Monday, March 28, 2011

US Energy Portfolio Shift

March 28, 2011, 6:00 AM

Renewing Support for Renewables

By NANCY FOLBRE
Today's Economist
 Nancy Folbre is an economics professor at the University of Massachusetts Amherst.
The biggest positive result of the accident at Fukushima Daiichi could be renewed public support for the development of renewable energy technologies.
Many influential policy makers, including President Obamacontinue to insist that we must expand nuclear power to help meet our energy needs. But plenty of experts disagree.
As the chart below illustrates, renewable energy sources (including hydropower and biofuels) already account for almost the same share of total energy consumption in the United States as nuclear power.
United States Energy Information Administration, “Annual Energy Review 2009,” Table 1.3, “Primary Energy Consumption by Source, 1949-2009.
More important is the rate of change in the cost and utilization of these technologies, particularly those that rely on wind, water or solar power and will not contribute to global warming.

The cost per kilowatt hour of generating electricity from wind and solar power has declined steadily in recent years and is projected to decline further. Energy Secretary Steven Chu predicted that they would be no more expensive than oil and gas by the end of the decade.
The cost of nuclear power, by contrast, has increased, even without factoring in the huge social costs imposed by accidents. These costs include the disruptive effects of major evacuations such as those under way in the vicinity of Fukushima Daiichi, as well as ominous — and difficult to measure — health risks.
In “Nuclear Power: Climate Fix or Folly,” Amory Lovins, a physicist with theRocky Mountain Institute, and two colleagues argued that expanded nuclear power does not represent a cost-effective solution to global warming and that investors would shun it were it not for generous government subsidies lubricated by intensive lobbying efforts.
In The Wall Street Journal, Prof. Benjamin K. Sovacool of the National University of Singapore recently argued, in “The Business Case Against Nuclear Power,” that subsidies for nuclear power during its first 15 years of use in civilian power generation far exceeded those provided to solar power and wind power in their initial years.
The private sector is clearly moving rapidly in the renewable direction. Clean Edge, a research and advisory group, asserts that the clean energy market grew 35 percent in 2010, and global installation of photovoltaics doubled.
Still, the big question remains. Can wind, water and solar power be scaled up in cost-effective ways to meet our energy demands, freeing us from dependence on both fossil fuels and nuclear power?
Yes, they can, say two highly respected scientists, Mark Z. Jacobson of Stanford University and Mark A. Delucchi of the University of California, Davis. In 2009 they published “A Plan to Power 100 Percent of the Planet With Renewables” in Scientific American.
The article persuasively addresses a number of concerns, such as the worldwide spatial footprint of wind turbines, the availability of scarce materials needed for manufacture of new systems, the ability to produce reliable energy on demand and the average cost per kilowatt hour.
A more detailed and updated technical analysis can be found in a two-part article (see Part I and Part II, recently published in the journal Energy Policy.
As Paul Krugman pointed out in his New York Times blog, projections of energy cost and supply are always hypothetical, based on assumptions that may or may not be borne out. This objection applies to all energy supply and demand projections.
The proven dangers of nuclear power amplify the economic risks of expanding reliance on it. Indeed, the stronger regulation and improved safetyfeatures for nuclear reactors called for in the wake of the Japanese disaster will almost certainly require costly provisions that may price it out of the market.
The role of the market, however, is small relative to political battles over relative levels of subsidy to fossil fuels, nuclear power and renewable energy. While both the fossil fuel and nuclear power industries are dominated by large companies with considerable political clout, renewable energy is a more decentralized, small-business-oriented sector that often finds itself outmaneuvered on Capitol Hill.
As Professors Jacobson and Delucchi put it, “The barriers to a 100 percent conversion to wind, water and solar power worldwide are primarily social and political, not technological or even economic.”
Research like theirs will help energize new efforts to overcome those barriers.

Saturday, March 12, 2011

Iconoclastic Capitalism

Patt Morrison Asks

Yvon Chouinard: Capitalist cat

The founder of Patagonia Inc. climbed from a hardscrabble childhood in the Maine backwoods to become a legendary outdoorsman, philanthropist, environmentalist and pioneering businessman.

Yvon Chouinard, founder and owner of outdoor clothing company Patagonia, Inc., holds a ceramic cat that sits on his office desk that's supposed to enhance good fortune. (Jay L. Clendenin/Los Angeles Times)
Yvon Chouinard, founder and owner of outdoor clothing company Patagonia, Inc., holds a ceramic cat that sits on his office desk that's supposed to enhance good fortune. (Jay L. Clendenin/Los Angeles Times)

By Patt Morrison,  The Los Angeles Times

 
What's with the kitty?

Yvon Chouinard invented better, eco-friendly rock-climbing gear in his own smithy. He climbed from a hardscrabble childhood in the Maine backwoods to become a legendary outdoorsman, philanthropist, environmentalist and pioneering businessman, the founder of Patagonia Inc. There probably isn't a major mountain range in the world he hasn't climbed, but it's the slippery slope of global eco-business where he's registered his reputation for blazing trails. In short, Chouinard has made his own luck. But that cat statue, an Asian symbol of good fortune and luck, still sits atop his desk at Patagonia's headquarters in Ventura.

Chouinard can sound alternately deeply dispirited and occasionally hopeful about the planet and the humans who overrun it. But what's really irked him just now is seeing that former Defense Secretary Donald Rumsfeld, pretty much the antithesis of Chouinard's personal ethos, poses on the cover of his new memoir -- wearing a Patagonia vest.

When you have to fill out "occupation" on a form, what do you put down? 

I traveled to China about 30 years ago; you had to put down your occupation, so I just decided to put down "capitalist," and they would look at that and say, "Capitalist. You must be very rich," and I'd say, "Yes I am!" You could hear them [he sucks in air between his teeth]. Already 30 years ago it was glorious to be rich in China. I hate that word "executive."

What's wrong with "executive"? 

To me it's those guys in airplane magazines, in all those executive ads. It denotes that you play golf!

Footprint Chronicles, on the Patagonia website, is a kind of corporate sustainability report, one article of clothing at a time. How does it differ from an ordinary corporate annual report?

Public corporations talk about all the good things they're doing, but none of them talks about all the evil they're doing. That got me kind of angry, so we decided to do one and put it in a format that it was readable by our customers and by other companies. I've heard other companies are now using it as a model.

What we're trying to do is to get companies to be more transparent in the good that they're doing but also all the bad, because if you don't face up to the fact, we're never going to do anything about it.

How about your 1% for the Planet program? 

It has 1,400 member [businesses] in 35 countries, and it's growing one a day. Whether you're profitable or not, you have to [give] 1% [of sales]. We don't look at it as charity; we look at it as the cost of doing business, because charity is: you've had a good year and you've got extra profits and you give a few hundred bucks to the symphony or something. We look at it as, we're using up nonrenewable resources, we're polluters, [so] we try to be as responsible as we can.

There's no such thing as sustainability in any human endeavor, so we just feel like this is the cost of doing business that we include in everything we do. It [has been mostly] real mom-and-pop operations, but we're getting more midsized companies joining now, which is what I was hoping would happen. Parts of public companies [are joining], but there's no public company entirely that's a member.

Patagonia isn't a public company? 

No, my wife and my kids and I own [it] all. If [it] was a public company, we wouldn't be able to give money to, say, Planned Parenthood, because a stockholder would go nuts. We're able to be much freer.

What would happen if yours were the nation's corporate model? 

You'd see more responsible companies, and you'd see companies grow a lot slower. Public companies demand 15% growth every year until they hit a size that is unsustainable and they go belly up. They're all heading toward suicide. You can't grow 15% every single year. Then you exceed your market, and you throw lots of people out of work. I think small, family-owned companies is the way to go.

You believed in sustainability once; do you now? 

I think that word has gotten overused, like "gourmet" or "adventure" or "green." You hear it all the time: sustainable this, sustainable that. And it's not. Any economic endeavor is going to cause waste and heat and pollution. It's just consuming and discarding, and the whole economic system is based on that. It's a finite world, but you won't find any economists who will tell you that. We're in a recession, and the government tells us to buy more, and that's the reason we're in trouble.

We have to get away from a system solely based on consuming. You can imagine what will happen if we do -- there's going to be a rough glitch for a while.

Rough to wean ourselves off consumerism? 

Yes, absolutely.

[Here's] what [Patagonia is] doing in the next year. We're asking our customers to think twice before they buy one of our jackets: Do you really need it, or are you just bored and you want it? And then if you do buy from us instead of Columbia or North Face or whatever, thank you. And if it breaks down, we promise we'll fix it. If you're bored with it or your kid has outgrown it, we're doing a partnership with EBay and we'll help you sell it. You can pocket the money or give it to [any of] five different environmental organizations. When it's finally worn out, give it back to us and we promise to recycle it into more clothing. We're going to take responsibility for our product.

So what do you make of the green movement at big corporations -- real, or Astroturf? You've been advising Wal-Mart

I always thought the revolution was going to start from the bottom, but this time it started from the top. Here's the largest company in the world, and they're committed to cleaning up their act as far as what products they sell, and getting rid of packaging and getting rid of fats in a lot of their foods, and they can do that. They could go to Kraft [Foods] and say, "We want you to get rid of all the high-fructose [content] in your thousands of products [or] we won't sell them." They have tremendous power.

Could they lead the way away from globalism, factory farming and the like? 

Nah, they're not going to lead us away from globalism, and I'm not an apologist for their labor issues and stuff like that. I do know that the Walton family is really pushing to get Wal-Mart suppliers to clean up their act. Wal-Mart [has the clout to] go to Crest toothpaste and say, get rid of the box, the box is just waste. Yeah, [the tube is] going to roll off the shelf, but you figure it out. And when you figure it out you're going to save money, because there's no box. And we want the savings.

Do you meet with other chief executives? Do they regard you as a pariah? 

One time I made a big mistake and I talked to about 50 bankers. They didn't get it. They just stood there stony-faced. They don't get that the world is changing. These millennium kids, they're totally different. [My generation is] not going to save the planet; we're not going to do anything about global warming; we're not even going to change our light bulbs. But these kids have had environmental education. They don't fall for advertising. They know the problems of the world and want to do something about it.

Do you see an awareness that there's more to the value of a product than the price? 

I can tell you that I love recessions because Patagonia has always thrived in a recession. In a recession, people stop being silly. They don't mind buying better quality; they just buy less of it. We're thriving in a recession because we have loyal customers who are buying less, but they're buying better.

You're not saying all growth is bad? 

There's growth where you grow fat, and growth where you spiritually grow or grow stronger, but America is just growing fat.

That's why I'm in business. I have no desire to grow this business any bigger; I have no desire to make any more money. Basically my business exists to put into practice what all the smart people are saying we have to do to save this planet, and if I can prove it's good business, then other companies are going to follow along. A lot of big corporations are really risk averse. We can take a risk and prove that it works, and then these other weenie corporations can follow along because we've already proved that it's good.

I love this little Zen lesson. If you want to change government, don't focus on trying to change government. You've got to change corporations because they're the ones running government. [Then] don't focus on trying to change corporations; focus on changing consumers. We have the ultimate say. We're telling corporations what to make, and then corporations tell government what to do. Civil democracy is the strongest force in America, and I'd say probably the strongest force in the world.

I've always said we live in a dollar democracy -- every dollar you spend is a vote for or against something. 

Within a couple of years a person will be able to go into a department store and zap the bar code on a product and it'll tell you the environmental footprint of that product, how responsibly it was made in every way, the fibers that were chosen, the sewing shop where it was made, how much water was used. The customer would have the final say: "These jeans are way more responsibly made, so I'm going to buy this one." And then corporations are going to have to change.

You sound hopeful. 

Nah, not at all. I've been around a long time and I've seen nothing but deterioration. So I'm very pessimistic. But I feel like I'm less a part of the problem than most people and hopefully I'm part of the solution. You have to be proactive. Imagine you had one of the best companies in the world, giving people good benefits and salaries -- but you're making land mines. That's evil.

So I take it no one will see you driving a Hummer? 

[Laughs.] No, but they're going to see me on a lot of airplanes! I'll be in that seventh level of hell [for] jet fuel, that's true.

You've done blacksmithing since you were a kid; do you still? 

I tinker around. They're outlawing felt soles for fishing boots because they carry invasive species, so I'm working on a [new fishing] boot and doing a lot of it in my blacksmith shop.

Did you see the movie "127 Hours"?

There's no way I could see that. It hits home too much for me. The guy's a climber. He used to work in a climbing shop that sold our gear. I know the guy and the whole grisly part of it. I don't want to have to see that.

patt.morrison@latimes.com

This interview was edited and excerpted from a longer taped transcript. Interview archive:latimes.com/pattasks.