The forgotten summit

Climate summit? When? Where? Now? Yes, the COP 16 UN climate summit just ended this weekend and if it hadn’t been for my interest in climate changes and solutions I would not have known that high profiled politicians from all over the world had gathered in Cancún to come up with an agreement to save the environment. Actually it was quite difficult to find news and updates on the summit and most news organization didn’t even mention it.

Compared to the coverage of COP 15 in Copenhagen last year the poor coverage of this summit really surprises me. I wonder if it’s because journalists and people in general have stopped to care about future agreements in relation to the environment or it’s because something completely different.

COP 15 was surrounded by not only high media coverage, but also really high expectations. The high expectations were not met and the horde of journalists that went to Copenhagen to cover the summit could report about only disagreements and the prospects of a warmer climate. Maybe the press actually played a role in the disappointing outcome last year and maybe more sparse media coverage this time around would leave the politicians not to worry about journalists, but to worry about getting signatures on a climate agreement. A much needed agreement as the Kyoto Protocol expires in 2012.

It actually seems as if the absent media coverage had a great impact on the negotiations for a greener future. Last Saturday, a day after the summit was scheduled to end, COP 16 President Patricia Espinosa could announce that the United Nation countries almost had reached an agreement. Only Bolivia voted against the agreement, but eventually Espinosa gaveled down its objections. Just reaching an agreement, even if it’s a compromise, makes this summit more successful than the Copenhagen summit last year.

In general the outcome falls short in emphasizing how dangerous climate change can be in the future and the decisions agreed upon will have to be adopted and confirmed at a future summit. But with that said, the points agreed upon are still overly important.

First of all, the countries worked out a plan to extend the Kyoto Protocol that is more wide ranging that the original protocol and calls for deep cuts in emissions. Furthermore, the UN agreed upon for the first time that temperatures should be prevented from rising more than two degrees Celsius.

Second of all, the summit agreed to establish a Green Climate Fund to channel money into poor countries to improve their climate defense, help them tackle global warming and compensate countries that desist from felling their forests. That solution is actually in accordance what with what the Danish scientist Bjørn Lomborg pointed out in his latest book “Smart Solutions to Climate Change: Comparing Costs and Benefits”. Lomborg suggests that $50 billion should be put into adaption to the effects of climate change and $99 billion spend on clean drinking water, healthcare, education etc. in poor countries to help them improve their climate defense.

So even though no one knows about the agreements that were made in Cancún the COP 16 has turned out not to be the disaster that you could have feared.  Agreements were made and the countries have set their minds on trying to fix the climate challenges. They’re taking the right path, but there is still a long way to go. We’ll wait in excitement for COP 17 in South Africa in December 2011.

Can the price of a green revolution get too high?

I was doing some research for an article about a relatively new green energy phenomenon the other day and talking to various sources I started to think about the price of a greener world.

The technology I was writing about is called Bloom Energy and converts fuel cells “into electricity through a clean electro-chemical process rather than dirty combustion”. A lot of industry spectators have announced Bloom Energy as a revolution in green energy and major companies such as Coca-Cola, Google, Adobe and FedEx have already installed the so-called Bloom Boxed that works as the energy servers.

Bloom Boxes are independent of natural phenomenon like sun and wind and that makes a huge competitive advantage in comparison to wind power and solar plants. Furthermore, it is an on-site energy server so it is more reliable and can be used 24 hours a day.

It all sounds really good and maybe it is too good to be true as well. Not that the technology behind the Bloom Boxes isn’t efficient, but the costs for this new green tech revolution seems to be an exorbitant price.

Electricity cost with a Bloom Box is $0.13/kWh to $0.14/kWh according to strategic advisor Lux Research, which is a high price to pay for energy when then average electricity costs in the U.S. are approximately $0.11/kWh.

Furthermore, the price of a Bloom Box of 100 kW is $750.000 whereas a diesel engine that produces the same power costs $50.000. Of course there’s an environmental advantage in Bloom Energy, but there has got to be just a tiny economic incitement as well. Or just a more competitive price.

All but one of the Bloom Boxes are installed in California where the price is subsidized both on a state and federal level and that makes the energy type more affordable. The founder KR Sridhar estimated according to Gigaom.com that customers get payback on their investments in three to five years in energy saving costs, but that the payback is calculated based on both subsidies.

So in order to spread the boxes to other states with fewer incentives Bloom Energy needs to be able to drive the prices down. The company has announced that it will be able to significantly reduce the costs over the next five years and maybe that can help the revolution move along. Otherwise the revolution will be too expensive.

What does 500,000 actually mean?

In just about one month the first affordable electric car for the masses will hit the markets all over the world. The much talked about Nissan Leaf is finally getting out to customers and last week Carlos Ghosn, Chief Executive Officer of the Renault-Nissan alliance behind Leaf, said that electric car would hit 500,000 sold units a year in three years.

I’ve always thought of the Leaf as a great alternative to a gas consuming car and I think I kind of expected every environmental responsible individual to sell his or her old fashioned car for the benefit of a green, electric car. That is, of course, a naïve thought, but a nice one at least.

So I thought about the 500,000 cars that Carlos Ghosn expects to sell every year for the next three years. Is it a lot of cars? Is it what you could expect or is the number disappointing?

Ghosn has earlier sad that he expected to sell a million cars a year, so compared to his previous forecast the 500,000 seems like a low number. Furthermore, I tried to compare the number to the total car sales in the U.S and the total global sales. The year to date car sales in the U.S. in 2010 is 9,570,721 and globally automakers are on track to sell about 74 million cars before this year is over. In comparison to those numbers 500,000 cars a year seems like drops in the ocean.

Maybe the electric cars will beat the estimates and more Leafs will be rolling on the street within the next couple of years. The development in the electric car industry is sure an interesting thing to watch. 

Uncommon approach by Vestas-boss

I must say I was really surprised by the press release Vestas send out yesterday. The CEO, Ditlev Engel, called on all the G20 leaders that will meet in Seoul in a couple of days, to meet him for an hour to offer them specific solutions on how to create sustainable solutions in their countries. It’s a very uncommon approach, but I think it’s pretty cool to have the guts to ask world leaders like Barack Obama, French Nicholas Sarkozy and Saudi Arabia’s King Abdullah for a “date” like that.

The COP15 last December definitely showed that is it almost impossible to get every UN nation to sign the same climate agreement, so offering each country a solution that is custom-fit might not be such a bad idea. If he can get the leaders to listen. And to participate, which might be one of the more difficult tasks.

Engel is the head of a working group for creating green jobs and the group wants the G20-leaders to commit to four actions in order to increase renewable energy solutions.

First of all the group suggests to set a robust price on carbon and create certainty and longer horizons. It believes that “even without a global climate deal or a global carbon market, much can be done on a national and regional level in G20 countries.” Wouldn’t that just be great if the group and Engel could convince the leaders that combating carbon emission on a local level makes sense?

Second, it calls for increasing the R&D spending by a factor of four to get to an optimal level. Actually, that is what Bjørn Lomborg, the Danish political scientist, is arguing for in his movie “Cool it”, where he suggest to stop spending billions on dollars on policies that won’t work and instead pour the money into R&D in new technologies to deal with climate change. It just seems that in a world where the financial markets are still unstable and people call for better health care and just clean water, it will be a difficult task to convince leaders to scale up research and development spending by a factor of four. But I’m sure the intentions are good, and maybe raising the question can change something.

Thirdly, the G20 leaders need to end fossil fuel subsidies with the shortest possible time frame and no later than in five years. In 2008 $557 billion were spent annually on fossil subsidies and even though the leaders are already phasing out some of the subsidies it seems like a pretty ambitious goal. Just think about how strong the oil industry lobby is.

Finally the green working group addresses that is it necessary to eliminate tariff and non-tariff barriers and environmental goods.

So far, I haven’t seen if any of the world leaders have responded on the invitation for the one-hour rendez-vous with Ditlev Engel, but I’m really interested in finding out. If he gets through with some of the points I hope we’ll see more renewable energy in the future.

How the midterms will affect green energy

With the Democrats losing 60 seats in the House and thereby the majority and losing six seats in the Senate, Tuesday’s midterm elections were almost as predicted. With the new grouping in Congress a lot of new predictions have already been made in terms of future policies and I think it’s particularly interesting to focus on the environment and sustainable energy.

Attempts to address the issues of global warning and get a clear sustainable energy policy with a Democratic-controlled Congress were met with resistance and now with more Republican filling up the seats it will probably get even more difficult to focus on sustainable energy.

The Washington Independent describes it as “common knowledge that it will be next to impossible to pass comprehensive climate legislation in the next two years.” Instead GOP is more likely to upset environmentalists by pushing nuclear power plants and coal.

Well, nuclear power has some places had a comeback from the 70’s protest campaigns as a renewable energy sources, but is it really necessary to go down that road again when several companies have figured out a way to make energy out of almost all the four elements?

Apparently the Obama administration isn’t as supportive of the alternative energy sources as before the midterms. Last Wednesday, just a day after the elections, the top advisers recommended cutting off funding for a federal loan-guarantee program for alternative energy projects with a budget of $2.5 billion, down from the $6 billion Congress approved for it in 2009. If the sudden urge to cut of the loan-guarantee has anything to do with the new grouping in Congress is uncertain, but overall it is bad news for sustainable energy projects.

What it takes to cut carbon emission is certainly not to cut of funding and having more oil, gas and nuclear advocates to control Congress. The major wind turbines manufactures have already had immense problems on the US market and I don’t expect the recent chain of events will make outlooks any better. 

BMW and the green car race – is it too late to join?

The German car manufacturer BMW seemed to be the “it” car company this Friday afternoon. Not only did it unveil that it will invest $746 million to set up production for the electric vehicle Megacity and put $560 million into expanding its Leipzig factory where the new car will be produced. BWM also announced that it would begin selling its first hybrid supercar by 2013.

All in all it looks like a pretty good day for luxury car fans and fanatics. But before everyone gets too exited I think it’s worth thinking about the time perspective in this green wave from BMW. The Megacity car, which is the first battery-powered vehicle from the Germans, will not hit the showrooms before 2013 the company said. That’s only two years before the European Union’s new emissions targets of 4.6 ounce of CO2 per kilometer is to be met.

In comparison to competitors as Japanese Nissan, which is launching its first electric car Leaf in December, BMW is lagging behind in the green car race. That fact was actually pointed out yesterday by the European Federation for Transport and Environment that accused BMW, Daimler and Volkswagen for not trying hard enough to meet the CO2 emissions targets.

But I guess that overall, even if it is a little late, that this new major investment in the Megacity is a good thing for a greener car industry and shows that BMW is changing.

What I don’t get though, is that BMW waited until now, or more precise 2013, to introduce their first hybrid car. The hybrid autos were supposed to be a transition vehicle before going all in on the all-electric cars and BMW will be 13 years behind Toyota’s Prius that in 2000 the was the first to introduce a hybrid four-door sedan to the US market.

I know that if I’d already made a decision to skip the fossil-fuel consuming car in favor of a greener alternative I would go for the electric car and not “just” the hybrid. I guess we’ll see how both cars do in three years.

More decline in wind power slashes Danish jobs

Since I’m both Danish and following the green business beat, yesterday was an important day for me in terms of industry news. The world largest wind turbine manufacturer Vestas reported its third quarter earnings and after a horrible second quarter with a $164 million loss it was quite interesting to see what numbers the company could pull out the hat this time.

The earnings report had both good and band numbers. The good numbers were the actual profit of 126 million euro, $175 million, that was higher than the average estimate of 80 million euro in Bloomberg survey of 13 analysts. At the same time the giant wind company reported an order intake of 6,567 MW in the first nine months of 2010, which is the highest ever for the Danish company.

So much for the good news. At the conference call the CEO Ditlev Engel admitted that the administration had been too optimistic in terms of growth in the European wind power market and has to lay off 3,000 people, primarily in Denmark. To US companies 3,000 workers might not sound like a lot, but for a country like Denmark with a population of only 5.5 million a firing round like that can ruin whole regions for good.

In a sense it is also really bad news for the whole wind industry. Vestas predicts a decrease in demand in the European market to 7,000-8,000 MW from 8,000-9,000 MW primarily because the debt crisis has limited the prospects for economic growth.

The job reduction is a direct outcome of the weakened demand in Europa and to Vestas it made sense to cut the jobs where the expenses were highest, the home country. The expenses in Denmark are so high that it cost as much for Vestas to produce a wind turbine in China and having it shipped to Sweden, as it would cost to manufacture the turbine in Denmark and ship it to one of the neighboring countries.

Again it seems like China has great influence on the whole industry and from a green point of view it raises quite a paradox. The carbon emission in relation to shipping a wind turbine halfway around the globe is probably noticeable and not really in tune with what a green company preaches.

Nevertheless, the announcements from Vestas prove once more that China effects both prices, competition and now also the number of people working in high wage countries.

The Beer Father of Brooklyn

This is not exactly in tune with my green business beat, but it is still a nice story I had to read for class. 

Steve Hindy did not just change his own life as an established journalist when he in 1987 quit his life as he knew it and founded the Brooklyn Brewery. He also changed the Brooklyn community and introduced the New Yorkers to great beer.

By Sara Sjølin

Date: October 18^th 2010

Two professors from Baruch College enter the door and look around in the yeasty smelling office area. As they wait for their students in their entrepreneurship class to show up a 61-year-old dark-bearded man in a casual navy blue fleece sweater and khaki pants greets them.

“Steve,” he says shaking hands with them.

The name instantly lightens up both teachers’ faces as the female professor impressively asks, “Are you Steve Hindy? The founder of the brewery?”

And it is Steve Hindy. One of the two founding fathers of the 22-year old Brooklyn Brewery that today occupies a large area on N 11^th street in Williamsburg and has brought not only Brooklyn Lager, India Pale Ale and Pennant Ale to the Brooklyners, but also a renaissance to the borough Southeast of Manhattan.

On this late Friday afternoon before the big rush-in to the weekly happy hour he has agreed to tell them the story of how he, a war journalist for AP in the Middle East, gave up his profession and started the brewery with his friend and former banker Tom Potter in the late 1980s. A story about both courage and confidence, but also about technically bankruptcy and difficulties distributing the beer to customers.

The two guys met each other in the Brooklyn neighborhood Park Slope in 1984 where their wives had become friends through their involvement in the local public schools that Steve Hindy’s two children Sam and Lily attended. Earlier that year Steve’s wife Ellen had suggested that with two small children it was about time to leave Middle East and go back to the States. The correspondent job had led Steve to cover important stories as the Iran-Iraq War, the Israeli invasion of Lebanon, and the massacres in the Beirut refugee camps. A month before the birth of his son he was abducted in South Lebanon while traveling with a United Nations patrol, but Steve tells today that the experiences prepared him for his career as a cofounder of the Brooklyn Brewery.

His interest in making his own brew started in those days and back in the U.S. Steve started brewing his own beer in the apartment in Park Slope. Sitting in the backyard and drinking homebrew goodies with Tom, the two friends developed the idea of opening a brewery together.  

In March 1987 the business plan for Brooklyn Brewery was complete and the haunt for investors started. To Steve it was a terrifying time. Tom had quit his job as a banker in March and Steve was going to quit his well-paid job at Newsday in October. 35 investors pitched in and three days before the stock market crashed in October 1987 they reached the magic $300,000 that was their minimum to go into the brewing business. Brooklyn Brewery became a reality.

However, the first years as brewers didn’t turn out as the great entrepreneur story it is today. The brewery made great beer and contributed at non-for-profit events to rebuild Brooklyn as a hip neighborhood, but the bills exceeded the income. The first five years the local brewing company was technically bankrupt and struggled with distributing the beer to customers. Steve went to bed every night thinking that the situation was troublesome. But despite the difficulties in creating a profitable company he never lost confidence in the Brooklyn Brewery and his experiences in the Middle East helped him endure and stay determined and focused.

His confidence proved right. In May 1996 he and Tom opened the brewery in Williamsburg after several years of contract brewing in up-state New York and the brewing business started to take off.  Last year Brooklyn Brewery grew 20 percent in a difficult American beer industry that lost 2.5 percent the same year.

To the entrepreneur students from Baruck University the Brooklyn Brewery and Steve Hindy are a great story of the American dream. To Steve it is has been not just a dream, but also a great adventure. Experiencing people order a Brooklyn Lager in a bar in Manhattan still makes him really proud and he enjoys being a part of New York like that, he says.

But the brewery does not take up all his time like it did in the first intense years. He went from working 80 hours a week till 40 and is currently writing a book about his years in Lebanon. Now it is no longer the destiny of the brewery that keeps him awake:

“This morning I got up at 3.30 because I’m writing a book about my years in Lebanon and I’m thinking about it all the time.”

However, in December Steve will again have a lot of beer on his mind. He is expanding the brewing business and will go from making 12,000 barrels on the N 11^th street premises to 120,000 barrels. 

How the Chinese interest rate can affect green energy

China has a habit of pulling random rabbits of out the hat and this week was no different. As a surprise to world economists the populous country raised its interest rate for the first time since 2007 causing the stock markets around the world to shake and keeping economists work overtime. Most economists seemed to agree that the unexpected interest rate-increase is a signal of slowing economic growth and a way to avoid the inflation rate to get out of control.

To the green industry the surprise act from the People’s Bank of China can have several impacts.

First of all, China is on its way to outpace the US in most installed wind capacity by the end of this year, which makes the Chinese market extremely important to wind turbine manufacturers. The increase in interest rate in China makes it more expensive to borrow money, thus making it more expensive to initiate new projects.

Most wind turbines get installed as new projects and this week’s signal of a slowing growth in the prosperous country might have an impact on the wind turbines manufacturers. If China is not supplying the same growth in wind energy some wind power companies will undoubtedly feel the effect on their order book and bottom-line.  Some international companies, like the world’s largest wind turbine manufacturer Vestas, already experience economic trouble and the new line in Chinese economy might just be another bitter pill to swallow.

Furthermore, the higher interest rate has already lowered the price on oil the most in eight months, because of concern that the oil demand in the world’s biggest energy user will decrease. In combination with low gas prices the incentives to switch to sustainable energy sources will get even lower and probably effecting the number of new wind turbines put up.

China still has a great demand for energy, so I’m implying that the change in interest rate is going to bring the growth in wind energy to a halt. But it will be interesting to follow the new economic direction in China in relation to the sustainable energy industry.

Will the US obstruct the wind energy companies?

The Spanish operator of wind-power plants Iberdrola Renovables announced yesterday in its third quarter earnings report that it lowers its expectations to the American market. Going from expecting new installations of 1000 megawatt earlier this year the company now only expects to install between 600-700 megawatt in the US.

Now what does really mean? First of all it confirms the downturn in the American wind market that is not only bad news for the wind industry, but also for the environment. One of the major reasons for the wind power obstacles in the US is the extremely low gas prices that do not give the electricity companies any incentive to buy power from wind power plants. In that way it is difficult for the turbine manufacturers as GE Energy, Vestas and REpower to get involved in new projects and put up more capacity.

According to one of the largest Scandinavian banks, Nordea, the downgrading outlook from Iberdrola Renovables is bad news for the wind business and such lower expectations will eventually affect the large companies, i.e. the world largest wind turbine manufacturer Vestas. Nordea already lowered its recommendations on the Vestas stock to “hold” in May because of the discouraging outlook for the American market.

Furthermore, regulatory challenges destroy growth possibilities for the wind power companies, because there still is no national legislation on sustainable energy in the US.

At the same time China is on a wind high at the moment and the World Wind Energy Association just reported that China has already installed 7800 megawatt this year up until July leaving the US and India on a shared second place with 1200 megawatt installed each. If this trend continues China will probably outpace the US in most installed capacity in total by the end of this year.

Off course it is amazing that China is doing such a great job in installing wind power, but at the same time it is very depressing that the worlds most energy consuming country is not following the same path. I find it important that the big nations turn to sustainable energy and also encourage the green companies to keep innovating. And at the moment we need more of that from the US. 

The fight for the Chinese wind market

A lot of things are happening on the Chinese wind market these days. The largest wind turbine conference on Chinese ground so far, China Windpower 2010, opened today and at the opening session the Danish ambassador Friis Arne Petersen said that he sees a “very promising future for the industry in this country.”

Not only for the international wind turbine companies, but also to a great extent for the Chinese manufacturers such as Goldwind, Sinovel, and Dongfang. The three companies are doing so well that they last year made it into top 10 of the largest wind turbine manufacturers in the world – by almost only putting up wind turbines in China. That says a little bit about the opportunities in the large country and at the moment China is the fastest growing market for green energy.

The huge demand and proven success for Chinese wind power companies have of course drawn the attention from large international players like Vestas, Gamesa, General Electric and Suzlon and intensified the competition of the Chinese wind.

Suzlon just announced yesterday that it would raise $1.1 billion on the stock market and use the money to increase its presence in China and India because of the slow order growth in Europe. Vestas, the world’s largest wind turbine manufacturer opened an R&D center in Beijing yesterday as the first international wind power company and is in general trying to gain market shares in the attractive Chinese market.

It all sounds like China is up for a lot of green energy, but to me it also sounds like the wind power companies are aiming for an intense competition. It makes sense that they all want to explore (or exploit?) the seemingly growing market, but is the market big enough for all of them?

The Chinese wind power producers have already set new standards for how cheap a wind turbine can be in China and with the prices the international companies offer, they might be lost in price competition.

However, the cheap Chinese prices do not account for the quality of the turbine that requires them to get repaired or changed every second year or so. In the long rung the international companies have a competitive advantage in terms of quality. The big issue for those companies will then be for the Chinese costumers to start appreciating that.

Nevertheless, the Chinese wind market and the fight for its market shares will be interesting to keep an eye on the nearest future. 

Organic - an irrational choice?

This is not exactly in the theme of my regular blog, but a predictably irrational experiment I carried out to test people's preferences for organic food.

Introduction

Every time I go grocery shopping I am confronted with making horrible decisions. Do I get the healthy, live longer, get prettier, and expensive organic variation of an item or do I go for the regular, pesticide-filled, “animals-have-died-because-of-you” non-organic grocery that cost me half of the money? Secretly, when nobody is watching I sneak the non-organic milk in my basket and convince myself that when I get a real job I will start to save the world and myself and buy organic food.   

However, when the topic lands on organic food at dinner parties I like to join the choir of organic-lovers and say that I too prefer the healthier and – the implied – better choice. 

I figured that there would be more like me out there. People who will say that they prefer organic food, not only because it is better for them, but also because they can tell a different in taste.

Thus, I decided to do an experiment with random people to see if their preference in a certain grocery is irrational and changes if they are told that one is organic and one is not. 

The experiment 

I wanted to test out my participants’ organic preferences on a grocery that did not have a lot of taste variation within the same item. That ruled out most fruits and I decided to carry out my experiment with roasted and salted cashew nuts. Cashew nuts have a distinct taste and the variations within cashews are often only determined by the roasting and flavor.

I got one bag of non-organic cashews at 41 cents per ounce and another bag of organic cashews at 61 cents per ounce. The organic cashews were almost 50 % more expensive than the other bag.

I ran my experiment on three groups. To count for any minor taste difference I started out by asking a control group which nut they preferred the most without telling them that one was organic. By doing that I could later on in the experiment see if more people preferred the organic, when they were told that it actually was organic. 

I then asked my second experiment group which cashew the liked the most by taste and told them that one nut was organic and the other was not. The purpose of this group was to see if the participants were influence by the organic choice.

With the third group I inversed the experiment. I asked the group to taste the two different cashew nuts and told them that the non-organic nut was in deed organic and vice versa. The purpose of the third group was again to record if the information that one nut was organic had significance and to rule out any taste difference. 

Hypothesis

My hypothesis was based on my presumptions that people are not making rational decisions when they have to choose between two items in which they have a preference for one of them. Like experiments with Coca-Cola and Pepsi many participants have found themselves choosing their not preferable brand of soda in a blind testing, but continued buying what they preferred in the first place. I expected that the same irrationality could be applied to organic food and that people would choose organic only when they were told it was organic and not because they liked the taste better.

Therefore, my hypothesis was that nearly everyone would choose the organic cashew nut when faced with a choice between the organic and non-organic. Further, I expected that there would be no difference in preferences in the control group.

Results

The experiments went almost as I expected. In the control group the organic cashew nut was low on popularity, but it gained a lot of support when the participants knew that the nut was organic.

In the control group only 10 % preferred the organic nut, 40 % chose the non-organic nut and 50 % did not have a preference at all. The comments on the two nuts were that the non-organic was saltier and therefore tastier, but the organic was crunchier. The overall result from the control group was the organic nut was not preferable. 

That changed as soon as it got a label on it. Now 38 % of the participants wanted to go for the more expensive organic cashew nut. However, the non-organic nut still got the most votes and ended up with the remaining 62 % simply because it was tastier, most participants said.

When it came to run the experiment on the third group I already expected the non-organic nut labeled as organic to get the most votes, since it apparently tasted better. I was right. 70 % went for the non-organic nut in disguise as organic whereas the real organic nut only was preferred by 30 %. 

Conclusion

From the results of my experiment I can conclude that the organic label makes people irrational to some extent. When not confronted with an organic awareness almost none of the participants chose the organic nut. But as soon as people were aware of the difference in the nuts 40 % chose to go for the organic alternative. Even when the nuts were deliberately mislabeled most people preferred the organic nut, but it seems, as the mislabeled cashew actually did taste better. 

I had expected that almost everyone would have chosen the organic cashew nut though, when they knew the difference. 

In any way, this experiments proves that an organic label can make people irrational and go for the organic choice even if it does taste as good. 

Way to go for sustainable architecture

As a Dane I actually got a little proud today.  The hotel Crowne Plaza Copenhagen Towers was recognized as the most eco-friendly hotel and got the EcoTourism Award. I started to read a little bit about the hotel and some of its sustainable thoughts are actually pretty cool.

First of all it has Northern Europe’s largest solar power cell system to produce electricity for the hotel while the ground water takes care of air condition. All the shampoo bottles, toothbrushes and shower caps are biodegradable and the TV’s and lamps run on low energy. Combined it all make this hotel carbon neutral.

Second of all, and this is actually my favorite part, it encourage its guest to take part in making the Earth a greener place. If a guest gets in an exercise mood he or she can go for a ride on the hotel’s electricity producing bicycles and everyone that produces 10 watt hours can enjoy a free meal in the hotel’s restaurant. I know I would definitely go biking a lot more with a nice meal in sight.

To me a hotel like that seems like an amazing idea and I would probably spend a few extra bucks on a greener conscience when traveling. So it made me think about sustainable architecture. Buildings and residential areas have the greatest carbon-emission impact and thus the most important place to take a look at in trying to reduce carbon-emission.

An interesting example is this one Danish guy Jul Hørlyck that made a business out of isolating people’s houses so well that they can be heated up by only two light bulbs. That’s just amazing.

By incorporating sustainability into architecture like the Crowne Plaza Copenhagen Towers and Jul Hørlyck a lot of carbon-emission can be omitted or reduced. And since there’s an ongoing international war against pollution and climate changes I think there’s a major business in sustainable architecture. It’s just up to the large office buildings, hotels, airports and residential areas to figure out that they need it.

Cancun – another climate anticlimax?

This year’s climate summit in November in Cancun, Mexico is approaching and the final round of UN climate talks has got under way in China. Basically it means that the delegates gather to prepare negotiations for the Cancun summit, but the executive climate secretary at UN Christiana Figueres has already cast a shadow on the outcome of the summit.

Before the meeting in China she said that it is “naïve” to expect “one climate agreement that will solve everything right now” and played down expectations of a legally binding deal.

That is not only bad news for the environmental activists and the future climate, but also for the companies who work in the sustainable energy industry.

At the moment the UN, the EU and the American government are all trying to define the best solution for a greener and better environment, but so far it seems as only the EU are getting somewhere in defining real goals and agreements.

The different announcements means the world to the green energy companies as they plan their investment according to expected demands. Policy making plays a major role in that matter and the uncertainty in American energy policy has already made large wind power developers cut down investments.

The climate summit in November could or should help define some shared goals and regulations and thereby help the energy companies, but Christina Figueres’ statement makes me wonder if Cancun will be the new Copenhagen. For the future certainty in energy policy I really hope not – we do not need another anticlimax. 

Will Vestas show better trends for this quarter?

In a few weeks the earnings report season start for third quarter and in these time of recovery and transition to green energy I thought it would be interesting to take a look at how well the wind power companies are doing.

The world’s largest wind turbine manufacturer Vestas showed horrible results in the earnings report for second quarter of 2010, and actually reported a loss of 119 million Euros, $163 dollars. The poor result made the company downgrade the profit outlook for 2010 and it came as a shock to many of the analysts.

Their competitors Siemens Wind Power, Clipper Wind Power and Nordex did not show the same trend at all and reported great profits for that particular quarter.

And looking at the results now kind of make me wonder why the world’ leading wind turbine manufacturer is doing so much worse than all of its competitors. According to one analyst I talked to Vestas is having greater loss because it spend money more on research and development in these hard economic times.

To some extend that is true. Vestas did raise it costs for R&D in second quarter compared to the same quarter a year ago. However, the expenses only rose from 35 million Euros to 44 million Euros, which does not explain the 119 million Euros reported loss.

On October 26^th Vestas is ready with the earnings report for third quarter and it will be interesting to see if they continue the negative trend, spend more money on R&D or come out with a profit. During the last quarter Vestas announced several new orders and a number of banks analysts changed their recommendations on the stock to “buy” from “sell”. So maybe there is good news for Vestas investors and the wind power industry.

Siemens dash forward while U.S. wind market step back

I looked at some of the major news in the green energy sector through the last couple of days and I stumbled upon several interesting points. What got my attention and curiosity the most was that the latest announcements in the wind energy segment seem quite contradictory.

Yesterday, the Energy Sector at Siemens, one of the world’s largest manufacturers of wind turbines, announced that it expects significant growth in orders in the Renewable Energy Divisions and that “new orders in the fourth quarter will probably be considerably above the comparable prior-year level”.

Now, what does tell us? It either tells us that Siemens is doing an incredible job of putting up wind turbines and far exceeds its competitors, or it tells us that there is an increased demand for wind energy. I really like to believe the latter and with the world’s largest offshore wind farm opening in the UK last Thursday, it is definitely heading in the right direction.

Looking at those two events it seemed like a good week for wind power.

However, the good news contradicts one of the latest statements on the U.S. market for wind energy. Last Friday the third-biggest American wind power developer Horizon Wind owned by Portuguese EDP Renovaveis, said it will cut investment in the industry because there is no clear national energy policy.

According to Dow Jones Newswires Horizon Wind will cut spending by more than half to less than $300 million in 2011. One of the reasons for the announced reductions on spending is that there is no long-term visibility in the energy policy.

So why isn’t there more visibility in the policies? The unclearness already made the largest American wind company NextEra Energy Inc. cut back on development in the U.S. and if more companies take the same road it does not look like a near future solely based on renewable energy.

The administration needs to give clear guidelines ASAP so the American wind companies can make the same announcements as Siemens: increased demand and growth.

Goodbye to the checkbook

A lot of things have happened to me since I moved to New York from Copenhagen a month ago. I got a new apartment, new friends, a slightly different look, a better American accent and a checkbook.  Yes, a checkbook. I kind of expected the first four things but I never in my life anticipated to be the happy owner of a light blue checkbook with different motives on each page (one with Winnie the Pooh, Bugs Bunny and even one with Mount Rushmore).

This is the first time in my 24 years lifespan that I’ve been acquainted with such a thing and for all that I knew no one really used that prehistoric find anymore (In Denmark we haven’t used checkbooks for years). However, a lot of things are different in the States and at first I didn’t really think more about it.

Then, a couple a days ago I actually had to write out a check and that’s when I started to think about the checkbook in a broader sense. First of all it is easier, faster and more modern just to transfer the money electronically and not jot down all those number and letters on a small piece of paper.

And second of all (and the whole purpose of this issue of my green blog, which I assume you all been waiting for) it is a whole lot better for the environment to abolish the checkbook and start transferring money online. Think about it – every time you write out a check or get a new checkbook from your bank it is good paper totally wasted on something that belonged in the 90es.

If we assume that just a quarter of the American population, 77 million people, uses a checkbook every year and a checkbook is 20 pages thick, then 1.6 billion pieces of paper is wasted on simple money transfers each year. Transfers that, for all that I know, could have been executed online.

So, in terms of saving the environment – or at least trying to – I’d say that we get rid of the checkbooks and start transferring money online. It is the little things that count, right?

One step closer to sustainability

Supporters of smart grid, the new way to transport electricity over longer distances, were up for some good news today. Seven national smart grid organizations announced that they have launched the Global Smart Grid Federation to help get smart grid spread out over the world.

From an environmental point of the view I think that the launching is a really interesting step towards a greener future and using sustainable energy sources. First of all, the organizations in the new federation are spread all over the world, the U.S., India, Japan, Korean, Australia, Ireland and Canada, which illustrates a global willingness to cooperate.

Secondly, the Global Smart Grid Federation can turn out to be an important player in replacing coal and oil with renewable energy sources. With an effective smart grid the electricity can travel larger distances and integrate renewable energy such as solar and wind power.

Let me give you an example: The energy generated in a really windy area can easily be transported to a calmer region where it can be used to heating, lightning etc.

And that is an interesting thought. At the moment wind energy cannot be used as a 100 percent electricity source, because the wind is not always blowing. However, the wind is always blowing somewhere and if we were able to transport the energy generated from the wind somewhere to a calmer elsewhere, then we would always have electricity from wind.

The same goes for solar energy and in that sense the Global Smart Grid Federation is of major importance. It was announced last year that the Desertec Industrial Initiative group plans to build a network of solar plants in Sahara. The plant is hoped to provide 15 percent of Europe’s electricity by 2050 and will be the biggest in the world.

With today’s launch the hope has definitely increased, as a smart grid will make it a whole lot easier to transport all the electricity produced from the sun back to Europe. Or elsewhere. Because the solar energy should not only be limited to Sahara and servicing Europeans. How about Death Valley in Southern California? Or the Thar desert in India and Gobi desert in China? It is said that if as little as one percent of the world’s desert is covered with solar panels it is possible to meet the energy demands of the world. And with the smart grid and the new Global Smart Grid Federation we might be a step closer to relying 100 percent on sustainable energy sources.

Good news for the electric car industry

With more and more electric car manufactures preparing to spit out electric cars in United States, we might be heading for an oil-free future. Today, when browsing around Treehugger.com I realized that a new competitor is ready to enter the electric car market and it actually made me kind of happy. Not because I’m looking to buy an electric car, but because it proves there is a demand or an expected demand for the green vehicles. 

The new car on the market is the 2011 Coda Sedan from Coda Automotive, a new company only building electric cars. And I think that is kind of nice. A whole company dedicated to only building oil-free cars and making the Earth a better place. That definitely tells me that people behind Coda Automotive believes in the electric car industry and that we will see more and more people choosing an electric driven car over a oil-sucking beaming Hummer. Or Alfa Romeo. Or Mercedes. Or pretty much any car that pollutes the environment with smelly gas.

When first checking out the 2011 Coda Sedan I didn’t really think that it would go the distance. It can drive 120 miles on a single battery charge, the charge is six hours and the top speed is 80 mph, which cannot compete with Nissan Leaf’s 90 mph and Tesla’s 125 mph. Over all the Coda Sedan has no special features from the outside and with a price tag set to $45,000, Nissan just lowered the cost of the Leaf to under $30,000, it seems like their up for hard competition in the electric car market.

However, when taking a closer look at this eco friendly vehicle it shows it full potential. The luxurious interior sets it apart from its competitors  - with an 8.4 inch touch screen monitor, DVD player, an iPod dock and a satellite radio this car might be the choice of the elite.

Green cars are already the number one choice in private transportation in Hollywood and all the stars are currently driving around in Prius, Toyota’s popular hybrid car, after Arnold Schwarzenegger replaced his Hummer with a Prius in 2005. Exactly because the trendsetting part of the population started to adapt the Prius as their primary means of transportation, the Japanese hybrid car rapidly became popular.

With more and more electric cars on the market it might therefore not be such a bad idea for Coda Automotive to launch a car that is targeted the rich, famous and luxurious segment. If the trendsetting prior Prius people go for the more luxurious Coda Sedan, the new electric car will probably soon become popular with the rest of the consumers. And that is not only good news for the particular company, but for the whole industry, as electric cars in general will gain popularity.

Who will take the lead?

Yesterday I raised a question on how we get everyone to stick to the same solution to save the environment, thus our planet and ourselves. So far different countries seem to approach the climate situation differently, which the climate summit COP15 in Copenhagen was a clear indication of.  At the end of the summit I got a feeling that not all UN countries came to Copenhagen with the same agenda and therefore not the same willingness to put their signatures on an agreement.

And why was that? I had a feeling that after getting overexposed to climate facts – and in some situations propaganda – that every citizen of the planet understood that we had to find a way to deal with the issue.

But then after thinking about it for a while I realized that maybe not every citizen shared the same knowledge and/or concern about the climate change. In order to get everyone to support the same solution, the first part would evidently be to get everyone to understand the urgentness and severity of the problem. And how do we do that? If I had the answer to that question I probably wouldn’t be writing this blog in the first place, but trying to save the world from some hot spot office in a major city (or maybe from a flooded tent somewhere).

However, making a movie like Al Gore’s “An inconvenient truth” might not be such a bad idea. I know Bjørn Lomborg, who I discussed yesterday, is far from a fan of a campaign that scares people off, but Al Gore did get a lot of people to draw attention to the problem. If, at some point, citizens and governments realized the impact of the climate crisis, people would probably be less reluctant to have one governing institution trying to figure out a solution. And probably support the solution down the line.

United Nations tries to take the leadership of the war on climate warming, but has no real governing power. Who will then take the leadership as the problem becomes more urgent? A country? Another organization? Or maybe a completely new institution assembled for the very cause? Someone has to take the lead and it is a very interesting question who that will be.

Can we all walk down the same road?

In a very coincidental way I got to see the new movie “Cool it” by the Danish scientist and formerly announced climate skeptic Bjørn Lomborg the other day. The movie is a documentary with points from his latest book “Smart Solutions to Climate Change: Comparing Costs and Benefits”, where the skeptic Lomborg turns out to be all about the environment as long as the money are spend in the right way. I have to admit that I was the one that was skeptic when I comfortably sat down to watch the movie. As a Dane myself I am constantly exposed to Lomborgs newest say in the climate debate and sometimes find him – lets say  - controversial.

However, by the end of the movie I was actually with him of some of his points. Maybe if was propaganda, maybe I’m naïve, but in some ways his arguments made sense. He pointed out that right now the only real climate policy we have is the European Union 2020 policy, which costs 250 billion dollars a year according to Bjørn Lomborg.

“If the EU continues to spend 250 billion dollars for the rest of the century, they will reduce temperatures by 0,1 degree Fahrenheit by the end of the century. Wow! I’m really sure our descendants are going to be really really happy,” he said to the magazine Foreing Policy.

Furthermore, he argued that the little everyday actions people are encouraged to do to cut down carbon emission merely scares people more of, than it actually helps the climate. So instead of trying to cut down carbon emission the slow EU way, he suggested that the 250 billion dollars should be spend differently and at the same time give the climate a way better future:

Invest 100 billion dollar in clean energy research and development, spend one billion dollars on geo-engineering solutions, put 50 billion dollars into adaption to the effects of climate change, and spend the rest 99 billion dollars on clean drinking water, healthcare, education etc. in poor countries.

And a long way down the road I actually had to agree. It does make more sense to do the necessary R&D on renewable energy sources such as wind, sun and water before going out and spending a lot of money on incomplete solutions right now.

So, Bjørn Lomborg got me convinced, but when I went home after watching the movie I couldn’t help but wonder if that was enough. And of course it’s not. Lomborg is a scientist and economy professor and, as far as I’m concerned, an idealist. The numbers he made out are evidently true and if his plan is carried out correctly able to save the earth for future climate agony. But he forgets one very important thing. Politics. Even if all the scientists in the world supported Lomborgs economic layout, they still needed politicians to carry out their plan. And that would probably cost a whole lot more that counted for in the report as politics do draw some dollars. Plus, it takes a master political strategist to get the different government and international organization to take the same road on the climate solution. But how do you do that? How do you get everyone convinced to choose the same solution and stick to it? That’s the next interesting question in the climate debate that didn’t seemed to be answered in Copenhagen and maybe will not be answered in Cancun.