Green or Bust

It’s working. You’re working.
Sustainability is impacting the mainstream. Industrial companies are being compelled to change. High efficiency companies are winning. It’s all about simplicity, transparency and accountability. The polarizing issues will improve over time, but only if we choose sustainable solutions with our dollars, our actions and our words. It involves shifting technology away from labor efficiency and resource liquidation and towards localization, import export and waste minimization.
It’s time for resource restoration and efficiency… Which will means jobs, security, stabilization, mitigation and opportunity.
If not now, then never. If not us, then no one. Keep going.
We’re doing well, but more is necessary.
Be the change the world needs.

Future Bright’s IPCC summary

Future Bright’s Summary of the IPCC, UN Climate Report 2014

Future Bright – kcoulson@optonline.net

The summary for policy makers and the full report can be found here: http://www.ipcc.ch/report/ar5/wg3/

The IPCC working group was charged with assessing scientific research related to the mitigation of climate change. One of there key findings was that current trajectory of economic activity, GHG (global greenhouse gas) emissions and mitigation is inconsistent with widely discussed goals of limiting global warming at 1.5 to 2 degrees above pre-industrial levels.

The purpose of this post is to condense the summary for policy makers and to suggest possible business opportunities embedded in the necessary mitigation strategy.

Below is my summary of the key points of the IPCC report along with notes, suggestions, business ideas or investment opportunities associated with the finding. Future Bright is an advisory and think tank on sustainability looking at economic, social and cultural investment opportunities.

• Sustainable Development: Best case mitigation calls for rapid improvement for energy efficiency, tripling of low carbon or renewable energy sources, nuclear, fossil fuel with carbon capture and growth in bio energy land use and afforestation.

o Business Opportunity: A banking structure whose mandate is to invest in local community infrastructure and efficiency. Offers substantially above market dividend.

• Mitigation Policy: could devalue fossil fuel activities and assets

o Investment Opportunity: Future Bright’s equity thesis is focuses on capturing risk in future unrealized waste liability while benefiting from investing in sustainable business models. A long short portfolio of top ten Solar (L) vs. Fossil Fuels (S) returned > 60% in 2013. The ratio of market capitalization of these two groups is still well over 100:1.

• Energy efficiency: Efficiency gains in retrofitting of buildings and existing structure can range between 16%-70%. Best case mitigation scenarios calls for reduced final consumption of energy use of 20%-30% in building and industry.

o Conclusion: The opportunity for securitization and scaling in energy efficiency is huge. Market size is between $500B to $1T (Deutche Bank 2012)

• Renewable Energy: Half of all new energy supply in 2012 was from renewable sources (RE). Best case scenarios call for growth of share from RE to 30% by 2030 and 80% by 2050.

 o Conclusion: RE investment funds focusing on mature segment plus new technologies and infrastructure growth should benefit. This is Future Bright’s central thesis.

• AFOLU: Agriculture, Forest and Other Land Use play a central role in food security and sustainable development. Afforestation, grazing land management and restoration of organic soils are keys to effective mitigation.

o Investment Opportunity: Organic healthy food systems and indoor farming technologies have experienced significant growth over the last decade. Opportunities for early cycle investment exist. Contact Future Bright to learn more. Think large scale production orientation of EDEN PROJECT

• Investment Flows: Over the next two decades annual investment in fossil fuels is expected to decline by $30B, Low carbon electricity supply investment is expected to increase by $147B and investment in energy efficiency is expected to increase by $336B.

o Conclusion: Follow the cash flows. Renewable Energy equity, securitization, storage technologies, efficiency funds should all benefit from shifts in investment flows.

Other Key IPCC Points
• Integrated Approach: An Integrated design approach is necessary: institutions both public and private must focus on societal and cultural dividends as well as economic goals to achieve success in GHG mitigation.
• Global Cooperation: A global approach is necessary. Mitigation efforts can be derailed by independent pursuit of economic goals with a disregard for coordinated GHG reduction.
• Current State: Amidst the technological advancements in efficiency and clean technology, global GHG emission have accelerated in absolute terms between 2000-2010
• Coordination: Mitigation today can avoid self-perpetuating climate change.
• Low Carbon Energy Sources: Worse case scenarios assume market share from low carbon sources to increase 105% by 2030 to ~20% and 190% by 2050 to ~42%. Best case scenario, described above as necessary to avoid greater than 2 degree temperature increase, call for increased share of low carbon sources of 145% by 2030 to 25% and 310% by 2050 to 60%.

o Conclusion: Renewable Energy is past the bubble stage. It is a proven technology that is in the deployment and growth phase.

• Targeted Reductions: Scenarios to keep temperature increase below 2 degrees call for 40-70% lower GHG emission in 2050 relative to 2010.
• AFOLU: Best case mitigation scenario calls for widespread adoption of afforestation and bioenergy with CCS (Carbon Capture Sequestration) in the later half of the century.
• “Delaying mitigation efforts beyond 2030 will substantially increase the difficulty in transitioning to lower long term emission levels while narrowing the options consistent with maintaining a temperature change below 2 degrees relative to re-industrial level (high confidence)”
• Costs: Best case scenarios costs in consumption growth, assuming global cooperation, technological availability and single carbon price, are estimated at 0.04% to 0.14% against a scenario where consumption growth is 300%-900% over the century.
• Development: Infrastructure lock-in for high GHG vs. low GHG assets will be a key determinant in adopting mitigation and policy framework.

o Conclusion: This should be a transparent election issue.

• Urban Migration: The next two decades present an opportunity for integrated urban planning based on sustainable development.

o Business Opportunity: City planners, builders and policy makers that embrace integrated design and balancing economic with societal and cultural dividend should benefit.     Operational costs savings, Clean and local food production, clean transport and service based durable goods providers should benefit.

• Tax–Based Policy: In some countries, tax based policy had proven to weaken the link between GHG and GDP.
• Policy: Credit insurance, feed-in tariff, power purchase agreements and rebates have all proven effective at promotion private investment in mitigation measures.

Other Conclusions
• Technology that focuses on resource productivity and transparency of resource use should be in high demand.
• Operational Cost Savings (OCS) opportunities exists across energy supply, industry, building and residents segments.
• Accountant embracing Full Cost or other forms of closed loop balanced accounting should be in high demand.
• Energy collectives, Investment Trusts and other forms of financial instrument innovation are ripe for development.

Sources

– IPCC WGIII AR5: Summary for Policy Makers
– Natural Capitalism (2001, Hawkins, Lovins)
– Homeenergysaver.gov

 

Future Bright is an advisory and think-tank in sustainability started by Ken Coulson to assists innovators in project development and financial presentation, study sustainability and develop tools for understanding a natural economic paradigm. Future Bright is developing framework and visualizations as it pertains to investing and the formulation of investment products. Contact Ken Coulson at kcoulson@optonline.net

Now is a good time to talk about Micro-grids

Now’s a good time to talk about Micro-grids

Hurricane Sandy has dealt a harsh blow to the northeast in loss of human life, property, infrastructure and sustained damage to the centralized electricity grid. In the wake of the devastation it is important that the northeast population familiarize themselves with Micro-grids and renewable energy parks. Understanding what they are and how they have been successfully employed is the first step.

A Micro-grid is a distributed power supply providing electricity for a small number of ratepayers.

A renewable power source is one generating from a renewable clean and limitless energy source like the sun or wind.

In their simplest forms, Renewable Micro-grids are local area networks built with a combination of solar PV, geothermal and wind energy. These micro-grids can be supplemented with some natural gas and biomass energy production. They are generally connected to the centralized grid but can operate independently in the case of an outage. Many states and countries have already illuminated a clear path to the successful use of micro-grids and renewable energy.

Distributed Micro-grids in commercial and open space settings in places like Westport CT could provide a long-term secure source for maintaining supply chains, safety, and security in the event of natural disasters.   

Close to home, Sikorsky is a stellar example of a progressive American company with respect to renewable energy. Sikorsky is its’ own Micro-grid with over 10 megawatts of renewable energy installed on their site in Stratford, CT. Renewable energy powers 85% of their 2 million square foot campus. As a side note, Sikorsky is also close to completion the worlds first zero gas helicopter. Now, that is awesome!

We should expect our legislators to look for successes which to follow. Germany, Vermont, Mass and California are a few examples of enacted laws with proven success in the renewable space. Germany derives 40% of their power from renewable sources showing a clear understanding of scarcity and security dynamics as well as environmental impact. Your local legislature should be encouraged to look to replicate the success of the structures in place in these environments. Regulation has been holding development of renewable energy parks back until recent years. But,.

The trend is your friend. Microgrids are expected to increase production 5 fold over the next 6 years from about 1GW to 6GW of energy production representing $4 billion in energy revenue. Grid tied renewable energy installations are seeing good growth numbers as well.  

Many people ask me how these projects can work economically speaking. They can be funded a number of ways from community or business sponsorships to public and private investor partnerships. Based on the current CT laws, sponsorship by the largest commercial property owners may be the best model, where local residences can also be included within the Micro-grid. Building owners can sign long term power purchase agreements with their tenants and homeowners and receive the federal tax credit as well (30% of installation cost). As stand alone private investments, renewable energy parks should be able to conservatively deliver 4-7% returns over long time frames (6-25 years). These advancements to our energy supply need to happen so I am confident they will. My hope is that our community, Fairfield County, CT takes up the reigns and begins the necessary march towards a distributed clean and locally owned energy supply.

To address security, safety, and environmental balance, renewable micro-grids are a necessary part of the solution.  

For more informations on Future Bright’s efforts with renewable energy investments, email ken@kencoulson.com

Water the ultimate everything

I could accumulate all the quotes and worrying snippets I’ve seen over the past few weeks here about water scarcity, pollution, or misuse. But that would defeat the simple point I want to ring through. One will suffice

“Without water, nothing happens” this was in the Time and said by a farmer referring to the extended dryness in the American farm belt

It could just as easily apply universally to all human activity. Our bodies are, after all, 70% water. In Iowa, the larger piece of arable land in the WORLD, ill-advised and mass farming techniques have polluted the ground water. In Colorado, Oil and Gas companies, with federal dollars padding their pockets, outbid farmers for water rights.

The food and energy problem will come to ahead in our lifetime, and water will be the big issue.

A start would be requiring Agricultural supply and Energy companies to take responsibility for their effect on groundwater. They’ve more than enough economic profit to protect and restore our water supplies.

Eden Project: There’s something happening here

There’s something in the air lately. I can feel positivity beginning to break thru on a mass scale and bring us closer. Can everyone ‘feel’ it or have I just tuned myself accordingly. We can indeed tune ourselves to the right vibrations and over the last year I have focused my mind and heart on listening and learning to what exactly is Human Nature and how exactly can Humans remember and be stewards of their part in Nature.

Nature refers both to our physical world collectively, all living things, and, doubly, to our predisposed inner qualities.

When we take Human and add energy or ‘E’ we end up with Humane or a showing of compassion or restraint.

Now more than ever, we need to exhibit Humane Nature or compassionate inner qualities in concert with all living things.

Some would argue there exists and oxymoron in the concept but we would be hard pressed to find an educated human that doesn’t understand their dependence on nature and vice versa. We are all linked through this wonderful system of science that created life in the first place. As a collective society, it seems at times we have battled this assumption. But I see many lights on the horizon, seeking to understand how we live and move forward recognizing our link to our natural environment.

A group of those people started Eden Project in Cornwall UK. Built on an old clay pit in 2001, Eden Project has become a largely self sustaining display of nature, science, sustainability, and education consisting of three different climate zones: Garden or UK, Mediterranean, and Rainforest. The two ‘transplanted’ climate zones were created in Biomes, or lean-to greenhouses constructed in environmentally responsible ways. Crops that make our food, fuel, and medicines are grown in the three climate zones and the Core provides educational and science displays on the sites operation and general frameworks for conservation and sustainability. This place looks incredible and I hope to check it out soon, maybe even play a show there!

Check it out yourself and spread the word: http://www.edenproject.com

Namaste

Ken