Cleantech Counterpoint

My new column, Cleantech Counterpoint, on Gigaom’s Earth2Tech blog debuted today, with the first installment focusing on California’s AB32 carbon emissions law and a retrospective look at what is going on in Spain.

I have, like many others, been fascinated with energy technology and agree with many of my peers that this is the next wave of Silicon Valley. While I am an enthusiastic supporter of renewable energy development, conservation technology, and energy storage, I just can’t get on the bandwagon with those advocating that we do this at any cost.

A sustainable energy proposal that bankrupts an economy is by definition itself unsustainable. We live in the real world and in that real world are people who pay for things with something called money and the less money they have to support their families because they are paying more to drive their cars, heat their homes, and turn on their lights, well that’s bad for all of us.

The other motivation for me is that the energy economy is far different than any other economy, except for maybe semiconductor manufacturing, in that the capital outlays and supply chain risks are enormous. This isn’t a market where you, as an investor, put $10m into a deal and wait patiently for an exit. We need rational analysis that looks at technology development, raw material supply chains, regulatory issues, and lastly, consumption dynamics and that is a far more complex type of investment than a straight software deal.

Lastly, I am very wary of the law of unintended consequences applied to energy markets. We have already seen what happens when food crops are diverted to fuel crops and when government subsidies sustain and otherwise unsustainable approach, and this should cause us all pause as it relates to large scale energy investments. We simply cannot take the approach of “well this seems like a good idea so let’s do it”.

There are many really good ideas for developing renewable energy, conservation, and allocation of energy resources, and all of these developments are worthy of consideration. It should be clear to everyone that better utilization of our resources is a universal value and that those economies that develop energy intellectual property will be well positioned in the future.

I want to thank Om and Katie for giving me a forum to publish my writings, it says a lot about their editorial integrity that they seek out voices from different perspectives.

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