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Last week I stumbled across this interesting dashboard of renewable energy projects in the PJM queue. Wind projects are by far the biggest category with nearly 42 GW of capacity planned. By comparison just 1.5 GW of PV solar is planned. And nearly 31 GW of nonrenewables are planned.

Separate from these planned capacity additions, PJM already has 165 GW of generation capacity available. Coal, natural gas and nuclear power are the three largest sources, whereas wind is a minuscule 2.3 GW of the current capacity.

The National Academies has developed a nice website entitled: “What You Need to Know About Energy.” It covers Uses, Sources, Costs, and Efficiency. In an earlier post I referenced its visualization of the U.S. Energy System. The other sections are worth exploring too.

When it comes to the issue of sustainability accounting, corporate responses are all over the map. Some corporations have voluntarily reported on a host of what are now called environmental, social and governance (ESG) factors for more than 20 years (e.g., Kodak), whereas as others have generally tried to avoid doing so (although the empirical evidence suggests that such a position is becoming less and less tenable). And of course, there are a host of intermediate responses, in terms of when companies decide to account for sustainability, and in terms of what they count as sustainability, and how they account for it.

Shareholder activism is one of many factors which might influence if, when and to what extent a corporation chooses to produce a sustainability account. With that idea in mind I was intrigued by a recent press release from Harrington Investments:

Intel corporation has agreed to amend the Charter of the Corporate Governance and Nominating Committee to include “corporate responsibility and sustainability performance” into the committee’s overall policy responsibility. Intel also provided [Harrington Investments] with an outside legal opinion stating that under Delaware Law directors have a fiduciary duty to address corporate responsibility and sustainability performance as specified in the committee charter.

Harrington Investments describes itself as “a 28 year-old Napa, California-based socially responsible investment advisory firm that manages assets of individual and institutional investors requiring social and environmental as well as financial portfolio performance.”

This was the second year in a row that Harrington had introduced a shareholder resolution to amend Intel’s bylaws to create a Board Committee on Sustainability. Although Intel initially opposed the resolution, it later engaged in a dialogue with Harrington. As of March 18, 2010, Intel’s Corporate Governance and Nominating Committee charter now requires its that the committee:

reviews and reports to the Board on a periodic basis with regard to matters of corporate responsibility and sustainability performance, including potential long and short term trends and impacts to our business of environmental, social and governance issues, including the company’s public reporting on these topics.

Currently, Intel’s Corporate Governance and Nominating Committee is chaired by David B. Yoffie.  Other members include Reed E. Hundt, Jane E. Shaw, and John L. Thornton.

The National Academies have posted a nice visualization of the U.S. Energy System, including where the energy comes from, how it is used, and how much is wasted. Bottomline: America consumed about 99 quadrillion BTUs (quads) in 2008. Of that, 42 quads were used by homes, businesses, factories, cars, trains, and planes. The remainder — 57 quads — was spent in generation, refining, transmission, distribution and efficiency losses. In other words, for every 100 BTUs we use, we waste another 135 BTUs. Ouch. Considering that energy is a $6 trillion global sector (and growing), figuring out how to reduce all this shrinkage sounds like a big business opportunity.

The New York Times has a nice timeline of the science and politics of climate change — from Fournier’s 1824 theorization about the way in which the earth’s atmosphere retains heat radiation to Callender’s 1938 measurements of atmospheric carbon dioxide concentrations to Plass’s 1956 calculations that a doubling of carbon dioxide levels would lead to a 3.6 degree Celsius increase in surface temperatures.

One trend I’ve been paying attention to lately is the growing tendency for organizations to provide an account of their sustainability. In fact, thousands of companies now voluntarily report on environmental, social and governance issues (ESG). Of course, some organizations prefer not to be so transparent, either on principle, or because they’d rather keep their dirty laundry private. But in those cases where organizations are unwilling to voluntarily offer their own sustainability accounts, detailed ratings and evaluations are increasingly available through ASSET4, Goldman Sachs SUSTAIN, KLD and others. And in August 2009, Bloomberg’s 250,000 customers gained access to ESG data on more than 3,000 public companies at no extra charge.

Synthesizing these trends has led me to postulate what might be termed the “inevitable sustainability accounts” thesis. Love them or hate them, whether by choice or compulsion, over the past 10 years or so sustainability accounts have become a virtual requirement for large, complex organizations.

With that general thesis in mind, I was intrigued by news of the 2010 College Sustainability Report Card . In much the same way KLD rates some 4,000+ global public companies across more than 200 sustainability indicators, the Sustainability Report Card graded the sustainability efforts of more than 300 public and private colleges and universities with the largest endowments, from Harvard University ($26 billion endowment) to West Los Angeles College ($0 endowment). In other words, my “inevitable sustainability accounts” thesis seems to not only cover the realm of public companies, but also the realm of another sector of large, complex organizations: higher eduction.

Grades were determined by assessing performance across 43 indicators in nine main categories, including:

1. Administration
2. Climate Change & Energy
3. Food & Recycling
4. Green Building
5. Student Involvement
6. Transportation
7. Endowment Transparency
8. Investment Priorities
9. Shareholder Engagement

Among the 332 schools evaluated this year, 8% of schools earned cumulative “A” level grades, 45% earned “B” level grades, 34% earned “C” level grades, and 13% earned “D” level grades.

Of local interest, Penn State received a B grade as announced on the PSIEE website. A detailed summary is available at GreenReportCard.org. As a point of comparison, Cornell University, my undergraduate Alma Mater, also received a B grade. However, while a B grade put Penn State in the top half of the Big 10 conference, a B grade left Cornell in the bottom third of the Ivy League conference.

Given these apparent systematic differences between the two conferences, an interesting exercise might be to think about possible explanations for “grade” variations across the larger sample. In short, can we “predict” the grades these colleges received? And if so, on what basis? Just off the top of my head: location (blue state v. red state, urban v. rural, single campus v. multi-campus), average SAT scores, admission selectivity rates, endowment size, state funding, research grants, governance structure (centralized, decentralized, federated, etc), athletic program revenue, responsiveness to ESG past issues (e.g., recycling, South African investments, sweat shop labor, etc), characteristics of the top management team (”TMT”; e.g., age, gender, educational and functional background, level of discretion, etc), values of the TMT (egoistic, altruistic, biospheric, etc.), participation in the UN Global Compact.

Although this might seem like a relatively undisciplined list, behind each factor are theoretical reasons why variations might play a contributing role in explaining a college’s sustainability grade. No doubt reasonable people could come up with even more possible explanations if they spent more than 5 minutes thinking about it.

What factors would you use to predict grades? Add a comment or send me an email with your ideas.

Today I found this visual comparison of U.S. federal government subsidies to fossil fuels versus renewable energy. The underlying data came from a study by the Environmental Law Institute and the Woodrow Wilson International Center for Scholars which reviewed fossil fuel and renewable energy subsidies for Fiscal Years 2002-2008. The study concluded that “the lion’s share of energy subsidies supported energy sources that emit high levels of greenhouse gases.” A PDF of the graphic is available here.

The Global Subsidies Initiative recently published a report that looks specifically at The Politics of Fossil Fuel Subsidies, but on a global basis.

Today I stumbled across the Greendex, a study jointly produced by National Geographic and Globescan, an international polling firm. The study measured consumer progress toward environmentally sustainable consumption in 17 countries around the world.

Greendex Map of Sustainable Consumption

With my dissertation on the horizon, over the past few months I’ve been exploring a variety of possible research settings. One idea I have considered involves studying the Pennsylvania Electricity Market as an in vivo cultural-economic-political experiment (ala Michel Callon and colleagues). At the risk of simplifying a relatively complex situation, three major pieces of state legislation have recently collided: deregulation, renewable portfolio standards, and consumption management. At the same time, the EPA is imposing new emissions reporting requirements on utility companies. All of this has generated a number of controversies, many of them entangled with issues related to sustainability, accounting and temporality — all themes I am hoping to explore in my dissertation.

1. Deregulation started in 1996 with the passage of the Electricity Generation Customer Choice and Competition Act. By January 1, 2001 all Pennsylvanians – theoretically – had the freedom to select their electric generation suppliers (“EGSs”). However, at the same time, the Act permitted the electricity distribution companies (“EDCs”) to recover their “stranded costs,” meaning “investments in infrastructure made before the law was passed that may have become uneconomic and unrecoverable in a competitive environment” (source). In exchange for the right to recover these stranded costs, electricity rates were capped. These caps expired in phases, with the last of the caps set to expire on January 1, 2011. Thus, despite some 14 years of “competition,” there is little to no retail competition in most regions of the state. However, PPL’s rate caps expired Jan 1, 2010, with bills expected to rise 30%. Early evidence suggests PPL customers are switching en masse, with 16.9% of residential, 23.3% of commercial and 68.6% of industrial customers having switched by January 16 (source). As one result, there is an unfolding debate over whether or not deregulation works.

2. Although deregulation is an interesting story on its own, the situation is complicated by the Alternative Energy Portfolio Standards Act (“AEPS” or Act 213 of 2004). AEPS requires that an annually increasing percentage of electricity sold to retail customers in Pennsylvania by EDCs and EGSs be derived from alternative energy resources. The level of alternative energy required increases according to a fifteen year schedule, including minimum thresholds that must be met for the use of Tier I (8% by 2020), Tier II (10% by 2020), and solar photovolatic resources. Of note, EDCs were exempted from compliance with AEPS for the duration of their “cost recovery period” as specified under the 1996 Customer Choice Act. In other words, not only are utilities such as PPL faced with new competitors, but at the very same time they are also subject to renewable portfolio standards. As a result utilities must supply a minimum percentage of their electricity from specified sources, even while face price pressures and uncertain overall demand. And while alternative suppliers (EGSs) face the same constraints, the result is an entirely new set of market dynamics.

3. Act 129 of 2008 imposed new requirements on EDCs , with the overall goal of reducing energy consumption and demand. The Public Utility Commission (PUC) will implement the Act in phases. The first phase will deal with the PUC’s obligation to adopt an energy efficiency and conservation program by Jan. 15, 2009. Subsequent phases of the Commission’s Act 129 implementation process will address EDC and default service provider responsibilities; conservation service providers; smart meter technology; time-of-use rates; real-time pricing plans; default service procurement; market misconduct; and cost recovery. The Act also expanded the types of alternative energy sources that qualify as Tier I alternative energy sources under the AEPS Act to include specific categories of low impact hydropower and biomass energy.

Against this backdrop, other events are unfolding. For example, another piece of legislation – Clean Energy and Green Jobs legislation (HB 80 and SB 92) — seeks to extend the AEPS to 2024, while increasing the Tier I requirement from 8% to 15%, including 3% from solar power. Those in favor of such legislation recently published a study by Black & Veatch. The study concludes that the pending legislation “will lead to nearly 130,000 new jobs and save between $1.9 and $4.6 billion for Pennsylvania consumers.”

Update March 26, 2010: It looks as if some others at Penn State think the Pennsylvania Electricity Market is an interesting research setting too.

2009 DuPont Sustainable Growth Excellence Awards

In October 2009 I was pleased to participate as one of five external judges for the 2009 DuPont Sustainable Growth Excellence Awards, which are intended to spotlight Dupont’s economic, safety, health, environmental, and social performance.

My participation involved reading and evaluating approximately two dozen DuPont sustainability innovations that were nominated from around the globe. Each nomination included both a narrative description of the innovation, as well as variety metrics related to its sustainability impact. Each of these nominations were rated, discussed and finally ranked using multiple criteria during a half-day conference call with my fellow judges. This is truly a wonderful program and I would encourage other organizations to consider putting a similar focus on recognizing sustainability innovation.

The results were announced this week. To read about the 6 winners download the 2009 DuPont Sustainable Growth Excellence Awards brochure.