03:24 pm | 1 recommendation | Be the first to comment

A Level Playing Field

Everyone hates their taxes being spent on subsidies - - unless it’s to
subsidize their own industry. It’s time for an honest debate about the role of
subsidies in a 21st Century economy and, at least, a restructuring
to a more level playing field.

Examples? When I served in California state government, the
Schwarzenegger administration tried for three years to push through a solar
incentive package. Ultra-conservative State Senator Tom McClintock rose during
the debate in red-faced indignation and bitterly opposed any subsidy of an
industry that couldn’t stand on its own two feet. I’ve heard that argument
repeatedly, often by the same politicians who support massive subsidies to the
oil and coal incumbents, despite the fact such “incentives” are hardly needed
to get fossil fuels out of the ground.

The latest salvo comes from President Bush, who yesterday said it was
time to end subsidies to “multimillionaire farmers.” He was addressing a point
about sharp increases in food prices, making wealthy agribusinesses even
wealthier, partially the result of rising fuel costs and ill-conceived
government mandates/incentives to produce ethanol. Ironically, the President
told Congress he would veto any bill than shifts even a small portion of the $100
billion/year subsidies given to oil companies towards alternative energy
sources.

Given that oil companies are recording profits that are the highest in
the history of commerce - - not just in the oil business, in the history of ALL
commerce - - it is hard to fathom. Moreover, some say the incentives are still
needed to keep oil companies investing in new oil exploration and to build more
refinery capacity. But few new discoveries are being made or exploited and
refinery expansion lags demand by an increasing and exponential pace. So much
for performance-based subsidies.

The role of subsidies should not be annuities for wealthy campaign
contributors, but should be used as a way to level the playing field when
incumbents have been given a similar (or far greater) head start. They should
be strategically used to jumpstart businesses that will provide multiple
benefits to the people - - in the case of incentives for renewable fuels or
clean energy technology, the benefits are domestic jobs, reduced dependence on
a shrinking fuel source, exports, improved public health by reducing pollution,
and a planet that is less at risk of biting us in the backside with ever more
drastic climate change impacts.

Those multiple benefits are something the incumbents can’t provide - -
and it’s time to tilt the playing field in the direction of positive outcomes
and end the fossil-fueled, taxpayer-funded boondoggles to the rich.

08:32 am | 2 recommendations | 2 comments

Of Comets and Carbon

What do the horseless carriage, the iPod, and global warming have in
common? Once thought fads or fantasy, it turns out that all three are
here to stay.

It also turns out that each is more connected to the other than is
apparent at first glance, especially when viewed through the lens of
21st century business. In the coming weeks, this blog will take readers
on a journey of connecting the dots, from emerging technologies to
evolving environmental ethics. I’ll share some insights as I travel the
world - - working with inventors, investors, and political visionaries
- - offering provocative and profitable ways to shape the future of our
planet and our economies.

Corporate social responsibility (“CSR”), especially when it comes to
the environment, offers that rare intersection of doing well and doing
good at the same time. But environmental CSR (call it “e-CSR”) will be
defined in new ways, even with a new language. Growing concern (and
regulation) of greenhouse gases, for example, will result in a trillion
dollar carbon market within a decade, creating a new global currency
that anyone can trade for a profit.

Climate change will collide with dwindling natural resources to
democratize the energy that powers our economies, redefining the haves
and have-nots almost overnight. Think about it - - oil, uranium, even
coal are in short supply and are controlled by the few, while the sun,
wind, moving water, and things that grow are available, unfettered , to
every human being on earth. Helping people master the technologies that
convert those resources to something useful will fundamentally change
our economic and political landscapes, like heat and pressure turn
carbon into diamonds (hmmm...that has a familiar ring!). e-CSR at its
best - - what’s good for the environment and its people is also very
good for the bottom line.

On his last day in office, British Prime Minister Tony Blair told me
that only the most sustainable businesses will survive and thrive in
the 21st century. They will define our future on this planet. We’ve got
a comet by the tail, so let’s use this blog to understand and enjoy the
ride.

Terry Tamminen • terry.tamminen@gmail.com • www.terrytamminen.com • www.pegasusinvestors.com

11:51 am | 0 recommendations | 1 comment

Game Changers - Part Two

Last week I mentioned that a perfect storm is about to change the game on our energy future and, therefore, our environment and economy (the elements in this case being climate change; fossil fuel shortages; and epic world-wide competition for energy). I listed three technologies that will allow us to weather this storm, game-changers, and promised two more this week.

California & Arnold Schwarzenegger

Ok, they’re not companies or technologies, but California is changing the game faster than any other force on the planet. Yes, I’m a Californian and have been a part of the state policy machine that Schwarzenegger assembled to force these changes (hmmm...rise of the machines??), but being as unbiased as I can be, this is the place to watch.

California policy will drive innovation and investment around the world, so if you want to know where opportunities will exist, watch what we do. Think about just 3 of the policies and programs California launched under the Governator:

The Million Solar Roof Initiative - - $3.2 billion for solar and requirements that utilities buy excess capacity from those residential and business rooftops.

Clean and Renewable Energy - - by law, 20% of electricity must come from renewables, like wind and solar, by 2010 and we’re targeting 1/3 by 2020. At the same time, a little-known bill passed in 2006 (Assembly Bill 1368) that says California utilities may not buy electricity from coal fired plants that are not as clean as the cleanest fossil fueled generation (meaning natural gas these days). These measures will push more deployment of energy efficiency and renewable energy technology and are being copied by more than 30 other states as they tackle energy and climate issues.

The Global Warming Solutions Act of 2006 - - California had a clean air act and a clean water act before the federal versions in the early 1970s, so we’ve done it again by blazing a trail for slashing greenhouse gases. States are copying this law too, especially in the absence of federal regulation, and putting four corners on this problem means that innovative solutions will emerge so that the state will meet its mandated greenhouse gas reduction goals.

All of this is driving investment (and making those investments pay off) in new forms of efficient lighting, HVAC, window and insulation, green building materials, solar panels, wind turbines, biomass converters, and a host of related technologies. Bet heavily on these game changers in advance of the entire country following California and its muscular Governor!

Terry Tamminen • terry.tamminen@gmail.com • www.terrytamminen.com • www.pegasusinvestors.com

02:10 pm | 0 recommendations | 1 comment

Game Changers

A perfect storm is about to change the game on our energy future and, therefore, our environment and economy. The unprecedented confluence of elements in this case? Climate change; fossil fuel shortages; and epic world-wide competition for energy. So what technologies will allow us to weather this storm, indeed to bring home the big catch from tempest-tossed seas? Here are my top 3 (I’ll give you two more next week):

LED lights. Using less energy and lasting longer than most of us alive today, LEDs will revolutionize the way we light our homes, businesses, streets, and game consoles (to name a few). LED lighting is not only more efficient and durable than anything on the market today, it can be programmed in a breathtaking variety of ways to deliver every color of the rainbow from each “bulb”, finally putting the “image” into “imagination” big time. Look at LED Effects, the designer of the ball that dropped on Times Square this past New Years Eve. It’s not just the LED “bulb” itself - - it’s how you program it to deliver light and images that will change the world of lighting as we know it.

Hydrogen fuel cells. Now that regulators have allowed them on aircraft, we’ll see them powering our laptops and iPhones, not just for a few hours, but for days at a time. Larger versions will power our lawnmowers, cars, RVs, and homes - - free from pollution, greenhouse gases, and blackouts on the grid. Look at the innovative work of Quantum Technologies in Orange County California (here’s a little secret - - they converted Governor Arnold Schwarzenegger’s Hummer to run on hydrogen!).

Solar, but not your father’s panels. Thin-film solar (some versions transparent), will turn buildings into solar power plants. High rises have small roofs, but acres of sides and windows. Ovonics and MiaSole are two winners here. Look too for nano technology that will be employed to create solar paint, capturing energy from any surfaces where sunlight falls.

By the way, all of these game changers are already in use today. Mass production and adoption into a wide variety of applications will make them commonplace within 24 to 36 months. Buckle up if you’re invested in incandescent lighting, petroleum power, or fossil fueled grid electricity - - the storm is about to make landfall and sweep those dinosaurs away!

Terry Tamminen • terry.tamminen@gmail.com • www.terrytamminen.com • www.pegasusinvestors.com

01:00 pm | 0 recommendations | 6 comments

But What If We HAVE To Do It?

Record heat waves, melting glaciers, epic droughts - - the climate is changing faster than we once thought possible, which means our response will have to be much more creative and comprehensive than we may have imagined. Just a few years ago, it would have been unthinkable to suggest slashing greenhouse gases in half by 2020, but what if we have to do it? Does the technology exist? Is there enough money and political will power on earth to commercialize those technologies fast enough?

I’ll let you in on two secrets that could be very profitable for smart entrepreneurs and investors. We could end our fossil fuel addiction within 20 years - - and make a lot of money in the process - - with two basic strategies.

First, no matter what we use for energy, we can double its productivity in less than a decade. The average American uses about 12,000 kilowatts of electricity per person per year. The average Californian uses just over half of that. If you’ve been in the Golden State lately, you know that efficiency is not because we have scrapped our big screen TVs, Jacuzzi tubs, or air conditioners in the desert. It’s because state regulators spent the last few years setting appliance and building efficiency standards and rewarding utilities for energy conservation programs. Every state could do the same.

Second, cutting greenhouse gases is a matter of harnessing renewable energy, like solar and wind, instead of burning fossil fuels like coal and oil. There’s enough energy in the sunlight that falls on the earth every hour to power all human energy needs for a year. Add wind, biomass, tidal flows, and other renewables - - clearly we have the clean sources of energy to end our fossil fuel addiction and to shut off the planetary crock pot we’ve created. We can also convert that clean energy into transportation fuels like waste-to-ethanol and hydrogen.

So how do we turn down the global thermostat and turn up the profits? I’d like to hear your ideas for where the game-changing innovations and killer aps will come from that can accomplish both. Next week, I’ll give you my top five.

Terry Tamminen • terry.tamminen@gmail.com • www.terrytamminen.com • www.pegasusinvestors.com

01:00 pm | 0 recommendations | 2 comments

Postcards from the Year 2030

Like our ancestors a century ago, who were debating massive transitions - - from horse to horseless, from blocks of ice to Fridgidaires, from carrier pigeons to telephones - - we too are faced with similar monumental choices today. Imagine our children grown to adults, sending us postcards from the year 2030. What world will their images and words convey?

I foresee two likely possibilities based on the world we have created so far. One postcard depicts 2030 in Dickensian terms. World oil supply disrupted by rebellions and social unrest, as people who benefit little from their nation’s resources attack oil pipelines to demand their share, while oil tankers and refineries have become frequent terrorist targets. Unrestrained demand in the U.S., China, and India has created shortages at gas stations as fuel prices double every twenty-four months.

Ford and GM reorganized under bankruptcy protection after decades of producing gas-guzzling vehicles that no one wanted, reduced to selling products made by Chinese companies and adorned with their once-proud American nameplates.

Pollution has grown beyond the ability of government regulators to moderate it, as petroleum fires and spills from aging infrastructure and increased dependence on coal-fired power plants foul air and water. Two million Americans died prematurely from completely preventable air pollution since 2000 and ten million more were hospitalized. The cost for health care tops the $20 trillion mark, draining money from Social Security, which declared bankruptcy in 2015 and can only pay 30 cents on the dollar in promised benefits.

Of course, that need not be our fate. An alternative vision for 2030 is equally plausible - - American inventors and investors have led the world to vehicles powered by hydrogen, electricity, and biofuels. More than half of world electricity comes from the sun, wind, water, and things that grow. U.S. and foreign automakers are in solid fiscal health, selling high-tech vehicles using fuel cells and drive-by-wire technology, along with home hydrogen fueling appliances, making a growing number of consumers truly energy independent.

Since the U.S. invasion of Iraq in 2003, no more wars were fought over oil, saving thousands of lives and billions of dollars. As a result, the U.S. economy is strong, the deficit erased, and the global fleet of oil tankers is systematically being converted to move scare supplies of fresh water around the globe. Although these tankers still routinely leak, because it’s only water, no one objects. The sky is blue again and the water is clean. The impacts of climate change rapidly diminishing.

So which postcard will our children send us from 2030? I’m betting on the one with a bright future, because the American entrepreneurial spirit is alive and well. Here’s three quick examples. At age 84, Stan Ovshinsky (ECD Ovonics) is still inventing and commercializing new thin-film solar panels and gee-whiz applications for hydrogen fuel cells in his Michigan factories. In Florida, Bob Moore (Intelligent Global Pooling Systems “iGPS”) is manufacturing shipping pallets from endlessly-recyclable plastic instead of one-time use wood (did you know that almost half of our nation’s hardwood is consumed to make pallets, most of which end up in landfills?), saving trees, landscapes, and energy in the process. In California, Dave Konwinski (Onsite Power Systems, Inc.) is turning agricultural and restaurant waste into energy, reducing pollution and turning a liability into an asset in the bargain.

These three visionaries and their products have many things in common that feed my optimism for the future, but two stand out - - they’re creating U.S. jobs and exports. They’re also creating the solutions to our climate change challenge, proving that what’s good the for environment is very good for the economy.

Which postcard will we get from 2030? It depends only on the scope of our imaginations and entrepreneurial spirit.

Terry Tamminen • terry.tamminen@gmail.com • www.terrytamminen.com • www.pegasusinvestors.com

04:47 pm | 0 recommendations | Be the first to comment

The 29% Who Are Onto Something Big

The Economist magazine recently released a report entitled “Doing Good - - Business and the Sustainability Challenge.” They analyzed responses about corporate social responsibility - - put more succinctly, sustainability - - from 1200 execs and concluded that the picture is grim.

The opening of this interesting report states...”Being a good corporate citizen has never been so challenging. Companies have long been under public scrutiny for practices ranging from recruitment to workplace safety, from attitudes to overseas investment to environmental pollution. The emergence of climate change as a mainstream political issue, however, has served to drive home the breadth of ethical issues with which firms must now grapple. The business—and societal—implications of how companies address these are so far reaching that a new area of management practice has come into being to manage them, known by many as “corporate sustainability”.

I disagree that “being a good corporate citizen is challenging”, because we actually have a lot of data on how profitable it is to take care of your employees and the community around them; to eliminate waste (waste costs money) and protect the environment; and to build a profitable enterprise.

But my only real disagreement with this excellent survey and report is the spin on the facts. “Doing Good” goes on to say...”In all, less than one in three executives (29%) say their company has a coherent strategy that covers the whole business and its supply chain.” You mean nearly a third of global businesses actually DO have a coherent strategy that includes sustainability metrics for themselves AND their supply chain? That’s fabulous!

Clearly a significant number of businesses have already gone beyond doing what they can to make their business successful socially, environmentally, and financially - - all interlinked - - and are now influencing their suppliers. That’s a revolution that can’t be stopped and a cause for celebration, not fretting over the 71% who are playing catch-up and who are therefore at a growing competitive dis-advantage.

Read the entire report yourself (at www.eiu.com) - - there’s a lot of good sustainability information in there - - and ask yourself...”Am I in the 29% or the 71%?”

04:53 pm | 0 recommendations | Be the first to comment

Dear Lee

It’s been almost two years since Exxon CEO Lee Raymond was paid about $400 million upon retiring. I’ve been wondering how he’s been spending his “golden” years and thought I’d drop him a line...

Dear Lee,

Boy did you jump ship at the right time! The legal noose is tightening around the fossil fuel industry as the evidence of damages to planet earth from global warming stack up higher than an Oklahoma gusher. California sued automakers to recover costs to the state from greenhouse gases and other air pollution (much like tobacco companies that paid billions for health care costs because of their toxic air pollution). Those cars burn the products you sold for so long, so I’m guessing your old pals are next.

And did you hear that the Supreme Court ruled that greenhouse gases are pollutants under the Clean Air Act? Imagine if courts rule that fossil-fueled pollution creates such a public nuisance that it must be stopped or mitigated. Could that put a dent in the $11.7 billion net profit (the highest quarterly profit in the history of American commerce!) that your alma mater reported for the last quarter of 2007.

Do you see where this is going? Win or lose, these cases show that fossil fuels - - and greenhouse gases - - are fast becoming as welcome as lung cancer. Tobacco execs say they knew their days were numbered when people at their country clubs wouldn’t look them in the eye - - has that happened to you yet?

Alcan executive Dan Gagnier tells how his company slashed greenhouse gas emissions from a coal-fired power plant in England by tuning up machines and mixing some biomass with the coal. They sold the resulting carbon reduction “credits’ for $30 million and invested it in more biofuels and a wind farm, which generated more credits.

Well here’s some friendly advice, Lee, that might help you and the world (you’re doing charity work in retirement, right?). Alcan proved that protecting our climate was profitable. You could do the same with a few hundred million from your nest egg and maybe convince your oil pals to do likewise. Soon we would have small wind turbines and solar panels on every rooftop, biomass and hydrogen powering our cars, and clean, high-tech jobs right here in the USA. Oh yeah, and Exxon-Mobil and other companies would avoid being dragged into court and forced to cough up billions.

You might inspire automakers, who sued California to prevent implementation of the law that limits CO2 emissions from new cars. Instead of spending dough on lawyers, they could also follow the Alcan example and make enough money to reduce harmful pollution from their products. Oil companies could invest the millions they are spending to defeat California’s Prop 87 (a ballot initiative that would tax oil drilling and invest the money in clean alternative fuels) and invest that money in CO2 reductions just like Alcan. Imagine if all of this money started working to reduce greenhouse gases - - and make a profit in the process?! What a country!

Anyway Lee, don’t be a stranger. Get involved in this climate thing. You aren’t welcome at your country club these days anyway.

Terry Tamminen • terry.tamminen@gmail.com • www.terrytamminen.com •
www.pegasusinvestors.com