Presentation by George A. Garland, DBA

Presentation by George A. Garland, DBA
January 18, 2012

For a video of George Garland and David Stillman of the Public Private Partnership Alliance at the Rotary Club of New York's Energy Meeting held on Monday evening March 19th, 2012 go to http://www.youtube.com/ppafoundation and http://www.flickr.com/photos/ppaf

David Stillman at the Janauary UN Breakfast meeting
Opportunities for progress for the U.S. and the global community, as you may agree, are
real and increasingly on the agenda. Years ago as a member of the Office of Solid Waste in
the U.S. Environmental Protection Agency I was meeting with the Utilities Solid Waste
Advisory Group, executives from the power industry, to discuss possible use of solid waste in
coal fired utilities. One participant from Indiana gave a factoid that sticks with me today. He
suggested that if one tore down all the buildings and tore up all the roads in the State of
Indiana and planted the entire State in switch grass (a promising bio-fuel), the electric utility
that his company had just opened in the southwest corner of the State of Indiana could run
for one day on the switch grass grown in a whole year. No one said replacing coal with
renewables would be easy.
UN Secretary-General Ban Ki-moon told delegates at the World Future Energy Summit in
Dubai this last Sunday that he wants to see the world double its share of renewable energy,
which typically includes wind, solar and hydropower, by 2030. He also called for providing
universal access to energy services by that date and doubling the rate of energy efficiency as
part of what he is calling the “Sustainable Energy for All Initiative.”
Ban said, “It is neither just nor sustainable that one in five lacks access to modern
electricity. It is not acceptable that 3 billion people have to rely on wood, coal or charcoal for
cooking and heating,” he continued. “We need to turn on the lights for all households. To do
that, we need to scale up success examples of clean energy and energy efficient technology.
We need innovation that can spread throughout the developing world where energy demand
is growing fastest.”
With support from the United Nations Foundation, the UN system in 2007 formed an
umbrella agency called United Nations Energy with membership of 21 UN Agencies. In June
2009 the United Nations Secretary-General established the Advisory Group on Energy and
Climate Change (AGECC) to advise on energy-related dimensions of the climate change
negotiations. Their April 2010 report, “Energy for a Sustainable Future,” highlights two goals:
•ensure universal access to modern energy services by 2030; and
•reduce global energy intensity 40 percent by 2030.
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The International Energy Association World Energy Outlook for 2011 released an excerpt
calling for universal access to electricity by 2030 entitled Energy Access for All: Financing
Access for the Poor http://www.iea.org/Papers/2011/weo2011_energy_for_all.pdf.
The facts are:
•1.3 billion people are without access to electricity
•2.7 billion people are without access to clean cooking facilities
•more than 95 percent of these people are in sub-Saharan Africa or developing Asia
•84 percent are in rural areas
At a projected level of investment of $14 billion a year from now to 2030, a billion people
will be without access to electricity and there will still be 2.7 billion people without access to
clean cooking facilities because of population growth.
Universal modern energy access by 2030 would require annual investment of $48 billion.
Five actions (you judge their likelihood of success) toward achieving this goal include:
1. A clear and consistent statement that modern energy access is a political priority and
policies and funding will be reoriented accordingly. National governments need to
adopt a specific energy access target, allocate funds for its achievement and define
their strategy for delivering it.
2. Mobilize an additional investment of $34 billion above the base case estimate of $14
billion each year. $34 billion is equivalent to 3 percent of global investment in energy
3. National governments need to adopt strong governance and regulatory frameworks
and invest in internal capacity building. The public sector, including multilateral and
bilateral institutions, need to leverage greater private sector investment where the
commercial case is marginal and encourage the development of replicable business
models. When used, public subsidies must be targeted to reach the poorest.
4. Concentrate an important part of direct public funding on those areas of access that
do not initially offer an adequate commercial return. End user finance is necessary to
justify initial capital investment. Operating through local banks and microfinance
arrangements can support the creation of local networks and necessary energy
sector capacity.
5. Make provision for the collection of robust, regular, and comprehensive data to
quantify the outstanding challenge and monitor progress toward its elimination.
We in the US have benefited from the past 125 years of investment in over a million
megawatts of yearly capacity to generate electricity in a context of rules to protect both the
environment and the consumer and assure utility companies a fair rate of return.
By contrast, there are 1.6 million people on the planet with no access to electricity. Wash
clothes? Provide food? Provide water and sanitation? Educate your children? All tasks
handled without electricity for about 20 percent of the earth’s 7 billion people.
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People in the U.S. produce about 19 tons of carbon emissions per person, about twice
what European countries produce and ten times what developing countries emit per person.
Yet China, which has both rapid development and the largest population, produces 6.5 billion
metric tons while the U.S. produces 5.8 billion.
What can the United States do? McKinsey and Company’s report, “Unlocking Energy
Efficiency in the U.S. Economy,” estimates a savings of about ten percent of the energy used
in the U.S. in one year from efficiency improvements which all pay for themselves.
This estimate assumes no life style changes; no changes in the mix of energy provided;
no improvements in technology; no efficiency improvements in the conversion, transmission,
distribution and transport of energy; and no increase in the price of carbon. Only efficiency
improvements whose costs are more than covered by the stream of actual savings,
discounted at a rate of 7 percent. Overall, the cost of improvements in energy efficiency
would require an outlay of $520 billion and return $1.2 trillion in savings.
What’s the catch?
Residential savings are spread across 129 million households running dozens of
appliances and devices and any heating air conditioning in each household. Half of the
industrial sector savings is in 10,000 facilities while the rest is spread over 320,000 small and
medium sized enterprises. Commercial sector savings are spread over 87 billion square feet
of floor space supporting functions as diverse as retail, education, and warehousing. The
existence of these potential but as yet untapped energy savings suggests that energy
efficiency does not yet represent the best investment opportunity for many in the commercial
The report also notes that some targets are richer than others. Community infrastructure
could save 290 quadrillion BTUs for an investment of $4 billion and return a savings of $5
billion every year!
With former President Clinton at his side, President Obama in December announced a $4
billion effort to improve the energy efficiency of government and private-sector buildings
aimed at boosting the economy and creating jobs.
“Making our buildings more energy-efficient is one of the fastest, easiest and cheapest
ways for us to create jobs, save money and cut down on harmful pollution,” Obama said of
the initiative, which is part of his continuing “We Can’t Wait” executive action campaign. “This
is an idea whose time has come.”
“It’s the nearest thing we’ve got to a free lunch in a tough economy,” Clinton remarked
after the two presidents toured a downtown D.C. construction site.
The commitment includes $2 billion, made through the issuance of a Presidential
Memorandum, to upgrade federal buildings “using long term energy savings to pay for upfront
costs, at no cost to taxpayers,” according to the White House. In addition, the private
sector is also making a $2 billion commitment to upgrade the energy performance in 1.6
billion square feet of office, industrial and municipal property.
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The commitments are part of the president’s Better Buildings Initiative launched in
February and spearheaded by Clinton and the president’s Council on Jobs and
Bottom line is this:
The richest source of energy for the U.S. is energy efficiency that also reduces the U.S.
carbon footprint! To reach the huge number of potential winners from energy efficiency, the
price system is the best means.
Washington State (D.) Senator Maria Cantwell’s bill, (the CLEAR Act), co-sponsored by
Maine’s (R.) Senator Susan Collins calls for auctioning permits to producers and importers of
fossil fuels. This auction would raise about 75 billion dollars that would in turn raise prices for
fossil fuels. Everything that requires fossil fuels to make or distribute would cost more. In
turn, every American would receive an equal share of the auction proceeds or about 1,000
dollars for a family of four.
About 80 percent of Americans would receive back more than they paid in higher energy
and product costs while the richest 20 percent of Americans (who use the most energy)
would receive less than the increased prices they paid as the impact of payments for permits
by fossil fuel producers and importers worked its way through the economic system.
Renewable energy providers would now be competing with higher priced fossil fuels.
Higher energy costs would signal the value of more attention to energy efficiency to millions
of energy users. The price system will also reward fossil fuel users for reducing their carbon
emissions if new technologies such as coal gasification or carbon capture and sequestration
are implemented.
I’ve saved the best for last.
The 2.7 billion people using animal manure, crop waste, wood, and charcoal may be
served by bio-ethanol stoves that free women and girls from gathering wood, almost
eliminate indoor air pollution and associated deaths, eliminate deforestation, and produce
agricultural jobs growing sweet sorghum or sugar cane. Haiti, for example, uses charcoal
from its dwindling forests. About 2 percent of Haiti’s original forests remain. Building a market
for bio-ethanol stoves can reduce deforestation, create a business for the stoves, and create
employment for land and labor in producing ethanol. Talk about win-win!