Tag Archives: GE

What GE Has in Store for Round 2 of the Ecomagination Challenge | GreenBiz

What GE Has in Store for Round 2 of the  Ecomagination Challenge
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GE is going back to the innovation well. Encouraged by the success of its $200 million Ecomagination Challenge — a crowdsourced contest, which yielded scores of grid-scale technology and investment opportunities — the Connecticut-based conglomerate is turning up the heat on the hunt for innovative home energy solutions.

The search includes both today’s and tomorrow’s technology. Starting with upgrades to existing gizmos — kitchen appliances, washing machine and dryer and other domestic energy hogs — innovative ideas are also sought for future solutions, such as electric car recharging systems or software apps to help cut power use.

Announced earlier this month at the Consumer Electronics Show, GE’s decision to extend the Ecochallenge was spurred by the huge volume of home-related ideas submitted in the first phase of the competition. Of some 4,000 submissions, more than a quarter focused on home energy use.

“Powering your home” is seeking submissions across two broad categories: energy efficiency, including appliances and air conditioning, as well as software systems to manage home energy; and renewable power, including familiar solar and wind systems but also residential-scale hydro and biomass solutions.

Select winners will be offered the opportunity to develop a commercial relationship with GE through:

Investment: $145 million of the $200 million pool from GE and its partners remains to be committed.
Validation: GE technical and commercial experts will evaluate entrant’s business strategy through in-depth discussions.
Distribution: The company will also explore partnership opportunities to scale the product or service globally.
Development: Winners can tap into GE’s technical infrastructure and GE Global Research Centers to accelerate technology and product development.
Growth: They can also explore opportunities for utilizing existing GE customers to take winning products to market.

The panel of expert judges — which includes GE execs and leading academics and technologists — will also pick five ideas that represent pioneering entrepreneurship and innovation. Winners of these Innovation Awards will score $100,000.

Launched in July 2010, the ecochallenge is a collaboration with leading venture capital firms Emerald Technology Ventures, Foundation Capital, Kleiner Perkins Caufield & Byers and RockPort Capital, and Chris Anderson, Editor-in-Chief, Wired magazine. Also joining this stage of the project is Carbon Trust, a London-based not-for-profit with a track record of commercializing low carbon technologies.

This phase of the challenge seeks will re-examine ideas already submitted as well as new proposals submitted before the deadline of March 1, 2011. The contest is open to proposals from around the globe. Learn more at www.ecomagination.com/challenge.

GE’s Innovation Avalanche | GreenBiz

GE's Innovation Avalanche

In New York yesterday, GE announced two big steps in its Ecomagination Challenge program. The company unveiled 12 investments, totaling $55 million, as the first round of its goal to put $200 million to work in power grid technology startups over the next 18 months.

Second, GE announced five $100,000 “Innovation Awards” for still- developing technologies identified from its novel effort to crowd source innovative energy technology opportunities from the Web. This batch included two of my favorites: WinFlex, which is developing a collapsible wind turbine rotors, for easier assembly, and IceCode, which is electrifying wind turbine blades to prevent power-sapping ice build-up.

In the big money category, GE and its venture capital partners are putting up $55 million into 12 startups, established companies and one academic program. Winners get more than investment funds. They’ll also have the benefit of warp-speed product development with the help of GE’s engineering and sales troops. Plus they’ll get guidance and financial help from leading VCs, including Emerald Technology, Foundation Capital, Kleiner Perkins Caulfield & Byers, and Rockport Capital.

For GE, the key is cultivating innovation from beyond its four walls. “What do I do? I’ve got 45,000 engineers and innovators, and 45,000 sales people. I can drive innovation at a scale these guys can’t do,” said Jeff Immelt, GE’s CEO and Chairman, at the announcement.

For today’s winners, all those engineers and sales experts offer a huge leg up. “For a startup, capital is necessary, but it’s never sufficient to build innovation,” said Thomas Noonan, the CEO of JouleX, one of the winners, which is making advanced grid-monitoring technology. “The work we’re doing with GE though their energy research labs, with access to their network, testing our products, has been extraordinary for a small, early-stage company.”

As you’ll see in the list below, this first round of winners was long on smart grid plays. This is no accident. Smart grid complements GE’s own ambitions in advancing its in-house power distribution and grid management technology.

Smart grid also offers some of the best growth potentials in clean tech, too, as Steve Vassallo of Foundation Capital pointed out during the announcement. While many cleantech plays are focused on the supply side of the opportunity — whether it’s converting photons to electrons, or switch grass to fuel — they’re very capital expensive to take commercial.

Conversely, Vassallo added, opportunities to reduce demand are more capital-efficient, faster to deploy, and not as dependent on subsidies because the solutions can deliver such quick savings to customers.

Jeff Immelt on Crowdsourcing, 30 Rock, and Why ‘Green’ Is No Longer Gold | GreenBiz

Jeff Immelt on Crowdsourcing, 30 Rock, and Why 'Green' Is No Longer Gold

Last week, at the Tribeca Cinemas in New York City, there was a rare intersection of business suits and hipsters in skinny jeans. The business suit, in this case, was worn by GE’s CEO Jeffrey Immelt, sans tie and relaxed. In the skinny jeans, perched on a stool next to Immelt was Scott Heiferman, co-founder and chief executive of Meetup.com. In the audience, appropriately enough, a hundred or so folks drawn from area groups — called Meetups — focused on entrepreneurialism, the environment, sustainable business, inventing and others.

The gathering was a joint effort by Meetup.com and GE to highlight the  Ecomagination Challenge, a novel effort by GE that aims to “crowd source” new ideas, products and services from the public to create tomorrow’s smart grid. The reward for winning ideas? The opportunity and funding to work with GE to turn them into a business. GE has teamed up with a handful of venture capital players to commit $200 million to take winning submissions from idea to reality.

It may not be obvious why Immelt, CEO of a $157 billion global industrial goods and financial services juggernaut was sharing the stage with Heiferman. In his intro Heiferman was self-mocking, pointing out that Meetup’s annual revenue is what GE churns out in a few hours. But Heiferman’s website is a leader in the online world of social networking. Founded in 2000, the site made wider headlines in 2004 as an emerging tool for Democrats to tap into young voters. These days, Meetup.com boasts over seven million users, who rely on it to help communicate about gatherings and issues on everything from knitting circles to Tea Party rallies.

Immelt was quick to point out that no matter how big GE may be, old school corporate culture is not as agile at identifying and commercializing innovative ideas as a start-up like Meetup can be. Immelt was there to learn: “You don’t get to a job like mine without a healthy paranoia about how new things — like Meetup — work,” he joked. “I need to understand how this works so I can use it sell more stuff in the future.”

For GE, Immelt continued, size is both a liability and a virtue. “How can you, over generations, make size an advantage? That’s really hard to do because size brings bureaucracy and makes you a big target,” he said. With a laugh, he asked: “Does the way Alec Baldwin acts on 30 Rock hurt your feelings?… It can be true!” referring to the NBC comedy’s stinging satire about bureaucracy at GE, the network’s long-time corporate parent. The upside of size, he went on, is running a company that can take a successful idea and scale it quickly. Consider the wind turbine market, Immelt said: “We bought it for $200 million from Enron [in 2002]. This year it will generate $7 billion in sales. We generate as much cash per month from the business as we paid for it.”

Can China Go Green? | BusinessWeek

Beijing has big plans to curb pollution and start a cleantech industry. But the global recession and looming trade frictions will test its resolve

The Sun-Moon Mansion, Himin Solar Energy's headquarters in Dezhou

China’s unprecedented growth in recent years has come at a terrible price. Two-thirds of its rivers and lakes are too polluted for industrial use, let alone agriculture or drinking. Just 1 in 100 of China’s nearly 600 million city dwellers breathes air that would be considered safe in Europe. At a time when arable land is in short supply, poisoned floodwaters have ruined many productive fields. And last year, ahead of most forecasts, China passed the U.S. to become the world’s largest source of greenhouse gases.

The immensity of these troubles has produced a result that may surprise many outside China: The nation has emerged as an incubator for clean technology, vaulting to the forefront in several categories. Among all countries, China is now the largest producer of photovoltaic solar panels, thanks to such homegrown manufacturers as Suntech Power (STP). The country is the world’s second-largest market for wind turbines, gaining rapidly on the U.S. In carmaking, China’s BYD Auto has leapfrogged global giants, launching the first mass-produced hybrid that plugs into an electrical outlet. “China is a very fast follower,” said Alex Westlake, a director of investment group ClearWorld Now, at a recent conference in Beijing.

GOVERNMENT SUPPORT

Understanding they are in a global race, China’s leaders are supporting green businesses with policies and incentives. Beijing recently hiked China’s auto mileage standards to a level the U.S. is not expected to reach until 2020. Beijing also says it will boost the country’s share of electricity created from renewable sources to 23% by 2020, from 16% today, on par with similar targets in Europe. The U.S. has no such national goal.

While most environmentalists applaud these developments, China watchers are voicing two very different sets of concerns. Some question whether China will really stand by its ambitious targets and are worried by signs of backsliding as the recession in China’s key export markets drags down economic growth. Another group, interested mainly in America’s own industrial future, fears that China’s growing dominance in certain green technologies will harm budding cleantech industries in the U.S. After all, China’s emergence comes just as the Obama Administration is trying to nurture these same types of ventures, hoping to generate millions of green jobs. Many of these U.S. businesses will have trouble holding their own against low-price competitors from China.

Beijing’s green intentions will soon be put to the test. China is in the midst of the biggest building boom in history. A McKinsey & Co. study estimates that over 350 million people—more than the U.S. population—will migrate from the countryside into cities by 2025. Five million buildings will be added, including 50,000 skyscrapers—equal to 10 New York Cities. And as quickly as new offices and houses multiply, they are filled with energy-hungry computers, TVs, air conditioners, and the like, sharply increasing demand for electricity, which comes mainly from coal-powered plants.

Environmental groups say it is therefore critical that Beijing promote rigorous, greener standards. And to some degree, that’s happening. A government mandate states that by the end of next year, each unit of economic output should use 20% less energy and 30% less water than in 2005. Portions of Beijing’s $587 billion economic stimulus package are earmarked for cleantech. On top of that, in March the Finance Ministry unveiled specific incentives to spark solar demand among China’s builders. Included was a subsidy of $3 per watt of solar capacity installed in 2009—enough to cover as much as 60% of estimated costs to install a rooftop solar array.

USING WASTE HEAT

Steps like these will help Himin Solar Energy Group in Dezhou, Shandong Province. Founded in 1995 by Huang Ming, an oil equipment engineer turned crusader against the use of fossil fuels, the company is the world’s largest producer of rooftop piping systems that use the sun’s rays to heat water. Its eye-catching headquarters, the Sun-Moon Mansion, showcases these heaters, which Himin cranks out in immense volumes—about 2 million square meters’ worth each year, equal to twice the annual sales of all such systems in the U.S. Because its water heaters sell for as little as $220, they are becoming standard in new housing complexes and many commercial buildings across the country.

Broad Air Conditioning, based in Changsha, Hunan Province, is also set to profit as Beijing pushes toward its green targets. By using natural gas and so-called waste heat from other machines and appliances instead of electricity, Broad’s big chillers can deliver two to three times more cooling per unit of energy than a conventional unit. In a similar fashion, Haier, headquartered in Qingdao, Shandong Province, combines low-cost manufacturing and a variety of advanced technologies to create affordable, energy-sipping refrigerators and other appliances. During the 2008 Beijing Olympics, Haier supplied more than 60,000 such devices for visiting athletes and tourists to use.

As these and other domestic players bump up against technological obstacles, they can draw on the expertise of many of the world’s top multinationals. In return for access to its domestic market, Beijing asks such companies as General Electric (GE), DuPont (DD), 3M (MMM), and Siemens (SI) to share their technology, help upgrade their China-based supply chains, and spread industrial processes to make manufacturing more efficient. These aren’t simply green practices, says Changhua Wu, Greater China director of the Climate Group, a consultancy in London that partners with companies to combat climate change. “They’re best practices.”

GE, for example, has transferred expertise to Chinese partners in everything from wind turbine construction to the building of low-pollution factories. At the Beijing Taiyanggong power plant, waste heat from the combustion process is recycled, resulting in around 80% efficiency, more than double the rate of most conventional power plants in the U.S. The bulk of GE’s sales of turbines for power plants in China are the ultra-efficient models. David G. Victor, a Stanford University professor who has studied China’s electric grid, says some of the coal plants being built there are “much more advanced than those we see in the U.S.”

Wal-Mart Stores (WMT), which buys some $9 billion worth of goods in China each year from some 20,000 vendors, infuses its supply chain with the latest ideas about energy efficiency. For example, Chinese factories that work with Wal-Mart are obliged to track vast quantities of data on energy use and make the information available for audits. “Many Western companies can’t track their own energy consumption,” says Andrew Winston, consultant and co-author of the book Green to Gold.

TORPEDOING U.S. SOLAR?

China’s early achievements in cleantech owe a lot to collaborations such as these. The benefits: China cleans up its own pollution, and the government-backed initiatives in solar and wind help drive down the cost of renewable energy systems in countries around the world.

But there is a downside. The rock-bottom prices for made-in-China green technology could make it impossible for cleantech ventures in the U.S., Europe, or Japan to compete. How, for example, will they go up against Suntech Power, based in Wuxi, Jiangsu Province, the world’s lowest-cost manufacturer of standard solar panels? The U.S. boasts plenty of advanced technology. But any efforts by Washington to nurture this sector could be quickly undercut by a flood of Chinese-made solar panels. Such a deluge is likely if there is a big increase in public subsidies for rooftop solar systems. “What [that would] do is create 10,000 Chinese jobs,” says Roger G. Little, chief executive of Spire Corp. (SPIR), a leading U.S. maker of manufacturing equipment for photovoltaics. “If we import all the [solar] modules, it will obliterate U.S. manufacturing” in this area.

A similar scenario exists in the much heralded area of electric vehicles. BYD, headquartered in Shenzhen, started selling its first plug-in hybrid, the F3DM, last year. It beat Toyota (TM) and General Motors (GM), both of which are developing such “plug-ins,” and hit the market with a price tag they probably can’t match: just $22,000. Henry Li, a BYD general manager, says the company will roll out a version of the car in the U.S. in 2011. Chevy’s answer to this car, called the Volt, is expected to cost about twice as much and won’t be out until next year.

How did BYD pull off this coup? Part of it is just being the new kid on the block. Today’s automobiles, with their advanced combustion engines, are the most complex mass-produced goods ever made, assembled from thousands of highly engineered parts provided by a web of suppliers. It’s difficult for a Chinese startup to compete on such a sophisticated playing field. But the emergence of a new, green-vehicle category clears the way. BYD was able to break in by leveraging its background as a battery maker. When it ran into technical hurdles, the company could draw on a deep pool of inexpensive, well-trained talent at China’s top engineering schools. BYD is also a leader in pure electric vehicles, the logical next step. The government is now putting some muscle behind BYD’s push. It is heavily subsidizing electric-car sales in about a dozen cities—in a stroke, making China the world’s biggest market for such advanced vehicles. Its goal is to boost domestic output of battery-powered vehicles to a half million per year in 2011.

How Washington and the beleaguered U.S. auto sector might respond to a wave of inexpensive electric vehicles from China is difficult to predict. And it is also unclear how China’s cleantech efforts in cars, energy, and other areas will be affected if key markets such as the U.S. and Europe don’t recover quickly from the recession. Chinese makers of solar photovoltaics, including Suntech, export about 98% of their production. They have been battered this year by a collapse in demand in Germany, Spain, and Japan, China’s top markets for solar gear. Suntech’s factories are currently running at half of last year’s capacity.

Even inside China, academics and business executives say Beijing needs to do more to bolster cleantech initiatives and make them recession-proof. For example, without better information on how such policies as the current Renewable Energy Law are to be enforced, “many of the terms are meaningless,” complains Himin’s Huang. And even when the terms are clear, companies don’t always adhere, says Zhou Weidong, the Guangzhou-based China director at the Business for Social Responsibility, a global consultancy promoting sustainable business practices: “Paying penalties is cheaper than complying with the law in many areas.”

At times, it seems as though Beijing is pedaling in the wrong direction. Late last year, China’s Environmental Protection Ministry loosened review standards on potentially polluting industrial projects. In an economic crunch, “environmental protection is downplayed to second, or third, or even fourth priority,” observes Guo Peiyuan of SynTao, a corporate social responsibility advisory firm in Beijing.

While acknowledging there has been some backsliding, most China watchers say the government is unlikely to stage a full-throttle retreat. Too much of its export growth is contingent on meeting strict environmental regulations. And Beijing recognizes that Chinese society can’t tolerate much more environmental degradation. The World Bank estimates damage from pollution—everything from decimated fisheries to premature human death—saps nearly 6% of China’s gross domestic product each year as well. For economic reasons alone, it will be difficult for China to turn back the clock.

with Charlotte Li and Pete Engardio

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Check out the original story here: http://www.businessweek.com/magazine/content/09_21/b4132040805185.htm

The Race Against Climate Change — How top companies are reducing emissions of CO2 and other greenhouse gases | BusinessWeek

On Nov. 21 power company executives from all over the country gathered in the Pit, a spacious General Electric () auditorium in Crotonville, N.Y., to meet with GE CEO Jeffrey R. Immelt and his team. The day was overcast and cold, but the discussion was about the warming climate. At one point in the meeting, David J. Slump, GE Energy’s chief marketing executive, asked for an informal vote. How many of the 30 or so utility and GE business executives thought that, once President George W. Bush was no longer in office, the U.S. would impose mandatory curbs on the emissions of carbon dioxide and other greenhouse gases linked to global warming? Four out of five of them agreed. “Forget the science debate,” says Cinergy Corp. CEO James E. Rogers, who was at the meeting. “The regulations will change someday. And if we’re not ready, we’re in trouble.”

The world is changing faster than anyone expected. Not only is the earth warming, bringing more intense storms and causing Arctic ice to vanish, but the political and policy landscape is being transformed even more dramatically. Already, certain industries are facing mandatory limits on emissions of carbon dioxide and other greenhouse gases in some of the 129 countries that have signed the Kyoto Protocol. This month representatives of those nations are gathering in Montreal to develop post-Kyoto plans. Meanwhile, U.S. cities and states are rushing to impose their own regulations.

A surprising number of companies in old industries such as oil and materials as well as high tech are preparing for this profoundly altered world. They are moving swiftly to measure and slash their greenhouse gas emissions. And they are doing it despite the Bush Administration’s opposition to mandatory curbs.

This change isn’t being driven by any sudden boardroom conversion to environmentalism. It’s all about hard-nosed business calculations. “If we stonewall this thing to five years out, all of a sudden the cost to us and ultimately to our consumers can be gigantic,” warns Rogers, who will manage 20 coal-fired power plants if Cinergy’s pending merger with Duke Energy is completed next year.

One new twist in the whole discussion of global warming is the arrival of a corps of sharp-penciled financiers. Bankers, insurers, and institutional investors have begun to tally the trillions of dollars in financial risks that climate change poses. They are now demanding that companies in which they hold stakes (or insure) add up risks related to climate change and alter their business plans accordingly. For utilities like Cinergy that could mean switching billions in planned investments from the usual coal-fired power plants to new, cleaner facilities.

The pressure is forcing more players to wrestle with environmental risks, even if the coming regulations aren’t right around the corner. As the debate over climate change shifts from scientific data to business-speak such as “efficiency investment” and “material risk,” CEOs are suddenly understanding why climate change is important. “It doesn’t matter whether carbon emission reductions are mandated or not,” explains David Struhs, vice-president of environmental affairs at International Paper Co. () “Everything we’re doing makes sense to our shareholders and to our board, regardless of what direction the government takes.” The nation’s biggest paper company, with $25.5 billion in sales, IP has upped its use of wood waste to 20% of its fuel mix, from 13% in 2002. That’s cut both net CO2 output and energy costs.

REALITY DAWNS
Adding to the pressure on CEOs, the public has largely accepted global warming as reality. And as in the case of IP, the economic logic can be compelling. Far from breaking the bank, cutting energy use and greenhouse emissions can actually fatten the bottom line and create new business opportunities, while simultaneously greening up companies’ reputations. One company that has hiked its visibility on this changed landscape is GE. It formed a new Ecomagination division last May to offer everything from more efficient locomotives to advanced, low-emitting coal power plants.

Scores of companies have already taken action to fight climate change. Who are the leaders? In this special report, BusinessWeek has teamed up with the Climate Group, a British organization that serves as a clearing house for information on carbon reduction, and Innovest Strategic Value Advisors, a leading Wall Street green investment research firm. Together with a panel of expert judges drawn from academic institutions, we have identified and ranked the companies that have shown the greatest initiative in cutting their greenhouse gas emissions. We have also identified best practices, effective policies, and what kinds of results to expect.

Details about how the judges made their selections and a wealth of material on the companies and individuals in the rankings can be found at businessweek.com/go/carbon. The lists feature some gold-plated names: Citigroup () is working with Fannie Mae () to encourage sales of energy-efficient homes. IBM () saved hundreds of millions of dollars by cutting energy use, while Unilever managed to slash its greenhouse gas output by more than 10% in a single year.

Topping the company ranking is an experienced hand at making the most out of changing regulations, DuPont (). Back in the mid-1980s, DuPont created a profitable business selling substitutes for chlorofluorocarbon (CFC) refrigerants that were destroying the earth’s protective ozone layer. Tackling climate change was a natural extension of that experience. After studying the data, “we came to the conclusion that the science was compelling and that action should be taken,” says DuPont Chairman and CEO Charles O. “Chad” Holliday Jr.

BEATING GOALS
In 1994, DuPont committed to cutting its gas emissions by 40% by the year 2000 from its 1990 levels. By 2000 the company had met its original target and set an even more ambitious one — a 65% reduction by 2010. But the gains have been so dramatic that DuPont has already hit that goal too. It also uses 7% less energy than it did in 1990, despite producing 30% more goods. That has saved $2 billion.

Saving money and reducing risks are both powerful incentives, and they help explain why investors and insurers are pressuring CEOs to tackle climate change.

Insurers in particular are staggered by their mounting bills for hurricanes, floods, fires, hailstorms, disease, heat waves, and crop loss. Many scientists agree that higher temperatures are causing more powerful storms and perhaps intensifying extreme weather events, ranging from drought and wild fires to ice storms.

Even tiny weather changes bring awesome costs. A slight uptick in intense storm activity could boost annual wind-related insured losses, to as much as $150 billion a year — an increase equivalent to two or three Hurricane Andrews in an average season, according to a 2005 study by the Association of British Insurers. Indeed, insured losses from catastrophic weather events have already increased fifteenfold in the past 30 years. “Risk of climate change is real. It’s here. It’s affecting our business today,” says John Coomber, CEO of insurer Swiss Re.

Rising temperatures aren’t the only factor in the increasing toll from weather-related disasters, of course. Development along coastlines and other high-vulnerability areas is surging, concedes Evan Mills, an energy scientist at the U.S. Energy Dept.’s Lawrence Berkeley National Laboratory. But overall, “weather-related losses are becoming more erratic and growing much faster than such shifts can explain,” he says.

The insurance exposure extends beyond weather events to management decisions. Corporate directors and officers are protected from personal liability for mismanagement by so-called D&O policies. If executives at companies that hold the policies don’t take stock of their environmental risk exposure, they could be on the firing line for mismanagement — with insurers picking up the tab. Says Chris Walker, managing director of Swiss Re’s Greenhouse Gas Risk Solutions: “Property. Life. Health. Crops. D&O — you name it. It’s the perfect storm for insurers.”

That’s why climate change is causing insurance companies to ally with institutional investors, banks, and rating agencies. Together they are pushing companies to start thinking about greenhouse emissions as a material risk, just like other forms of financial risk that can impair future earnings. JPMorgan Chase & Co. (), for instance, is helping analysts and bankers model the impact of carbon on the banks’ clients. “Global warming is on the radar screen of a lot of financial institutions,” said Denise Furey, senior director of Fitch Ratings Ltd., at a recent climate conference.

The specter of new regulations on carbon emissions has already galvanized executives at Alcoa Inc. (), another company on the BusinessWeek/Climate Group list. To reduce its greenhouse emissions and save energy, too, Alcoa improved a key step in the aluminum production process, helping to cut total greenhouse gas output by 25%.

A handful of big coal burners have also leaped to the forefront. American Electric Power (), Cinergy, and TXU () all did detailed studies of the risks posed by climate change — and by expected new rules. Their biggest challenge: planning new power plants for an uncertain future. At some point in the next 40 years — the operating life of a plant — the U.S. is certain to join in a round of international greenhouse discussions, says Michael G. Morris, CEO of AEP, the nation’s biggest coal consumer: “That’s clear in my mind, and in our board’s mind.” If the U.S. rules are similar to Europe’s, where it already costs a company more than $20 to release a ton of CO2, utilities and rate payers could face billions in expenses.

That would force utilities to invest more in lower-carbon alternatives such as wind power, “clean” coal, or natural gas, which emits one-third as much carbon per kilowatt as coal. But executives need to know soon what rules they will have to meet. That’s why many are in favor of mandatory limits — though they hesitate to say it publicly because of the opposition in Washington.

ISOLATED
The President remains opposed to any policy that would require carbon cutbacks. Instead, the White House asserts that climate change can be tackled with voluntary action and with major investments in alternatives to fossil fuels, such as hydrogen.

Yet the White House is growing increasingly isolated. U.S. public opinion is shifting. In October, a Fox News poll found that 77% of Americans believe global warming is happening, and of those, 76% say it’s at least partly due to human activity. That’s making greenhouse gas reductions trendy: The 2006 Super Bowl in Detroit, for one, aims to offset all of the new CO2 the championship generates by planting thousands of trees in the hills and towns near Ford Field.

More substantively, states are stepping into the breach with their own regulations. Nine Northeastern and Mid-Atlantic states have formed the Regional Greenhouse Gas Initiative (RGGI). By 2009 the initiative aims to set up a “cap-and-trade program” covering carbon dioxide emissions by nearly 200 power plants operating in Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. Companies would be given an upper limit on greenhouse gases they may release. If they can cut their emissions below that level, they can sell the unused allowances to companies that are emitting above their cap level.

This initiative could bring a major change in the politics of global warming. First, state action will compel more companies to seek nationwide regulation from Congress, explains Eileen Claussen, president of the Pew Center on Global Climate Change. “Companies don’t want to see a patchwork of state regulations. As more states get involved, it ups the ante.”

Plus, two likely candidates for the 2008 Republican Presidential nomination are on board. New York Governor George E. Pataki launched the regional initiative in 2003, and Massachusetts Governor Mitt Romney backs it in principle.

Meanwhile in Washington, the Republican-led Congress is opposing the Administration’s hard line. On June 22, over the objections of the White House, the Senate voted 54-43 for a resolution calling on Congress to “enact a comprehensive and effective national program of mandatory market-based limits and incentives on emissions of greenhouse gases.”

Some evangelical Christian groups, traditional allies of the Bush White House, have joined the call for action. “This used to be seen as just the passion of a few environmentalists on the left,” says Jim Jewell of the National Association of Evangelicals, which includes 52 denominations serving 30 million parishioners. “But support on the issue has broadened. God’s call on his people is to care for his creation.”

In the battle in the nation’s capital, it will help that some people believe God is on the side of greenhouse gas reductions. For most business executives, though, the real driver is the bottom line. Often, the best way to slash emissions is simply to reduce energy consumption. Because carbon is basically a proxy for fossil energy, cutting carbon equals cutting costs, argues energy guru Amory B. Lovins, head of the Rocky Mountain Institute (RMI), a nonprofit energy and environment policy think tank: “Efficiency is cheaper than fuel.”

That approach is what landed Geneva’s STMicroelectronics, the world’s No. 6 chipmaker, on the BusinessWeek/Climate Group ranking. Lovins and the RMI helped cut the company’s energy use by 5% per year. Many changes were surprisingly low-tech, such as putting in larger air-conditioner ducts. That enabled air-circulating fans to do their job at half speed, using just a seventh of the energy. Last year, with $40 million in improvements, the company saved $173 million.

When mandatory regulations are issued they essentially put a price tag on carbon emissions. That obviously makes cleaner, more efficient projects more financially attractive, spurring new business opportunities. GE, for one, is seizing the moment with its new Ecomagination division. And scores of small companies are bringing new clean-technology innovations to market. Massachusetts Institute of Technology chemical engineer Isaac Berzin started GreenFuel Technologies Corp. to harness the power of algae to grab CO2 from the exhaust of a gas-fired power plant. At a pilot site atop MIT’s on-campus power station, the GreenFuel device cuts CO2 by 82% on sunny days and by 50% on overcast days.

How far can this effort go? Some economists say cutting emissions and boosting efficiency will spur economic growth this century. The engineering challenges are immense and will require research and development investment in fields that have been relatively neglected until now: alternative energies, carbon sequestration, higher efficiency engineering, new lightweight materials for buildings and vehicles, and rebuilding old industrial and energy infrastructure with clean gear.

Yet despite the claims of the global-warming skeptics, the cost can be affordable. As the examples of companies in the BusinessWeek/Climate Group ranking show, there often is a boost to the bottom line. Far more substantial cuts are needed to make a real dent in the global-warming problem. And clearly, the developing nations need to be on board with cleaner technologies as well. But the news is that many companies are energetically tackling this growing environmental challenge.

By Adam Aston and Burt Helm, with Michael Arndt in Chicago, Amy Barrett in Philadelphia, and John Carey in Washington