Established industries are vigorously defending their license to operate, with newer technology companies admitting financing shortfalls and higher than projected costs. The substantial discoveries of low-priced natural gas in the US altered the financial calculus for renewables while economic pressures have given new momentum to coal and nuclear industries. The regulatory forces have shifted, with governments failing to reach consensus on carbon targets in Copenhagen and relatively low likelihood of Waxman-Markey passing the US Senate. The academic basis for carbon cap legislation is in question, with controversy surrounding the transparency on the scientific methods coupled with disagreement on magnitude and effects of climate change. The ball has been passed back to the private sector to make progress in spite of these developments.

In a business requiring long-term investments and large upfront capital commitments, this level of uncertainty means that companies will likely pursue incremental change and will hedge their bets by participating in range of ventures.

MOVING FORWARD

There are certain fundamentals to watch:

1)    Energy Consumption--Projected to rise by two times by 2050, as the world’s population grows from 6.5 to 9 billion and we begin to serve the 1.5 billion people who have no electricity and 2.5 billion without sanitation. The US uses five times as much electricity per capita as China and 25 times as much per capita as India.

2)    Natural Gas Reserves--There is between 4-8,000 trillion cubic feet of natural gas in the US, according to Boone Pickens, the equivalent of 700 billion barrels of oil, or five times the oil reserves of Saudi Arabia. He and Ford Motor representative suggested that it would be possible to convert the entire truck fleet of the US to natural gas, cutting oil imports by a third.

3)    Capital Cost--Renewables are not on track to produce electricity as cheaply as coal, which presently accounts for 50% of US power generation (85% in China, 65% in India). But Amory Lovins of the Rocky Mountain Institute noted that new wind projects are half as costly as new coal and 1/3 as costly as new nuclear facilities.

MORE COMPLEXITY IN BOTH CONDITIONS AND COALITIONS

Within this context, the actions and alliances being pursued, continue to innovate and sometimes appear, “stranger then fiction”.

1)    Renewables--The Wind industry is crying out for transmission lines that connect power generation locales to population centers. The smallest and the largest wind projects are attracting financing but there is a "donut hole" of mid-sized projects not being funded. Wind entrepreneurs are hoping for legislation that requires utilities to purchase its output first, over fossil fuels. About 8 gigawatts of wind power was added in the US in 2009; only 400 megawatts of solar was built. To put that in perspective, the goal is to have 2,000 gigawatts of renewables on line by 2050 (my math is 50 gigawatts a year, not 8.4 created in 2009). A few utilities are now pursuing "hybridization," combining solar with natural gas. FPL's CEO said that the solar plant at scale can only make 75 megawatts of power (11,000 homes served) versus a natural gas plant that can produce 3,800 megawatts. Solar is used to heat up synthetic oil that then is used to produce steam to drive an existing turbine.

2)    Clean Coal and Clean Nuclear--Mike Morris, CEO of AEP, a US utility that gets 88% of its power from coal, believes in the promise of clean coal. His company is spending $660 million on a facility that will pump carbon dioxide two miles into the porous rock formation where it will remain. Lou Hay, CEO of FPL, a US utility that gets only 4% of its power from coal, said that the cheapest electricity in the US comes from nuclear. He noted that many of the current nuclear plants are 30-40 years old and will need updating or replacing. In terms of the public debate, we are also provided a clear example of the emerging complexity, with different, highly credible environmental NGOs like Sierra Club and Environmental Defense Fund taking fundamentally opposite philosophical views on the environmental merits of clean coal in the energy mix.

3)    Rise of Electric Cars--Peter Voser of Shell said that there will be a doubling of the number of cars from 1 to 2 billion by 2050 but predicted that 40% of those would be electric vehicles. If every car in the US were a hybrid we would get a 20% reduction in carbon output.

4)    Decentralized Energy Production--Given the weakness of the distribution grid, there could be a market niche for products such as the Bloom Box Fuel Cell. This product, as large as a standard car, has zero emissions. It burns agricultural methane at 800 degrees to create electricity.

THE CONSUMER FROM TARGET AUDIENCE TO PARTNER?

Alan Murray of the WSJ and I ran a panel discussion on green marketing. Key conclusions were necessity of giving consumers information to make right decisions, potential for partnership with NGOS to boost business credibility and importance of selling more than green attributes, such as health, lifestyle and performance. The Disney team spoke about tying purchase behavior to specific philanthropic acts, which worked brilliantly in their Give a Day, Give a Disney Day promotion. Our group was quite pointed in criticizing the very notion of green marketing where people pay a premium, suggesting that behavior change would stem from authentic endorsement by peers and parity priced products. A Yale study indicates a person only spends 30 seconds to research the green provenance of a product, said Professor Dan Esty.

Marketers are still sifting through often-contradictory insights into consumer sentiment around “green”, where high aspirations are expressed, but true behavior change is often quickly de-railed by inconvenience and price premium. But all could agree that “green marketing” as a stand-alone conceit is becoming as anachronistic as “total-quality-management”. Instead green attributes are finding their place in the basic consideration funnel, needing to make their case to the consumer alongside quality, price, etc. Resulting purchase decisions will vary and depend on specific brands, markets and industries.

Those of us in public relations can play a vital role in the transition to a more complex greener society on both a rational and emotional basis. It starts with establishing the evidence for change. We can help the scientists communicate with more credibility by acknowledging uncertainty where data sets are insufficient. As Professor Esty said eloquently last night, "The culture of scientific consensus is not helpful. We need to have a broad range of opinions." We can inform people’s behaviors and purchases by providing transparency on the environmental impact of manufacturers’ and retailers’ supply chain, best done in partnership with civil society, because NGOs provide an independent and credible authority. We should also inform the emotional elements of people’s purchase decisions, by facilitating peer-to-peer discussion, creating hang tags that reinforce confidence in environmentally sustainable purchases, such as the FSC tag on lumber, and emphasizing safety plus comparable efficacy.