Wednesday, December 31, 2008

Solar Stocks: Short Side Profits

With the imminent inauguration of a Green President, solar stocks may appear to be a bargain, but investors seeking to profit from their support of Green should consider the various issues and concerns that effect solar stock valuation.

Alongside price, one of the most important considerations with solar panels is their efficiency ratio, (a measure of how well solar cells convert light energy into electric power). We have seen advances on both fronts and for some this has led to meteoric growth (ie: FSLR's 700% increase), however the news for solar is not entirely sunny.

A difficult economy and the low cost of crude have weakened the price of solar stocks, in December the beleaguered auto industry and the Madoff scandal increased the downward pressure. A growing number of solar companies, including Q-Cells in Germany, have recently cut production and sales outlook. And concerns about oversupply in an economic downturn are legitimate particularly for firms like FSLR that trade in Europe. Sovello (a new joint venture of Q-Cells, Renewable Energy Corp, and Evergreen Solar), had been anticipating a spring 2009 public offering, but has decided to wait until the market stabilizes.

Accross the board, the solar sector has been experiencing price declines. According to an AP ONLINE article posted on December 15 of this year, shares of solar companies continue to fall "due to a continued over supply and macroeconomic headwinds."

Lazard Capital Markets analyst Sanjay Shrestha reduced his price targets on several solar companies citing "worsening industry turbulence and accelarating price declines." He said "while companies with strong liquidity will slow production until the market stabilizes, companies in need of cash will likely flood the market with their product, reinforcing the downward spiral in pricing." Shrestha added that "price declines have even reached some high-quality cell manufacturers." However, the analyst also added that the President elect's focus on renewable energy could "brighten the solar sector and provide near-term trading opportunities for investors."

According to an article in Forbes earlier this month, "investors remain heavily bullish toward the alternative energy sector. [D]ata from the International Securities Exchange (ISE) and the Chicago Board Options Exchange (CBOE) reveals that this bullish sentiment could be far from fading. [However], this rising optimism on a sector locked in a technical downtrend has bearish implications from a contrarian perspective." Falling oil prices and bearish fears have driven down the price of solar shares, but the same article concedes that you can profit on the short side, and some of us already have.

Next: My Solar Stock Picks: Timing and Strategy

Tuesday, December 30, 2008

Time to Invest in Green

As 2008 draws to a close, there are a lot of good reasons for investors to see value in Green stock. Chief amongst them is President-elect Obama's 750 billion dollar stimulus, much of which is devoted to Green initiatives like renewable energy. Reducing greenhouse gas emissions, and preserving natural resources are amongst Obama's presidential priorities. As we make the transformation to the "new energy economy" we can expect painful adjustments, but there can be no doubt about the incoming administration's commitment to making America more competitive through Green technology.

The current economic situation is not as bad as some sensationalist media headlines would have us believe. Downturns purge inefficiency, and although we know that some will not survive, most non-financial corporations are in better financial shape than they have been in over 30 years. John Zechner of JZechner Associates Inc. predicts that the US economy will shrink by about 7% with unemployment peaking at about 7.5%. Even if this assessment proves to be optimistic, we will not be anywhere near the dismal economic numbers posted early last century. (From 1930 to 1934 the US economy contracted by 27% and the unemployment rate was over 25%).

Unlike 1929, central banks around the globe are responding to the economic crisis. We have come to understand that governments have a very important role to play. The combination of policy, regulation and investment should stimulate markets and slow the decline. And although it may take some time, 'reflation' should work as it has in the past.

The market decline and ongoing volatility is inspiring many investors to review their portfolios. But knowing how to profit from the market is largely a matter of timing. The history of recessions and bear markets indicates that downturns last between 7 and 14 months. Leading some to expect a resurgence starting in the middle of 2009. However not all firms will prosper going forward, and this is the caveat to smart investing. As the once mighty pillars of the old economy fall, investors are tasked with the challenge of identifying firms well positioned to take advantage of global trends.

Historical data (1932, 1942, 1982 and 2003) demonstrates that investors who buy when the economy seems most troubled, earn the greatest returns. Stock prices have dropped to five-year lows, and when compared to bonds, stocks are at their most inexpensive level in 40 years. We have not hit bottom yet, but we would do well to remember that markets tend to begin their rebound anywhere from two months to six months before an actual economic bottom. This is the time to begin looking at firms that are well positioned to capitalize on global trends.

There are an abundance of Green investment opportunities that arise from Obama's pledge to invest in renewable energy, energy efficient public buildings, and the electricity grid. As he put it, "The pursuit of a new energy economy requires a sustained all- hands-on-deck effort." This "21st- century economic recovery plan" will put Americans to work building wind farms, solar panels, and fuel-efficient cars. With the announcement of his energy and environment team, President-elect Obama has demonstrated his commitment to renewable energy and reducing America's dependence on foreign oil.

We are about to embark on a journey towards "a new energy frontier", investors who seize the moment will be in a position to benefit. To quote the President-elect, "we must seize boundless opportunities now [and] we must have the will to act and to act boldly." For those who wish to support the environment and turn a profit, now is the time to go bargain hunting for undervalued Green stock that is well positioned to soar in 2009. Green can provide smart investors with an earning opportunity of a lifetime.

Next: Solar Stocks: Short Side Profits

Tuesday, December 23, 2008

12 Reasons to be Thankful this Holiday Season

Despite the economic hard times, those who celebrate the growth of Green have much to be thankful for this Christmas season. The Twelve Days of Christmas end with Epiphany which commemorates the Wise Men (or Magi) who presented gifts to the Christ child. Although there are no partridges or pear trees, here are 12 reasons why environmentally conscious people should be hopeful this holiday season.

1. Increasing Home Energy Efficiency: Although far from where it could be, the drive toward energy efficiency continues. Energy-efficient compact fluorescent light bulbs (CFLs) are being used in more homes all around the world, underscoring the powerful importance of small gestures repeated millions of times.

2. ESA Protection: Although a lamentable illustration of the effects of climate change, the polar bear's listing as "threatened" under the Endangered Species Act (ESA) affords some protection. The polar bear is the first of countless species that will fall under ESA protection due to climate change. This affords yet another reason to get serious about reductions in America's CO2 emissions.

3. 'Hypermiling': Defined as the "attempt to maximize gas mileage by making fuel-conserving adjustments to one's car and one's driving techniques". The Oxford American Dictionary named "hypermiling" the 2008 word of the year. Hypermiling techniques include keeping tires perfectly inflated, killing engines at stoplights, turning off the air-conditioning and driving at a steady speed, with as little rapid acceleration or deceleration as possible.

4. Climate Change Skeptics are Left Out in the Cold: It is increasingly difficult to deny the reality of anthropocentric climate change. Discredited by bad science, those who refute climate change have less credibility than ever.

5. Cap-and-Trade: In the EU a cap-and-trade system is operating well and according to an MIT analysis, has had little or no negative impact on the overall EU economy. Even large cities like Tokyo are passing legislation that will require a cap-and-trade scheme for emissions. 2008 saw the introduction of the first national carbon cap-and-trade legislation to reach a full vote in the US Senate. Although it did not make it into law, it began a debate that is sure to continue as cap-and-trade has the support of the President-elect.

6. First CO2 Auctions: Putting a price on carbon pollution is crucial to CO2 reductions, one way to achieve this is through a cap-and-trade program which would auction CO2. This system puts the power of free markets to work for the environment. In September, the Regional Greenhouse Gas Initiative, (a pact of 10 northeastern states to cut carbon emissions) held their first carbon auction. In November Europe held its first auction of CO2 permits.

7. Addressing Deforestation: Tree loss accounts for at least 20% of global carbon emissions. As the world's third largest carbon emitter, Indonesia is regulating deforestation. With the help of California, Indonesian officials announced their government would set up a regulatory framework for carbon forestry programs. Earlier this month Brazil announced that it has set targets to reduce deforestation by 70 percent over the next decade.

8. Coal Moratorium: In the US coal is cheap, but it is also responsible for 30% of the country's carbon emissions. Coal currently supplies half of US' electricity. A November 13 ruling stipulates that the EPA has no grounds to refuse to regulate the CO2 emitted by new coal plants. That prohibited the EPA from certifying any new coal plants, effectively stopping further development of 100 new coal plants currently in the development pipeline. Poland is one of the most coal dependent nations on earth, it gets 90% of its electricity from coal. But it is reducing it's dependence on home-grown coal so that it can meet it's CO2 targets.

9. Fuel Efficient Vehicles: There is a radical shift well under way in the car culture of the world's biggest carbon emitter. The growing popularity of hybrids and smaller cars demonstrate that fuel efficiency is something Americans expect from their automobiles. Even before gas was $4 a gallon, sales of compact or subcompact cars were up and sales of traditional SUVs and full-size pickups were down. And for the first time, fuel-efficient four-cylinder engines surpassed six-cylinder models in popularity. “It’s easily the most dramatic segment shift I have witnessed in the market in my 31 years here,” said George Pipas, chief sales analyst for the Ford Motor Company. “The era of the truck-based large SUVs is over,” said Michael Jackson, chief executive of AutoNation, the nation’s largest auto retailer. "We continue to see that fuel efficiency will remain one of the top priorities for purchasing consumers," said Bob Carter, general manager of Toyota's U.S. division. “This shift appears to be a permanent situation,” said Jesse Toprak, chief industry analyst for the auto information Web site Whatever the fate of the big 3 US auto giants, the days of Detroit's gas guzzling behemoths are gone forever.

10. Lessons In the Management of 'Green' Initiatives: Events in the agricultural commodities market are ushering a better understanding of how we must manage Green initiatives. The bio-fuel bubble burst due to over investment and collapsing ethanol prices coincided with several studies refuting ethanol's Green status. Not only is American ethanol production of questionable Green value, the federal subsidies that encouraged farmers to grow corn, had unintended global consequences like driving food prices to record highs. The recent credit crisis serves to further illustrate the transnational character of our globalized economies.

11. Renewable Energy: The EU set targets for renewable energy generation at 40 percent by 2020. Earlier this month the US Congress passed renewable energy credits which extended the federal tax credit system that helped build the domestic solar and wind industries. These credits enable renewable energy to compete with cheap fossil fuels.

12. President-Elect Obama: The election of Barack Obama is part of an American epiphany that offers hope for all those who feel that environmental leadership must come from the worlds preeminent economic and industrial power. President-elect Obama embodies America's realization of the importance of Green. The Obama team has pledged to create Green collar jobs through alternative-energy investment and the implementation of a cap-and-trade system. The world has reason to rejoice over Obama's forward looking plans for environmental stewardship. Cynical chants of "drill baby drill" were drowned out by choruses of "yes we can." Green now has a champion in the most powerful office on earth.

Friday, December 19, 2008

A Green Christmas Carol

Moral bankruptcy fosters corruption and fuels global recession. Scandals from Enron to Blagojevich reveal our ethical vacuousness. The housing, credit and financial crises are like the three spirits that warn Ebenezer Scrooge in Dicken's cautionary tale, 'A Christmas Carol'.

The now infamous Madoff scandal is an illustration of the tangled web of corruption. Despite 'credible and specific' allegations regarding Madoff's financial wrongdoing, the SEC somehow failed to detect the biggest Ponzi scheme of all time. To add to the subterfuge, U.S. Attorney General Michael Mukasey recused himself from the Madoff probe because his son is representing a top financial officer at Madoff's investment firm. To complete this incestuous web of malfeasance, Eric Swanson, a former SEC attorney, is married to Madoff's niece.

Corruption is not limited to the US. In China, Shanghai's widening pension fund scandal is stealing headlines like so many other scandals around the world. According to Fromm, (The Sane Society, 1955) a society in which "consumption has become the de facto goal", is itself a sick society. The world's economic woes are a function of an ethical crisis. A new economy must address the failed morality of unbridled greed and rampant consumption.

Green comes with an inherent value system, and a purpose beyond consumption. Eco-ethics reflect the understanding that human destiny is fundamentally intertwined with the fate of the earth. Green values like responsibility, sustainability and social justice encourage people to enrich themselves by serving the greater good of the wider community. Green rebukes the amorality of our business culture, and provides guidance in a world awash with corruption. But like the old miser in Dickens' Christmas classic, we must act while we still have time to redeem ourselves.

A Tale of 7 Cities

"It was the best of times, it was the worst of times..."
- Opening line from 'A tale of Two Cities' by Charles Dickens.

However dire it may appear, the current state of the global economy presents an important opportunity to make broad spectrum changes. The way we manage our cities is crucial to a sustainable future. Cities can create jobs and be more Green, this is the premise of a guide entittled A Tale of 7 Cities. Written by academics from the LSE, the guide examines how 7 European cities managed the death and resurrection of their industrial cores. A riff on the central theme of the Dickens classic, 'A Tale of two Cities'. The guide demonstrates how cities can reinvent themselves. "Parlaying the benefits of innovation and research clusters into cleaning up inner city areas is 'smart economically, and sustainably, since densely built cities use less energy and generate fewer greenhouse gas emissions,' says Bruce Katz, director of the Metropolitan Policy Program at the Washington-based Brookings Institution. "The revival of older industrial cities in Europe has much to teach"

According to an article in Tree Hugger, "One of the best ways to move out of the current financial morass is by promoting and expanding the green job sector, a new report from Worldwatch Institute called Green Jobs: Working for People and the Environment outlines the scale of green jobs already out there and advocates that a 'bailout for the environment' can create jobs on a global level and 'help rebuild communities amidst the ashes of the current economic crisis.' The report estimates that retrofitting the European Union’s residential buildings to cut carbon emissions by 75% could create an additional 2.6 million new jobs by 2030. It also argues that from a job creation perspective, developing more public transportation would create more jobs than increases in car manufacturing. [T]he report [also] points out that organic farms employ an average one-third more people per farm than do their non-organic counterparts."

Government policy must support sustainable development to expand green jobs. According to the report:"Integrating social and environmental aspects into the cost of doing business and undertaking large-scale public and private sector investments will be key to realizing the massive potential that green jobs hold. Government targets, mandates, business incentives, and reformed tax and subsidy policies must promote sustainable development in order for the green labor market to take off."

Green provides jobs, grows the economy and bails out the environment. Investment in Green reflects the understanding that the earth and its ecosystems are an important part of the value chain. Green will continue to proliferate out of pragmatic necessity and the need to be competitive will drive radical shifts in our economies. These economic changes will change behaviors and propel the paradigm shift towards a Greener world. By creating jobs and growing the economy, Green offers us a way out of our present predicament. However, meeting the challenges we face demands a new sense of responsibility, a new ethic without the encumbrances of the old polemics and ideological divides.

Next: A Christmas Carol: Green Ethics Combat Corruption

Thursday, December 18, 2008

Giving Green: Environmental Charities

Many are thinking of the earth this holiday season. As an impetus for change, the confluence of volatile energy prices and the global economic crisis presents a valuable window of opportunity. According to Planet Green, "change is needed now more than ever on countless eco-fronts. And giving to a green-guided charity just may be enough to help turn the tide."

Whether part of your normal holiday giving or in lieu of a gift, get to know your charity before making a donation. Below is a list of environmentally friendly charities:

Canadian Wild Lands
Center for a New American Dream
Click For Greenland
David Suzuki Foundation
Donate Solar Energy
Earth Justice NRDC
Environmental Defense
Environment Northeast
Environmental Working Group
Expand Nature Reserves in Scotland
Forest Watch
Keep Pollutants Out of the Ocean
Land Care Niagara
Patagonian Coastal Steppe
Plant an Oak Tree
Preserve United States Wilderness
Protect wildlife habitat
Race for the Rain Forest
Red FeatherMarine Wetlands, American Prairie or Rain Forest
Reduce Pollution
Remove CO2 from the Atmosphere
Save Swedish Forest
Santa Monica Baykeeper
South American Rainforest
Save the Rain Forest
The Environment Site
The Nature Conservancy
The Rain Forest Site
20/20 Vision

For an independent assessment of your charity, and a summary of environmental charities, go to the Charity Navigator: "Your Guide to Intelligent Giving"

Tuesday, December 16, 2008

A New Energy Economy: Obama's Gift to America and the World

Transcript of President-elect Obama's press conference announcing his Environment and Energy Team. December 15, 2008.

In the 21st century, we know that the future of our economy and national security is inextricably linked with one challenge: energy. In the next few years, the choices that we make will help determine the kind of country and world that we will leave to our children and our grandchildren.

All of us know the problems that are rooted in our addiction to foreign oil. It constrains our economy, shifts wealth to hostile regimes, and leaves us dependent on unstable regions. These urgent dangers are eclipsed only by the long-term threat of climate change, which, unless we act, will lead to drought and famine abroad, devastating weather patterns, and terrible storms on our shores, and the disappearance of our coastline at home.

For over three decades, we’ve listened to a growing chorus of warnings about our energy dependence. We’ve heard president after president promise to chart a new course. We’ve heard Congress talk about energy independence, only to pull up short in the face of opposition from special interests. We’ve seen Washington launch policy after policy, yet our dependence on foreign oil has only grown, even as the world’s resources are disappearing.This time has to be different. This time we cannot fail, nor can we be lulled into complacency simply because the price at the pump has for now gone down from $4 a gallon.

To control our own destiny, America must develop new forms of energy and new ways of using it. And this is not a challenge for government alone; it’s a challenge for all of us. The pursuit of a new energy economy requires a sustained all- hands-on-deck effort, because the foundation of our energy independence is right here in America, in the power of wind and solar, in new crops and new technologies, in the innovation of our scientists and entrepreneurs and the dedication and skill of our workforce.

Those are the resources that we have to harness to move beyond our oil addiction and create a new hybrid economy. As we face this challenge, we can seize boundless opportunities for our people. We can create millions of jobs, starting with a 21st- century economic recovery plan that puts Americans to work building wind farms, solar panels, and fuel-efficient cars.

We can spark the dynamism of our economy through a long-term investment in renewable energy that will give life to new businesses and industries with good jobs that pay well and can’t be outsourced.

We’ll make public buildings more efficient, modernize our electricity grid, and reduce greenhouse gas emissions, while protecting and preserving our natural resources. We must also recognize that the solution to global climate change must be global.

Just as we work to reduce our own emissions, we must forge international solutions to ensure that every nation is doing its part. As we do so, America will lead not just at the negotiating table; we will lead, as we always have, through innovation and discovery, through hard work and the pursuit of a common purpose.

The team that I have assembled here today is uniquely suited to meet the great challenges of this defining moment. They are leading experts and accomplished managers, and they are ready to reform government and help transform our economy so that our people are more prosperous, our nation is more secure, and our planet is protected.

Dr. Steven Chu is a Nobel Prize-winning physicist who has been working at the cutting edge of our nation’s efforts to develop new and cleaner forms of energy. Steven is uniquely suited to be our next secretary of energy as we make this pursuit a guiding purpose of the Department of Energy, as well as a national mission.His appointment should send a signal to all that my administration will value science. We will make decisions based on the facts, and we understand that facts demand bold action.

For my administrator of the Environmental Protection Agency, I’ve chosen Lisa Jackson. As commissioner of New Jersey’s Department of Environmental Protection, she helped make her state a leader in reducing greenhouse gas emissions and developing new sources of energy. And she has the talent and experience to continue this effort at the EPA. Lisa also shares my commitment to restoring the EPA’s robust role in protecting our air, our water, and abundant natural resources so that our environment is cleaner and our communities are safer.

Nancy Sutley will be an integral part of this team as the chair of my Council on Environmental Quality in the White House. In recent years, we’ve seen states and cities take the initiative in forging innovative solutions on energy. she will bring this unique experience [at the state and city level] to Washington and be a key player in helping to make our government more efficient in coordinating our efforts to protect our environment at home and around the globe.

Finally, the scope of the effort before us will demand coordination across the government and my personal engagement as president. That’s why I’m naming Carol Browner to a new post in the White House to coordinate energy and climate policy. Carol understands that our efforts to create jobs, achieve energy security, and combat climate change demand integration among different agencies, cooperation between federal, state, and local governments, and partnership with the private sector. She brings the unmatched experience of being a successful and longest-serving administrator of the EPA. She will be indispensable in implementing an ambitious and complex energy policy.

Looking ahead, I’m confident that we will be ready to begin the journey towards a new energy frontier on January 20th. This will be a leading priority of my presidency and a defining test of our time. We can’t afford complacency nor accept more broken promises. We won’t create a new energy economy overnight. We won’t protect our environment overnight. But we can begin that work right now, if we think anew and if we act anew. Now we must have the will to act and to act boldly.

Monday, December 15, 2008

Green Gifts

Consumers have a variety of eco-friendly gift options for the holidays. The key to Green holiday giving is waste reduction, this also entails reducing purchases that deplete resources and ultimately end up in a landfill. The environmental footprint of your gifts can be minimized in several ways, using recycled materials, handcrafting, buying locally or even offering experiences in the place of traditional gift items.

Make your own gifts, handcrafted gifts are appreciated as a personal investment of time, love and creative energy. Purchase the handiwork of local artisans and craftspeople. Buy secondhand books and CDs or give non-material gifts, such as food or wine. To help make your gifts Greener, use recycled wrapping (paper or cloth) or choose gift boxes and gift bags made from recycled paper. "If each family would use alternative gift-wrap such as a pillowcase, bedsheet or newspaper for three presents, it would save enough paper to cover 45,000 football fields, according to the Carnegie Mellon Green Practices Initiative."

Instead of giving objects, give people an experience, give a certificate to a spa, concert tickets or courses in wine appreciation, or better still, pledge to plant a tree or give carbon credits as gifts.

"Being green isn't an all-or-nothing proposition," Tina Riley co-host of Eco-Friendly Holiday Decorating Workshops, said. "Think creatively about how to reduce your waste. And then when it's time to buy something new, make the right choice."

"People are learning that having an 'eco' Christmas doesn't only mean being earth-friendly; it means being economical as well," said Wava Riley, the other co-host of Eco-Friendly Holiday Decorating Workshops. "It's really about being practical and getting the most out of what you already have."

More than any year in recent memory, consumers are likely to be cautious about their holiday spending. Green gift giving not only saves money, it is a personal statement that helps to save the planet. This year, let Green become part of your holiday gift giving tradition.

For a summary of 'green' gifts, see Tree Hugger's easy to navigate Holiday Gift Guide.

Next : Green Giving: Environmental Charities

Friday, December 12, 2008

Hope for the Holidays

In the wake of US home mortgage meltdown, the credit crunch, a financial crisis, and growing unemployment, many expected a softening of consumer confidence. But Americans appear to be ignoring the headlines, recent US consumer spending contrasts against the bleak backdrop of global recession. As reported in the National Retail Federation’s recent Survey, there were more shoppers and increased spending on black Friday weekend (Nov 27 - Nov 30) in 2008 compared to 2007, and a 10% increase in online shopping traffic.

Nations around the world are working cooperatively to keep their economies from shrinking. The EU is united in its support for a 260 billion stimulus and Japan has announced that it will add 255 billion to its stimulus. President-elect Obama is expected to join them with a stimulus package of his own once he assumes office.

Wth the American auto industry teetering on the brink of bankruptcy, there are hopeful signs for Green. Earlier today, the EU announced that it had unanimous agreement on a precedent setting plan to cut continental emissions 20% by 2020. Far from being an impediment, the recession appears to be driving Green behavior. Wendy Liebmann, chief executive of consulting firm WSL Strategic Retail, "has noticed that the economic downturn is accelerating mainstream acceptance of the thriftier behaviors of the green movement."

According to a global poll by the HSBC, "The environment remains a top concern for people around the world despite the financial crisis. The new poll, released on 26 November, finds that 43 per cent see climate change as a bigger problem than the economy. The survey confirms the findings of a UNEP poll released in October that showed that nearly 90 per cent of young people across the globe think world leaders should do 'whatever it takes' to tackle climate change. The two surveys are an unequivocal call from people around the world for unity in the fight against climate change."

The severity of the current economic climate has not undermined support for the environment and although the circumstances may be less then desirable, the world is uniting to confront these challenges. Like the Grinch before Christmas, the recession stole trillions of dollars and thousands of jobs, yet people in Who-villes all around the globe continue to hope for a brighter future.

United Nations Climate Change Conference

The 14th Conference of the United Nations Framework Convention on Climate Change (UNFCCC) concludes today in Poznan, Poland.

Highlights of this year’s UNCCC agenda include:

- Increasing understanding and commonality of views, a “shared vision” for a new climate change regime

- Stong commitment to the Partnership for Climate

- Progress on a number of ongoing issues required to enhance the implementation of the Convention and the Kyoto Protocol, including capacity-building for developing countries, reducing emissions from deforestation (REDD), technology transfer and adaptation.

Nearly 200 countries are involved in the UNFCCC and more than 750 non-governmental and intergovernmental organizations are invited to the conference as observers.

Thursday, December 11, 2008

Creating a Sustainable Future

Responding to rising consumer awareness of a sustainable future, the 2008 International Home and Housewares show presented eleven exhibits focused on green. With topics ranging from embedding sustainable design, to corporate sustainability reporting.

"The first step toward a truly sustainable future is creating it," says JohnPaul Kusz of the Center for Sustainable Enterprise at the Illinois Institute of Technology, "design can be the engine for behavior change as well as new products. My contention is that we can extend the design brief to include the engagement of the end user in a dialogue with the product and its maker that creates a relationship of shared responsibility and stewardship,” he says. “By doing so, we can move from simply designing artifacts to designing and developing comprehensive business and system models that bring more value to the brands we create.”

One emergent “green” concept is corporate sustainability reports, according to Chad Upham, founder of Covive, Inc., a San Francisco-based consulting and design firm that guides corporations through the process of developing those reports. Upham says the process drives “real strategy and innovation” for the long term. He notes that every major company produces an annual financial report, which helps investors and analysts make decisions about their commitment to the company, which justifies a similar report on sustainability.

“Over the past decade, with the increase in access to global information through the Internet and media, the public has grown more aware of the social and environmental liabilities of the products they consume,” he says. “More consumers are basing their buying decisions on social and environmental factors in addition to quality and price. Corporations that are proactive at adopting strategies to reduce environmental impacts and strengthen communities build consumer confidence and can discover tremendous economic benefits through efficiency and goodwill.”

Mark Dziersk of Laga/One80 Design describes the changing product development process as moving from “a three-legged to a four-legged stool,” the latter including sustainability as well as what “works well, looks good and costs little.” He says the “old chestnut” that consumers won’t pay more for a product that includes an authentic sustainability element “is no longer true.”

“From Wal-Mart to Detroit to Wall Street, green has come into its own as a sincere piece of the go-to-market plan,” Dziersk says. “The mistake many companies make is to lead with green or compromise the other three legs. Looks great, works great, costs the right amount and ‘is green’ are the new table stakes in housewares, packaging and the design industry in general. Without the fourth leg, you will not be taken seriously in the future.”

Another element of an effective sustainability movement is cutting through the hype and zeroing in on what consumers want to hear as “green” becomes the buzzword of the early 21 st century. The Energy Pulse survey has shown that while today’s consumers embrace the concept of green home products, they also believe “green” may have more to do with the color of money they’ll shell out than saving the planet.

Albing International Marketing (AIM) has identified an “increasingly passionate interest in the environment.” In an online survey of more than 1,500 consumers, AIM found that 39 percent said “green” is very important to them. Another 39 percent said it was somewhat important and it “probably” should be more important to them. Four percent said it is “critical” to all of their decision-making.

Concerns for the environment come up in most focus groups and virtually every interview. “We have been astounded by the passion and level of interest among all consumers concerning the environment in the past 19 months,” Albing says. “In the past, it always seemed like a passing fad. Today, it’s considered a lifestyle choice."

Wednesday, December 10, 2008

An Open Model of Innovation

Although focus groups continue to indicate that there is broad based interest in Green, as of yet that level of interest is not reflected in actual buying behavior. "

Awareness of eco issues and interest in environmental lifestyles has risen dramatically" explains green activist and innovation strategist Jennifer van der Meer, "but there is still an alarming gap between those who say they want green options and those that actually buy into or try to live a greener lifestyle."

Corporations are increasingly offering more than just statements and promises, but the future of Green depends on commercially viable product development and marketing. For van der Meer the key is "translating consumer needs back into business and design requirements. [T]he nature of this challenge requires constant, ongoing conversation between all the elements. The rise of web-based communities and social networks are the very thing necessary for everyone to participate in these experiments."

Van der Meer's idea is to tap the creative, proactive energy of smart, visionary people around the world to solve these larger challenges. Charlene Li and Josh Bernoff of Forrester Research calls this The Groundswell: 'a social trend in which people use technologies to get the things they need from each other instead of from companies.' In this context, progressive brands provide a service of creating platforms for people to connect and collaborate with the people inside and outside of company boundaries.

When emerging green consumers are asked "to take the time to give their real opinion about their lifestyle, they reveal an untapped desire to participate in the process. When you...engage people in the challenge of designing a green future, they want to do so much more than just vote with their wallet. One-on-one interviews, blog studies, and focus groups [indicate that] People wanted to dissect how they chose to eat their food, build their home, rely on transportation, raise their children, and create meaning in their lives."

Consumers want Green products, but they will not compromise. "Although over 50% of consumers want greener, more natural housing cleaners, only 5% actually purchase this category of product. Consumers do not want tradeoffs, they are not willing to settle for a product that performs less than a more eco-unfriendly alternative."

To address the discrepancy between interest and buying behavior, we need to include consumers at the product development stage. Van der Meer, advocates an Open Model of Innovation, a sustainability driver, that leverages tools "like ethnography and sophisticated needs analysis. When given the opportunity, these methods drive the whole development process towards more meaningful and commercially viable innovation. These user-centered methods are the precursor for solving the green problem.

According to van der Meer, impediments include the old compartmentalized structure, "which resulted in confusion all along the chain, the initial pleasure and fascination with the complexity of the problem devolved into fatigue amongst the newly green converts at the consumer and corporate level." Ideas often get watered down between conception and launch. "This is in fact where the activity of greenwashing occurs--good intentions turn into skepticism, compromises, and incidental innovation.

Value creation is limited when people inside of companies are limited to their department, their role and their phase gate in the innovation process. When value creation is opened up, consumers are happy to supply ideas, content, taste, social acceptance, and emotional drivers that ultimately lead to behavioral change. These participatory models demonstrate a path forward for sustainable innovation.

Even companies locked into the industrial economy can also adopt open innovation, connecting the corporate value chain to partners, vendors, suppliers, and emerging entrepreneurial ventures. Sustainably minded companies invite community stakeholders, third party auditors, and environmental NGOs into the innovation process to vet green standards, develop workable solutions, and verify claims.

As van der Meer points out, participation is the key to innovation. "The roles of designers, product development specialists, and marketers should never have been as segmented and will never be again. The green challenge is now the innovation catalyst for a whole new way to do business. To fix the destructive and even alienating industrial chain of production, we have to blend the relationship between consumer and producer. We need to envision a new way to work, play, and live--a new way to create our own future."

Friday, December 5, 2008

To Bail or Not to Bail: Financing the American Auto Industry

The American auto industry's big 3 arrived in Washington yesterday with cup in hand asking for 34 billion in loans. Their late inning theatrics may not be enough, it may take more than a few hybrids and CEO salary reductions to convince Washington that the American auto industry deserves the bailout they are requesting. As I write this, Chrysler Chairman-CEO Robert Nardelli, Ford President-CEO Alan Mulally and GM's Mr. Wagoner are scheduled to testify before two congressional committees.

Accusing them of being slow learners is amongst the kindest things that can be said about these 3. Even if big auto's CEO's abandon their corporate jets, drive hybrids and work for free, that does not cover the exorbitant cost of decades of errant strategy, woeful mismanagement and blatant disregard for the environment. For some, the only act of contrition adequate to the circumstances would be letters of resignation confessing their incompetence.

Across the board, the auto industry is experiencing declining sales in the US. The American auto industry has experienced declines of between 31% and 47%. Even successful auto firms like Toyota are experiencing declining sales. As reported in AdAge, "this was the worst November in 50 years for the auto industry, with virtually every automaker -- not just Ford, GM and Chrysler but also Toyota, Honda and Hyundai -- dinged by a unit-sales slide exceeding 30%.

American auto makers are quick to blame the congressional hearings for the declining American sales. "[T]he specter of bankruptcy is spooking consumers already rattled by the housing crisis and credit crunch. November started out strong, but by mid-month there was a 'noticeable slowdown' in sales that coincided with Detroit's first unsuccessful round of congressional hearings, said Ford's Jim Farley, group VP-marketing and communications. GM's Mark LaNeve, VP-vehicle sales, service and marketing in North America, cited findings by consultant CNW Market Research that 25% to 30% of Americans avoided Detroit showrooms last month because of all the media reports speculating about bankruptcy for one or all of them." But these explanations ignore the fact that problems in the American automotive sector have been a fixture for many years before these Congressional hearings.

A recent Wall Street Journal article (Oct 25) explains "How Detroit drove into a ditch". According to the author of the article, a former Detroit bureau chief who is writing a book about America's car culture, the blame is placed largely on problems in the factories. "Detroit failed to grasp -- or at least to address -- the fundamental nature of its Japanese competition. Japan's car companies, and more recently the Germans and Koreans, gained a competitive advantage largely by forging an alliance with American workers."

The author of a recent adage article suggests that American automakers are "lacking personality." She explains "It seems to me that the fundamental nature of Japanese competition is their ability to build brands." Her contention is that despite spending $4.6 billion on advertising in 2007, (3.3% of total U.S advertising spending and 5.9% of total U.S. network TV spending), Detroit has failed to build powerful brands. Of the 100 most valuable brands in the world, according to Interbrand, 52 are owned by U.S. companies. Ford is the only automobile brand represented and it should be no coincidence that this is the US auto maker that is in the best shape. "Expensive Saturns and cheap Cadillacs [and] dozens of other branding mistakes," are to blame for GM's poor performance. By way of explaining the lack of effective American automotive branding, the author of the same article says, "There's a growing disconnect between U.S. management and U.S. marketing. Management wants to build a business. Marketing wants to build a brand. The two are often diametrically opposed. To build a business, you tend to 'expand' the brand. To build a brand, you generally need to 'contract' the brand.

To combat the apparent unpopularlity of an auto bailout, efforts are being made to get the public aboard. Chrysler has published a website entitled, General Motors is using a form letter and a website that sends a missive to congressional representatives. Ford activated a new website, And as explained in AdAge, "Chrysler is working with a number of organizations, including its own dealers to use public relations and events to take its case to the streets. Mr. Nardelli, Vice Chairman Jim Press and other Chrysler officials are spending the first part of this week in a grassroots effort it calls a 'Virtual Road Show' with initiatives spread across seven states."

However, branding and public relations are far from the only problems faced by the big 3 auto makers. US car makers have made strategic decisions that are at odds with consumer demand and insufficiently mindful of environmental concerns. Decades after the oil embargo of the 70's American car companies continued to build behemoths with big engines and their more efficient vehicles cannot compete with those of Asian automakers.

However as part of their efforts to secure financing, each of the major 3 US automakers are emphasizing Green in their business plans. As reported in AdAge, Ford's 'Business Plan includes "hybrid, plug in electric vehicles. The plan also calls for an investment of some $14 billion in the U.S. for advanced technologies and products to improve fuel efficiency over the next seven years on all its models. By 2010, Ford said half of all Ford, Lincoln and Mercury light-duty models will qualify as 'Advanced Technology Vehicles' under the U.S. Energy Independence and Security Act, increasing to 75% in 2011 and over 90% in 2014. Chrysler plans 24 major product launches through 2012 that include a "wide portfolio of hybrid electric vehicles ranging from neighborhood electric models (like golf carts) to battery-electric versions." Cadillac has decided to offer a four-cylinder sedan in 2010. GM's Red Tag year-end clearance sale will emphasize fuel economy. And a recent Saturn insert had the headline Saturn Aura: 'Rethink responsible.'

There is no shortage of reasons why Detroit is in trouble. Amongst these reasons many point to overzealous labor demands, recent historic highs at the pumps, the credit and financial crises, the ongoing implosion of the housing market and global recession. But all of these reasons fail to acknowledge that for over 30 years, American automakers have lost their competitive advantage and failed to provide consumers with the best cars at the best price.

American automakers are big and that may be part of the problem. In 2007 GM recorded $181.1 billion in sales, which made it the fourth-largest company in America. However despite its impressive sales numbers, GM also holds the distinction of being amongst the most troubled companies in the US. Perhaps the American car giants are too large and too deeply entrenched in an outmoded strategy to make the kind of adaptations required.

Letting the big 3 flounder would have significant consequences for an American economy already in recession. But pouring money into firms with a proven track record of strategic myopia does not make sense either. Saving jobs is entirely desirable, but money must come with strings and Congress should entrust technocrats to determine how this money should be spent.

Under current treasory secretary Paulson, the financial bailouts are as free of obgligations as the unregulated markets they are trying to cover. Thankfully, Congress appears appropriately committed to attaching strings to the automakers request. To ensure that it does more than prop up a dysfunctional business model, the auto industry bailout must be geared towards helping automakers design and build Greener cars that people will buy. They must also develop a more sustainable, long term plan that will make them more competitive going into the future.

Despite the importance of the big 3 to the US economy, Detroit should not see a dime of federal financing until there are safeguards that guarantee the money will be used to improve the competitive position of the American automotive industry. We would do well to remember the bailout of Chrysler almost 30 years ago and the energy crisis that preceeded it. Bridge loans are not necessarily a bad idea as long as the American taxpayer does not finance a bridge to nowhere.

The Heartbeat of America in Cardiac Arrest
Efficiency and Auto Industry Bailouts
The Way Forward

Wednesday, December 3, 2008

Canadian Municipal Green Incentives

Canadian cities are offering a range of incentives from $250,000 Green grants to rebates to help with the purchase of eligible water efficient clothes washers. As reported in, the municipal government of Toronto is supporting environmental innovation. The 'Live Green Toronto program', will allocate $20 million over the next five years for citizen-driven carbon savings projects. The funding, in the form of subsidies, will go to projects that will help the city to reduce its carbon footprint 6% by 2012 (30% by 2020 and 80% by 2050). Funding will especially be directed to people looking to invest in equipment and materials.

Numerous other Canadian municipalities also offer incentives to go Green. The city of Medicine Hat is offering up to $10,000 in incentives, $1,000 for certified buildings. 50 per cent of the installed cost of a solar water heating system to a maximum of $3,000. 50 per cent of the cost associated with a microgeneration installation to a maximum of $6,000. The City of Lethbridge is offering homebuyers rebates for houses that meet environmental performance targets. Rebates between $2,500 and $3,500 are available for houses that meet "silver" or "Gold" standards of environmental achievement. To see Hamilton's and Burnaby's responses to peak oil, click here. To see Victoria's incentives for high-efficient clothes washers, click here.

Next: To Bail or Not to Bail: Financing the American Auto Industry

Canadian Provincial Government Green Incentives: North

The Government of the Northwest Territories Energy Efficiency Incentive Program helps consumers to purchase more energy efficient products. Rebates are available to help with the purchase of a new ENERGY STAR qualified refrigerator and front-loading clothes washer. Visit the Arctic Energy Alliance Web site for more information. The NTW also offers various rebates for the purchase and installation of high efficient furnaces or boilers, emission neutral wood or pellet stoves or efficient water heaters. Full details are available on the Web site.

North West Territories Government Environment (Natural Resources)

Nunavut Government Environment (Natural Resources)

Yukon Government's Good Energy Program provides rebates for eligible ENERGY STAR qualified appliances and heating equipment purchased until February 28, 2009. A full list of products and more details are available on their Web site.The Yukon Housing Corporation offers mortgage financing of up to $200,000 at a reduced interest rate for homes built or upgraded to the corporation's GreenHome standard, which includes strict energy efficiency requirements. GreenHomes must be constructed by Yukoners, and Yukon businesses must supply at least 75% of the building materials.

Yukon Government Environment (Natural Resources)

Next: Canadian Municipal Government Green Incentives

Canadian Provincial Government Green Incentives: Atlantic

Efficiency NB, a crown corporate of the Government of New Brunswick, promotes ENERGY STAR qualified appliances and products in its public education initiatives as well as providing an ENERGY STAR Package Incentive Bonus as a component of its New Homes Program. Efficiency NB offers new homeowners a grant if their home has an EnerGuide rating of 80 or higher. There are four versions of this grant:The province of New Brunswick provides grants from $1,000 to $3,000 for first owners of new homes. Grants are available for heating systems and for those that achieve EnerGuide rating of 80 or more. An additional incentive is available to homeowners who install ENERGY STAR qualified appliances and lighting

Nova Scotia's Department of Energy provides incentives to offset the initial cost of an EnerGuide building plan evaluation on a sliding scale based upon their EnerGuide ratings ($175-$300).

Nova Scotia Government Environment (Natural Resources)

Newfoundland Power offers up to $10,000 in financing to cover the cost difference between a conventionally constructed home built to the National Building Code Standard and the same house built as a high-efficiency (registered R-2000) home. Loan payments are made through monthly electric bills, with repayment schedules up to 60 months.

Newfoundland Government Environment (Natural Resources)

PEI Government Environment (Natural Resources)

Next: Canadian Provincial Government Green Incentives: NORTH / Canadian Municipal Green Incentives

Canadian Provincial Government Green Incentives: Centre

The province of Ontario has unveiled the Next Generation Jobs Fund which will make $650 million available to companies looking to invest in the development of clean cars, clean fuels, and renewable technologies and products. The province is also behind other recent clean and renewable initiatives including: A $10 million investment with Roxul Inc. to support the development of new commercial, industrial and residential insulation products that use recycled scrap material from the steel and construction industries. A $1.6 million investment with wood composite manufacturer Flakeboard Company that will feature a biomass combustion system that will help reduce gas consumption. A $235 million investment in General Motors that includes the development of fuel-efficient cylinder deactivation engine technology and the production of 100 prototype fuel cell-equipped Chevrolet Equinoxes. A $21 million investment to help Queen's University create its Advanced Research and Innovation Centre that specializes in bio-processing and biomaterials. A $6 million investment in the Ontario BioAuto Council to help move emerging technologies into the marketplace. And $6 million to support Lakehead University in working to ensure the sustainable development of Ontario's boreal forest.

Ontario has a point-of-sale retail sales tax exemption for decorative light strings, ENERGY STAR qualified light bulbs, refrigerators, dishwashers, clothes washers, freezers, dehumidifiers and room air conditioners (purchased, rented or leased). Full details can be found on the Government of Ontario's Web site.

Ontario Government Environment (Natural Resources)

The government of Quebec has increased the maximum PST refund to $2,000 on any sale or long-term lease of a new hybrid vehicle (combined with the federal rebate this amounts to a $4000). Gaz Métro offers financial incentives on the purchase of qualified ENERGY STAR hot air furnace, boiler and programmable electronic thermostat. The Energy Efficiency Fund will offer owners of residences supplied by Gaz Métro for heating purposes a $5 per square feet rebate with the purchase of high energy efficiency ENERGY STAR windows and sliding doors.

ENERGY STAR qualified compact fluorescent bulbs. Until April 30, 2009, Hydro-Québec is offering a mail-in rebate on eligible brands of ENERGY STAR qualified compact fluorescent light bulbs. ENERGY STAR qualified lighting fixtures. Hydro-Québec is offering a mail-in rebate on eligible brands of ENERGY STAR qualified lighting fixtures. Visit the Lighting section of Hydro-Québec's Web site for the list of eligible brands, the rebate coupon and the terms and conditions.

Hydro-Québec is offering mail-in rebates on the purchase of a new ENERGY STAR qualified clothes washer, refrigerator and freezer (Valid until December 31, 2008)

Quebec Government Environment (Natural Resources)

Next: Canadian Provincial Government Incentives: ATLANTIC, NORTH / Canadian Municipal Government Green Incentives

Tuesday, December 2, 2008

Canadian Provincial Government Green Incentives: Prairies

The Province of Saskatchewan offers a PST exemption for qualifying ENERGY STAR residential furnaces, boilers and ENERGY STAR heat pumps. For more information visit the website.

Saskatchewan has announced rebates of up to $2,400 for buyers of energy efficient new homes. For more information click here.

Saskatchewan Government: Environment (Natural Resources)

Manitoba Hydro has several programs which provide Green incentives, they include: The Commercial Refrigeration Incentive Program for retail stores and restaurants that is unique in Canada. (Please refer to the “Commercial Refrigeration Application” for more details). The Commercial Kitchen Appliance Program offers rebates for ENERGY STAR qualified steamers and fryers for restaurants and foodservice establishments. The Commercial Clothes Washers Program, offers an incentive for its commercial customers that purchase and install ENERGY STAR® qualified front-loading commercial clothes washers in their business or facility. The Power Smart Furnace/Boiler Replacement Program offers a $245 credit on customers‚ natural gas bill for the installation of a new ENERGY STAR qualified high-efficiency furnace or boiler. The Power Smart Home Insulation Program offers financial incentives on the purchase of insulation (up to 100 per cent of the material cost ) that must meet eligibility requirements and insulating work that must meet the minimum Power Smart levels. The Power Smart Appliance Rebate Program offers rebates on ENERGY STAR qualified appliances. Electricity bill rebate, to customers who build a new single-family home heated with electricity or natural gas that incorporates prescribed energy efficient components. For more information consult Manitoba Hydro.

Manitoba Government Environment (Natural Resources)

Next: Canadian Provincial Government Green Incentives, CENTRE, ATLANTIC, NORTH / Canadian Municipal Government Green Incentives

Monday, December 1, 2008

Canadian Provincial Government Green Incentives: WEST

The BC government offers a provincial sales tax exemption on pre-manufactured ENERGY STAR qualified windows, skylights, doors, side lights and transoms. Qualified residential forced air furnaces or boilers, air source heat pumps and ground source heat pumps are eligible for a provincial tax exemption if purchased or leased for residential purposes. For more information see the BC Government website under Energy Conservation. Rebates are being offered on the purchase of new ENERGY STAR qualified appliances, Complete details can be found on the web site. For vending machine sensor rebates, visit their Web site.

BC Government: Environment (Natural Resources)

Built Green Municipal Incentives in Alberta (and BC) offer a building permit fee rebate for homebuilders who achieve R-2000 or Built Green certification. There are four categories of eligibility offering a rebate between 10%-30% of the building permit fee.This incentive is currently available in the following municipalities: Strathcona County, Alberta Calgary, Alberta Edmonton, Alberta, Saanich, British Columbia.

Alberta Government: Environment (Natural Resources)

Next: Canadian Provincial Government Incentives: PRAIRIES, CENTRE, ATLANTIC, NORTH / Canadian Municipal Government Green Incentives