Thursday Oct 15, 2009

Trip Report: A Visit to the Capitol

Last week I was down in DC with a group of investors and business execs, many of whom were in the green space under the banner wecanlead.org, a collaboration between Ceres and the Clean Economy Network. John Doerr was the headliner of the group, but there were CEOs of some hot company like A123 and Seventh Generation. The motivation for us all to be there was to impress upon our legislators that well-constructed, comprehensive legislation could be good for business.

(Aside: one of the dangers of these events is that the "well-constructed" part of the message is ignored or left to be defined by the audience, so the message can be interpreted as "pass anything!". My experience with business folks who are savvy about climate policy is that they are fairly particular about what "well-constructed" means. Another risk is that the press and others will try to figure out what your profit motive is, and often zero in on one part of your group, such as happened here. So whenever agree to participate in one of these missions you have to think through risks like this.)

Overall we were well received, and the trip garnered good press attention. In particular, the executive branch pulled out all of the stops, allocating time from three Department Secretaries: Sec'y Salazar (Interior), Sec'y Chu (Energy) and Sec'y Locke (Commerce). We also heard from Carol Browner, Director of the White House Office of Energy and Climate Change Policy, and several other members of the administration.

With all of these meetings we were able to get a sense of the administration's overall mood and approach to climate change legislation. These impressions were probably slanted somewhat by the fact that the administration knew it had a favorable audience. The good news was that, overall these folks all knew their stuff. Obviously Sec'y Chu is deep into the science side of energy and Director Browner into policy, but Sec'ys Salazar and Locke both exhibited a deep knowledge and personal passion on environmental issues.

Compared to past trips to DC, the biggest change for me was a new focus on clean energy competition with China. Particularly Sec'y Locke and Director Browner emphasized China above all other reasons to get legislation done, and done soon. Personally I think this is a good change. I believe it can get more broad-based support, and will focus the discussion more on innovation. However, if China truly takes center stage as the driver for legislation, it can't help but change the focus on the individual elements of the package. In particular, is cap and trade a central mechanism in a competitive agenda as opposed to a climate change agenda? This will be interesting to watch.

Beyond the emergence of China as a motivator, there were some other notes of interest:

  • The administration isn't waiting for climate legislation to get started. They discussed what they were doing with stimulus money and within the jurisdictions of their own departments. Earlier in the week the President had signed an executive order to drive the greening the federal government.
  • The message on timing for climate legislation is "as soon as possible". But it was pretty clear that a climate bill is second fiddle to health care, and everyone was very careful to avoid making commitments about Copenhagen. Carol Browner was particularly careful with her words, and I was left with the sense was they're willing to let the timetable slide past December if the higher priorities aren't complete yet.
  • Nuclear is back on the agenda. Sec'ys Locke and Chu both talked about an increase in US nuclear capability in a manner that assumes its a done deal. There was none of the hedging about the usual concerns, no hint of upcoming deliberation, etc. There will be more nukes.
  • Public lands will be used for renewables. Similar to the discussion on nukes, Sec'y Salazar spoke with a confident certainty about opening up public lands for renewables, including solar in the southwest and wind farms on the continental shelf off of the Carolinas. Again, not even a nod to the expected concerns.

Finally, when one talks about "comprehensive climate policy", the scope of what we heard in DC and what's in the proposed legislation is certainly comprehensive in the sense that there are lots and lots of programs there. But listening to two days of discussions it is still very hard to see how the decarbonization math adds up in order to meet the goals that people are proposing. As someone commented "it's a mosaic, but there's no picture".

I remain particularly concerned about the lack of an R&D plan to support the innovation that is required to meet these goals. Lots of faith is being put into "the market" and the effects of a cap and trade system, but so far that faith eludes me.

Wednesday Oct 08, 2008

A Great Milestone

Today we announced that we have met our original GHG reduction goal, by achieving a 23% absolute reduction below 2002 levels for the US. I'm excited and proud that we made this milestone well ahead of schedule.

As part of the announcement we also went public with our new goal of a further 20% absolute reduction of our global impact by 2015.

A couple of quick notes. First, why US only? When we set the goal we only had a decent handle on our US emissions. Obviously it would be better if this were a global result, but we've been applying the same techniques in other parts of the world (primarily OpenWork and more efficient datacenters), so I'm confident that we have seen solid improvements elsewhere as well. Also note that our new goal is global.

Second, where did the reductions come from? All of the reductions are a result of changes to operations, practices and the physical plant. Other than the makeup of the power that we get from our utilities, there were no additional purchases of greener energy. Also, there were no offsets or other onetime savings. In other words, the changes that we've done have resulted in a "permanent" reset of our energy and emissions baseline.

And, what did this cost? All of the major changes have had (or are on the way to having) a positive financial return. So while there were short term costs, sometimes in capital, sometimes in driving process change, etc, these activities have resulted in a net decrease in the cost to run Sun day in and day out. We're hoping that we can repeat that same kind of result as we meet this new goal. We have a bunch of targets that should have a good return, but we aren't quite sure we can get the full 20% that way yet.

Finally, thanks to all of the individuals and groups at Sun who helped us make this goal. Well done!

Sunday Aug 19, 2007

A Great Award, Thoughts on Governments and Energy

Last Tuesday Senator Barbara Boxer came by the Santa Clara campus and presented Sun with her "Conservation Champion Award". This was an exciting day for us - we always appreciate recognition for the hard work we've been doing. We know we've got a long way to go, but its great to get some pats on the back along the way!

Jonathan and I were both fulfilling commitments outside of CA that day, but Greg Papadapolous and Subodh Bapat represented Sun and our eco team with flying colors (that's Greg in the picture accepting the award from the Senator). SenBoxer-GregP.jpg

One of the reasons that I think this visit was important is that it was another step in the dialogue between business and government on energy. I think everyone's pretty much accepted at this point that neither the government nor business can address our energy and climate challenges alone, and in fact we need both to be on their best game.

I'm spending lots of time in DC these days, and interacting regularly with our public policy folks around the world. There's lots of useful discussion going on, but there's some huge entrenched interests with big money involved as well. Businesses have the benefit that a good fraction can do more or less the right thing, and pull along the laggards. There's only one federal government, however, and we need it to hit at least a triple, if not a home run. State-level initiatives help by giving us some testing ground, but if we want to meet these challenges with the best economic outcome, it has to start at the federal level.

So, as a result, we really appreciated the Senator coming by, sharing her thoughts and listening to what we're up to and what we're concerned about. Government needs to be careful not to listen too carefully to industry on this one, but having thoughtful legislators who are clearly intent on learning and listening come by and spend time can never be a bad thing.

Thanks for the award and your visit, Senator Boxer!

And, importantly, thanks to everyone at Sun that makes an award like this possible!

Monday Apr 09, 2007

Friday Question Followup

On Friday I asked about relative environmental impact of buying a new, more efficient car versus driving the old one. I got some good comments and emails, so thought I'd respond to a few here.

  • A couple of people commented that they didn't believe the idea that a new car wouldn't be built if someone opted not to buy one. In the case of single person, that may be true (although I'd disagree with that as well), but in the case of a more widespread change in behavior, its patently not true. If many people extended the life of their car by a year (i.e. waited a year longer than normal to buy a new one), it would have a huge impact on the auto industry and result in less cars being built.
  • I wholeheartedly agree with the "drive less" comment. That's more important than any purchase decision. How much you're driving also factors into the answer to my question. If you only drive a few thousand miles a year, its very unlikely that a more efficient car is a net win. If you drive 50K miles per year, its much more likely that a more efficient car is a net win.
  • I'm intrigued by the comment about the usable lifetime of the car. That hadn't occurred to me at all, and it definitely should be a factor of some kind.
  • One commenter questioned whether the energy to build a car was significant. Josh Simons sent me this website which includes this study, which says that it is. Now this may have been written by the Hummer Owners of America or it may be totally accurate, I don't know. But its worth looking at how they calculate that an H3 has a lower total energy impact than a Prius (yes, you read that right - read the study).

A couple of reasons that this kind of intellectual experimentation is useful for me. First, its a good reminder that none of these seemingly simple questions is really as simple as they look. These energy issues are deep, and its good practice to understand where the subtleties are and get in the habit of looking beyond the initial answer. I'm getting better at thinking these through, but I'm still surprised by some of the points every time, like the comment about lifetime above. Seccond, we're embarking on a similar study on the complete energy cycle of computers, so its interesting for me to look at another complex product. More to come on this over the next few quarters.

Friday Apr 06, 2007

Friday Eco Question

Here's a question I've been wondering about:

If I upgrade my car to a brand new one that's more efficient, I save energy and emissions based on the miles I drive with the new vehicle. However, a lot of energy went into making and delivering the new vehicle, and, in theory, that energy wouldn't have been spent if I didn't buy a new car.

So how big of a MPG increase do I need to get before it's at least environmentally break even?

Friday Mar 16, 2007

Is All CO2 Equal? - Part 6 revisited

I wanted to respond to Tom Arnold's comment to my last entry in a new post as opposed to a comment, as I thought it had some important points that I wanted to bring out. First, I was clearly making a generalization, and like all generalization this one has some counterexamples. It was unfortunate that I picked on a blog post from Terrapass, as they are, in mind, the most prominent counter to many of the issues I see with carbon offsets. So I wanted to state publicly, that Tom is absolutely right, and that my statements do not apply to all carbon offset providers. Second, although I agree that Terrapass suggests that you do other things, the rhetoric of carbon offsets is that of being the total solution. "Go Zero" "Eliminate your carbon footprint" "Carbon neutral" "Undo your contribution to global warming". Finally, on the response to the challenge question, I agree there are differences between companies and individuals, individuals still finance most large items and both have finite budgets and have to make tradeoffs. $40K solar cells may only be an option for corporations or the well-to-do, but upgrading to greener grid energy or buying a more efficient air conditioner aren't. So I believe there is are legitimate consumer versions of the question as well.

Wednesday Mar 14, 2007

Is all CO2 Equal? - Part 6, Are Offsets the Right Investment?

So we've been looking at Dell's Plant a Tree for Me program (last post is here), and see that a) it is doing most of its good far out in the future, versus now, when it is needed, and b) can't scale to the size of Dell's business at the current price of carbon offsets.

This leads to the obvious question: instead of planting trees, why not do something that scales and that will offset the carbon this year? I've looked at this question a lot over the last few months, and my conclusion is that there is no scalable, timely way to take CO2 out of the atmosphere for $3.95/ton (current price on the Chicago Climate Exchange). Here's some possible things that might meet the criteria: invest in home wind or solar power, purchase green power through the grid, upgrade to a more energy efficient appliance or car, or pay your share of an investment in a CO2 scrubber for a coal plant. Any data I've seen for these suggests that they would cost a lot more than $4 per ton of CO2.

My timing of writing this today couldn't have been better, as the NY Times wrote about offsets, and elicited a response from Terrapass. The Terrapass argument is that we are "Making the perfect the enemy of the good". There are aspects of this I agree with; as I said in the very first topic on this, planting trees is a good thing to do, and I don't want to discourage it. But Adam's missing the point. The problem is that 'the good' is marketing itself as perfect. Buy these offsets and you'll be "carbon neutral"! Wow! What could be better than that!

So the issue isn't that the offsets are used as an excuse to cover up bad behavior, its that they may act as a disincentive against other investments which could potentially have more immediate and lasting effect. I'm not claiming that every other investment would have a larger impact than offsets for a given amount of money. But right now offsets are cheap and are claiming to be the end-all solution, so no one is having the debate. Just like Adam wants someone to measure consumer attitudes, I want someone to study these offsets as one of a number of environmentally impactful investment options. For example, is it better for me to use $100 to plant trees, or invest in solar energy for my house? This analysis will require some kind of net present value of CO2, which is missing from today's discussion.

So to make this concrete, I've come up with an Eco Challenge Question. Take a look at it, and let me know what you think! I'd be interested in input on the parameters of the question, as well as an analysis of the answer.

Saturday Mar 10, 2007

Spring Ahead

Happy Daylight Savings Day!

Here's the energy/environment rationale for the change (from a CNN article):

"The energy savings would translate into a 10.8 million-metric-ton reduction in carbon emissions over the next 13 years, Markey said, citing an analysis by the American Council for an Energy-Efficient Economy.

...

While 10.8 million metric tons of carbon emissions may sound like a lot, it pales in comparison to the 5.9 billion metric tons the United States emitted just in 2004, according to the U.S. Department of Energy."

So we're talking about a little less than .02%, or two one-hundredths of a percent. That may not seem like much, but do 50 or 60 projects like that and you've wiped out most of the increase in carbon emissions in the US since 2000. Every little bit helps!

Tuesday Jan 23, 2007

Energy Policy in WSJ Today

(A short break from my CO2 offset series, back to that later this week)

There's three interesting energy pieces in the WSJ today. If you get a chance to pick one up (I can't link to it), its worthwhile.

The cover story titled "In Climate Controversy, Industry Cedes Ground" talks about how companies and industries are coming to the conclusion that green house gas policy of some kind is coming, so might as well accept that and get into the conversation. It's worth reading because it highlights how small changes in policy can have big changes in how it effects different industries. Based on this you can expect some huge $$ flowing to Washington and to the 2008 candidates over the next couple of years.

The second is an op-ed piece by Vinod Khosla. In essence it proves the meta-point of the first article, as it is basically a request for $$ to be spent on his vision of green energy. He may have the best path forward, but I continue to believe that we need a portfolio approach to cover our massive energy usage, and Vinod's vision will just be one element of the portfolio.

Finally, Daniel Yergin has a nice piece on energy independence, and argues that what we really want is energy security. Worth checking out.

With the cap-and-trade debate about to launch into full gear, it's worth taking a second to point out that there is an often overlooked feature of these systems. In general, cap-and-trade systems involve handing handing out the credits which represent the right to pollute. Who do we give the most credits to? To those who've been polluting the most in the past! Check out Sky Trust for an alternative viewpoint. There's not much current discussion of it, but it's worth keeping in mind as this giant handout is debated.

Wednesday Jan 17, 2007

Is All CO2 Equal? Part 2

This is Part 2 of an ongoing look at CO2 offsets. Part 1 is available here.

In order to make this conversation concrete, I'm going to use the new Dell "Plant a Tree for Me" program as an example.

Before I get into it, let me explain why I'm using a competitor's program. First, at Sun we've looked a number of times at doing a similar program, so its something I'm familiar with. Ultimately we've decided not to pursue such a program right now (for some of the reasons cited in this series), but it will consider to get serious consideration as we go forward. Second, Dell is big enough that the scale of the program provides useful data on the scalability of such programs. So I decided to go with Dell since its a familiar area, and they're big enough to have an interesting discussion about.

My overall impressions of the Dell program are positive:

  • Planting trees is a "good thing", and setting aside land for protected tree stands is also good.
  • Dell picked good, credible environmental partners for their program (CarbonFund and The Conservation Fund). This stuff is tricky enough that having good quality input is crucial.
  • The program is reasonably transparent. The website describes how they are calculating the offsets and provides ample links to help understand how the money will be used.
  • The Plant a Tree program has gotten good high level support from within the company and good PR backing.
  • Dell appears to have integrated it into the ordering process so its simple for customers to use.

These are the big things I'd look for in a program such as this: social benefits, solid partners, transparency, internal support and simple to use.

It is worth pointing out that Dell isn't donating their own money, it's a system for customers to donate their money. That doesn't lessen the program, just the amount of credit Dell should get for its success.

More importantly, there's no mention of whether Dell is paying into the program for their own internal system usage. Dell has over 60,000 full time employees, so if 40,000 of them are operating PCs it's .42 tons/year each (using Dell's numbers from the program), or around 17,000 tons of CO2/year. My sense is that if you're asking your customers to put their money out for something, you should be willing to do it yourself.

It's also worth noting that the program currently covers US-based consumer customers only. In my mind this is a sensible place to start. The CO2 accounting is not consistent throughout the world, and business customers who care will probably deal with offsets at a different level of accounting than worrying about each PC, lightbulb, printer, etc.

So far this program looks pretty good, so what's my issue? My issue is with the fundamental design of CO2 offsets as they are being practiced today. Specifically, I believe there are 4 potential problems which limit the effectiveness of these programs. Not all of these apply to every program, but most have at least one of these issues. The four are:

  • Time shifting: offsetting the CO2 at a time much later than the CO2 is being generated.
  • Space shifting: offsetting the CO2 at a different place in the world than where it was generated.
  • Scalability: will the offsetting be effective if widely adopted?
  • Cheap substitutes: ignoring obvious direct offsets because they are more expensive than indirect ones.

In the next few posts I'll explore each of these in more detail using the Dell program as an example.

Saturday Jan 13, 2007

Is All CO2 Equal? Part 1

OK, I'm going to come right out and admit it: carbon accounting and offsets hurt my brain. There's too many parts that feel like apples to oranges, and I keep thinking myself into corners.

Before we get into my personal issues, let me describe what I'm talking about. Carbon dioxide (CO2) is one of the most prevalent green house gasses. As it is a common byproduct of extracting energy from fossil fuels (oil, natural gas, coal), most of our everyday activities generate CO2 as a direct or indirect effect. For example, in the US producing electricity creates, on average, around 1.3 lbs of CO2 per kWH. So a 60W bulb running for 16 hours (about 1 kWH), produces 1.3 lbs of CO2 that generally goes into the atmosphere.

Now if I want to reduce my CO2 production, I can do it a number of ways. First, I could stop doing whatever it is that's producing CO2. Second, I can find greener sources of energy for what I want to do, maybe use a hybrid car or install some solar cells for electricity. Finally, I can do what I was going to do, but purchase some CO2 credits or "offsets" which counterbalance my creation of CO2. (if you want some history on this type of trading system, check out Wikipedia's article on emissions trading).

Offsets derive from a couple of sources. First, the money you pay may be used to fund alternative energy sources. Second, it may fund the development of carbon sequestration sources, or, in english, things that will take green house gasses out of the atmosphere. Planting trees is a popular form of sequestration. Finally, organizations can get credit for CO2-reducing activities that are beyond "business as usual". This last set are the most controversial and difficult to understand.

The critical question is what does it mean to counterbalance or offset my CO2 production? This is a topic of hot debate. A number of organizations have put themselves in a position of "blessing" CO2 offsets (example), but of course, since there's more than one of those, there isn't agreement among them and they don't necessarily make things clearer. To get an idea of the depth and complexity of this discussion, you might take a look at this report from Clean Air/CoolPlanet, the rebutals (1, 2) from Terrapass, a popular group which helps individuals with personal CO2 offsets, and an analysis of it on Gristmill aptly titled "Ranking carbon offset provi... hey, where you going?".

One last note. People often get sloppy between talking about CO2 and carbon. You'll often hear people talk about "carbon offsets", when they really mean CO2 offsets. Sometimes things are measured in carbon, so there is a conversion required to switch between CO2 and carbon mass measurements. For example, in this useful site you'll see that a carbon calculation is multiplied by 44/12 to get the amount of CO2. That's because the carbon atom has an approximate molar mass of 12, vs. the two oxygen atoms at 16 each. So the total is 44, 12 of which is carbon.

Whew. So that's some background. Given the complexity of this topic, I've decided to break it into an as-yet undetermined number of parts. In the next few parts we'll look at a specific example, and in the last parts I'll summarize and discuss some of the internal debate and thought processes that are going on within Sun on this topic.

Saturday Dec 02, 2006

Let Me Pull on My Cardigan, and Come Join Me By the Fire

Can Energy Efficiency Be as Sexy as Solar?: "It's long been axiomatic that energy efficiency is the awkward stepchild of renewables -- that is, that it's sexier to install cutting-edge renewable-energy technologies like solar panels than to engage in more prosaic (and less-visible) measures to get more value out of each BTU or barrel."

This is the start of an excellent post on Worldchanging by Joel Makower. Almost 30 years ago then-president Jimmy Carter tried to get us to take efficiency seriously. It wasn't a popular idea then, and it still isn't today.

The two biggest things to tackle are transportation and buildings. However, I'd add a third major category, namely electronics in the form of servers, desktop systems, cell phones, network switches and all of their related accessories.

When President Carter made his plea to the American public, the first two categories would have sufficed. But today our entire economy and way of life is just as dependent on electronics as it is on buildings and transportation. So this is the challenge we're trying to rise up to meet here at Sun. We've really just gotten going, but I think we're getting some momentum.

Read Joel's article and lets give efficiency a chance!

Wednesday Nov 08, 2006

Sustainability Conference Q&A

The last few weeks have been a string of sustainability conferences. While, in general, they have been excellent, there's still some rough edges so I can't resist poking some fun at them.

Q: What is the GHG emissions to make and ship a nylon briefcase or a canvas bag?

A: I don't know, but I've got 4 new ones with conference names on them if anyone needs one.

Q: If I emit 1 ton of CO2 traveling to an environmental conference, can I really offset it for $5?

A: According to the Chicago Climate Exchange you can (actually it's about $4.25), which defies all logic that I can apply to it (I believe their CO2 prices are absurdly low). Actually, carbon credits and offsets are the hottest topic at these conferences. Look for some upcoming posts where I try to tease things apart a little bit. In the meantime, here's a good discussion of offsets on Worldchanging.

Q: Didn't anyone read Marshall McLuhan?

A: Clearly some people missed his famous "The Media is the Message" pitch. About once a conference I get a 20 or 30 page glossy brochure, printed on non-recycled paper with inks that ensure that it won't be easily recycled in the future. These generally have 2 or 3 net pages of text and the rest is really cool nature pictures. You may be doing really good work, but its hard for me to take you seriously when that's how you choose to deliver your environmental message.

Q: What's a good target energy usage for an office employee?

A: I actually don't know right now. While lots of companies are making public commitments, few are actually willing to talk about the real details of where they're at. This seems like a simple question, but the lack of transparency makes it not so. Again, watch this space - more coming on this.

Q: At the current rate of growth, are sustainability conferences sustainable?

A: No comment :-)

Tuesday Oct 03, 2006

EU HQ

Spent the middle of last week's trip in Brussels. Since becoming the home for the EU government Brussels has taken on an interesting feel. The best way I can describe it is that its a new kind of melting pot. Not the traditional kind that attracts the hungry, tired, etc, but a new kind that attracts political professionals from all walks of life. brussels.jpg

Discussions on energy and the environment were incredibly easy to come by in Brussels. I met with a number of government officials, and was impressed by their depth and breadth of knowledge, interest to hear new ideas, and desire to move the ball forward. I found an interest and openness to working with industry to find solutions that can benefit both the environment and the economy.

Two of the topics that I discussed were of consistent interest. First, the heightened sensitivity to the economy brought a strong interest in the interplay between our business and our eco responsibility initiative. Were the EU regulations such as WEEE and RoHS were causing us economic distress? (nothing serious) Did we see energy efficiency as a competitive advantage or business opportunity? (yes to both) What role could the EU play to help industry drive energy efficiency harder? (endorse standards for comparison of energy efficiency among products) I also learned a lot in these exchanges, and hope that the exchange of ideas can continue.

The other area was the interest in Sun's iWork activity, where we encourage employees to work at home or where ever is convenient. I joked about the big banner on one of the EU administration buildings, saying that they'd left off "Stay Home" as one of the ways to save energy. While I'm proud of the eco story around our products, I sometimes feel like iWork may be our biggest eco innovation to date. The iWork story seems to have something for everyone: cost savings, environmental benefits, social responsibility, personal gains, and societal and macro-economic plusses. Come talk to us if you haven't yet - remote work is a story that's still at its early stages, but will be getting more and more attention going forward.

Tuesday Sep 19, 2006

Lovin' the Mixed Reaction

Mark Fontecchio at SearchDataCenter.com reports that the "PG&E and Sun rebate program gets mixed reaction". Well, the EPA sounds intrigued, other utilities sounds interested, and customers are viewing it positively. Seems like the only folks on the other side are competitors. Cool!

Lin Nease of HP makes an important point: "If you look at the lifecycle, the rebate is a miniscule part of the equation". We agree. Based on the study we did with PG&E the annual energy savings for each year were more than the rebate, so we're trying to get the word out that there's lots of savings to be had here even if you aren't in the PG&E area.

Olivier Helleboid from HP and Mark Feverston from Unisys are stuck on this point that there are more important savings to be had elsewhere. Somehow I don't buy this point that we shouldn't design, deliver and reward customers for buying more efficient servers because we can save energy in other places as well. Can't we do both? In the case of Mr. Feverston, aren't you saying that we shouldn't increase the MPG of cars because we can also save energy carpooling? We're big fans of virtualization at Sun, and we think you can have BOTH energy efficiency (servers and cars) and savings through consolidation (virtualization and car pools).

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