Blog Post

Opinion: The Land of Eco-Opportunity

How America can revamp its energy infrastructure, recharge its economy and reshape its future by embracing three major green initiatives.

The financial meltdown has rattled the U.S. banking system to its core. The unprecedented increase in the price of oil this summer has wreaked havoc on household budgets. The presidential race has surfaced divisions of class, race and geography among the American people.

But a crisis is a terrible thing to waste. The presidential election taking place next week has the potential to set America on a new path. Embracing three massive opportunities presented by eco-related initiatives will help America move closer toward its goals of achieving energy independence, escaping recession and creating a sustainable lifestyle for its citizens.

1. Rebuild the National Grid.

The current power grid is outdated and inefficient. The majority of power plants are more than 30 years old. The aging infrastructure costs the economy between $25 to $180 billion in outages every year. More than 7 percent of energy was lost due to inefficient transmission and distribution methods in 2007 alone.

The problem stems from the massively complex network of power producers. There are more than 3,100 electric utilities in the country, run by either state or local governments, publicly-owned electric companies, or regional co-ops. That doesn’t include the 2,100 other non-utility power producers that contribute to the grid’s complexity.

The nation has successfully streamlined its infrastructure in the past. Think back to the early part of the 20th century when the automobile went from a play toy of the very rich, to a transportation method for the middle class. The nationwide maze of 75,000 miles worth of streets, country roads and dirt trails were organized into the U.S. Highway System in 1925. In the 1950s, the federal government further modernized the system by funding the construction of major interstates and standardized numbering of the highways. The result was a tremendous improvement in commerce, travel and quality of life.

In the same way that the highway infrastructure was created, the nation must unite to build a new energy infrastructure. A new power grid is needed to allow for distribution of renewable energy sources. The grid needs to leverage digital technology to improve transmission efficiency and enable precise power management by both suppliers and consumers. The result will be a robust, secure, streamlined power distribution system which will help deliver energy independence to the American people.

2. Stimulate the “Green Collar” Economy

Alternative and renewable energy technology have the power to transform the U.S. economy. Creating an energy technology industry would help to solve two of the country’s major problems: an economy in recession and an expensive dependence on foreign oil.

Speaking at the Corporate Eco Forum meeting in September, Google CEO Eric Schmidt underscored the opportunity for energy technology to be an economic engine in the same way that Internet technology was during the last decade. By leveraging the same networks of innovation, technology, funding and talent that helped web-driven businesses to transform business and communication, energy technology will spawn hundreds of new companies and create hundreds of thousands of high-paying jobs in American cities and towns.

However, the green economy does not need to focus exclusively on energy technology. Experts have likened the job creation associated with rebuilding the energy grid to a “green New Deal.” New and established companies alike will tackle the next wave of offerings in the areas of pollution control, water conservation, recycled products, municipal regeneration — and many other areas that will help Americans live more sustainably and cost effectively. These green industries should be rewarded for their innovation and incentivized to prosper.

3. Move to a Sustainable Economy

Building a new energy grid and bringing the “green collar” economy to life will dramatically improve the U.S. economy. But in order to create a truly sustainable economy we need to move away from our current consumption-based economic model. Today, America’s livelihood is measured largely by its Gross Domestic Product (GDP). The only way for the U.S. to show growth is to increase consumption.

The alternative is Bhutan. The country is famous for its “Gross National Happiness” index. Rather than only measuring material consumption, the metric is intended to show Bhutan’s progress on factors such as spiritual, environmental and cultural values. What if the U.S. developed a “Gross Sustainability Index” to better measure our progress towards a eco-conscious future? If we continue to chase growth for growth’s sake, we will ultimately lose the race.

Next Moves

The resolution of the presidential election next week will be an opportunity for a fresh start. The new president should appoint a “Sustainability Czar” to chart a course for the country’s future while keeping an eye on the business, social and environmental impacts of our current actions. The czar should immediately call for a national summit of business leaders, experts and public representatives to evaluate our options and to deploy a strategy that takes advantage of America’s many eco-opportunities.

M.R. Rangaswami is the founder of the Corporate Eco Forum, an organization dedicated to improving eco-strategy at Global 500 companies, and the co-founder of Sand Hill Group, a technology investment and consulting firm located in the San Francisco Bay Area.

13 Responses to “Opinion: The Land of Eco-Opportunity”

  1. MR – great piece and agree a new grid, with super conductive implemented, and the energy czar are necessay. Also the energy dialog in the USA does not address all the key areas and as a result we have poor policy and poor outcomes.

    The areas that need to be addressed by any energy approach or policy are:

    Energy Independence
    Energy Security
    Environmental impact
    Water

    All these elements drive prosperity –any policy that does not balance all these dimensions results in bad outcomes (e.g. biofuels) and is insanity. Therefore I see the current debate that automatically excludes certain energy sources and/or innovation around these sources is fundamentally flawed.

  2. Navaz Porbandarwala

    MR,
    It is a very impressive Article you have written. I agree it is extremely important to rebuild the current failing power grid. Hopefully the recent rise in Oil prices to levels unheard of before is an eye opener to all of us, as to how dependent we are on others for our energy use.
    Maybe this will force research into Alternative energy sources.

  3. Ernie von Simson

    MR, this is excellent in terms of objectives.

    But our society is so skewed between rich and poor that asking the low end to ascribe to a happiness or sustainability index might well lead to a political revolution.

    One other thought. The green revolution has to be bottoms up in my view. Corporations like Google and those at your conference are already active. Now the consumer has to see the benefits and make the right investments or change habits. Just as the automobile revolution was led by the consumer.

    Why don’t the utilities build the new electrical web as the common carriers built the Internet?

    All quibbles. Your thoughts are well worth pursuing. Keep up the great work!!! Ernie

  4. MR – Excellent thoughts, well-written article. Thanks for sharing.

    I agree with your sentiment – “A crisis is a terrible thing to waste”, indeed. In addition to rebuilding critical energy distribution infrastructure, imagine if the US would use leverage this moment to create “the next” source of inexhaustible energy.

    For instance, the US could devote focused and well-funded scientific attention to safe, massively-scalable, limitless and clean energy. Maybe next-gen Nuclear Fusion, focusing on safety and controllability.

    From vision to ubiquity is likely to be a “Road paved by a generation”. The road will likely cost a Ba-zillion dollars. But….imagine the unassailable legacy that we will leave behind. It is a pursuit that will bring forward the best and the most-committed in the nation, perhaps the world.

    No other country can marshall resources like the US. No other people has repeatedly exhibited its resilience, against the severest of odds, like us – Americans.

    We have a proud history of fearless and inspirational leadership. And an equally proud history of inventing our way forward, braving and bucking seemingly impossible odds.

    Let us also be clear – Consumerism is not the root-cause of the world’s problems today. In fact, we need unabated consumption to keep the economic engine running. On the contrary, we should enable responsible consumerism by educating people and creating jobs for them – jobs that, in turn, define, develop and continually create a legacy of sustainability. Responsible leadership will guide us to leave behind a legacy that can be continually leveraged – like infrastructure. The play-field will get tilted in our favor if we do so.

    The world is NOT flat – and will not be any time soon. Countries differently have, harvest, invest and enjoy competitive advantage for different reasons. We Americans have (yet another) opportunity here to create a sustainable competitive advantage.

    It is time for Kennedy-esque leadership and American-esque fortitude and followership.

    Thanks again for sharing….Ashwin

  5. Bob Richter

    If a real breakthrough is made in energy production away from oil, what would the effect be on the middle east and Russia. If their instability is a problem now, just think what a loss of their primary economic engine would cause.

    The effect of cheap energy would probably be just as upsetting outside the oil producers – just different.

  6. Dear MR: Statistics revealed by you are not merely eye openers, but are scary too. Your suggestions are timely, pragmatic and should really be taken seriously by the forces to be ! It also appeared to me that its the acid test of Mahatma Gandhi’s Theory on “Minimization of Wants” If wasteful expenditure and obscene consumption levels plummet, Mother Earth will gradually be a better place to live.

  7. Chris Stauber

    This is exactly the kind of things we need to do. Instead of bail-outs, hand outs, and (imagined) socialism, if we apply our resources to fixing these issues we will once again shine as a leader in the world.

  8. MR, I love the specific road map for the way forward. I completely agree with the point about sustainable economy.

    Most economists seem to criticize the consumerist mentality as the deeper root of the current mess, but all solutions seem geared to address the current symptoms, instead of reaching deeper. If it doesn’t work, hopefully they move from the band-aid solutions to a far reaching one.

  9. M.R. I didn’t realize you had gone green! Totally agree with your comments on revamping the highways. Since I moved to LA, traveling has been a nightmare. Two hours and 15 minutes to go 40 miles yesterday afternoon! Talk about inefficient.

  10. Kamal Bawa

    I enjoyed reading the article ; the idea of developing some sort of sustainability index is a good. let us hope that the next President focuses on development of new energy infrastructure as an engine of economic growth

  11. Ravi Soparkar

    M.R. Rangaswami,

    Your article on energy saving is an eye opening. Such measures would be more appropriate for India, as we are suffering energy crisis as well as we have much more transmission losses.

    I would be happy to receive more of such valued articles from you.

    Ravi Soparkar
    Pune, India

  12. R Ramakrishnan

    Dear MR Your article is well written and cogent Speaking objectively the first suggestion of yours to rebuild the energy grid is a really good and useful one and will in the long run help US sustain which is what you want finally So let all the goodmen who want to come to the aid of the party concentrate on this and remain focussed and here is strength to their success ! RK