Billionaires, big problems and big thinkers at renewables conference

The historian Douglas Brinkley, billionaire and activist Tom Steyer, and money-manager Theodore Roosevelt IV on the stage in Aspen. Photo/Allen Best

The historian Douglas Brinkley, billionaire and activist Tom Steyer, and money-manager Theodore Roosevelt IV on the stage in Aspen. Photo/Allen Best

Billionaires, big problems and big thinkers at renewables conference

A gathering of the choir and mostly Democrats in Aspen

by Allen Best

With the possible exception of T. Boone Pickens, whose bone-picking is mostly with U.S. dependence on foreign oil, especially that from the Mideast, all speakers at a recent conference in Aspen believe deeply in the dangers posed by human-caused climate change.

Former President Jimmy Carter took the stage at the American Renewable Energy Day conference to dismiss those who don’t believe in global warming as “nut cases.” The billionaire former hedge fund manager Tom Steyer said that climate change is the defining issue of our times.

“The science is clear. We now believe the economics are quite compelling,” said Rachel Kyte, the vice president and special envoy for climate change for the World Bank Group. Every politician lives and dies by job growth, she said, but she maintained that decarbonizing the economy and expanding energy to the world’s poor people can be done while adding jobs. Failure to create resilience to climate change creates economic risk.

This was a conference of the choir, of the fervently dedicated.

Unless, perhaps, you live in Aspen, the sheer star power of the conference bowled you over. With Pickens, Steyer, and then Ted Turner, at least three billionaires mounted the stairs. Amory Lovins, a local but sort of a patron saint of renewable energy, spoke several times, and Theodore Roosevelt IV, who may well have been the token Republican, added an extra layer of presidential prestige.

Only Carter filled the ballroom of the Hotel Jerome. He may be remembered generally as having a failed presidency, yet at age 88 he remains physically and mentally supple. A long line extended through the hotel’s hallway to get his signature on his new book.

New models for innovation

Several themes were evident this year at ARE Day —which, after 10 years, has now expanded to four days. One was the need for business models for delivering electricity. “The end of the era of the regulated utility is coming to an end,” said Roosevelt.

Lovins was at least partially alluding to the same theme when he said that “21st century technology is colliding head-on with 19th and 20th institutions and cultures.”

 This argument, now playing out in public-utility commission hearing rooms about net-metering and other policy issues, is that the monopoly utilities need to be displaced, such as the Bell telephone monopolies of the 1970s were replaced. A century ago, as electricity was becoming commonly available, investor-owned utilities submitted to government regulation in exchange for monopoly status. Their revenues, in turn, were determined by sale of electricity. This model assumes the utilities own the power plants.

Since at least 1976, Lovins has argued for a new business model. In his famous 1976 essay in Foreign Affairs, “Energy Strategy: The Road Not Taken,” Lovins called for a decentralized power production, to make it more resilient and less vulnerable to terrorism. He later went on to argue for new incentives, so that profits of utilities are determined by energy services, not alone by energy production. That, he has argued, will accelerate energy efficiency and renewable energy, too. And just as the breakup of the Bell monopolies unleashed innovation in telecommunications, so could this shift accelerate change in such things as demand-side management. This is a conversation front and center in Colorado.

Amory Lovins listens to Daniel Fung of the UNDP Peace and Development Foundation.

Amory Lovins listens to Daniel Fung of the UNDP Peace and Development Foundation.

None of this was explained at ARE Day. This was a time for skipping rocks across a lake, not a place for didactic conversation or for drilling down.

Stranded assets

A parallel and overlapping theme was about stranded assets. Roosevelt, a Navy Seal for two years in Vietnam and now managing director of investment banking at Barclay’s Capital Corporation, spoke several times about the fossil fuel and infrastructure for burning it becoming “stranded assets.”

In other words, when so much of your net worth is in the infrastructure of mining and burning coal, what happens when this infrastructure is worth nothing? It provides a strong disincentive to change.

Bill McKibben, the writer and global warming activist, was not at Aspen, but his name was mentioned several times. He has argued that fossil fuel companies have great incentive to continue with the status quo. But with the divestment campaign that pressured South Africa to end its apartheid in mind, he has now called for university and other endowments to cut their ties to the fossil fuels sector.

Tim Wirth, the former U.S. Senator and former president of Ted Turner’s UN Foundation, admitted to being “very, very frustrated” as the large institutions, the large utilities, seek to protect their fossil fuel assets. As with Roosevelt, he sees need for institutional change. “We are scrambling around doing things that should have been done a long time ago.”

The problems of divesture

Wirth moderated one full panel, which included a student at Harvard, and another – the grandson of Ted Turner – from the University of Denver. Signing the divestment pledge, Wirth explained, means that you will not purchase any more equities in fossil fuel companies over the next three years.“Fifteen foundations have divested in the last three years, and they are having superior returns,” Roosevelt said. “It’s not done overnight. It’s done in phase-out period.”

Divesting is, of course, more easily said than done. Fossil fuels are pervasive – and profitable.

John Powers, a Denver activist who retrofitted the Alliance Building, a model for building sustainability in LoDo, asked Wirth whether the UN Foundation, the organization funded by Ted Turner over which Wirth had presided for many years, divested itself of carbon?

“It’s not that easy,” Wirth answered. The UN Foundation had multiple responsibilities to multiple constituencies, he said, and the UN altogether is not ready to be divested. But fossil fuels represent only 3 percent of the UN Foundation’s holdings, he added.

Steyer has also come under fire for investments he oversaw in fossil fuels. He grew up in Manhattan. In the summer of 1976, while in college, he told the historian Douglas Brinkley in an interview, he was working on a ranch in hot, dry, and dusty Nevada for $100 a week for six days. One weekend, he took a break, going to Lake Tahoe, which he had never visited. It was close but a world apart, “I thought I had gone to heaven,” he said.

Tom Steyer

Tom Steyer

After graduating from Yale, he got a master’s from Stanford before working at two investment banks and then founding Farallon Capital, a hedge fund based in San Francisco, in 1986. Fortune magazine values Steyer’s worth at $1.6 billion,

The New York Times in a July article described him as the green-minded answer to Charles and David Koch, the patrons of libertarian-minded Republicans. He has committed $50 million to electing Democratic senators in seven states, including Colorado’s Sen. Mark Udall.

In late 2012, he left Farallon to plunge into climate change politics, including the fight against the Keystone XL pipeline. He remains a passive investor, aides told the Times.

Earlier this year, conservative media discovered that Steyer’s firm before he left had provided the money to allow expansion of major coal mines in Australia and India – and with a tidy profit. One article was headlined “The Epic Hypocrisy of Tom Steyer.”

That drew the attention of the Times, which in July published an article titled “Aims of Donor Shadowed by Past in Coal.” The Times solicited the opinion of U.S. Rep. Cory Gardner, who is seeking to unseat U.S. Senator Mark Udall in Colorado. Steyer has spent $100,000 in campaign ads to benefit Udall. “You can’t claim you are a great environmentalist and invest in the very same technologies you are railing against,” Gardner told the Times.

In a later piece in Politico titled “How Climate Change Changed Me,” Steyer admitted that his hedge fund invested in fossil fuels under his watch.

“But the more I learned about the energy and climate problems we currently face, the more I realized I had to change my life,” he writes. “I concluded that the best way to align my work with my beliefs was to make a real change—leaving my role managing a firm with investments across the industrial spectrum, and instead joining in the global effort to find a solution to climate change once and for all.”

Creating a nice footnote is his endowment to Stanford University, where his money was used to create a program at the Precourt Institute for Energy. The name belongs to Jay Precourt, a Vail resident who made his fortune in transporting fossil fuels. Precourt is the financier for the Vail Global Energy Forum.

Steyer first came to national prominence for his financial commitment to block the Keystone XL pipeline. He was a central focus of the New Yorker’s “The President and the Pipeline” in 2012.

Campaign strategy this year

In Aspen, there was no mention of Steyer’s smudged fingers. The questions were marshmallow puffy.

Steyer said that movements are created by politics, and politics are determined by who wins elections. In a non-presidential election, he said, the task is to get voters inclined to Democratic candidates to just get off their couches and get to the polls. “This is much more about showing up than it is about persuasion,” he said.

He also outlined how he sees change. In 1999, he said, the Internet was making inroads into newspaper advertising, but it was just small, and he drew a line in the air indicating a slight drop-off. But then advertisers left newspapers in droves.

“The world does not change in 3.3 percent increments, so we have to get ahead of those changes,” he said.

A carbon tax got claps and whoops when Carter mentioned it. Mark Reynolds, who directs a group called Citizens Climate Lobby, talked about nothing but. (Full disclosure: I have become tangentially involved in this group).

Citizens Climate Lobby approaches a carbon tax—which it prefers to call a “fee”—from a decidedly bipartisan perspective. It seeks to have a grassroots movement, working with all members of the U.S. House of Representatives. It already has branches in 380 of the nation’s 435 congressional districts.

Reynolds said members do not take sides in elections. “Nothing could more polarize members of Congress than campaigning against them,” he said. “Our job is to work with who’s there.”

He also spoke to the CCL’s narrow focus. “I’m of the belief that you can never over-focus an organization, but you can underfocus.”

The group’s strategy was informed by an analysis of why the cap-and-trade bill failed in Congress in 2009. One problem, according to a Harvard faculty member, was that the solution was created almost entirely in Washington, and not by the grassroots. But a second problem the professor identified was the need for the revenue to be returned to households, to avoid the tax-and-spend accusation.

The tax will not grow government, and most households will see no net difference, because the tax will  be returned to them. “The people who will have difficulty are those that have five or six homes and a couple of airplanes,” said Reynolds.

By putting an extra price on carbon-based energy, the intent is to “send a signal to venture capitalists, entrepreneurs, banks that the future is in renewable energy and you should put your investments there,” said Reynolds.

A study  commissioned by CCL and conducted by by Regional Economy Modeling found that a carbon fee will add 2.3 million jobs in the first 10 years and 2.8 million jobs in 20 years even as GDP grows. Greenhouse gas emissions will decline 30 percent in the first decade and to 50 percent by the second decade.

Unlike cap-and-trade, which was defeated by a coalition of coal and farm states, this study suggests economic gain in all but a few states of the South.

Broad tent for carbon tax

CCL has attracted a diversity of supporters. Advisors include both James Hansen, the climate scientist who was the inspiration for 350.org, but also George Shultz, the secretary of state under Ronald Reagan, a booster of natural gas and domestic drilling, and a leading figure at the Vail Global Energy Forum for the last three years.

At the conference and at a separate session elsewhere in Aspen, Reynolds emphasized CCL’s mission of reaching out to Republicans and taking a neutral stance on many issues of the day. With a carbon tax/fee in place, other issues such as fracking and nuclear will take care of themselves. If asked about nuclear, he said, CCL volunteers must respond in ways that respect science: it has been shown to be a safe alternative. Whether nuclear is viable economically is another matter.

Kemmerer pow0001_2

A smokestack emerges from the prairie at Kemmerer, Wyoming. Photo/Allen Best

The vast majority of economists sees a carbon tax as the most effective way for instigating a transition to less polluting energy sources.

Reynolds said CCL wants to start meeting with Republicans behind closed doors. If they come out as a group, “more people who want to be sensible can actually speak up.”

He said he stays in touch with McKibben’s group, 350.org, and to a lesser extent with big-green groups, i.e. Sierra Club. “But we really are more focused on building coalitions with people on the right.”

“Our job is to make sure we have the relationships with members of Congress, so when there’s a chance to get a bill passed that we get something that has teeth in it and will hold up over time.”

In March, at an event in Boulder, Wirth had talked about a carbon tax, saying “I think it will happen sooner than you might think.” I was pretty sure he said “five years.” In Aspen, he distanced himself from a timeline but explained his optimism.

“Politics isn’t linear,” he answered. “Things zig and zag—and you have to be ready when the opportunity presents itself.”

This originally appeared in the Aug. 26, 2014, issue of Mountain Town News, an e-zine sent to subscribers. Subscriptions are $15 per year.

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About Allen Best

Allen Best is a Colorado-based journalist. He publishes a subscription-based e-zine called Mountain Town News, portions of which are published on the website of the same name, and also writes for a variety of newspapers and magazines.
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