April 2010 Archives

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As I Twittered early this morning, the BP Gulf oil spill now has the potential to become larger than the catastrophic Exxon Valdez spill of 1989, which spilled 10.8 million gallons of oil into Prince William Sound, devastating the Alaskan fishing industry and state's economy.

The Exxon Valdez spill resulted in an estimated $5 to 7 billion dollars (in 1989 dollars) of damage over a two-year period (shore clean-up below).

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The fire-caused break and leak of BP's oil well is blasting a now-estimated 210,000 gallons a day (5,000 barrels) into the Gulf deep under 5,000 feet of water. An attempted controlled burn of the oil is occurring before the oil is forecast to hit the wetlands and beaches of the Gulf Coast tonight or tomorrow.

A BP spokesperson said on the McNeil News Hour this afternoon that the UK corporation will be sending two ships to drill nearby relief wells. The wells will take up to 90 days to get in place, meaning 18,900,000 gallons of oil may spill in the meantime--almost twice the amount of oil spilled in the Exxon Valdez incident.

Look for the event to have major consequences on US energy and disaster-response policy, the Gulf fishing and tourism economies in up to five states (Texas, Louisiana, Alabama, Mississippi and Florida), and wildlife. The economies of New Orleans; Biloxi, MS; Mobile, AL; and Pensacola, FL, and Panama City, FL, are the communities most vulnerable to the spill.

Oil prices and the debate about a potential coming 2014-2015 energy crunch may also flare up with this tragic event. Already, 11 lives of workers were lost on the offshore rig when it blew up.

Drilling for oil under such enormous and biologically sensitive areas like the Gulf Coast is a reality that is occurring to meet the demands of the current global economy.

Without new sources of renewable energy, better planning and comprehensive clean energy policy and clean tech job creation, the Gulf and many of our nation's (and our planet's) waters, our coastal communities, and marine and shore animal-bird populations will be at severe risk, as easy-to-drill oil becomes less and less available.

In the meantime, there will be an acute need to drill even deeper, in more sensitive places and to drill almost everywhere, until we diminish our global addiction to oil.

Warren Karlenzig is president of Common Current, an internationally active urban sustainability strategy consultancy. He is author of How Green is Your City? The SustainLane US City Rankings and a Fellow at the Post Carbon Institute.      

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With Mumbai, one of the largest cities of the world, treating only 30-40 percent of its sewage, experiencing five-hour traffic delays and hosting massively expanding unplanned slums, urban sustainability needs to be viewed through a different lens than elsewhere.

India will add an additional 26 cities of one million or more by 2030 to its 42 one million+ cities today. The 2008 population in cities of 340 million in 2008 will soar to 590 million by 2030. The need for much improved urban housing and health services, let alone better planning, governance and carbon management, threatens the nation's and thus the world's economic stability: India's population by 2030 is forecast to overtake China's

A report released this month by the McKinsey Global Institute, "India's Urban Awakening," provides a rich and thorough analysis of the challenges faced by Indian cities, while also providing a clear agenda for future improvements. Changes will need to occur at the local, state and national level, and will require the active participation of the international business community through public-private partnerships.

First the bad news.

As a contrast to China, which has staged much of its recent urban growth in nationally planned phases targeted at geographies, economies and infrastructure, Indian cities are experiencing rapid unplanned growth. Major financial investment, to the tune of $1.2 trillion over the next 20 years, will be needed to address how Indian cities are falling short of meeting even a basic standard of living in:

  • Water supply: will need to increase 3.5 times current supply to meet basic demand by 2030
  • Sewage: treatment will need to increase two times current levels to meet demand by 2030
  • Solid waste: will need to increase six times today's treatment levels by 2030 because of consumption expected by an emerging middle class.
  • Public transit access and service: 20 times the capacity of metros and subways will need to be added over what has been provided in the past ten years
  • Affordable housing: will need to increase 10 times by 2030 to meet expected needs.
  • Slum populations that now comprise 24% of India's urban population will need to be addressed with formal affordable housing programs and housing structures.

Oddly, no forecasts were made in "India's Urban Awakening" regarding the amount or mix of energy that will be needed to meet the needs of India's cities. With massive growth in electricity use for buildings (at least 40% of India currently is not connected to the power grid), large increases in personal auto ownership, and volatile global energy supplies and pricing, India is faced with urban growth-associated issues that if unaddressed threaten the very core of its existence as a nation.

According to the McKinsey report, however, India has sufficient time and the means (with international financial, business and humanitarian partners) by which to address many of these pressing or devastating issues. The McKinsey Institute report also presented a framework for a plan by which India can meet the financial need to increase spending on cities from its current rate of 0.5% to 2% of GDP.

On a per-capita basis, India now spends 14% of what China spends on its cities and only 4% of what the United Kingdom spends on its cities.

The key elements of the report plan outlined five strategies for meeting its urban financial obligations, most of which India currently ranks "poor" in:

1. Monetize land assets.
2. Maximize property taxes and usage charges.
3. Establish a formula-based grants systems from state and central government.
4. Use appropriate debt and private-sector participation (i.e., public-private partnerships).
5. Create enabling systems and city development funds to facilitate use of revenue sources.

The report also outlined four significant "dimensions" besides funding, on which Indian cities need to concentrate improvements in order to successfully transform urban economies and sustainability opportunities:

1. Shape: Where people live. Unlike China, India has made no real attempt to plan where growth of cities will occur, or to determine where new cities will be most needed, and as a result unplanned urban sprawl is increasingly common.

2. Governance: How cities in particular are governed. Develop executive leadership at city level in mid-sized to large cities. India is currently the only G20 nation lacking such leadership. Cities in India are currently governed by their host states from a considerable distance in many cases. The report does cite the success of Kolkata's (Calcutta) mayor-commission model as a potential national model for executive power combined with administrative-technical support.

3. Sectoral policies: These include economic development, sustainability management, and housing management. India does not plan enough for affordable housing, providing 200,000 units a year versus needed minimum of 2 million units. The number of people living in slums in 2008 was some 82 million, a number that could double by 2030. Recommendations are to establish funding, draw upon external expert advice and hire dedicated managers to focus on these areas.

4. Urban Planning: Change from ad hoc and sporadic planning. Develop longer-term plans (40-50 year) with nested 20-year master plans designating land uses, transportation services, infrastructure and building typologies that are actionable on the ground with transparent public processes. Use modeling and "fly-overs" to educate stakeholders of planning options (Singapore, London and New York are cited for best practices). India's current urban planning processes exist as documents only, and are not executed or followed in reality.

The report in its introduction observes: "The speed of urbanization poses an unprecedented managerial and policy challenge--yet India has barely engaged in a discussion about how to handle this seismic shift in the makeup of the nation."

From my experience, I would dispute the assertion that the country is barely engaged in such discussions. My firm Common Current and our partners have been involved in a lively series of exchanges with high-level officials from national ministries and planning bodies in India regarding the future of its cities, with sustainability focused approaches in renewable energy, water and transportation infrastructure being key points of discussion.

How India's national urban planning plays out on localized levels in actual cities, though, remains to be seen. Whatever may transpire, "India's Urban Awakening" is an invaluable resource for determining just how the path forward can be understood and, hopefully, navigated.

Warren Karlenzig is president of Common Current, an internationally active urban sustainability strategy consultancy. He is author of How Green is Your City? The SustainLane US City Rankings and a Fellow at the Post Carbon Institute.

 

 
 



lttr_green_jobs.gifUtilities, energy businesses and clean tech companies have all taken a big hit with the stall of the Climate Bill in the Senate. Don't look for the favored immigration bill to create many jobs or boost innovation in technology or manufacturing.

The Wall Street Journal reported tonight that business leaders from energy, utility and clean tech sectors have protested Congress and the Obama administration's apparent decision to put an immigration bill ahead of a climate-clean energy bill in Congress. Some clean tech related stocks also lost market valuation today with this change of priorities.

The North American clean tech venture-funded market totaled about $3.4 billion in 2009, 62% of the global $5.6 billion market. Such investments are much more at risk if no action is taken on climate and energy in Congress, the likely result of immigration's new status at the top of the Congressional agenda.

The Wall Street Journal
quoted the U.S. Climate Action Partnership, "The U.S. faces a critical moment that will determine whether we will be able to unleash billions in energy investments or remain mired in the economic status quo."

So where are the jobs and financial gains from an immigration bill? How about law enforcement? There may be an uptick of enforcement personnel hired, particularly in the US Immigration and Customs Enforcement (ICE) agency. These jobs pay about $34-$39,000 on an annual basis and this agency has 19,000 jobs.

Border patrol jobs pay up to $50,000 and there are about 18,000 of these jobs. Let's say both those numbers of jobs double if immigration reform goes through Congress, with about 75,000 jobs, tops. Throw in an extra 50,000 jobs in other miscellaneous agencies or companies. So that's 125,000.

In contrast, clean tech's lowest earning jobs for those with a high school degree pay from $36,100 a year to $72,900 a year. Executive clean tech jobs can earn well over $200,000, with middle management opportunities for those with college degrees in the $60,000-$180,000 range.

The clean tech industry also is likely to produce far more jobs in sheer numbers. Last year, there were an estimated 770,000 clean tech jobs. These jobs are distributed across the nation (California, Colorado, Oregon, Michigan, Massachusetts, New Mexico, Pennsylvania, Ohio, Texas) whereas most immigration-related jobs are concentrated in southern border states (Texas, Arizona, New Mexico, Florida, California only).

Silicon Valley venture capitalist Vinod Khosla recently credited California's 2006 Global Warming Solutions Act (AB 32) with encouraging innovation on the order of creating "ten Googles because of it."

So the move to the head of the queue in DC for immigration reform is obviously not about the economy. But shouldn't just about every major national initiative at least cast a sidelong glance at job-creation potential, especially if we want to continue on the road to recovery?

Then there are critical issues such air pollution, US lack of leadership in math and science, as well as national security implications from foreign energy dependence.

Our climate's abrupt change is, of course, also paramount, endangering health, the economy and the environment, on a global basis. 

Sounds like there are some seriously misplaced priorities inside the Beltway.

Warren Karlenzig is president of Common Current, an internationally active urban sustainability strategy consultancy. He is author of How Green is Your City? The SustainLane US City Rankings and a Fellow at the Post Carbon Institute.  
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Legendary technologist and venture capitalist Vinod Khosla spoke last night about how his funded companies will soon enable cars and coal to be a big part of the climate change solution, instead of the major part of the climate problem.

All that pesky advice for people "trying to be green," even expert energy and technology forecasts, will be made unnecessary or erroneous once Khosla and his Khosla Ventures posse reinvent the world's energy and transportation technologies.

He took potshots at everything from small business "eco-bikinis" to corporate greenwashing, such as Shell''s advertising of "sustainable tar sands." "Environmentalists are spending too much time on things that don't matter," he told the San Francisco Commonwealth Club audience.

Such bravado would be particularly annoying were it coming from someone without as much commitment--in the form of $1.3 billion and many years of effort--as Khosla.

Khosla highlighted four portfolio companies in his presentation, which focused on, "inventing the future, not predicting it....Who would have imagined Twitter two years ago?"

"We need to get rid of fossil oil, which is 70 percent of the climate problem," he said. Khosla's goal as a venture backer is to fund companies that are "90 percent likely to fail," as they have the best chance of leapfrogging current technologies, leading to the demise of monopolies such as Big Oil. He called these disruptive types of companies or ideas, "Black Swans."

He said smaller companies in the $7 to 70 million range that are taking the big potential high-return risks should be the highest priorities for funding, whether from his own funds ($1 billion large VC fund; $300 million "science experiment" fund) or another source. Khosla credited the US Department of Energy's year-old ARPA-E program with "doing a great job" in terms of the funding it has provided for smaller, innovative clean tech companies.

Khosla Venture's current flock of Black Swans include:

  • Calera: Trying to turn the climate change pollutant C02 from coal emissions--along with other hazardous emissions including mercury--into an energy and cement feedstock. "It will be able to reduce the carbon footprint twice as much as solar," Khosla predicted.
  • Kior: The start-up is aiming at turning wood waste such as wood chips into oil.
  • Ecomotors: Attempting to produce non-hybrid engines that are 50-100 percent more efficient, aimed at cutting world oil consumption in half.
  • Soraa: Engineering circuitry that may use ten times less electricity for lighting.

Khosla said his investments all share the goal of being available at "relevant cost, relevant scale and relevant adoption." With some current green technologies, he said, "the average person in India could not even turn on the light."

Regarding the growth of India, Khosla's homeland, he said Indian car ownership is forecast to increase 5000 percent in 30-40 years (what, trusting a forecast?) and that to meet this demand, "biofuels are probably the right solution."

He proposed using the 1 billion acres of abandoned agricultural land worldwide to produce biofuel crops such as miscanthus that will replace or improve that degraded soil, and also suggested using cropland for biofuels in the winter that is not being utilized year-round for food crops.

Overall, Khosla and his funded companies are pushing the envelope with some intriguing new ways of addressing our climate and resource crises.

These companies are based in The Bay Area's Silicon Valley and in Southern California, as well as in more traditional centers of energy (Kior is based in Houston), and transportation (Ecomotors is in the Detroit area). The design innovation and the hundreds or thousands of green jobs they are producing will be critical in transforming our industrial economy.

Khosla suffers from the myopic view, however, that technology alone can triumph without the need for new behaviors, planning, policies and systemic approaches (though he did credit California's Global Climate Change law AB 32 with encouraging innovation on the order of "creating 10 more Googles because of it").

Such thinking about the absolute superiority of "progress"--cars, electricity, chemicals, engineered food--has in the past presented us with so many of the dilemmas that we now face.

Global climate change, along with massive resource and species depletion, demands that we not risk betting everything on the hope of techno-fixes, no matter how enticing these partial solutions may be to someone breathing the rarefied air of California's Silicon Valley.

Warren Karlenzig is president of Common Current, an internationally active urban sustainability strategy consultancy. He is author of How Green is Your City? The SustainLane US City Rankings and a Fellow at the Post Carbon Institute



 

 
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Did runaway exurban sprawl--particularly in hypergrowth Sunbelt communities--help create the conditions for gaming in the financial industry? In other words, Goldman Sachs and other financial firms gave us what we wanted as a nation and then bet against us when they saw too many suckers entering the game. 

These issues loom large as the Securities and Exchange Commission (SEC) accused Goldman Sachs of fraud last week tied to collateralized mortgage debt obligations that contributed to the worst financial crisis since the Great Depression.

Goldman made large profits on the housing boom through 2006
, then essentially bet on the market to fail so it could profit on the national housing bust, which raged in 2007-2009.

The first domino of that financial panic was the 2006 spike of foreclosures in the most sprawled, car-dependent communities such as Phoenix, Las Vegas, San Bernardino-Riverside, California and Tampa, Florida.

Goldman started betting against the mortgage market in 2007, which thereafter began its well-publicized death spiral, particularly in newly developed suburbs located far from city centers of public transportation and jobs. 

The Post Carbon Institute will soon be publishing my report examining the sustainability impacts of such "easy credit terms" and subsequent speculation. The study also provides planning solutions for greater metro area resilience, which The Natural Resources Defense Council recently highlighted: "NRDC has chosen sustainable communities as a strategic objective for the next five years. Karlenzig's advice seems right on target as we further refine that agenda." 

Here's an exerpt from, "The Death of Sprawl: Designing urban resilience for the 21st century climate and resource crises." (The study profiles a fast-growing exurban city in Southern California, Victorville. Victorville, now wracked by foreclosures, grew in population from 60,000 in 2000 to 107,000 by 2007, largely due to zero downpayment home loans for newly built subdivision homes):

Relatively cheap real estate, flat land, and single-purpose zoning meant big profits for real estate developers and construction companies. Builders could easily and quickly build vast residential neighborhoods without thinking about where residents would work or how they would get there. Relaxed federal regulations on the financial industry meant first-time homebuyers could "own" their home without a downpayment, and sit back while home prices climbed. 

And for a few years, climb they did. When home prices were rising in the region in the early 2000s, Victorville seemed like a sound investment. But by 2006 the price of gasoline began its steady ascent above $2 a gallon and a bubble burst in Victorville and other exurban market housing prices creating the first wave of foreclosures that helped set off a national economic crisis.
A complex and devastating chain of events began with people losing confidence in the seemingly ever-upward growth of exurban economies. Across the country, home foreclosures began to appear overnight in exurban hyper-growth markets, most notably inland Central and Southern California, Las Vegas, Phoenix and much of Florida.
The nationwide exurban decline that ensued may prove to be the last gasp of the Sunbelt's decades-long development frenzy. We will be absorbing or trying to erase the unwanted surplus of this end-of the-twentieth century building spree for years, if not decades.
Whether Goldman was guilty or not, we are all paying a high price for unfettered housing growth and financial speculation. The impacts of the financial and housing sector "gone wild" includes a much greater carbon footprint, wasted resources, significant traffic and air quality impacts, not to mention now-blighted communities.

We can learn much from such lessons, but who will take responsibility so that it won't happen again? Local, regional and state government that allowed the crazy-quilt growth surely are to share the blame with national financial oversight agencies.

But to a certain degree, this chapter in our nation's history was a reflection of ourselves.

We sacrificed our domestic jobs so people could instead live off their housing deal or "property flipping" income and home equity loans. We built over our best farmland, forests and watersheds, greedy for tax revenues from endless housing subdivisions and strip malls. And we sacrificed our historic communities and walkable neighborhoods for mass-produced completely car-dependent chimeras.

Make no mistake about it, we are Goldman Sachs.

Warren Karlenzig is president of Common Current, an internationally active urban sustainability strategy consultancy. He is author of How Green is Your City? The SustainLane US City Rankings and a Fellow at the Post Carbon Institute.

 




 
 

About the Author

    Warren Karlenzig
Warren
Warren Karlenzig, Common Current founder and president, has worked with the United Nations Department of Economic and Social Affairs (lead co-author United Nations Shanghai Manual: A Guide to Sustainable Urban Development in the 21st Century, 2011); United Nations Center for Regional Development (training of mayors from 13 Asian nations on city sustainable economic development and technology); provinces of Guizhou and Guangdong, China (urban sustainability master planning and green city standards); the United States White House and Environmental Protection Agency (Eco-Industrial Park planning and Industrial Ecology primer); the nation of South Korea ("New Cities Green Metrics"); The European Union ("Green and Connected Cities Initiative"); the State of California ("Comprehensive Recycling Communities" and "Sustainable Community Plans"); major cities; and the world's largest corporations developing policy, strategy, financing and critical operational capacities for 20 years.

Present and recent clients include the Guangzhou Planning Agency; the Global Forum on Human Settlements; the Shanghai 2010 World Expo Bureau; the US Department of State; the Asian Institute for Energy, Environment and Sustainability; the David and Lucile Packard Foundation; the non-governmental organization Ecocity Builders; a major mixed-use real estate development corporation; an educational sustainability non-profit; and global corporations. Read more here.

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This page is an archive of entries from April 2010 listed from newest to oldest.

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