Investment

On nearly the eve of the new year, a couple of noted industry observers have already gone public with their greentech predictions for 2009. On December 4th, Cleantech Group Executive Chairman Nicholas Parker published their "Nine clean technology predictions for 2009," which, briefly stated, are the following: (1) Energy efficiency infrastructure boom initiated, (2) Global climate talks bog down—no serious deal until 2011/12, (3) U.S. passes national RPS, but cap & trade bill only in 2010, (4) Wind stocks come back; thin film PV shakeout, (5) Clean technology VC stabilizes at $7B globally; Private Equity more active, (6) Failure rate of cleantech startups doubles, (7) IT turns to the energy opportunity, (8) R&D stagnates...

Absent a rigorous examination of statistics, meaningful dialogue about environmental issues is impossible. This is particularly challenging now that environmentalism is generally recognized to be inextricably linked not only with the endlessly complex science of ecology, but with the dismal science of economics as well. To try to quantify the rational basis for a legitimate ideology of environmentalism is not easy. One way to productively further the dialogue of rational environmentalism is to publish online interactive spreadsheets of hopefully instructive simplicity, quantitatively presenting options in terms of costs and benefits for environmental issues management. To this end, we...

The fate of GM, Chrysler and Ford hang in the balance, with widely varying sentiments regarding what can be done, if anything. Both a bailout or a bankruptcy present a set of opportunities as well as negative consequences. If a bailout were structured to include in its terms some of the restructuring benefits that otherwise could only be realized through bankruptcy, however, it would be the preferred option. Indeed, a federal bailout that facilitated fundamental cost cuts for the automakers might set a useful precedent for restructuring other large U.S. institutions that have overpaid workforces and inefficient operations, such as most of our state and local governments. Using General...

How epic has this correction been? The answer is worse than the 1987 programmatic crash (S&P -32%) but not as bad, to-date, as the 1973 oil crisis (S&P -48%) or the dot-com bubble (S&P -49%). For an excellent graphic of these events and the current housing bubble (S&P -45%) visit CalculatedRisk.com. In this graph each of the indices starts at the same point on the top of the vertical axis, which represents the percentage amount of drop in index value. With the horizontal axis representing time, it can be seen that while the percentage drop of the S&P 500 is not quite as severe as in the case of the corrections of '73 or '00, those corrections took 2-3 years to hit bottom. We are less than...

It is difficult to put both sides of any initiative into a few words and capture all the nuances, but here are some observations for voters to consider as we go into the last days before the election.  The points made here are based on very recent conversations with people intimately involved with the campaigns both for and against Prop 7.  While everything revealed here was on the record, sources will not be disclosed. Here is the Legislative Analyst analysis of Proposition 7.  If you wish to view for yourself the areas in the bill cited below, click here for full text of Proposition 7 (this is a .pdf and will not accommodate text searches, if you prefer to keyword search the text, please click here for the full text in a format that...

It is always interesting to read the ballot in California when there are a dozen or more citizen's initiatives.  Californians, despite being social liberals, still tend to vote against any new taxes of any sort.  During the internet boom and the housing boom there was so much revenue flowing into the state and local governments it didn't matter - Californians had the best of everything.  But as California's economy, along with the rest of the nation, returns to sustainable rates of economic growth, something's got to give.  California's state and local governments will either dramatically cut spending, or they will dramatically raise taxes. Muddling the issue is the issuance of...

If you think about the mission of enterprise resource planning software, in some ways it's surprising the modules for environmental health and safety compliance weren't integrated sooner.  It is also interesting that at the same time as the major ERP vendors - Oracle, Microsoft, SAP, IBM, and others - were systematically integrating the major business information systems that had evolved, one company, ESS, a 15 year old company based in Tempe, Arizona, was systematically integrating the environmental health and safety (EH&S) information systems that had similarly evolved as fragmented, tactical solutions.  In both cases, there were compelling reasons why these information systems needed to be welded...

On Thursday 10-16-08 I attended the User Group meeting of Plexos Solutions LLC, a boutique firm providing software and consulting to the rapidly changing California electric market. One of the presentations covered issues surrounding integration of renewable energy resources into the California Independent System Operator (CAISO). This is important to sustainable energy investors because virtually all the growth in generating capacity is forecast to come from renewable resources. While the fundamentals of this market have been overwhelmed by broader market conditions this last month, over time the fundamentals provide the tailwind that will lift stocks. And the growth expectations for renewables are very high in the California market. Over the...

We have been warning readers about the pension crisis for a few years now.  In a nutshell, the problem is the following:  California public employee unions - which are virtually unregulated despite the fact they operate in the uncompetitive public sector - have pretty much taken over California's state and local governments. In recent years they have negotiated pay and benefit increases so dramatic that the average government worker in California often earns 2-4x what globalized private sector workers earn to do jobs of comparable worth.  This dramatic disparity is largely due to the value of their retirement pensions.  The present value of what someone collects in retirement must be...

The opponents of California's ballot Proposition 7 (read full text of Prop 7) claim it will "cost consumers and taxpayers hundreds of millions per year in higher electric rates - a $300 increase per household per year."  It is hard to get access to the calculations behind these estimates, so we have attempted to come up with estimates of our own. In our recent post "California Proposition 7" we put forward some fundamental assumptions and come up with a total projected cost to install the generating facilities.  We assume that by 2025 Californians will draw 1,000 gigawatt-hours per day, meaning at 50% renewables we'll need 500 gigawatt-hours per day to come from renewable sources.  We therefore project, based on $2.5 billion per...

America's credit crisis should come as no surprise to anyone whose been paying attention.  We discussed this about a year ago in our post "Inflation vs. Deflation," and if you read that post, you will see links to discussions we've had on this topic that go back as far as 1998.  Because this has been brewing for a long, long time.  And the question still remains - inflation or deflation - pick your poison.  Our belief is inflation is a far more palatable option. Back around 2003 I remember debating economic policy with a business reporter for the Wall Street Journal.  I still recall the shock this person displayed when I downplayed the mitigating value of the "current account" when discussing America's...

From the DOE online reference, CO2 Emissions Report, Table 1, you will see that in 1999 in the USA there were nearly 1.8 million metric tons of CO2 emissions from the burning of coal to create electricity, which yielded nearly 1.9 million kilowatt-hours of power.  This means in that year in the USA, for each megawatt-hour of coal-fired electric power, there were .95 tons of CO2 ejected into the atmosphere.  It is likely the global efficiency of coal-fired electricity plants in the USA in 2008 exceeds this standard, but for the sake of a numerically clear argument suppose for every megawatt-hour of coal-fired power, 1.0 ton of CO2 enters the atmosphere. Currently the United States emits about 6.0...