When Fred Krupp began his career as an environmental lawyer, he thought he would spend his career chasing corporations that pollute or break environmental regulations.
Now he thinks companies will be the key to saving the world.
"When we put our capital in place, change [the way utilities think] and begin to grow this big behemoth market, we will show that the profit motive, which ironically got us into this fix, will get us out of this fix," he said.
In his book, "Earth: The Sequel," which was published in March, the president of the Environmental Defense Fund predicts "a total makeover" of the world’s $6 trillion energy economy.
"A revolution is on the horizon: a wholesale transformation of the world economy and the way people live," the book begins. "This revolution will depend on industrial technology -- capital-intensive, shovel-in-the-ground industries -- and will almost certainly create the great fortunes of the 21st Century. But this new industrial revolution holds a more important promise: securing the world against the dangers of global warming."
Greentech startups have a major role to play in this revolution, said Krupp, who has been part of the Environmental Defense Fund, an environmental nonprofit, for 23 years and who began working on the book in September 2006.
Among those mentioned in "Earth: The Sequel" are biofuel companies Amyris Biotechnologies, GreenFuel Technologies and Verenium; solar startups Ausra, BrightSource Energy, Energy Innovations, Innovalight and Miasolé; wave-energy firm Finavera Renewables; carbon-capture company Carbozyme; coal-gasification startup Ergo Exergy and green drywall company Serious Materials.
Greentech Media sat down with Krupp to talk about what he learned while researching and writing the book.
Q: Given the current regulatory and economic uncertainty, as well as the challenges -- such as cost and scale -- that some of these technologies are facing, why are you so certain that an economic revolution is afoot?
A: What’s been happening in the last 18 to 24 months is like this [EDITORS NOTE: He used a gesture to indicate the beginning of a freefall here]. What we’ve seen so far is a mere glimpse of what we’re about to see. The reason we burn coal and don’t have more clean technologies is there’s no limit to putting carbon in the sky. But all three candidates support strong cap-and-trade measures. We’re going to see a law passed to set the price of carbon in the next 18 to 24 months.
Q: Europe already has a carbon cap-and-trade program. Why would a similar program in the United States make such a big difference?
A: We will be the last industrial country to set a price on carbon, and that will turn the spotlight on India and China. The United States is tied with China as the biggest emitter. This will send a signal in the investment community that will create a gigantic waterfall of money. This explosion of capital is about to arrive.
Right now, the investment question is, ’Do I give money to this company in today’s conditions, where people can generate energy and throw the garbage into the sky?’ Soon it will be, ’Do I give money to this company, which has a certain cost structure and conditions that suddenly look a lot more compelling?’ A much wider set of ideas become competitive and profitable. …
[Another] thing is that America is a linchpin -- politically, because we’re the last industrial nation to do this -- but also technologically, because we are the center of innovation and technology. We have entrepreneurs and risk takers like nowhere else, and capital.
Q: It sounds like government policy is fundamental to your belief in this revolution, but regulation always is uncertain and often takes longer than people think.
A: I’m not saying it’s not going to happen without the government firing the starting pistol for the greatest race of all time -- a race against time -- but the government is getting ready to change everything dramatically. The fact that Europe started in 2005 and just started the Kyoto system [a few months] ago means we’re already seeing a weak signal, because other industrial nations put a cap in.
But the signal will become stronger when the United States steps in and when the world in 2009 in Copenhagen renegotiates Kyoto. … The government has a necessary role to play in starting this race. But government turns out to have a supporting role. The starring role is [for] entrepreneurs and investors. They’re the ones who are going to save the planet.
Q: What feeling did you come away with when you finished writing this book?
A: I came away from writing the book enormously hopeful because I see a future where we can solve the problem. It’s important to share the hope because the [fear] can be debilitating. … There are all these puzzle pieces out there. The book puts together a picture of an abundance of alternatives. There are a lot of possibilities once you change the fundamental drivers.
Q: A number of scientific studies, such as the reports released by the United Nations’ Intergovernmental Panel Climate Change last year, indicate that we need to make large cuts quickly. People have different ideas on the emission levels we need to reach. What do you think?
A: Conventional wisdom, from the IPCC reports, is we need to cut 50 percent worldwide by 2050, in 42 years, and people have mostly assumed [we would need] 80 percent cuts in developed countries and 50 percent cuts in developing countries. Pre-industrial levels of greenhouse gases per air were 280 parts per million. Right now, right here, they are at 380 parts per million, so we’ve added 40 percent [Editor’s note: Specifically, that comes out to 36 percent]. The current plan stabilizes us at 450 parts per million. … Why are we aiming for 450 parts per million? Current levels are giving us unacceptable consequences. Over time, citizens in governments will need to decide. I’ve come to the conclusion we need greenhouse gases at today’s levels, if not lower.
Q: Considering the dramatic cuts required to reach the levels you consider acceptable, what makes you believe the world can solve the global-warming problem on time?
A: The No. 1 and No. 2 emitters contributing to global warming right now are China and the United States. We’re not sure of the order. No. 3 and No. 4 are Indonesia and Brazil. [Most of] the emissions [from Indonesia and Brazil] come from burning rainforests year after year. Conceptualize [a plan in which] these countries reduced the burning and cuts in emissions would be compensated by the world. They would be paid, based on satellite monitors and verified economic data.
In the next few years, as alternative-energy technologies scale up, we’ve got this great low-hanging fruit. We could stop them from burning if we were paying them, and that’s 20 percent, or one-fifth, of the world’s total. Beyond that, if you look at farmers with a million acres in Kansas and [elsewhere in the Midwest], every farmer who changes their farming practice to no-till agriculture -- where they’re just leaving [agricultural waste] in the ground and puncturing holes -- stores 1 to 2 tons per acre per year.
Q: I notice those solutions aren’t technologies.
A: In a carbon market, the high-tech people would have to compete with low-tech people. Everybody will have to figure it out. And it’s probably true that in the early years, it will have to be the low-hanging fruit. There will be a whole system where cuts [in emissions] will support new technology. Why am I hopeful? We’re not relying just on solar, just on geothermal or just on high-tech. Everybody can play. There will be entrepreneurs in Brazil trying to make money on rainforests.
Q: Which technologies were you particularly encouraged by, when you were researching your book?
A: Ultimately, I think solar has the most potential, given how much solar comes to earth. Applied Materials’ $1.9 billion order was something. Geothermal potential also is amazing. In low-temperature geothermal, I’ve been working with United Technologies, which is generating electricity and hot water at half the temperature people thought, until now, we would be able to generate geothermal from. I’m excited by Amyris and the biofuel area because, for the near-term, we are going to power cars with liquid fuels. And Verenium, a cellulosic-ethanol [company], which is using a local supply of sugar cane after the juice has been taken out.
Q: Cellulosic materials have proven more difficult to harvest and collect than some companies expected. Why do you think cellulosic ethanol will work?
A: There are a lot of logistical issues, but there’s a lot of cellulosic material out there, so I am hopeful. One of the problems of ethanol to date is it’s based on the government picking a winner, not on a carbon metric. In a carbon-based metric, we will flow to the answers.