Cap and Trade for Traffic

Great article today on a study suggesting that traffic congestion is created by the marginal driver, and more interesting, from the marginal driver from specific and predictable locations.  Maybe 1% of commuters leaving from specific neighborhoods have a big increase on traffic congestion and commute time for everyone. The link to the study is here.

We dealt with this in the demand response market for energy.  With regulators 10-15 years ago creating free markets enabling companies to sell a reduction of energy demand to the power companies instead of increase generation.

We dealt with this in the carbon, Renewable Energy Credit, and Acid rain sphere by creating cap and trade style mechanisms enabling the rest of the market to pay some marginal actors just enough for them to drop out first.

There are bars that change the price of beer based on demand.

The stock market handles real time demand pricing every day.

Why not for traffic?  Hammer congestion and air pollution.  Create localized markets where the transit or roads authority, like Caltrans, TexDOT, or the local air district, instead of spending my tax dollars only on new roads, infrastructure, or regulations, used cellphone apps to pay a few dollars to commuters who would drop out of the critical commute paths at the right times.  Perhaps credits on your toll road account?  The more who apply, the less each make? Compliance tracked against your cellphone GPS?  A thousand ways to address the myriad technical issues with payments, tracking, compliance, verification, and additionality.

Small investment, massive social, environmental and economic benefits.

How About A Sane Energy Policy Mr. Obamney?

It’s Presidential Election year.  Ergo, time to discuss our 40 year whacked out excuse for an energy policy.  Royally botched up by every President since, umm?


Make US energy supply cheap for the US consumer and industry, fast growing and profitable for the American energy sector, clean, widely available and reliable, and secure, diversified, environmentally friendly and safe for all of us.


Cheap, Clean, Reliable, Secure, Energy


An Energy Policy that leaves us more efficient than our competitors

An Energy Policy that leaves us with more and more diversified, supply than our competitors

An Energy Policy that leaves us more reliable than our competitors

An Energy Policy that makes us healthier and cleaner than our competitors

An Energy Policy that makes us able to develop adopt new technologies faster than our competitors

An Energy Policy that makes it easy for industry to sell technology, energy, and raw materials to our competitors

An Energy Policy that keeps $ home.

A Sane Energy policy


Think more drilling, less regulation on supply, lower tariffs, more investment in R&D, tighter CAFE and energy efficiency standards, simpler and larger subsidies for new technologies, less regulation on infrastructure project development.


A couple of key action items:

  • Support the development of new marginal options for fuel supply, and support options that improve balance of payments, whether EVs ethanol, solar et al
  • Make crude oil, refined products, Gas, LNG and coal easy to import and export
  • Drive energy efficiency like a wedge deep in our economy
  • Support expansion and modernization of gas, electric, and transport infrastructure
  • Support long term R&D in both oil & gas, electric power, and renewables
  • Reduce time to develop and bring online new projects of any type (yes that means pipelines, solar and wind plants, offshore drilling, fracking and transmission lines).
  • Support policies and technology that enable  linking of energy markets
  • Challenge the OPEC cartel like we do EVERY OTHER cartel and break the back of our supply contraints
  • Support the export of our energy industry engineering, services and manufacturing  sectors overseas
  • Incorporate energy access into the core of our trade policy
  • Support deregulation of power markets
  • Support long term improvement in environmental and safety standards
  • Broadly support significant per unit market subsidies for alternatives like PV, wind, biofuels, fracking as they approach competitiveness

Or we could do it the other way:

  • Leave ourselves locked into single sources of supply in a screwy regulated market that involves sending massive checks to countries who’s governments don’t like us because that’s the way we did it in the 50s?
  • Keep massive direct subsidies to darling sectors so the darling sectors can fight each other to keep their subsidies instead of cutting costs?
  • Keep a mashup of state and federal regulatory, carbon and environmental standards making it virtually impossible to change infrastructure when new technology comes around?
  • Promote deregulation in Texas, and screw the consumer in every other market?
  • Every time there’s a crisis, we can shoot the industry messenger in the head, stop work, and subsidize something.
  • Continue the Cold War policy of appeasing OPEC so they can keep us under their thumb for another 30 years
  • And drop a few billion here and there on pet pork projects

Come on guys, stop the politics, let’s get something rational going.  Oh wait, it’s an election year.  Damn.

And in the meantime how about making energy taxes (a MASSIVE chunk of your gasoline and power prices) variable, so they go DOWN when prices go up.  Then at least the government’s pocket book has an incentive to control cost, even if they’re incompetent at putting together a policy that does so.

Top 10 Cleantech Subsidies and Policies (and the Biggest Losers) – Ranked By Impact

We all know energy is global, and as much policy driven as technology driven.

We have a quote, in energy, there are no disruptive technologies, just disruptive policies and economic shocks that make some technologies look disruptive after the fact.  In reality, there is disruptive technology in energy, it just takes a long long time.  And a lot of policy help.

We’ve ranked what we consider the seminal programs, policies and subsidies globally in cleantech that did the helping.  The industry makers.  We gave points for anchoring industries and market leading companies, points for catalyzing impact, points for “return on investment”, points for current market share, and causing fundamental shifts in scale, points for anchoring key technology development, points for industries that succeeded, points for industries with the brightest futures.  It ends heavy on solar, heavy on wind, heavy on ethanol.  No surprise, as that’s where the money’s come in.

1.  German PV Feed-in Tariff – More than anything else, allowed the scaling of the solar industry, built a home market and a home manufacturing base, and basically created the technology leader, First Solar.

2. Japanese Solar Rebate Program – The first big thing in solar, created the solar industry in the mid 90s, and anchored both the Japanese market, as well as the first generation of solar manufacturers.

3. California RPS – The anchor and pioneer renewable portfolio standard in the US, major driver of the first large scale, utility grade  wind and solar markets.

4. US Investment Tax Credit for Solar – Combined with the state renewable portfolio standards, created true grid scale solar.

5. Brazilian ethanol program – Do we really need to say why? Decades of concerted long term support created an industry, kept tens of billions in dollars domestic.  One half of the global biofuels industry.  And the cost leader.

6. US Corn ethanol combination of MTBE shift, blender’s, and import tariffs – Anchored the second largest global biofuels market, catalyzed the multi-billion explosion in venture capital into biofuels, and tens of billions into ethanol plants.  Obliterated the need for farm subsidies.  A cheap subsidy on a per unit basis compared to its impact holding down retail prices at the pump, and diverted billions of dollars from OPEC into the American heartland.

7. 11th 5 Year Plan  – Leads to Chinese leadership in global wind power production and solar manufacturing.  All we can say is, wow!  If we viewed these policies as having created more global technology leaders, or if success in solar was not so dominated by exports to markets created by other policies, and if wind was more pioneering and less fast follower, this rank could be an easy #1, so watch this space.

8. US Production Tax Credit – Anchored the US wind sector, the first major wind power market, and still #2.

9. California Solar Rebate Program & New Jersey SREC program – Taken together with the RPS’, two bulwarks of the only real solar markets created in the US yet.

10. EU Emission Trading Scheme and Kyoto Protocol Clean Development Mechanisms – Anchored finance for the Chinese wind sector, and $10s of Billions in investment in clean energy.  If the succeeding COPs had extended it, this would be an easy #1 or 2, as it is, barely makes the cut.


Honorable mention

Combination of US gas deregulations 20 years ago and US mineral rights ownership policy – as the only country where the citizens own the mineral rights under their land, there’s a reason fracking/directional drilling technology driving shale gas started here.  And a reason after 100 years the oil & gas industry still comes to the US for technology.  Shale gas in the US pays more in taxes than the US solar industry has in revenues.  But as old policies and with more indirect than direct causal effects, these fall to honorable mention.

Texas Power Deregulation – A huge anchor to wind power growth in the US.  There’s a reason Texas has so much wind power.  But without having catalyzed change in power across the nation, only makes honorable mention.

US DOE Solar Programs – A myriad of programs over decades, some that worked, some that didn’t.  Taken in aggregate, solar PV exists because of US government R&D support.

US CAFE standards – Still the major driver of automotive energy use globally, but most the shifts occurred before the “clean tech area”.

US Clean Air Act – Still the major driver of the environmental sector in industry, but most the shifts occurred before the “clean tech area”.

California product energy efficiency standards – Catalyzed massive shifts in product globally, but most the shifts occurred before the “clean tech area”.

Global lighting standards /regulations – Hard for us to highlight one, but as a group, just barely missed the cut, in part because lighting is a smaller portion of the energy bill than transport fuel or generation.


Biggest Flops

US Hydrogen Highway and myriad associated fuel cell R&D programs.  c. $1 Bil/year  in government R&D subsidies for lots of years,  and 10 years later maybe $500 mm / year worth of global product sales, and no profitable companies.

Italian, Greek, and Spanish Feed in Tariffs – Expensive me too copycats, made a lot of German, US, Japanese and Chinese and bankers rich, did not make a lasting impact on anything.

California AB-32 Cap and Trade – Late, slow, small underwhelming, instead of a lighthouse, an outlier.

REGGI – See AB 32

US DOE Loan Guarantee Program – Billion dollar boondoggle.  If it was about focusing investment to creating market leading companies, it didn’t.  If it was about creating jobs, the price per job is, well, it’s horrendous.

US Nuclear Energy Policy/Program – Decades, massive chunks of the DOE budget and no real technology advances so far in my lifetime?  Come on people.  Underperforming since the Berlin Wall fell at the least!


Green Education = Environmental Religion?

by Richard T. Stuebi

In a recent article in USA Today, a spokesperson of the Competitive Enterprise Institute was quoted as asserting that schools and teachers educating children about eco-friendly actions was tantamount to “environmental religion” and should be stopped.

Angela Logomasini of CEI went on to state “Let the parents teach the kids the values and the lifestyles….If [a child] is going to be ostracized for legitimate choices that people can make in a free world, that’s not right.”

According to their website, CEI is “a non-profit public policy organization dedicated to advancing the principles of free enterprise and limited government”, which believes “that individuals are best helped not by government intervention, but by making their own choices in a free marketplace.”

That all sounds well and good, but how does this mission coincide with concerns about what kids are being taught in schools? Oh, yes, I see: according to SourceWatch’s profile of CEI, the organization has a long history of being opposed to government action on most environmental issues, with a particularly strident focus on thwarting any action to mitigate climate change.

By the logic of CEI, children should be similarly shielded from concepts such as fiscal responsibility (“don’t spend more than you have”) or ethical behavior (“don’t lie or take actions that can benefit you while seriously harming other people”), as they place restraints on an individual’s free will.

I don’t know about you, but when someone criticizes teachers for exposing children to ideas and concepts that have considerable benefit without much downside, it’s hard for me to take their side of the issue. In my eyes, CEI looks really bad on this one.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become a Managing Director at Early Stage Partners.

McCain-Palin is the Energy / Cleantech Dream Ticket

John McCain picked first term Governor Sarah Palin of Alaska as his veep choice today. I love this pick.

She’s a 44 yer old first term, youngest and first, woman Governor of Alaska. She’s known as a maverick and anti-establishment in Alaska, and has taken on Republicans and the oil industry over ethics and pork. She beat two longtime Alaskan political heavyweights to win the Governorship. She’s a fiscal conservative, anti pork, pro drilling, and pro Alaskan gas pipeline. She used to be on Alaska’s oil & gas commission, and is a progressive on climate change. Her bio from Wikipedia. So what does the choice of Palin mean for McCain’s climate change and alternative energy focused energy policy?

In some ways she and John McCain make an energy /cleantech dream ticket. He has made his reputation in energy around proposed legislation like the McCain-Lieberman climate change bill, the most well thought out climate change bill yet proposed in the US. He’s got an energy plan hinging on domestic drilling, transport fuel switching, alternative energy expansion in power, progressive climate change policy and energy efficiency. More progressive on energy and environment than any Republican in history.

And he’s adding a climate change progressive domestic energy expert to the ticket. Not a bad combo for cleantech.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding CEO of Carbonflow, founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of, and a blogger for CNET’s Greentech blog.

In Search of A Better Story

by Richard T. Stuebi

One of the best things I’ve read recently is an oped in The Washington Post entitled “Going Green? Easy Doesn’t Do It” by Michael Maniates, a professor of political science and environmental science at Allegheny College.

Prof. Maniates gets right to the heart of one of the things that bothers me about what I hear from some of the more ardent proponents of the cleantech movement: the unexpressed sense that saving the world can be easily accomplished with a few minor changes in behavior, and that technological advancements will be coming to save the day at little incremental cost to all of us.

His punchline: “Never has so little been asked of so many at such a critical moment.”

I hope we’re wrong, but Prof. Maniates and I both believe that, if we’re going to seriously address our energy and environmental challenges, we’re going to be exposed to major economic and behavioral sacrifice, relative to our current standards of living. I don’t see how we can reduce greenhouse gas emissions by 80% from present levels without a fundamental shift in how we do things at every level of existence.

This takes courage and determination. As Prof. Maniates exposes, what we get instead from politicians, the media and (yes) many advocates is a mixture of hyperbole and half-truths that serve to relax the masses.

In a conversation I had about a year ago with David Orr, one of the true pioneers in environmental thinking at Oberlin College, I said to him that we all needed to create and broadcast a story about energy and environment in the U.S. that clearly induces urgency to action without inspiring panic and depression. I know that I haven’t been able to craft such a well-balanced story. Has anyone out there?

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

Is Environmentalism Compatible with Capitalism?

by Richard T. Stuebi

Perhaps the pivotal challenge facing the environmental community is resolving the apparent conflict between the need to reduce emissions and the widely-held desire for continuing economic growth.

This issue came directly to the fore in reading a recent Business Week article entitled “Little Green Lies”, profiling how the green initiatives of Aspen Skiing Company were often bumping into, and in fact prevented by, commercial realities of the business.

I was particularly provoked by the reader comments to the article. One respondent said that the contents of the article did not surprise him because (in his view) reduced consumption is ultimately the only environmental solution, which means reduced travel and reduced skiing, which runs against the profit motive of Aspen Skiing Company. This posting confirmed for another reader that (in his view) environmentalists are inherently anti-capitalism, viewing capitalism as the evil force that has led to climate change and other environmental ills.

To quote Rodney King, “can’t we all get along?” The answer, I think, is yes — and the path for squaring the circle is to note that capitalism is not to be confused with materialism or consumerism.

Capitalism is a social system that provides clear price signals and unfettered ability to undertake transactions, thereby enabling economic actors to make individual profit/utility-maximizing decisions, which in turn promotes efficient allocation of capital, maximizes liberty of citizens and businesses, and facilitates private wealth-creation.

We aspire to free-market capitalism in the United States, and we come pretty close to achieving it, closer than most countries in the world. And, because we are very capitalistic, it is easy to make the leap that American consumerism is inextricably a co-product of capitalism. It is not.

For instance, look at the leaders on the list of The Economist‘s rankings of national economic competitiveness. Sure, the U.S. is well above average. But the top two countries on the list are Denmark and Finland — countries that, unlike the U.S., are not known for their excessive materialism. It is also noteworthy that Denmark is arguably the world leader in actually tackling climate change head-on by minimizing emissions through the mass-adoption of renewable energy and energy efficiency.

Capitalism and environmentalism can be reconciled — theoretically, at least — once energy price signals more accurately reflect their environmental costs. Right now, each unit of fossil fuel burned generates greenhouse gas emissions, which have a societal cost, but the consumer faces no burden in their wallet associated with this societal cost.

It is because energy prices do not currently include their full environmental costs that Aspen Skiing (and other companies) can’t increase their profitability by pursuing as many green initiatives as they would philosophically like to do. If energy prices were to fully reflect all environmental costs, then the capitalist system would be freed to work its magic in motivating capital and behavioral shifts in the economy to significantly reduce emissions.

Alas, here’s the dilemma: many environmentalists have qualms about letting markets work to reduce emissions, and most free-marketer capitalists are leery of policymakers adding environmental externality factors (a euphemism for “taxes”) to energy prices. Unless this bridge can be gapped, we’ve got trouble.

Oh, yes, customers in Denmark and Finland face much higher energy prices (especially for transportation fuels), including much higher energy taxes, than we do here in the U.S. While Danes and Finns don’t perhaps live la vida loca like Americans do, neither do they seem to be collapsing in existential angst or economic depression. The question for us Americans is: do we have the courage to elect leaders that would put us on a deliberate/planned march towards higher energy prices?

A first step for we Americans to make that shift is to better appreciate that reduction of consumption to preserve our planet is not necessarily anti-capitalist, but rather anti-materialism. Because, as the renowned Jared Diamond recently argued in a compelling New York Times oped, it is excessive human consumption of resources that is at the root of continued viability for life on Earth.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.

Cleantech Blogging is Changing the World

We are picked up across the blogosphere as well as mainstream media, and we appreciate it all, but there were four mentions in 2007 of which we are particularly proud. So whether it is our spectacular writings (probably not), or simply that the future of clean energy has arrived, we do believe Cleantech Blog and the green blogosphere is changing the world.

In 2007 Cleantech Blog was named one of the 50 Best Business Blogs by the London Times. Not only do I love the London Times for its coverage of the all things clean energy related, but to make the same list as industry leaders like Boing Boing, TechCrunch, Jonathan’s Blog, and Freakonomics, and one of my own favorites, The Energy Blog was inspiring.

We were one of 10 blogs named in the Environmental Blog Roundup on Blog Action Day by Buzz, the official blog of, a part of Google. We are big fans of Blogger, since we use their platform, and it was wonderfully surprising to find out that someone Up There was reading. Please keep up the great work, Blogger people.

In 2007 Cleantech Blog was picked up by CNET. now provides CNET’s Cleantech Blog. We have long admired CNET’s coverage of the clean and green sector (especially journalists Martin LaMonica and Michael Kanellos, who write about everything we find interesting), and to be asked to participate in the family was a humbling experience. Frankly, Cleantech Blog has had lots of opportunities to hook up with sites we respect, but to write alongside those two on the green web was not an opportunity I could pass up.

Over the summer we were mentioned by Jim Buckmaster, CEO of Craigslist, in the Wall Street Journal’s Happy Blogiversary article on the 10th anniversary of blogs. I always tell people that when I do move back to Texas from the Bay Area, the San Francisco Craigslist community will be what I miss the most. I also always tell people that I firmly believe blogs and the democratization of content and journalism are changing the world. So the fact that the CEO of Craigslist, the site I visit and respect more than any other, felt it worthwhile to mention us as part of the citizen journalism movement in the environmental and energy blogosphere, was amazing. Thanks Jim.

And a warm Merry Christmas to the two bloggers, Rob Day of Cleantech Investing, and Jim Fraser of The Energy Blog, whose blogs inspired us to put Cleantech Blog together in the first place.

I am well aware that my columnists, including Richard Stuebi, Heather Rae, and John Addison deserve most of the credit. You can find their bios here. And I still find it humbling that this little blog is having a real impact. But the true example of the power of the blogosphere to change the world is the fact that when they picked us up, I had not met nor even previously communicated with anyone from the London Times, Blogger, CNET, or Craigslist, except through our writings in Cleantech Blog itself.

Thank you,

Neal Dikeman

Blogroll Review: CO, Surveys, & Phones

Conservation of energy
Carbon monoxide or CO is not your friend. It binds to your hemoglobin and your brain starves from a lack of oxygen. But like all molecules out there, it’s not really good or evil. It’s just trying to maximize its entropy.

With biofuels now in the spotlight, some have proposed converting CO into ethanol. Not all are convinced. Robert Rapier at R-squared says the fermentation methods are inefficient. He discusses the thermodynamics:

“Let’s say 340 BTUs of CO get fermented to 340 BTUs of ethanol, and then it takes 340 BTUs of natural gas to purify the ethanol. In effect, what we have is an input of 680 BTUs of CO plus natural gas to produce 340 BTUs of ethanol.”

Looks like someone is trying to make the world’s most expensive drink. 🙂

Acting locally
Earth day, as far as I can tell, is not yet a Hallmark Holiday. It’s interesting to look at how attitudes are changing with regard to the environment. Or are they?

On his blog, Joel Makower writes about recent surveys on America’s perception of the environment. The results are fascinating but perhaps not so surprising:

“Hope or Hypocrisy? An ABC news poll found most Americans consider global warming the world’s biggest environmental problem and that an whopping 94% say they are willing to make personal changes to help the environment. However, 8 in 10 Americans say they oppose increasing taxes on electricity to encourage energy conservation, and about two-thirds are against raising gasoline taxes and prices at the pumps.”

Can we breathe now?
Mobile phones have come a long ways. Not only do they come with a whole array of applications, they are becoming socially enabling devices. One company makes software that helps you find dates. Another even claims they have the best mp3 player in the world.

But who would have thought they could tell you if the air you breathe is good or bad? Ecogeek reports on an app that gives you air quality reports:

“The ecogeeks at have created a cell phone widget that will provide live air quality reports that update automatically as the cell phone (and its breathing owner) moves about. Using data from Environmental Protection Agency air monitoring stations, the cell program will harness GPS technologies available through uLocate Communications’ WHERE Platform. That means no more sending textys offering up your current city or zip code – your phone will know where it is – and it will know if you should be wearing a SARS mask.”

Now if only these devices could tell me where I left my keys. 🙂

Frank Ling is a postdoctoral fellow at the Renewable and Appropriate Energy Laboratory (RAEL) at UC Berkeley. He is also a producer of the Berkeley Groks Science Show.