Climate Change: April 2010 Archives

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.  
vinod-khosla-trees-photo.jpg

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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About this Archive

This page is a archive of entries in the Climate Change category from April 2010.

Climate Change: February 2010 is the previous archive.

Climate Change: May 2010 is the next archive.

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