I’ve already made my argument that ”sustainability” and “green” are obsolete terms, and over the last year there appears to be growing mainstream momentum (it originated out of the systems design community) around the term “resilience” as a possible successor. One voice on the subject is Dennis L. Meadows, author of The Limits of Growth. In a recent interview with Pictures of the Future, Meadows made the following argument:

In my opinion [sustainable development] is an oxymoron, a term with nonsense meaning. To many people,"development” seems to imply that we can simply keep going as we have for the last 100 years, depleting resources on a large scale and polluting heavily. And adding some kind of “sustainability” makes the detrimental effects of our model of development go away. I am more interested in the term “resilience”. This concept is about how to structure a company or a city or a country so that it can continue to function quite well even in the face of major shocks. Implementing policies that give you resilience tends to make the system more sustainable.

Meadows went on to equate the coming environmental crisis with the current financial crisis, saying that he expects to see similar systemic problems. He said behavioral change is the most important factor in preventing these problems, combined with the tools of technology to realize those changes.

Like the financial crisis, climate change or energy scarcity are not going to proceed in a nice orderly, uniform way. Sometime in the foreseeable future there will be discontinuities, which will put us in a mode of crisis… to prepare ourselves the most important thing is to increase our time horizon.

The leading proponent of the resilience concept has been Jamais Cascio, an “ethical futurist” based in the San Francisco area, who points out the two reasons why resilience is gaining traction: 1. the future is inherently uncertain and 2. failures happen, so the OS of humanity needs to be flexible and self-aware enough to identify failures early and adapt accordingly. He adds that resilience implies two characteristics needed to do that: strength and flexibility.

One reason why the idea of resilience resonates with those of us 
engaged in foresight work is that, as troubling as it may be to 
contemplate, the current massive economic downturn is likely to be 
neither the only nor the biggest crisis we face over the next few 
decades. The need to shift quickly away from fossil fuels (for both 
environmental and supply reasons) may be as big a shock as today's 
"econalypse," and could easily be compounded by accelerating problems caused by global warming.

A number of organizations exist to explore the possibilities for resilience as a new social meme, including the Center for Resilience at Ohio State University. Others have emerged in South America and Europe

I asked my friend Graham Noyes, attorney at renewable energy law firm Stoel Rives focused on bioenergy projects, federal energy incentives and carbon monetization, for his thoughts on the Kerry Lieberman bill.

Q: What was your main takeaway from the bill?
A: Some context first. There’s a massive potential hammer out there on GHG emitters in terms of the risk of regulation under the Clean Air Act (CAA) by the EPA, which has already issued an endangerment finding that found GHGs to be a danger to public health and welfare, thereby making the EPA obligated to regulate GHG's under the CAA. So the wheels are turning forward at the EPA to regulate GHG. That’s what the EPA will do if nothing else happens. So it’s really surprising that Kerry Lieberman imposes what I think to be much stricter limitations on the EPA than the status quo.

In that sense the bill is very favorable to those industries that have the most to lose from GHG regulation, because it essentially weakens the regulatory landscape for GHG intensive industry when compared to what the EPA is likely to do. That’s why we have the strong industry support lined up for the bill. What’s odd is that we have universal Republication opposition (from a party known for its pro-business stance), and near universal Democratic support (from a party known to support more environmental protections). That is a fundamental disconnect.

The 800 lb gorilla in the room is the EPA's ability to utilize the CAA if the Kerry-Lieberman bill stalls. That’s a really interesting regulatory and political landscape for this thing to play out.

Q: Can you be more specific on how Kerry Lieberman is easier on emitters?
A: We don’t know what the EPA will do precisely in order to get its targets in the endangerment finding. Emissions levels, cost implications for regulated industries – we don’t know. But it’s easy to imagine a scenario in which the EPA ratchets down harder and harder on these emissions to get the problem under control, specifically the PPM concentration of CO2 in the atmosphere. By contrast, Kerry Lieberman has a slow front-end phase-in (with only some industries included in the first years), price collars and very substantial offset programs to lower the economic impact, none of which the EPA would necessarily do. Most people expect the EPA would be more onerous than Kerry Lieberman.

Q: Is legislation or regulation better at the end of the day?
A: The Clean Air Act was not designed for GHGs, but for what we usually think of as pollutants – emissions that are directly unhealthy. CO2 is not something people worry about breathing, it’s the indirect risk of global warming caused by the escalating CO2 levels that triggered the finding. CO2 is also more ubiquitous than other pollutants hence the tailoring rule actually reduces scope of CAA enforcement.

The EPA would regulate by mandate, not by consensus. If we can’t get legislation passed and the EPA begins enforcement, there will be a lot of criticism about over-reaching and strangling industry. EPA would take a lot of heat for this.

Q: Some argue that EPA will take much longer to regulate than legislation.
A: I don’t necessarily think so. This legislation requires extensive rule-making that will take a long time to happen, consider the RFS2 delay. And the EPA won’t build in phase-in limits like Kerry Lieberman. If EPA moves ahead on its present course, I think it would have a faster impact on emissions than the bill. Ultimately, I think this landscape will spur a deal with a surprising alliance.

Q: What are the top three ramifications on business from this bill?
A: The bill would establish a long-term value to CO2e reductions. This will benefit all renewable energy projects andsupport US offset projects in methane capture, agriculture and forestry that make good GHG sense.

Based on the rash of predictions for cleantech in 2010 from investors, consultants and media (see the full list at the end of this post), I’ve pulled together a “trend of trends” list below that attempts to synthesis the broader, over-arching themes. As always, I’m amazed that water isn’t on the top of every list, every year, although there are some positive signs on that front. So here are the 12 things that filtered to the top:

• Energy efficiency will have a big year, with buildings and information and communications technology (ICT) front and center (nice to see the “wow” factor over technologies like solar being tempered by the realization that there are a lot of cheaper ways to meet immediate goals for reducing emissions)
• Private investment will revive (with one prediction for a record-breaking year), but fears persist that the pending end of stimulus dollars will cast a long shadow over the market
• Differentiation – i.e. marketing – will increase in importance as we move from a technology-heavy phase to a commercialization-focused phase (something I’ve called attention to in the past).
• Consolidation and industry shake-out will accelerate, as will increased involvement of major corporates. Many VC-backed firms need an exit (especially in smart grid, solar and biofuels), so expect a few IPOs, but mostly M&A or failure as scale becomes more important and winners and losers emerge. And as the market grows and the issues being addressed become more complex, big multinationals with vested interests will try to play a larger role
• Smarter transportation – especially electrified – continues to gain traction, while next generation liquid fuels (cellulosic in particular) takes baby steps
• It’s more than energy, stupid. Land, water, rare earth metals, etc take more mind share as understanding grows  that the issues we face go beyond energy and carbon
• Importance of carbon measurement and management will increase, but folks seems pretty skeptical that even if climate legislation/treaties get enacted that they will be aggressive enough (some expect sector specific carbon regulation – i.e. aviation and shipping – instead of economy-wide measure  
• Distributed solutions continue to erode the power of centralized systems (in energy generation, building, transportation, etc)
• Some technologies expected to garner attention: Waste to energy, waste biomass, power storage, geothermal, aquaculture, ultracapacitors, desalinization, building materials, large-scale solar
• There is a lot of expectation around advancements and interest in upgrading the electric grid; although there was a warning to expect at least one major failure of a smart grid rollout (not to mention that people have been predicting an intelligent grid for many years)
• Standards gain a higher profile – whether building codes, water or carbon labeling, unified standards for the smart grid, etc, creating a clear marked playing field grows in importance, including communicating the rules to consumers as needed
• International competition to be the cleantech leader intensifies (again this is something I’ve written about in the past, so not really news in my opinion)

If you want to read for yourself, the various predictions I’ve pulled from are here: Energy stocks to watch from Seeking Alpha; Overall industry outlook from the Cleantech Group; Clean energy predictions from Deloitte; Two different VC perspectives, one from Lightspeed Venture Partners  and the other from Rob Day at Black Coral;  5 biggest hurdles from Earth2Tech; IT and corporate green from Greenmonk’s Tom Raftery; Green building trends from Earth2Tech;  Top 10 promises from cleantech companies from Cleantech Group; Smart grid from Earth2Tech.

The American Council on Renewable Energy (ACORE) had this to say about the current state of affairs on bioenergy. Nice to see some realism out there:

"The prospects for a successful green energy revolution  appear problematic with the diffused applications of the American Recovery and Reinvestment Act (ARRA) of 2009, the seemingly faltering relevance of carbon regulation, the lack of policy coordination  on environmental/ renewable energy issues in the Federal Government between departments and agencies with broad natural resource jurisdiction, and the controversy surrounding green  energy uses  of bioenergy sources  such as co-firing by electric utilities and other companies. The significance of these issues will be escalated if the scheduled reduction in Federal grant, tax and loan assistance programs to renewables occur in 2011."

If you want to learn more ACORE on this subject take a look at Sustaining National Stimulus: The Bioenergy Case

Technologies and services that reduce natural resource consumption and emissions are the future of global growth, as well as the pathway to climate stabilization. In China alone, expectations are for a $1 trillion annual "cleantech" market by 2013.

We are now entering a transition phase in cleantech, with focus shifting from technology to market commercialization. The winning technologies will win in large part because of marketing and communications. In the case of cleantech, it's not enough as a marketer to be a good practitioner of marketing.

In a world of ever increasing sophistication and specialization, in-depth knowledge of key drivers is essential to success. That means a deep understanding of underlying technology, cultural perceptions, policy, and consumer and enterprise behavior.

Moreover, there is interconnectedness in cleantech that does not exist in other areas of the economy, which requires maintaining unusually high levels of visibility into multiple vertical industries. Here are six keys to success:

1. Think systems. One of the unique things about cleantech is that you can't effectively talk about what you're doing in a silo. It is all inter-related. If you do power storage, it relates to renewable energy and smart grid. If you do water, it's connected to energy. If you do biofuels, it impacts food, water and energy. Your point of view must be developed accordingly.

2. Market the solution, not the problem. There is enough fatigue out there already about the environmental problems we face. Be a face for the solution.

3. Be specific. Talking about "green jobs" or "renewable energy" is no longer enough and audiences are growing more skeptical about "greenwashing." Talk about "wind energy jobs" or "solar power." The more detail you provide, the more believable you become.

4. Drive sales by focusing on your customers' strategic priority. While it may be tempting to lead with the environmental benefits of your product or service, our research shows that compliance and cost/ROI take precedence. Take time to research your customers and understand their primary motivations. You can adapt your message (and channels of communication) accordingly and be far more impactful.

5. Be a policy wonk. Perhaps more than any other space, cleantech requires that you have your finger on the pulse of policy. Whether you are in clean energy, water, smart grid, biofuels or transportation – national and international policy will play a major role. Ignore engagement with policy-makers at your peril.

6. Go digital. Communications have moved online. Social media is the new currency. Find compelling content that can mobilize online communities and get traction for your brand. Ad spend and press releases are becoming less and less effective as the role of online search takes stories directly to individuals at the touch of a button. It can be very cost effective, too.

This first appeared in MediaPost's Marketing: green newsletter

This week I had the opportunity to join 200+ business leaders from 35+ states in Washington, DC to present the business case for comprehensive climate and energy policy for the US. The We Can Lead group met with senior Obama administration officials and members of the Senate. It was a great first step in kicking off an effort to provide an institutional counter-point to the fossil fuel lobby, but my conclusion from the event was that we face a major uphill struggle. Specifically:

·         the current Administration is still measuring itself against the inaction of the Bush years, and needs to measure itself against the action of China and other governments that are accelerating their steps toward a clean economy while we appear to be stuck in 2nd gear.

·         the US Senate is still nowhere near enacting any climate or energy policy. 2009 is definitely out because of healthcare (I heard last week at REFF that the market has already discounted anything for 2009 as well). And there is even the possibility (albeit remote) that immigration reform could be up for deliberation before climate.

·         There are doubts on the key Senate finance committee about imposing a cap on carbon. The complexity of the issue has people searching for band-aids, and I fear stepping away from what’s really needed – reconstructive surgery.

On the positive side, it’s about time that the business sector representing the clean economy finally has an influential voice on Capitol Hill, and money to put behind it and against the fossil fuel lobby. I am a founder and on the steering committee of the Clean Economy Network, which was one of the co-organizers of the DC event (along with CERES).

Some of the trends, information I found interesting at REFF-West (rather than Tweet all of them, I’ve just listed them here):

• Compared to REFF-West last year, the mood was considerably more positive. Especially important, project finance appears to be recovering (the “community as a whole is looking to migrate back to development projects”) and tax equity is attracting more players than just JP Morgan. Jonathan Yellen of Deutsche Bank said “the projects market… is very strong for what we just went through”. He attributed this in part to the tightening of the bond market, which was pushing institutions more aggressively into funding solar, wind and geothermal projects.
• Some skepticism exists – Dan Reicher of Google said that without more policy support “we’re staring at the biggest cliff” for renewables when stimulus funding runs out in 18 months. Many at the meeting said DOE needs to be replaced by a CEDA (or the Green Bank), with Matt Cheney of Fotowatio less upbeat on the prospects for solar projects, and saying that “banks were not open for business” as claimed and calling for more innovation from the banking community on financing models.
• VCs are also seeing more action – Anup Jacob of Virgin Green Fund said he’s now seeing 6 deals a day, up from 6 a week half a year ago. He lamented, however, that the quality of the deals was too low.
• The forecast for M&A activity in 2010 is to expect “a lot of upside”, according to Jim Metcalfe of UBS Securities. IPO outlook “is improved, but there is still some way to go” to get back to the sweet spot of 2006/2007, according to Kevin Genieser of Morgan Stanley. There are 24 IPOs on file in various markets, but they will be smaller in scale, so likely to get good reception,
• Not new, but good quote from Mike Eckhart of ACORE: “If you’re interested in clean energy, the government is your partner”. Like it or not, in the highly regulated energy space, you better get your government groove on.
• Coal-to-liquid – I was unaware that the US CTL program began in 1944. Give it up already, or in the words of John Geesman, “after 65 years, the audacity of hope should yield to the audacity of nope”.
• Parker Weil of BofA Merrill Lynch said the “markets doesn’t believe that the best companies are getting the government funding”. 250 reviewers in DOE building every day since May reviewing ARRA projects, Matt Rogers of DOE said. But oddly, there is little transparency in how the decisions to fund are made – the credit committee for DOE loan program is confidential. That was troubling to many.
• Renewable energy technology entrepreneurs should not see utilities as competitors who will try to go it alone and scale their own technology, according to Weil, who said the utilities do not have as strong of a capital position as many believe.
• Former US Rep. Vic Fazio thinks the Senate can find 60 votes for climate and energy bill in the January-March 2010 timeframe. On a similar note, Tim Newell, advisor to U.S. Renewables Group, said that the capital markets have already discounted the possibility of climate legislation happening in 2009,
• China – good intelligence from Ryan Wiser of LBNL
  • Good chance it will surpass the US in wind installations for 2009.
  • Solar PV feed-in tariff could come this year, but more probable next year (already feed-ins for biomass and wind).
  • Expecting government to significantly increase their targets for wind and solar generation by end of 2009
• “Biofuels is a 4-letter word in most investment shops right now” – Jacob
• Hottest sectors in next 12 months:
  • PV, CSP – Yellen
  • “Big Wind and Small (i.e. distributed) Solar” – Weil
  • Wind for developers, smart grid for private equity – Jim McDermott
  • Smart grid and solar – Jacob
  • Smart grid (including demand response, meters and data management) – Geneiser

Interesting events mentioned that are worth sharing: US Partnership on Renewable Energy Finance and The Networked Grid

At the launch of the Gigaton Throwdown in DC last week, entrepreneurs and investors adopted a new metric for cleantech businesses other than internal rate of return – something called gigaton scale. The herd mentality that has characterized cleantech over the past three years continues today. In 2007 it was biofuels, in 2008 it was solar, and this year it appears to be smart grid and efficiency (which is ironic because for the longest time investors swore up and down that energy efficiency didn’t fit the VC model). What is so captivating about the Gigaton Throwdown is that it challenges businesses, investors and policymakers alike to focus on the technological pathways that have the potential to abate one gigaton of carbon or GHG equivalent per pathway per year by 2020. And executives with vision appear to be buying in. The CEO of Novozymes, Steen Riisgaard, for example told me during a recent conversation: “Thinking at gigaton scale is helping us identify our ultimate potential. Novozymes has the aim to help our customers achieve a 75 million tons reduction in greenhouse gases by 2015. But we actually believe the potential is much, much higher if you look at the entire industrial biotech space, where we think can reach gigaton scale within 10-20 years." Similarly, Marty Lagod of Firelake Capital referenced one company, EOS Climate, in his investment portfolio that he bet on precisely because it has the potential to reach gigaton scale. Marc Porat, who has founded three cleantech building companies (Serious Materials, CalStar and ZETA Communities) has focused on building materials and building efficiency for the same reason. In his typical candor, he said that a lot of cleantech businesses in Silicon Valley are “vanities, which will not make a difference”. He’s absolutely right. And while businesses and entrepreneurs seem to be getting it, according to Cathy Zoi, the newly confirmed assistant secretary of energy for energy efficiency and renewable energy, policymakers in DC “don’t fully understand the potential scale of clean energy”. If the Gigaton Throwdown is successful it will change that, and bring all parties involved in the clean economy to the common realization that gigaton scale – besides meaning the possibility of climate stabilization within the necessary timeframe – also means gigadollar scale.

The creation of the Clean Economy Network (CEN) is long overdue. A number of clean energy, clean technology advocacy groups already exist such as the Clean Technology and Sustainable Industries, E2, Apollo Alliance, ACORE. But none has been focused exclusively on generating the influence in DC and in state capitals needed to compete with the lobbying might of the power, manufacturing and oil and gas industries. CEN is looking to change that by bringing together a “nonpartisan collection of professionals, entrepreneurs, investors, workers joined by like-minded professionals and thinkers from across the economy and across the political spectrum.” The goal is to advocate for policies that “catalyze clean development and create green jobs”. The group has already started making an impact, through targeted advertising (take a look at their “We Can Lead” campaign launched in collaboration with CERES Business for Innovative Climate + Energy Policy (BICEP)), regular face-to-face interaction with policymakers and bi-weekly policy briefings for executives in the cleantech sector. I am a founding member, and encourage others who work in the field to get involved.

The Cleantech Law & Business Review has officially launched with the release of its first quarterly issue. The goal of the Review is to accelerate cleantech commercialization by addressing a current deficiency in the sector: the absence of a forum that has the ability to look holistically, and through expert eyes, at the opportunities and challenges of cleantech.  

The journal will be peer reviewed (the first such publication in cleantech) and solicit contributions from business, academic, policy and legal experts to address the most topical and strategic issues facing cleantech commercialization today. 

“We want people to start thinking more laterally, not in silos… because a one dimensional approach is a non-starter,” says managing editor Bill Pentland. “Understanding the problems is something that will determine the success of the solutions, and that requires a systems approach.”   

Existing cleantech publications are doing a good job of reporting on specific solutions. The Review hopes to take all of the pieces and fit them together. The publication will be supported by sponsorship and subscriptions. The inaugural issues was built around the theme of carbon offsets. Other issues this year will focus on water, renewable energy and climate change.