Sensational Speech by Hot Flat and Crowded author Tom Friedman thinks inside the box

Tom Friedman is an amazing speaker.  His speech at Stanford's GCEP yesterday filled the hall with clean energy researchers and innovators.  The speech is part of a tour for his new book, Hot, Flat and Crowded 2.0, a sequel to his 2008 version of the book. The insights he has gained in the last two years has led him to agree with many sustainability gurus such as Dana Meadows and Amory Lovins.  In fact, he ends his compelling hour long speech with an a excerpt from his book, a speech by Amory Lovins at the memorial service for Dana Meadow. While Friedman's conclusions may be nothing new, his delivery was impeccable and fresh, interspersed with new terminology and fun words in classic Friedman fashion.  While I agreed with most of his points, his statement on the energy innovation sector was short sighted.  First, let's highlight the agreement points.

In his speech, Friedman takes an American centric approach.  If the US goes, so goes the rest of the world.  US leads world culture, clearly demonstrated by wide adoption of the American Dream.  Population alone isn't the problem, it's the fraction of the population currently living or rising up to live American lifestyles that will destroy our planet.  These thoughts close echo Hunter and Amory Lovin's sentiments in Natural Capitalism.  Friedman goes on to say that the three factors leading to the downfall of the financial market (Bear Sterns) and our climate stability (polar bears), are the same three factors.  These factors are (a) underpricing risk,  (b) privatizing gains and (c) socializing losses.  Unfortunately, we are now the "generation of Noah," where we have to concern ourselves with saving the last two.  Loss in biodiversity at an unprecedented rate means that "doing it later" is no longer an option.

Using a photo of students in an airport parking lot in Guinea, Friedman then addresses the issue of the "energy poor." He asserts that the energy poor are most susceptible to climate change because they do not have resources to dig a new well, or invent a new cookstove that needs less fuel.  The energy poor are also keen to climb out of energy poverty.  Thus, the availability of clean, cheap energy would be the key to unlocking both climate change and social disparity.

Then, Friedman likened the clean energy age with the IT age.  He termed it ET - energy technology.  He was fast to point out that while the IT age presented users with unprecedented function, and therefore prices did not matter, the ET age is only triggered by the price signal.  And therein lies our disagreement.  First I contend that in the IT age, price DID matter.  True, new functions were presented.  But the functions solved existing communication point points, and delivered higher value at a lower price in a different way.  Secondly, I contend that while energy generation functions of ET is innovating over existing energy use infrastructure, and therefore subject to price signals, the wider set of ET innovations are not.  These include energy delivering, monitoring and consumption innovations.  In addition, innovations in energy generation and delivery have co-influencing price points.  Thus to simply state that the entire ET age is subject to by price signal triggers only, would be to think inside the box at a time when out of box thinking is most crucial.

The Presidio Difference - Business as Unusual

I'm often asked: Why Presidio?  What does an MBA in Sustainable Management mean?   I thought I'd address the question here.  In business as usual, sustainability has its own column.  A business erects a CSR department to address the "sustainability problem."  At Presidio, we see sustainability infused into every part of a business.  Remember when there were “internet” classes?  Nowadays, knowledge of the internet is simply a given.  In the same way, we believe that the word sustainability eventually becomes obsolete and becomes an essential part of everything we do.  Instead of a classic MBA program with an elective in sustainability, every class at Presidio explores the integration of sustainability principles in the subject matter.  Because business as usual is not sustainable, we believe in "Business as Un-usual."  

Presidio is at the forefront of the nascent sustainability field in the US.  There are no established laws on carbon emissions, and the experts are still debating about LCA standards and how to conduct impact assessments.  Yet, these are some very basic first steps towards a sustainable world.  Thus at Presidio, we spend time exploring and debating what sustainability means, and how it may manifest in business.  Sustainability thinking itself is not new. Indeed, our forefathers demonstrated what we now call sustainable thinking when they created the US National Park system.  Unfortunately, our use and toss culture in the last 50 years has put us in the current bind.  Recognizing that we inherit the system for better or for worse, Presidio is a gathering of passionate people bent on applying sustainability in today's business context.   

Stanford Tutorial on Carbon Capture and Sequestration

I've been a skeptic on Carbon Capture and Sequestration (CCS).  After today's tutorial at Stanford's GCEP, I remain skeptical, but open to the idea that at least some part of our population should continue to work on the problem even if the solutions today are prohibitively expensive to be a true solution.  Professor Sally Benson laid out a compelling case for CCS research.  Carbon dioxide in the atmosphere causes ocean acidification, which negatively impacts the growth rate of organisms at the bottom of our food chain.  If we do not get below 350 parts per million of CO2, then we risk runaway climate change.  Since energy demands are "up and to the right," and we need negative emissions to reach 350 ppm, we must investigate CCS.

The thought of a time-bomb of underground carbon is unsettling.  Professor Benson's contends that utilities have been storing natural gas as part of business as usual, and we can use these underground storage sites to store our CO2.  Apparently we have enough suitable storage sites to allow us to perform CCS for a hundred years.  Or up to 1000 years if we consider saline aquifers as suitable storage sites.

There are a few gaping troublesome spots though.  The only solution to underground water contamination seems to be avoiding water tables altogether.  This may be a good short term solution but the ground layers can shift.  In addition, the cost of CCS, typically at 50-100% of the electricity cost, is cost prohibitive.  At that price we can put in wind and solar infrastructure instead of investing in a new coal plant.  Since today's CCS technology can only sequester carbon from high concentration outputs such as the tailpipe of a power plant, it seems cheaper to simply retire carbon intensive powerplants and build new ones based on wind, solar and nuclear.

But the reality of negative emission need remains.  So CCS is probably sticking around.  Or perhaps a twist of CCS can address the cost barrier, such as these companies working on recycling of CO2.

Senior Year

Meeting the newbies this fall reminds me just how far I have come from my fresh faced self.  I am finally a senior at Presidio's 2-year full time MBA program.  We are getting into the application side of the curriculum, and it's fantastic.

Presidio's MBA is offered in four full time semesters.  Each semester consists of four classes, which accumulates to 16 by graduation.  One can choose to be part time, take on half the classes at a time, thus extending the program to four years.  I am currently in my third semester full time, the funny middle where the work load is just ramping up, the content is increasingly interesting, yet I feel ready to be done with grad school.  But despite my occasional exhaustion as a student, Presidio continues to engage and challenge me in unanticipated ways.

I invite you to stay tuned on the ups and downs of my MBA journey.

Ebay reusable box test

I spent last summer investigating the business case for a reusable box business.  The conclusion was that a large entity with leverage is best served to enter this market, where critical mass must be met quickly in order to become profitable.  So I'm happy see Ebay taking this idea forward with their launch of reusable boxes.  The pilot is an observation ground only.  It distributes these boxes to Ebay sellers, but does not resolve the return logistics issue.  However, it does fund the initial need for boxes and enables sellers to apply their ingenuity towards the return logistics problem.  It will be interesting to see what happens...

Image Courtesy: Inhabitat

The Real Life Social Network v2

My MBA Marketing class is focusing on social media as the new wave for reaching customer audience with product message. As a result I have been researching social media trends. This excellent slide presentation by Paul Adams of Google's UX team explains the dichotomy between today's social networking tools and the dynamics of real social networks. We keep many different and often separate social circles, yet online social networking tools blends these separate lives into one big, muddy pool. While this is true, I realized that I have been getting around the problem, albeit poorly, by using different social networking tools differently. LinkedIn is obviously for professional contacts, Facebook is for "Great sushi restaurant" type status updates, and Twitter is for linking relevant industry news as a supplement to resume building. A pattern is interesting to note here. LinkedIn had a well established purpose message from the starting gate, which targeted a specific demographic of my network, my professional contacts. But neither Facebook nor Twitter had a purpose message, leaving users to guess which of his or her social network to accept as friends to their profile. Even today, after some time for establishment, neither service has a purpose message. Herein lies an opportunity for clarifying purpose and guiding users in structuring their online networks as organically as their real life networks.