On the one hand, President Obama had been an unprecedented supporter of Cleantech, especially renewable energy and “green jobs,” and promised to make this a continued focus of his second term.  On the other hand, challenger Mitt Romney focused more on expanding and bringing down the price of traditional sources of energy, such as coal, and criticized – even derided – President Obama for his administration’s financial support of Cleantech companies (especially failed ones like Solyndra).  Setting aside any opinions about which candidate is right when it comes to Cleantech, I suspect most would agree that President Obama is a bigger fan of this industry.  Thus, now that the ballots are in and President Obama has emerged as the winner, it’s safe to say Cleantech was a big winner on election day, too.

But what will this win actually mean for the future of the Cleantech and “green jobs” over the next four years?  After all, Cleantech has taken quite a hit these past couple years after becoming a political hot-button in the midst of an economic crisis.  After emerging as the “it” industy and darling of venture capitalists in 2008-2009, Cleantech became something of a political football in 2011-2012.  Will President Obama make it a priority of his second term to help the cleantech industry regain its momentum?  And without the pressure of re-election, might he even try to tackle climate change (again)?  After all, following relatively little talk of climate change on the campaign trail, it didn’t go unnoticed when the President’s victory speech mentioned the “destructive power of a warming planet” near the top of his list of challenges facing America.  Among other things, Obama has promised to continue his “all of the above” approach to energy independence, which includes continuing to increase production from renewable sources like wind, solar and biofuels.

What exactly an Obama second term will mean for cleantech remains to be seen, but his track record and campaign promises, along with an improving economy at large, do give us some indication that the next four years should be better for the industry than the last two.

In June 2011, DOE announced a partnership with The Appraisal Foundation to help ensure appraisers nationwide have the information, guidelines and professional resources they need to evaluate a building’s energy efficiency performance when conducting commercial real estate appraisals. Through this partnership, DOE and The Appraisal Foundation will develop educational tools and guidelines for valuing energy efficient buildings based on the Uniform Standards of Professional Appraisal Practice, which are the generally accepted standards for real estate appraisers in the U.S.

The Appraisal Foundation Partnership is one of the steps DOE is taking as part of its Better Buildings Initiative, which set a goal of making commercial and industrial buildings 20% more energy efficient by 2020. DOE estimates that commercial buildings account for about 20% of all energy consumed in the U.S., and that improvements in energy efficiency could save American businesses about $40 billion annually. According to DOE Secretary Steven Chu, “Providing appraisers with the tools to accurately include energy performance when they place a value on a commercial building will help American businesses and institutions save money by saving energy. If better performing buildings have a higher value, it will help enable the upfront investment for energy efficiency upgrades.”

During a recent (April 30th) appearance at an Environmental Law Institute conference, Maria Vargas, director of DOE’s Better Buildings Challenge, said the draft appraisal guidelines should be available for public comment soon, and that she hopes to have them in place by this time next year. The guidelines will help real estate appraisers, building owners, and potential buyers to accurately assess the value of energy efficiency as part of a building’s overall appraisal. In other words, it’ll allow you to know just how much those upgrades you paid extra for are really worth!

In one of our earlier posts in October 2010, Elaine Spencer reported on the findings and recommendations of the Washington Clean Energy Leadership Council (CELC), as presented in the Council’s Clean Energy Leadership Plan Report. The CELC had been created by our state legislature in 2009 and charged with developing a plan of action to accelerate business growth and clean jobs in Washington State as the world transitions to a clean energy economy. It met that charge by preparing the Leadership Plan Report, which was also followed in January 2011 by a series of specific recommendations for implementing the action plan outlined in the Report. The first of those recommendations was to establish an “innovative, dynamic Clean Energy Partnership by consolidating and refocusing existing state resources, rather than creating a new organization.” Following up on that recommendation, Washington’s 2011 legislature introduced, but ultimately did not pass, a bill that would have formally created and set up a mechanism for funding the Washington Clean Energy Partnership (CEP). Instead, the 2011 legislature took a broader approach by establishing a new state agency called “Innovate Washington.”

Innovate Washington was created By SESB 5764, now codified at RCW Chapter 43.333, as a “collaborative effort between the state’s public and private institutions of higher education, private industry.” (RCW 43.333.10(1)) Its mission is to “make Washington the best place to develop, build, and deploy innovative products, services, and solutions to serve the world.” To carry out this bold and wide-ranging mission, Innovate Washington is to:

Develop and strengthen academic-industry relationships through research and assistance that is primarily of interest to existing small and medium-sized Washington-based companies; facilitate company growth through early stage financing; and leverage state investments in sector-focused, innovation-based economic development initiatives consistent with the state’s economic development strategic plan and export strategy. (RCW 43.333.010(2))

With regard to clean energy leadership, Innovate Washington is specifically directed to:

a) Work with regional public and private utilities, district energy providers, the utilities and transportation commission, and the state energy office to improve the alignment of investments in clean energy technologies with existing state policies. This may include facilitating public-private partnerships to encourage research and development of emerging clean and renewable energy technologies; and

b) Serve as the lead entity in the state for coordinating clean energy-related initiatives and establishing a long-term funding strategy for programs targeted at expanding the clean energy sector, while maintaining existing energy policy and regulatory functions at the department of commerce within the state energy office. (RCW 43.333.010(2)(g) – (h))

Thus, it appears the Clean Energy Partnership, originally recommended by the CELC to help secure Washington’s leadership in the emerging clean energy economy, has been subsumed into Innovate Washington – a larger agency tasked with developing and supporting technology-based businesses in general. Only time will tell whether this approach will get Washington further faster when it comes to clean energy. In the meantime, Innovate Washington appears to be just getting rolling, and has a page on its website discussing its connection to the Clean Energy Partnership. According to this page, additional details about Innovate Washington’s clean energy efforts are “coming soon.” One way or another, it seems Innovate Washington will have an important role to play in the future of the cleantech sector – including clean energy – in Washington.

Number 3: The Resurgence of Bio Fuels in the Pacific Northwest

Several years ago, the city of Portland, Oregon mandated that all diesel fuel sold within the city limits contain at least 5% biodiesel (also known as B5). Portland was the first city in the nation to impose such a mandate. Portland officials have since hailed the mandate as a “raging success,” and claim it has created new jobs and businesses in Oregon. Following Portland’s lead, Oregon imposed a state-wide 2% biodiesel (B2) mandate in 2010. Although Washington does not require that all diesel sold be at least B2, it has required for several years that biodiesel sales amount at least 2% of all diesel sold in the state. See RCW 19.112.110.

These government mandates, and others like them in British Columbia, have provided a needed shot in the arm to the Pacific Northwest’s biofuels industry, which experienced a resurgence in 2011. This resurgence may be best exemplified by Imperium Renewables, a Seattle-based company recently profiled in the Seattle Times. Back in 2007, Imperium became one of the nation’s largest biodiesel producers when it opened a plant in Grays Harbor, Washington capable of producing more than 100 million gallons of biodiesel per year. But by 2009, the Grays Harbor plant had fallen on tough economic times and laid off most of its workers. Another two years later, Imperium has turned things around, thanks in part to increased demand for biodiesel right here in the Northwest. The company posted record profits in 2011, and its founder and CEO, John Plaza, expects 2012 to be even better. The biodiesel mandates in Oregon and Washington, along with a similar federal mandate in 2012 and beyond, appear to be securing the future of the Northwest’s biofuels industry.

Number 2: What Climate Change?!

If climate change is one of the most important global issues in a generation, you might not have guessed it in 2011. As a result, entry #2 on our Top 5 list is not so much a story as it is a non-story. That’s not to say there weren’t any developments on the climate change front in 2011, because there certainly were. For example, the U.S. Environmental Protection Agency continued to take steps in 2011 to regulate greenhouse gases under the Clean Air Act. And on the international front, delegates of the United Nations Framework Convention on Climate Change (UNFCCC) met in Durban, South Africa in November/December to continue negotiating an international climate agreement. Unfortunately, the UNFCCC talks failed once again to yield an international agreement, and the biggest news out of Durban was Canada’s decision to pull out of the Kyoto Protocol. In perhaps an unwitting commentary on the difficulties on this front in 2011, the UFCCC nonetheless hailed the Durban conference a “breakthough” by virtue of the fact that the delegates at least agreed to enter into an agreement at a later time.

Here in the U.S., cap-and-trade climate change legislation was pronounced officially d-e-a-d in 2011 (just kidding, but not really) thanks in large part to a weak economy and a divided, dysfunctional Congress. And just when cap-and-trade proponents thought things couldn’t get any worse, major presidential candidates started making news by reverting back to questing the science behind anthropogenic global warming. Indeed, 2011 was a far cry from the “old days” of 2009 when the House of Representatives passed a comprehensive climate change bill, and President Obama himself was showing up at UNFCCC meetings to hammer out international agreements. With an election cycle coming up in November, we can probably expect more non-stories on climate change in 2012…

Please stay tuned next week for our #1 Cleantech Story of 2011!

Without further ado, here’s Part I of the list, counting down from 5th to 1st:

Number 5: Venture Capital Continues to Flow into Cleantech as Sector Matures

According to investment statistics contained in the Q3 2011 PricewaterhouseCoopers/National Venture Capital Association MoneyTree report, 2011 is shaping up to be another strong year for venture capital investment in CleanTech. Through the first three quarters of 2011, the Cleantech sector (which crosses several traditional MoneyTree industries and includes alternative energy, pollution and recycling, power supplies and conservation) was the third leading sector for venture capital investment, behind only software and biotech. After surging in 2008, venture capital investment in Cleantech slowed in 2009 and then rebounded to near-2008 levels in 2010. Assuming the 4th quarter of 2011 is generally on par with the first three quarters, this year will see slightly more venture capital flowing to Cleantech than in 2010. Through the first three quarters of 2011, $3.073 billion in venture capital has been directed to Cleantech investments. By comparison, $3.755 billion in venture capital went to Cleantech ventures in all of 2010. Although it appears 2011 will still outpace 2010, Cleantech investments were down 13% from Q2 to Q3 this year, potentially signaling a softening in this sector. This 3rd quarter downturn, combined with the relatively steady level of venture capital investment from 2010 to 2011, has led at least one analyst to call the trend for the Cleantech sector “flat” to slightly down.

Number 4: The (Continued) Emergence of China as a Cleantech Force

China has long been considered an important player in the Cleantech sector, if for no other reason than because China is one of the world’s foremost polluters (along with the United States) and presents a potentially-huge market for cleaner, greener technologies. And of course, China is a major manufacturing center for various industries, including Cleantech. In 2011, China has emerged as more than just a market and manufacturing hub for green technologies; it is also becoming a major source of capital investment in Cleantech, including both private and government-backed investments. According to the Cleantech Group, China-based Cleantech start-ups raised $176 million in Q2 2011 and $138 million in Q3 2011, which was far more than they had raised in previous quarters. From this, a recent article in Forbes notes that at the same time investment firms worldwide are committing more capital to China, Chinese venture capital firms appear to be investing more in Cleantech. One of the primary reasons for this increased private investment appears to be the Chinese government’s pro-Cleantech policies, which include everything from government-backed financing to fast-tracking permits for Cleantech projects. During the next decade, China is predicted to spend between $440 and $660 billion on Cleantech investments – that’s roughly $50 billion per year, or about 12 times the amount of venture capital coming from U.S. firms (discussed above) during the banner year of 2008!

Stay tuned as we “venture” into our Top 3 Cleantech stories of 2011…

The proposed spending cuts targeted the ATVM program, which provides funding to U.S. auto manufacturers to retool their plants to make reduced-emission vehicles such as electric cars and hybrids. To date the ATVM program has provided over $9 billion in loans to 6 car companies, with Ford Motor Co. being the largest recipient at $5.9 billion. According to DOE, the loans to Ford have helped the company upgrade factories in 5 different states, and will help avoid about 2 million tons of carbon dioxide emissions by increasing the fuel efficiency of the company’s cars. DOE also reports that the loans to Ford will create or save 33,000 jobs.

In response to the proposal to cut ATVM funding in exchange for FEMA funding, House Democrats accused their Republican counterparts of putting auto manufacturing jobs at risk, and some even noted a connection between natural disasters and this DOE clean tech program: “The record floods, fires, droughts, and storms that have ravaged our nation are exactly what climate scientists have been predicting,” Rep. Henry Waxman (D-Calif.) said in a statement. “If we want to avoid future weather disasters, we need to increase — not cut — investments in clean vehicles and other clean energy technologies.”

In the end another budget standoff, and potential government shutdown, was avoided when FEMA took another look at its books and discovered it had enough funding to last until next week, which marks the beginning of the new fiscal year. Although clean tech proponents may be encouraged to see some members of Congress ardently defending the ATVM program, one wonders whether this is the beginning of an assault on funding for such programs, which have been tainted recently by the collapse of Solyndra, a major (government-sponsored) solar manufacturer.

According to a recent study by the consulting firm Clean Edge, Washington ranks a respectable sixth among all states in clean energy leadership. The second annual U.S. Clean Energy Leadership Index (CELI) concludes, however, that the Evergreen State lags significantly behind its west coast counterparts in clean energy promotion and innovation. Top-ranked California, whose clean-tech startups attract more venture capital than all other states combined, finished significantly ahead of the pack with an aggregate score of 95 out of 100. Energy-efficient development and transportation projects helped Oregon to a distant second-place finish (79/100), while Massachusetts, New York, and Colorado rounded out the top-five clean-energy states.

Notably, Washington ranked second in clean electricity as a percentage of total generation, at 72 percent. (Idaho was first with an impressive 84 percent of its electricity coming from renewable sources.) Despite the fact that both Washington’s relative rank and overall score dipped slightly from last year, the 2011 CELI confirms that the state remains a national leader in clean-energy. As to the United States’ status on the global clean-energy scene, Clean Edge managing director Ron Pernick offers this:

“While the industry faces many challenges, including strong national-level commitments in China and Germany against the backdrop of uncertain federal leadership here, the U.S. is still a relevant clean-energy innovator as exhibited by the state-level movements tracked in this year’s Leadership index.”

Methodology: The CELI measures several broad categories of states’ clean-energy activities, including technology development, policy initiatives, and capital formation. The chart below shows the subcategories under which states receive relative rankings based upon a variety of indicators:

While precise information on the study’s methodology is only available to institutional subscribers (annual subscriptions are rumored to start at a cool $15,000), sample indicators for the above subcategories are listed here.

*Matt Viers is a 2011 summer associate at Graham & Dunn.

We hold that the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants. Massachusetts [v. EPA, 549 U.S. 497 (2007)] made plain that emissions of carbon dioxide qualify as air pollution subject to regulation under the Act. And we think it equally plain that the Act “speaks directly” to emissions of carbon dioxide from the defendants’ plants.  American Electric Power, 564 U.S. ___ at 10 (citations omitted).

The plaintiffs, which also included three non-profit land trusts, originally brought the lawsuit in 2004 seeking a decree from the federal courts setting carbon dioxide emissions from the defendants (allegedly the five largest emitters of carbon dioxide in the United States) at an initial cap, to be reduced over time. In rejecting the plaintiffs’ requested relief, the Court reasoned that EPA, not the courts, is in the best position to fashion rules and regulations related to carbon dioxide emissions, and that EPA has undertaken to do just that following the Court’s decision in Massachusetts v. EPA. The Supreme Court’s ruling reversed a Second Circuit decision that would have allowed the lawsuit to go forward. However, the Second Circuit’s decision was based at least partly on the fact that EPA had not yet regulated carbon dioxide emissions when the plaintiffs’ initially filed their lawsuit in 2004.

The Supreme Court’s decision puts the proverbial ball squarely in EPA’s court when it comes to climate change and greenhouse gas regulation. That’s not to say the courts won’t have any role to play in the regulation of greenhouse gases—as the Supreme Court notes in American Electric Power, the federal courts may still be called upon to review agency actions or hear civil enforcements action if EPA fails to act. The Supreme Court also remanded the question of whether the plaintiffs may still pursue their claims under state law, potentially leaving the door open for courts to limit greenhouse gas emissions based on a state common law nuisance theory.

A copy of the American Electric Power decision can be found here.

issued a decision invalidating Snohomish County’s designation of Point Wells as an “Urban Center.”  Point Wells is a 60+ acre tract of waterfront property in the very southwest corner of Snohomish County, adjacent to the Town of Woodway and the City of Shoreline.  The site is currently accessible only via one small access road through Shoreline, which is located in King County.  Point Wells is currently operated as an asphalt plant– a less-than-ideal use for a lovely waterfront tract in the Seattle suburbs, but one that nonetheless fits the site’s relatively isolated location.  Despite the limited access, Snohomish County and the property owner propose to redevelop the site into a densely-populated “urban” hub, with approximately 3100 housing units, several 18-story towers, and more than 100,000 square feet of commercial space.  To put the scale of this project in perspective, the proposed 18-story towers would be the tallest buildings between downtown Seattle and Vancouver, BC.   In Snohomish County such a dense scale of development is only allowed in an area appropriately designated as an Urban Center.  The City of Shoreline, Town of Woodway, and Save Richmond Beach, a community group comprised mostly of Richmond Beach and Woodway residents, opposed the Urban Center designation because of the significant traffic impacts, particularly given the lack of access or mass transit, and other unresolved conflicts with surrounding communities.

In defense of its proposed Urban Center at Point Wells, the developer argued that buildings, landscaping, and infrastructure within the site would be built using cutting-edge sustainable design.  The developer also pointed out that the site is located along the rail line used By Sound Transit’s Sounder trains, although there are no plans for a stop at Point Wells.  Following extensive briefing and a hearing on the merits, the Board agreed with Save Richmond Beach, Shoreline and Woodway that Point Wells is not an appropriate site for an “Urban Center,” and invalidated the Snohomish County ordinances designating it as such.  The Board noted that adequate urban services and infrastructure are not currently available or planned for Point Wells, making it inappropriate for Urban Center development. Among other problems with the proposed scale of development, the Board noted: serious deficiencies in road and intersection capacity along the access road; lack of transit access or transportation links to the regional network; and lack of adopted plans for the necessary water and sewer infrastructure. The Board also agreed with the surrounding communities that Snohomish County’s environmental review for the project was inadequate, and remanded the project back to the County for further environmental review in accordance with the State Environmental Policy Act.

The Growth Management Hearings Board is a State agency charged with hearing cases concerning compliance with the goals and requirements of the Growth Management Act and related provisions of the State Environmental Policy Act. The Central Puget Sound Hearings Board is a three-member panel of land use experts focusing on cases affecting the greater Seattle area.  The Growth Board’s decision is a good reminder that sustainable development is not just about high-tech, environmentally-friendly design, but also choosing locations with adequate mass transit and transportation infrastructure.  Land use attorneys at Graham & Dunn represented Save Richmond Beach in the Growth Management Hearings Board proceeding.  For more information, visit yesterday’s story in the Seattle Times or visit http://www.saverichmondbeach.org/.

Pros
Advocates of nuclear power have suggested that the Fukushima nuclear plant actually held up quite well in light of the absolutely devastating magnitude of the earthquake and tsunami. They also point out that any lessons learned from Japan will only make the rest of the industry safer.  The events at Fukushima already have prompted U.S. nuclear plant owners to approve an industry-wide assessment, to be completed within 30 days, to verify and validate each plant site’s readiness to manage “extreme events.”

Nuclear power plants currently produce about 20% of U.S. electricity.  According to the Nuclear Energy Institute (NEI), no other source of electricity can provide the combined benefits of large amounts of reliable electricity, long-term price stability, and no greenhouse gas emissions. Along those lines, even former anti-nuclear advocates such as Greenpeace co-founder Patrick Moore have acknowledged that nuclear energy is the only non-greenhouse-gas-emitting power source that can effectively replace fossils fuels and satisfy global demand. And despite their many differences, our last two presidents have both supported nuclear power as an important component of America’s plan to achieve energy independence reduce greenhouse gas emissions.

Cons
But nuclear power is not without its dark side. First, there is the problem of how to safely and securely dispose of spent fuel and other radioactive material. Yucca Mountain in Nevada, which received a lot of attention last year during Harry Reid’s re-election bid, provides perhaps the most thorny and famous example of this quandary.

And then there are those exceedingly rare but frightening accidents. Like Three Mile Island and Chernoble before it, the harrowing scene at the Fukushima Daiichi facility has struck fear in our collective conscience and highlighted the low-risk, high-impact nature of nuclear accidents. Whether it’s justified or not, this type of spectacular, low-risk/high-impact accident seems to strike more fear in the human psyche than the comparatively slow but equally well-known environmental impacts of alternative activities such as burning coal. As the NEI put it in a recent press release, the nuclear power industry operates “in an environment where the penalties for mistakes are high and where credibility and public confidence, once lost, are difficult to recover.”

So what do you think? Does the nuclear power industry deserve to ride the “cleantech” band wagon as a steady source of carbon-free power? Or does nuclear have too many of its own issues to be considered cleantech? Please feel free to leave a comment and let us know your thoughts.