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 Date:6/22/2010

 

News & Views
Stanislaw: “’Green’ isn’t the ‘Magic Bullet’”
A recent white paper issued by Deloitte LLP points a new path toward clean energy, jobs and security. “Green” initiatives, indicates author Joseph A. Stanislaw, Ph.D (a world-renowned financial advisor on international markets), aren’t a panacea but a step in the right direction.

One imagines that Joseph A. Stanislaw, Ph.D, doesn’t like deflating anyone’s balloon. However, he recently had to poke a sharpened point into the “green” mindset.

“’Green’ initiatives,” he wrote in a recently published white paper (“Clean Energy 1.0: Moving Beyond Green to Create Sustainable Jobs and a Long-term Energy Strategy”) aren’t the “magic bullet” that will resolve the world’s energy concerns. But he doesn’t dismiss such initiatives. Rather, he feels they can provoke a necessary next phase of global development in energy and economic sectors.

In his paper, Dr. Stanislaw—an independent senior advisor to Deloitte LLP and founder of the JA Stanislaw Group LLC—focused on the three interconnected mandates driving clean-energy evolution in the United States: environmental protection, creation of sustainable jobs and enhanced national security.

Historical Context
Stanislaw, co-founder and former president and chief executive officer of Cambridge Energy, place the narrative in historic context with this opening volley: “Just two years ago, when oil was levitating towards $100 a barrel and Russia was playing politics with pipelines, green energy was the holy grail of energy security. Then, when concerns over climate change reached a fever pitch, it became the silver bullet to solve global warming. Finally, when the ‘Great Recession’ struck, green energy was the panacea for unemployment and falling wages.”

This metamorphosis, he continues, is part of a necessary maturing of the debate around energy because clean energy technologies must “evolve from their current 1.0 stage to a 2.0 stage and beyond.”

He draws an analogy: “Right now, clean energy is where the mobile-phone industry was in 1983, when Motorola released its two-pound, $4,000 DynaTac 8000x, or where the computing world stood that same year, when Windows 1.0 was launched.”

Stanislaw goes on to explain that the past two years alone have demonstrated that green energy is no longer the magic bullet. Clean energy, he says, can now take its “pivotal but mortal place in an array of energy forms and technologies that will power the world in the 21st century.”

From “Green” to “Clean”
He proposes that the green-to-clean transition will power the next developmental phase of world economy in the race to create technologies that help us better produce energy and, subsequently, reduce energy usage.

The stage, he indicates, is now set for a smart, long-term American energy strategy, and he cites several reasons:

  • Energy is now top of mind: The federal stimulus bill has helped kickstart a massive investment in clean energy technologies and has shifted America’s energy psychology.

  • New stratagems and courses: Our recent immersion in clean energy has allowed us to better understand, through experimentation and debate, what our long-term energy strategy might be.

  • Clean beats green: We now understand that what matters most is not green energy but clean energy – whether it comes from the wind, clean coal, natural gas or nuclear—all of which is underscored by Americans’ greater understanding of reduced energy consumption.

  • Energy equates to jobs policy: Policymakers have learned that energy policy cannot be separated from jobs policy – and that sustainable jobs matter most.

  • Energy improves the bottom line: The recession has underscored the pocketbook benefits of efficiency and clean energy for individuals and corporations, in addition to their positive impact on climate change and national security. “Efficiency and clean energy are now firmly embedded in the [American consciousness],” he says.


These set the stage for a new public mandate: Americans insist that corporations “go clean,” thus shaping product development and capital allocation. “Americans should encourage policymakers to follow suit,” says Stanislaw.

He suggests focus areas to help move the United States along the clean-development continuum:

  • Development of a federal framework. “The absence of a federal framework is an enormous handicap. Federal government should not avoid mandating renewable power consumption nationwide. Whether the target is 20 percent of American energy coming from renewable sources by 2020, or something more modest, a mandate is important. Policymakers should not try to pick winners, but they should set targets.”

  • Reduction and management of energy demand (instead of merely producing clean energy). “Energy efficiency is perhaps the biggest untapped market for entrepreneurs, investors, and policymakers. It meets all the demands of those seeking to reduce emissions and increase national security, while having the potential to contribute mightily to the creation of sustainable, well-paying jobs.”

  • Research and development resurgence. Stanislaw cites an estimate that before the stimulus bill, the Federal government budget for energy research was the same today, adjusted for inflation, as it was in 1968 (about $3 billion). This situation is worsened by a decline in energy-related research and development expenditures in the private sector over recent decades, he adds. “We should reverse this trend by creating market conditions to promote investments in research, development, and market penetration in energy efficiency, in new methods of consumption, and in all forms of energy, be they traditional—oil, gas, coal, nuclear—or alternative.”


Stanislaw concludes his white-paper message by reiterating that this is just the early dawn of the clean energy era: “Only in the past year or two has energy become a national state of mind. But historic importance can hardly be underestimated.”

His thesis advances the notion that businesses and governments should respond to this new reality by creating the products and services that will help Americans manage energy consumption.

Meanwhile, corporations must realize that individual business concerns extend beyond core business activities. Indeed, each and every one is an energy-focused company, whether they know it or not. And energy usage management can be critical to their bottom line.

Policymakers can amplify these trends by recreating the rules of the game and by funding research that positions the United States at the cutting edge of clean energy evolution.

Dr. Stanislaw’s paper can be downloaded at www.deloitte.com/us/CleanEnergy. The Deloitte Center for Energy Solutions provides a forum for innovation, thought leadership, groundbreaking research and industry collaboration to solve the most complex energy challenges. As used in this document, “Deloitte” means Deloitte LLP and Deloitte Services LP, a subsidiary of Deloitte LLP. Visit www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.