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Cleantech is fun because it touches so much, although technically in the case of wireless there is no touching going on (alas). Wireless is particularly effective when applied to more efficient use of energy, water and other resources. I first took notice of the growing wireless/cleantech ecosystem when I learned that Vulcan Capital (my neighbor in Seattle) had invested in a company called Ember. Other companies in the space, many of which use wireless for various sensing applications that monitor and automate demand of  energy and water use for utilities, buildings and facilities, have attracted investment including SynapSense, Eka Systems, Accuwater and Powercast to name but a few. Of course major players such as Honeywell and Siemens (through spin-off EnOcean) are also heavily involved. A newcomer called On-Ramp Wireless is claiming orders of magnitude greater capacity and range when compared to other systems based on the Zigbee standard (a full list of companies involved with Zigbee can be seen here). Wayne Manges, a leading wireless advocate with the Oak Ridge National Lab, put the whole "green wireless" opportunity into perspective in an interview with Green Mountain Engineering. Mr. Manges noted: "The 'holy grail,' of course, is low-cost ubiquitous sensors. With improvements in process visibility users get better energy efficiency, materials use, quality control, inventory tracking and reduced waste." He predicted that wireless sensing will spark "a tidal wave of change" to industry and culture. Pacific Northwest National Labs is also doing work in this area, focused more on managing HVAC systems wirelessly, something my client Optimum Energy is working on as well. The Department of Energy (DOE) has largely been responsible for creating the industry for wireless in energy management, in part through its guaranteed loan program. One of the keys, according to Manges and others, to really blowing out the wireless cleantech segment is promulgating standards that take away the hesitation of end-users, many of whom are wary of investing without protocols that can talk to each other. ISA 100 intends to do that, and expects its first standard to come out in December 2008. Suffice it to say that cleantech is more than just the sexy, shiny (and high risk) renewable energy gadgetry. It is also the more mundane, but equally if not more impactful, world of wireless controls and automation and their importance in delivering on the promise of the smart grid. Even so, there is also cutting edge work being done to achieve Nikola Tesla's dream of wireless transmission of energy, including experimentation with magnetic resonance by Marin Soljacic at MIT, which might eventually have even bigger ramifications. This will continue to be a fun space to watch.

Ad Age recently published a special section on agencies involved in green marketing. Of course I am happy to see the Weber Shandwick Cleantech and Planet 2050 practices included, but I have to say that the list seems pretty arbitrary. There are a number of agencies out there that are not mentioned. Just to name a few that I know about: Blue Practice, Antenna Group, egg, Clean Agency and Earth Advertising. The other thing that struck me about the Ad Age list is how different the approaches are from one firm to another, from setting up different practice groups to trying to infuse values of sustainability throughout an organization. Granted, I've only worked in the world of agencies for 3 years, but given what I've seen throughout the industry so far I would have to say that infusing anything into organizations that are typically based on individual P&Ls seems quite a challenge unless is is bottom up. As they used to say in China where the central government is always at odds with regional governments, "On top is policy, below is counter-policy". A good resource for marketing and communications issues around sustainability is Greenbiz.

Here's an op-ed that I penned with Dan Rosen that appeared in the Tacoma News Tribune. If you haven't joined Business Leaders for Climate Solutions, you should. 

For a long time, "green" in Washington state has stood for Granny Smith and pine trees. With the Legislature's passage last session of the Climate Action and Green Jobs bill, the state took a big step in creating a future based on the new green – a vibrant economy based on clean technology (cleantech), the green consumer and green exports.

Gov. Chris Gregoire deserves congratulations for requesting and championing the bill. But we all still have more work to do. The window for establishing leadership in the cleantech economy is fast closing. The opportunity to have a strong voice in shaping federal climate policy is closing fast, too. According to the Cleantech Network, while the total amount of venture capital invested in clean technology grew explosively in the last year, the Northwest accounted for just four percent of the total. The Northwest's share was $261 million out of a national total of $6.4 billion, barely placing it in the top 10 regions. And that's not just Washington state, but Oregon and British Columbia as well.

 

Discount the investment in the local biodiesel company Imperium Renewables in 2007, and Washington easily trails the Vancouver, B.C., cleantech cluster and is arguably far behind Oregon, where business leadership has articulated a much clearer vision for establishing an industrial base around the theme of sustainability. California and the Northeast have taken significant leads, and places like Austin, Texas, and Chicago are mobilizing civic leadership around this sector.

As members of Business Leaders for Climate Solutions, we are proud to have supported the Climate Actions and Green Jobs bill. We were joined by 32 other state business leaders, representing cleantech entrepreneurs, investors, energy consultants, service providers or simply business people passionate about sustainability.

But if the Evergreen State is going to emerge from the ongoing cleantech boom with a significant piece of the green that is being created, the broader business community must rapidly and definitively elevate its game.This is not a niche issue; the challenge of using energy more efficiently and developing sustainable products and services affects every sector of the economy and will provide both opportunities for leadership and tremendous risks for the laggards. A recent survey found 61 percent of business executives around the world expect climate change solutions to boost company profits. That's why the major corporations that provide Washington's economic backbone and their executive leadership need to bring their vitally important participation to the table: It's of great economic interest to all of us.

Washington state arguably has several characteristics that will help us as we strive for a piece of the green economy. Our assets include: unrivaled branding as a center of "green" ideas; a consumer base that is highly sophisticated and demands truly sustainable products and services; and strong trade and economic ties with China and the Far East, which is fast emerging as a leading consumer of cleantech products and services. We applaud Sen. Maria Cantwell's efforts to make Seattle the center for the dialogue with

China about these issues.We also have a vibrant green building-and-design industry, which is one of the key pillars of the green economy. And we have the potential to become a power in providing integrated design solutions that will be needed to reduce energy usage worldwide, including "green software" and smart-grid applications.

Along with these strengths, we need to find sustainable and verifiable ways to leverage our vast forestry and agricultural resources as sources of renewable fuels and carbon sinks as regional and international markets take root.

But key pieces are missing. Specifically, for Washington to compete and lead in the cleantech economy, the business community must demand and achieve three things:

  • Legislation next year that commits Olympia to put a price on carbon through a regional cap-and-trade system, along with complementary policies that promote clean energy, sustainable development, transportation and land use, energy efficiency and training for the green-collar workforce;

  • Pressure on the federal government for strong climate policy that achieves reductions in global warming pollution that is science-based and beneficial to the economy;

 • And we need a business community that is focused on and organized around the vision of making the region an international leader in the coming cleantech transformation.

 We have a chance to truly be Evergreen. Now let's seize it.

Last year, I said that a time would come when the term "green" would fall into disuse. I'm now wondering if that time is nearer than I originally thought. I'm already sensing some fatigue from friends in the media. At the consumer level it's also more pronounced (depending on the day, search for "green fatigue" on a leading search engine bring back 500,000 to over 1 million results). Ironically, at the recently concluded Fortune Brainstorm: Green event, Andrew Shapiro of Green Order said that it felt as if 2008 would be the "apex of green". Which of course begs the question: How steep is the downward slope in 2009? Ted Nordhaus (who coincidentally was my childhood neighbor growing up in the southeast quadrant of Washington, DC, back when we both had hair) and his cohort Michael Shellenberger, in 2004 shook up the establishment with their paper called "Death of Environmentalism". They succeeded in pounding the final nail in that coffin. Now green's utility is in question and it is even being challenged by another color - "blue". Sustainability advocate Adam Werbach is now selling blue as the next step beyond green, arguing that blue is more accessible because it, in effect, means having your cake and eating it too (I've tried that, by the way, and I keep biting my hand by mistake). But really, green or blue, aren't we just creating another arbitrary label that will also fade away with time? Aren't we just setting ourselves up for "blue fatigue", when the next Adam Werbach comes along and pronounces the blue movement dead, and argues that its time for chartreuse to have a turn? Not to mention the fact that people in the developing world (I spent 16 consecutive years in China from 1987-2003 so I have some credibility) have just started the Long March to consumerism and couldn't really give a damn about green or blue, unless its related to the color of their new car or the tile in their newly renovated, air-conditioned kitchen.  

I moved into technology because public capital markets (and human activity more generally) are driven by short-term interest and unsustainable growth. Facing a powerful system backed by powerful inertia, it was my conclusion that fundamental change to our behavior around consumption/growth is highly unlikely to happen (to the degree or within the timeframe needed) to address the ecological problems we face. That POV was largely informed by my time in China, where I watched stock markets open, bans on advertising lifted, private cars allowed back on the roads and consumerism return with a vengeance. I witnessed China's boom and how it raised a lot of people out of poverty. The problem is that we can't raise the remaining 1 billion Chinese out of poverty without totally screwing ourselves and the ecology. And China is just the start - Brazil, India and the rest of the developing world are going through the same transformation. Far be it for me to deny others the chance to live lives of comfort. But it is highly naïve to assume that individual Chinese or Indians or Brazilians will have the foresight to look beyond their drive to material comfort and make decisions on how they live based on a moral responsibility for the health of the planet. The West didn't. It just won't happen (no offense Bill McKibben, whose conclusion for our generation - that more is not better - ignores the fact that its mainly people who know wealth who have room to think about less). Only when people are so afraid of the ramifications of climate change or toxic sludge seeping out of their water taps will they be motivated to change behavior (as recent events in Juneau underscored). But of course, by then it will be too late.  

So my bet for overcoming the challenges is technology, broadly defined. The way I see it, technology is the layer buffering natural resources from consumer and corporate behavior. It allows consumers to continue to behave much as they do and it allows natural resources to get a reprieve from that behavior. The more scaleable the technology, the bigger the reprieve and the better our chances. What Lawrence Berkeley National Lab has done with appliance standards in China is a perfect example of this. "Technology buffering" is not a panacea, but at least there is an opportunity to insert new clean technologies into existing products and systems and have a significant and accelerated impact. That's what gets me moving in the morning. (Several new books, The Cleantech Revolution, The Plot to Save the Planet and Apollo's Fire address this movement). 

What interests me from the Fortune event and others that I've attended over the past two years is a shift in the conversation. Many of the people I talk to say green/blue doesn't really matter. I agree. What matters is that "industrial restructuring" takes place. Whether the CEO of Stonyfield Farm ("we don't even use green to describe our customers, but 'quality' or 'educated'"), the chairman of SC Johnson ("we need to move the conversation from going green to transforming industry"), Vinod Khosla ("people's view of green is obsolete, its about mainstream business"), or builder Steve Glenn ("within 15 years green building goes away as a category"), the focus is more and more on creating a technological buffer to reshape the way we supply and demand.  

So let's focus on the technology that is going to get rid of the only color that deserves our attention - the black of oil and coal.

Hundreds of leaders from business, policy and NGOs in the same room for two days, naturally some interesting things will emerge. Below is a quick sketch of trends and comments from the just wrapped Fortune Brainstorm Green that I thought of particular note:

• The media "needs to get off cars and on to buildings" - Autodesk executive chairman Carol Bartz on the fact that the issue of buildings sucking energy, material and water is still not getting the attention it deserves. The numbers back her up. Conversely, it was noted by others in the green building space like Hycrete and Serious Materials that after a two decade hiatus, venture funding has found its way back to building in the past 2 years.
• A new version of LEED is set for unveil at Greenbuild in Boston and will be a "quantum leap" - head of USGBC Rick Fedrizzi
• Seems to be growing unease, and even skepticism, that cap and trade is going to be as easy at many thought. 2011 was heard repeatedly as a possible timeframe for legislation. Will a nascent business consensus fray into a mess? Are the economics fully understood to push forward aggressively? Is the Hill ready? Anecdotally at least, the answer is still clearly in the balance. One interesting alternative presented was Cap and Dividend.
• Like building, energy efficiency is still struggling to get more than a lot of lip service. Is recession the catalyst for cracking that nut? It was mentioned as a possibility.
• Hybrids and small cars are the fastest growing segment of US automotive market, according to Beth Lowery of GM. "The price of fuel is driving behavior," she said.
• "Living building" that taps into biomimicry is going mainstream. HOK - the giant architecture and design firm is starting to position itself as "bio-inspired", according to Janine Benyus, the founder of the Biomimicry Guild. Benyus' group is also looking to launch Asknature.org - a cool idea that allows anyone to query a database with questions about how nature addresses specific issues.
• Coke's environmental guru Jeff Seabright said look for something soon about consumer-facing information about "water used" in the company's products. It may not be on-package information, but something is coming. This would be welcome, since embedded water in consumer products is still very opaque to the consumer (for example, according to Dow Chemicals' Scott Noesen, it takes 2,000 liters of water to make a McDonald's hamburger if you do the whole-cost analysis.) There is nutritional information, now carbon labeling information has appeared, and water is the logical next step. Let's hope it happens.
• Vinod Khosla was the most provocative in my opinion during a 1:1 with Fortune's Adam Lashinsky. Highlights include:
  • Next generation batteries are not on a rapidly declining cost curve and require a quantum jump with a high probability of failure
  • The "Prius is more greenwash than green"
  • Technology for clean energy will only succeed if it passes the Chindia price test. If it's affordable in China and India then it has a shot.
  • Carbon emissions from all-electric cars are 3x more than that of cars powered by cellulosic ethanol.
• The highest correlation in the movement of solar stocks is the price of oil (not the price of natural gas as would be expected) - David Edwards, analyst at Morgan Stanley
• Both Monsanto CEO Hugh Grant and Khosla cited the same statistics placing biofuel as the fourth leading cause for the spike in global grain prices. The top three - rise in oil prices, drought in Australia and change in eating habits in developing countries like China (to more meat). I found one paper on Khosla's site about Fuel vs. Food, but it didn't appear to include the above list. Anyone know where it comes from?
• When Fortune's Marc Gunther asked a panel of Xerox, GM, SC Johnson and Dupont executives what grade corporate America should get in addressing environmental challenges (10 being the best grade), all of them said "1″, with the exception of GM's Lowery, who gave a "2″ because of innovation happening around new technologies. If you want to actually score a company, you can thanks to the CEO of Stonyfield Farm Gary Hirshberg, who has created an online corporate scorecard at Climatecounts.org

The Clean Technology and Sustainable Industries Organization (CTSI) organized a "DC Policy Tour for Clean Technology" this month, taking 50 cleantech industry players (representing cleaner coal, solar, wind, nuclear, hydrogen, demand response, water, biomass and fuel cells, plus investors) on a Congressional walk-about. I spoke with Patti Glaza, executive director and CEO, to get her take on the day and the outcomes. After a total of 45 meetings with elected officials from more than 20 states, Ms. Glaza reported that renewable energy tax credit extensions will happen, but only for one year (longer term extensions will most likely come in the next administration) and that climate change legislation will be considered in June, although again it would be surprising to see anything being signed into law prior to the next administration. She also said that both the House and Senate have requested a significant increase in the Dept. of Energy (DOE) budget from what was in the department's original request, and that more funding should be available than last year. Ms. Glaza added, however, that it was unlikely that the Advance Research Projects Energy (ARPA-E) program that was approved in the America Competes Act last year will get off the ground.  More details from the day can be gleaned from the Q&A below, including tips from Ms. Glaza for how companies, even start-ups, can work with their elected officials to make a bigger difference at the Federal level. 

Q: Any humorous moments from the tour?

A: We learned to never let a tour member tell a Republican official that we should pay for the renewable energy tax extensions with funding for the Iraq war.

Q: Who did you visit and get traction with?

A: The primary focus of the meetings was with members of the Appropriations and Ways & Means Committees as Congress is currently finalizing agency budgets and funding programs slated for this fiscal year. We also targeted the Science & Technology, Small Business, Energy Independence & Global Warming, and Energy & Commerce committees and subcommittees, in addition to several executive-level meetings at the DOE. The highlight was Sen. Byron Dorgan (ND) who leads the Democratic Policy Committee and sits on key committees including Appropriations; Commerce, Science & Transportation, and Committee on Energy & Natural Resources. Sen. Dorgan and his staff took a significant amount of time with our group and showed real interest and knowledge of the challenges the sector faces.    There are a lot of champions on the Hill and we need help in reaching out to all of them. Congressmen that took the time to meet with the tour directly included: Tom Udall, Vito Fossella, Dale Kildee, Phil English, Jay Inslee, and Dorgan. Additional offices showing high-level support included: Cantwell, Clinton, McNerney, Barrow, Capuano, and Candace Miller. 

Q: It seems there is a scarcity of coordinated government relations work being done on the part of the cleantech industry. Is that an accurate read on the situation?

A: My initial assessment is that as an industry or sector, clean technology has not had strong representation in Washington DC. Inslee made the comment that he has been waiting for a group like CTSI and is glad we have started our efforts. That being said, there is strong government relations work being done for specific clean technology segments, solar, wind, and biofuels being examples. The role CTSI is trying to fill is to advocate for policies and programs that address the complexity and interrelated issues of energy, water, and the environment. Renewable energy needs smart grid needs cleaner base load generation needs distributed generation support needs water management/reduction, etc.

It was obvious from our meetings that the Hill is extremely receptive to a sector they see as providing new jobs, energy security/independence, and increasing the US global competitiveness. Regardless of the group organizing, a broad technology platform is essential. Industry has to be seen as working together on solving the bigger issues (growing energy demand, climate change, etc.) and not just advocating for specific industry segments in isolation.    

Q: How can companies make a difference on the national level?

A: I see three immediate ways that organizations can make a difference:

- Companies need to take the time to educate their local representatives on their companies, technologies, and how they are working to solve the larger issues.

- Executives need to participate in Washington DC based meetings to emphasize the important role policy and regulation play in developing the clean technology sector. Nothing grabs attention like a company telling their representative that they expect to start laying off workers in June/July because the renewable tax credits haven't been extended.

- Overall, companies need to recognize that policy isn't just for the big players. Policy and regulations have and will have a significant impact on the rate of development and adoption of clean technologies, and growing technology companies need to be at the table when those policies and regulations are being created. Yes, resources are limited. Yes, policy is complicated and difficult to understand. Thus the role of policy and trade organizations.

Cleantech events abound these days, but the organizers of COPENMIND are taking a novel approach - creating a giant shopping mall for the most cutting edge cleantech ideas coming out of academia. Besides having a clever name, COPENMIND will hopefully drive more rapid technology transfer from leading research institutes to the market. In September, the event in Copenhagen will bring together 200 top-notch universities from around the world to provide potential business partners with an inside look at what's next in cleantech, according to event founder Steffen Moldow. Joining the scientists will be thousands of corporations, as well as investors and leading public figures. It's no secret that universities are poor marketers, so providing a venue that allows them to get their IP in front of the people who might fund commercialization is key to a more rapid development of the cleantech sector. Pre-event match-making will kick off on May 1 through COPENMIND's website.  

Besides technology transfer, the event will also focus on sponsored research and recruitment. "The event will help solve the issues that are discussed at Davos," Moldow told me, referring to the World Economic Forum. Cleantech areas of focus include: climate change & air pollution, energy, water, waste & recycling and agriculture & land.    

The event will also provide a nice prelude to COP15, the highest body of the UN Climate Change Convention, which is set to take place in Copenhagen in 2009 and will set global climate change direction from 2012.

Two years ago, I attended a conference where a panel of leading cleantech VCs were asked if they had ever made an energy efficiency investment. The question was met with uncomfortable shifting and dead silence. Michael Kanellos of CNET, noted a similar tendency last year: 

"Despite the savings, people have a tough time getting excited about energy efficiency. At clean-tech conferences, attendees will pack the room to see an ethanol roundtable. But when the agenda turns to smart grids, a lot of people take a coffee break." 

Marc Gunther of Fortune has also told me that of all of his columns on CNNMoney, the one that elicited the least interest was about energy efficiency.  

But last week it struck me more than ever - especially with talk of a recession - that 'Efficiency-Tech', as I'm now calling it, has entered primetime. I was at another conference, where Duke Energy CEO Jim Rogers pronounced that his vision was for the United States to become the "most energy efficient economy in the world" through grid optimization, which he suggested could be the greatest engineering feat of the 21st century. His thesis was that in an ever more resource-strapped world, the economy that best used technology to achieve the greatest amount of efficiency would have a distinct advantage. Mr. Rogers was not alone. Many of the speakers - Dan Reicher of Google, John Podesta of the Center for American Progress, and yes, even leading VCs - invoked the importance of energy efficiency in their remarks. With the US economy poised for a potential downturn and Corporate America starting to tighten its collective belt, the argument can be made that efficiency is also poised — poised to finally take its long overdue place as a legitimate target for significant investment.

It was refreshing to hear Mr. Rogers frame the issue from a perspective of economic competitiveness in the global marketplace. That is a message that resonates with the business community — self-sacrifice, saving the planet, etc have proven repeatedly to fall flat with consumers. Precisely for that reason, another speaker at last week's conference, CEO of PNM Resources Jeff Sterba, said that there is a need for technology to produce devices that deal with the issue of energy savings, rather than asking the consumer to - "prices to devices, not prices to people" as he put it so well. Tom Konrad of AltEnergyStocks.com had a thoughtful analysis on why energy efficiency is such a hard sell last fall, surmising that people only buy energy efficiency if they are made to feel that they are part of a "conspicuous" movement. The issue is how to make energy efficiency cool. EnerNOC and Comverge have certainly helped the business case, with successful IPOs for the two demand-response companies last year. Mr. Rogers had one other insight that stayed with me, which he said was gaining currency - namely that efficiency should be viewed as a form of production of energy. If this happens, the economics will shift in favor of efficiency even more.  

"The mindset that has stymied energy efficiency efforts for a generation has been altered", says Kevin Klustner in his upcoming book "Energy Efficiency: The Future is Now". Klustner, also the CEO of Verdiem, is doing his part through addressing PC power waste, a huge issue. And he's not alone. An energy efficiency survey of business executives done by Johnson Controls in mid-2007, revealed that 50% planned to use capital and operating budgets to increase investment in energy efficiency over the next 12 months. A recession was not in the cards at the time of the survey, so I'm sure that the inclination is now even that much stronger. Ironically, Efficiency-Tech is finally getting what it deserves - more power behind it.

The spectrum of cleantech media continued to fill out this week, following earlier news about the Wall Street Journal , Earth2Tech, and other media.. Green Options, a popular online media group focused on making green more accessible to people, went public this week with CleanTechnica. Sarah Lozanova, the editor of the new blog, said she and her core team of 5-6 writers hope to tell the stories behind green technology and renewable energy instead of just reporting on them. "A lot of content on other sites is above peoples' heads," Sarah told me, adding that CleanTechnica wants to make cleantech "more accessible to a wider audience - to the green curious audience - so it's approachable." The blog will initially look to post at least one story per day, and is open to outside contributors, who can provide "different perspectives, experiences and exposures". Sarah also said they hoped to do a lot of Q&As.

The Wall Street Journal launched a free business-meets-green blog called Environmental Capital. The blog's editor is Jeff Ball. The lead writer is Keith Johnson, who just moved back to the US from 12 years in Spain. The blog addresses the convergence of business and environment. It will include energy, water - anything that addresses how businesses are dealing with the new energy/environment paradigm. They expect to have 4-5 posts per day, and hope to differentiate from other similar media/blogs by taking a step back, highlighting trends and connecting the dots. If they deliver on that promise, it will fill a nice gap.

When first conceived, this was intended to be a new franchise like the D event Walt Mossberg does except focused on green. As part of that concept, the WSJ will also be holding its first ECO:nomics conference this year in March. I will be interested to see how that is different from the Brainstorm Green event planned by Fortune.