. In an essay in The Spectator in February 2010, he wrote that when the ‘Climategate’ scandal unfolded, “It was amateur bloggers who scented the exaggerations, distortions and corruptions in the climate establishment; whereas newspaper reporters, even after the scandal broke, played poodle to their sources.” In addition, George Brumfiel has noted in Nature that blogs have become a more prominent source for stories, and a greater influence on public discourse. However, Cass Sunstein warned in his book Republic 2.0 of the likelihood of the ‘echo chamber’ effect where this interactivity actually cordons off users from one another by merely consuming news that mesh with their worldview and ideology.

The US-based group ‘Americans for Prosperity’ (AFP) seems to be mindfully taking up new and social media to produce their own content online and garner media attention for their sponsored events and initiatives. Through internet organizing – mass emails, web announcements, Tweets, Facebook communications, YouTube clips, blog posts – AFP has assembled a number of influential anti-climate legislation campaigns. Among them was the 2008 ‘Hot Air’ tour. In 2009, AFP also began a web-based campaign called ‘No Climate Tax’ where constituents can send emails to their elected officials to encourage them to send a ‘No Climate Tax Pledge’. In addition, AFP hosts ongoing web-based campaigns called ‘Stop the Power Grab’ to contest US Environmental Protection Agency actions to regulate CO2 emissions without the explicit support of US Congress. As new/social media emerge more prominently in the general public, the boundaries defining who are ‘authorized’ speakers and who are legitimate ‘claims-makers’ are changing, and constantly contested and challenged.


It’s The Real Thing: The Power of Koch

September 8, 2010

We are at a critical juncture, as a backlash appears to be derailing action on climate change. If progressive groups want to address this threat, we need to understand the interests, strategies, and cultural politics at play.

by David L. Levy

Brian Flannery, chief climate strategist for ExxonMobil, recently circulated his rather depressing report from the UN climate August negotiations in Bonn regarding the future of the Kyoto Protocol. After the failure to reach agreement last December at Copenhagen, the plan was to encourage countries to sign up to the bare-bones Copenhagen Accord and build momentum for a treaty this December in Cancun, Mexico. But according to Flannery, “Governments and the Secretariat have been lowering expectations for a legally binding agreement, or even substantive progress, at CoP 16 in Cancun. Attendees were well aware of setbacks to climate legislation in Australia, Japan and the USA. The Bonn meeting continued to dampen expectations.” Flannery observed that the discussions continue to be deadlocked over fundamental issues, and that the consensus is that “Cancun at most will produce CoP decisions, not a legally binding treaty”. There even seems to have been some backsliding regarding REDD (forests) and the Technology Mechanism, while “the status of CDM going forward may be questionable”.

This news comes at the end of a summer that has seen record temperatures in the Eastern US and Europe, floods in Pakistan, and an iceberg four times the size of Manhattan breaking away from the Petermann ice shelf on Greenland. Global average temperatures in 2010 are on track to be the highest ever, and the Arctic is melting at an unprecedented pace, stirring fears of major shifts in the jet stream and global weather patterns. How can we square the ever-mounting evidence of climate change with national and global policy paralysis?

During the 1990s, it was easy to blame business lobbying and public misinformation campaigns for US inaction. But this explanation seemed less tenable after the Global Climate Coalition (GCC) collapsed in early 2000 (see my earlier post). Some former GCC companies have since joined more progressive organizations that espouse sustainability and support action on climate, such as the Pew Center Business Environmental Leadership Council and the US Climate Action Partnership (though there have also been some recent high level defections). I suggested that business had called a ceasefire in the carbon wars and was joining the grand “Carbon Compromise”. A weak carbon regime would not threaten core business operations in the short-to-medium term, leaving adequate time and resources for longer-term strategic repositioning as the climate issue plays out.

Even Exxon, historically the strongest opponent of mandatory carbon controls, has shifted its stance, and now calls for a carbon tax (instead of a cap-and-trade system) while investing heavily in biofuels. Flannery’s report from Bonn was not celebrating the political quagmire; at this stage, big business is looking some regulatory predictability, so that it can plan investments. Flannery commented that:

By and large business groups would like to see focus on some issues, such as the Technology Mechanism and Finance, if only to build trust and create some tangible progress.  Business is also involved in a dialog session… to explore establishing a recognized process for formal business input to the UNFCCC.

Conventional wisdom holds that the political stalemate over climate stems in large part  from the dramatic rise in populist climate denial and opposition to any policy measures that would raise fuel prices during a tough recession. Public opinion polls in the US and the UK show a dramatic jump in the last year in the percentage of people who don’t think that climate change is a priority issue. Climategate and last year’s unusually cold winter in Europe and the eastern US fired up the rhetoric of climate deniers, and their voices have been channeled to mass audiences through the tabloid press and talk radio.

The populist climate backlash is not, however, a purely organic movement driven from the grassroots. Rather, it’s been organized and nurtured through a carefully crafted and well funded strategy. This second wave of corporate opposition emanates more narrowly from the oil industry. As I discussed in Carbon Wars II: The Sequel, last year the industry front-group Energy Citizens contracted with a professional events management company to plan about 20 large rallies against carbon regulation during August 2009, with a focus on energy producing southern states such as Texas and Louisiana. Member companies encouraged their employees to join in. Energy Citizens’ website proclaims that it is “a nationwide alliance of organizations and individuals formed to bring together people across America to remind Congress that energy is the backbone of our nation’s economy and our way of life.” In fact, Energy Citizens was set up and financed primarily by the American Petroleum Institute (API), with support from the National Association of Manufacturers and other groups. This project complements a massive increase in lobbying efforts by the fossil fuel industry in the last six months.  (more…)