Carlos Rymer

Sustainability, Life, and More…

Archive for the tag “clean energy”

Just Lead on Climate Change and They Will Follow

It is 2012, and international negotiations on climate change are still at an impasse largely because the world’s two largest economies and emitters (the United States and China) are demanding greater commitment from each other. Domestically, the United States is deeply gridlocked in politics over other issues to the point where climate change is no longer a priority to Congress. Meanwhile, China is moving ahead in securing dominance in the clean energy market. Previously, I argued that if the 2012 U.S. elections aren’t positive in terms of getting enough elected officials who understand the gravity of the issue, we may as well just turn to handing over the clean energy market entirely to the fossil fuel industry in its current form through specific economic incentives. Now, I want to answer the question of whether that’s truly necessary. Does the fate of the climate truly rest on the United States alone?

While it is largely believed that without the U.S. the international community cannot truly address climate change, current economic conditions point to the fact that this may not be entirely true. Yes, the U.S. is still the world’s second largest emitter of greenhouse gas emissions, and yes China is reluctant to commit to serious greenhouse gas emission reductions without a fair commitment from the U.S. Yet everything points to the fact that regardless of climate change as an issue, clean energy, energy efficiency, sustainable transportation, and everything else that can help address climate change are engines of economic growth that cannot and are not being ignored. This is why President Barack Obama so often claims that the nation “that leads on clean energy” will “win the future.” It’s no longer about whether this needs to be done; it’s becoming an issue of who is doing it the best and the fastest.

The U.S., while still uncommitted to tough greenhouse gas reductions, is leading in investments in clean energy just as other nations like Germany and China are gearing up to claim market share. Just as recently as 2010, China led the world in clean energy investments. The U.S., thanks to the Obama administration, has also seen investments rise to the point where it surpassed China in 2011. Pressure is clearly building to prevent clean energy jobs from being created elsewhere. It’s arguable that if other nations keep pushing, the U.S. would have no choice other than to follow through on making hard commitments to cut greenhouse gas emissions. It is this fact that gives fuel to the argument that the U.S. isn’t necessarily the decision-maker on climate change.

China, along with other countries, are arguably poised to lead the clean energy market. The challenge would be to not just lead in clean energy, but to make hard commitments to reduce greenhouse gas emissions to send a signal to their markets and the world that they are ready to claim a large share of a market that promises jobs and energy security. If China and other countries suddenly became manufacturing centers that supplied the their own markets and the rest of the world for a host of technologies ranging from solar, wind, geothermal, and even carbon capture, political pressure would lead the U.S. to do what it isn’t doing yet to ensure it doesn’t slip through the cracks in this 21st century opportunity to “win the future.”

It is up to China and other countries to leave behind the argument that they need a strong commitment from the U.S. to begin making hard commitments. If the U.S. decides to stay on technologies of the 20th century, that only helps them in winning the future and eventually making the U.S. a market for instead of a supplier of new technologies. There is in fact a way forward without U.S. gridlock, and it is up for grabs. Some countries are already aware, but they need to move faster and more aggressively if they want to truly claim the front seat of this wave of innovation and growth.

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Are We Already Practically Cooked?

These days, it feels as if the climate debate has entirely fallen off the agenda (even Obama is not allowed to say “climate” anymore). So much has the debate shifted that it feels like we’re already practically cooked, waiting for the climate to warm up to levels that will simply reorganize Earth in a way that won’t be very comforting for anybody. We have gone from the days of Texas mega wind farm Ads on TV and the constant mention of climate and energy in the presidential campaign to a time where climate change is no longer in the agenda of U.S. politics. Obviously, this has thrown people off even as a global movement to address climate change has grown to record levels.

At the same time, we have experienced early warnings of the catastrophic effects severe climate change will bring to society. From floods of biblical proportions in Pakistan, Brazil, and Australia to massive snowstorms in the U.S. and Europe to record low winter sea ice extent in January, we are coming to grips with the reality of climate change. It is becoming all too clear that climate change is already affecting us directly in many ways, from rising food prices causing social instability to massive property losses due to increasingly frequent extreme weather events.

Given these realities, can we say that we are practically cooked? An optimist will rightly say we have to keep hoping, while a pessimist would say there’s nothing we can do. Yet the reality is very different from both of these views. While it may look hopeless, the fact is that a revolution is cooking. The world is realizing that clean energy technologies are not just good because they help fight climate change, but also because they provide real market stability, jobs, and hard currency. In spite of real economic problems, both advanced and emerging nations are joining a race that is set to intensify this decade. And if you’ve heard the trade debate lately, it has a lot to do with just that.

Nations are betting that whoever is the best at developing high-end clean energy products will win precious advantage this decade. That is why emerging nations like China are throwing a lot of money at clean energy and why the Obama administration opened an investigation into the matter, why Secretary Steven Chu wants the cost of solar energy to drop 75% by the end of the decade and Vice President Biden announced over $50 billion for new and improved high-speed rail lines, and why investments by major corporate players are now focusing a lot more on innovations that will change how we move around and use energy. From surging wind and solar manufacturing in China to the big bets automakers are making on EVs and plug-in hybrids, the race is clearly on.

My personal bet is that this race is set to intensify in dramatic ways, with investments surging over the next few years and game-changing innovations driving a shift away from fossil fuels and energy waste. While the question of whether this will be enough to slow and reverse climate change remains, it is clear that we aren’t practically cooked yet. In addition to this race, we will need to find ways to actually remove carbon from the atmosphere or adapt to a significantly warmer world, and my hope is that the fruits of this global race will create enough capacity for us to figure out how to do that in a way that is beneficial and does not change global ecological stability. In five years, we will know whether in fact we won’t be cooked by a fast warming planet in the future. Stay tuned for those news.

China: The New Big Hope on Climate Change

This past week, it became very clear that the United States will never get around to doing what it takes to lead on climate change. Last December, President Barack Obama went to Copenhagen promising the world the U.S. would cut its emissions 17% by 2020. That target by itself, while an important milestone, didn’t even come close to what the science says we need to do to avert catastrophic climate change. After tough health care and financial reform battles, Obama chose not to embrace a battle for climate change legislation, instead sending his own lobbyists  to work on “getting the votes” in the U.S. Senate. The bill in consideration, initially focusing on capping greenhouse gas emissions, got so watered down that it basically became an energy bill like the one passed in 2005 under the Bush administration, with no goals on cutting greenhouse gas emissions nor any renewable energy targets. All of this in a Democrat-controlled Congress that promised swift action to end our addiction to fossil fuels and spur a clean energy economy that creates hundreds of thousands of new jobs.

So, after more than 10 years of fighting and high public support for action on climate change since the days of Kyoto, the U.S. Senate has confirmed what we refused to admit. The United States will NOT lead on climate change, so we must not put our hopes on this nation. It seems that no matter what we do locally or globally, the ideology-based members of Congress will simply not agree to ensuring the U.S. economy doesn’t miss the great jobs and growth opportunity that clean-tech would bring. They will only agree to enriching the pockets of their fossil fuel friends, and ONLY with fossil fuels, as to them it seems that fossil fuel money is very different than clean energy money. As a result, it’s time to think not about nation-building through problem-solving, but about human survival through problem-solving. In other words, we have to think about how we can avert climate catastrophe at whatever cost instead of how we can do so at benefits to us (“us” being U.S. citizens). In the end, we’ll be better off averting climate catastrophe even if it’s not us who take the biggest piece of the clean-tech pie.

As it stands, the best hope we have right now to avert climate catastrophe is China. With all the press that people read about coal burning and ever-increasing consumption in China, it is the only country showing the incredible capacity we’ll need to muster to make the transition to clean energy. In only four years, China has become the world’s leader in wind and solar, beginning exactly from nothing. It took the developed world decades to get to where China has gotten in just a few years. On top of that, it takes China very little to make a decision that will strengthen their capacity to lead on clean energy, such as creating feed-in tariffs, investing twice as much on clean energy than the United States, and even creating a cap-and-trade system to price carbon directly. It can do this even while having one of the biggest supplies of coal. If what China has done in a few years is any indication of what’s to come, we MUST begin to put our hope on China as a major innovator in clean energy and, as such, the only leader that can and should be responsible for leading the world away from climate catastrophe.

To make this clear, let’s put out some numbers about how impressive China’s clean energy sector has been over the last few years. Five years ago, China wasn’t even up on the charts in the wind energy sector. In 2005, it approved major policy to drive growth of wind turbine manufacturing and wind energy installations. In 2009, it led the world in total installations of wind energy, installing a stellar 13.8GW of wind energy (compared to 9.9GW in the U.S.; China is expected to pass the U.S. in installed capacity in 2010). At the same time, it became the world’s top manufacturer of wind turbines, with 3 firms already in the global top 10. In photovoltaic (solar power or PV), it supplied nearly 40% of the world’s panels last year, making it the leader in PV manufacturing. In addition to these key technologies, it has broken it’s own goals in solar hot water, biomass, and hydro consistently. It is also building the world’s largest and most advanced high speed rail systems, and has one of the world’s most ambitious programs to manufacture electric vehicles, having its own target of becoming the world’s leader in just three years. A very long walk for such little talk.

We can’t fool ourselves. China is clearly today’s most capable nation of turning this crisis into an incredible opportunity. While the U.S. still has incredible capacity, its gridlocked politicians will never let it pick up momentum, especially now after everything indicates politics will just get worse after November 2010. In spite of the reality that there are key issues in relation to China’s jump into clean-tech (such as quality), these are gradually going away as China’s clean-tech sector matures. It is time for the world’s attention to shift away from the U.S. and onto China when it comes to climate change. Chinese authorities know they will lead, and it is why their game has been very simple: obstruct international negotiations that could lead to the U.S. being more aggressive on clean-tech. This buys China time to create its industries, fix any issues they might have, and drive them to incredible growth that can not only meet domestic clean energy targets, but also easily take the rest of the world on a transition to clean energy, EVs, high-speed rails, etc.

The sooner we admit this, the sooner the rest of the world can shift its attention to China, putting pressure on its authorities to drive the clean-tech bandwagon fast enough to cut greenhouse gas emissions on a scale that would prevent Greenland’s melting, the Amazon’s burning, and the Arctic’s disappearance. For us, it’s no longer about whether we will lead. It’s about whether we will survive.

Can Obama Succeed On Clean Energy?

Today, Senators John Kerry and Joe Lieberman, joined by a strong coalition of business groups and NGOs, unveiled “comprehensive” climate change and clean energy legislation and emphasized their confidence in getting it passed during the current Congress. Immediately afterwards, President Obama applauded the Senators for introducing legislation that would spur clean energy innovation and ensure the U.S. meets its climate change pledge to the international community under the Copenhagen Accord. Regardless of how anybody may feel about this (i.e. too late, too weak), it is a major milestone. We’ve marked off the checklist for everything that needs to be done to pass a climate bill, except getting the Senate to pass one. Now, it is up to President Obama to fight hard to get climate change and clean energy legislation passed. Can he do it?

Ever since he signed health care legislation over a month ago, President Obama has been wavering among a host of issues ranging from climate change legislation to wall street reform to nuclear proliferation. Unfortunately, he hasn’t decided to choose or two of these priorities and go with them as aggressively as he did with health care reform. What’s worse, he’s failing to live up to one of his core principles he repeatedly mentioned throughout his campaign for health care reform, and that is that his choice to act wouldn’t be influenced by “politics or the polls,” but instead by what “is the right thing to do.” With the upcoming Congressional elections, it seems that President Obama is being influenced more by the polls than “the right thing to do” as he has chosen not to fight aggressively for anything. A great example is his rather short period of campaigning for wall street reform, which lasted a couple of weeks to be left to Congress again.

If President Obama wants to succeed on climate change and clean energy legislation, he will have to push it as hard as he pushed health care reform. So far, President Obama hasn’t dedicated any town hall meetings or domestic visits to climate change and clean energy legislation. He’s only spoken about it during a few times during his weekly addresses and when he announced lifting the ban on offshore drilling in many areas. A quick search through the White House website for health care yields 616 entries as of today, while for energy and the environment there are 64 (that’s roughly 10%). Clearly, if President Obama wants to succeed on climate change and clean energy legislation, he’ll have to campaign more aggressively for it to tip the political balance towards getting the necessary votes in the Senate to pass the strongest bill possible.

Furthermore, he will have to come up with the kind of language that will resonate with people across the country. When he campaigned for health care reform, he spoke of insurance industry abuses, unreasonable premium hikes, and a ballooning federal deficit, all of which were key messages that resonated with people across the country. However, when President Obama speaks of climate change and clean energy, he talks about innovation, leadership, and job creation, failing to emphasize the loss of jobs to other countries, the impacts of floods, droughts, and rising temperatures that are not uncommon across the country, and the damage that fossil fuels incur on the environment, health, and the pockets of U.S. citizens. It is  important to emphasize how climate change and clean energy legislation will spur new industries and create new jobs, but it is also important to emphasize how action will benefit citizens directly, just as he did with health care.

This is perhaps the best time to get it right. The BP oil spill and the coal mine disasters have exemplified our need to eliminate our dependence on fossil fuels altogether, while our continued loss of clean energy manufacturing jobs to other countries will continue to make it harder to fight the high unemployment rate. We all witnessed how President Obama mustered public support to pressure Congress to act on health care. There is no doubt it can happen again for climate change and clean energy legislation, but it will require President Obama to “do the right thing,” step up to the plate, and campaign aggressively for legislation before campaigning for the Congressional elections erases all chances to get anything done this year. This one is just as up to the Senate as it is to President Obama.

Our Bet On Clean Energy Innovation

The time to decide on a strategy to remain as #1 is slowly coming to an end. The U.S. has seen a jolt in economic activity as a result of the Recovery Act, but it’s all too clear that this alone won’t bring the U.S. economy back to sustainable growth over the long-term. We have entered a period where huge deficits are in order and the private sector won’t make a comeback where it used to prosper. Instead, something new must arise to fill the gap in economic activity after the U.S. government can no longer sustain the economy by issuing debt. The Obama administration has repeatedly said that it is “confident” that clean energy is the only sector that can fill that economic gap and pave the way to lower deficits, a higher trade surplus, and a better overall fiscal status.

Until very recently, the climate movement in the US, largely led by youth, was the main reason why clean energy had a future. The idea was that we had to develop clean energy to reduce our greenhouse gas emissions and slash our oil bill, which was financing “terrorists” and making the trade deficit worse. The youth climate movement was successful in making it clear that we better develop a clean energy economy to also create the jobs of the future and become the leader in this all-too-important sector. So today, the Obama administration understands that developing clean energy is all about creating jobs in the US and cleaning up the Federal books (though more importantly it’s about preventing runaway climate change). Whether “clean energy” means wind, solar, and geothermal or nuclear, clean coal, and biofuels is another debate. We know that nuclear, clean coal, and biofuels would not produce enough jobs compared to wind, solar, and geothermal, so I assume the outcome will be a mix, as Obama actually intends in his strategic political plan.  However, Obama may be overoptimistic in thinking that the US can win the clean energy race under his plans.

First of all, unlike other industries of the past that generated big economic growth (think cars, Internet, IT, etc.), clean energy is something the entire world knows about and is working hard to get its hands on. While it takes Washington years to make any decision on clean energy, Asia and Europe have already been racing to develop the best clean energy technologies in the world. Out of the top 10 clean energy companies in the world, only one or two are from the U.S., while increasingly more and more Chinese clean energy companies are going public. That’s because China made the decision to take this market a few years ago, and it’s already succeeding.

According to the Apollo Alliance, a US labor organization that promotes a clean energy economy, the US already imports over 70% of all components for renewable energy projects. Most of this manufacturing is happening in China, which has already become the world’s largest manufacturer of wind turbines and solar components. With an economy that’s less than half the US economy, China is already spending more than twice as much than the US on clean energy, and plans to ramp it up further. And while experts have believed that China would focus on manufacturing while the US focuses on innovation, China is spending big on creating breakthrough technologies as well. Already, it is funneling $1 billion into the world’s first clean coal power plant that will capture carbon dioxide, and only because there’s less red tape in China to begin construction of such a plant.

The Breakthrough Institute has analyzed how much the U.S. would need to spend in order to remain competitive in this sector and truly create the technologies that will lead the market. According to its analysis, the U.S. will spend about $175 billion over the next five years on clean energy, including R&D and tax incentives. On the other hand, China alone plans to spend $397 billion, leaving the other “Asian Tigers” out. This leaves the U.S. at a significant disadvantage, making it highly unlikely to create the leading clean energy technologies that can fill it’s economic gap. Even passage of a climate bill in Congress, which would certainly put all serious action until at least 2014, would be insufficient to close this gap.

In the end, the numbers do show that the Obama administration’s bet on clean energy will probably not hold out. Asia will end up taking all the manufacturing jobs and exporting their technologies to the U.S., and the U.S. will have to look elsewhere for innovation in order to fill the economic gap. And while cloud computing has its promises, it will not create a market big enough to fill the gap. So, I wouldn’t bet on clean energy making it for the U.S. economy, even if there was a change in Washington. It is time for a drive in innovation in a variety of sectors, not just clean energy. It’s really the only way out.

Author’s note: I didn’t make any mention of EVs and high-speed trains because they’re in the transportation sector. While they are clean technologies, I wanted to focus on clean energy. Readers should know that the US is also behind in these other clean techs.

Dominican Republic Set To Lead on Renewable Energy

cneOriginally published in It’s Getting Hot In Here.

While there is a lot of debate about a national renewable energy standard and more than half of the states have some kind of RPS, where does the rest of the world stand on renewable energy targets? As an Hispanic, I’m very interested in what Latin America and the Caribbean do about global warming, not just because we need to show leadership to northerners, but also because this is our future. Most countries in Latin America depend on oil imports, and most of them are also already being and will be impacted by global warming. So, not surprisingly, we are seriously trying to be on top of this.

Everybody knows about what Brazil is doing with ethanol, but what about other countries in Latin America? And what does the future hold for renewable energy in this region. I’m from the Caribbean, specifically the Dominican Republic, and I’m very involved in what’s happening in that country and elsewhere around the region. Since 2005, I’ve been visiting the country quite often, helping found an organization that promotes sustainable development and now looking into renewable energy ventures in that country. So, what is the Dominican Republic doing about global warming? In short, it’s emissions are going up, but it has a renewable energy standard that says 25% renewables by 2025. Let’s take a closer look at the details.

Last April, the President of that country, Dr. Leonel Fernandez, signed a renewable energy law passed by the Congress. After 6 years of meetings and drafts and building support, it finally passed. Within a year of the idea that the law was going to definitely pass under Fernandez’ administration, a Spanish company invested E$100 million in solar cell production, wind companies announced over 400MW of planned installations, the Brazilian company Infinity Bio-Energy announced an investment of $200 million in a large ethanol plant (since the country has a lot of sugarcane), and lots of small solar and wind energy subsidiaries have been set up in the country. With over 25,000MW of wind potential in less than 3% of the land (over 60,000MW in 9% of the land) and an infinite supply of sunlight (sunny Caribbean), the potential is there for the country to meet all its energy needs from renewables.

Before specifying what the law does, it’s important to mention the fact that the government is committing to paying for what the incentives described below on top of all the problems the country has. Among them are an unemployment rate of 15%, a per capita GDP of just over $8,000 (though growing at 10%), some 25% of the population in poverty, a relatively high crime rate, congestion in large cities, high energy costs and power blackouts, many urban areas without potable water or paved roads, and an education system that is not near the best it can be. Of course, high energy costs justify taking this action because it will create large energy savings in the future, but the investments required to incentivize renewable energies are coming out of the pockets of citizens of the Dominican Republic.

So, what does this law do exactly? First of all, it removes all taxes from all equipment, sales, and income for at least 10 years. Clearly not the case in the United States or elsewhere. Second, it pays up to 75% of the cost of installing solar or wind in homes or community co-ops. Again, higher than the incentives in the United States or elsewhere. And third, but most important, it places a feed-in tariff! That’s right, utility producers receive a premium equal to the estimated externalities of fossil fuels for the renewable energy they produce. Essentially, they’re putting the incentives that makes solar work in Germany. But, of course, this country is sunnier, so the potential for higher installations is clearly there.

On the fuels side, they have lots of incentives for ethanol and biodiesel production, including the 100% tax exemptions. Brazil and Chile are therefore very interested in producing ethanol in the country. The law mandates that all gasoline sold in the country be blended with a 10% mix, with higher blends to come. While there may be transformations coming to the mobility sector of that country that will make ethanol unnecessary (and thus solely for tax-free exports to the U.S.; yes, CAFTA works for this), this is pretty impressive. There are several experimental plots that will be producing biodiesel from Jatropha and other plants. And the President joined investors last week at the Clinton Global Initiative to announce plans for biodiesel production in Haiti (to promote growth, create jobs, etc.).

Now, isn’t this enough to justify the U.S. hopping on board? “No,” the administration will say, “it doesn’t matter what others do, as long as India and China are not in…” But, then again, India is on track to cutting emissions 25% by 2020 anyways and China just announced investments of up to $280 billion over the next several years, and has a renewable energy standard of 15% by 2025. Well, if we go past the tipping point, the city where I grew up will be under water, and so will most of the major cities in the Dominican Republic and many other countries all over Latin America. Anyways, this is all really impressive, but don’t think we’re stopping there…

As I mentioned, I work for an organization in the Dominican Republic that promotes sustainable development. I’m currently leading a renewable energy campaign that seeks to make the country climate neutral by 2030, with a medium-term target of 50% renewables by 2020. The current law doesn’t call for this, but our campaign is looking to do something that hasn’t happened in many places. The country, as many know, is blessed with great beaches and beautiful landscapes. No wonder, then, that tourism is the #1 sector of the countries economy. Next year, it will experience a demand of around $10 billion. So, what are we trying to do with this sector, specifically the $10 billion in demand?

Our renewable energy campaign is calling on the tourism industry to use take out 2% of its demand ($200 million) every year, beginning in 2010, to invest in renewable energies and new mobility systems together with all the investors that will be rushing into the country. With this scale of annual investments, the carbon neutrality target is clearly achievable. The logical question is, why would the sector be interested? Well, a story is well-deserved. The sector began to grow in the 1960’s, when the government passed a law that gave tourism activity a 100% tax exemption and payments for roads and other services. As a result, the sector kicked off. A decade later, many incentives remained, but taxes were put in place (well, the hotels couldn’t run out, could they?). Today, they have a 30% tax on their income, though some of it is reinvested in roads and other things that they need. What we’re saying is this: here’s the opportunity to enjoy of the business opportunity you had in the 1960’s.

With this new renewable energy law, the tourism sector can meet Agenda 21’s call for social and environmental responsibility at a huge profit. The sector has the opportunity to team up with foreign investors in scaling renewable energies in this country and make profits, all with 100% tax exemptions for at least 10 years and a feed-in tariff. Under our view, there’s no reason why the sector should ignore this business opportunity. The reason why others are already planning to invest more than $2 billion in the next few years is because this law makes these investments highly profitable. Here’s a chance to reduce and stabilize energy costs in the country, promote strong economic growth and fossil fuel independence, create 1 million jobs while at it, and green up the sector’s image, attracting ever-more tourists. In fact, the sector’s decision to do this would likely lead this country to achieve a very high quality of life (more than $25,000 per capita; of course, this does not fit the entire picture of “quality of life”) within 10-15 years at current rate of economic growth.

For those skeptical ones who ask: “how is the government going to pay for this?” Currently, electricity costs are over $0.22/kW-hr. This is more expensive than solar! The reason is that most electricity comes from oil. While coal and natural gas are on the way, it will still keep electricity prices up at around $0.15/kW-hr. So, this means that funds are going to come directly from price differences. For example, if wind costs US $0.07/kW-hr, the market price is still $0.15 or 0.22/kW-hr, and that’s what they charge. The difference they keep is used to pay the premium. In addition, the government currently taxes gasoline and natural gas at 5%, so those funds will be used to pay for homeowner installations.

All in all, this looks like the future for the Caribbean and the rest of Latin America. Where is the U.S.’ leadership on this area? If nothing is done about emissions, all the work in Latin America won’t matter. Global warming will destroy us anyways. The hope is that these bold actions by both the government and the private sector send a message to Washington, D.C. and Europe: climate neutrality for the world within 2 decades is necessary!

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