IMAGE: Bush at climate conference
Charles Dharapak  /  AP
President Bush sponsored a conference on energy security and climate change at the State Department in September.
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updated 11/26/2007 2:25:47 PM ET 2007-11-26T19:25:47
Political connections

On every front -- domestic and international, public and private -- the drive toward a low-carbon energy future is accelerating, leaving Washington, and particularly the Bush administration, farther behind.

None of the latest developments approach the magnitude of the change necessary to avoid the potential risks from global warming that the United Nations climate change panel, in its final report [PDF] this month, chillingly identified: a calamitous rise in sea levels, widespread economic and social disruption, and species extinction on a vast scale.

But evidence is accumulating that the debate over global warming, at least outside of Washington, has reached a tipping point in which a virtuous cycle of government initiative and private investment fuels a long-term transformation from today's fossil fuel economy to a low-carbon, clean energy, future.

"This [clean energy] sector could be the largest economic opportunity of the 21st century," says John Doerr, a prominent venture capitalist whose firm nurtured many of the iconic companies of the computer and Internet revolutions, from Netscape to Google. "The Internet and its effect on the economy and our lives pale in comparison."

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More and more institutions are moving to seize those opportunities -- and respond to the threats that climate change poses. Consider the developments in just the past two weeks.

Six Midwestern states (and one Canadian province) last week signed a regional accord imposing mandatory reductions on carbon dioxide and the other emissions linked to global warming through a market-based "cap-and-trade" system. That approach establishes binding limits on greenhouse gas emissions, but seeks the most efficient reductions by allowing industry to trade credits for the right to pollute.

Interactive: Carbon trade game

The Midwest partnership joined similar "cap and trade" initiatives under way in the Northeast (where ten states have signed on) and the West (where Montana this week signaled its intention to join an alliance that includes California, five neighboring states, and two Canadian provinces). Florida's Republican Gov. Charlie Crist, who recently set mandatory reductions for state utilities, wants to organize a comparable Southeastern effort.

All these regional alliances mean that while Congress debates whether to establish a national cap-and-trade system -- and President Bush resists any mandatory greenhouse gas reductions -- "more than half the population" lives in states moving toward compulsory cutbacks, notes Terry Tamminen, who has helped to organize the regional efforts as a senior fellow at the New America Foundation.

As next month's key U.N. climate conference in Bali approaches, change is coming as steadily abroad. Australia has backed Bush's opposition to international agreements for mandatory reductions. But Kevin Rudd, the leader of the opposition Labor Party that gained power in this weekend's voting, says that if elected he will pursue such reductions as his top priority.

Similarly, Prime Minister Gordon Brown this week directed advisers to study whether Great Britain can reduce its greenhouse emissions through 2050 by 80 percent, the same level the leading U.S. Democratic presidential contenders have endorsed. Brown also urged reductions in greenhouse emissions from cars comparable to those California and 13 other states say they will adopt if the federal Environmental Protection Agency, which hasn't ruled for two years, grants them a necessary waiver.

In the business world, the dynamic is similar. The amount of venture capital invested in clean energy across North America doubled from 2005 to 2006 and should more than double again this year, says Doerr, a partner in the legendary Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers. Last week, the firm, which is investing heavily in green technologies, marked a milestone by announcing an alliance with Generation Investment Management, an environmentally oriented investment firm co-founded by former Vice President Al Gore, who will become a Kleiner Perkins partner in the deal.

These rising waters are breaching old barriers and nourishing new alliances. The regional cap-and-trade initiatives have attracted even major coal-producing states such as Montana and Illinois. And while the regional efforts are still driven mostly by "blue" Democratic states, Republican governors in Utah, Connecticut, Minnesota, and Florida have followed the path-breaking example of California's Arnold Schwarzenegger and separated from Bush to endorse mandatory greenhouse reductions.

Most importantly, the public and private initiatives are reinforcing each other. Tougher government regulation to reduce greenhouse emissions, improve automotive fuel economy, and require utilities to generate more electricity from renewable sources, provides entrepreneurs with greater confidence that clean, low-carbon energy sources can compete with traditional fossil fuels. The greater private effort, in turn, provides governments more confidence that ambitious clean-energy targets can be met.

The scale of the global warming challenge still dwarfs these fledgling ventures. But they point toward the concerted, coordinated effort that stabilizing the climate will demand. "We are not going to get there without the right policy, the right innovation and the right investment," Doerr says. "All three have to pull together."

Copyright 2012 by National Journal Group Inc.

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