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Global effort: Businesses change ways in America, worldwide

By Bradley J. Fikes,

Saturday, October 11, 2008 11:03 PM CDT

The Southern News Services

The environmental movement, once viewed as radical and anti-business, is now squarely in the business mainstream.

Reducing use of pesticides, protecting endangered species, developing renewable energy sources and preserving forests and oceans are established in public awareness.

Catering to this demand is the "cleantech" industry, a name for fields that focus on environmental protection, energy efficiency and new energy sources.

So sweeping is the trend that it may be a misnomer to call it a separate industry. Cleantech is being baked into the foods we eat, the clothes we wear, the buildings we work in and the homes we live in.

The signs of cleantech are everywhere:

l Wal-Mart advertises energy-saving compact fluorescent lights.

l Utilities grant rate reductions for those who conserve electricity.

l Hummers and SUVs gather dust in car lots across America, while the Toyota Prius hybrid and other high-fuel-mileage vehicles are snapped up.

This push for cleantech has investors and businesses opening their wallets, pouring in billions of dollars, creating companies and entire industries worth tens of billions of dollars.

Global warming takes center stage

Interest in environmental technologies has risen in recent years because of a growing emphasis on fighting global warming, which has become a top item for action.

Most climate scientists believe carbon dioxide is at least partially responsible for increasing global temperatures over the last several decades. That increase has been linked to undesirable changes in climate, such as drought in the American West and more powerful hurricanes.

Consumers now also believe that global warming is a danger, stated a 2007 report, "Climate Changes Everything: The Dawn of the Green Economy," from the New York consulting firm Deloitte LLP. Moreover, the report said, consumers are acting on that belief, looking at the environmental consequences of their purchases.

"At the supermarket they are beginning to scan "carbon labels" that have begun to appear on products such as Pepsi and Walker's potato chips, which detail the amount of carbon dioxide generated in making the product � from growing the raw ingredients to disposal of the packaging," the report stated.

Proctor & Gamble, the Cincinnati-based household products maker, has gotten into the environmental mode, the report stated. Last October, the company said it intended to sell $20 billion in products with reduced environmental impact over the next five years.

Giant new market

Governments across the world have pursued a number of ways to tackle global warming, including reducing energy use, increasing vehicle mileage and generating power from renewable resources, such as solar, wind, geothermal and biomass.

Reducing carbon emissions is the centerpiece of these efforts, an industry that in a few short years has reached an annual sales rate of nearly $120 billion a year. Governments have taken to issuing carbon emission permits, which can be bought and sold on the market. In just a few years, this has created a huge new industry.

The global market for trading carbon emission permits reached $59 billion in the first half of 2008, according to Point Carbon, a Oslo, Norway company that provides news and consulting in the carbon emissions industry.

The permits include a monetary carrot along with the regulatory stick. If a company can reduce its emissions for less than the permit costs, it can sell the emission "savings" to another company.

Follow the sun

With new opportunities and new technologies abounding, venture capital firms have been raising and investing hundreds of millions of dollars in promising companies, especially in solar energy.

Venture capital cleantech investments reached $961.7 million in the second quarter of 2008, up 41 percent from the year-ago quarter, according to New York-based Dow Jones VentureOne. This is a record quarterly total for cleantech investment, when overall venture capital investment was down nearly 8 percent from a year earlier.

Most of the money, 52 percent, or $494.9 million, went to solar-energy companies.

California, a leader in the push for phasing out fossil fuels, has mandated that utilities get 20 percent of their energy from renewable resources by 2010. And Gov. Arnold Schwarzenegger has upped the stakes further, setting a goal of 33 percent renewable energy by 2020.

Utilities throughout California have aggressively adopted solar energy. In July San Diego Gas & Electric Co, announced that it would spend $250 million over five years to install solar panels in locations such as shopping malls.

The energy from the panels will be most abundant during the hottest part of the day, which is also when air conditioning is most needed. Some of the panels will cover parking spaces, providing cooling shade for customers.

In May, Southern California Edison announced a similar project that's even larger: it plans to spend $875 million installing solar panels on the roofs of commercial buildings. It is the world's largest solar power project of its kind, producing a maximum of 250 megawatts, or enough to power 162,000 homes.

These solar power projects generate electricity through photovoltaic technology, in which semiconductor materials absorb light and emit electricity. Their efficiency has been steadily growing over the years, along with new twists such as movable solar panels that track the sun's course to catch the most sunlight.

Biofuels advance

While solar energy is big right now, advances in biofuels may eventually provide an even bigger energy source.

Algenol Biofuels of Loxahatchee, Fla., is developing technology to make ethanol from primitive ocean microbes called cyanobacteria, also known as blue-green algae. These cyanobacteria get their energy from the sun by photosynthesis, the same process used in plants.

Cyanobacteria have major advantages over plants such as corn as an energy crop. They grow quickly and live in seawater, of which there is a virtually limitless supply.

In June, Algenol said it had received $100 million from a business partner, BioFields, that plans to start growing cyanobacteria in Mexico next year. BioFields said it is investing $850 million in the project.

Making ethanol from cyanobacteria, if it can be done economically, would represent a vast new energy source. In addition to making ethanol, the process produces fresh water, oxygen and agricultural fertilizer, and removes carbon dioxide from the air.

Moreover, making ethanol from cyanobacteria would not use a food crop, as is the case now with ethanol made from corn. The spike in corn prices this year has been blamed in part on the growing demand for corn for ethanol.

Around the same time Algenol made its announcement, RockPort Capital, a venture capital firm based in Boston, said it had raised $450 million for a cleantech fund.

Turning a green leaf

Cleantech jobs are being created throughout the economy, far afield from environmentally focused companies such as Algenol. San Diego's Qualcomm Inc., the wireless technology giant, provides a good example.

Qualcomm owns and occupies what it believes to be the largest certified "green" building in the world, in San Diego, said Alan Ball, Qualcomm's senior director of business services. The building conforms to the Leadership in Energy and Environmental Design (LEED) standard, Ball said at a recent "Green to Gold" conference on how to make money from cleantech.

"Sustainability wasn't a word that we knew about when we started our programs about 15 years ago in energy efficiency," Ball said at the conference, held in San Diego. "We were looking more for the cost savings with reducing energy consumption."

Today, Qualcomm has incorporated environmental sustainability as a goal important in its own right, Ball said. About five months ago, the company established the position of manager of sustainability.

The change has been taking place from the grass roots as well, Ball said. Employees formed a network called QC Green that encourages environmentally friendly practices, such as reusing plastic water bottles.

Computer chip maker Intel Corp. also has taken the energy-saving route, said Gregg Descheemaeker, senior manager of enterprise solutions. The company is continually looking for ways to reduce the power consumption of its chips, and to help customers better use power-saving features that are available but underused.

Intel's goal is to increase energy efficiency in the information technology sector by half, Descheemaeker said. If that goal is achieved, it would save enough electricity to reduce carbon dioxide emissions by 54 million tons per year.

"That would equate to removing 11 million autos from the highways each year," Descheemaeker said. "That would be the equivalent of removing 20 coal plants. that would be equivalent to planting 25,000 square miles of trees."

Bradley J. Fikes is a reporter at the North County Times in San Diego County, Calif. Contact: 760-739-6641 or bfikes@nctimes.com.