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Final Thoughts on the Light Bulb Law

I’ve been in a discussion of the upcoming lightbulb law with @NobleIdeas, and he’s provided a blog response to my earlier post. His post is useful, since it covers most of the standard points used to support the law, as well as providing support for one of my key points. Here’s my thoughts in response.

The Main Point

The federal government has many proven, existing programs to drive efficiency, including Energy Star, portfolio standards and product labeling schemes, not to mention the myriad of state and local programs, many of which have already invested in lightbulb efficiency. These are especially effective in cases where there is strong coordination with industry, as there is in the case of lighting.

Like most (all?) proponents of the law, @NobleIdeas fails to answer the following question: Given the successful track record of other efficiency programs, why it was necessary to take the unprecedented step of outlawing inefficient consumer products? Use of this new mechanism is especially troublesome in this case, where there is no cost-effective substitute on the market for specific, but common, use cases of incandescent bulbs.

@NobleIdeas provides a vivid illustration of this point in his blog post, where he has converted most of his house to CFLs, but has a specific situation in his kitchen where he still uses old, inefficient bulbs because he wants to use a dimmer. This is very similar to my house, where we’ve switched to more efficient bulbs, except where there’s specific reasons that we can’t, and where we still use incandescent bulbs.

Ultimately this comes down to a question of what you feel like the federal government’s role should be in helping to drive efficiency, and whether it is a step too far to outlaw commonly used products. Personally I believe that this unprecedented step goes too far for a case where consumer health is not in immediate danger. We have already proven that we can capture most of the benefit using existing efficiency programs that will have a slower impact, but can drive to the same ultimate conclusion without outlawing products.

In short, this is an unnecessary overstep of the role of the federal government.

I’ll close with one last minor comment on mercury.

One last Note on Mercury

As I covered in my recent look at state-level mercury emissions, the broader claims of mercury reduction as a result of a switch to CFLs are, on average, correct. But my issues with CFL’s and mercury aren’t at a national level, or even at a state level. They are at the most local level, meaning that I’m concerned about mercury spills in my house, especially in areas where the kids play and pets hang out.

Clearly the EPA has some concerns there as well, since they went to the effort to include some pretty scary directions for dealing with CFL mercury spills in their CFL-mercury FAQ.

In an effort to downplay the situation they compare the mercury released by a CFL to the mercury from a broken mercury thermometer. Personally we don’t have mercury thermometers in our house (or thermostats), and certainly wouldn’t have them out in any area where kids might play. Similarly, these are the areas where we have not switched to CFLs.

Averages, CFLs and Mercury

I’ve been having a useful exchange back and forth with @NobleIdeas about the lightbulb law that is set to take effect in January 2012. (Here’s my first post and @NobleIdeas’ reply. I have another note on this in the works.)

One of the recurring themes of this discussion is the mercury content of compact fluorescent lightbulbs (CFLs). The standard argument is that widespread use of CFLs, despite their mercury content, will lower the ambient mercury level. The reason is that that most environmental mercury in the US is a result of burning coal in power plants, and the amount of mercury from electricity generation that is saved by switching to a CFL is higher than the potential amount of mercury released in the environment (note that I say “potential” because CFL recycling programs will avoid mercury release). This argument is spelled out in @NobleIdeas’ post, and further elaborated in this well-written EPA FAQ.

The purpose of this post is not to argue against this conjecture: I totally agree that, in total, switching from incandescent bulbs to CFLs will result in less environmentally released mercury. However, as is often the case, averages can hide important details, and I’d like to look a little deeper at CFL mercury.

Diversity of Electricity Sources

Electricity sources vary across the United States by surprising amounts. For example, in the EPA’s eGrid database you can see the diversity in electricity sources at a state level, as well as the resulting variation in emissions (the Summary Tables are a great place to start). Although this captures much of the variation, there is disparity from town to town within states as well, or even down to a household as individuals pursue their own clean energy agendas.

As you can imagine, with such a wide disparity in energy sources, “average results” that are true across the US in aggregate may not be true locally. For example, in this post I showed why electric vehicles may actually result in more GHG emissions than gas-powered vehicles in some areas of the country.

State Electrical Sources and Mercury Emissions

Since airborne mercury emissions are a result of burning coal, mercury reduction from switching to CFLs would be lowest in a states that burn the least coal. Among those state is CA, where eGRID2006 reports that only 1.2% of its electricity coming from coal, resulting in .0014 pounds of Mercury per GWh of electricity. This is roughly 1/20th of the national average of .0269 lbs/GWh. [Note: I used eGRID2006 for this analysis since the more recent reports have, for some reason, not included mercury emissions. However, the electricity source mix for the states mentioned below seems consistent to the latest version].

Doing unit conversions and plugging these values into the computations on the EPA FAQ, we see that mercury emissions from electricity has dropped dramatically for both types of bulbs, and the net mercury released by a CFL is now almost twice that of an incandescent bulb since the mercury released at disposal starts to dominate (.50mg v .28mg of mercury).

What does that mean? It means that as California residents switch to CFLs, if they don’t recycle the bulbs they will actually cause an increase in mercury in the environment. This is also true for 5 other states, including Arkansas, Idaho, Maine, New Hampshire and Rhode Island, all of which also have very low uses of coal as a source of electricity. In Montana and Oregon the switch to CFLs will have negligible difference on mercury output.

Does this finding change the statement that switching to CFLs will reduce mercury output for the nation overall? No, that continues to be true. However, if we only cared about mercury in the environment, then the right thing to do would be to switch to CFLs in the states not listed above, and leave the states above on incandescent bulbs.

(Of course, this last statement is also based on averages, and the true optimization would be to assess the mercury at each household and make a determination of when to switch.)

Conclusion

Averaging data across the country lets us make important statements about the impact of decisions and policies. However, averages can mask wide regional, state or local variation in the actual data, and statements made about the aggregate national behavior may not be true when applied at more local levels.

One important area is in electricity, where there are major differences in electricity sources across the country. As we’ve seen with electric cars and mercury emissions, these differences can mean that statements that we take as fact at a national level may not be true at a local level.

Why I Oppose the Lightbulb Law

For the past few days I’ve been going back and forth with @NobleIdeas on the national lightbulb law (formally known as the Energy Independence and Security Act of 2007), but I thought I’d break out of the 140-character limit and write down my rationale.

Those who know me know that I’m a big fan of efficiency, especially when it results in economic gain as well as environmental. During my term as CSO at Sun we did big lighting retrofit projects, and saved tons of money.

I’m also a big fan of government efficiency programs, provided they are thoughtful and competitively balanced. Topping the list is EPA’s Energy Star program which is the envy of countries around the world, and for good reason. It puts useful data in consumer’s hands, and is a platform for thousands of other efficiency programs. For example, many state and local rebate programs use Energy Star as their benchmark for rewarding efficient consumer choices. Unfortunately, as efficiency as grown in economic significance, the standards setting processes are becoming increasingly political, and prone to domination by the largest companies in a given industry.

About the Law

The lightbulb law didn’t technically ban incandescent lights, but it practically did. Incandescents are typically 5% efficient (meaning the other 95% is waste heat), and the law requires bulbs to be at least 30% more efficient, and incandescents aren’t going to get there (even if they could, the major bulb manufacturers now have no incentive to do it since they already make and sell the more expensive alternative). The law starts in 2012 with 100W bulbs and picks up many of other common bulbs by the end of 2014.

While industries often fight against efficiency laws, the lighting industry, led by giants GE and Philips Electronics were way in favor of this one. To understand their support, you have to look no further than the economics of compact fluorescent lightbulbs (CFLs), the only practical alternative that meets the federal law. While everyone touts the decreased cost to consumers, all of the savings is in energy. CFL manufacturers are charging many times the price of an incandescent bulb, but consumers are making up more than the difference in energy costs. And while some cite longer life spans, the economic advantages based on that alone are inconclusive.

I’m sure that environmental policy types played a role in this law, but I’m confident that such a draconian law would never have been passed without the full support of the industry. It’s actually pretty incredible when you think about it: major companies got the federal government to outlaw a widely used product, forcing customers to buy a higher priced alternative from the same companies. And through this statement you can start to see why this law is so unique:

  1. for the first time in the efficiency space the government has banned products below a certain level, instead of using an informational program like automobile MPG labels, a branding program like Energy Star, or doing a portfolio standard, like the CAFE standard for cars.

  2. the government banned a product which is widely used and which is not a direct hazard to consumers.

  3. the government banned a product when is no true, equivalent replacement product available. CFLs, the only economically viable option, have different spectra, have disposal and safety issues due to their mercury content, and have known deficiencies in warm environment, such as recessed lighting, to name a few. Sure CFLs work great in many cases (we use them in our house), but they don’t replace all current uses of incandescent lights.

Why I Don’t Like the Law

At this point you’ve probably guessed why I don’t like the law, but I’ll spell it out anyway.

  1. It treats Americans like dirt. In my experience supporters of the law have had two views on consumers: 1) they’re being stupid for not understanding the long term cost benefits, or 2) they have reasons to want to still use the old ones, but GHG reduction is more important. I believe US consumers are smarter than people believe, and are making rational decisions based on their own situation. As a result, I find both of these views disrespectful and outside of the founding ideals of this country.

  2. Other industries will try the same thing. If you think the success of this ploy by GE and Philips hasn’t been noticed in other parts of those companies and in other industries, then you’re quaintly naive.

  3. It’s setting a really bad precedent. The federal government now believes it has a new tool in its efficiency toolkit: outlawing inefficient products, irrespective of whether they are popular or there exists a true replacement in the market. Many have said “relax, its only lightbulbs”. Beyond the fact that sometimes lightbulbs matter to people (see #1 above), lets see what products the government tries to apply to tool to next.

Amazing Video

Terje Sorgjerd writes:

This was filmed between 4th and 11th April 2011. I had the pleasure of visiting El Teide. Spain´s highest mountain @(3715m) is one of the best places in the world to photograph the stars and is also the location of Teide Observatories, considered to be one of the world´s best observatories.

(Thanks to WUWT)

The Mountain from Terje Sorgjerd on Vimeo.

Twitter’s Conundrum

We all know that Twitter is amazing, that everyone is using it, and that it’s on the road to making everyone who’s involved with it rich. But if that’s the case, why are they messing around with their developer agreements at the risk of annoying their most loyal partners?

Maybe the answer is that Twitter isn’t the financial slam dunk that we all thought. The problem, I believe, goes back to a fundamental decision that they made early on, and that probably also contributed to their rapid rise. While they concentrated on their own web interface, Twitter created an elegant API which allowed others to develop first-class UIs for the service on every type of system imaginable. A nice piece by Matthew Ingram at GigaOm highlights the benefit of this approach to Twitter:

Without the help of third-party apps like Tweetie and Tweetdeck, the company likely would not have been nearly as successful at building the network (and a ready-made client like Tweetie certainly wouldn’t have been sitting there waiting to be acquired). But the ecosystem didn’t just build demand for the network — it also helped build and distribute the behavior that now makes Twitter so valuable: the @ mentions, the direct messages, re-Tweets and so on, none of which were Twitter’s idea originally. That created a huge amount of goodwill, and led to the (apparently mistaken) idea of an ecosystem.

The result of this approach is that Twitter didn’t control the user interface for its own service. Of course they controlled the website, and they offered their own client, but they don’t control how Twitter content looks on other desktop clients, or on my blog, or on my non-Twitter phone app. Twitter says that over 90% of their content is viewed on their own UIs, but independent developers claim its in the 42% range (here’s a good summary on GigaOm).

Why am I dwelling on this? Because if you offer and service that doesn’t embed a commerce transaction, and you don’t control your UI, the only way you can make money is to have people pay directly for your service. You may argue with my assertion (Tim Bray and I have been going back and forth on it), but I haven’t found a counterexample.

Here’s my case. First, I included the phrase “doesn’t embed a commerce transaction” for reason. Tim’s first comeback was that Googles AdSense and AdWords APIs make money without a UI, but I categorize those as commerce APIs – they are explicitly about the exchange of money for a measurable service (showing ads).

Beyond that, there are presumably a number of ways Twitter could try to monetize their service, so lets look at each of them:

  1. They could charge a fee for using the Twitter service. I’m sure that they believe this would be suicide – that they’d quickly be replaced by some similar service that had some way to monetize itself without a subscription (or maybe just a purely free alternative – more about that in the follow-on post).
  2. They could embed ads in the results they return. Their own clients would presumably show the ads, but other UIs would naturally try to strip them out.
  3. They could protect the ads in their results through their terms of service (Tim suggested this). Maybe, but then they get into specifying how big the ads have to be, possibly splitting revenue with the other developers, etc. Once you do that you might as well….
  4. Get rid of all of the other clients so that you can control the UI and monetize it to your heart’s content.

So if you’re starting a social networking company of some kind, control your own UI. Expose select APIs which enhance the desirability of your service, but not ones which restrict your ability to monetize the users’ experience.

Finally, this whole discussion of Twitter and how it might monetize itself raises an interesting question: could someone build an open, federated alternative? I’ll explore that idea in the next post.

Welcome to the People’s Republic of JPMorgan

“JPMorgan” is a registered trademark of JPMorgan Chase & Co.

Sorry for starting with a legal disclaimer, but you’ll see why in a minute.

You may recall that 18 months ago Greg Papadopoulos and I published a book called Citizen Engineer, where we tried to help engineers understand key topics related to the role in society, including sustainability and intellectual property. Since then we’ve traveled around giving talks (on our own dime) to help spread the word to students and engineering professionals. I know we’ve gotten some universities to think about their engineering curriculum, and hopefully we’ve gotten our message across to some engineers.

As part of the project we put up a website at citizenengineer.org. One of the features that I only got partially implemented were the forums. Unfortunately I didn’t get the security fully setup, so they have since filled up with spam.

Apparently some of this spam is very sensitive to JPMorgan, as it prompted them to send me the attached letter. The offensive content appears to be 4 spam posts that include random gibberish (with links, of course). Here’s a sample:

powdered peanut butter austin peanut butter recall montana lakes jp morgan preferred stock the party never stops rachael mullenix saw for hire shemika jackson tiffany yorks

I’m not going to say much about the letter beyond highlighting a couple of sentences.

Our firm does not object to your ownership of citizenengineer.org.

Its not even worth coming up with an ironic reply to that one.

…our firm demands that you immediately remove all banking or financial services reference from all web pages that are located at citizenengineer.org.

Well, unfortunately their email is causing me to write more about banking and financial services, not less.

I’m not sure what else to say. If you are an investor in JPMorgan Chase, then I’m sorry to report that some of your profits are being used like this. If you are an employee, then I’m just sorry.

My New Gig(s)

It’s been almost a year since the Oracle deal closed, and I’ve been fortunate to work on a lot of interesting projects since then, including the Energy Innovation Tracker, which I’ll write more about soon.

By last fall I was feeling like it was time to settle down somewhere again. I talked to a number of companies; some of the companies were really small, and some were really large. But late in the year I got an offer to work full-time for Applied Minds and their spinoff, TouchTable, and enthusiastically accepted.

For the rest of this post I’ll just answer some of the obvious questions.

Why Applied Minds and TouchTable?

There were two things that attracted me. The first was innovation. I thought a lot over the summer whether I should go be a senior exec somewhere, or I wanted to stay closer to the innovation. I also considered whether I wanted to focus on one thing (like you do at a startup), or have a broader scope.

This job hit the answer to both questions. I still feel like I can innovate, and that there’s some important problems and some potentially lucrative problems around that deserve some attention. But, at the same time, I had a hard time committing to a single problem. AMI and TouchTable offered up a combination of both.

The second thing that attracted me was the opportunity to work with Danny Hillis again. We’d worked closely at Thinking Machines for almost a decade, had stayed in touch since, and I always wanted to work closely with again.

Are you moving to LA?

Nope, we’re staying in Concord, MA. I’ll be out here regularly, but also expect to help both companies out in DC, which is an easy trip for me. I started work on a home office over the summer, and am putting together plans to finish that off now that I know what I’m doing.

Are you going to be working on sustainability?

This is the most frequent question I got over the past year, and my answer has consistently been “I’m always working on sustainability”.

I did look at some CSO type jobs, but I’ll tell you that they are few and far between. I recently told someone that I bet there are fewer full-time corporate sustainability professionals than there are NBA players, and last I checked that was a pretty tough gig to get.

But as we said at Sun, “every job is an eco job”. So I plan on bringing an eco mindset to everything I do, but also am confident there will be some opportunities at AMI to work directly on some eco problems. Furthermore, I’ll still be involved with activities outside of work such as EIT and NEON.

I’ll send more details as I settle in, but having fun so far!

UK Carbon Bait and Switch

David Roberts has an excellent piece at Grist titled “Carbon tax in the U.K.: What does it mean for U.S. debate?”..

Personally I wasn’t surprised. I’ve always believed that there was a mismatch between the idea of a pure cap and trade system and a democratic system of government. Once cap and trade (or any other carbon pricing scheme) fills up the proverbial cookie jar, there’s no way that elected officials will be able to keep their hands out of it.

On the other hand, even as jaded as I am I never dreamt that the UK government would empty the jar this soon!

As David points out, this accomplishes half of the accepted benefit of a price on carbon, which is to tip the economic scales against activities with high emissions, and in favor of limiting those activities or switching to lower-carbon alternatives. What it doesn’t do is use the proceeds to help accelerate alternatives, or to provide support for individuals and companies who are more acutely impacted by the carbon price.

However, if we’re going to accept that as a “better than nothing” policy solution to carbon emissions, then we need to acknowledge our existing energy taxes and subsidies, which fit into this expanded definition. For example, the US average gas tax is $0.456, and the diesel tax is $0.508 (charts and further references are here). Assuming that we continue to support ethanol and biodiesel such that taxes on those are effectively negated (assuming the 6-year old biodiesel tax credit is extended later this year), then these are equal to a $50-$60 per ton carbon tax for a 20mpg car, and $25-$30 per ton for a 40mpg vehicle.

Of course these taxes are counterbalanced by a hodge-podge of fossil-fuel subsidies, so the amounts may be overstated. Just removing those may be, in fact, a de facto increase in the cost of carbon.

So the takeaway is that any serious effort at pricing carbon needs to clean up all of the various taxes, subsidies, incentives, credits, etc that already exist. If we want to deliver a true signal to the markets, we have to take away the existing noise.

Two Reasons Why Carbon Management Software is Not the Next Big Thing

In my experience Chris Mines at Forrester is the top analyst covering the green enterprise, but I think he’s slightly off the mark on his latest article “Five Reasons Why Carbon Management Software is the Next Big Thing”.

Before I talk about where he’s wrong, let me say that he’s right on the money that ECEM is an important function in the enterprise going forward, and as I’ll cover below, I think its just the tip of a larger iceberg.

But saying its an important function isn’t the same as saying there’s an opportunity for a major new software market, and here’s why:

  1. Today the ‘M’ in ECEM isn’t really management, it’s monitoring. Unlike HCM and ERP (and, to a lesser extent, CRM), the energy and carbon software can tell you what’s going on, but you can’t use the software to affect change. In ERP I can order more parts, in HCM I can give someone a raise or a new title, but I can’t use ECEM to swap out incandescent light bulbs or upgrade a truck fleet. In other words, a separate ECEM application can tell you where you might want to look for changes, but that’s where its functionality ends. Look through the list of top 100 software companies, and you won’t find any businesses centered around monitoring.

  2. There’s no cost center in enterprises that can successfully pay for and push for ECEM as a major new application. ECEM spans two large corporate functions, operations and facilities, as well as a number of other functions, including sustainability, legal, CSR, risk, finance, audit, etc. From a budget perspective operations has the biggest one, so would appear to be a good candidate. Facilities is a cost center, and in every business I know is under major budget pressure, and the other functions are even less likely to finance a major application purchase. But the problem is that operations already has a monster investment in ERP, and would need a compelling reason to bring in a major new application (more on this later), and facilities and the other functions rarely have the clout to push a new enterprise-wide application on operations.

But I said that ECEM would be a major corporate function, and here’s how I believe it will play out.

First, the enterprise function will be much bigger than energy and carbon. Within a few years companies will find that they need to track, manage and report water, a wide range of chemicals, and various forms of recycling at the same level of detail. Similar to energy and carbon this will span facilities and business operations, and will reach out through the supply chain. This trend will be driven by environmental and natural resource concerns, but will also have huge financial drivers as our supplies of energy, water and other natural resources are further stressed.

Second, the ECEM market as we see it today will split into two, and in doing so will turn the ‘M’ from monitoring to management. In the case of operations, enterprise carbon, energy and natural resource management (ECENRM) will become a feature of the major ERP platforms. Last year SAP bought Clear Standards, and they and Oracle have been touting their growing feature list. For operations this is the right place for the functionality to be, since not only can you see what’s happening within the ERP system, but you also have the controls to make changes. Want to optimize the amount of product shipped by rail instead of air? The logistics package in your ERP system is where you’ll have the data and control to do that.

Facilities will absorb the second fragment of the proposed ECENRM space. Today this is a much smaller market than the ERP market, and will remain so. But the part of ECENRM that falls into facilities management will be able to both monitor and management the energy, water, etc. Much of this will be manual today, but will become increasingly automated.

As for the 70+ (and I’ve heard 100+) companies who were started up in this space, they will find that they need to focus on either operations or facilities, and that in both cases its tough to convince either group that they need another, separate application. A few lucky ones will be bought by existing ERP and facilities management companies, some will find small, profitable niches, and the rest will have a tough go of it.

Where will that leave the sustainability professional, charged with reporting enterprise-wide carbon and energy? They’ll have to talk to both operations and facilities and integrate the two sets of data into a final report. Is this ideal? Probably not, but the functions are so different that dealing with each of them on their own turf probably makes the most sense anyway.

The EPA Turns to Bridge Burning

Over my years as Sustainability Officer at Sun I’ve publicly given lots of credit to the EPA, primarily for their world-leading Energy Star program and for the excellent Climate Leaders program.

Boy, do I feel foolish now.

First, in my eyes they tarnished their crown jewel, Energy Star, with the politically motivated and poorly conceived Energy Star server specification (a longer, separate story that I won’t cover here). But I still felt justified in singing their praises as long as they still ran the excellent Climate Leaders program.

At Sun we relied heavily on Climate Leaders when we were starting our carbon accounting, and continued to participate due to the high quality of interaction. We used the resources and contacts to make quick headway in formalizing our program, and in actually reducing our GHG emissions. For minimal investment the EPA had itself in a valuable position with leading corporations, sitting at the center of the corporate sustainability discussion and helping to drive lower emissions throughout industry (you can see a list of the companies involved here).

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Well, in the Lisa Jackson era, that proved to be too good to be true as well. Last month the EPA announced that they were suspending Climate Leaders, and with a lack of grace rarely seen even among giant, faceless bureaucracies, used the annual meeting to dash any hopes of discussing potential futures for the program.

It’s worth reading Paul Baier’s excellent write-up of this last meeting, both to see the quality and intentions of the companies involved, as well as heavy-handedness of the EPA. As Paul says:

Gina McCarthy, assistant administrator of EPA’s Office of Air and Radiation, was blunt and unrelenting with Climate Leaders partners: “Our relationship with you must change.”

Two things of note about this statement. First, the wording of it was apt, for instead of saying “Our relationship with companies must change”, she used “you”, leaving it open to the companies or the individuals in attendance. The truth is that the companies are not going to feel the impact of this as much as the individual sustainability leaders within those companies. These were the people who were working with the EPA and defending it within their companies and the broader community, and the Agency has decided it didn’t value the relationship.

Basically, Lisa Jackson and team just told a large group of incredibly influential and effective sustainability leaders to “F— off”.

The second point about this statement is that they accomplished their goal. I’ve already noticed a strong shift in attitude about the Agency among my former peers. I’m not currently in a corporate sustainability leadership role, but I have been in the past, and even though I wasn’t at this Climate Leaders event, just reading about it has been like a slap in the face. So I’ve learned my lesson as well: the EPA does not want to be my partner and I should act and speak accordingly.

The next obvious question is “Why?”, but we can only speculate. The budget excuse they used in public seems silly due to the tiny amount of money that was spent on this, but maybe it was also a telling statement. The fact may be that the current leadership of EPA just can’t see itself spending any money to work cooperatively with business leaders.

The more paranoid view is that this was only Act I, and was laying the groundwork for an even more aggressive Act II. “Why spend money to work with them when they’re going to really hate us in 6 months?”. I have absolutely no evidence for this, but given the way this was all handled its hard to see it as an isolated incident.