BOSTON--If you attached a cost to putting greenhouse gases into the atmosphere, how would the energy business change?
Steven Koonin, the undersecretary for science at the Department of Energy and former chief scientist of BP, has thought this question over. Koonin was the keynote speaker Thursday at the Fifth Annual Conference on Clean Energy here, where he offered a big-picture analysis of how the U.S. should convert to low-carbon energies.
Steven Koonin, undersecretary for science in the U.S. Department of Energy (DOE).
(Credit: DOE)The main drivers toward cleaner energy are efforts to improve the country's energy security and to cut greenhouse gas emissions. But there are many paths to that destination and we won't get there by only putting a price on carbon, Koonin said.
"Now the economists will tell you that all you need to do (is put a price on carbon emissions) and the market will take care of itself after that," Koonin said. "And that may be true, but as a technologist I have the ability and in fact the responsibility to look ahead and ask what the likely responses will be if there is a carbon price."
Establishing a significant, long-lasting, and universal carbon price would act as a "supply side" signal to the energy industry and favor certain technologies, he said.
One clear implication for the U.S. would be a greater shift toward natural gas, which is significantly less-polluting than coal for making electricity. Recent drilling improvements allow for capturing large amounts of natural gas from shale in the U.S., Koonin said.
Onshore wind is economically competitive in many areas in the U.S. and has the potential to supply 20 percent of the country's electricity by 2030. Another clean source of power is small and medium-size hydro power, which can supply tens of gigawatts from small dams.
Nuclear fission, which now supplies about 20 percent of the electricity in the U.S., is also poised to expand in an economy with a carbon price because there are no emissions during power generation. Carbon capture and storage facilities attached to coal-power plants, too, are needed because existing coal plants will continue to operate, he said.
Finally, increased conservation and efficiency are required in both the transportation field and for heating and power, he said.
Not just about technology
Koonin favors a cap-and-trade system to regulate carbon emissions, a system proposed in the energy and climate legislation now being debated in the Senate. Under cap and trade, heavy polluters such as utilities are given pollution permits and can buy additional permits to stay under a government-set limit on carbon.
But other policies are required, in part because the energy industry by its nature changes very slowly. Koonin specifically mentioned portfolio standards, where utilities need to get a portion of their electricity supply from renewable sources or a "low carbon" portfolio standard.
"One of the most important things we need to do beyond technology is to accelerate energy change," he said. "It takes decades to affect significant changes in the energy system."
It's a mistake to look at the IT industry as a model for how quickly energy can change, Koonin said. Whereas digital technologies evolve very quickly, energy changes slowly because power plants and buildings last decades and even cars last 15 years.
The first hybrid passenger car came to the U.S. in 2001, and even now, eight years later, there are fewer than 1 million sold, out of a total 150 million cars, he noted.
The scale and investments required to adopt different energy technologies is much bigger in than IT, and the energy industry is dominated by incumbents with well-optimized processes, he added.
To accelerate changes in energy, the DOE has established different types of research centers. This year, there will be $25 million a year to fund three "innovation hubs" at universities focused on specific problems, such as advances in nuclear. The DOE also recently awarded grants for ARPA-E, research aimed at breakthrough technologies.
Autodesk is making a revised method for tracking greenhouse gas emissions available for free to other companies.
The design software company on Monday published the results of its own program to reduce its environmental footprint. It also open-sourced its methodology, called Corporate Finance Approach to Climate-Stabilizing Targets (C-FACT).
Although many companies do track their greenhouse gas emissions (GHGs), there is not a standardized way for setting targets or reporting that data in the U.S.
Autodesk's methodology is based on the the long-term target of reducing global emissions by 85 percent by 2050, set by United Nations' Intergovernmental Panel on Climate Change. From there, companies can set targets based on their relative contribution to global gross domestic product.
"Corporate GHG target setting has become a little like the Wild West, with few laws, little scrutiny, and quite a bit of aimless shooting," said Emma Stewart, senior program lead for Autodesk's sustainability initiative, in a statement. Autodesk is encouraging others to use the method because the targets will be proportional to a company's economic contribution.
The company has committed to using the C-FACT method through 2020. From 2008 to 2009, its greenhouse gas footprint increased by 1 percent. But its revenue grew during that period, so the "carbon intensity per unit of added value" dropped. Carbon intensity by square foot and per employee also dropped in the period.
Google CEO Eric Schmidt (left) and U.S. Secretary of Energy Steven Chu at Google headquarters Monday.
(Credit: James Martin/CNET)MOUNTAIN VIEW, Calif.--For a bunch of search engineers, Google employees care an awful lot about energy and the environment.
Google hosted an event for employees Monday featuring Steven Chu, the U.S. secretary of energy under President Obama and a man Chief Executive Eric Schmidt said "may become one of the most influential scientists of our generation, if he isn't already." Chu took about an hour to speak to a packed room of Google employees following his announcement of $151 million in funding for new energy-related projects as part of the ARPA-E program.
Chu found a friendly audience of some of the most science-and-technology-obsessed individuals in a region known for science and technology obsession. He called the need to invest in alternative fuels and energy systems "the engineering and science challenge of our time" that will demand contributions from young scientists and technologists like the ones in Mountain View.
Several employees asked Chu to opine on the viability of various alternatives to fossil fuels, such as nuclear and geothermal, and the need to reduce carbon through a cap-and-trade system and carbon sequestration. Here Chu jostled a bit with Schmidt, who said he is skeptical about cap-and-trade systems and the ability of the nuclear industry to solve thorny problems like waste disposal and safety.
Congress is considering cap-and-trade legislation at the moment, and Chu is scheduled to testify before Congress on Tuesday about the need for such legislation. Schmidt isn't sure a global system can work because of the tendency for "rogue nations" to do as they please, but Chu thinks if carbon measurement systems are improved, hard data will make it easier to encourage those who are overproducing carbon to get their act together.
And on nuclear, Schmidt bemoaned the lack of standards in nuclear plant construction, saying "the human factors are a disaster" with every plant a little different than its counterparts and the waste issue still unsolved. Chu didn't debate the point, but said the nuclear industry is moving more toward solving those problems and improving safety.
Those were minor policy disagreements, however: Google and the current Department of Energy are definitely friends. Schmidt called Chu one of his heroes, and Chu praised Google's work on reducing the energy consumption of its servers and assuming a "leadership position" in reducing the carbon footprint of its operation.
Schmidt, who serves as an adviser to the administration on President Obama's Council of Advisers on Science and Technology, asked Chu what it's like being the senior scientist in the government. He's actually the first scientist to hold the secretary of energy position, and won the Nobel Prize in Physics in 1997.
"It's funny in a macabre sort of way. I don't think Congress treats me like your average cabinet member," Chu said with a wry chuckle. He said he's spent much of his first year on the job talking to Congress about the problems with energy use and the environment, and that legislators are receptive, for the most part.
"I think the president has made it very clear that science plays such an integral role in the decisions we have to make," Chu said. He was preaching to the choir at the Googleplex.
The Obama administration is pushing for a "comprehensive" energy and climate bill because it will provide the economic foundation to spur investment in clean-energy technologies, said Carol Browner, the president's assistant on energy and climate.
Browner, the former administrator of the Environmental Protection Agency, was interviewed on Friday along with other business and political leaders at the Atlantic's First Draft of History conference at the Newseum in Washington, D.C. The interview was streamed live online.
Carol Browner, assistant to the president on energy and climate change, speaking at MIT earlier this year.
(Credit: Martin LaMonica/CNET)She argued that U.S. businesses will invest more in clean-energy technologies once Congress passes a law with incentives for renewable energy and efficiency as well as a cap-and-trade system that limits heat-trapping greenhouse gases.
"The point is we have to get started, we have to send a signal to the marketplace that we are going to be dealing with these (greenhouse gas) emissions in a different way," she said.
The House narrowly passed an energy and climate bill in May. The Senate earlier this week introduced its own version although passage of any combined bill is not expected before the end of this year. The timing is significant in international negotiations because the Copenhagen round of international climate negotiations will start in December this year.
A number of large companies and green technology start-ups continue to urge lawmakers to set up regulations that put a price on carbon emissions, with many business people preferring a cap-and-trade system. With a cap-and-trade, large polluters such as utilities can buy and sell permits to emit carbon to stay under a government-set cap, a system already used to reduce other air pollutants.
Passage of the bill in the Senate is far from certain with 60 votes needed. Earlier this week, the Environmental Protection Agency went ahead with a program to see how carbon dioxide and other greenhouse gases from stationary sources, such as power plants and factories, would be regulated under the Clean Air Act. But that is not the route that the Obama administration prefers, Browner said.
"We want to tools so we can work with the business community to reduce these pollutants," Browner said. "Every time we've implemented environmental clean-air regulations, we've gotten solutions more quickly and at dramatically less cost than anticipated."
She said that a "piecemeal" approach to regulations will not create the certainty that businesses need to make investments in clean-energy technologies because the regulations create demand.
The process around the passage of Waxman-Markey worked because lawmakers addressed regional and competitive issues posed by a cap on carbon emissions. For example, special programs to address high-polluting industries and incentives for regions that rely heavily on coal were set up.
Some lawmakers are drawn to clean-energy technology policies out of concern that China will "best" the U.S. economically, she added.
In response to a question, she said that nuclear power has to be part of the U.S. energy future. "You can't rule out clean sources of fuel," she said. Energy storage, particularly for solar and wind, and smart appliances that lower household electricity usage are some of the most active areas of technology development, she said.
Contraception would be the cheapest and most effective way to reduce carbon emissions worldwide between 2010 and 2050, according to a study by the London School of Economics.
The report, "Fewer Emitters, Lower Emissions, Less Cost," (PDF) determined that if contraception was made widely available between 2010 and 2050 to women and men around the world who wished to use it, the reduction in unwanted births could result in saving 34 gigatonnes (one billion tonnes) of carbon emissions. That's roughly 60 years worth of U.K. emissions or 6 years worth of U.S. emissions.
The cost for supplying, and distributing contraception over those 40 years would cost an estimated $220 billion, or $7 for each tonne of carbon emissions avoided. It's cheaper than the next most efficient low-carbon technology, wind power, which would cost $24 per tonne or $1 trillion to prevent the same amount (one billion tonnes) of carbon emissions from being produced, according to the report.
In its per-tonne cost analysis, the report also calculated $51 for solar, $57 to $83 for coal plants with carbon capture and storage, $92 for plug-in hybrid vehicles, and $131 for electric vehicles.
The contraception as carbon reduction conclusion was based on United Nations statistics that 40 percent of worldwide pregnancies are unintentional. If contraception was made available to people who wanted it, those unintentional births could be reduced by as much as 72 percent. Between 2010 and 2050, that would result in curbing the world population growth by half a billion people, according to the UN statistics.
That is a conservative estimate, according to the report, since the UN figures are based solely on the lack of contraception access for married couples, and did not include unintended pregnancy statistics for unmarried women.
The study was funded by the U.K. environmental group Optimum Population Trust (OPT), which has argued that a more responsible attitude toward reproduction could be the answer to many environmental issues such oil, food, and water shortages.
The group has said that family planning programs in poor countries should qualify for environmental aid, since fewer people result in less energy use and fewer emissions.
"It's always been obvious that total emissions depend on the number of emitters as well as their individual emissions--the carbon tonnage can't shoot down, as we want, while the population keeps shooting up," Roger Martin, chair of OPT, said in a statement.
Is the practical idea too controversial to be considered because of moral reservations, or will countries warm up to it as not only climate change, but world water supplies become an issue?
"The taboo on mentioning this fact has made the whole climate change debate so far somewhat unreal. Stabilising (sic) population levels has always been essential ecologically, and this study shows it's economically sensible too," said Martin.
(Credit:
Sandbag)
Part environmental watchdog and part social-networking site, Sandbag lobbies the United Nations and European Union for tighter caps on carbon emissions and permits, while buying up carbon credits.
The U.K.-based not-for-profit community organization, whose motto is "real action on climate change," launched in September 2008. It uses donations to buy up EU carbon credits and cancel them in an effort to drive up the price of carbon credits in the marketplace.
The group has started to gain a following. The Guardian Newspaper Group became a corporate sponsor earlier this year, and on Monday, two London hospitals agreed to sell Sandbag 2,000 tonnes worth of carbon credits. It's the equivalent of taking 1,000 cars off the road, according to Sandbag's founder Bryony Worthington.
The group's pitch, which is explained through a silent video "Sandbag in 60 seconds," is that if polluting is made expensive enough, companies will invest more in technology to clean up their processes rather than buying emissions credits to cover their excess pollution.
In July 2009, Sandbag put out a report (PDF) on the European Union Greenhouse Gas Emission Trading System (EU-ETS), the EU's current program that regulates about 50 percent of carbon emissions in the EU and doles out about 2 billion tradable permits each year.
Sandbag asserted in the report, as it's been widely reported, that pollution has been reduced not so much as a result of big industry cleaning up their processes but because production itself has been down due to the recession.
The report goes on to say that as a result of the economic downturn, there is a glut of permits and no real economic incentive for companies to reduce pollution.
"Industry is likely to have nearly 400 million tonnes worth of surplus permits across the period 2008-2012. (As a result, industrial sectors will not have to reduce their emissions.) They will either be able to sell their surplus for windfall profits of over 5 billion euros (at current market value) or bank them for future use depressing the price of carbon in the next phase of trading," Sandbag said in its July 2009 report.
Sandbag has been lobbying the EU to address the issue by following the suggestion made by France and Ireland, which is to essentially reduce the amount of carbon permits made available going forward, according to its report.
In addition to its carbon credit report and buy-back plan, Sandbag has also mapped out by country how emissions credits have been allotted.
Interested people can use the organization's Web site tools to view Google Maps plotting emissions data for 2008 in relation to how many permits are allotted or needed for a given area. Maps are by country with an option to zoom in to a particular area of interest.
A map of the U.K. showing areas with excess carbon permits to sell.
(Credit: Sandbag)
A panel of tech and policy leaders takes on the topic of building "smart cities" at the Fortune Brainstorm: Tech conference on Wednesday.
(Credit: Ina Fried/CNET)PASADENA, Calif.--Technology has the potential to help build smarter, greener cities, but whether it will is another matter.
That was the take-away from a panel discussion Wednesday at Fortune's Brainstorm: Tech conference here.
The need for cities that use less energy is clear. Although cities occupy just 2 percent of the world's geography, they account for 75 percent of the world's greenhouse gas emmissions, according to Clinton Climate Initiative Chairman Ira Magaziner. Cisco Systems CTO Padmasree Warrior noted that there will be 100 new cities with populations of more than 1 million people by 2025.
But while technology has the best potential for allowing society to maintain its standard of living in a sustainable way, the industry isn't necessarily set up to provide such technology.
"We're not there yet as an industry," said Sun Microsystems CTO Greg Papadopoulos. "Our business models are built on complexity."
Technology is also built based on frequent upgrade cycles and getting value from disposability of products. "There's a tension there," he said. "It's going to be a lot harder than you at first think."
Papadopoulos pointed to home automation as an example where the tech industry has failed to recognize the different standards needed in new markets.
"We've failed pretty miserably at that so far," he said. "The are complex and they don't work well. If we follow that model we will fail and we will be cursed."
Hara CEO Amit Chatterjee said that the focus now should be on changes that can be made without major technology shifts, giving solar and other low-carbon technologies a chance to mature.
"There is a unique opportunity to focus on lo hanging fruit or fruit that's on the ground," Chatterjee said. "That is where we need to start. Insulation is a huge win for the U.S. well before we get to solar panels."
Composting locally, he added, creates compressed natural gas that can fuel vehicles.
Chatterjee said that going after the "quick wins" could cut 30 percent of our carbon footprint.
Cutting energy use can also create jobs, the panelists agreed. But only if the right economic incentives are there, such as putting a price on carbon use.
Magaziner said awareness of the issues are improving, but that that isn't enough.
"What we really need is action," he said. "The next three, four, five years are going to be critical."
Yahoo thinks its plan for a new data center could eventually help the company achieve carbon-neutral status without having to resort to the purchase of carbon offsets.
Yahoo's David Dibble discusses the company's plans for a Buffalo-area data center with New York Senator Charles Schumer (right, red tie) and other state officials.
(Credit: Yahoo)Yahoo designed its forthcoming data center to let outside air cool the servers at all times, borrowing the idea from the design of a chicken coop, according to Yahoo co-founder David Filo. The company joined New York officials such as Governor David Patterson and Senator Charles Schumer Tuesday to unveil plans for the data center, the design of which Yahoo is attempting to patent.
Data centers are vital to huge Internet businesses such as Yahoo, and companies throughout this industry have started paying more and more attention to the amount of energy consumed by facilities that can have thousands of servers running all day, every day. Google has talked up its own push for greater efficiency in its data centers, and Microsoft just announced plans for two new data centers geared around energy efficiency.
As part of the announcement of the new data center in Lockport, N.Y., just outside of Buffalo, Yahoo also revealed that it will no longer purchase carbon offsets as part of its energy strategy. Carbon offsets have been controversial in some quarters, but they allow companies to claim they are "carbon neutral," in that purchasing offsets diverts money to green projects.
Yahoo plans to focus its green strategy on projects such as the Buffalo data center rather than the purchase of offsets, which means it will take them some time to return to the carbon-neutral goal set in 2007. "We believe creating highly-efficient data centers will have a greater long-term, direct impact on the environment and gives us the best opportunity to play a leadership role in addressing climate change," Filo wrote.
Corrected at 3:05 p.m.: Yahoo clarified the new data center will be in Lockport, N.Y., just outside of Buffalo.
A heat map gives a reading of how much energy is used in the supply chain and production of ingredients in a company's products.
(Credit: Planet Metrics)Start-up Planet Metrics is developing software that could give consumers a better read on the embedded energy of everyday products.
The San Francisco-based company on Tuesday released the beta test version of its hosted application, which it calls Rapid Carbon Modeling. It also said Method, which makes eco-friendly home-cleaning products, is a customer.
There are a number of companies writing software for calculating how much energy is linked to a business' operations and managing carbon emissions. Planet Metrics' software is geared at manufacturers and makers of consumer packaged goods.
Using Planet Metrics' software, a person could, for example, see how much energy consumption is associated with procuring the components that make up a cell phone. With that information, a company can then look for ways to cut energy consumption, such as reducing waste or finding another supplier.
The carbon footprint picture is built by combining a company's internal data, such as bills for certain materials, with scientific and academic models for calculating embedded energy, according to Planet Metrics.
Method is using the software in product design and sourcing, co-founder Adam Lowry said in a statement. "By better understanding volatile energy and resource prices, we can make better decisions to lessen the overall footprint (of our products) and save money," he said.
Planet Metrics CEO Andy Leventhal said the company does not yet have hard return-on-investment numbers for its software, but companies with sustainability initiatives, such as Wal-Mart Stores, have found significant savings in reducing fuel use and waste.
Verisae, a small Minnesota-based company, has received a patent for a system to track and report greenhouse gas emissions with software, a business attracting a growing field of companies.
The company on Wednesday said that the U.S. Patent and Trademark Office issued a patent to Verisae for a method for calculating a corporation's emissions. The patent, filed in May of 2007, describes a business process for gathering corporate emissions data, generating reports, and managing carbon credits.
Verisae is already offering hosted carbon accounting software focused primarily on retail companies, basing its tracking and reporting on the protocols established by the nonprofit Climate Registry, which sets guidelines for emissions reporting.
"This is a shot across the bow to others building this stuff," said Verisae product manager Daniel Stouffer. "This is a big story for those venture capital companies which might be spending money with firms that might be building solutions that might already be covered."
Verisae's hosted software compiles the greenhouse emissions data from a corporation's different assets. For example, a refrigerator in a store has emissions associated with its energy use and the refrigerant which is a powerful greenhouse gas, Stouffer explained.
The company is also working on a way for businesses to monetize incentives to reduce emissions, Stouffer said. Businesses can make money by participating in demand response programs, where the utility reduces the electrical load of the business--such as turning down lights in a supermarket or cooling in a building--during peak times.
Reason for worry?
The patent disclosure comes at a time of heightened interest around carbon emissions-related software. Investors expect that this year will see a lot of activity in software for tracking and reporting greenhouse gases, sometimes called carbon accounting software.
On Monday, start-up Hara Software, backed by venture capital firm Kleiner Perkins Caufield & Byers, announced its Web-based software. SAP purchased another carbon accounting company, Clear Standards, earlier this year in a sign of consolidation among providers.
The claims of Verisae's patent appear to describe a fairly general method for managing a business' greenhouse gas emissions. But how broadly it can be enforced is unclear, said patent attorney Eric Lane in the clean-tech practice at Luce, Forward, Hamilton & Scripps.
The claims on the patent include a number of different processes, noted Lane, who examined the patent and some related documents. That means that another carbon software company could develop a product that doesn't combine all of Verisae's claims.
Still, Lane said that the patent is worth noting for the growing number of carbon accounting software companies.
"Whether other companies ought to be worried is hard to say. Should they be aware of this? Yes," Lane said. "They have a nice package."
Growing field
Patents around different forms of carbon accounting have seen a surge in the past year, according to a recent study. In programs designed for trading carbon permits, there were six patent familes in 2000, nine in 2002, and 15 in 2006.
A significant case likely to affect carbon software is a decision by the federal appeals court that made it harder to claim business process patents often implemented in software applications, Lane said.
Part of the reason for the uptick in carbon accounting software is the expectation that heavy polluters in the U.S. will be need to comply with looming regulations to cap greenhouse emissions.
The American Clean Energy and Security Act of 2009 bill calls for the creation of a cap-and-trade program to limit emissions. But the earliest a bill would pass is next year and caps on carbon emissions would be phased in over many years.
Even before a national U.S. mandate, companies are investing carbon-tracking software as part of corporate sustainability programs or to administer energy efficiency initiatives.
