Guns Beat Green For Venture Capital Investment ?  

Naomi Klein has an article - "Guns Beat Green" - on some investors who think that there is more of a future in investing in guns (and surveillance technology) than there is in cleantech. Hopefully she is wrong (surely big brother is getting more data than he needs - or can process usefully - right now) but the last 6 years make me wonder. However - everyone needs clean energy and only a few countries are creating massive police state infrastructures like the US and China are, so the cleantech market opportunity must be bigger when you take a global point of view.

Anyone tired of lousy news from the markets should talk to Douglas Lloyd, director of Venture Business Research, a company that tracks trends in venture capitalism. "I expect investment activity in this sector to remain buoyant," he said recently. His bouncy mood was inspired by the money gushing into private security and defense companies. He added, "I also see this as a more attractive sector, as many do, than clean energy."

Got that? If you are looking for a sure bet in a new growth market, sell solar, buy surveillance; forget wind, buy weapons.

This observation--coming from an executive trusted by such clients as Goldman Sachs and Marsh & McLennan--deserves particular attention in the run-up to the United Nations Climate Change Conference in Bali at the beginning of December. There, world environment ministers are supposed to come up with the global pact that will replace Kyoto.

The Bush Administration, still roadblocking firm caps on emissions, wants to let the market solve the crisis. "We're on the threshold of dramatic technological breakthroughs," Bush assured the world last January, adding, "We'll leave it to the market to decide the mix of fuels that most effectively and efficiently meet this goal."

The idea that capitalism can save us from climate catastrophe has powerful appeal. It gives politicians an excuse to subsidize corporations rather than regulate them, and it neatly avoids a discussion about how the core market logic of endless growth landed us here in the first place.

The market, however, appears to have other ideas about how to meet the challenges of an increasingly disaster-prone world. According to Lloyd, despite all the government incentives, the really big money is turning away from clean energy technologies and banking instead on gadgets promising to seal wealthy countries and individuals into high-tech fortresses. Key growth areas in venture capitalism are private security firms selling surveillance gear and privatized emergency response. Put simply, in the world of venture capitalism, there has been a race going on between greens on the one hand and guns and garrisons on the other--and the guns are winning.

According to Venture Business Research, in 2006 North American and European companies developing green technology and those focused on "homeland security" and weaponry were neck and neck in the contest for new investment: green tech received $3.5 billion, and so did the guns and garrisons sector. But this year garrisons have suddenly leapt ahead. The greens have received $4.2 billion, while the garrisons have nearly doubled their money, collecting $6 billion in new investment funds. And 2007 isn't over yet.

This trend has nothing to do with real supply and demand, since the demand for clean energy technology could not be higher. With oil reaching $100 a barrel, it is clear that we badly need green alternatives, both as consumers and as a species. The latest report from the Nobel Prize-winning UN Intergovernmental Panel on Climate Change was characterized by Time magazine as "a final warning to humanity," while a new Oxfam report makes it clear that the recent wave of natural disasters is no fluke: over the past two decades, the number of extreme weather events has quadrupled. Conversely, 2007 has seen no major terrorist events in North America or Europe, there are hints of a US troop drawdown in Iraq and, despite the relentless propaganda, there is no imminent threat from Iran.

So why is "homeland security," not green energy, the hot new sector? Perhaps because there are two distinct business models that can respond to our climate and energy crisis. We can develop policies and technologies to get us off this disastrous course. Or we can develop policies and technologies to protect us from those we have enraged through resource wars and displaced through climate change, while simultaneously shielding ourselves from the worst of both war and weather. (The ultimate expression of this second option is Hummer's new TV ads: the gas-guzzler is seen carrying its cargo to safety in various disaster zones, followed by the slogan "HOPE: Hummer Owners Prepared for Emergencies." It's a bit like the Marlboro man doing grief counseling in a cancer ward.) In short, we can choose to fix, or we can choose to fortress. Environmental activists and scientists have been yelling for the fix. The homeland security sector, on the other hand, believes the future lies in fortresses.

Tyler at Clean Break has "A depressing commentary on coal".

My friend and colleague Eric Reguly, perhaps the best example of an environmental capitalist worried about his children's future, wrote this column in the Globe and Mail about how, despite all our talk of renewables, conservation, and even nuclear, the demand and money is flowing to coal -- a bad sign all around. A three-word summary of his article: we are screwed.

Tyler also has a column in the Toronto Star about the use - and nonuse - of passive geothermal energy in Canada (not the HDR geothermal I explored at length recently)

There was an informal lunch last week in the executive dining room of RBC Financial, organized by Corporate Knights editor Toby Heaps. The purpose of the small get-together was to discuss ways to spur the large-scale deployment of geo-exchange energy systems for the heating and cooling of buildings.

A number of stakeholders were represented, among them RBC, Manitoba Hydro and Hydro One, but commercial builder The Remington Group, geothermal utility start-up GeoXperts and carbon offset champion Zerofootprint also shared their views.

As discussion unfolded, one thing became clear: All saw the tremendous potential for mass deployment of geo-exchange technology, both as a way to reduce greenhouse gas emissions in Ontario and as a way to save owners of buildings and homes a bundle of money over time.

Geo-exchange technology, also known as low-temperature geothermal, provides heating and cooling by taking advantage of constant temperatures two metres or more below the Earth's surface. It's renewable and free of greenhouse gas emissions, and while it requires electricity to operate, it considerably reduces the fossil fuels or power required to operate conventional heating and cooling systems.

"I think we're on to something, and I think it's the way of the future," said Richard Tripodi, vice-president of Remington's high-rise division.

Ron Dembo, founder and chief executive of Zerofootprint, said there are 140,000 new buildings being constructed in Canada each year and about 700,000 homes in Ontario still heated with electricity, making them prime candidates for geothermal. Locally, hundreds of schools across the GTA have a mandate to be green and a need for energy savings – which could be in the order of 30 per cent a year if existing systems were enhanced with geothermal technology.

TreeHugger has a report on the Carbon Trust's aim of having 1 GW of organic solar power capacity by 2017.

We’ve looked at the concept of organic solar cells before, and while they are unlikely to reach the operating efficiencies of silicon based PV any time soon, they do offer the potential for substantially cheaper manufacture. Now we hear from the UK that the Carbon Trust, which is already well known for handing out cash to worthy projects, is funding a research project, led by the University of Cambridge's Cavendish Laboratory with The Technology Partnership, to the tune of £5 million (US$10 million) that aims take organic solar cells from the laboratory and on to rooftops. The eventual aim is to have 1 gigawatt of generating capacity installed by 2017. However, the researchers have no intention of replacing conventional silicon-based solar, merely to compliment it:

Is organic solar likely to replace silicon, then? Even though the more efficient silicon has an obvious cost penalty, Greenham doesn't think so: "There's going to have to be a lot more PV of all kinds. We want to make it cheap enough to really expand the market."

That view is shared by Professor Paul O'Brien at the University of Manchester. He's been involved with solar cells for more than 20 years, especially those that don't use silicon. "Silicon is made in a foundry and the technology is the same as we use to make silicon chips. That, of course, is far too expensive," says O'Brien, who reckons that solar cells need be no more pricey than high-performance self-cleaning glass. "Get the cost down, and the whole thing becomes viable."

As the twin crises of climate change and dwindling oil reserves unfold, lets hope that more funding bodies step up to the plate to develop real alternatives to fossil fuels, and then set equally ambitious goals for implementing them.

After Gutenberg has a post on efforts to increase electricity production from biomass.

More CHP (Combined Heat and Power) from biomass is a recommendation of the IPCC Synthesis Report. According to European Commission Directorate-General for Energy and Transport1, there has been a marked growth in European electricity generation from solid biomass “with a 16.2% increase between 2004 and 2005 (+6.1 TWh, i.e. a total of 44.1 TWh).” Still there is a need to improve electricity generation from the combustion of solid biomass, i.e., principally wood and wood waste, but also straw, crop harvest residues, vegetable and animal waste.

The Biopact team reports that the call has gone out for further increases of electricity production from biomass. With a request for proposals — FP7-ENERGY-2008-1 — the Seventh Framework Programme aims to extend applications to a wider range of biomass materials.

Language Matters has an interesting post on "Living the diesel shortages in China"

Trucks are lining up in their hundreds at three stations in Chongqing, China, in the hopes of getting 40 litres of fuel each. In this city of 10 million, only those three are still selling diesel. This may be an economics-induced dress rehearsal of the reality that will face the rest of the world in the post-peak oil universe.

I am currently living in China and I hear the Chinese media speaking about diesel shortages, but the message they prefer to deliver is“take the shortages with a grain of salt”. International media are also covering the story of limited supplies, but what I have still not seen covered is the effect of limited diesel supplies on the economy and the population as a whole.

The story goes something like this: Inflation is out of control at 6.5 per cent and prices of everything have at least doubled in the last year and a half. Wages remain almost stagnant with no upward rise to match the inflation rate. Five years ago, when China’s economic boom started, dreams were alive in the air: a new car, a new apartment and a better life filled with possessions if you came to the cities and worked real hard. That is exactly what happened, a flood of workers came to man the factories, build new skyscrapers, and fill offices by the hundreds of millions.

The carrot dangled in front of 1.3 billion people was simple: come, work and be rewarded. That was then, this is now. The dream is dying on the vine. A majority of Chinese citizens now realize that car ownership will not occur for them, same goes for the apartment. Property values are skyrocketing, from 2500 yuan for a square metre in 2003, to 10,000 yuan for a square metre in today’s high-rises.

With unfulfilled dreams of car and home ownership, average workers trudge through their days knowing that the basic necessities and a night out on the town is all they will get in life. With inflation running at 6.5 per cent now what little income there was is being eroded, and the dreams of nights out on weekends are starting to disappear. Doubling food prices are making the country tighten spending and more grumbling from the average person on the street.

To highlight social stress inflation is causing: “Stampede leaves 3 dead, 31 injured” is a headline that sums up the situation. Carrefour supermarket had a special on cooking oil which was discounted $1.55 from the regular $7 price. The promotion saw bargain shoppers lining up at the store entrance at 4 a.m. When the doors opened at 8:40a.m., there was a stampede to the aisles. Fights over the bottles of oil began, and shoppers were pushed to the floor. Some were trampled to death. Those that went to the hospital for injuries had bruises and gashes to the face, hands and forearms caused by other shoppers using cans as weapons to loosen the grip of those with bottles in hand, and retrieving dropped bottles. This incident is also a result of bio-fuel production interfering with food production and driving up cooking oil prices. Inflation was not the only cause.

It has been a culmination of lost dreams, minimal income, rising food prices and no end in sight of rising cost of daily life that made last month’s 10 per cent rise in fuel prices unpopular and added another nail to the coffin. Those that were able to afford cars within the last few years are now complaining about filling up the tank. Two years ago gasoline was 2.5 yuan per liter, now it sits at 5.8 yuan.

China’s national government sets fuel prices, and with the Olympics approaching they want no civil disorder like that which Myanmar experienced after their fuel prices climbed. The illusion of a harmonious society needs to be maintained through the Olympics to generate more foreign investment. Another rise of fuel prices of 20-30 per cent will bring the refiners to the break even point when selling refined fuel in China, but will also cause transport drivers to strike and the gentle old lady on the street corner selling roasted chestnuts to become a fire breathing dragon asking for change. ...

AlterNet has an article from Kelpie Wilson asking "Does Our Energy Future Hinge on Iran?".

Oil is likely behind our saber-rattling with Iran. But can military action in the Middle East actually work to secure oil for U.S. interests?

Last weekend, a Reuters report revealed that the US military has stepped up its logistics to move a large amount of additional fuel supplies into the Persian Gulf. Correspondent Stefan Ambrogi reported: "A Gulf oil industry source said the charters suggested there would be high naval activity, possibly including a demonstration to Iran that the U.S. Navy will protect the Strait of Hormuz oil shipping route during tensions over Tehran's nuclear programme."

According to the report, the US Military Sealift Command appears to be moving at least double the ordinary volume of liquid fuels for aviation and shipping into the Gulf. Ambrogi says that, "In the past ... fuel movements have provided advance clues of U.S. intentions." The report was based on information that came from an anonymous oil industry insider.

As concerned citizens worry about our president [possibly] launching another war in the Middle East, we ask ourselves: how can it be that the only way for us to find out our government's intentions is to intercept a semaphore signal like this?

We don't even really know why we are involved in the current war in Iraq. First we were told it was to protect us from WMDs, then to bring democracy to the Middle East. Many suspect the real goal was to exert control over oil. This goal finally became explicit in Bush's speech of September 13 when he justified the occupation of Iraq to protect the "global energy supply" from "extremists."

Concerned citizens now need to help their fellow Americans answer a question that reaches beyond the moral and even the legal evaluation of the Bush-Cheney press to attack Iran.

Will military action against Iran work to secure oil for US interests?

In order to answer this question, it must be put into the context of peak oil. Peak oil is simply the moment in time when the rate of oil production stops growing. Lester Brown of the Earth Policy Institute reports world oil production has already dropped from 84.80 million barrels per day in 2006 to 84.62 million barrels per day during the first 10 months of 2007. Brown reports that the German Energy Watch Group is projecting that oil production will soon start to decline by seven percent a year and fall to 58 million barrels a day by 2020, barely more than half of what economists say the world will need twelve years from now.

The implications of peak oil for global security are profound. Lester Brown said: "When oil output is no longer expanding, no country can get more oil unless another gets less."

China is already feeling the pinch of oil shortages and has set up a monitoring system in parts of the country to give advance warning to try to get fuel where it is needed. China's predicament brings up the question: Why are we sitting on Iraq's oil? In other words, what are US interests? Are we building giant permanent military bases in Iraq for the benefit of American SUV drivers? Or for the benefit of the US economy? But China is an intrinsic part of the US economy now, with its investment in our treasury. If we grab more oil at the expense of China, do we just hurt ourselves?

Links:

* Clean Break - Why power freezers when it's freezing?
* Clean Break - Canadian Pacific to gasify old rail ties
* Clean Break - More evidence of the Wal-Mart effect
* The Energy Blog - Neste Oil to Build Largest Plant Producing Renewable Diesel. Using palm oil - I wonder if they'll run into the some economic problems Australian producers have.
* Globe And Mail - $100 oil fades fast
* Resource Investor - Peak Oil Passnotes: Work Those OPECs!
* Whiskey and Gunpowder - Carbo-geddon, Part I
* New York Times - Ski Resorts Prepare for a Future Without Snow
* SMH - Punt on pasta reaps rewards on a fortunate patch of dirt
* TreeHugger - What Does "Carbon Neutral" Mean Anyway?
* IHT - Gore praises UK's leader for his battle against global warming. No mention of super new materials.
* Physorg - Fever Outbreak Linked to Climate Change
* New York Times - None Survive Turkish Plane Crash. Including "several prominent nuclear physicists".
* WhiteHouse.gov - Iraq To Become Colony Of US
* Cryptogon - FOIA Request for Documents Related to the Plunge Protection Team Yields, “177 Pages of Crap”
* Cryptogon - Forget the Green Technology - The Hot Money Is in Guns. "You won’t have the clean technology without a total, fascist lockdown." I like to think Kevin is wrong about this, but you never know...
* RI - America Ate My Brain (Part Two). So why was Dennis in the picture for Part 1 ?