As seen on FastCompany.com – Wed Jul 20, 2011

by Jigar Shah, CEO Carbon War Room

The local food movement in America is gaining steam. The question is whether can it attract sufficient capital from the private sector to build large, profitable businesses. Without that, it’s just a fad.

Energy and agriculture have more in common than you might think. Food and fossil fuels prices are rising at the same time as land and water are becoming increasingly scarce commodities–and both energy and agricultural production processes are harming human health and the environment. At the same time, both industries suffer from complex and inefficient distribution systems and heavy government regulations that favor the status quo. Each industry is also supported by government subsidies that benefit incumbent producers over young companies that might have solutions to some of these problems.

And then there is the inextricable link between energy and agriculture. The food industry in the U.S is one of the largest and most wasteful consumers of energy. Various studies estimate that the food industry consumes around 10% of the nation’s energy with only about 20% of it used in the actual production of food. The rest goes to processing, home refrigeration and preparation, and of course, transportation. Transportation costs also are a major factor in food prices, especially for water-heavy vegetables such as romaine lettuce.

For all of these reasons and others, the local food movement in America is gaining steam. Families, restaurants and schools are purchasing more of their food from farmer’s markets. Community, school, and backyard gardens are springing up all over. And in places where land is scarce–large, densely populated urban areas–consumers and some businesses are taking to the sky and growing food hydroponically in rooftop greenhouses.

The question we must ask is, “Will this scale?” For anything to scale, it must solve a real problem, be cost-effective and replicable, and have the right systems in place to support it. To do that, it must attract sufficient capital from the private sector to encourage entrepreneurs to build large, profitable businesses.

In 1999, when I was an MBA student, I came up with a solution for selling solar power to businesses at or below the going rate for electricity. My idea was to form a company and raise money from big investors to cover the upfront costs of buying photovoltaic solar panels for commercial customers’ rooftops. The company would install, own and operate the plants. In return, customers would sign power purchase agreements locking in electricity prices for as long as 20 years. This would create a steady revenue stream for the company and an affordable way for customers to use (very) locally generated clean power for their businesses, instead of paying the rates du jour for power generated by utilities at central stations and transmitted over aging and congested transmission lines.

I wrote a business plan, but it was the height of the dotcom era and no one was interested in financing a company that did not have a sock puppet for a mascot. It wasn’t until 2003 that I actually got SunEdison off the ground. It was not easy because we had to overcome the qualms of conservative investors and, in many states, push to get laws and regulations that posed potentially insurmountable barriers. But over the next few years, we created a thriving multi-billion industry with scores of competitors.

Now, a company called BrightFarms is taking a similar approach to rooftop farming. In business since 2006 as a consultant to rooftop farmers, the company recently adopted a new business model. BrightFarms contracts with supermarkets to build, own and operate onsite greenhouses on store rooftops. There are no upfront costs for the retailers–just the obligation to purchase food grown hydroponically on store rooftops farms through long-term, fixed price contracts. BrightFarms has a policy of not announcing customers until its farms are delivering produce, but it has signed up eight supermarket chains as customers so far. (In the interests of full disclosure, I am an investor in BrightFarms.)

Retailers purchasing food grown on their premises completely disrupts the complicated and expensive food industry supply chain. It reduces transportation costs to almost zero–offsetting the higher upfront costs of greenhouse farming over conventional methods–and increases margins because the produce has a longer shelf life. It also lowers water, fertilizer, and other inputs by over 90%. And it gives consumers what they want: fresh, tasty, affordable produce. Most importantly, the model requires local labor to work, so it keeps and adds jobs in local communities.

Only time will tell if this new model catch on with enough U.S. supermarket chains to make a difference in our nation’s food supply.

 But what is clear now is that no silver bullet exists for America’s energy and food production issues. Just as solar rooftop systems meet some but not all of our energy needs, rooftop gardens can make some but not all of our nation’s food production and distribution more efficient. Finding the right answers for energy or food production will require us to invest in thousands of technologies that are scalable and make an impact.

 But given the economic and environmental benefits of rooftop gardening, it is worth it to start trying.

[Image: BrightFarms]

Creating Climate Wealth Summit, Washington DC, May 3-4, 2011

Investing $1.3 trillion each year in green sectors would deliver long-term stability in the global economy, a new UN report has suggested. Spending about 2 percent of global GDP in 10 key areas would kick-start a global low carbon, resource efficient green economy.

Since the oil crises of the 1970s, billions of dollars have been pumped into technology development in the areas of energy efficiency, low carbon energy, efficient transportation, bio-fuels, and other areas. This investment has led to hundreds of breakthroughs that are today cost effective. Yet, full commercial utilization of these innovations and their financial rewards still elude us.

The 2011 Creating Climate Wealth Summit (www.creatingclimatewealth.com) series aims to fast-track this amazing wealth creation opportunity—one we can use to create economic growth, entrepreneurial wealth, well paid jobs, and make billion ton (gigaton) carbon reductions.

The North America Summit kicks off the series on May 3-4 with Creating Climate Wealth, DC – an invitation only event – providing a unique workshop-driven convening of executives, investors, entrepreneurs, and leaders from the private and public sector. The purpose is to identify specific US pathways to accelerate deployment of green solutions in the face of low expectations and weak mandates.

During the summit, delegates will address ways to bring existing technologies to scale, while meeting employment, economics and sustainability goals. The technologies are spread across seven clean tech tracks:

• Distributed Generation
• Energy Efficiency
• Island Nations
• Renewable Fuels
• Shipping and Freight
• Sustainable Agriculture
• The Future of Person Transportation.

Each working track begins ahead of the Summit with a Carbon War Room Research pre-read report on market barriers. Delegates will use their entrepreneurial expertise to problem-solve and technology expertise to build new approaches to delivering high-profit solutions.

• Full membership to the Carbon War Room
• Admission to 2 days of plenary and workshop discussion in one of the seven clean tech working tracks
• Access to leading clean technology finance, entrepreneurs and policymakers
• One year membership  of Carbon War Room’s online communities and operations
• One year subscription to the Creating Climate Wealth digital-only financial magazine 
• Invitation to the Climate Leadership Gala Dinner, 3 May, 2011 at the EPA Atrium, DC

Don’t miss other Creating Climate Wealth Summits in Sydney, Australia on 7-8 July and London, UK on 7-8 September.

For delegate registration: www.creatingclimatewealth.com

For sponsors: adavlin@carbonwarroom.com

For media and affiliate program: mwilson@carbonwarroom.com

By Mark Grundy

February 28, 2011

The monthly digital-only financial title will launch on May 3 at Creating Climate Wealth Summit, DC and will be available to a select group of C-suite executives in Europe, USA and Asia. The title will have an exclusive distribution into the heart of key decision makers at some of the world’s most progressive companies, inter-governmental and non-governmental organizations. The magazine will be produced in multiple formats for subscribers through online, iPad, Tablet and smart phone editions.

With an initial 167,250 readers per month, we want Creating Climate Wealth to become the leading green business digital magazine distributed directly to entrepreneurs and C-suite executives using Carbon War Room’s membership database and become available by subscription on iPad. Our readers are affluent, influential, decision makers, future shapers, international professionals and investors.

Creating Climate Wealth focuses on working with entrepreneurs and industry to reduce carbon emissions that make good business sense and benefit both the industry and the environment almost immediately. The magazine will focus on seven main sectors—Electricity, Transport, the Built Environment, Industry, Land Use, Emerging Economies and Carbon Management, and will  feature:

• regular news and event updates from Carbon War Room operations
• an in-depth look at Carbon War Room operations: shipping, energy efficiency and aviation
• thought-leadership from Carbon War Room founders, board members and C-suite
• research reports on gigaton-scale reduction opportunities and new clean technologies
• profiles on the latest and most promising clean tech investment opportunities
• and articles by some of the world’s best journalists on clean tech

Richard Branson will launch the magazine with an in-depth article on why he set up the Carbon War Room, and his vision for creating climate wealth and bringing economic prosperity to economies across the globe.

The first edition will incorporate the Creating Climate Wealth Summit program and be available in hard copy at the event.

By Jigar Shah,

February 28, 2011

In 2006, Sir Nick Stern published a ground breaking report saying that Climate Change was not only real, but that it had a cost to society, and we could afford to solve it (then).  He assumed that there would be a small hit to global GDP because some of the low carbon choices are more expensive than the business as usual case.  But two things were missing in the report—the innovation and the process needed to get there.

We have a shot at saving the 17 gigatons (billion tons) by 2020 and the 80 percent reductions by 2050 because those innovations boldly invested in during the 1970s oil crisis have become mature, well-proven technologies today. So well proven are they that just implementing them in lieu of new polluting infrastructure would put us on the right pathway to preventing the 2 degrees rise. 

The challenge is not finding the solutions: the challenge is about getting the solutions implemented. We need to re-discover how to ‘do’ infrastructure, but more importantly we need to re-discover the will to do it.  The people that regulate infrastructure today are no longer qualified engineers; they are appointed officials with an eagerness to learn, but limited experience.  From World Bank solutions for the emerging markets to infrastructure agencies in the western world, we aren’t qualified to do infrastructure. 

The climate skeptics drone on about the need for more R&D and more time.  We don’t need more time. We need more done—and entrepreneurs who are fearless enough to carry out this implementation.  Today, in the US, we create waste heat with more than 60 percent of all the fuels burned for electricity and transportation.  We have well-tested technologies to recapture over half of those losses at a cost; a cost that is less than building new power plants.  We then waste half of that energy in the electricity sector by rewarding the most inefficient among us with “bulk discounts”, while simultaneously taxing the less well off with high fixed utility charges.  Utility companies know full well how to change the way we charge for energy and to provide the price signals that conserve without raising energy bills, but there is no need for them to change. 

The reason that our infrastructure providers in electricity, water and transportation fuels don’t do the right thing is that they are not encouraged to.  Incremental solutions, like renewable fuel standards and portfolio standards, are a great start but they are still incremental. We have the technology to move quicker and with great impact, if the infrastructure is there; the internet and communication revolution showed us that.  But we need the will to do it.

At the Carbon War Room, we believe that 30+ years of studies is more than enough data.  The Germans have invested greatly in protecting their people from rising fuel prices by aggressively tackling these wasteful practices for years.  Their heating systems are over 90 percent efficient while those in the UK average less than 50 percent– there is little doubt that the Germans made it through the oil and financial crisis of 2008 in better shape because of it.  In fact, the Germans are able to compete with low cost labor in the manufacturing sector as well because of this “War on Waste”.  The Germans have had the will for a long time now.

The International Energy Agency predicts that we can meet 100 percent of our incremental demand for electricity and transportation fuels from low-carbon sources every year for the next 40 years.  For electricity, this means implementing renewable energy, energy efficiency, cogeneration, storage, demand response, and other 21^st century approaches that have been deployed for decades.  In transportation, the level of innovation around renewable fuels has been impressive.  Today, the costs of renewable fuels are on par with traditional fuels and over the next five years the cost of renewable fuels are expected to fall to below the costs of fossil fuel alternatives.  Infrastructure professionals call this a “planning moment”.  But renewable fuels and clean electricity don’t appear overnight.  The rules and regulations necessary to pave the way for their deployment require a multi-year commitment—which must start right now. 

So you are still not convinced that this transition won’t hurt GDP?  Globally, we subsidize fossil fuels at a level of $550B per year.  In places like India, Iran, Russia, and other countries this number is significant and is causing financial instability.  Ending these subsidies could also increase our national security.  Many experts have said that the “War Against Terror” cannot be stopped until “oil becomes the next salt”. But where is the will to try? 

And don’t forget about productivity.  Countries with high percentages of distributed electricity generation have much higher power quality which is great for our 21^st century computers and thirst for energy. Think New York with no more blackouts.  Countries that genuinely promote fuel flexibility actually have private citizens choosing natural gas over gasoline, LPG over diesel, and increasingly electricity over both.  When oil reached $147/barrel people started to sacrifice essential trips to save money – trading their precious time for a few pennies in savings and a big loss in productivity. Let’s give the US that choice too.

Climate change represents the greatest wealth creation opportunity on the planet. In fact, it is the ONLY growth story that doesn’t require deficit spending by central governments.  Eliminating our energy waste problem is a challenge we can all rally behind without deference to political parties and geography.  And the great news is: the entrepreneurs are ready. They just need the infrastructure to succeed.

Consistent with the plan to visit all Wave 1 cities by the end of the third quarter, Operation Lead Murat Armbruster and Tony Paulson (Senior Finance Director) set off earlier this month to visit our Wave 1 European cities, London and Copenhagen. During this trip, Murat and Tony were also able to meet with current and potential sponsors for the Green Capital Global Challenge (GCGC) as well as to recruit participation for the Wave 2 process.

In Copenhagen, the team was hosted by Claus Bjørn Billehøj, and Signe Gaarde of the City of Copenhagen’s Center for Sustainable City Development, and spent three days in meetings with key stakeholders in the city, members of the finance team and members of the utility.  During their time in Copenhagen, Murat and Tony also managed a visit with Nokia at their city headquarters.

In London the team had an equally packed visit with three full days in meetings hosted by Emma Strain, head of London’s Energy Efficiency Project Development. In addition, Murat and Tony met with several stakeholder agencies within the government as well as senior members of the banking community, such as Deutsche Bank.

Both cities are progressing well in their Energy Efficiency programs. The CWR team’s expertise was very much sought to help refine the financing model that would facilitate broad participation of private capital.

This trip helped to clarify the team’s understanding of both the barriers cities face and the successful practices cities are using. The team also identified where the Carbon War Room can provide the most input and value, while also forging a relationship with key stakeholders in each city. The trip centered on the premise that understanding the internal and external dynamics of each city and/or program helps to shed light on key levers that can help each city move forward.

CWR founder, entrepreneur and civic leader, Vladas Lasas, hosted the team in Vilnius where they were given a very comprehensive tour of the city and its surrounding areas, meeting with the former and potentially future mayor of Vilnius as well as advisers to the national government in energy and the environment. Vladas arranged for the team to have a hot air balloon tour over the city so that they were able to identify the housing stock most ripe for energy efficiency retrofits. Vilnius’ participation in Wave 2 will be significant in that the housing stock of Vilnius is the housing stock of the former of the Soviet Union and would provide a great leader for cities in the Baltic Region.

The Green Capital Global Challenge (GCGC) team was excited to announce the launch of its Wave 2 application process in late July, following a successful Wave 1 initiative in which the team worked with a small sample of cities to develop a methodology, means and platform to be able to serve a broader number of communities in Wave 2. Over the past several months, the GCGC team has worked to finalize a Wave 2 Launch Strategy and on July 27, distributed more than 50 e-mail invitations to cities across the globe requesting that they submit an application and join the Second Wave.

The GCGC team is now in the process of working with cities and potential contacts to help solicit applications and answer any questions, and plans to announce the selected Wave 2 cities by the end of September.

In collaboration with its web development team, MARS, the GCGC team also completed Phase 1 of its database launch. During the months leading up to the launch, the team consulted with a variety of industry stakeholders to identify gaps and needs in the industry. The team concluded that there is a need for a comprehensive and accessible information platform, which is being created through the online database. The website will aid the industry in its maturation by providing background, guidance and templates for the following key components of Energy Efficiency and Renewable Energy (EERE) program development: finance structure and underwriting criteria, legislative templates, a market analysis tool, program design and administration best practices, and marketing and outreach best practices.

We look forward to bringing this database to Phase 2 in the coming months by opening it up to the public. For now, the site is used for internal purposes and to help facilitate our Wave 2 application process.

The GCGC Operation Lead (Murat Armbruster) and Senior Advisor (Tony Paulson) traveled to the East Coast in July to conduct a site visit with two of our W1 Cities: Gainesville, FL and Atlanta, GA.  The purpose of the trip was to get an “on-the-ground” feel for how the cities were progressing and to identify potential areas for GCGC input.

During the visit, Murat and Tony also attended a conference in New York City conducted by the CAP (Center for American Progress).  Murat and Tony were able to establish important new contacts during these meetings and calibrate with industry leaders on creating climate wealth.

Civic and Entrepreneurial Action on Climate Change is boosted by Cities from Around the World Joining a Challenge to Create Low Carbon Prosperity

WASHINGTON, April 28 /PRNewswire/ – The Carbon War Room, a non-profit organization that harnesses the power of entrepreneurs to implement market-driven solutions to climate change, today announced the first wave of cities selected to participate in the Green Capital Global Challenge.

Participant cities were selected from across the United States, Canada and Europe, after the Carbon War Room received an overwhelming number of applications from cities around the world.  They include:  Atlanta, Babylon (New York), Burlington (Vermont),Charleston (South Carolina), Chicago, Gainesville (Florida), New York City, Portland(Oregon), San Francisco, Washington D.C., Toronto, Vancouver, London, Birmingham(England), and Copenhagen.

“In this time of uncertainty around the ability and resolve of governments to lead the planet to low-carbon prosperity, it is up to businesses and cities to step up and assume responsibility,” said Sir Richard Branson, Co-Founder of the Carbon War Room.  ”Mayors are the entrepreneurs of the civic world who realize their pivotal role in the fight against climate change.”

Many participating mayors around the world echoed Sir Branson’s sentiments, citing this as a tremendous opportunity for their cities to engage in a healthy competition that will be a key step in moving many of their pioneering initiatives forward – ranging from green building initiatives and renewable energy programs to achieving full carbon neutrality.  Moreover, all mayors agreed that this is an initiative that will reduce energy costs, create green jobs that will improve their economic competitiveness, and, most importantly, improve the quality of life of their citizens.

“These cities are committed to taking immediate action to be a part of a movement that will create jobs, help local economies thrive, and green cities around the world,” saidJigar Shah, Chief Executive Officer of the Carbon War Room.  ”These cities, along with many others that applied for the first wave, have pioneering sustainability visions, but they cannot do it on their own.  The Carbon War Room is committed to working with them to create the mechanisms that will allow cities and the private sector to work together to make these visions a reality.”

“We were inspired by the quality and quantity of nominations in the selection process,” said Peter Boyd, Director of Operations of the Carbon War Room.  ”We will be working hard alongside the first wave of cities to help connect them with the private capital they need to improve energy efficiency of their buildings, and create jobs in their cities.”