Media Coverage Archives

October 22, 2007

BusinessWeek Moves the Debate

Well, it was bound to happen around now. Once every magazine had done a cover story on the wonders of going green (my previous post here), the media had to turn on itself and declare it all a sham. It's the normal course of things.

BusinessWeek's cover this week, "Little Green Lies," certainly tries to be incendiary. The subhead: "The sweet notion that making a company environmentally friendly can be profitable is going up in smoke." But dig in and the reality of the article is equal parts insightful and inane/obvious (a bit more of the latter perhaps). And it doesn't actually say anything all that different than green business writers/thinkers have been saying. If one of the main messages is that it's not so easy to go green, I can only say, no kidding.

And in a funny turn, BusinessWeek managed the feat of starting the cover parade in January and taking just 9 months to totally contradict itself. But let's look at a couple of the specific complaints.

First we have the repeated stories of eco-champion Auden Schendler at Aspen Skiing failing to get his management to green light green expenditures. The story seems to be that the ROI was not always enough. On this one, I couldn't agree more in part. Yes, any investment in a company competes for cash with all other options. And, yes, looking at pure ROI, some energy efficiency investments won't look great (they may take 5-10 years or more). But as a reader of Green to Gold knows, I don't believe that traditional cost/benefit analysis is doing a very good job. It doesn't take into account intangibles at all.

What's the value of reducing risk of energy spikes? (By the way, how do some of the ROI calculations from not that long ago when oil was $40/barrel look now?). What's the marketing value of walking the talk? How will employees feel?

The other point the article brings out is that it's tough to convince people and move a culture. Not everyone buys it — the story of one manager not believing the high ROI for a project is, sadly, not surprising. This is partly a legacy of green guys in a company not getting business respect. So, again, the idea that this is all hard is not shocking.

But a core criticism in the article — the attack on Renewable Energy Credits (RECs) as a way for companies to offset emissions — is a deeper and much more important question. It's incredibly complicated how or if RECs create real demand and generate renewable energy. Lowering the costs for wind generators (by paying them the additional value of the REC) should in theory drive growth (Micro Econ 101). But the article is fairly devastating on the scale of the REC vs. the cost of generation. One argument could be that the market for RECs has to grow much more so that the price rises (Micro Econ 101 supply and demand). That would potentially expand production. But the point that a REC today doesn't exactly mean less fossil fuel today is well taken.

But I focus on another lesson here: RECs and all offsets should be a last resort (no skiing pun intended). First, cut emissions through eco-efficiency. Second, generate renewable energy onsite. Then seek the highest quality offsets.

In the end, this article is a sign that we're evolving. The author may not realize it, but the piece is telling companies to look at the full value chain environmental impact (not just measure emissions at owned facilities, a mistake Nike makes, according to the author) and measure emissions completely before making claims. I couldn't agree more.

If I've learned a couple things (or strengthened some assumptions) in the year since Green to Gold came out it's this: we're just getting started, companies have a long way to go, and it's not easy. I started reading this article thinking it was so odd as a juxtaposition with the Wal-Mart meeting the other day that really was the starter's pistol on this movement: strange, I figured, that it's getting started in earnest right when BusinessWeek declares it over. But the reality is that this article doesn't match the aggressive title and sub-title — the content is actually a sign that all of this is for real. Only fundamental shifts in how business works cause this kind of scrutiny and warrant tough questions.

This piece is actually making the case for a main arm of the Green to Gold story: know your footprint, do things that actually reduce yours or your customer's, and then take credit for it. As the Aspen Skiing Company shows, getting frustrated with lack of progress — as Schendler so rightfully does — and getting some of those steps reversed, is a recipe for trouble.

We're at an odd junction in the greening of business. Millions of business people are just now coming to the table and seeking some easy wins. They're moving incrementally, or trying to skip steps entirely. At the same time, some "old-timers" who have been working hard for years are getting frustrated at the lack of speed. It's like they're finally not alone in the wilderness and they want to start running. The problem is that everyone else is just starting their training for the race. Like Schendler, the leaders are getting impatient and pushing hard. I'm not sure which force will win, but it's going to be an interesting battle.

December 10, 2009

News Flash From Bjorn Lomborg and the WSJ: We Should Help Poor People

For some reason I can't understand, Mr. Skeptical Environmentalist Bjorn Lomborg keeps getting space in places like the Wall Street Journal and Time to peddle his drivel. The Journal has given Lomborg a weekly op-ed for about 6 weeks to talk about how we shouldn't really tackle climate change.

Here's how each of these weekly missives work. Lomborg picks out one person in a country to talk to and asks them how much they care about climate change. Yesterday, he told us that a very poor person living near Mt. Kilimanjaro doesn't care so much about melting glaciers, but cares more about education about HIV. Last week we learned that a very poor person living near Himalayan glaciers that are melting, which will create vast water and food shortages, also cares more about pressing daily issues of local poverty. Earlier, a very poor person living in Africa told Lomborg we should tackle malaria directly rather than take on climate change. Wow, these are real surprises.

Lomborg's sole purpose in life seems to be creating false arguments that nobody is really making and then knocking them down. In the malaria article, he makes it sound like all the government, NGO, and business work to battle climate change is intended solely to stop the spread of malaria (which may become more prevalent as warmer weather makes things more hospitable to mosquitoes at higher latitudes). So, he says, the potential investment of trillions of dollars to create cleaner, more efficient economies is an expensive solution for malaria. Treated bed-nets are much cheaper.

Well, yeah, no kidding, Bjorn.

As if anyone is saying that reducing carbon is just about malaria, or water supplies in Asia, or only any one of the many specific issues Lomborg splits up into little targets and compares to the whole (inflated) price tag. And, by the way, who said that tackling climate change is separate from helping the poorest among us? The issues are all integrally related and the poorest are being hit hardest by climate changes already. Lomborg always seems to be arguing against some phantom Birkenstock-wearing Greenpeace activist chained to the bulldozer of progress...in the 1970s.

The logic and arguments for decoupling our economies from carbon have evolved tremendously and include national competitiveness and job creation, healthier air, eliminating reliance on fuels from parts of the world that fund terror, and reducing dependence on volatilely-priced, and declining, resources that will raise the cost of doing business over time. This is why many important capitalists such as Jeff Immelt at GE (but not the US Chamber of Commerce of course) are making the business case for climate action.

You'll notice that none of these other reasons actually depend on believing fully in the science. And they make for more prosperous economies, which can help the poor the most. And guess what, we have to walk and chew gum at the same time -- we have to think holistically and tackle issues in a synchronized way.

But overall, what I really love is Bjorn Lomborg taking his argument for helping the poor to the skeptics of the world and going through the Wall Street Journal -- as if this is the crowd lining up to send development money to countries for food, water, and bed nets. Who is he speaking to?

Perhaps the real question here is this: What the heck is wrong with the Wall Street Journal? Today, they pick up Lomborg's arguments hook-line-and-sinker and offer an assemblage of greatest hits on not taking action. But yesterday was really hilarious.

They printed one op-ed -- in a series of daily, relentless lamenting about climate science -- laying out how climate skeptic bloggers (who almost all have no climatology or geology or any -ology background) have dismantled the idea that the actual measured data show an increase in GHG gases (the famous "hockey stick" chart) or any warming at all. Yet, in the same issue of the paper, the WSJ printed a truly helpful, excellent article looking at the main arguments/myths from the skeptics and comparing them to what the scientific community is really saying. The very first comparison is this one...

WHAT THE SKEPTICS SAY: The Earth isn't warming -- at least not to any extent that could actually be called a "crisis." And some data even suggest that the Earth is getting colder. The planet may have grown warmer over the course of the 20th century. But that warming stopped more than 10 years ago, and since 1998 the trend shows less warming or even cooling...

THE RESPONSE: It's true: By most measures, average temperatures this decade seem to have plateaued. But this isn't evidence of a cooling planet. Partly, it's a result of picking an exceptionally hot year -- 1998 -- as a starting point..the long-term trend since the mid-1970s shows warming per decade of about 0.18 degree Celsius (about 0.32 degree Fahrenheit)...The '00s still have been exceptionally warm: The 12 years from 1997 through 2008 were among the 15 warmest on record, and the decade itself was hotter than any previous 10-year period. While 2008 was the coolest year since 2000 -- a result of the cooling counterpart of El Niño -- it was still the 11th-warmest year on record. And 2009 is on track to be among the five warmest.

The Journal is as schizophrenic as the population I suppose, but the op-ed pages are totally out to lunch. We need good reporting now about what we know, and what we don't -- not ideological blustering. And we need to stop creating false tradeoffs between helping the poor and helping the planet, as if the poor -- and all of us -- don't live and breathe on that planet.

This first appeared on Huffington Post.

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November 2, 2012

Hurricane Sandy=Climate Change? Some big names are believing it.

[Note: With power out and limited connectivity, I've gotten behind on re-posting blogs that I've written elsewhere like HBR ...I'll put a few in a row up over the next few business days.]

This is just a quick blog to recognize that the devastation from Hurricane Sandy has had one important silver lining -- many mainstream voices, especially in the business community, seem to be waking up to the connection between extreme weather and climate change. (My take on this is on my Harvard Business Review Blog here, and I'll post it here next week.)

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Two news items have given me real hope.

1) Businessweek blares on its cover, "It's Global Warming, Stupid"
After the required caveat that no single storm is "caused" by something as long-term as climate change, the business magazine declares, "Clarity, however, is not beyond reach" and explores how scientists are increasingly willing to draw the connection. Bravo Businessweek.

2) Mayor Bloomberg's titles his endorsement of President Obama, "A Vote for a President to Lead on Climate Change."

In his own words, "The devastation that Hurricane Sandy brought to New York City and much of the Northeast -- in lost lives, lost homes and lost business -- brought the stakes of Tuesday’s presidential election into sharp relief...Our climate is changing. And while the increase in extreme weather we have experienced in New York City and around the world may or may not be the result of it, the risk that it might be -- given this week’s devastation -- should compel all elected leaders to take immediate action."

Bloomberg then cites Obama's work on fuel-efficiency and increased controls on mercury emissions which restricts coal burning...and highlights how Romney has reversed himself on climate change since his days as Governor.

This is clearly noteworthy that a well-respected moderate has made climate change the deciding factor in his vote for President, especially since the topic did not come up in the debates for the first time since 1984.

The media, the business world, politicians...all are waking up to the deep connections that today's events have to longer-term trends and the actions we all take. I have hope that we will mobilize fast enough now.

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November 8, 2012

The Fantasy of the "Sad Green Story"

(Note: This blog is co-authored with my colleague Jigar Shah, a partner at Inerjys and a board member of the Carbon War Room, where he served as its first CEO. Jigar also founded SunEdison, helping to create the multibillion-dollar solar services industry.)

To get back to some non-election topics...A couple weeks ago, New York Times columnist David Brooks wrote an op-ed entitled "A Sad Green Story" about the (supposed) travails of the green movement over the last 10 years. The idea that the clean technology sector is failing, or that it's a bad investment, is common enough in the business world and pundit class. But it's patently false. So what is Brooks talking about and what's really true here?

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Brooks focuses in part on whether Al Gore has made money on clean tech — a total distraction that has no bearing on the reality of climate change or the growth of clean tech. What's more important is Brooks' absurd logic that an entire sector of the economy is a "sad story" because some government-supported companies struggle, go under (Solyndra), or get acquired (battery maker A123). And how can Brooks tear down the government's involvement in promoting the deployment of American green innovation while providing no tangible idea of how he would do it better?

Most of us watching or working with the clean tech sector agree that government shouldn't try to pick winners (see Jigar's take on Solyndra's failure here), but we can propose a plausible model of how the government might play a more productive role. This ranges from providing a roadmap for remaking the multitrillion-dollar energy sector, to providing leadership by example (and scale) when purchasing new technologies.

For proof of how crazy all of this criticism of clean tech is, we need look no further than a recent Times-reported story on natural gas. Natural gas is a booming industry. But as the paper of record reports, it turns out that one key part of the natural gas value chain — that is the step of actually digging it up — is struggling financially. Small, scrappy entrepreneurs like Exxon Mobil are, according to its CEO, "losing our shirts today... Were making no money. It's all in the red."

This is exactly the same economic story that Andrew described a few weeks ago about the solar industry. The manufacturing end of the chain, experiencing a glut of supply, is losing money. But downstream users of the product, solar panels in one case or natural gas in the other, are doing very well. The financial struggle for some companies in both solar and natural gas is a sign of a boom, not a bust.

So we assume David Brooks and other green skeptics will soon write about the "sad brown tale" of the (also) highly subsidized industry of fossil fuels, which, since some people are losing money, must be shut down and mocked. We'll hold our breath.

Brooks' column is also filled with fantasies and misstatements that would be easy to correct with a simple Google search. As Andrew mentioned in his previous blog post, the percentage of our electricity coming from green energy has doubled in just four years — that doesn't seem like much of a sad story. Brooks also dismisses the idea of green jobs with no data to back up his position. Of course there are green jobs — there are 100,000 people working in solar in this country today. And, not for nothing, but the fastest growing green jobs markets are in politically red states. (We'll stop there and let climate blogger Joe Romm tear apart some of the more subtle Brooks fallacies.)

From a practical perspective, green technology is succeeding in part because we have oil prices that are stuck near $100/barrel, and water challenges that are creating deep competition between agriculture and oil and gas in places like Colorado. At some point Brooks and others will also have to acknowledge what the U.S. military, particularly the Navy, has already determined: future conflicts will arise over resources like oil and water; climate change is a security threat; and pursuing a renewable energy future is a safe, logical path.

In the end, fact-free attacks on all things green need to stop. Like in all industries, some paths are profitable and some are not. But we'll only find out what works if we invest in new growth sectors and not act like the sky is falling — or that there's some devious green investing cabal secretly making money — when some companies fail. Sad business stories become happy ones through persistence and overcoming failure. Not understanding that is Brooks' greatest fantasy.

(This post first appeared at Harvard Business Online.)

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