Block’s Indicator of Sustainable Growth

by Ray Block

An important op-ed in the Washington Post by John Doerr and Jeff Immelt   (August 3 2009) is a sharp reminder of what renewable energy is all about.

The big growth industries in the 21st century will be in renewable energy and energy efficiency. And as I have pointed out in the past, the big growth performers in the beginning of the 20th century were in electical supply and motor vehicles.

It is largely the same 100 years later. Motor vehicle growth in the 21st century is about battery and fuel cell development for electric and hydrogen vehicles, and in biofuels. The same is true for wind and solar power, along with geothermal and biomass, all renewable energy sources, and possibly in “clean” coal.

To come to the op-ed in Washington Post, John Doerr is the lead partner in the venture capital firm Kleiner Perkins Caulfield & Byers, while Jeff Immelt is the head of General Electric, which was formed in 1890 to take over most of the patents and R&D in electrical supply. To-day, it is  one of the five largest companies in the US, whoich among other product leaderships has possibly the No1 or No2 position in the world wind turbine market.

Kleiner Perkins has invested US$680 million in “48 of the most compelling  new clean energy technologies, with a further $1.1 billion more to invest.”

Doerr and Immelt say that China currently holds the lead in renewable energy. Chinese cars are more fuel efficient a than their counterparts in the US. “China is on track to create 150,000 jobs through the deployment of 120 gigawatts of wind power by 2020, nearly five times America’s…. This year alone, it will abate almost 350 million tons of CO2 as compared with business as usual.”

The Doerr-Immelt let’s get serious messages about clean energy can be distilled down to four key signals:

-”Send a long- term signal that low-carbon energy is valuable.”  This would be done by putting a price on carbon and a cap on carbon emissions.”

-”Get the rules of the road right for utilities. We must make our utilities a driving force for repowering America, driving efficiency through incentives, a renewable electricity standard and a national unified smart grid.”

-”Set energy standards that grow steadily stronger. America should strive to have the most efficient buildings, cars and appliances in the world.”

-”Get serious about funding reseach, development and deployment at scale.” The US federal government currently spends only $2.5 billion on clean energy R&D a year -o.25 per cent of the US annual energy bill.

-”Fulfill President Obama’s commitment to become the world’s leading exporter of renewable energy.”

John Doerr and Jeff Immelt conclude by saying that there is “still time for the US to lead the global race, although that window is closing. We need low-carbon policies to exploit America’s strengths -innovation and entrepreneurs.”

The US may be currently behind China, but countries like Australia and Canada are still in the starting stall, talking but not doing nearly enough  No matter how hard you talk the talk, growth comes only from walk the walk.