Google & Khosla: If AB32 Dies, So Goes CA’s Greentech Market

AB 32 signing

Google & Khosla: If AB32 Dies, So Goes CA’s Greentech Market.

The path to rebuilding our economy is predicated by a need to rebuild the pillars of American greatness – world class education, science & technology, and infrastructure. Facilitating these will offset the artificial growth perpetuated by financial wizardry over the past decade and enhance America’s engineering and manufacturing bases. Our greatest exports are our ideas, and the 21st century growth patterns show that we need to make some drastic choices to continue thriving as we have in the past regarding our use of natural resources. If we continue to rely on carbon-heavy subsidies over nurturing the start-ups which propelled our IT revolution, we will be doing our country, our planet, and future generations the greatest disservice imaginable. Can’t get better sources for how to nurture the leap ahead technology necessary than these two.

If California’s climate change bill AB32 — which was passed back in 2006 and creates a plan to reduce the state’s carbon emissions — is repealed, California’s greentech markets will be seriously jeopardized, said venture capitalist Vinod Khosla and Google’s Green Energy Czar Bill Weihl at an event at Google HQ on Tuesday morning. The main theme for the Google event was a discussion of Proposition 23, a ballot measure that, if passed on the upcoming November ballot, would essentially kill AB32, and is backed by Texas-based oil companies Valero and Tesoro.
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Khosla stated his position clearly on the oil-backed ballot measure: “Prop 23 will kill the market and the single largest source of job creation in California in the last two years.” Innovation started happening in California, and the next ten Googles of greentech will be created there, because the market is there, he said. If California’s market is destroyed, countries like China and other states will have a competitive edge and those next ten Googles will be built in those markets, said Khosla.
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Google’s Weihl agreed and said that AB32 has helped create companies and jobs and has been one of the brightest spots in the economy in the state. While many studies and researchers back this position, other conflicting studies have also found that AB32 could reduce the number of jobs (which is the fear that Prop 23 is tapping into). Think about AB32 as a 401K, said Khosla, you put aside a little bit month by month, but over time you save a whole lot. “It’s an investment in our future.”
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Weihl also noted that, in addition to maintaining AB32 in California, the federal government needs to increase its spending on basic energy research and development, as well as scaling of energy projects. While the stimulus has created a temporary market, the greentech market needs permanent funding over a ten-year period to move forward, said Weihl. Both Khosla and Weihl said that the federal government also needs to focus on funding “home runs” and breakthroughs, instead of funding incremental technology gains.
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As Khosla put it: “Right now California is in the pole position to win the greentech race. .  . It is our race to lose.”

Does America need a Green Bank?

A Green Investment Bank – Fixing the Holes in the New Energy Economy | NewEnergyNews.

While this is a solution being advocated for the UK, it would still be so crucial domestically with national and state variants similar to State Infrastructure Banks (SIB) or a national counterpart. Whereas SIBs are focused mostly on building out or rehabilitating large assets or systems, green banks could help more at the micro level providing loans and credit assistance to individuals and families as well as local shopkeeps and business owners for investments in energy efficiency and renewable generation sources.

In It’s A Wonderful Life, George Bailey – the CEO of investment bank Bailey Savings and Loan – won the hearts and minds of the citizens of Bedford Falls by supplying them with the financial freedom to resist the tyrant Mr. Potter. Such a quaint idea. Yet that’s what advocates in the UK are calling for with an innovative idea to finance New Energy and Energy Efficiency growth in these slow economic times.
The UK New Energy advocates arrived at the conclusion of a Green Investment Bank (GIB) by adding 3 things: (1) The urgent need for action on climate change, (2) the daunting UK targets for New Energy, Energy Efficiency and emissions cuts, and (3) the challenges of an economic crisis requiring severe spending cuts. The answer they get to this addition problem is the need for innovative financing to maximize the leveraging of public spending with buy-in from the private sector.

A Green Investment Bank (GIB) is described in Unlocking investment to deliver Britain’s low carbon future, from the UK’s Green Investment Bank Commission. It is one of the more innovative ideas so far proposed and especially worth noting because policymakers in the U.S. and elsewhere are considering it.

The basic idea: A combination lending institution and New Energy ultimate arbiter – something like a cross between the Federal Reserve Bank and the Federal Housing Authority – could channel that portion of the government budget dedicated to New Energy (NE) and Energy Efficiency (EE). It would accomplish 2 simple ends: (1) Streamline spending more efficiently, and (2) create the long-term certainty of supportive investment that would attract private sector buy-in.

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The need for a GIB has emerged with the slowing of returns from the European Union (EU) Emissions Trading Scheme (ETS). A predictable outcome of the recession and the concomitant retarded energy demand, the slowing is not a failure of the ETS marketplace but it is a barrier to the growth of NE and EE.

But the need to fund the growth of NE and EE is urgent. The fight against climate change cannot be hampered by natural gaps in the economy like market fluctuations. The GIB would be an alternative source of capital. With it, private sector investment could be sure of a steadier marketplace for its products and a steadier source of financing.

A GIB is needed, first of all, because of the scale of the investment. To meet the UK’s NE, EE and emissions-cutting targets for the fight against climate change will require more spending than anything since the reconstruction following World War II.

This is where one of the real failures of the marketplace becomes obvious. Trying to build a new NE/EE infrastructure without stable, long-term access to capital is like trying to rebuild the housing sector without having 20-to-30-year mortgages. A GIB is the answer because it expands available capital, reduces regulatory uncertainty, expands marketplace transparency, drives innovation and literally makes NE/EE investment more attractive to private money.

The benefits reach far beyond investment banking. A well-financed NE/EE sector would mean enhanced emissions-free energy capacity and security, paring away at dependence on price-volatile fossil fuels, and realizing an enormous wellspring of jobs and revenues.

A GIB would also be a vehicle for UK folks to buy “green bonds,” save in “green savings accounts,” and thereby share in the profits reaped by the transition to a New Energy economy.

Just what George Bailey wanted for Bedford Falls.

William McDonough On Cradle-To-Cradle Design – Forbes.com

McDonough Partners

William McDonough On Cradle-To-Cradle Design – Forbes.com.

Former UVA Dean of Architechture William McDonough on building sustainable closed feedback loops in design.  ”Doing less bad is not doing more good.”

William (Bill) McDonough is perhaps best known for redesigning Ford Motor’s River Rouge plant with a vast green grass roof. But McDonough has morphed from pure architect to designer of everything. With the publication in 2002 of his book Cradle To Cradle: Remaking The Way We Make Things, McDonough unleashed a design revolution that began examining not just what things look like, but also the chemical makeup of things: water bottles, carpet, countertops. In the view of McDonough and his design partner Michael Braungart, a chemist, waste can be eliminated by making products that can be either recycled or re-used. McDonough spoke with Forbes Technology Editor Kerry Dolan about sustainability and the future.

Forbes: What’s your next project?

McDonough: The next project from the architecture side is NASA’s new Sustainability Base at the Ames Research Center at Moffett Field [near Mountain View, Calif., in the Bay Area].

We said, “Where is the energy going to come from?” instead of just saying “We’ll plug it in and try to be less bad by reducing our energy consumption.” That would be benchmarking. You can’t really benchmark innovation because you don’t leave the box. I mean, Google–one of our clients–didn’t benchmark the Encyclopedia Britannica.

So NASA had the question. “Where’s the energy come from?” Well, it comes from the sun. [i.e., solar power] “OK, now we need coolness. Where did that come from?” you think, “Well, below my feet is the coolness of the earth, 55 degrees. We’ll go there for coolness.”

The building is 7% under budget. The building will breathe. Basically the windows open and close, depending on when and where you need temperature and oxygen, stuff like that. It’ll probably be the most monitored building in the United States. The parking lots will have solar collectors over them, like they have at Google. We expect that the building will be a net energy exporter.

What are you going to do when the sun’s down to power this building?

There are a lot of strategies that’ll be starting to show up. Clearly batteries are one. And that’s something used in space. We will be exporting [excess solar power] to the grid and then borrowing it back from the grid [when needed].

Who or what have been your biggest influences?

I grew up in Japan and Hong Kong and then came to the States.

Japan was a huge influence on me because, as a child, I would hear the oxcarts come and collect our sewage at night out of our house from the latrine and then take it off to the farms as fertilizer. And then the food would come back in oxcarts during the day. I always had this sort of “our poop became food” mental model. The idea of “waste equals food” was pretty inculcated, that everything was precious and the systems were coherent and cyclical.

When we moved to Hong Kong everybody was in desperate shape, typically because they were refugees from Communist China and very poor and destitute. We had people dying of cholera and typhoid and typhus, starvation. Beggars used dead babies to get your sympathy. It was really quite another world. And it was sort of like living in the future. It was a crowded, desperate place with limited resources. You had four hours of water every fourth day.

When we moved to Connecticut, I was a teenager and went to high school. I went to a public high school in Westport. The first day in gym all the boys left the showers running with hot water, just left them on and went back to class. I was just in shock. I couldn’t believe it. And I’m still in shock. What are we doing here? Where are the values? So those things have been a big influence.

In design, people like Buckminster Fuller amazed me at the levels at which he could think.

He could think molecularly. And he could think at the almost galactic scale. And the idea that somebody could actually talk about molecules and talk about buildings and structures and talk about space just amazed me. As I get older–I’ll be 60 next year–what I’ve discovered is that I find myself in those three realms too.

Then the last thing, which is what I’m working on in a lot of cases, is synergetic: the idea that the Earth is a whole system. Fuller really had that range of interest that I think was inspirational that we could think at those scales altogether. I think at the molecular scale with our chemistry work and with Michael Braungart, who is my most influential influencer. He’s inspired me in so many ways.

On the buildings, I’m inspired by modernism. I see that idea that we need a new form as something critical. I mean, we do need to invent and not be benchmarking all the time. That’s important to me.

Are there things that you’re sick of?

I’m sick of people thinking that efficiency is going to be sufficient. I’m sick of seeing people say, “I’m going to reduce my carbon footprint,” and think that being less bad is being good. I’m sick of a lot of people saying, “I have recycled content. And that makes me good.” But they’re recycling PVC, and they’re providing carcinogens and plasticizers into children’s’ environments, claiming to be eco-warriors when they’re recycling cancer. I want healthy, safe things in closed cycles, not just being less bad.

What we do with our work, like our first textile, we did in 1993 with Michael and I. I was designing what it looked like, but we also wanted to design what it was. We looked at 8,000 chemicals in the textile industry and said, “No more cancer, birth defects, mutagenic effects, heavy metals.” And basically we reduced it down to 38 chemicals that were all safe and healthy. The fabric cost 20% less to make. It was clean enough to eat. It’s been selected by the Airbus 380. So if you find yourself at 40,000 feet with a fiber deficiency, you can eat your chair.

How has new technology changed what you do?

Certainly the Internet and the Web have been immensely helpful because we can catalog data with other practitioners on a global basis. That’s pretty exciting. The other thing for me, as a designer and architect, and for Michael Braungart, as a chemist, is that we can start to integrate whole systems and their cross benefits. So we can talk about the benefit to water is part of the benefit to energy, is part of the benefit to society, is part of the benefit to reverse logistics, is part of the benefit to soil and recarbonizing.

Technology helps because of its ability to manage data, to visualize data?

Yes, manage data and render visible interactions. People can get out of their silos, start to see whole systems and think whole systems.

In the era of quick knockoffs, is there still some value in original design?

I think the job of an original designer is to inspire. In that case the knockoffs are just something we hope for. Now the case of green architecture. We did the first green office in New York in 1984. We were very lonely, because we were the first architects in New York to starting asking, “What’s in a product and what’s it volatilizing in the commercial sector?”

Now the green building agenda is huge. It’s wonderful. And they’ve created this LEED standard, [for rating how energy efficient and green a building is] which is benchmarking, which is a good thing to do because most people need checklists. You need standards as reference points. And my job is not to accept that. My job it to push past all that.

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