Green energy to get big lift from stimulus

March 17, 2009

4 commentsby Ryan Randazzo – Mar. 15, 2009 12:00 AM
The Arizona Republic
Arizona companies that develop alternative energy – and state agencies that promote those technologies – are scrambling to take advantage of at least $50 billion set aside in the federal stimulus package.

The more than $57 million coming directly to the state for weatherization is expected to create hundreds of construction jobs needed to make low-income households more energy efficient.

Billions of dollars more directed nationwide at alternative energy are expected to help build solar and wind-power plants that could help companies in Arizona, which have seen a slowdown in activity amid the recession.
But many of the organizations are waiting to see exactly how fast the money will translate into jobs.

“It is to be seen how this money will be delivered to the economy,” said Gregory Lawrence, a partner with the energy group McDermott Will & Emery LLP in Boston.

Stimulus funds are widely viewed as just the beginning of pledges made by the new president’s administration to prop up the renewable-energy industry.

Alternative energy also should see a significant boost if the administration moves ahead with proposals to limit the amount of emissions that come from coal-fired power plants and create a national requirement that utilities provide a set amount of renewable energy.

“You can look at greenhouse-gas regulations as a drag on the economy, and you also can look at it as appropriate costing of a harmful gas and creating a more even playing field between renewable-energy generation and carbon generation,” Lawrence said.

Here are some of the key areas of the stimulus that could affect Arizona’s energy industry:

Households

On Thursday, the U.S. Department of Energy announced that Arizona would receive $57 million to help weatherize low-income homes and another $55.4 million for the state energy program, which weatherizes homes and is involved in several other energy-efficiency and renewable-energy programs.

All told, the state is getting about a tenfold increase in the amount of money that community organizations can dole to people struggling to pay utility bills and better insulate their homes, said Cynthia Zwick, executive director of the Arizona Community Action Association.

The associations throughout the state that use the money are looking to train more air-conditioning technicians, plumbers and electricians who are contracted to make low-income homes more energy efficient, she said.

“We are re-employing people who have been laid off in this economy,” she said.

Last year, the organization weatherized 850 Arizona homes, with a maximum spending of $2,500 per home, she said. The stimulus not only increased the overall funding, but raised the amount that can be spent per home to $6,500.

“That is wonderful because now you can completely weatherize a home,” she said.

Solar energy

Three things in the stimulus package are expected to help develop large solar-power plants.

The first is funding for a smart electricity grid and support for new transmission lines for renewable-energy projects.

“That does affect our business and help our business,” said Brian Rasmussen, the Arizona director of project development for Oakland-based BrightSource Energy Inc.

“There are some private transmission projects in Arizona that we understand will be looking to apply for stimulus funds.”

Solar-power developers have been scouting sites in Arizona near existing transmission lines, but even the existing network will need to expand to accommodate more generators, he said.

Alternative-energy power plants also should get a boost from a nuance in one of the existing federal incentives. Instead of getting a 30 percent tax credit that can be taken over five years, such projects can now get 30 percent grants paid up front, which should significantly help financing.

“That is a big incentive,” he said.

Loan guarantees also provided in the stimulus could ease the credit crunch large projects are facing, he said, although nothing does as much to spur the industry as renewable-energy requirements placed on utilities.

Wind power

Wind-power proponents spent most of 2008 pushing for an extension of a production tax credit and finally won a year extension, and the stimulus gives those credits a three-year extension that should provide the industry some continuity, officials said.

That 30 percent tax credit also can be taken as an up-front grant, which should help finance new wind farms, said Steven Lockard, president and CEO of TPI Composites Inc. in Scottsdale, which makes blades for wind turbines at factories outside of Arizona.

But even with loan guarantees and the new provision for the 30 percent investment grants, large wind farms are finding it hard to get loans in the current credit market, he said.

“We are very pleased to see the three-year extension, and those that voted for it, we thank them,” he said. “But we’re still concerned about the cost of debt and the lack of free-flowing debt. We need to see that change . . . for the markets to really recover.”

Alternative vehicles

Natural-gas fueled, hybrid electric, pure electric and other alternative transportation also should see a boost from the stimulus.

The act directs $300 million to Clean Cities coalitions, which help spur fueling stations and other measures for alternative vehicles. Another $400million is targeted directly at electric-vehicle infrastructure.

The Tucson area is working on building electric infrastructure in a partnership with Nissan that was announced this month.

“We’re not quite sure yet who will be the applicant (for those grants), but our thought is to tap into this money,” said Colleen Crowninshield, who manages the Clean Cities program for the Pima Association of Governments.

The coalition is looking across the state for vehicle fleets, including school-bus fleets, that want to add natural-gas vehicles or biodiesel-burning buses, and hopes to help them apply for the grants from the stimulus to institute them.

Consumers

People who want to put solar panels or wind turbines on their homes are expected to be able to apply for the 30 percent tax credit to be taken up front as a grant, just like large power plants, although details are not yet available on how to apply.

Previously, solar hot-water heaters, a far more economical way to tap sun power, had a tax-credit cap of $2,000. That cap has been removed and now those systems qualify for a full 30 percent incentive just like solar panels that make electricity.

People hoping to buy electric vehicles will qualify for a $7,500 tax credit.

Reach the reporter at ryan .randazzo@arizonarepublic.com.

Special Report Compiled by B.E.S.T. : Weatherization Tips For Your Home

March 16, 2009

Recommended by US DOE (1)

– Test your home for air tightness. A professional blower door test is the best option, however you can find major leaks yourself. On a windy day, hold a lit incense stick next to your windows, doors, electrical boxes, plumbing fixtures, electrical outlets, ceiling fixtures, attic hatches, and other locations where there is a possible air path to the outside. If the smoke stream travels horizontally, you have located an air leak that may need caulking, sealing, or weather-stripping.

– Caulk and weather-strip doors and windows that leak air.

– Caulk and seal air leaks where plumbing, ducts, or electrical wiring penetrates through exterior walls, floors, ceilings, and over cabinets.

– Install rubber gaskets behind outlet and switch plates on exterior walls.

– Look for dirty spots in your attic insulation, which often indicate holes where air leaks into and out of your house. You can seal the holes by foaming the gap, or by stapling sheets of plastic over the holes and caulking the edges of the plastic.

– Install storm windows over single-pane windows or replace them with double-pane windows. Storm windows may as much as double the R-value of single-pane windows and they can help reduce drafts, water condensation, and frost formation. As a less costly and less permanent alternative, you can use a heavy-duty, clear plastic sheet on a frame or tape clear plastic film to the inside of your window frames during the cold winter months. Remember that the plastic must be sealed tightly to the frame to help reduce infiltration.

– When the fireplace is not in use, keep the flue damper tightly closed. A chimney is designed specifically for smoke to escape, so until you close it, warm air escapes 24 hours a day!

– If you have to use a space heater, make sure you use it properly. Make sure it’s been tested

safely and has been approved by a certified testing organization. Don’t place it within 3 feet

of anything flammable. Keep kids away. Always turn it off when you go to bed or leave.

– For new construction, reduce exterior wall leaks by either installing house wrap, taping the joints of exterior sheathing, or comprehensively caulking and sealing the exterior walls.

General Energy Saving Tips

USE APPLIANCES EFFICIENTLY
– Buy the right size – the appliance that offers the performance you need without using extra energy.

– Compare efficiency ratings — the Energy Guide labels — on appliances before purchasing. Check with the ACEEE for their latest appliance comparison ratings. [ACEEE: http://www.aceee.org%5D

– Turn off the lights and televisions when not in use. Consider using a power strip ($10 – $15) for TVs and stereo gear that are not really fully “off,” when switched off, hence drawing phantom power loads you pay for every hour. These low cost devices are often equipped with beneficial surge protectors as well.

– Cut down on washer and dryer use – Wash full loads only, Use cold-water detergent, and use an outdoor clothesline in suitable weather (solar clothes drying…).

– Use lighting efficiently – Switch to fluorescent and compact-fluorescent lighting; they cost more than standard bulbs but can save energy and money in the long run.

HEAT & USE WATER WISELY

– Insulate the hot water pipes (first 8- to 10 feet is most important) and hot water storage tank unless it is an efficient unit with 3 inches or more insulation from the manufacturer..

– Use cold or luke-warm water whenever you can.

– Repair leaking faucets and running toilets.

– Use low-flow restrictors on showerhead’s and faucets.

– Lower the thermostat on your water heater to 125 degrees (check your owners manual if you have a dishwasher). You should also check the temperatures at hot water taps in the house, when running hot water to avoid too cold temperatures which waste water while “warming up” the tap.

MAINTAIN YOUR HEATING AND COOLING SYSTEM

– Have your system check once a year by a professional service person.

– Change your furnace filter once every month or two during heating season. Follow manufacturers recommendations on electronic filter maintenance.

– Keep your air conditioner filter and coils clean during the cooling season. Avoid toxic or caustic air coil cleaning solutions intended for commercial buildings.

– Clean radiators, ductwork, and vents.

– Keep furniture and other things away from forced air heating and AC registers and return grilles.

– Set heating thermostat to 65 degrees during the day, or even lower at night while you’re sleeping. Exception- most heat pumps should not be severely set back for heating since when set up again to comfortable temperatures later, the direct electric strip heating elements can come on wasting power and actually increasing your bill. Caution: elderly persons should re-consider deep setbacks of thermostats for health reasons.

– Set air conditioner thermostat to 78 degrees. Use local circulating fans or ceiling fans to boost comfort.

Disclaimer — (1.) B.E.S.T. has provided this governmental generated free information as a general service to consumers, and disclaims any liability for the fitness or use of this information by any individual or company. The user of the information shall indemnify B.E.S.T. from all perils stemming from its use or misuse.

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Additional Detailed Information from US DOE

Home Energy Audits
A home energy audit is the first step to assess how much energy your home consumes, and to evaluate what measures you can take to make your home more energy-efficient. An audit will show you problems that may, when corrected, save you significant amounts of money over time. During the audit, you can pinpoint where your house is losing energy. Audits also determine the efficiency of your home’s heating and cooling systems. An audit may also show you ways to conserve hot water. You can perform a simple energy audit yourself, or have a professional energy auditor carry out a more thorough audit.

A professional auditor uses a variety of techniques and equipment to determine the energy efficiency of a structure. Thorough audits often use equipment such as blower doors, which measure the extent of leaks in the building envelope, as well as infrared cameras, which reveal hard-to-detect areas of air infiltration and missing insulation. The following is a discussion of do-it-yourself as well as professional audits.

Do-It-Yourself Audits
You can easily conduct a home energy audit yourself. With a simple, but diligent, “walk-through,” you can spot many problems in any type of house. When auditing your home, keep a checklist of areas you have inspected and problems found. This will help you prioritize your energy efficiency upgrades.

1) Locating Air Leaks
Inspect windows and doors for air leaks. See if you can rattle them, since movement means possible air leaks. If you can see daylight around door and window frames, then the door or window leaks. You can usually seal these leaks by caulking or weatherstripping them. Check the storm windows to see if they fit and are not broken. You may also wish to consiFirst, make a list of obvious air leaks (drafts). The potential energy savings draft reduction may range from 5% to 30% per year, and the home is generally much more comfortable afterwards. Check for indoor air leaks such as gaps along the baseboard or edge of the flooring, and at junctures of the walls and ceiling. Check to see if air can flow through electrical outlets, switchplates, window frames, baseboards, weather-stripping around doors, fireplace dampers, attic hatches, and wall- or window-mounted air conditioners. Look for gaps around pipes and wires, electrical outlets, foundation seals, and mail slots. Check to see if the caulking and weatherstripping are applied properly (no gaps or cracks), and are in good condition.

der replacing your old windows and doors with newer, high-performance ones. If new factory-made doors or windows are too costly, you can install low-cost plastic sheets over the windows.

If you are having difficulty locating leaks, you may want to conduct a basic building pressurization test. First, close all exterior doors, windows, and fireplace flues. Turn off all combustion appliances such as gas burning furnaces and water heaters. (Remember to turn them back on when you are done with the test.) Then turn on all exhaust fans (generally located in the kitchen and bathrooms) or use a large window fan to suck the air out of the rooms. This increases infiltration through cracks and leaks, making them easier to detect. You can use incense sticks or your damp hand to locate these leaks. Moving air causes the smoke to waver, and you will feel a draft when it cools your hand.

On the outside of your house, inspect all areas where two different building materials meet. For example: inspect all exterior corners; where siding and chimneys meet; and areas where the foundation and the bottom of exterior brick or siding meet. You should plug and caulk holes or penetrations for faucets, pipes, electric outlets, and wiring. Look for cracks and holes in the mortar, foundation, and siding, and seal them with the appropriate material. Check the exterior caulking around doors and windows, and see whether exterior storm doors and primary doors seal tightly.

CAUTION: When sealing any home, you must always be aware of the danger of indoor air pollution and combustion appliance “backdrafts.” Backdrafting is when the various combustion appliances and exhaust fans in the home compete for air. An exhaust fan may pull the combustion gases back into the living space. This can obviously create a very dangerous and unhealthy situation in the home.

In homes where a fuel is burned (i.e., natural gas, fuel oil, propane, or wood) for heating, be certain the appliance has an adequate air supply. Generally one square inch of vent opening is required for each 1,000 Btu of appliance input heat. When in doubt, contact your local utility company, energy professional, or ventilation contractor.

2) Insulation
Heat loss through the ceiling and walls in your home could be very large if the insulation levels are less than the recommended minimum. You should check to see if the level of the attic and wall insulation of your home is at least at the minimum recommended amount. When your house was built, the insulation recommended at that time was installed. Given today’s energy prices, and that future prices probably will be higher, the level might be inadequate, especially if you have an older home. In 1997, the U.S. Department of Energy updated its recommended insulation R-Values (see Insulation Fact Sheet, below).

If the attic hatch is located above a conditioned space, check to see if it is at least as heavily insulated as the attic, is weather-stripped, and closes tightly. In the attic, determine whether openings for items such as pipes, ductwork, and chimneys are sealed. Any gaps should be sealed with an expanding foam caulk or some other permanent sealant. If you have recessed light fixtures, determine if they are IC rated fixtures. It is strongly recommended that only air tight-IC rated fixtures be used. Other types allow large amounts of your heating dollar to escape into the attic. If you do not wish to purchase new IC rated fixtures, be certain to allow a three-inch space around any recessed lights. This will prevent the recessed light from overheating.

While you are inspecting the attic, check to see if there is a vapor barrier (retarder) under the attic insulation. The vapor barrier might be tar paper, kraft paper attached to fiberglass batts, or a plastic sheet. If there does not appear to be a vapor barrier, you might consider painting the interior ceilings with vapor barrier paint. This reduces the amount of water vapor that can pass through the ceiling. Large amounts of moisture can reduce the effectiveness of insulation and promote structural damage. Make sure that the attic vents are not blocked by insulation. You also should seal any electrical boxes in the ceiling with flexible caulk (from the living room side or attic side) and cover the entire attic floor with at least the recommended amount of insulation.

Checking a wall’s insulation level is more difficult. Select an exterior wall and turn off the circuit breaker or unscrew the fuse for any outlets in the wall. Be sure to test the outlets to make certain that they are not “hot.” Check it with a lamp or portable radio. Remove the cover plate from one of the outlets and gently probe into the wall with a thin, long stick or screwdriver. If you encounter a slight resistance, you have some insulation there. You could also make a small hole in a closet, behind a couch, or in some other unobtrusive place to see what, if anything, the wall cavity is filled with. Ideally, the wall cavity should be totally filled with some form of insulation material. Unfortunately, this method cannot tell you if the entire wall is insulated, or if the insulation has settled. Only a thermographic inspection (discussed below) can do this.

If your basement is unheated, determine whether there is insulation under the living area flooring. In most areas of the country, R-25 is the recommended minimum level of insulation. The insulation at the top of the foundation wall and first floor perimeter should have an R-Value of 19 or greater. If the basement is heated, the foundation walls should be insulated to at least R-19. Your water heater, hot water pipes, and furnace ducts should all be insulated.

3) Heating/Cooling Equipment
Inspect heating and cooling equipment annually, or as recommended by the manufacturer. If you have a forced air furnace, check your filters and replace them as needed. Generally they should be changed about once every month or two, especially during periods of high usage. Have a professional check and clean your equipment once a year. If the unit is more than 15 years old, you should consider replacing it with one of the newer, energy-efficient units. This would go far to reduce your energy consumption, especially if the existing equipment is in poor condition. Check your ductwork for dirt streaks, especially near seams. These indicate air leaks, and they should be sealed with a duct mastic. Insulate any ducts or pipes that travel through unheated spaces. An insulation R-Value of 6 is the recommended minimum.

4) Lighting
Energy for lighting accounts for about 10% of your electric bill. Examine the wattage size of the light bulbs in your house. You may have 100 watt (or larger) bulbs where 60 or 75 watts would do. You should also consider compact fluorescent lamps for areas where lights are on for hours at a time. Your electric utility may offer rebates or other incentives for purchasing energy-efficient lamps.

Professional Energy Audits
All professional energy audits should, at a minimum, include a “walk-through” similar to the one above and a blower door test (discussed below). Most will also include a thermographic scan (also discussed below). Professional audits generally go into great detail. The auditor should do a room-by-room examination of the residence, as well as a thorough examination of past utility bills.

Before the auditor visits your house, make a list of any existing problems such as condensation and uncomfortable or drafty rooms. Have copies or a summary of the home’s yearly energy bills. (Your utility can get these for you.) The auditors use this information to establish what to look for during the audit. The auditor first examines the outside of the home to determine the size of the house and its features (i.e., wall area, number and size of windows). The auditor then analyses the occupants’ behavior: Is anyone home during working hours? What is the average thermostat setting for summer and winter? How many people live here? Is every room in use? Your answers may help uncover some simple ways to reduce your household’s energy consumption. Walk through your home with the auditors as they work, and ask questions. They may also use equipment to detect sources of energy loss, such as blower doors, infrared cameras, furnace efficiency meters, and surface thermometers.

Blower Door Tests
A blower door is a powerful fan that mounts into the frame of an exterior door. The fan pulls air out of the house, lowering the air pressure inside. The higher outside air pressure then flows in through all unsealed cracks and openings. The auditors may use a smoke pencil to detect air leaks. These tests determine the air infiltration rate of a building. Several reasons for establishing the proper building tightness are: to reduce energy consumption due to air leakage; to avoid moisture condensation problems; to avoid uncomfortable drafts caused by cold air leaking in from the outdoors; and to make sure that the home’s air quality is not too contaminated by indoor air pollution.

There are two types of blower doors: “calibrated” and “uncalibrated”. It is important that auditors use a calibrated door. This type of blower door has several gauges that measure the amount of air pulled out of the house by the fan. Uncalibrated blower doors can only locate leaks in homes. They provide no method for determining the overall tightness of a building. The calibrated blower door’s data allows the auditor to quantify the amount of air leakage and the effectiveness of any air-sealing job.

Thermographic Inspection
Energy auditors may also use thermography—infrared scanning—to detect thermal defects and air leakage in building envelopes. Thermography measures surface temperatures by using infrared video and still cameras. These tools see light that is in the heat spectrum. Images on the video or film record the temperature variations of the building’s skin, ranging from white for warm regions to black for cooler areas. The resulting images help the auditor determine whether insulation is needed. They also serve as a quality control tool, to ensure that insulation has been installed correctly.

A thermographic inspection is either an interior or exterior survey. The auditor decides which method would give the best results under certain weather conditions. Interior scans are more common, because warm air escaping from a building does not always move through the walls in a straight line. Heat loss detected in one area of the outside wall might originate at some other location on the inside of the wall. Also, it is harder to detect temperature differences on the outside surface of the building during windy weather. Because of this, interior surveys are generally more accurate, as they benefit from reduced air movement. Thermographic scans are also commonly used with the blower door is running. The blower door helps exaggerate air leaking through defects in the building shell. Such air leaks appear as black streaks in the infrared camera’s view finder.

Most energy audits take from four to eight hours and cost between $300 and $500. Any retrofit work would of course cost additional money.

Finding and Selecting an Energy Auditor
There are several places where you can locate professional energy auditing services. Your state or local government energy or weatherization office may help you identify a local company or organization that performs audits. They may also have information on how to do your own audit. Your electric or gas utility may conduct residential energy audits, or recommend local auditors. Also check your telephone directory under headings beginning with the word “Energy” for companies that perform residential energy audits.

Before contracting with an energy auditing company, you should take the following steps:

* Get references, and contact them. Ask consumers if they were satisfied with the work.
* Call the Better Business Bureau and ask about any complaints against the company.
* Make sure the auditor uses a calibrated blower door.
* (Optional) Ask if they do thermographic inspections, or contract another company to conduct one. [ed. note: Combined blower door testing and thermography may be available at a discount compared to separate services from different providers.]

For More Information
The following publications and videotape are good sources of information on how to reduce the amount of energy you use at home, and how to keep energy costs down. Some of them provide tips on home energy auditing, how to prioritize your energy efficiency investments, and how to do them, if you are so inclined. The publications may be found in your local bookstore, library, or obtained from the publisher as indicated. You should verify availability, prices, and shipping charges before ordering. This list was updated in August 2000.

Consumer Guide to Home Energy Savings, A. Wilson, J. Thorne, and J. Morrill, American Council for an Energy-Efficient Economy (ACEEE), 1999. Available from ACEEE, 1001 Connecticut Avenue, NW, Suite 801, Washington, DC 20036; Phone: (202) 429-8873; Fax: (202) 429-2248; Email: info@aceee.org ; World Wide Web: http://www.aceee.org . 231 pp., $8.95.

Energy-Savers: Tips on Saving Energy and Money at Home, U.S. Department of Energy, 1998. Available in print from the Energy Efficiency and Renewable Energy Clearinghouse (EREC), P.O. Box 3048, Merrifield, VA 22116; Phone: (800) 363-3732; Fax: (703) 893-0400; Email: doe.erec@nciinc.com ; 33 pp., free; or on the World Wide Web at: http://www.eren.doe.gov/consumerinfo/energy_savers/ .

Home-Made Money: How to Save Energy and Dollars in Your Home, R. Heede, et al., Rocky Mountain Institute (RMI), 1995. Available from RMI, 1739 Snowmass Creek Road, Snowmass, CO 81654-9199; Phone: (970) 927-3851; Fax: (970) 927-4178 or (970) 927-3420 (for publications); Email: orders@rmi.org ; World Wide Web: http://www.rmi.org. 276 pp., $14.95.

Insulation Fact Sheet, U.S. Department of Energy, 1998. Available in print from the Energy Efficiency and Renewable Energy Clearinghouse (EREC), P.O. Box 3048, Merrifield, VA 22116; Phone: (800) 363-3732; Fax: (703) 893-0400; Email: doe.erec@nciinc.com; 19 pp., free; or on the World Wide Web at: http://www.ornl.gov/roofs+walls/insulation/ins_01.html

Residential Energy: Cost Savings and Comfort for Existing Buildings, 2nd Ed., J. Krigger, Saturn Resource Management, 1996. Available from Iris Communications, PO Box 20, Lorane OR 97451; Phone: (800) 346-0104; Fax: (541) 767-0357; World Wide Web: http://www.shop.oikos.com/catalog. 280 pp., $35.00. ISBN 1880120089.

“What to Know About a Home Energy Audit,” Consumers’ Research Magazine, (73:19) pp. 17-21, January 1990.

10 Quick Ways to Cut Your Energy Bills, Iris Communications, Inc., 1994. Available from Iris Communications, PO Box 20, Lorane OR 97451; Phone: (800) 346-0104; Fax: (541) 767-0357; World Wide Web: http://www.shop.oikos.com/catalog . 20-minute video tape, $20.00.

National Geographic Feature: It Starts at Home

March 10, 2009

By Peter Miller
Photography by Tyrone Turner

Not long ago, my wife, PJ, and I tried a new diet—not to lose a little weight but to answer a nagging question about climate change. Scientists have reported recently that the world is heating up even faster than predicted only a few years ago, and that the consequences could be severe if we don’t keep reducing emissions of carbon dioxide and other greenhouse gases that are trapping heat in our atmosphere. But what can we do about it as individuals? And as emissions from China, India, and other developing nations skyrocket, will our efforts really make any difference?

We decided to try an experiment. For one month we tracked our personal emissions of carbon dioxide (CO2) as if we were counting calories. We wanted to see how much we could cut back, so we put ourselves on a strict diet. The average U.S. household produces about 150 pounds of CO2 a day by doing commonplace things like turning on air-conditioning or driving cars. That’s more than twice the European average and almost five times the global average, mostly because Americans drive more and have bigger houses. But how much should we try to reduce?

For an answer, I checked with Tim Flannery, author of The Weather Makers: How Man Is Changing the Climate and What It Means for Life on Earth. In his book, he’d challenged readers to make deep cuts in personal emissions to keep the world from reaching critical tipping points, such as the melting of the ice sheets in Greenland or West Antarctica. “To stay below that threshold, we need to reduce CO2 emissions by 80 percent,” he said.

“That sounds like a lot,” PJ said. “Can we really do that?”

It seemed unlikely to me too. Still, the point was to answer a simple question: How close could we come to a lifestyle the planet could handle? If it turned out we couldn’t do it, perhaps we could at least identify places where the diet pinched and figure out ways to adjust. So we agreed to shoot for 80 percent less than the U.S. average, which equated to a daily diet of only 30 pounds of CO2. Then we set out to find a few neighbors to join us.

John and Kyoko Bauer were logical candidates. Dedicated greenies, they were already committed to a low-impact lifestyle. One car, one TV, no meat except fish. As parents of three-year-old twins, they were also worried about the future. “Absolutely, sign us up,” John said.

Susan and Mitch Freedman, meanwhile, had two teenagers. Susan wasn’t sure how eager they would be to cut back during their summer vacation, but she was game to give the diet a try. As an architect, Mitch was working on an office building designed to be energy efficient, so he was curious how much they could save at home. So the Freedmans were in too.

We started on a Sunday in July, an unseasonably mild day in Northern Virginia, where we live. A front had blown through the night before, and I’d opened our bedroom windows to let in the breeze. We’d gotten so used to keeping our air-conditioning going around the clock, I’d almost forgotten the windows even opened. The birds woke us at five with a pleasant racket in the trees, the sun came up, and our experiment began.

Our first challenge was to find ways to convert our daily activities into pounds of CO2. We wanted to track our progress as we went, to change our habits if necessary.

PJ volunteered to read our electric meter each morning and to check the odometer on our Mazda Miata. While she was doing that, I wrote down the mileage from our Honda CR-V and pushed my way through the shrubs to read the natural gas meter. We diligently recorded everything on a chart taped to one of our kitchen cabinets. A gallon of gasoline, we learned, adds a whopping 19.6 pounds of CO2 to the atmosphere, a big chunk of our daily allowance. A kilowatt-hour (kWh) of electricity in the U.S. produces 1.5 pounds of CO2. Every 100 cubic feet of natural gas emits 12 pounds of CO2.

To get a rough idea of our current carbon footprint, I plugged numbers from recent utility bills into several calculators on websites. Each asked for slightly different information, and each came up with a different result. None was flattering. The Environmental Protection Agency (EPA) website figured our annual CO2 emissions at 54,273 pounds, 30 percent higher than the average American family with two people; the main culprit was the energy we were using to heat and cool our house. Evidently, we had further to go than I thought.

I began our campaign by grabbing a flashlight and heading down to the basement. For most families, the water heater alone consumes 12 percent of their house’s energy. My plan was to turn down the heater’s thermostat to 120�F, as experts recommend. But taking a close look at our tank, I saw only “hot” and “warm” settings, no degrees. Not knowing what that meant exactly, I twisted the dial to warm and hoped for the best. (The water turned out to be a little cool, and I had to adjust it later.)

When PJ drove off in the CR-V to pick up a friend for church, I hauled out gear to cut the grass: electric lawn mower, electric edger, electric leaf blower. Then it dawned on me: All this power-sucking equipment was going to cost us in CO2 emissions. So I stuffed everything back into the garage, hopped in the Miata, and buzzed down the street to Home Depot to price out an old-fashioned push reel mower.

The store didn’t have one, so I drove a few miles more to Lawn & Leisure, an outfit that specializes in lawn mowers. They were out too, though they had plenty of big riding mowers on display. (The average gasoline-powered push mower, I’d learned, puts out as much pollution per hour as eleven cars—a riding mower as much as 34 cars.) My next stop was Wal-Mart, where I found another empty spot on the rack. I finally tried Sears, which had one manual mower left, the display model.

I’d seen advertisements for the latest reel mowers that made them sound like precision instruments, not the clunky beast I pushed as a teenager. But when I gave the display model a spin across the sales floor, I was disappointed. The reel felt clumsy compared with my corded electric model, which I can easily maneuver with one hand. I got back in the car empty-handed and drove home.

As I pulled into the driveway, I had the sinking realization I’d been off on a fool’s errand. I didn’t know exactly how foolish until the next morning, when we added up the numbers. I’d driven 24 miles in search of a more Earth-friendly mower. PJ had driven 27 miles to visit a friend in an assisted-living facility. We’d used 32 kWh of electricity and 100 cubic feet of gas to cook dinner and dry our clothes. Our total CO2 emissions for the day: 105.6 pounds. Three and a half times our target.

“Guess we need to try harder,” PJ said.

We got some help in Week Two from a professional “house doctor,” Ed Minch, of Energy Services Group in Wilmington, Delaware. We asked Minch to do an energy audit of our house to see if we’d missed any easy fixes. The first thing he did was walk around the outside of the house, looking at how the “envelope” was put together. Had the architect and builder created any opportunities for air to seep in or out, such as overhanging floors? Next he went inside and used an infrared scanner to look at our interior walls. A hot or cold spot might mean that we had a duct problem or that insulation in a wall wasn’t doing its job. Finally his assistants set up a powerful fan in our front door to lower air pressure inside the house and force air through whatever leaks there might be in the shell of the house. Our house, his instruments showed, was 50 percent leakier than it should be.

One reason, Minch discovered, was that our builder had left a narrow, rectangular hole in our foundation beneath the laundry room—for what reason we could only guess. Leaves from our yard had blown through the hole into the crawl space. “There’s your big hit,” he said. “That’s your open window.” I hadn’t looked inside the crawl space in years, so there could have been a family of monkeys under there for all I knew. Sealing up that hole was now a priority, since heating represents up to half of a house’s energy costs, and cooling can account for a tenth.

Air rushing in through the foundation was only part of the problem, however. Much of the rest was air seeping out of a closet on our second floor, where a small furnace unit was located. The closet had never been completely drywalled, so air filtered through insulation in the roof to the great outdoors. Minch recommended we finish the drywalling when the time comes to replace the furnace.

Minch also gave us tips about lighting and appliances. “A typical kitchen these days has ten 75-watt spots on all day,” he said. “That’s a huge waste of money.” Replacing them with compact fluorescents could save a homeowner $200 a year. Refrigerators, washing machines, dishwashers, and other appliances, in fact, may represent half of a household’s electric bill. Those with Energy Star labels from the EPA are more efficient and may come with rebates or tax credits when you buy them, Minch said.

There was no shortage of advice out there, I discovered, about ways to cut back on CO2 emissions. Even before Minch’s visit, I’d collected stacks of printouts and brochures from environmental websites and utility companies. In a sense, there’s almost too much information.

“You can’t fix everything at once,” John Bauer said when I asked how he and Kyoko were getting along. “When we became vegetarians, we didn’t do it all at once. First the lamb went. Then the pork. Then the beef. Finally the chicken. We’ve been phasing out seafood for a few years now. It’s no different with a carbon diet.”

Good advice, I’m sure. But everywhere I looked I saw things gobbling up energy. One night I sat up in bed, squinted into the darkness, and counted ten little lights: cell phone charger, desktop calculator, laptop computer, printer, clock radio, cable TV box, camera battery recharger, carbon monoxide detector, cordless phone base, smoke detector. What were they all doing? A study by the Lawrence Berkeley National Laboratory found that “vampire” power sucked up by electronics in standby mode can add up to 8 percent of a house’s electric bill. What else had I missed?

“You can go nuts thinking about everything in your house that uses power,” said Jennifer Thorne Amann, author of Consumer Guide to Home Energy Savings, who had agreed to be our group’s energy coach. “You have to use common sense and prioritize. Don’t agonize too much. Think about what you’ll be able to sustain after the experiment is over. If you have trouble reaching your goal in one area, remember there’s always something else you can do.”

At this point we left home for a long weekend to attend the wedding of my niece, Alyssa, in Oregon. While we were gone, the house sitter caring for our two dogs continued to read our gas and electric meters, and we kept track of the mileage on our rental car as we drove from Portland to the Pacific coast. I knew this trip wasn’t going to help our carbon diet any. But what was more important, after all, reducing CO2 emissions or sharing a family celebration?

That’s the big question. How significant are personal efforts to cut back? Do our actions add up to anything meaningful, or are we just making ourselves feel better? I still wasn’t sure. As soon as we returned home to Virginia, I started digging up more numbers.

The United States, I learned, produces a fifth of the world’s CO2 emissions, about six billion metric tons a year. That staggering amount could reach seven billion by 2030, as our population and economy continue to grow. Most of the CO2 comes from energy consumed by buildings, vehicles, and industries. How much CO2 could be avoided, I started to wonder, if we all tightened our belts? What would happen if the whole country went on a carbon diet?

Buildings, not cars, produce the most CO2 in the United States. Private residences, shopping malls, warehouses, and offices account for 38 percent of the nation’s emissions, mainly because of electricity use. It doesn’t help that the average new house in the United States is 45 percent bigger than it was 30 years ago.

Companies like Wal-Mart that maintain thousands of their own buildings have discovered they can achieve significant energy savings. A pilot Supercenter in Las Vegas consumes up to 45 percent less power than similar stores, in part by using evaporative cooling units, radiant floors, high-efficiency refrigeration, and natural light in shopping areas. Retrofits and smart design could reduce emissions from buildings in this country by 200 million tons of CO2 a year, according to researchers at Oak Ridge National Laboratory. But Americans are unlikely to achieve such gains, they say, without new building codes, appliance standards, and financial incentives. There are simply too many reasons not to.

Commercial building owners, for example, have had little incentive to pay more for improvements like high-efficiency windows, lights, heating, or cooling systems since their tenants, not they, pay the energy bills, said Harvey Sachs of the American Council for an Energy-Efficient Economy. For homeowners, meanwhile, efficiency takes a backseat whenever money is tight. In a 2007 survey of Americans, 60 percent said they didn’t have enough savings to pay for energy-related renovations. If given an extra $10,000 to work with, only 24 percent said they would invest in efficiency. What did the rest want? Granite countertops.

After buildings, transportation is the next largest source of CO2, producing 34 percent of the nation’s emissions. Carmakers have been told by Congress to raise fuel economy standards by 40 percent by 2020. But emissions will still grow, because the number of miles driven in this country keeps going up. One big reason: Developers keep pushing neighborhoods farther into the countryside, making it unavoidable for families to spend hours a day in their cars. An EPA study estimated that greenhouse gas emissions from vehicles could increase 80 percent over the next 50 years. Unless we make it easier for Americans to choose buses, subways, and bikes over cars, experts say, there’s little chance for big emissions cuts from vehicles.

The industrial sector represents the third major source of CO2. Refineries, paper plants, and other facilities emit 28 percent of the nation’s total. You would think such enterprises would have eliminated inefficiencies long ago. But that isn’t always the case. For firms competing in global markets, making the best product at the right price comes first. Reducing greenhouse gases is less urgent. Some don’t even track CO2 emissions.

A number of corporations such as Dow, DuPont, and 3M have shown how profitable efficiency can be. Since 1995, Dow has saved seven billion dollars by reducing its energy intensity—the amount of energy consumed per pound of product—and during the past few decades it has cut its CO2 emissions by 20 percent. To show other companies how to make such gains, the Department of Energy (DOE) has been sending teams of experts into 700 or so factories a year to analyze equipment and techniques. Yet even here change doesn’t come easily. Managers are reluctant to invest in efficiency unless the return is high and the payback time is short. Even when tips from the experts involve no cost at all—such as “turn off the ventilation in unoccupied rooms”—fewer than half of such fixes are acted upon. One reason is inertia. “Many changes don’t happen until the maintenance foreman, who knows how to keep the old equipment running, dies or retires,” said Peggy Podolak, senior industrial energy analyst at DOE.

But change is coming anyway. Most business leaders expect federal regulation of CO2 emissions in the near future. Already, New York and nine other northeastern states have agreed on a mandatory cap-and-trade system similar to the one started in Europe in 2005. Under the plan, launched last year, emissions from large power plants will be reduced over time, as each plant either cuts emissions or purchases credits from other companies that cut their emissions. A similar scheme has been launched by the governors of California and six other western states and the premiers of four Canadian provinces.

So how do the numbers add up? How much CO2 could we save if the whole nation went on a low carbon diet? A study by McKinsey & Company, a management consulting firm, estimated that the United States could avoid 1.3 billion tons of CO2 emissions a year, using only existing technologies that would pay for themselves in savings. Instead of growing by more than a billion tons by 2020, annual emissions in the U.S. would drop by 200 million tons a year. We already know, in other words, how to freeze CO2 emissions if we want to.

Not that there won’t still be obstacles. Every sector of our economy faces challenges, said energy-efficiency guru Amory Lovins of the Rocky Mountain Institute. “But they all have huge potential. I don’t know anyone who has failed to make money at energy efficiency. There’s so much low-hanging fruit, it’s falling off the trees and mushing up around our ankles.”

By the last week in July, PJ and I were finally getting into the flow of the reduced carbon lifestyle. We walked to the neighborhood pool instead of driving, biked to the farmers market on Saturday morning, and lingered on the deck until dark, chatting over the chirping of the crickets. Whenever possible I worked from home, and when I commuted I took the bus and subway. Even when it got hot and humid, as it does in Virginia in July, we were never really uncomfortable, thanks in part to the industrial-size ceiling fan we installed in the bedroom in late June.

“That fan’s my new best friend,” PJ said.

Our numbers were looking pretty good, in fact, when we crossed the finish line on August 1. Compared with the previous July, we slashed electricity use by 70 percent, natural gas by 40 percent, and reduced our driving to half the national average. In terms of CO2, we trimmed our emissions to an average of 70.5 pounds a day, which, though twice as much as we’d targeted as our goal, was still half the national average.

These were encouraging results, I thought, until I factored in emissions from our plane trip to Oregon. I hadn’t expected that a modern aircraft packed with passengers would emit almost half as much CO2 per person as PJ and I would have produced if we’d driven to Oregon and back in the CR-V. The round-trip flight added the equivalent of 2,500 pounds of CO2 to our bottom line, more than doubling our daily average from 70.5 pounds of CO2 to 150 pounds—five times our goal. So much for air travel.

By comparison, the Bauers did significantly better, though they also faced setbacks. Since their house is all electric, Kyoko Bauer had tried to reduce her use of the clothes dryer by hanging laundry on a rack outside, as she and John had done when they lived in arid Western Australia. But with their busy three-year-olds, Etienne and Ajanta, she was doing as many as 14 loads a week, and it took all day for clothes to dry in Virginia’s humid air. “It wasn’t as convenient as I hoped,” she said. “I had to race home from shopping a couple of times before it started to rain.” Their bottom line: 97.4 pounds of CO2 a day.

For the Freedmans, driving turned out to be the big bump in the road. With four cars and everyone commuting to a job every day—including Ben and Courtney—they racked up 4,536 miles during the month. “I don’t know how we could have driven less,” Susan said. “We were all going in different directions and there wasn’t any other way to get there.” Their bottom line: 248 pounds of CO2 a day.

When we received our electric bill for July, PJ and I were pleased that our efforts had saved us $190. We decided to use a portion of this windfall to offset the airline emissions. After doing a little homework, we contributed $50 to Native Energy, one of many companies and nonprofits that save CO2 by investing in wind farms, solar plants, and other renewable energy projects. Our purchase was enough to counteract a ton of jet emissions, roughly what we added through our trip and then some.

We can do more, of course. We can sign up with our utility company for power from regional wind farms. We can purchase locally grown foods instead of winter raspberries from Chile and bottled water from Fiji. We can join a carbon-reduction club through a neighborhood church, Scout troop, Rotary Club, PTA, or environmental group. If we can’t find one, we could start one.

“If you can get enough people to do things in enough communities, you can have a huge impact,” said David Gershon, author of Low Carbon Diet: A 30-Day Program to Lose 5,000 Pounds. “When people are successful, they say, Wow, I want to go further. I’m going to push for better public transportation, bike lanes, whatever. Somebody called this the mice-on-the-ice strategy. You don’t have to get any one element to work, but if you come at it from enough different directions, eventually the ice cracks.”

Will it make any difference? That’s what we really wanted to know. Our low carbon diet had shown us that, with little or no hardship and no major cash outlays, we could cut day-to-day emissions of CO2 in half—mainly by wasting less energy at home and on the highway. Similar efforts in office buildings, shopping malls, and factories throughout the nation, combined with incentives and efficiency standards, could halt further increases in U.S. emissions.

That won’t be enough by itself, though. The world will still suffer severe disruptions unless humanity reduces emissions sharply—and they’ve risen 30 percent since 1990. As much as 80 percent of new energy demand in the next decade is projected to come from China, India, and other developing nations. China is building the equivalent of two midsize coal-fired power plants a week, and by 2007 its CO2 output surpassed that of the U.S. Putting the brakes on global emissions will be more difficult than curbing CO2 in the United States, because the economies of developing nations are growing faster. But it begins the same way: By focusing on better insulation in houses, more efficient lights in offices, better gas mileage in cars, and smarter processes in industry. The potential exists, as McKinsey reported last year, to cut the growth of global emissions in half.

Yet efficiency, in the end, can only take us so far. To get the deeper reductions we need, as Tim Flannery advised—80 percent by 2050 (or even 100 percent, as he now advocates)—we must replace fossil fuels faster with renewable energy from wind farms, solar plants, geothermal facilities, and biofuels. We must slow deforestation, which is an additional source of greenhouse gases. And we must develop technologies to capture and bury carbon dioxide from existing power plants. Efficiency can buy us time—perhaps as much as two decades—to figure out how to remove carbon from the world’s diet.

The rest of the world isn’t waiting for the United States to show the way. Sweden has pioneered carbon-neutral houses, Germany affordable solar power, Japan fuel-efficient cars, the Netherlands prosperous cities filled with bicycles. Do Americans have the will to match such efforts?

Maybe so, said R. James Woolsey, former director of the CIA, who sees a powerful, if unlikely, new alliance forming behind energy efficiency. “Some people are in favor of it because it’s a way to make money, some because they’re worried about terrorism or global warming, some because they think it’s their religious duty,” he said. “But it’s all coming together, and politicians are starting to notice. I call it a growing coalition between the tree huggers, the do-gooders, the sodbusters, the cheap hawks, the evangelicals, the utility shareholders, the mom-and-pop drivers, and Willie Nelson.”

This movement starts at home with the changing of a lightbulb, the opening of a window, a walk to the bus, or a bike ride to the post office. PJ and I did it for only a month, but I can see the low carbon diet becoming a habit.

“What do we have to lose?” PJ said. 

To view the photo gallery of this article, click here.

Marketing, Diplomacy, & A Plan: Aperion at ECO:nomics

March 10, 2009

Monday, March 9, 2009

By Janie Diaz

Many people feared that ECO:nomics might just be another conference, like so many in the past several years, that just collects high-minded people, asks them to present their ideas, tell us why they improve the world and move on. But this year’s ECO:nomics in Santa Barbara,Calif. was different. The energy was palpable, the ideas were more in sync and the participants seemed to have consensus on many of the issues that plague our environment and economy.

A room full of industry heads, environmental and economic celebrities like Al Gore, Peter Darby, Eric Schmidt, T. Boone Pickens, and Richard Edelman, sponsored by the Wall Street Journal and hosted by Alan Murray; you now have my attention. ECO:nomics is to the world of environmentalism, efficiency and economics what the Oscars are to Hollywood. But what happened this March 4 through 6, and how will our world be different because of it?

To answer that, you’ve got to ask another question: What is green, really? From the standpoint of Aperion Companies CEO, David Maniatis, in order for green to be optimal, efficient, and practical, the private sector must work on solutions that address both the economic and environmental issues while also finding where everyone’s individual efforts overlap. According to Maniatis, there is a “crisis of confidence in government and in the private sector,” — this crisis is costing us more than just dollars and time, it’s keeping us from creating and utilizing private sector innovation and diplomacy to generate answers, engender healthy debates, and ultimately, craft a plan of efficiency and productivity and implement it.

On the first day of ECO:nomics, Al Gore noted that all of the solutions exist, what’s lacking is political will. So what will coax the Sleeping Giant into fighting for our future? According to Maniatis and the sound words of Václav Klaus, the President of the Czech Republic and the EU, perhaps it’s time to look away from government and toward the private sector. It may seem like madness in a time when we all need someone outside of ourselves to help us, to “fix it,” to rock us to sleep and make us believe it will all be alright, but cutting the umbilical cord from today’s scared consumer to the government and directing his eye toward corporate America by means of marketing a movement might be the only way we save ourselves.

This year’s ECO:nomics raised issues and eyebrows. Champions fighting the good fight, thought leaders, innovators and courageous spokespersons for deep green initiatives are now frustrated enough by guardians of the status quo to throw down the gauntlet. So when it came time to discuss the future of cap and trade and ideas for a gas tax, proponents for change spoke up, bravely confronting industry moguls to defend the rights of consumers and how revenue streams should be spent.

Michael Morris of American Electric Power stated that energy efficiency was of little to no benefit to the utility customer. Others presented less than promising thoughts, but all were met with positivism from other attendees.

Peter Darby, CEO of PG&E announced that they use a rate base from which they take an 11% profit while the remaining 89% goes back into the pockets of consumers — PG&E’s stocks rising and they are reporting profits are up this quarter. Darby is a willing public speaker for the issue of revenue sharing in efficiency and cap and trade initiatives.

A revenue stream created by a cap and trade system should go toward research and development — $60 billion — a mere fraction of the $700 billion revenue stream from cap and trade put into research for efficiency and renewables would create an 11 multiplier effect, making the initial investment seem a pittance when compared to short and long term savings for the business sector and consumers alike. But where would the rest of the $700 billion go?

“We went to this conference to get tax districting on the map and leave here with a plan,” said Maniatis. According to Maniatis, tax districting would allow home and business owners to retrofit structures using a voluntary assessment, making it possible to weatherize at no out-of-pocket cost and no cost to the government. He adds that through tax districting and weatherization, economic stimulus can be achieved and millions of new jobs created while consumers save millions on the cost of energy.

But what about the plan? Maniatis believes a plan for our economic and environmental security must include marketing and diplomacy among corporations within the private sector. Maniatis’ feelings were echoed in the insights delivered by CEO Richard Edelman who noted that there are three major challenges in today’s market: One, that the business community has defaulted to the government; two, that private sector diplomacy is not leading and it must; and three, that a popular movement must be marketed to lead us toward true green.

Is anyone doing this yet? Absolutely, and it may be surprising to some to hear who is on board with a green — and not a “greenwashed” plan for America. Something magical is happening when the CEO of Ford gets up to talk about the future of automotives and Carl Pope of the Sierra Club roots him on. Eric Schmidt’s belief in our ability as a nation to innovate came to life when Ford CEO Alan Mulally announced that by 2012 a fully electric vehicle would come off the Ford line, and that by 2011 a hybrid plug-in would be available. Mulally noted that the key to the future of cars is battery technology. “What we need is a mini-Manhattan project for the car battery,” added Maniatis.

But what about the meantime? According to T. Boone Pickens, a comprehensive plan that includes the use of natural gas for heavy trucks in addition to electric cars down the road will allow us to break our foreign oil addiction. In addition to advances in transportation technology, the consensus among those at the conference seemed to be that efficiency is the fuel we’re not using, and it’s high time we did. Amory Lovins of the Rocky Mountain Institute spoke about a method for building high-rises that reduced air conditioning cost by 75%. This method also creates a higher quality interior, increased productivity and best of all, we know it’s achievable. Bottom line: the capital cost of efficient green building is cheaper than building the old fashioned way, and that doesn’t even account for the massive energy and financial savings for builders, businesses, and consumers.

So what about next year’s ECO:nomics? “Enough of these meetings,” says Maniatis, “let’s get a plan together and implement it.” Mainly what Maniatis would like to see next year are more breakout sessions and attendees working in teams to tackle issues and come up with workable solutions that can be drawn up into an implementable plan to be delivered to the president.

Maniatis told us that his goal coming out of next year’s ECO:nomics is to work with environmental, economic, and industry leaders to get this plan on paper. Aperion’s mission, said Maniatis, is to “Bring efficiency to life, to lower the cost of everyday living through master-planned communities, smart homes, smart demand-side management systems and weatherization of existing structures, communities, and cities.”

This is not just another conference. ECO:nomics is well on its way to becoming one of the most important convergences of minds in our history. As Thomas Friedman said, “Green is the new red, white, and blue.”

No Debate Czech President Václav Klaus on why the discussion about global warming is a monologue (Wall Street Journal)

March 10, 2009

March 9, 2009

For Václav Klaus, the inconvenient truth is this: Global warming is far from being proved, and the problem is that everybody has jumped on the bandwagon before any real debate has taken place.

Mr. Klaus won his second five-year term as president of the Czech Republic in February 2008. He studied at the Prague School of Economics, where he currently holds a professorship in finance.
The Journal Report

* See the complete ECO:nomics report.

Mr. Klaus talked to Robert Thomson, managing editor of The Wall Street Journal. Here are edited excerpts of their discussion.
Listening in Frustration

ROBERT THOMSON: Mr. President, obviously during the dark days of communism, America was a beacon for you and many other people in Central and Eastern Europe. What are your impressions of contemporary America?

VÁCLAV KLAUS: Sitting here in this room in the last two hours and the coming from, first Europe, and, second, from a former communist country where I spent most of my life, I almost don’t believe my eyes to see how much you believe in government and how much you don’t believe in the market.

This is for me a shocking experience. And I have to say that very loudly. As a professor of economics, I have my theoretical arguments about the impossibility of running the economy from above.
video
ECO:nomics: Czech Perspective
5:32

Czech Republic President Vaclav Klaus criticizes strong government control and argues against the idea of global warming, in an interview with Robert Thomson, Managing Editor of The Wall Street Journal, at the ECO:nomics conference.

As a person who spent almost 50 years of his life in a communist country, I know how crazy it is to introduce schemes like the cap and trade and similar ideas, how devastating and damaging for the economy all those ideas really are. So I’m rather frustrated. It seems to me that to fight for freedom, free markets, is still the task of today, even if we hoped almost 20 years ago in the moment of the fall of communism that it was over.

This is the same in Europe these days. There is one EU summit after another one weekend after another, there is a summit trying to find solutions. But I don’t think that this solution will come from the government.

MR. THOMSON: Now, you’re also well known for your views on the environment. Are you concerned more about the environmental debate or the lack of debate that seems to be implicit in some people’s approach to the environment?

MR. KLAUS: I’m afraid that a serious debate about that issue has not yet started. What we witnessed are monologues, a conference of believers in global warming. The debate has not yet started. Nevertheless, I’m afraid the politicians have already accepted this idea, understood that it’s a good political project, and now the things are moving in a way which I consider extremely dangerous. And I know that not only politicians, the businesspeople discovered that it’s very attractive investments to get taxpayers’ money and to start doing some things. So this is another problem.

But I would like to make one thing clear, let’s really differentiate the protection of the environment from the debate about global warming and decarbonizing the economy. I am not against the protection of the environment. I am against global-warming alarmism. Those are conceptually, structurally, two totally different issues.
[The Journal Report: ECO:nomics] Genesis Photos

Václav Klaus

MR. THOMSON: But a person could argue, “Look, frankly, you’ve lost the debate on global warming. And what you’re doing now is just blaming political correctness for your inability to win an argument you’ve already lost.”

MR. KLAUS: To win an argument you must have a potential place to argue, but I am afraid it does not exist anymore. And to speak about the scientific consensus about global warming, it’s not true. To speak about a very strong relationship between carbon dioxide and the temperature in the world, again, not true. And I am really frustrated, I must say.
The Price of Water

AUDIENCE MEMBER: I have great respect for your work in promoting freedom. And at the heart of the current situation regarding climate change, I’d like to compare it to the water-scarcity issue that you identified in California. At our breakout session this morning, I think we pretty much reached a unanimous conclusion that one of the causes is a failure to price water appropriately. It’s priced below market. Isn’t that a failure in terms of dealing with the environment overall, a failure to price environmental goods?

MR. KLAUS: Well, of course, as an economist, I am aware of the externalities. I am aware of various cases of market failure. Nevertheless, I am first convinced that the government failure is incomparably bigger than any imaginable market failure in history.

With regard to the question of water, I think it’s rather difficult to introduce the real market in the case of water. I wouldn’t mind doing it in some respect. We are used to doing it differently, without paying attention to the real cost of water. It was a mistake, definitely so. I wouldn’t be against, not rationing water, but introducing some sort of market mechanism in consuming water and then paying for that.

AUDIENCE MEMBER: I’m an environmentalist. But I want to applaud your willingness to take on and to try to separate the sometimes frustratingly intertwined topics of climate change or, say, global warming, versus environmental conservation. The Amazon rainforest, for instance, we’re looking the equivalent of about 180 football fields every three minutes in deforestation. And that’s not a sustainable model in my opinion. Can you comment on what it means to help conservation without overheating the argument around carbon?

MR. KLAUS: Well, there are several points. The first one, I thank you for stressing the difference between protection of the environment and global-warming alarmism and decarbonization of the economy. Those are two separate issues. By the way, communism is the nonexistence of real economic prices on the one hand, and state ownership, no private ownership, was a disaster for the environment. Everyone knows that. So we solved the environmental issues in our country in the moment of the fall of communism. By reintroducing normal prices, which give you the real scarcity of one thing or another, plus by introducing private property forced the solution for the environmental protection in general. This is my very strong, strong belief. The policy, the government policy for the environment, was not secondary but much lower importance as compared to those two systemic changes, prices and property rights.

Second, thank you for differentiating conservationism from environmentalism. Environmentalism is really a doctrine, religion, ideology, which has no connection to climatology or environment or anything else.

Then you mentioned the Brazilian forests. Well, tragic problem. Nevertheless, I think that the real stimulus for deforestation in many developing countries, including Brazil, was the crazy idea of biofuels. And those ideas came from the environmentalists. Now, they discovered it was a wrong idea, so they tried to pretend that they forgot the idea. So I’m afraid the deforestation in Brazil and the environmentalism is deeply, negatively connected.

Walking the Green Walk

March 10, 2009

Environmentally friendly policies are high on the Obama administration’s agenda. But how about on officials’ personal agendas?
The Journal Report

* See the complete ECO:nomics report.

What are the new president’s appointees, and others in Washington, doing personally to protect the environment and reduce energy use?

We interviewed some members of President Obama’s environmental and energy teams, as well as leading members of key congressional committees from both parties, to ask about any measures they have taken to be “greener” in their own lives.

Steven Chu, energy secretary: Mr. Chu is relocating to Washington from his home in Oakland, Calif., where he worked as director of the Department of Energy’s Lawrence Berkeley National Laboratory. He says his Oakland house was “very energy-efficient,” so that he didn’t have to turn on the heating until after Thanksgiving or use air-conditioning. “We had a chimney effect — we could bring in the cool air at night and actually close the windows the next day, and even during a heat wave, we didn’t turn on our air conditioner.”
[Steven Chu]

Steven Chu

Mr. Chu confesses to being “a little bit worried” about living in Washington because “we’re used to very, very modest heating bills, and no cooling bills.”

Tom Vilsack, agriculture secretary: The former Iowa governor and presidential contender lists a number of measures he has taken, including making his house in Des Moines more energy-efficient and driving a hybrid Mercury Mariner.

At his home he had an energy audit done and as a result has lowered the temperature of the water heater, is putting in more energy-efficient light bulbs and getting a cover for the air-conditioning unit. “We are setting the thermostat a little bit lower than it has been, so we use sweaters around the house and the fireplace frequently during the winter,” Mr. Vilsack says.

When Mr. Vilsack arrived at the USDA he was presented with a new Cadillac but insisted it be exchanged for a vehicle that would run on E-85 fuel, a blend of up to 85% ethanol. He also had a small area of asphalt broken up to avoid the urban-heat effect of such a surface and plans to use that land for an organic vegetable garden tended by people with disabilities and employees in their own time. “The produce will be given away to the homeless,” Mr. Vilsack says. “I’m encouraging [organic gardens] for USDA locations all around the country and around the world.”

Jeff Bingaman, chairman of the Senate Energy Committee: Mr. Bingaman (D., N.M.), the author of proposed legislation that would require a rising proportion of U.S. power to come from renewable sources, bought a Toyota Prius hybrid in March 2007, having grown “tired of paying so much at the pump on the Ford Contour that I had before.” Last year he installed more energy-efficient windows in his house in Washington.

Looking ahead, he says he has thought about putting in a solar-thermal energy system in his house in New Mexico but adds that “I don’t know that it would make sense for us, as little as we are there.”
[Lisa Murkowski]

Lisa Murkowski

Lisa Murkowski, ranking Republican on the Senate Energy Committee: The Alaska senator, who supports expanded use of renewable energy along with opening up new areas for oil drilling, describes her attempts to cut down on energy use as the typical response of families out to save money — “and by the way, it’s actually making a difference with reducing emissions.”

When in Washington, Ms. Murkowski lives on Capitol Hill, so she can walk or ride her bicycle to work. For meetings that are farther away, she says she tries to share a car with others from her office.

She is also remodeling her D.C. townhouse and installing more energy-efficient windows and appliances, putting in efficient light bulbs, and insulating and weatherizing the property. She says she pays close attention to bills and has a “smart reader” that shows the energy consumption of appliances.

Barbara Boxer, chairman of the Senate Environment and Public Works Committee: The California Democrat, a proponent of a cap-and-trade system to control carbon-dioxide emissions, has been driving a Prius since 2003. In her house she has a solar heating system and changes her thermostat with the seasons to reduce energy use. She also replaced all her light bulbs with energy-efficient models, powers down computers when they’re not in use and unplugs cellphone chargers. “I walk to work as often as possible when I’m in Washington,” she adds.
[Barbara Boxer]

Barbara Boxer

For the future, “my husband and I are evaluating a comprehensive solar-energy installation for our house,” Ms. Boxer says.

Joe Barton, ranking Republican on the House Energy and Commerce Committee: Although he helped write the Energy Policy Act of 2005, which among other things promoted renewable energy and energy efficiency, Mr. Barton is dismissive of personal efforts at economizing on energy use.

In a statement, the Texas congressman says he “doesn’t think screwing in some [compact fluorescent bulbs] will make America great, or cutting the thermostat to 65 will make Americans freer, happier and more productive.”

“The congressman’s personal rule is, don’t squander resources, period,” the statement says.

—By Yuliya Chernova, Sari Krieger and Mara Lemos Stein of Clean Technology Insight, a Dow Jones & Co. newsletter, and Ian Talley of Dow Jones Newswires. They can be reached at reports@wsj.com.Printed in The Wall Street Journal, page R2

ECO:nomics Creating Environmental Capital (Wall Street Journal)

March 10, 2009

March 9, 2009

All bets are off in the business of the environment.

A year ago, energy prices were surging, and the new-energy industry was growing at a feverish pace. Wind-turbine and solar-panel makers were cranking out their wares full-throttle. Fuel-efficient cars were flying off dealer lots.
The Journal Report
[The Journal Report: ECO:nomics]

* See the complete ECO:nomics report.

Andy Jordan’s American Journey

* Andy Jordan looks at companies and communities at the forefront of economic stimulus and the conversion to a greener economy.

Videos from ECO:nomics

* Seeking Funding for Eco-Projects
* Gore, Pickens and Space-Age Cars
* Ford’s Mulally on Detroit’s Future
* CEOs Talk Cap and Trade

Today, amid a recession, Americans aren’t buying much of anything at all. Capital markets have frozen and energy prices have plummeted, and one of the hardest-hit victims has been the clean-energy industry that not long ago seemed on top of a new world.

ECO:nomics, The Wall Street Journal’s second annual conference on the business of the environment, revealed last week the conundrum in which companies seeking to profit from a shift to cleaner forms of energy now find themselves. These companies are betting that over the long term, an improving economy and deepening concerns about global-warming emissions will lead to new technologies that will crank out energy with less impact on the climate.

But what do they do in the meantime? How can they maintain their momentum as they wait for the economy to bounce back?

Within that cauldron of uncertainty, many questions are bubbling.

Some questions are about technologies. Does the future of power production in the U.S. continue to rest on cleaning up coal? Or in ramping up renewable energy? Eric Schmidt, CEO of Google Inc., predicted renewable energy could produce about 30% of U.S. electricity by 2030. Michael Morris, CEO of American Electric Power Co., said he thinks that’s too optimistic. Behind that debate are questions about the viability not only of “clean coal,” but also of nuclear energy, which emits essentially no carbon dioxide but has long been politically unpopular.

And what will the automobile of the future run on? Google has talked up the possibility of plug-in hybrid electric cars. Vinod Khosla, managing partner of Khosla Ventures, a prominent energy investor, said he’s particularly excited about the potential for biofuels. Texas oilman T. Boone Pickens envisions a future in which vehicles, starting with trucks, run on natural gas.

Other questions are about politics — notably, how the Obama administration and Congress will choose to impose a cost on greenhouse-gas emissions. What seems likeliest is a cap-and-trade system in which the government would distribute a set number of permits for companies to emit those gases, and then companies would buy and sell those permits among themselves, creating an economic incentive to find emission cuts at the lowest possible cost.

Former Vice President Al Gore said some sort of price on carbon is necessary to propel technological development forward. Václav Klaus, president of the Czech Republic, said Europe’s experience reveals the deep flaws in a cap-and-trade system.

For now, much of the money pouring into the environmental market has dried up. But there’s probably no better sign that the market is likely to bounce back than that those who will be the most affected by it are arguing mightily over its details.
—Jeffrey BallPrinted in The Wall Street Journal, page R1

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

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Innovative Plans by Major Arizona-Based Developer Sparks Landmark Energy Conservation Legislation

March 6, 2009

March 3, 2009 2:52 PM EST

Follows Agreement with Microsoft to Improve, Automate Health Care in Master-Planned Communities

SCOTTSDALE, Ariz., March 3 /PRNewswire/ — His company owns tens of thousands of acres across the West but it’s his company’s ideas that are sparking legislation in multiple states that would radically alter the use of energy grids. And now Aperion Communities CEO David Maniatis will bring that message this week to The Wall Street Journal’s Second Annual ECO:nomics Conference in Santa Barbara.

Maniatis’ plans for next generation master planned communities, anchored by pioneering new energy conservation policies, have sparked state legislative efforts in New Mexico (HB572), Arizona, (HB2335) and the State of Washington.

Aperion’s Inspiration communities in Albuquerque and Fort Worth provide for weatherization of homes and businesses through an innovative tax districting system that avoids the prohibitive up-front costs associated with most energy conservation measures.

“It is an achievable, practical way to solve the riddle of energy conservation that can bring direct benefits to consumers and the environment now. And we are turning these ideas into reality at our master-planned communities in Texas and New Mexico,” Maniatis said.

Under the recommended structure a lender — be it a city, utility, bank, master-planned community or special districts, homeowners or businesses within designated neighborhoods can easily access low-interest loans to complete efficiency or renewable energy projects. Through an addition to their utility or property tax bills, borrowers in turn repay the loans over 20 or 30 years. This is typically done with the money earned through energy savings or sales back to the electric grid. The debt typically stays with the property, rather than the individual, so homeowners who will be selling their homes inside of a 30-year repayment period aren’t dissuaded from participating or concerned about imposing further burdens on their property.

Indeed, Maniatis believes they will be a key selling point for homeowners in his communities.

All of this creates massive savings and energy efficiencies for residents of Inspiration communities. And it serves nearly everyone’s goal of greater energy independence for America.

“With all due respect to President Obama’s energy conservation plans, they are more incrementalism. Practical radicalism is not an oxymoron. And it is what we need at the ECO:nomics Conference this weekend in Santa Barbara and what governments at all levels need to insist upon to achieve an American energy revolution,” Maniatis said.

Last year, Aperion signed an agreement with Microsoft to create a one-stop shop for residents of Inspiration communities to track, monitor and research each individual’s health care.

Inspiration communities are being planned or built in Fort Worth and Albuquerque.

For more information on Aperion Communities please go to http://www.aperioncommunities.com, http://www.aperionsmarthome.com, http://www.davidmaniatis.com, and http://www.weatherize.com.

Promoting energy efficiency in the developing world

March 4, 2009

Developing economies have a huge opportunity to strengthen their economic prospects by boosting their energy productivity.
FEBRUARY 2009 • Diana Farrell and Jaana Remes

In This Article
Exhibit 1: Developing countries could cut energy demand growth by more than half through higher energy productivity.
Exhibit 2: Developing regions represent 65 percent of the positive-return opportunities to reduce energy demand.
Exhibit 3: Energy policies, climate, and industry structure explain somewhat more than half of the energy productivity variation among developing countries.
Letters to the editor
Big gains await developing countries if they raise their energy productivity, research by the McKinsey Global Institute (MGI) has found: they could slow the growth of their energy demand by more than half over the next 12 years—to 1.4 percent a year, from 3.4—which would leave demand some 25 percent lower in 2020 than it would otherwise have been (Exhibit 1). That is a reduction larger than total energy consumption in China today.

Policy makers and businesses in developing regions must not be deterred from boosting energy productivity (the output they achieve from the energy they consume) because of the present weakening economic environment and falling oil prices; these do not affect the long-term projections in the study.1 Time is of the essence: developing economies will install half or more of the capital stock that will be in place in 2020 between now and then. Every building or industrial plant constructed without optimal energy efficiency represents a lost opportunity to lock in lower energy consumption for decades.

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Just by using existing technologies that would pay for themselves in future energy savings, consumers and businesses could…

Register to read this article at http://www.mckinseyquarterly.com/Promoting_energy_efficiency_in_the_developing_world_2295#

More gas storage vital for UK security

February 25, 2009

Feb 25, 2009
Reuters

LONDON: Britain needs more natural gas storage facilities to ensure supplies and for its energy security, Energy and Climate Change Secretary Ed Miliband said on Wednesday.

“Do we need more gas storage in the future? I would unequivocally say yes,” Miliband told a parliamentary energy and climate change committee.

With domestic gas output falling, Britain is becoming increasingly dependent on imports of the fuel, which makes it crucial to increase its storage facilities for energy security and ensure Britain has enough energy to meet demand.

Miliband said rough gas storage facilities were at around 20 percent, which is lower than expected for the time of year, mainly because of the Russian-Ukraine dispute in January that disrupted gas supplies.

A report showed this week that Britain’s power industry needs to invest at least 234 billion pounds by 2025 to secure supply and meet its targets for carbon emissions and renewable energy.
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“I am conscious of the challenges around the credit crunch and talking to the European Investment Bank about getting more investment into the sector which could help with gas storage,” Miliband said.

Britain also faces possible electricity supply problems as early as 2012 unless the government provides more support for clean energy projects hit by the global credit crunch, analysts say.

DELAYS

Project delays and cancellations mean a power generation gap, which many expect to hit Britain from 2015 after old nuclear and coal-fired power stations shut, could occur earlier.

“We are driving forward new nuclear. We need diversity. Renewables play a role (in the energy mix) but they are only one (element),” Miliband said.

Britain aims to raise the share of renewables in its energy supply from about 0.5 percent now to 20 percent by 2020.

On Wednesday the Financial Times newspaper reported power companies were worried the government’s timetable to have a coal-fired plant with full carbon capture and storage (CCS) operational by 2014 had slipped.

CCS is seen as a potential silver bullet to curb emissions from coal-fired power plants but it needs testing before it can be deployed in large plants for commercial use.

The FT said power companies also feared the Department of Energy and Climate Change is arguing with the Treasury over funding for a CCS demonstration plant.

Asked if the FT report was accurate, Miliband said “there are no disputes with the Treasury.”

Miliband made no mention of the 2014 timetable in his response to this question but said only: “We are trying to get the right policy. What we’re not going to do is have a moratorium on new coal-fired plants. We want to drive CCS forward and need to find a way for that to be properly funded as well.”

In response to a question about progress with the demonstration plant plans, Miliband said: “We will choose a bidder by next year. That is still our intention.”

(Reporting by Nina Chestney; Editing by William Hardy and Sue Thomas)


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