The Clean Economist: Framing the Future

During this season of hope and a new year ahead, I thought I'd dial back the density a bit and introduce a more engaging topic: how to use approachable and intuitive metaphors and analogies to describe the complexity and nuance of a 21st century retrofit of our global economy to a clean economy. So jumping right in, since I've not only drunk the Kool-Aid but have spiked it and then beer-bonged the thing, I am always riding the thin line between bombastic rhetoric and thoughtful insight. I hope that the following provides a "both/and" in these literary endeavors ("both/ands" seeming to be necessary in many clean economic conversations these days, but more on that in a moment).

The context for clean economic development can be contentious, especially for those of us returning from holiday travel where we may have been surrounded by loved ones who don't see the world quite the way we do. Take, for example, climate change. The folks who are still debating climate are like cancer patients who have been given the diagnosis but want second opinions. Yes, the doctor and those MRIs could be wrong, but our challenge is that there is no second scientific global community to reinforce the initial diagnosis. So, do we just wait until the patient changes their mind on those chemotherapy treatments? Or do we start slipping them the drugs without their knowledge? I don't have the answer, but I do recognize that either the humans in this analogy represent the cancer itself (status quo participants perpetuating carbon dissemination), the scared-and-in-denial patient (many, if not most duped consumers), or the chemotherapy and surgery (change agents, whether policy, technology or marketplace players). Barring being able to ask doctors what they do when cancer victims refuse treatment, this observational analogy has some implications for dinner table debates. Unless one of those in your circle of friends and family is an active part of the cancer, like the CEO of a large oil and gas corporation who is making minimal strides towards a change in business model, chances are she is a patient in denial. With this perspective, we can adopt (potentially) a bit of compassion when listening to the troubling verbiage about the climate hoax. Cancer is scary; climate issues are pretty terrifying too.

The reason we need to figure out how to get everyone on board in tackling our recovery, whether it's chemotherapy (treating the disease, so clean coal) or surgery (removal of the tumor, so transforming the vehicle fleet from internal combustion engines to electric drive-trains with solar charging stations) is that in order to find ways to create an effective cure, we at the bare minimum have to acknowledge the disease. Why? Because the very real challenge we have is to remove the thumb on the scale when it comes to favoring fossilized sunshine and one of the most expedient ways to do that is to even up the playing field for competitive energy products and services by giving the market good information on the price or value of the millions of years it takes to fossilize sunshine. Most people call that putting a price on carbon.

So here's another metaphor for the fair market playing field that is the goal, versus the skewed one we have right now. Imagine it's Monday Night Football, and Team Petroleum is geared up with full equipment, the line of 300-pound athletes posed for the battle to come, rippling muscles from grueling work-outs and protein shakes, and probably a few that are using more nefarious chemicals for competitive prowess as is the case with any collection of humans. Team Petroleum has had plenty of time to get so strong, over a century since the inception of Standard Oil, and plenty of gear for the task at hand in the form of $557 billion worth of subsidies annually. Now, here comes Team Renewables & Energy Efficiency. The crowd is roaring; there is some great signage around the arena full of statements of sunshine and optimism, pictures of blue skies and happy babies. Ladies and gentlemen, here comes the team now... but what's this? We see half a dozen or so competitors the size of horse-jockeys, naked and in flip-flops skipping a bit clumsily towards the field. They aren't all even running in quite the same direction. This should be a pretty brutal match-up. Seems someone should at least get these guys a few helmets. Many folks believe that we not only need to defrock Team Petroleum, so strip away the subsidy platforms, but we also need to gear up Team Renewables & Efficiency with mechanisms that allow the knowledge-based economy of the silver buckshot of technologies and services to flourish; there is no one silver bullet here that can represent what petroleum has provided us in the last century. And it is a "both/and" equation for many market playing field reforms; we need innovation in financing mechanisms and ways of enhancing our energy literacy, and we need the existing infrastructure of lending and educational institutions to play their part as well. As an aside for those around the dinner table that are grumbling about the bank bail outs, large lending institutions seem to not be lending these days. Local financial firms who did not receive TARP funds may be an interesting ally in community finance development for clean energy infrastructure and in some cases are already working on ways to make more money available for clean energy projects.

Casting the sports analogies to the side for a moment, I've found that it is often best to frame the art of the possible in terms that are recognizable and that seem to have precedent. People in general are resistant to change and any organization's first impulse is self-preservation. So, how can we frame the revolution that needs to happen in ways that seem common-sense and completely benign? Tall order, but when I talk about the shift from a 20th century infrastructure (of inefficient and largely monopolistic electricity franchises married with transportation systems and technologies that rely on a diminishing supply of fossilized sunshine) to a 21st century infrastructure (of knowledge economies networked together literally and figuratively), I tend to use reference points that resonate with how we originally set up that 20th century infrastructure in the first place. When we see innovations in financing for distributed, integrated clean energy micro-generators and self-sufficient, patriotic energy efficiency retrofit pioneers as similar to the evolution of the commercial and home mortgage industry of financial services, we can talk about the complexity of something like a Property Assessed Clean Energy program (PACE) or a power purchase agreement (PPA) in ways that deftly compare the similar legalese of a refinancing bank document which we all are comfortable with, even though we might not understand the minutiae. The conversation usually starts, "If you wanted to buy a home in 1901, chances are you'd have to go clear the land, build the house from brick and wood, and pay for all the costs in cash out of your own pocket. Fast forward a few decades, and a whole industry of financial tools that help a homeowner mitigate the upfront costs of the long term value of a home has grown into an industry all its own. So society wins by innovating ways that help finance developing communities as aggregations of residences; the financing tools that represent the mortgage industry have allowed millions of citizens to have access to the long term value of home ownership without paying for their house in cash up front. We are at a similar threshold where we are seeing financing innovations that allow a home or business owner to access the long term value of clean energy generation and energy efficiency retrofitting, without having to do all the heavy lifting in terms of research, project coordination, and cash payment on the front end."

Transportation is a stickier wicket in many ways, but again we can see the way that the horse-less carriage as an "alternative" transportation mode that was described in reference to an existing technology evolved to be known as the automobile, a stand-alone-descriptor. I believe that this evolution might rely on the success of individual brands. So right now, we have a categories of hybrid electric vehicles and plug-in hybrid electric vehicles (PHEVs). It could be that one of the first movers (the Nissan Leaf or Chevy's Volt for example) becomes synonymous with personal transport in vehicle form. Like one has a Coke in the south east, where that could mean lemon-lime or any type of soda, a Volt will be what one has parked in the driveway regardless of the actual manufacturing source. Or we could see a disruptive technology that has nothing to do with our aging interstate system. A personal airborne Segway, a la the Jetsons perhaps?

Regardless of the conversation, we need to think of the context from our audience's frame of reference. So we should frame the benefits of clean economic development so that the value we describe matches the perception of benefits for our community, whether that is a familial community around a dinner table or a region's community on the same part of the electricity grid. The fact that when wind projects go into development the collected property taxes go towards increasing funding for education will speak to Utah citizens as an important goal for families of the Church of Latter Day Saints, as it is to all of us with children. The issues that are addressed in terms of energy security might be especially important to communities with a strong military presence, while environmental benefits might be particularly interesting to communities engaged in outdoor industries. The point is that we need to use approachable ways to create a dialogue, not a dictate from on high about the "right thing to do."

Thank you for humoring me during this season of good cheer and at the start of a brand new year. I was about to launch into a description of the potential for urban revitalization and metropolitan strategies for global synergy building clean economic development in the 21st century. But I think I'll refrain and save that for another time. All the warmest of wishes to you and your family, and may your dinner table conversations in the new year be about something other than electricity transmission and distribution policies in the 2011 Congress.