By Alison Loomis | Friday, 14 March 2008
Sustainable technologies and policies to address the climate change crisis and the world’s growing energy requirements are urgently needed. However, at UC Berkeley’s second annual Energy Symposium March 7th, policy, business, and academic leaders concede that shaping a shift to a clean energy infrastructure will fall short or “crash” without significant government R&D funding.
“We’re at a very critical cusp in time. There is no magic bullet for adapting to global warming because the impacts are so wide ranging,” says David Sandalow, Senior Fellow at Brookings Institution. “De-carbonizing the world’s energy supply," he says, "is the challenge of our time.”
“No one knows what the tipping point is in the future,” says John Doerr, Partner of Kleiner Perkins Caufield & Byers. “The best way to predict the future is to invent it. The second best way is to fund it.”
“It's also about getting people to believe in things that haven’t happened before, like the Reynolds project exemplified,” - referring to the small town of Reynolds, Indiana, who successfully decided to set an example to use only renewable energy.
“In 5 years, if we go on as business-as-usual, the Arctic ice cap will melt,” says Doerr. “We must transition into a clean energy paradigm.”
California Leading the Way
California in particular is considered to be the epicenter for climate action—exemplifying vision, innovation, and leadership. “California is the first state to implement carbon cap-and-trade and to adopt a low carbon fuel standard, which is more progressive than the Congress-adopted CAFE standards. “Who ever thought Silicon Valley would be Solar Valley!” exclaims Doerr.
Felix Kramer, founder of CalCars, claims, “California has tremendous opportunity to create innovative solutions with the California Air Resources Board (CARB).” CARB is charged with the implementation of California's landmark Global Warming Solutions Act, AB 32. CARB is also initiating a regulatory proceeding to implement the Low Carbon Fuel Standard (LCFS), in pursuit of AB 32.
Kramer wittily remarks, “This makes the head of CARB, Mary Nichols, the most powerful person in the world for car companies.”
Dan Kammen, UC Berkeley Professor in the Energy and Resources Group, follows, “Pretty soon California will have a price for carbon. My guess will be three to four years at the federal level.”
“But we have also learned from California” - that as progressive as we are - “it takes time to put these things in place. Right now, we need speed,” says Doerr.
Focusing on tangible clean energy solutions is imperative in the next few years. “One important call to action is extending the ITC for another 10 years” - referring to a 30% solar energy investment tax credit, soon to expire.
But the most significant opportunity lies in the 55% of energy wasted in heat and transmission. This is 1.6 Gt of CO2. “With AB 32 2020 goals, we can get there with energy efficiency alone,” says Margaret Taylor, Assistant Professor of Public Policy at UC Berkeley.
“However, the 80% reduction by 2050 requires a major transformation in our energy infrastructure, and has become a much bigger part of the conversation since the start of this year,” says Diane Doucette, Director of the Climate Campaign at Environmental Entrepreneurs.
First Ever Carbon Cap-and-Trade System
The scoping plan for California’s carbon cap-and-trade program - the first in the nation - comes out in June. Many are hoping that the carbon cap-and-trade will prove to be as successful as similar programs were in dealing with acid rain (SOx and NOx).
One way to do that, is by pairing the carbon cap-and-trade system with a carbon tax. This is an idea that appeals to many speakers at the symposium. It can not only place a safety cap on the trading price of the market credits in the event of a market failure, but it also can help fund California’s carbon mitigations programs. Doerr claims, “A carbon tax could be tax-neutral for taxpayers, where only polluters are taxed.”
Dan Sperling is the founding director of Institute of Transportation Studies at UC Davis. He anticipates a plan known as “City Carbon Budgets” - which essentially transfers cap and trade to cities. “ARB is presently putting a scoping plan of how the City Carbon Budgeting can meet AB 32,” says Sperling.
For household carbon budgets, beyond the realm of the cap-and-trade system, Dan Kammen recommends UC-Berkeley’s new carbon calculator. Mary Nichols of ARB hopes the state will endorse it to require companies to do proper assessment of carbon.
The Case of Biofuels and Transportation
Biofuels and transportation were also a major part of the discussion, particularly since California - the fifth largest economy in the world - has a transportation sector that accounts for almost 60 percent of its greenhouse gas emissions. Transit, for the country at large, currently accounts for only 2% of passenger miles.
The Joint BioEnergy Institute (JBEI) and the Energy Biosciences Institute (EBI), two very prominent biofuel innovators, admit no company has come far along enough to predict what the most sustainable - and scalable - biofuels will be. “At some point multiple companies will be successful and it will come together like the Cambrian Explosion,” says Doug Cameron, Chief Scientific Officer at Khosla Ventures.
Vinod Khosla, Founder of Khosla Ventures, was quoted as saying that America will be off petrol gas in roughly 25 years using cellular ethanol as opposed to farm-based ethanol.
However, Kammen notes, “In the upcoming years, we are stuck with corn, which has the most down side of anything.” He adds, “The best we can do in the next 5 years--in terms of fuel--is use waste streams.”
Sandalow says, “We may have a federal government mandate for 36 billion gallons of biofuels and massive corn ethanol subsidies, but ultimately solving the oil problem requires smart land-use patterns like mass-transit and telecommuting. We must re-think our tendency to widen roads for solving traffic problems.”
“Politicians have been reluctant to do anything, particularly with 'Vehicles Miles Traveled (VMT),' which includes land use issues, mass transit, and behavior change—like driving less. All VMT standards in California have failed thus far,” says Kammen.
Felix Kramer of CalCars believes electric Plug-In Hybrids are an equally important part of the solution. “The real win is to plug these cars into renewable energy sources like wind and solar.”
However, “Utilities recognize that vehicle-to-grid is not going to happen for a decade or so,” says Kramer. “The best we can do right now is charge our Plug-In Hybrids with a rooftop PV during the day, then at night the car could power the house.”
Sperling adds, “Instead of executing new [expensive] Plug-In Hybrid fleets and biofuels with in the next few years, what makes sense right now is energy efficiency, affordable mass-transit, implementing carbon budgets for cities, and LCFS.”
The Research-and-Development Dilemma
Ultimately, since policy undoubtedly matters for energy, “A low carbon energy infrastructure needs good policy,” says Diane Doucette, “And technical innovations need a financial mechanism.”
While cleantech venture capital is rising exponentially - with 50% more investment in 2007 than 2006 - we are concurrently “experiencing an energy research and development failure,” says Kammen. “R&D must significantly increase at the federal level.”
“Without designating proper R&D investment, we cannot ensure predictability for policy-makers, which is critical to nurture innovation,” says Mitch Zuklie, a partner at law firm Orrick, Herrington & Sutcliffe. “We [also] may get stuck in crash programs, like we learned from corn ethanol,” says Dan Sperling, referring to reckless government subsidies for food-based biofuels that “crashed” from indirect land use effects and rising food prices.
“Only $1 billion of federal R&D are designated for renewables,” says Doerr. “The federal geothermal budget was only 5 million. This is criminal for investment R&D.”
“57% of R&D is currently conducted by the private sector. The private sector under-invests in R&D,” says professor Taylor.
“If science can’t get funded by the private sector, then the government must step in. We can achieve government funding coordination—its been done before,” explains Zuklie. "In the 50s and 60s, there was a big push to get us into space—and it was all government funded. The same momentum can be applied to clean energy independence."
What becomes clear at the Energy Symposium is that it is not a lack of ideas, technology or the efforts of many talented people that are limiting our progress toward a clean energy future. It is a federal government unwilling to match its own promises with the necessary purse strings.