If there were an M.B.A. school for green executives, Joel Makower undoubtedly would be its dean, historian, and booster-in-chief. Joel Makower. During a 20-year career, …
For my money, there’s nothing more delicious than a book that lays bare the rot of a corrupted industry from an insider’s perspective. In the …
Last week, World Energy Exchange, an online energy trading platform, officially launched a new marketplace for renewable-energy certificates and greenhouse-gas permits. The World Green Exchange employs an auction system -- think eBay -- to bring buyers and sellers together. In theory, auctions create a more transparent marketplace and drive out cost inefficiencies by directly connecting the buyer and seller and removing the middleman. Philip V. Adams. We caught up with World Energy President and COO Philip V. Adams last week to find out how the launch went and why he thinks WGE will stand out in an increasingly crowded field dominated by the Chicago Climate Exchange in the U.S. and European Climate Exchange and European Energy Exchange overseas. Grist: Congratulations on launching the World Green Exchange. I know it's only been up and running for a couple of days, but is it attracting users and working as you had hoped so far? How will you measure success longer term? Adams: Thank you. The World Green Exchange was formally launched last week, but in fact we have been conducting transactions on the platform for the past several months. We're a bit of a conservative firm, and took the view that we would have real client success in the marketplace before making an announcement of our capabilities. As we suspected, the auction approach is performing very well. In several transactions conducted to date, we have significantly bettered benchmark prices that were derived to our clients who were using brokers or bid-ask exchanges.
It seems that a day doesn't slip by without someone raising the stakes in the alternative-energy poker game. The most recent bombshell wager: Cambridge Energy Research Associates report that alternative energy investments will -- hold on to your hats! -- top $7 trillion by 2030. That's an audacious number by any measure, and normally it would be enough to suck the oxygen right out of a convention of wind-farm enthusiasts. But that's not the half of it. The most startling aspect of the report is that it barely raised a ripple in the investment community. And why should it?
Eric Janszen Eric Janszen, the founder and president of iTulip.com, recently argued in Harper's Magazine that the alternative energy segment is a prime candidate for a massive asset bubble, potentially dwarfing both the dot-com and housing bubbles. I wrote about Janszen's prediction last week. This week, Janszen joins us for a question-and-answer follow-up.
In case you missed it, the Dow Jones Industrial Average experienced a violent and exhausting 1,000-point swing the past week, down 450 points on Tuesday before trimming its losses and then tumbling 330 points on Wednesday before rebounding with a 299-point gain. It's not the only financial freefall of late. The housing market bubble was punctured last fall and has been leaking like the Hindenburg ever since. (And long before that, the economy experienced the dual dot-com and technology implosions in the spring of 2000.) Photo: iStockphoto All of which is to say, it's probably safe to assume most Americans are familiar with what a financial bubble looks like when it bursts. But how many of us could spot a bubble in the making? Eric Janszen believes he can. In fact, the president of iTulip.com predicts the next bubble is going to be green -- not as in the color of money, but as in alternative energy companies, suppliers, and technologies. If Janszen's right (and he's got a pretty good pedigree in all things bubbles, having had a front-row seat at the dot-com debacle and now as founder of a website that tracks financial dislocations), it could be the mother of all bubbles.
As one key economic engine after another -- housing, finance, autos, retail -- sputters and stalls out, the fledgling eco-economy is purring right along, fueled in no small part by venture capital firms hungry for new opportunities in industries that promise outsized returns on their investments. In the first three quarters of 2007, VCs poured $2.6 billion into alternative energy and clean-tech firms, more money than they invested for the whole of 2006. The new year promises to be another record breaker. And it's not only the Silicon Valley sharpies that are on the prowl: GE is promising to plow $6 billion into renewable energies by 2010, double what they were projecting only last year; Germany's Schott Solar is plunking down $100 million to build a plant in New Mexico, and predicts its investment will grow to $500 million when the facility is completed; and as 2007 drew to a close, Morgan Stanley made a $190 million investment in a clean-tech venture. Morgan, by the way, estimates the global renewable energy industry has a market cap in the neighborhood of $170 billion. Certainly not all is rosy in the clean-tech patch. Tesla Motors and Imperium Renewables, once considered high fliers, have been dealt setbacks -- and as a result, have trimmed employee rolls. And alternative energy stocks are starting to look positively bubble-ish to some on Wall Street (the subject of a future post). Recessions don't play favorites, for the most part. When U.S. consumers snap their pocketbooks shut, it creates a drag on the overall economy and everyone -- including governments that depend on tax receipts -- feels the pinch. The eco-economy probably won't be immune. But with the hundreds of millions of dollars streaming through the doors almost weekly, it's not a bad place -- and better than most -- to ride out the storm.