Zachary Coile / San Francisco Chronicle – 2009-01-09 01:05:58
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2009/01/08/MN041558UP.DTL
Venture Capitalist Says US Losing Green Race
Zachary Coile / Chronicle Washington Bureau
WASHINGTON (January 8, 2009) — Silicon Valley venture capitalist John Doerr, whose early investments helped launch Google and Amazon, delivered a stark warning to Congress on Wednesday that the United States is on the verge of being left behind in the green tech revolution.
Doerr, a partner at Kleiner Perkins Caufield & Byers, which is betting billions on clean energy technologies, told senators that two of his firm’s biggest investments were with foreign firms because U.S. companies did not have the most advanced technology. Of the top 30 companies in solar, wind and advanced batteries, just six are U.S. firms.
“Notice the trend here,” Doerr told members of the Senate Environment and Public Works Committee. “We won the space race with the Soviet Union. Now as (New York Times columnist) Tom Friedman says, we’re in an Earth race with other nations to see who can invent the technology so that men and women can stay on Earth. And we are not winning today.”
But Doerr and other evangelists of green technology believe the environment could change under President-elect Barack Obama, who has pledged to make tackling global warming a top priority. Doerr has been meeting with Obama’s transition team and leaders in Congress to urge them to use the new economic stimulus package to modernize the electric grid and offer new incentives to help clean energy startups get off the ground.
Doerr was invited to speak by California Sen. Barbara Boxer, who chairs the committee, along with Friedman, the author of a new book, Hot, Flat and Crowded, which calls for a green tech revolution to solve the country’s climate, energy and foreign policy challenges. They spoke at a policy briefing, not a formal hearing, but most of the committee’s Democrats stopped by. None of the panel’s Republicans attended, a sign of the continuing partisan split on Capitol Hill over how to address global warming.
‘American Nothing’
Friedman, a Pulitzer Prize-winning author and columnist, echoed Doerr’s assessment by showing a slide of a billboard advertisement in South Africa by Daimler for its new uber-efficient smart car, the ForFour. “German Engineering, Swiss Innovation, American Nothing,” the billboard reads.
“Someone actually thought that the best way to sell their product was to advertise that it had ‘American Nothing’ inside,” Friedman said. “That billboard actually pisses me off on many levels … because I think it’s wrong. But it does reflect a view out there, a view that I feel strongly about. We need to get our groove back as a country.”
Friedman noted that as he travels the country, he’s constantly handed business cards by innovators working on a new cellulosic biofuel or other clean energy technology, reflecting his view that America is actually “bursting with innovation” around energy and climate change.
“If I were to draw a picture of America today, it would be a picture really of the space shuttle taking off. You know, all of this incredible thrust coming from below,” he said. “But in our case the booster rocket – Washington, D.C. – has been cracked and leaking energy. And the pilots in the cockpit are still fighting over the flight plan.”
Investors hamstrung
Several Democratic senators acknowledged that Congress’ failure to pass a climate-change bill has hamstrung investors and entrepreneurs working on clean-energy solutions.
“America increasingly gets it about the consequences of climate change,” said Sen. Sheldon Whitehouse, D-R.I. “Somehow this building seems to be sort of the last redoubt of people who don’t seem to get it.”
Doerr, who has been a major donor to Democratic candidates and causes and a close ally of former Vice President Al Gore, now also a partner at Kleiner Perkins, said the single most important thing Congress can do is to pass legislation, either through a cap-and-trade system or a carbon tax, that puts a price tag on emitting carbon dioxide and other heat-trapping gases. Doing so would make cheap, high-carbon energy – especially coal – more expensive while making investment in wind and solar power more affordable for utilities.
Friedman agreed. “We can only innovate our way out of this problem by shaping the marketplace with the right rules, incentives and price signals to stimulate the kind of innovation we need – which is 10,000 innovators in 10,000 garages trying 10,000 things,” he said.
Doerr gave Congress a detailed list of recommendations, including new tax incentives for renewable energy, a huge boost in federal research and loan guarantees to help clean energy startups survive the “valley of death” – which is venture-capital-speak for the period between the lab and the marketplace, when many promising technologies die for lack of funding.
Kleiner Perkins, which invests for a select group of foundations and universities, has invested $600 million in 45 green tech startups, and Doerr said the firm will invest in at least 40 more over the next two years. Venture capitalists poured more than $1.8 billion into clean energy ventures in California last year and about $5 billion into green tech projects nationwide.
$6 trillion industry
Friedman pointed out that the figure is just a tiny fraction of the $80 billion that was invested during the height of the information technology revolution in 2000. Doerr noted that many investors are still waiting for new federal policies and incentives to jump in. But they sense a huge opportunity in the energy industry, valued at $6 trillion annually with 4 billion customers worldwide, he said.
“It is the mother of all markets – perhaps the largest economic opportunity of the 21st century,” Doerr said.
Obama has shared some of the optimism, suggesting that investments in clean energy could create millions of new jobs and help pull the country out of recession. After Wednesday’s briefing, Boxer said many of Doerr’s ideas are likely to make it into the new stimulus plan and future legislation.
“America pulled itself out of the Great Depression by mobilizing to fight World War II,” she said. “Now, in order to break out of this deep recession … we must mobilize again.”
John Doerr’s 5 recommendations for Congress
The legendary Silicon Valley venture capitalist made five recommendations to Congress and President-elect Barack Obama to jump-start a green-tech revolution and fight global warming:
Modernize the grid: As part of the economic stimulus package, Doerr said Congress should invest in a more efficient electric grid that can deliver solar and wind power to consumers across the country.
Put a price on carbon: A cap-and-trade system and a carbon tax that’s refunded to taxpayers could drive up the costs for coal plants and make low-carbon sources, wind and solar, more competitive.
A national renewable energy standard: Doerr believes the federal government should follow California and two dozen other states that require utilities to generate more of their power from renewable sources.
New incentives for utilities: California utilities will spend $3 billion on energy-efficiency measures over the next 18 months because state rules give companies major incentives to conserve energy. New federal rules could force other states to follow suit, he said.
More federal energy research: The federal government spends less than $1 billion a year on renewable energy research. Doerr urged more federal research and loan guarantees to help new technologies get off the ground.
E-mail Zachary Coile at zcoile@sfchronicle.com.
© 2009 Hearst Communications Inc.
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John Doerr’s Five Recommendations for Congress
SF Chronicle
WASHINGTON ( January 8, 2009) — The legendary Silicon Valley venture capitalist made five recommendations to Congress and President-elect Barack Obama to jumpstart a green-tech revolution and fight global warming:
• Modernize the grid: As part of the economic stimulus package, Doerr said Congress should invest in a more efficient electric grid that can deliver solar and wind power to consumers across the country.
• Put a price on carbon: A cap-and-trade system and a carbon tax that’s refunded to taxpayers could drive up the costs for coal plants and make low-carbon sources, wind and solar, more competitive.
• A national renewable energy standard: Doerr believes the federal government should follow California and two dozen other states, which require utilities to generate more of their power from renewable sources.
• New incentives for utilities: California utilities will spend $3 billion on energy efficiency measures over the next 18 months because state rules give companies major incentives to conserve energy. New federal rules could force other states to follow suit, he said.
• More federal energy research: The federal government spends less than $1 billion a year on renewable energy research. Doerr urged more federal research and loan guarantees to help new technologies get off the ground.
Chronicle staff report
© 2009 Hearst Communications Inc. |
