Dear (Friend):

You asked about my view on the cleantech sector after I took some time to survey it. Let me answer by starting with the big picture and the thing that prompted me to look at cleantech in the first place. Then I will be better able to answer your question at the bottom.

First, the global view.

Globally, we are standing at the confluence of two exponentially increasing tides. The power of one may help us address the risks of the other, but only if we engage them both head-on. One is the curve of resource usage, the other is the curve of technological change.

Curve 1: Overshoot and collapse and “peak everything”

We have used up half of our forests and half our our fish stocks on the planet to-date and given our “peak everything” 3.5%/yr compounding resource usage curve, we will use the same amount of resources in the next 20 years as we used in the last 260 years. It is widely understood that we have already exceeded the capacity of this planet to support our continued growth as a species by between 20-30% and are already going to have to plan for a “controlled crash.”

Curve 2: Double exponential technological advances

Simultaneously, technology is developing at a double exponential rate such that we can not even comprehend what our world may look like by 2050 from a technology perspective. A brief reminder: 30 steps taken 1 foot a a time moves you forward 30 feet. 30 steps taken exponentially moves you forward 1.07 billion feet. It’s hard for our brains to grasp. The next 10 years will be like our last 100 in terms of new technology and that is accelerating.  If predictions by people such as Ray Kurzweil come true, we could have nano solar devices providing 100% of humanity’s power requirements by 2030,  the wealthy and maybe even middle class will be iiving long healthy lives free of disease and many of them will be integrated into computers and robots. If we choose our technologies wisely, even the poorest will have the benefit of low-cost desalination and solar power.

In terms of scenarios, it will already probably be either a huge cliff, a controlled step-down crash, or in a miracle of miracles, a bounce off the bottom and a move to a regenerative world. Hopefully we still have those options.

Actions we need to take:

We need to understand and act on the knowledge that comes from both of these curves.

Regarding the first curve, we need to stop the denial, anticipate the issues, structure responses that address both the rational and irrational causes of inaction, address our flawed, emotional, homeostatic tendencies, and work towards creating a regenerative world, rather than the destructive negative overuse cycle we are in.  We know a lot about why we do not act. We don’t need “more information”, we need to build plans that take into account our very human responses to things. Jared Diamond and Joseph Tainter’s work is key here.

Regarding the second curve, we need to stop sticking our head in the sand about technology and embrace and channel technological development. Relinquishment of technologies won’t work. That would be like standing idly by saying “I will have no part in that river coming dangerously close to the village” when that river is doubling in volume and power every year. We can’t stop it, but we can channel it. We need to slay our sacred cows by revisiting nuclear power (which is emissions free) and genetically modified foods.  We need to use every advantage we have to both increase resource generation and regeneration and also to decrease resource usage per person. This will require structuring government incentives for radical expansion of green technologies.  The Sustainable Development Technology Canada program is a great start. We need more. We need to think like Vinod Khosla who says “if we do not address maintech (building materials, concrete, water, chemicals, coal, oil, efficiency) and solve them at low-cost, that can get to market unsubsidized in China and India and scale to the whole planet, then we won’t solve our problems”. Since we don’t know where the innovations will occur, we need to structure capital to create massive “optionality” and R&D across the board, focusing on those areas that are most ripe for change / disruption / innovation and that are causing the biggest problems. Sadly, I think we should also continue to support companies and organizations like Space X and the LifeBoat foundation, both of which are trying to get off the planet in case we really make a mess and can’t live here any more.

We need to work the top line by increasing resources

We need to Increase outputs and resources and regeneration through restoration of forests, soils, forests, fisheries. We need to boost agricultural outputs (again) by raising land and water productivity and studying ways of producing protein more efficiently that with the standard corn-fed cattle approach. This includes continued research into genetically modified foods.

We need to work the bottom line by decreasing our resource usage per person

We need to also lower our resource use/person by restructuring economically through things like cap and trade, removal of subsidies on things like oil (we spend $700B annually across the globe subsidizing the exact wrong behaviours), restructure the energy landscape by decommissioning coal, shifting to renewables, pushing for all of the efficiency we can get now and every year going forward. We need to get MUCH better at urban design since in 30 more years, 80% of the planet will live in 3% of the surface area in cities and that means urban transportation, bikes, water use, city farming, squatter gentrification. We need to implement “third world” solutions in our own backyard – micro finance, entrepreneurial education, population stabilization (which happens automatically as people move to the city).

National leaders…aren’t leading

Global progress on our bigger issues is stalled. Copenhagen was widely regarded as a failure. Nations are too slow to act. China and the US refused to take material action at Copenhagen and that means that no other nations will follow. The US is frustrating cap and trade. Canada is also lagging. Within our borders, our provinces and territories are too heterogeneous and their populace has too many diverging interests.

We have structural capital issues that are impeding our ability to bring investment into Canada that will continue to haunt all forms of technology development, including cleantech, and they need to be addressed. The Section 116 problem has never been resolved and makes it difficult for investors to invest in Canada without great hassles. We need to fix this as it continues to scare US venture capital away and is causing a hollowing out of Canadian companies as US investors must move our companies south in order to invest in them. It’s easier for a US company to buy out and move a Canadian company than to simply invest in it.

This revolution will happen provincially, regionally and municipally:

BC is already the 10th largest “cleantech market” in North America.  We have top-notch universities that pump out research, we have core resource and mining people, law, and organizations in place that can be repurposed for cleantech company creation, financing, and implementation of things like carbon projects. We already have an excellent industry association leadership in the BCTIA, the Premier’s Technology Council is already very supportive of cleantech, and we have programs such as the newly launched CleanWorks BC marketing campaign intended to attract foreign investment to BC. We also have a large number of excellent cleantech companies here and we have strong core competencies in hydro electric power, power transmission, storage and battery technology, wastewater management, and bioenergy.

The Lower Mainland as a region and all of the cities inside it will be key. You can make a difference at the regional level. Cities are massive producers of the problem and they’re also massively incentivized to solve the issues for themselves – they are almost self-contained zones.

In Vancouver, we have a mayor who sees the benefit of working on all three pillars of sustainability: “people, planet and profit” as it is often referred to. He is building ties with Governor Schwarzenegger from California and Richard Branson’s Carbon War Room Initiative , among many other things. In short, he is trying to put Vancouver on the global map as a “Green Capital” in the world.

So what do we need to do next?

We need capital fixes. There are many others who know much more about this but I know that we have capital gaps. The exits are long and difficult for investors (10 years) for many of these green technologies and so many companies suffer or fail as do their investors.

We need to continue to back primary research at the universities that feeds into our technology landscape.

We need to build more funds that create small companies that can fail faster – allowing us to create promote “optionality” or the creation of as many options as possible.

We need to build a more unified province wide Cleantech BC association that unifies traditional energy, renewables, materials, efficiency, and water all into one cohesive strategic plan.

We need to survey our assets in the universities and our companies, scan the market for current and latent need and then really support those clusters where we can excel and build networks of inter-related and successful companies.

As a province, we need to realize we are competing globally, not within Canada.

As a province, we need to redefine “cleantech” to include all of our “maintech” – the stuff that will move the needle. That will require vision expansion and coaching. This means expanding our idea of “cleantech” from renewables to greening of the entire supply chain and all materials and energy usage.

We need to continue to push these changes bottom up because waiting for national governments (Canada, US, or otherwise) will take too long and be too ineffective. The only exception to that is major cap and trade policy and other regulation which mostly needs to happen federally. But even without it, cities and regions can adopt their own and enforce them locally as they’re doing now. It’s less effective but it’s a step until the national dithering is resolved.

The province must address issues of forest, agricultural land, fisheries and water restructuring in order to once again focus on maximizing sustainable, regenerative yields. One area I’m significantly concerned about here is water rights. It appears that we are selling off our water rights to foreign interests and that needs to be reversed. Peak water is right behind peak oil as a critical issue.

My final summary?

We have a lack of national leadership on the major environmental challenges ahead of us as evidenced by Canada’s embarrassing performance at Copenhagen, but that is countered by highly motivated provincial, regional, and municipal leaders. And we have a province filled with excellent cleantech companies, entrepreneurs, and teams that are highly capital efficient.

So, while my survey of the sector has tempered me with its long, difficult, unpredictable company builds and exits, the people working on those companies have excited me with their passion, vitality and energy for finding and creating solutions to our big challenges. That passion and energy is one of the key reasons I have decided not to return to the US and to instead, stay here and work to build BC’s local technology sector. We have a lot of work ahead of us. Let’s get to it.

I’ve excerpted the beginning below. Click here for the full speech transcript over on Care2.com.

You were born to save the planet.

The earth is 4.5 billion years old, and it has all been leading up to you.  4.4 million years ago an ancestor we now call ARDI roamed the land of Ethiopia, and her life was leading up to you.  The last ice age, about 10,000 years ago, thawed, leaving the redwood forests to our North, and all of this was leading up to you.  The Earth needs you right now.

Your generation was born to save the planet.

Have you ever wondered when things started going wrong?  Our ecological systems are in decline, one-third of fish species stand at the verge of collapse, the glaciers of the Himalayas, which provide drinking water to over a billion people, are rapidly melting, the chemicals we’re putting in us, on us and around us are forming complex endocrine disrupting compounds that are in every one of our bodies.  Every mother who is breastfeeding in America today is probably passing a man-made chemical to their child.   There’s something fundamentally wrong when mothers need to worry about chemicals that they’re passing to their children.

We’re born with better sense than that. You learn basic rules in kindergarten. Don’t break your friend’s toys.  Share. Wait in line. Don’t hurt anybody. Robert Fulghum wrote a little book called All I Needed to Know I learned in Kindergarten.   But then we grow up.  We forget all of that.  The plague of Middle School is visited upon us.  We get focused on soccer practice.  And bands.  And ballet.  And sex. And STAR tests.  And SATs. And college.

I actually want to write a sequel to Fulghum’s book.  We could call it:  All I Need to Forget I learned in Middle School.

Whenever it started, the bad news seems to keep on coming.

Ten months ago the last wild jaguar in the United States was killed.  The last one. They called it Macho B.  Biologists had been seeing Macho B for years. The Arizona Department of Game and Fish killed it accidentally in a bungled attempt to save it, because the Federal Government had refused to give the jaguar Endangered Species Protection.

This is happening in your lifetimes.  This isn’t something you need to wait for a Kens Burns Documentary to hear about, the crash in biodiversity in our last wild places is happening now.

Click here to read the rest.

WANT.

More info here.

Thomas L. Friedman wrote an excellent post over here at the NY Times pleading with the climate folks to go on offense with a simple 50 page grade six english report on the state of the world. It’s awesome. Read it. I agree with all of it and particularly getting rid of the phrase “global warming” because idiots then say “well it was warm today here in Arizona so Al Gore is OBVIOUSLY a lying idiot.”(sigh)

Key quotes are below:

What’s real? In my view, the climate-science community should convene its top experts — from places like NASA, America’s national laboratories, the Massachusetts Institute of Technology, Stanford, the California Institute of Technology and the U.K. Met Office Hadley Centre — and produce a simple 50-page report. They could call it “What We Know,” summarizing everything we already know about climate change in language that a sixth grader could understand, with unimpeachable peer-reviewed footnotes.

At the same time, they should add a summary of all the errors and wild exaggerations made by the climate skeptics — and where they get their funding. It is time the climate scientists stopped just playing defense. The physicist Joseph Romm, a leading climate writer, is posting on his Web site, climateprogress.org, his own listing of the best scientific papers on every aspect of climate change for anyone who wants a quick summary now.

Here are the points I like to stress:

1) Avoid the term “global warming.” I prefer the term “global weirding,” because that is what actually happens as global temperatures rise and the climate changes. The weather gets weird. The hots are expected to get hotter, the wets wetter, the dries drier and the most violent storms more numerous.

The fact that it has snowed like crazy in Washington — while it has rained at the Winter Olympics in Canada, while Australia is having a record 13-year drought — is right in line with what every major study on climate change predicts: The weather will get weird; some areas will get more precipitation than ever; others will become drier than ever.

2) Historically, we know that the climate has warmed and cooled slowly, going from Ice Ages to warming periods, driven, in part, by changes in the earth’s orbit and hence the amount of sunlight different parts of the earth get. What the current debate is about is whether humans — by emitting so much carbon and thickening the greenhouse-gas blanket around the earth so that it traps more heat — are now rapidly exacerbating nature’s natural warming cycles to a degree that could lead to dangerous disruptions.

3) Those who favor taking action are saying: “Because the warming that humans are doing is irreversible and potentially catastrophic, let’s buy some insurance — by investing in renewable energy, energy efficiency and mass transit — because this insurance will also actually make us richer and more secure.” We will import less oil, invent and export more clean-tech products, send fewer dollars overseas to buy oil and, most importantly, diminish the dollars that are sustaining the worst petro-dictators in the world who indirectly fund terrorists and the schools that nurture them.

4) Even if climate change proves less catastrophic than some fear, in a world that is forecast to grow from 6.7 billion to 9.2 billion people between now and 2050, more and more of whom will live like Americans, demand for renewable energy and clean water is going to soar. It is obviously going to be the next great global industry.

via Op-Ed Columnist – Global Weirding Is Here – NYTimes.com.

Part 1
Part 2

I have been thinking about this a lot as I’m currently living in Canada, but working with two clients in the U.S. For the most part, because so many teams are distributed, including their client’s teams, there is no “there” to go to, even if I did want to fly somewhere. The only way to have a “there” is if we all meet in the middle somewhere. So I might as well live in the country side surrounded by fresh air, mountains, stream, squirrels, and birds or go live in Costa Rica for a month as be in an office park in Silicon Valley. I have to say…I’m all for this.

Their somewhat dodgy claim is that the vehicle “achieves 100mpg in daily driving.” The reason for that is that they know that most drivers drive less than 65 miles per day and that in that case, this vehicle drives the first 40 of those from the batteries and then kicks in the gas engine beyond that. But marketing jedi mind tricks aside, it’s still pretty damned cool. Even Arnold Schwarzenegger loves it and he’s one of the greenest politicians the U.S. has these days.

What vehicle would YOU want if you knew that it could get 100-120 mpg? Hmmmm, Hummers are still too ugly. But how about a Nissan XTerra Hybrid? Or aToyota Forerunner hybrid?

It is these sorts of discontinuous leaps that will be critical to addressing the automotive industry’s 100+ year old thinking. Congrats to the Raser and FEV teams.

Wow. This thing can get 60mpg??? I’ll believe it when I see it. But I have to say that it triggers some deep techno-lust for this geek.

Range Rover concept courtesy of Fast Company

This film was made entirely with my pocket-sized Olympus Stylus 750 camera and iMovie.

Soundtrack: “Running Two” from “Run Lola Run” available at Amazon.com here. To watch the large version of the film, click on the YouTube logo in the lower right hand corner, and then when you land on the video on YouTube, click the icon in the lower right hand corner of THAT. (It’s two steps from here is what I’m saying.) Otherwise, just click on the middle of this video and enjoy it right here on the blog.

[my analysis and notes are in these square brackets.]

“It’s all about the infrastructure” by Debra Chrapaty, Corporate Vice President of Windows Live Operations

• The cloud sounds romantic but it’s 1.5 million pounds of batteries, 1 million pounds of steel, 300 miles of cable. Not so romantic. (Image courtesty of Niall Kennedy’s Flickr photos)
  

• Opex and Capex are THE KEYS: If your revenue goes up a hockey stick….and your CapEx and OpEx curves go up with it…you haven’t succeeded
• [finally!! Somebody else is talking about this!! This is super critical in SaaS. It's easy to make a company deliver apps over the web. It's hard to do it in a way that you can serve a lot of people cost effectively and make more profit as you scale.]
  

• Scale: can you scale up to 3.5GB/minute TOMORROW?
• Reach: Microsoft is running services in 235 countries around the world
• Servers: This is critical
• configration optimization: go for standardization / optimization
• Density: watts/square foot is important; drive density up by 200% you can drop power costs 40% (!).
• Storage costs: There has been an 85% drop in a Terabyte of data THIS YEAR.
• Technology evolution: staying on the curve helps you be operationally efficient.
• Data center critical success factors. (there are more but she wouldn’t share them)
• connectivity: critical
• location, location, location (close to connectivity and supplies and resources and people)
• materials and equipment: (if you buy a million pounds of steel and steel prices go up….you have a $5M bill)
• trades and labour: we have waited months for an electrical person
• power:
• we now count in terms of megawatts not square footage. That is a key metric.
• 30-40% of your power usage is COOLING!!!! so build green!
• looking at solar – it’s incredibly important to us
• Opening a data center in Quincy Washington that is completeley carbon neutral
• Additional useful links:
• Operations: The New Secret Sauce.
• Generators for Data Centers Getting Hard to Find
• Behold the Server Farm
• Microsoft bets big on Server Farm
• Wired / The Information Factories
• Data Centers on rise in rural areas
• Utility offers millions to help data centers go green

In one fell swoop, Mark has managed to hit on a whole bunch of my favourite subjects: the environment, structure driving behaviour, adaptation, complex system effects, social policy, cultural behaviour, global policy….he has hit it all.

The archive of his writings can be found here. The current article is below:

No wait, not six. To hell with that. Make it 10. Ten bucks a gallon, no matter what the going rate for a barrel of light sweet crude. That would so completely, violently, brilliantly do it. Revolutionize the country. Firebomb our pungent stasis. Change everything. Don’t you agree?

Here’s what we could do: Give gas discounts to cab drivers (at least initially) and metro transit systems and low-income folks, those who have to drive their busted-up ‘78 Honda Civics to their jobs scrubbing restaurant toilets and flipping burgers and vacuuming the residual cocaine from the seat cushions of numb SUV owners. Everyone else, 10 bucks a gallon, across the board. Eleven for premium.

It would take some finessing. Maybe also give a price break to some truckers and trucking companies (so vital to the overall economy), but not so much to global delivery companies (FedEx, DSL et al.), because not doing so would force them to raise shipping rates and force you (and me) to reconsider buying everything online and hence will encourage you to shop locally once again, thus reviving a stagnant local economy.

Voil

Excerpts below:

Look, see those tire marks? That ungainly footprint? Feel that breath of humid doom upon your skin? Yes, the president was just here. Up in Napa Valley, riding his official Trek Mountain Bike One over the rocks and down the trails and through the cool California mud, a small army of handlers and Secret Service agents and emergency medical personnel by his side and/or rumbling along behind him in big black SUVs. It was very cute, in a fingernail-yanked-with-pliers sort of way.

It was Earth Day weekend. The president talked about how mountain biking helped him “settle his soul” and “burn off excess energy when you’re living life to its fullest,” which apparently means blindly running your nation into a bloody flaming wall at full speed like a drunk NASCAR driver on Ambien. He talked about how he enjoyed mountain biking because it had such minimal impact on the pristine, wild surroundings. Shockingly, lightning did not strike him dead on the spot.

Later on, the prez talked up the need for wildly implausible hydrogen-powered cars to the California Fuel Cell Partnership, a group who, if they had a drop of integrity and brains among them, didn’t believe a single word he said.

[...] This much we know: Bush is, it has been widely noted, the worst environmental president in modern America history. He has done more to eliminate protections and pollute the air, sell off national forests, whore the waterways, drill for oil and eviscerate pollution regulation than any president on the books. His environmental record is abysmal, shameful, and includes installing two of the worst secretaries of the interior in history, the abominable Gale Norton and now her male counterpart Dirk Kempthorne, who have turned around and reduced protections and sold off more forestland to private concerns — oil, timber, coal, you name it — since the Harding administration.

[...] Bush is, after all, a failed oilman. He has done all he can to ensure we will be dependent on the black death for the next two decades, minimum, which is, not surprisingly, the average remaining life span of his favoritest CEO cronies in the oil business. Serve the masters first, the Saudi sheiks second, the American people about, oh, 157th. It is the BushCo way.

[...] There is no beauty in American political policy toward the Earth. There is no poetry or grace or true heart in how politicians — especially Republican politicians — view our natural commodities, no respect unless it is based on fear, unless it is begrudging and resentful, like when a hurricane makes a mockery of the president’s feeble and unconvincing attempts to prove he cares. Has it always been this way? Maybe. But some leaders are far, far worse than others.

This is perhaps the most frightening thing about the Bush visit, about him having the nerve, the sheer vulgar gall to discuss the quality of his soul while biking through a natural habitat his administration so violently works to defile. It is this: He actually meant it. Bush was probably genuinely heartfelt about enjoying his ride through our troubled trees. He thinks he is attuned and connected. He thinks nature is nifty and calming. And, simply put, there is no more dangerous a leader on the face of the earth who, in every policy and every law and every action, abuses and distorts and molests the world around him, and yet who can turn on an ideological dime and calmly glorify that very thing which he helps destroy.

Recall former Spokane Mayor Jim West, big scandal just recently, an outspoken and homophobic

Does anybody have any information on negative health effects of waterless urinals??

SUSTAINABLE HOMES

Description: What do you consider a “sustainable” home? What do you need to get there? Where is “there”? An innovative dialogue hosted by the Sustainable Building Centre and the Canadian Home Builders’ Association of BC.
 
Moderator: Helen Goodland is the Executive Director of the new Sustainable Building Centre on Granville Island and is a LEED accredited architect with over 15 years of experience in green building design, education and construction.

Please visit http://www.sustainablebuildingcentre.com for more information.

I am very excited about our launch of the 30 Days of Sustainability. For the month of March, Vancouver will host a cornucopia of events and activities, all focused around bringing sustainability to our lives and our city.

One key component of the 30 Days of Sustainability is a dynamic, interactive website, which also launched on March 2nd, 2006. To learn more about the 30 Days, check out http://www.30daysofsustainability.com.

Each presenting company was given 10 minutes to pitch their company, market, team, market problem, solution, and investment needs to a group of prospective investors. Then the investors had a Q&A period with the entrepreneurs.

In addition, we had some excellent presentations:

* Bull Housser Tupper spoke on Intellectual property protection, employment issues, and term sheet negotiation;
* PriceWaterhouseCoopers spoke on Top 10 tax issues for startups
* The TSX Venture Exchange spoke on how to go public

Thanks everybody for a great day and we look forward to seeing you all back here in Fall!