Love in the Age of World Domination

Where to Put Your Money

Its crazy how much $$$$ is flowing into clean tech and clean energy companies these days, through not just VC and private equity but also through standard investment funds, green funds, mom-and-pop mutual funds, and alternative energy indexes.

Some say it is a bubble not dissimilar to the dot.com craze, but others say that investing in energy is totally different (and I tend to go with this camp) - its investment in physical infrastructure. There are physical assets involved like wind mills and power plants, and transmission cables. Clean tech company valuations are based on cash flows and regular business models.  In any event the numbers speak for themselves:

· Global biofuels market: $20.5 billion (2006) - $81 billion (projected 2016)

· Wind power market: $18 billion (2006) - $60.8 billion (projected 2016)

· Solar PV market: $15.6 billion (2006) - $69 billion (projected 2016)

· Fuel-cell and hydrogen market: $1.4 billion (2006 - $15.6 billion (projected 2016)

In total for the 4 clean energy sectors:

· $55.4 Billion (2006) will grow fourfold to more than $226 billion by 2016 

 
In 2000, the markets for solar PV and wind power represented annual global revenues of just $2.5 billion and $4 billion respectively. Six years later, these two industries combined equal more than $30 billion in annual revenues, a roughly fivefold increase. Solar PV and wind are big business.

Then there is the rapidly rising demand for Renewable Energy IPOs. Clean energy M&A activity is apparently rising by 25% to $41 billion by year end.

I am telling you - this is the new new thing.

Nobel: Big Win for Climate

You Go Goracle!

Although I really don't get why this is a peace prize per se.

Anyway, this bright and sunny morning in Washington DC, we are thrilled. Hopefully this will allow the climate debate in the US to move past "lets make more ethanol" and on to a more serious platform of technology improvements, carbon caps, expanded R&D programs, and maybe even carbon taxes (ok maybe not).

WRI's Climate Director (and one of my bosses) Jonathan Pershing was one of the lead authors for the most recent IPCC report, and has been a participant in all four of the IPCC reports since 1990. So we are doubly thrilled!

In its formal citation, the Nobel committee called Mr. Gore “probably the single individual who has done most to create greater worldwide understanding of the measures that need to be adopted.” If not for the incredible levels of public awareness raised by Gore, his film, and now this - we would not be here today.

But parallel to the publicity, and equally important, is the science. And the awesome analysis of the IPCC -  2000 of the world's top climate scientists - have made some major inroads in creating some kind of global consensus around man-made global warming (well except for Bush and Enron).

You still think climate change is a hoax? Ok, now, thats just crazy talk.

Dreamy Al in Action

From the WSJ Energy Blog:

Al Gore is enlisting major musical performers, from Bon Jovi to Madonna, to play in Live Earth, a massive concert series to help raise funding to combat climate change. There have been rumors of Pink Floyd or Led Zeppelin getting back together for the show, which Gore has called “the largest musical event in world history.”

Using the model (and some of the same organizers) of previous benefit mega-concerts such as Live Aid and Live 8, Live Earth will be held on 7/7/07 at seven locations around the world: Johannesburg, London, New Jersey, Rio de Janeiro, Shanghai, Sydney and Tokyo. The venues will reportedly use on-site power generation and other methods to minimize environmental impact. 

The concert has not been without controversy; the U.S. site was only named Tuesday. Mr. Gore and concert organizers had wanted to hold the event on the National Mall in Washington, D.C., but holding the show on the grounds of the U.S. Capitol was opposed by some Republicans in Congress. Not surprisingly, Sen. James Inhofe of Oklahoma, who has called global warming a “hoax,” was the most outspoken against Live Earth.

Trying to do her part, Sheryl Crow – in addition to playing in Live Earth — is taking a biofuel-powered bus on a college tour to raise awareness of global warming.  Crow launched her 13-day “Stop Global Warming College Tour” this week with Laurie David, one of the producers of Al Gore’s “An Inconvenient Truth.”

On the other hand, some people are calling for a boycott of the climate concerts because of the potential  carbon footprint of the event and the climate-unfriendly lifestyles of the stars involved.

Leaving the World Bank + New Job

They say the horizon is only as far as you can see. When you get there, you see a new road and a new horizon in front of you. Must be true because I feel like I just came around another corner of my life.

Last week, after almost three years, I left the World Bank. I am moving on to new challenges in climate change and alternative energy work, so I am psyched, but I am seriously sad to leave the World Bank, my first job post-MBA. I have gotten to know some very brainy and accomplished people at the Bank, whose ideas, hearts, and minds I will miss. I will miss the Community Development Carbon Fund, the next-to-impossible projects we worked on from Guinea to Mongolia to Nepal, as well as my cool-headed clued-in boss.

The 'new horizon' is called the World Resources Institute. They recruited me as a Senior Associate into their Climate Team about two weeks ago, it all happened very suddenly, what can I say... the Universe conspires and moves in mysterious ways.

The reason why I am interested in this job, enough to leave the great (and by that mean the awesome lifestyle :) of the World Bank are threefold. First, the position is within the Capital Markets team at WRI, and it involves the financial aspects of bringing clean technologies to market. And well thats right up my alley. A HUGE part of the equation in solving the climate problem is getting the capital flowing from big iBanks and Silicon Valley VCs into the clean tech firms that have the technology. 99% of alternative energy sources and clean technologies that we need are there today, but deployment of it at scale needs a lot of $$$. 

I am also psyched because I will be working on the big picture, in particular in America. At the World Bank, I worked primarily on a small part of that big picture - carbon offsets under an international agreement - Kyoto. However, CDM is only a small part (11%) of the carbon market, and the 'carbon market' i(ie. cap and trade) itself is only one possible solution out of a broad gamut of solutions. Voluntary restraints, national legislation, and a carton tax are some of the others. And of course, the critical player without whom no solution is worth the name, is the United States. Therefore, I find climate work that concentrates on the US agenda uber-relevant, especially right now, what with 3 Bills before the new Democratic Congress.

But seriously people. This is, umm, like, serious. Except for George Bush, I think everyone has now got the memo (IPCC AR4) that the scientific debate on climate change is settled - ie. its real, its here, and its man-made. There is currently momentum, like never before, behind doing something about it.  Richard Branson offered $25 million for a carbon sequestration technology, Tony Blair is leading a Global Legislators Forum on it, and Al Gore's movie An Inconvenient Truth won an Oscar.

But its when the private equity firms get in on it that you know  for sure that things are 'heating up' :)
You don't want to miss this train when it leaves the station.