Now What?

They came. They met. They left.

By the best accounts, this past December’s climate change negotiations in Copenhagen set the stage for future discussions. By the worst accounts, the meeting was a flop. As the world waits for an international global warming treaty, Momentum sat down with Berkeley professor Daniel Kammen—a nationally-recognized energy policy guru—to get his take on the future of clean tech and renewables in an uncertain climate.

Some argue that limited progress was made in Copenhagen.

No argument needed.

What do you expect will happen now in terms of private and public investment in renewable energy?

I don’t think it’s going to change the investment patterns much at all. The reason is that the renewable energy market is booming around the world. You look at what’s happening with solar and wind essentially across all of Europe, solar in California and New Jersey, plus the wind markets that are evolving from Minnesota down to Texas. And China installed more wind power last year than the U.S., so I think the renewable energy markets are truly going great guns.

If not a carbon market, what’s driving the development?

Those markets are basically being driven more by local regulations, state renewable portfolio standards or feed-in tariffs than by what the carbon market would do anyway. For example, California’s solar is doing very well, but our greenhouse gas law doesn’t even really start until 2012. Right now, the real constraint [to growth] has been the available supply of wind turbines and solar panels and, of course, the financial crisis.

It seems like putting a price on carbon would spur even greater demand, though.

The price on carbon moves us from energy policy into climate policy. And that’s where the lack of action, the failure in Copenhagen, really hurts. … It was always an incredible stretch to think that a new administration could arrive in Washington, bring in a whole new staff, develop a coherent climate policy, get it accepted not only by the U.S. House and Senate and U.S. industry, but also convince Asian and European partners, allies and competitors that we had truly changed our climate policy all within the first 11 months of a new administration. You’d like to think you can do anything, and the U.S. does have this “wake up at the 11th hour” mentality. But we went into Copenhagen with a very troubled setup. 

Meaning?

First of all, not as much came out of the U.S.-China summit on energy when President Obama went to Beijing in November as one would like. Second, even before President Obama went to China, and I was there during that visit, he made this important G-20 stop in Singapore, where multiple heads of state announced that Copenhagen wasn’t going to produce any binding agreement. So, these leaders had done one of two things: They had either lowered expectations or they had essentially declared that Copenhagen would be a failure two months before the meeting.

What’s needed to get an international agreement on climate, then?

The way to get major game-changing political action is not to try to sit down with 180 nations and negotiate, where Vanuatu and the Seychelles and Russia and the U.S. are individual players, with one vote per one nation. These things come together when a small group gets together, figures out what works for them, and then other nations get together to look at it, kick the tires, change it or just simply adopt it. That’s what’s needed now. The U.S. and China arguably started a dialogue but haven’t finished it. Europe has already staked out a position, which makes sense environmentally but hasn’t proven to have political traction yet.

You mentioned a climate bill versus an energy bill. Which do you see coming first in the United States?

If I forecast over a year ago, I would’ve said I think what’s going to happen is there’s going to be an energy bill and then there will be a climate bill. … Things are jumbled now. I know what needs to happen, though, and that is: We critically have to demonstrate to U.S. industry and the world that we’re serious about this transition to a low, or lower, carbon future. And we have to move away from nice pronouncements about what we plan to do in 2050 and really figure out what we’re going to be doing by 2020.

What do you make of the United States’ current position in the world when it comes to clean tech and renewable energy development?

We trail, unfortunately, in many of these areas. The real irony is that many of these technologies were first developed in the U.S. After Carter, we had a period of absolute neglect of energy research. While a few states like California, New Jersey, New York and Wisconsin did things, we didn’t progress as a nation. So, other countries who took this seriously–everything from hybrid vehicles to wind turbines—took U.S. innovations and commercialized them. The U.S. is still exceptionally innovative in some areas such as new wind turbine technology, energy storage and solar. But every day that the U.S. isn’t developing actual clean energy products for the market is a day we’re falling behind.

Investment Climate

Todd Taylor, a lawyer with the Minneapolis-based law firm Fredrikson & Byron and a noted clean-tech expert, weighs in on:

GROWTH
“There really hasn’t been a robust carbon finance market in the United States to date and deals are still getting done. Many venture capitalists tell their companies not to look for government programs to help their business succeed. Venture finance doesn’t tend to be too worried about short or medium-term regulations. The lack of carbon regulation probably matters more in the context of a missed opportunity for faster growth.”

INCENTIVES
“Tax credits for investors are very helpful because they provide an incentive for angel investors and start-up capital investors to contribute. Wisconsin, with their angel network, has a type of public/private partnership between the state and investors. Minnesota needs to do something like that, and I know there are a number of efforts underway to get that done. The state had an angel tax credit that got vetoed because of some other budget issues, but it needs to come back not just for clean tech, but for investment in Minnesota overall.”

INNOVATION
“There are some really amazing things coming out of universities and private companies in the U.S. that you just don’t see from a lot of other countries. The problem, though, is we’re not so great when it comes to support for commercialization of new technologies. Whereas in Germany, it may be kind of a bread-and-butter technology that someone’s developed, but there’s a heck of a lot of support to get it commercialized. I think having too much control by the government would stifle innovation, but too little means you have all these great ideas that never go anywhere. So we need to find a balance.”