The Emergence of VERGE
This week, GreenBiz Group is unveiling a new initiative called VERGE, focusing on the convergence of four technology sectors: vehicles, information, buildings, and energy. It represents an exciting new dimension for us, and I’m pleased to share the vision and the plan.
Over the past few years, I’ve been watching — and speaking about — this convergence, and its potential for business, society, and the environment. VERGE is about an interconnected world, in which this technological mash-up yields a diverse array of products and services that aren’t just greener — with potentially dramatic reductions in energy, water, and materials use as well as in waste and emissions — but also better.
We’ve witnessed other such technological mash-ups in recent years. In fact, most of us now carry around the fruits of the convergence of computers, telephony, media and commerce. It’s called a smartphone. And its emergence not only has transformed the technologies that underlie these products, and the companies that make them, but also all of us who use them.
VERGE has this potential, in spades. Relative to smartphone technologies, VERGE technologies are far more capital intensive — energy plants, vehicles, and buildings. The product cycles — the amount of time it takes to go from concept to market — is years longer than most IT products and services. And their life-cycle — their time in productive use — can range from a decade (for a car) to a century (for a building). Because they are infrastructural, expensive, and long-lasting, their convergence, while slower in coming, will potentially transform how we live, work, shop, travel, and play.
To help define and accelerate the VERGE opportunity, we’ll be convening three high-level roundtables on three continents. On June 21 and 22, we’ll follow the sun, with consecutive events held in Shanghai (hosted by Rob Watson), London (hosted by Marc Gunther), and San Francisco (hosted by me). Our lead sponsors for the events include Autodesk, IBM, PwC, and SAP.
The events will be livecast in local times, starting with Shanghai and London on the 21st, culminating in a full-day virtual event on the 22nd, hosted in San Francisco. (More in the coming weeks on participating in the virtual event.)
At these invitation-only events, we’ll be assembling executives, policy makers, and thought leaders to bring to light the vision of VERGE in their respective organizations, the products and initiatives already underway, and the pathways to success. We will address the barriers participants face — for example, a lack of policy, industry standards, or customer demand — and how they might be overcome. By the time the sun sets in San Francisco on June 22, we hope to have a roadmap, or at least the milestones for one.
What’s struck us over the past year that we’ve been envisioning and designing these events are the companies that, implicitly or explicitly, already hold the VERGE vision. Indeed, it seems there are dozens of large companies, and hundreds more smaller ones, that are in the middle of a revolution not all of them yet clearly see. We hope to change that.
As we’ve begun to assess the VERGE market space, we’re also struck by how many companies already are playing in all four of these technologies — companies as diverse as 3M, Autodesk, Best Buy, Cisco, Eaton, GE, Google, Honda, IBM, Johnson Controls, and Schneider Electric. And many, many more are in three of the four technologies. Of course, this doesn’t consider the hundreds — thousands? — of startups. And many more VERGE companies yet to be born.
Many of these companies are, or soon will be, finding themselves in new business sectors, sometimes far afield from their original areas of core competence. We’ve already seen this in the IT revolution (Apple as music seller; Amazon as book publisher; Google as travel agent). So, too, in VERGE world: Microsoft as energy-management company; Boeing as solar company; Best Buy as EV renter). As the landscape shifts, the technologies mature, and the end-user applications grow, this blurring of traditional boundaries will accelerate.
All of this represents the first steps in what we anticipate will be a long and exciting journey to elevate the world of VERGE. I’ll look forward to bringing you more information in the coming weeks on what we’re doing and how to participate.
April 18, 2011 in Clean Tech, Climate Change, Trendwatching | Permalink | Save This Page | Comments (2)
Can General Motors Save the Planet?
Today is a watershed day for General Motors — and I’m not talking just about the historic and record-breaking initial public offering marking the company's return to the stock market, and away from majority ownership by the taxpayers.
Today, Chevrolet, the company’s largest brand, announced it would invest $40 million in 8 million tons of carbon offsets — equivalent of roughly a year’s worth of driving the cars it will sell next year.
It may not be the most innovative move — dozens of other companies have made significant investments in planting trees, building renewable energy plants, weatherizing buildings, and other things that reduce energy and greenhouse gas emissions. But it’s a bold move, both in its size and its timing.
Consider: On a day when of America’s most iconic companies has come back to life as a public company after going through bankruptcy and government bailout, its first gesture is an environmental one.
Clearly, something different is going on here.
I’ve had a opportunity to track GM’s road to this announcement over the past few months, through the window of my relationship with the consultancy GreenOrder, and through my friend Sue Hall, founder of the Climate Neutral Business Network, which shepherded the project through GM. Last week, I attended a small brainstorming session convened by Hall at GM headquarters in Detroit to look at how the announcement and its messaging were shaping up, and to provide feedback.
And over the weekend, I spoke with Joel Ewanick, GM’s vice president of marketing, the principal driver of this initiative, as he was — well, driving a Chevy Volt from Detroit to Los Angeles, where today’s announcement was made, at the L.A. Auto Show.
First, the basics. GM today stated its intention to “invest $40 million in various clean energy projects throughout America” with the aim of offsetting 8 million metric tons of carbon. The company estimates that the goal equates to the emissions in 2011 from driving the 1.9 million vehicles Chevrolet is expected to sell in the United States over the next year. Chevy will be making the investments through third-party organizations such as the Bonneville Environmental Foundation, a nonprofit organization based in Portland, Ore.
The project began with Ewanick, who joined GM in May by way of Nissan and Hyundai. “When I first started, we began talking about the direction the company was going to take, and fact that there was a real need over the long haul to balance our portfolio,” he told me about 1,700 miles through his 2,300 Detroit-Los Angeles trek, just outside Moab, Utah. “For at least the past 25 years, we’ve been heavily dependent on trucks. We haven’t put as much emphasis on fuel-efficient sedans. And our Japanese and Korean competitors did.” The company had begun to turn the corner, creating the electric-gas Volt, a 42 mpg Cruze, greening up its operations — roughly half of its manufacturing plants worldwide are now zero-waste facilities — and taking other efforts.
“But we said, ‘There must be more we can do.’ We need to show that we’re no longer that company that’s going to send a legion of lobbyists to Washington to say climate isn’t important, because it is. As a company that produces cars, we can go a long way to making people aware of our responsibility, both from a corporate standpoint and an individual standpoint. And that’s where this whole thing started.”
“This whole thing” took a variety of twists and turns. A wide range of bold and audacious ideas were tossed around by Ewanick and other members of the senior leadership. The idea of offsets rose to the top, though the company understood that offsets can be a dicey proposition, for several reasons. One, they’re not that easy to explain to the general public. Two, they’re complicated and controversial as to whether they really reduce emissions. And three, GM’s demand for offsets might be sufficiently large that it could outstrip supply.
In the end, the notion of offsetting a year’s worth of driving got the green light. GM acknowledges that it doesn’t know exactly how it will achieve its goal — that is, where it will invest money to buy, at an average of $5 per ton of offsets, enough quality projects that it will truly reduce emissions, and not simply write a check for something called "renewable energy credits" and be done with it. The projects it has eyed include providing energy-efficient technology such as smart energy sensors and solar panels to schools, supporting wind farms and solar projects that help family farms increase their revenues per acre, and capturing flammable methane from community landfills to deliver clean energy to the grid and improve local air quality and safety.
Pulling all that off might be relatively simple, compared to explaining all this to the American masses.
I asked Ewanick, “What did you hear in the research that convinced you that offsets were the way to go, that people would understand what they were and that this would move the needle on people’s perceptions of GM as a result?”
“It’s going to be a difficult challenge,” he conceded. “A lot of people don’t understand this issue -- that we can do something about CO2 by doing other things, by finding more efficient ways of producing energy, weatherizing schools or finding things we can do with the methane gas [from landfills].
“In our research, we found that people don’t believe in ‘being green.’ But if you ask them if they do things that help the environment, just about everyone we talked to said, ‘Of course.’ A lot of people feel they’re doing good things by buying more fuel-efficient cars. Others recycle. But the unifying thought that happens is that they feel helpless as individuals, that what they do as individuals doesn’t really make that much difference. There’s no way to make people feel collectively that they’re making a huge difference. So, here’s a way through Chevrolet where we can say, ‘Collectively, you and us are making a huge difference.’ And we can quantify that difference and they don’t feel helpless.
“They constantly told us, ‘As an individual, I can only do so much. Companies need to do more, the government needs to do more.’ They said that ‘If a company did something good for the environment, I would support them.’”
GM plans to push the story out to the mainstream, seeking that support. Full-page ads will show up soon in major U.S. daily newspapers. Starting Sunday and over Thanksgiving week, TV watchers will see a series of commercials touting the carbon commitment. Additional ads will follow, though less intensively. There's a new website devoted to the initiative.
“It’s a really great time to do it over Thanksgiving,” said Ewanick. “Families are home together. There’s a lot of conversation at the dinner table. With any luck at all, maybe Chevrolet will be part of that conversation. People can talk about what we’re doing.”
Can General Motors truly change the conversation on carbon and climate? It’s an audacious, almost unfathomable notion, particularly when you think about where GM has come from: suing state carbon regulators, lobbying against federal action, stonewalling activists, selling Hummers, and all the rest.
I, for one, will be anxious to see how that works. Certainly, there will be critics on both sides -- environmentalists who blindly charge greenwash, because that’s what they do; and conservatives who will rail against this somehow as a misuse of taxpayer bailout money — because that’s what they do.
Personally, I wished the company’s messaging had taken this head-on. I would have preferred that GM had said, “America, you invested in us. Now that we’re back, we’re returning the favor. We’re going to invest in schools and communities around our 3,100 showrooms. We’re going to put people back to work -- not just making greener cars, but making greener buildings and greener energy. We're going to invest in a more sustainable future, in clean air, in energy independence. We’re going to turn the tables on that old adage: ‘What’s good for GM is good for America.’”
As he cruised along U.S. 191, passing some of America’s finest scenery, I asked Ewanick what success looked like -- “What’s the story you’ll get to tell five years from now if you get this right?”
He responded, “We’ll look back and say, ‘Finally a car company stepped up and signaled to the world that cars are part of the issue when it comes to CO2.’ And as the car industry grows around the world, that we got together and started doing initiatives like this together. In the end, it can’t be just Chevrolet. A lot of our competitors need to join us on this.”
Can GM really move the needle on climate change — and on its own image as a responsible company? It’s a long, long journey, filled with potholes at every turn. The destination is far off, at times elusive.
But for at least a day, we should celebrate what’s at minimum a symbolic shift by America’s largest automaker, and very possibly much more than that.
November 18, 2010 in Business Practices, Climate Change, Green Marketing | Permalink | Save This Page | Comments (11)
Sustainability Still Wins Elections
Sometimes, the voters get it right. For sustainability advocates, desperate to find something positive in this week's election, here's one: Proposition 23, the California voter initiative to undo America's most aggressive climate program, was soundly, roundly defeated.
It wasn't even close: More than 60 percent of California voters chose to stay the course on California's nation-leading green-economy march. The opponents of climate action didn't just lose, they were trounced.
Prop. 23, for the uninitiated, aimed to reverse California's sweeping greenhouse gas legislation, known as AB32, signed into law in 2006 by Governor Arnold Schwarzenegger. It requires a reduction in state greenhouse gas emissions to 1990 levels by 2020. The law will engage a broad-based effort by just about every business entity in the state, along with government at all levels -- and, of course, individuals in their roles as shoppers, drivers, and homeowners — in dramatically reducing California's climate impacts.
Reaching the law's mandates involves a low-carbon fuel standard for vehicle fuels as well as regulations for tires, engine oils, paints, window glazes, and vehicle insurance. It involves new regulations that affect housing, trucking, refrigerated vehicles, cargo vessels, rail freight, chemicals, and many other parts of the economy. It is, simply put, the most comprehensive climate legislation enacted, at least in the U.S.
Which is why some big companies hated it. Fossil fuel companies in particular. Valero and Tesoro, two Texas oil companies, provided the majority of funding in support of Prop. 23. The proponents took the stance that California simply couldn't afford to address climate change during a recession, with state unemployment at more than 12 percent. Proposition 23, had it passed, would have mandated that AB32 efforts be back-burnered until the economy greatly improved — until such a time that unemployment hit 5.5 percent for four consecutive quarters. That is to say, until never.
Proposition 23 was significant for one principal reason: It was the first time that action on climate change had been put to the voters.
And the voters spoke, resoundingly: Californians overwhelming agreed that this is no time to stop California's leadership on energy efficiency, renewable energy, clean technology, and greenhouse gas reductions.
And they shook off the claims that this would be a job-killer, agreeing instead that AB32 represented a tremendous opportunity for the state to build on its existing foundation as a leader in new technologies, companies, and industries. Indeed, it was the new-economy companies, investors, and entrepreneurs -- and the occasional large company, like HP — that stood on the side of climate action.
"Evidence says 'As goes CA so goes the nation,'" Sunil Paul, a clean-tech investor and entrepreneur, and creator of an initiative called the Gigaton Throwdown, told me last week. "It's true not just for food -- McDonalds to California cuisine — but for environmental laws. Environmental regulation in other states and at the federal level often starts here in California. But so can dismantling the laws. California policy instability in the early 1990s lead to the collapse of the U.S. wind turbine business and those anti-clean energy attitudes took root elsewhere in the country."
Another clean-tech VC, Rodrigo Prudencio of Nth Power, put it this way: "Prop. 23's biggest impact on California's clean-tech economy would not have been in the direct impact of killing AB32 — only a few cleantech companies rely on a price of carbon in their economics," he told me. "Rather, it would have been the surreptitious attack on the many laws and regulations that underpin California's environmental leadership, many of which, arguably, could be sidelined by passage of Prop 23. The proposition was a legitimate Trojan horse."
In this case, the big wooden horse of economic recovery was quickly seen for what it was: an diversionary insurgent effort by some of the biggest contributors to climate change to maintain the status quo in order to protect their narrow interests.
And so it went: Californians said, in effect: "Climate change is both a threat and an opportunity. The threat is to our homes, communities, and children. The opportunity is to reinvent our economy toward a low-carbon future — even if it takes significant changes in our economy and our lives. The promise of a green economy, and all of the companies and jobs that will create, is greater than the risks of change."
And just in case you think Californians were smoking something, consider that another initiative, Prop. 19, which would have essentially legalized marijuana, was similarly quashed by voters. Today, the sweet smell in the air is that of rational, progressive thinking.
November 3, 2010 in Climate Change, State of the Art, Sustainability | Permalink | Save This Page | Comments (0)
Lifting the Lid on Stonyfield's New Plant-Based Packaging
Today, Stonyfield Farm, the organic yogurt company, is unveiling a new packaging solution: A yogurt cup made from corn.
It's not the first revolution in yogurt cups, or the first packaging innovation made from corn. But Stonyfield's journey to today is a case study in sustainability, innovation, persistence, and systems thinking that I think is worth sharing.
First, the basics. Stonyfield's new cup — now being used in its multipack Yo-Baby products and a few others — replaces polystyrene with a plant-based plastic called polylactic acid, or PLA. Essentially, it's a plastic made from corn.
The PLA is made by NatureWorks in Nebraska, which is owned by Cargill, then sent to Clear Lam Packaging in Illinois, where it is mixed with colorings and other additives and turned into rolls of plastic that are formed into cups at the Stonyfield Yogurt Works. The new package is 93 percent plant-based, with the balance being nontoxic colorings and additives.
The cups offer a number of advantages. Aside from the obvious — substituting plants for petroleum — PLA uses less energy and releases fewer greenhouse gas emissions than polystyrene over its lifecycle.
PLA is made from corn, which captures carbon as it grows, so PLA releases 48 percent less carbon into the atmosphere than polystyrene does from cradle to grave. For Stonyfield's 200 million-odd cups that translates to reducing its carbon footprint by 1,875 metric tons a year. That's no small number, since packaging represents Stonyfield's second-largest carbon footprint, after cows.
Moreover, the new packaging is stronger than the oil-based plastic it replaces, and offers some other performance characteristics. For example, it reduces breakage during shipping and forms a tighter seal with the lid. The plastic is stronger than polystyrene, so less is needed, making packages lighter. (One downside: PLA's strength dulls industrial cutting blades on packaging machines more quickly.) Because of PLA's higher efficiencies and lower losses, the shift to plant-based plastics can be done at no net cost increase to Stonyfield.
So far, so good.
But it's never that simple.
While PLA can be made from a range of materials, in the U.S. it is made from corn. And 70 percent of U.S.-grown corn contains genetically modified organisms, or GMOs, according to the U.S. Department of Agriculture's Economic Research Service. That means that in using PLA, Stonyfield, a company maniacally committed to organic farming, is supporting GMOs. And therein was a dilemma.
Stonyfield is not the first company to grapple with such issues. Sustainably minded apparel and footwear companies, for example, have looked at using PLA in their products and have become stymied, fearing backlash from consumers and activists for supporting GMO crops.
Many of the objections to GM technology stem from its potential use to create unnatural organisms -- for example, a plant modified with genes from another species of plant, or even an animal.
Another concern is that genes used to modify crops could escape into wild plants, creating "superweeds" highly resistant to pests, or alter plants in other ways that might cause damage to the environment. It is possible, this argument goes, that plants emitting their own toxins could lead to insects and other pests mutating into bigger, stronger, more resistant beasts.
A further concern is that GM crops themselves might prove to be harmful to either wildlife or the people who eat food harvested from the crops. Still another key concern is that genes escaping from the crops could pollinate non-GM crops that are being grown organically.
Stonyfield found what it determined to be an acceptable workaround: GMO offsets.
The company worked with the Institute for Agriculture and Trade Policy and its Working Landscapes Certificate program. The goal of Working Landscapes is to reduce the environmental impact of corn and other crops grown for industrial purposes, such as plastic and ethanol production.
Working Landscapes pays farmers who agree to grow the corn we need according to very strict sustainable production standards — things like strengthening soil, protection air and water, and promoting biological diversity. Working Landscapes also ensures that non-GMO corn is used. It's seen as a win-win situation for farmers and the environment, and we hope other companies follow their lead.
This "offset" program means that the amount of corn produced using sustainable corn production practices through Working Landscapes will be equivalent to the amount used for Stonyfield's packaging needs — about 500 acres' worth in 2010 — although the sustainable corn itself may or may not actually show up in the final Stonyfield packaging.
Working Landscape meshed well with Stonyfield's longtime support for family farming.
"It's critical to us that the farmers get most of the money," Nancy Hirshberg, vice president for Natural Resources at Stonyfield, told me recently. "This is using the market to transform farming to what we believe are more sustainable practices."
She added: "We could bring over lactic acid made from non-GMO beets in Europe, or tapioca in Asia, or sugar cane in South America. But we really felt that moving American farmers to more sustainable practices was a better route to go."
Offsets are a decidedly imperfect solution, one not embraced by all environmental advocates, but Gary Hirshberg, Stonyfield's "CE-Yo" (and Nancy's brother), a longtime environmental advocate himself, saw no other viable option. "Obviously, we wish it were not corn," he told me. But, he added, "We can't afford to hang out in the black or white space — we've got to lunge into the gray here."
But there's an even greater good here that Stonyfield is pursuing: growing the market for PLA to reach a volume that makes eliminates the need for corn to make PLA. That's long been the ultimate dream of companies like Stonyfield: sourcing plastics from agricultural waste or high-yield perennial crops grown on marginal land unsuitable for food crops. According to the U.S. Department of Energy, the market for these so-called cellulosic feedstocks will be commercially viable within five years. But Stonyfield thinks it — and its competitors — can accelerate this.
Toward that goal, the company has decided to make this technology, on which it's been working for years — open-source, available to its competitors.
"We had the opportunity for exclusivity on this, and it was not an option that we thought was ethical," said Nancy Hirshberg. "So, we're putting all of our studies on the Internet. We're welcoming other companies to come in to see how it runs. We'll be out speaking to others. We're really encouraging others to do this."
Said Gary: "The big win, as I've come to understand this, is that the only thing that the only impediment to getting to agricultural waste or algal waste PLA is volume. Every chemist I know on both sides of the Atlantic says it's only one thing that makes it five years instead of one year, that's volume. It's simple."
"That's why we're being really open-sourced about this," he added. "If Yoplait wants to do this, we're going to be thoroughly open-book."
It's a book whose final chapters have yet to be written, but the story line is promising: a forward-thinking company combining technical expertise, market savvy, and sustainability commitment to transform an industry, and maybe other industries, by breaking through barriers and taking a risk.
We need many more such stories.
October 13, 2010 in Business Practices, Climate Change, Green Marketing | Permalink | Save This Page | Comments (3)
The Dairy Industry and the 2 Percent Solution
What's the carbon footprint of a glass of milk? It's more than a mere trivia question. Calculating, managing, and reducing the emissions of everyday products is a growing quest for companies across the business spectrum. But most products are multi-company affairs. So, it's one thing for a company to do this. It's altogether another thing to address climate change across an entire industry.
That's what's happening in the dairy industry, where a vast and complex web of players has come together to address their individual and collective climate — um, hoofprint.
This week, the industry announced it has completed a carbon footprint study that measured the life-cycle greenhouse gas emissions associated with producing milk in the United States. Researchers followed the journey of a gallon of milk across its entire life-cycle: growing crops to feed cows; producing milk and delivering it to processors; processing, packaging and distributing it to retailers; and consumer use and waste.
That's a big task, made bigger by the fact that milk is produced in all 50 U.S. states by hundreds of large and small dairy farmers. Putting the information together was no doubt a gargantuan task. Figuring out what to do about it is even harder.
But the exercise underscores both the complexity of industrial systems and the need for collaboration to measure environmental impacts, share best practices, and optimize the entire process.
The milk study was conducted by the Applied Sustainability Center at the University of Arkansas on behalf of the Innovation Center for U.S. Dairy, a two-year-old trade group, and is being presented this week at the International Food LCA Conference. It involved 540 farms, more than 210,000 roundtrips of transportation, and 54 processing plants — about one-fifth of the U.S. total.
It concluded that the U.S. dairy industry's greenhouse gas production is about 2 percent of total U.S. emissions. That's far less than others had estimated (a 2006 Food and Agriculture Organization study put the number at 18 percent), but it's still a significant contribution to global climate change — roughly equal to that of the airline industry. The airline industry, for its part, has pledged to halve its emissions over the coming years, and other sectors are being pressed to account for and reduce their emissions. The milk industry has its own plans to squeeze carbon emissions out of its value chain — 25 percent by 2020.
It's not simply a feel-good thing. The dairy industry has been feeling the heat. "Our customers — - major retailers and food channels — want us to do better," Erin Fitzgerald, vice president of sustainability for the innovation center, told me recently. "Our consumers are demanding this." Other players in the beverage industry, like Coca-Cola and Pepsico, are making their own moves to address their carbon emissions. "Even the financial community is asking, 'Are you able to measure your impact and quantify it for the future?'" Beyond that, says Fitzgerald, "It makes good business sense. It's better to be self-directed than directed by others."
The study also underscores how much climate emissions depend on the practices and efficiency of every member of the complex industry web. For example, it found that regardless of a dairy operation's size, region, or other factors, management practices were the biggest factors affecting carbon emissions. There's a dairy farm's "feed conversion efficiency" — based on how, how often, and what cows are fed — that affects their yield of milk and production of manure. The more efficient you can feed the animals, the lower the enteric emissions — that is, methane gas emitted from both ends of the cow (belching and farting, in plain speak), which represents 25 percent of the industry's emissions. The types of fertilizers used to grow feed crops like corn and alfalfa are another factor, 19 percent total emissions. Then there's manure management — when and how it is applied to the land as a fertilizer, which affects methane emissions — another 24 percent.
All told, nearly three-fourths of total emissions occur by the time the milk leaves the farm, before it goes to processing, packaging and distribution.
Consumers aren't left out of the equation. It turns out that fully 20 percent of milk is wasted by consumers — presumably, disposed of after exceeding its "sell-by" date. Retailers, too, cry over spilled milk — about 12 percent of milk waste occurs within store operations. Together, those account for 5 percent of industry emissions.
(You can download the executive summary of the report here - PDF.)
Why bother with all this trivia? "In the political environment, we're entering a period of radical transparency," explains Fitzgerald. "We thought it was very important to measure our impacts and chart a path for our industry to follow."
The good news is that there's a lot that can be done at every step of the process: changing livestock feeds, reducing or optimizing crop fertilizers, adopting no-till farming methods, switching from annual to perennial crops, installing energy-producing digesters to capture methane produced during manure storage, making boilers (for pasteurizing) and refrigeration more efficient, optimizing delivery routes, and many others. Not to mention growing feedstocks for biofuels and installing solar panels and wind turbines on their land.
It's a seemingly endless list of solutions. Fitzgerald's group has compiled a portfolio of 12 projects with names like "Cow of the Future" (practices and technologies to reduce enteric emissions) and "Next Generation Clean in Place" (reduced-temperature milk processing).
There are policy implications, too. The federal government is considering offering carbon offsets and incentive payments to encourage rural landowners to pursue climate-friendly activities. State governments and others may also include ag as part of their efforts to reduce climate emissions.
There's great potential here for farmers. "There is a move to look at ecosystems services — carbon trading, water trading, biodiversity trading," says Fitzgerald. All of which will require the industry to closely account for its climate impacts and benefits. "Take green spaces, for example. We have no idea of how much farms contribute to the value of green spaces. What would happen if farms were converted to urban landscapes? We're starting to quantify those environmental attributes."
Understanding those values could allow farmers some day to bottle up and sell not just milk, but also credits that result from being model climate citizens.
September 23, 2010 in Business Practices, Climate Change, State of the Art | Permalink | Save This Page | Comments (1)
Shanghai: A City of Two Tales
I'm writing this en route home from Shanghai, where I've spent most of the past week touring, visiting, meeting, and experiencing this Asian megacity for the first time. The occasion was Expo 2010, the world's fair situated on both sides of the Huangpu River, which runs through the center of China's largest city.
I came to Shanghai primarily for the opening of an art installation, "The Nature of Cities," on cities and biodiversity, at the Expo's United Nations pavilion. The theme of the exhibition — created and produced by Art Works for Change, the nonprofit group founded and headed by my wife, Randy Rosenberg — reflected the theme of the Expo itself: "Better City — Better Life."
That "better cities" theme pervaded the pavilions representing nearly 200 countries, plus dozens more organizations and corporations that are exhibiting here. And it aimed to signify Shanghai's emerging status in the 21st century as the "next great world city" — at least by Shanghai's own reckoning. Shanghai, like most big cities in both developed and developing economies, is a study in contrasts: on the one hand, world-class shopping, fine dining, and some of the planet's most impressive buildings; on the other, choking pollution, gridlocked traffic, and a struggling underclass. A rich and tortured history; a promising but uncertain future.
For two days, amid some of the hottest temperatures Shanghai had seen in 50 years, we toured the Expo, at times standing in long lines. The story each national pavilion told was predictable: "We're a proud people with deep traditions and care for the land that is our home. We support progress and a clean environment. We have great hope for our children. Here are a few of the things we're good at. Come visit us! Come buy our stuff!"
But not the USA pavilion, which stood out among the others, less for its design than its content: Its primary purpose was to showcase the companies that sponsored the building, a roll call of American capitalism: Alcoa, Boeing, Caterpillar, Chevron, Citi, Corning, Dell, Dow, Dupont, Fedex, GE, Goodyear, Honeywell, Intel, KFC, Marriott, Microsoft, Pepsi, Pfizer, Pizza Hut, Procter & Gamble, Visa, Walmart, and more than a dozen others.
The message, as best I heard it: "We innovate to bring great ideas to the world! We build brands that the world wants! We create opportunity! Come visit us! Come buy our stuff!"
But it wasn't the country pavilions that most interested me. On my second day at the Expo, I made a beeline for the corporate pavilions, a smaller group of grandiose buildings across the river from the Expo's main crowds. It was here I found two competing tales of our energy and transportation future.
Up first: the General Motors Pavilion — actually the SAIC-GM Pavilion, reflecting GM's partnership with the Shanghai Automotive Industry Corporation. The pavilion's theme: "Drive to 2030," an engaging and highly optimistic tale of where transportation can take us within the next two decades, with an emphasis on China's vehicular future. That future, says GM, is one
in which driving will be free from emissions, accidents, petroleum, and congestion. It is a future in which driving will also be more enjoyable and fashionable than ever before.
The keys to this Utopian vision are electrification and connectivity — a technological mash-up of vehicles, energy, and information, where vehicles — from traditional cars, buses, and trucks to a new generation of cool "personal urban mobility" vehicles called the EN-V (pronounced "envy") — zip along at a decent clip, kept collision-free thanks to next-gen technologies GM is developing or integrating into vehicles — or at least plans to. Oh, and the sky is always blue.
I found the vision compelling and hopeful: a car maker that gets that the future is not just about cars and trucks, or even buses and trains — but about mobility: getting where you need to go, when you need to do it, in the least taxing (personally, economically, societally, environmentally) way possible. And maybe even tap into some cool, fashionable technology along the way.
(I'll admit to a little bias: GM is a client of GreenOrder, the strategy and management consultancy with which I am affiliated. But I would have been equally laudatory of any car company that promoted such a sustainable mobility vision. GM, as it turns out, was the only car company hosting a pavilion in Shanghai.)
You might respond, "Great. Nice vision. But when will we actually see it?" After all, we've been tantalized before at world's fairs with cool tech that never came to pass. (Picturephones, anyone?) And GM's track record for delivering on change isn't that great.
"This has become very strategic to GM," David Tulauskas, GM's head of public policy in China, told me over lunch at the pavilion. He cited the growing number of places like London and Singapore that are using congestion pricing; additional cities are creating "back office" traffic management technology platforms to manage vehicle congestion. He described the emergence of Dedicated Short Range Communications standards that can keep adjacent vehicles from colliding in order to utilize roadways more efficiently ("kind of like schools of fish that never run into each other," he explains). He explained how the expansion of GM's OnStar telematics technology could provide a range of consumer-friendly services. Tulauskas also pointed out that the "new" GM has taken a more aggressive stance on innovation, such as the venture fund it recently launched to develop and invest in advanced technologies, and a more robust long-range planning process being undertaken by GM that is approaching business development from a mobility perspective, and looking more frequently outside the company for technology solutions, a far cry from the inward-looking pre-bankruptcy GM.
Of course, it's all just talk and cool prototypes. But I walked away with the sense that this old-line company has a bead on where the future is headed, and wants to be in the driver's seat, so to speak, as that future comes into view.
That was not the case at the second corporate pavilion I visited, the Oil Pavilion, presented by three of China's largest petroleum companies, though it might as well have been sponsored by the American Petroleum Institute.
There was a decidedly old-world vision offered here — a propaganda machine spewing bromides about the wonders of petroleum in our world and how much we rely on it daily. Fortune-cookie-like reminders were everywhere you looked: "Convenient traffic conditions/70% are contributed by oil," read one. "One needs 551 kg of oil for food in lifetime," read another. (I'm guessing they weren't referring to this line of petrochemicals.)
The heart of the Oil Pavilion was an impressive 4-D movie (the fourth dimension is sensation: you "experience" snakes, flies, wind, ocean spray, and more). But its central message was decidedly one-dimensional: Oil is a critical part of everything we do, and it isn't going away, so learn to love it. Even when there is mention of the need for a "low-carbon economy," it quickly and curiously follows that "oil and gas will remain predominantly." Unlike GM's forward-looking message, this industry's viewed tomorrow as a carbon-copy of today — stay the course! — hardly a hopeful vision. Suffice to say that amid the petro-carnage in the Gulf of Mexico, not to mention the Persian Gulf, the core message of the Oil Pavilion seemed to have run out of gas.
And so went the Expo's two tales. Both anticipate a growing global population of urban dwellers seeking the good life, a life that demands mobility, not to mention food and shelter and fun. Both anticipate the challenges ahead of making cities that work, ensuring they aren't paralyzed by polluted air and congested roads, but which offer ways to get where people want to go.
But only one of those is a city I hope to see. The other is a city to dread.
July 6, 2010 in Clean Tech, Climate Change, State of the Art, Sustainability | Permalink | Save This Page | Comments (0)
When It Comes to Cars, ICE Is Still Hot
If you were to believe the mainstream media, the future of transportation is electric. And so it seems: In the coming year or two, we'll see a parade of electric vehicles (EVs), hybrid-electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and extended-range electric vehicles (EREVs) — and probably a few variations on those themes — all of which employ kilowatts where gasoline once reigned. They're coming from both the world's biggest car companies and some of the smallest.
But the conventional gas-powered internal combustion engine (ICE) won't be going away any time soon. While the spotlight belongs to electricity, off in the shadows the auto industry remains in high gear to ensure that the century-old ICE technology doesn't go the way of the buggy whip.
There's good reason: Even the more optimistic estimates put sales of all of types of EVs at only 20 percent of the U.S. market by 2020. That's a good start, but it leaves millions of new car sales employing ICE technology, not to mention nearly a billion ICE-power cars already on the roads, hundreds of millions of which will still be on the road a decade from now.
As a result, the world's major car companies, in both collaboration and competition with dozens of Fortune 500 companies and startups, are turning up the heat on ICE technology, seeking to improve the fuel and greenhouse gas performance of both new and existing vehicles.
The fortunes of some of these firms rose last week when the Obama administration set new greenhouse-gas emissions standards for automobiles and light trucks, a long-awaited and much-needed move to prod the U.S. transportation system in the right direction. The first-ever national greenhouse gas emissions standards "will significantly increase the fuel economy of all new passenger cars and light trucks sold in the United States," according to the U.S. Department of Transportation and U.S. Environmental Protection Agency, which jointly issued the standard.
Of course, the big automakers, not to mention the rest of the free-market crowd, viewed the standards as a needlessly expensive, technologically infeasible, and counterproductively intrusive mandate that will crush a U.S. car industry just coming out of bankruptcy, along with the jobs that come with it. And it will raise car prices, too, though the added cost will be more than covered by fuel savings.
But improving ICE technology turns out to be not that hard, technologically speaking. And much of the technology already has been invented, as the Wall Street Journal pointed out last week, referring to "a number of more mundane solutions to reduce fuel consumption of vehicles that look and operate like cars now."
Among some of the incremental solutions: more-efficient tires, low-friction engine lubricants and added gears. Auto makers also will use technology to build four-cylinder motors that can deliver the power of six-cylinder engines and replace V-8 motors with more efficient six-cylinder versions. More use of turbocharging allows for reduced engine size while maintaining performance.
There's no shortage of companies working on these things. A January report on the topic by analysts at the financial services firm Robert W. Baird & Co. listed some of the products and technologies that can improve internal-combustion engines, along with estimates of their benefits. They include diesel (30% to 35% potential fuel-efficiency improvement), turbocharging (7% to 8%), direct injection (11% to 13%), cylinder deactivation (6% to 8%), variable valve timing (4% to 6%), continuously variable transmission (5% to 7%), automated manual transmission (5% to 15%), stop-start ("micro-hybrid") technology (7% to 9%), and low-resistance tires (1% to 2%). Many of these are in the market, or close to it. Behind these are still other technologies, says Baird, with exotic names like "homogenous charge compression ignition" and "advanced torque transfer technologies," each of which brings further improvements.
Put several of these together — and throw in some lightweighting, thanks to advanced carbon-fiber materials — and suddenly, Obama's new standard — fuel economy of 2016 model cars about 34 percent better than last year's models — seems like a relatively low bar.
Such technologies represent a significant business opportunity for the auto industry's biggest suppliers — companies like BorgWarner, Eaton, Johnson Controls, Navistar, TRW, and Visteon — as well as dozens of startups — firms with a far, far lower profile than electric-vehicle darlings like Tesla and Better Place, among them Achates Power, EcoMotors International, Pulstar, Fallbrook Technologies, Transonic Combustion, and Zajac Motors.
And then there's the question of what to do with the current stock of cars on the road. Is there a way to retrofit them with enhanced technologies, or to convert them to hybrids, plug-ins, or other EV technologies?
Felix Kramer believes there is. The founder of the California Cars Initiative, better known as CalCars.org, last year launched an initiative "to 'fix' a large fraction of the 250 million U.S. vehicles and 900 million globally to run partly or fully on electricity, thereby gaining millions of cleaner, more efficient vehicles that are cheaper to drive, while creating many jobs and providing new revenue streams to automakers from vehicles they've already sold."
Kramer and his team point to a a dozen or so companies and organizations already in the process of converting ICE cars to hybrids, including ALTe, Bright Automotive, ElectraDrive, Linc Volt, and Poulsen Hybrid. It's a market that's scarcely tapped, with blue-sky potential — literally and figuratively.
What will it take to turn this potential into real business — and jobs? It won't likely happen through individual consumer purchases of these upgrades. More likely will be fleet buyers — the thousands of government agencies, taxi companies, rental car companies, and corporations that own hundreds or thousands of vehicles — that will create a demand for ICE upgrades and retrofits. (My colleague, Tilde Herrera, recently reported on the billions in fuel savings fleet buyers will enjoy from the new Obama emissions standard.) But what will motivate them? Tax incentives? High gas prices? A price on carbon? Public pressure?
Another key challenge is how to accelerate the pace of innovation in the design of new cars, shortening the long product cycles now typical of the major car companies, thereby allowing more rapid adoption of new technologies. The Chevy Volt, for example, an EREV that will be in the market this fall, was first unveiled in late 2006 and formally announced in early 2007. Assuming its conception goes back at least a year earlier, that suggests the Volt took fully half-a decade to get to market. Even then, Chevy plans to make only about 10,000 of them in the first model year. How can tomorrow's cars get to market in half that time?
That will be a challenge for car makers going forward: creating scale and speed. We know how to make cars, even green cars, accelerate wicked fast. The next hurdle will be to bring new, clean technologies to market at similarly impressive 0-to-60 speeds.
Of course, all of this addresses only automobile technology — the nature of the vehicles themselves. That omits the larger picture — the notion of buying mobility services, as opposed to owning vehicles. There's vast opportunity for innovation in business models that provide alternatives to owning vehicles in the first place.
Until entrepreneurs and big companies focus their sights on that part of the transportation picture, all these techno-fixes will drive us to making good time going in the wrong direction.
April 4, 2010 in Clean Tech, Climate Change, Money Matters, State of the Art | Permalink | Save This Page | Comments (12)
