001

Table of Contents
 
Praise
Title Page
Copyright Page
Foreword
PREFACE
Introduction
What Drives the Green Wave?
An Oily Proposition
We Want Our NRG!
A Cleaner Future
Green Is Getting Cost Competitive
Mo’ Money, Mo’ Growth
The Greening of the Consumer
Building a Green Portfolio
Environment Protection Becomes Big Bucks
The Goal of This Book
 
CHAPTER 1 - Catalyzing into Green
 
Rising Global Energy Demand
The Chindia Syndrome
Where Does That Energy Come From?
Energy Security: The New Cold War
Carbon Concerns
 
CHAPTER 2 - Mandating Growth
 
Green Public Policy
Mo’ Money, Mo’ Growth
The Green Capital Boom
The VC View
Making Real Money
 
CHAPTER 3 - Waving The Green Flag
 
Driving Along in My Automobile
A Green Way Forward
The Hybrid Theory
Plug In and Fire Up the Engine
EV All the Way
How Do We Make Money?
The Bleeding Edge
Words of Caution
 
CHAPTER 4 - I Wanna Soak up the Sun!
 
Sand and Sun, Not Just a Vacation Mantra
Costs and Incentives: Creating Sunny Choices
Let the Sunshine In
The ChangeWave Thesis
Solar Superstars
A Solar Epilogue
 
CHAPTER 5 - Water, Water, Everywhere, Nor Any Drop to Drink
 
You’re Going to Drive Me to Drinking
If You Build It, They Will Drink
A Tall Drink of Green Water
The Alliance Dips Its Toe into the Water
Splashing Around in the Water Investment Pool
Toweling Off—and on to the Power Grid
 
CHAPTER 6 - Avoiding “Grid” Lock
 
A Vision for the Modern Grid
Seven Valuable Virtues of the Modern Grid
Meters for the New Millennium
The Smart Meter Players
Adopting the Information Solution
 
CHAPTER 7 - Eco-Efficient IT
 
What Is Virtualization?
Saving Kilowatts Equals Saving Money
Virtually the Best
Eco-Efficient IT Is the Future
 
CHAPTER 8 - Green Plastics
 
The Rise of Green Plastics
The Why and Who of Green Plastics
A Question of Cost and Market Adoption
Just a Drop in the Bio Bucket
 
CHAPTER 9 - Fill ’Er Up with Biofuels
 
Ethanol: The Good, the Bad, and the Ugly
Cellulosic Ethanol
Blame It on Rio
Mandates, Tax Credits, and Tariffs
Investing in Team Ethanol
Bye-Bye Biologics
 
CHAPTER 10 - Fuel Cells and Advanced Batteries
 
Fuel Cells: Hydrogen Anyone?
Fuel Cell Types and Applications
Big Costs, Big Benefits
Powering Your Portfolio with Fuel Cells
Advanced Batteries
 
CHAPTER 11 - Wind Power
 
Blowin’ Up the Energy Charts
The Good and the Bad of Blowin’ in the Wind
Turbines at a Glance
The Breezy Dynamics of Growth
Subsidies and Supply Shortages
Investing in Windy Conditions
Blowing on to Chapter 12
 
CHAPTER 12 - The New, Old Green Tech
 
The Coal, Hard Facts
Movin’ On Up from Low Grade to High Grade
Scrubbing Coal’s Image
The Great Carbon Roundup
A Deeper Shade of Green
 
CHAPTER 13 - Living La Vida Verde
 
The Green We Inhabit
By the Dawn’s Early Green Light
LED Lighting Leads the Way
Green Movement Market Opportunities
Toward the End of a Green Journey
 
CHAPTER 14 - Building a Green Portfolio
 
CAUTION: Green Portfolio Construction Ahead
The World Is Not Flat—It’s Voracious
APPENDIX A - Master List of Green Companies
APPENDIX B - Green Investing Resources
References
Index

Additional Praise for Billion Dollar Green
“A must-read book about the green revolution that crosses political lines and helps investors invest more wisely in green energy. Green energy is coming one way or the other. Tobin Smith shows you where it will land so you can profit. Absolutely fascinating read.”
Louis Navellier
CIO of Navellier & Associates
Author of The Little Book That Makes You Rich
 
“There are a lot of stock market prognosticators out there but few are the real deal and Toby happens to be at the top of the list. Investors like Toby because of his wit and charm but everyone respects him because of his ability to see out further into the future than others. More importantly is with the rapid greening of capitlaism it’s so important that investors truly understand how to capitalize. Toby explains the Eco Revolution and names the exact companies to be in order to profit from it.”
Charles Payne
Founder & CEO
Wall Street Strategies
 
“Ride the green wave to success with this indispensible guide to the coming global economic transformation! As usual, Tobin Smith is ahead of the curve, synthesizing a complex theme into easy-to-understand, useful information for all investors.”
Jill Schlesinger,
CFP Chief Investment Officer
StrategicPoint Investment Advisors

001

Foreword
I’ve been conserving energy and water since I was four.
Oh yes, as a child growing up in L.A. in the 1970s, many of us learned how to conserve before we learned how to read. I’ll never forget my father marching us upstairs one day to show us how to put a brick in the toilet tank. My four siblings and I were enraptured. “It’ll save water, kids. Because,” he said very slowly so that we fully understood, “one day the world might not have enough clean water.”
Listen, it wasn’t exactly a news flash, even for this preschooler. We were already grappling with the drought back then . . . fending off dagger eyes from the San Francisco folks because Los Angeles was “stealing northern Californians’ water.” We battled yellowish-gray smog that prompted the infamous “smog alerts” screamed at us by Eyewitness News anchors every morning.
So I suppose you could say that from an early age I had a sense of what it meant to be “Green.” But aside from my forward-thinking father and some of his friends—one of whom climbed up on his roof in Beverly Hills and installed solar panels 36 years ago and hasn’t paid an electric bill since—most people following the Green movement were thought of by others as “those kooks in Topanga Canyon,” or macramé-toting nature moms. I mean, could you really make a dime off Ed Begley Jr.’s idea to run his toaster by pedaling a stationary bicycle? C’mon. Making real green off being Green was never part of the equation. Until now.
Little did we know that we were on the very cusp of an idea that would take three more decades to really take hold. Now, as we face skyrocketing global energy, water, and food demand, suddenly the world has woken up. But as the proverbial sun rises on this idea whose time seems to have finally come, it has brought along the realization that there’s a massive land grab going on in Green Land.
Enter Tobin Smith. What Tobin has done for you with Billion Dollar Green is not only generous, but genius as well. He’s done the heavy-lifting homework for the legions of investors who rightly believe there’s money to be made off the Movement but just don’t know where to begin. If you’re one of those folks who’s just now realizing that Green technology—wind, solar, biofuel, Green nano-technology—are investments you should have in your portfolio, a mere scratching of the surface has probably revealed that while world governments were fiddling, Rome wasn’t the only city burning. New York, Beijing, Moscow, Los Angeles, Tokyo, and the rest have become polluted and panicked.
The good news is that smart people everywhere weren’t waiting for world leaders to lead. They have been starting up companies around the world that could very well solve most, if not all of our problems. Legions of brilliant scientists and entrepreneurs have been at it for years, and many of them have begun companies that are ripe for your investment portfolio. But caution is the keyword. We all know how many dot-coms sprouted up in the late 1990s. And, conversely, we know how many of them failed. Tobin has pin-pointed the Green names he feels have a fighting chance and are worth a look for your portfolio.
Is global warming a reality? I’ll leave you with this: last year I had a chance to ask the world’s second-richest man whether he believes global warming is real. Warren Buffett also happens to be arguably the greatest investor of our time. He didn’t pause for long before telling me, “Well, Liz, we don’t really know. But since we only have one planet, we’d better err on the side of the planet.”
 
LIZ CLAMAN
September 2008
New York, New York

PREFACE
An Opportunity Too Big to Miss
If you’ve just picked up this book, most likely you’re of a mind that investing in alternative, clean, green, and energy technologies as well as their many related sectors is an opportunity too big to miss out on.
To that I say: Wise decision!
You see, it’s not hyperbole to believe that the greatest wealth creation wave since the discovery of oil is upon us right here, right now—and more importantly, will likely be with us for the next two decades and beyond.
Moreover, your decision to read this book is also a great one—if I may be so bold as to say so myself—because it will give you a quick, painless, and very enjoyable education in the opportunities that a new greener world has brought forth.
Simply put; if you want to learn about the green investment arena, you’ve come to the right place.
But hey, why should you take my advice on how to approach this enormous investment opportunity? Well, because I’ve seen this transformation technology movie before, and I know how to make the story turn out the way you want.
You see, analyzing transformation change is what we do at ChangeWave Research, the global investment research company I founded 10 years ago. We have always been early to identify the major technological and regulatory shifts of the late twentieth and early twenty-first centuries. Because of our ability to identify these transformational shifts, we have grown into one of the largest independent investment research firms in the world.
From the rise of the Internet to the rise of satellite radio, and most recently the rise of alternative energy technology, we have consistently chosen the winning horses in the transformational technology stakes.
Our edge in accomplishing this feat is our 15,000-member investment research and analysis network, the ChangeWave Alliance. With this volunteer army of scientists, geophysicists, engineers, entrepreneurs, physicians, and sales and marketing professionals of all stripes, we are able to get a ground-level view of emerging transformational waves way before most other analysts.
It was from this most august group that we were early to identify the transformation in the supply/demand curve for oil and natural gas. The secular transformation of China and India from exporters of oil and coal to fast-growing importers is one major leg of the alternative energy investment thesis—and it’s a leg we identified way before the news was fit to print.
Intelligence reports gleaned early on concerning energy supply and demand from our network of geologists and energy professionals got us early into mostly unheard of energy exploration and production companies based around the world. We were early into the tar sands of Canada, and early into technology companies that have revolutionized the craft and science of energy exploration.
It was this early recognition of the secular shift in the supply and demand for fossil fuels in the new, twenty-first century global economy that led us to conclude that, for the very first time, economics—not just environmentalism or tree-hugging wannabes—would drive the decades-plus secular transition to alternative energy technology.
In my ChangeWave Investing advisory service, we have already earned significant triple-digit profits investing in the “arms dealer” plays on first-generation green energy companies. But the profits in the second- and third-generation green energy space will be measured in thousand percent gains. Why? Well, because we have tens of trillions of dollars in growth still to come.
It’s those second- and third-generation companies—the technologies that compete favorably with the costs of energy from fossil fuels without government subsidies—where the greatest investment profits will be made.
I’ve looked at hundreds of private and public green energy companies, and have visited dozens of these second- and third-generation companies. Just like the boom in the Internet and unconventional energy spaces, I have made significant personal investments in both public and privately held companies developing amazing technology designed to help solve the world’s energy challenges.
I have personally earned seven-figure wealth investing in transformational change, and perhaps that’s the most important reason of all to at least give my analysis of this—the mother of all technology transformations—a thorough read.
Making small—and not so small—fortunes investing in transformational technologies is really what my life’s work is all about. The best advice I can give you on making your fortune in this amazing opportunity is to read this book and learn the basics, including the lingo and general concepts in all of the various green sectors.
Then you can start to build your list of existing companies, and new, yet-to-go-public companies in the various green sectors we cover, including; solar, wind, biofuels, power grid infrastructure, solid-state lighting, energy storage, electric vehicles, and, of course, the core arms dealers supplying goods needed to make the world’s green dreams a reality.
Finally, you’ll want to make your investments early in the life cycle of the new and existing players coming to prominence in this dynamic marketplace. You’ll want to find companies with the lowest-cost solutions, the greatest market dominance, the highest efficiency, and the strongest patents in their respective fields.
But, hey, I realize I am getting a bit ahead of myself here. Those of you who are familiar with me and my sometimes unbridled enthusiasm for all things investing will understand that it’s all part of what makes me who I am. Another thing that makes me who I am is my intense commitment to you, the individual investor.
The way I see it, this book is literally the first step on your path to a lifetime of wealth. And as any seasoned traveler knows, the first step is always the most exciting. So, please put one foot in front of the other, and let’s take that first step down the green brick road.
 
—TOBIN SMITH

INTRODUCTION
It’s a Green, Green, Green World
Everywhere I look, I see green.
No, I am not admitting to some overwhelming sense of jealousy inherent in the fabric of my being. I am talking about the ubiquity of all things “green” in our society intended to protect and improve our environment.
I suspect that like me you have already noticed in recent years the tremendous attention given to all things green. Books, magazine articles, newspapers, TV, radio, investment advisors, and even the political class—maybe especially them—have all put green issues into the forefront of the world’s collective conscience. In fact, the tremendous focus on green has now become so pervasive that nearly everyone reading this can think of many examples of how the Green Revolution is already influencing how they live. Indeed, “going green” is now considered a virtuous pursuit that we all must embark on. The new awareness that we must go green is not just a matter of making the world a cleaner, more livable, and better place. It is about ensuring the very survival of our species.
I know that sounds dramatic and, quite frankly, it is very dramatic. However, it’s dramatic for a good reason.
Think about it. What is more important than ensuring the world has enough energy to thrive? What is more important than preventing the world from suffocating under a blanket of carbon emissions?
This means something very specific to the investor. Quite simply, going green could be the greatest wealth-building opportunity of the twenty-first century. Indeed, the greening of just about everything nowadays means that the entire game is changing when it comes to investing in clean tech, alternative energy, or green-related companies. I use these three terms to describe this green path to gold because investing in this sprawling, multiheaded, multifaceted, and often nuanced space has become much larger than just clean energy technologies. In this book I use the term green investing to cover the entire gamut of profitable opportunities directly and tangentially related to alternative energy and its many offshoots.

What Drives the Green Wave?

I am not exaggerating in the least when I say that the global move toward all things green has the potential to be just as big, if not bigger, than the tremendous wealth-producing effect of the microchip.
But what is driving this green opportunity besides the new “awareness,” the realization that green is good?
The simple answer is economics.
Now when I say economics, it is not just the cost of specific energy components such as oil. I mean the complex interactions between the rising costs for existing energy assets derived from fossil fuels and the decreasing costs of alternative green sources.
This complex economic interaction has a lot to do with the increased world demand for energy and the need to find a supply of energy. Of course, the issue of climate change and the costs to society associated with global warming is also a big part of the economics driving the green energy wave.
Then you have the economics of consumer demand. The world is realizing that green is good, and that means consumers are choosing goods and services increasingly because of their green characteristics.
Finally, you have a tremendous amount of investment capital pouring into all things green in search of a big return. As that capital flows, new technologies that were once relegated to the drawing board now have the financial means to make it to the marketplace.
I think the increasing amounts of venture capital going into green companies and technologies means that the smart money is betting on a greener future. That means you, the individual investor, will have ample opportunity to pick and choose from the best of the best when it comes to companies in many burgeoning green industries.
Now let’s take a quick glance at some of the economic drivers to see why this “green wave” has become so incredibly powerful.

An Oily Proposition

I can remember in 2006 when I was touting $60-a-barrel oil as the cure for $60 oil. Today, that $60-a-barrel mark is a fond and very distant memory. Oil has blown past the $100-a-barrel mark in the first quarter, 2008; a level many Wall Street professionals and petroleum industry analysts didn’t think would come to pass for another decade.
I am of the opinion now that $60 oil is an artifact, and that we will never see that level of cost for petroleum again.
Why will oil likely remain so expensive?
The answer here is not just a matter of increasing demand from the growing economies of the world—although that, too, is a major driving force behind increasing oil costs. But the one real key to the economics of oil is the increasing cost of finding and producing new light, sweet crude (low-sulfur oil needed by 90 percent of the world’s refineries) outside of Saudi Arabia and Russia.
Discovery and production costs for new crude oil (mostly from deep water wells) are helping push prices to over $100 a barrel. We are also depleting existing sweet crude reservoirs faster than we are replacing them—about 1.5 times faster, according to the latest industry estimates.
So understand this: If 90 percent of the world’s oil refiners need low-sulfur oil, and most of the spare capacity and new oil coming from the Organization of Petroleum Exporting Countries (OPEC) is sour crude, we have a supply-and-demand problem in sweet crude.
The key point here to understand is that virtually all of the easy-to-find, easy-to-extract crude oil has already been found. Sure, there are still plenty of proven reserves of oil around the world, but they are located in either very remote locations or in environments that are very hostile to operate in. This means the cost of extracting this oil is going to rise—and hence the current high cost of oil. But supply-and-demand issues are not the only factors driving oil prices higher. The politics of oil dominate the discussion, and with oil prices controlled largely by the OPEC cartel, oil prices can keep going up regardless of organic supply/demand dynamics.
Then there is the security issue with respect to oil. Given the fact that much of the world’s oil is located in countries that are less than friendly or even downright hostile toward the United States—Iran comes to mind here—any political move to disrupt the flow of oil could really cause the price per barrel to surge.
The bottom line here, given the aforementioned factors, is that oil prices are not likely to go significantly lower anytime soon. Sure, there may be a pullback in crude oil prices from the record highs we hit in early 2008, but with demand for oil soaring, and with the easy-to-extract, “cheap” oil nearly gone, the world will have to cope with higher oil prices for decades to come.
Those higher oil prices mean that alternative energy sources will continue growing in popularity, and it means that their costs will continue coming closer and closer to parity with traditional sources.

We Want Our NRG!

Remember that tagline from the Music Television network back in the 1980s—“I want my MTV”?
Today, the world can be heard making a similar proclamation, but this time it is—“We want our NRG!” Here NRG is just my way of saying energy.
I’ve alluded to it already, but today the global demand for all energy is growing at a blistering pace. According to forecasts from the International Energy Agency (IEA), world energy demand for energy will increase by 55 percent from 2005 to 2030, or at an annual rate of 1.8 percent.
Much of this demand growth is coming from China, India, and other developing nations. As these hugely populated countries make the transition from largely rural to largely industrial nations, worldwide demand for energy is going to continue growing.
Providing the world’s hefty appetite for energy will be a challenge, not only because the growing beast that is these developing nations will need more and more resources, but also because these traditional resources come with a price tag.
That price tag is more and more greenhouse gases, and that is something virtually nobody wants.

A Cleaner Future

When you burn organic matter—be it wood, oil, coal, or natural gas—you get carbon as a by-product. That carbon goes into the earth’s atmosphere and creates a situation which either causes—or at least contributes—to increases in the planet’s surface temperature.
That temperature increase across the globe could have a deleterious effect on the world as we know it. Now, I suspect you have heard the doomsday scenarios reflected by the Al Gore camp as to just how bad global warming could potentially be.
These chaos-ridden scenes where drought, famine, floods, and a host of other calamities afflict the planet are indeed very discomforting even for the harshest of skeptics.
But I am not going to argue the truth of the former vice president’s claims, nor am I going to challenge or confirm the science behind his thesis. What I am telling you is that people are rightly concerned about this issue more than they have ever been before, and that concern is something you, the individual investor, can take advantage of.
The fact is that the world wants a cleaner future. We want to reduce our “carbon footprint,” to quote a very fashionable term, and we want to make sure that the countries in the developing world don’t throw caution to the wind with an unabashed and even reckless use of fossil fuels.
The only way to satiate the world’s growing energy appetite while not creating a situation where we choke on our own carbon by-products is to make sure we employ as much green energy—and as many green products—as possible.

Green Is Getting Cost Competitive

As long as the price of oil and other fossil fuel energy sources such as natural gas and coal remains high—which it most likely will, given the demand drivers already mentioned—the price of alternative energy sources will get more and more competitive.
Indeed, the cost of green energy is likely to continue declining with new technologies coming on line, and as a general rule, we can safely say that as the price of fossil fuels goes up, the cost of alternative sources is—and will continue—coming down.
And as demand for green energy increases, production from green sources such as solar, wind, biofuels, and others will begin declining. Why is this so? Well, technology here is the key.
You see, there is no cost associated with the “fuel” of these green energy sources. The sun, wind, and heat generated from the earth’s crust are all free commodities. Once you’ve figured out a way to harness these sources and deliver them to the market technologically, the cost will start to come down.
Also, there is a tendency in technologically driven industries to see the price of their products decline rapidly over time. We saw this in the computer industry, as the costs of both the microchip and computing power have experienced a steady decline over the past several decades.
This kind of price decline due to new technologies will no doubt occur in the green energy production segments, and that means clean energy will get more cost competitive with other legacy sources.

Mo’ Money, Mo’ Growth

In addition to technological improvements, another factor greasing the wheels of the green energy sector is investment capital.
According to the research group New Energy Finance, U.S.-based venture capital investments in energy technologies more than quadrupled from $599 million in 2000 to $2.7 billion in 2007. As a percentage of total venture capital, energy technology increased from well under 1 percent in 2000 to over 9 percent in 2007.
Between 2006 and 2007, venture capital investments in the U.S. clean energy space increased by more than 70 percent!
Remember that old adage “follow the money”? Well, that’s exactly what we are doing here, and there is no doubt that the money is going toward all things green.
Want even more evidence to support the claim that dollars are flooding into the green energy? How about $150 billion?
That’s the estimate on Wall Street regarding the new global investment in all green energy sectors in 2007.
All I can say to this is—wow!
Yet, in my opinion, we’ll look back on this number and realize it was just a drop in a big green bucket.
According to the International Energy Agency, $16 trillion needs to be invested by 2030 to meet the growth in projected demand for electricity and fuel worldwide. That’s about $600 billion a year.
I suspect much of that will go into green energy production, and that means growth in the space is going to be with us for a very long time.

The Greening of the Consumer

In the United States, people follow the hippest trends, and I can’t think of any trend more pervasive nowadays than going green.
All kinds of products and all kinds of services have sprouted up offering green products to a green-conscious consumer. This desire to make the green choice—in many cases even when that choice means the consumer may have to pay a little more—is driving many buying decisions.
Everything from automobiles to food to clothing to appliances, the greener it is, the better we like it.
This greening of the consumer means there will be plenty of opportunities for growth in those sectors that cater to green-sensitive tastes.

Building a Green Portfolio

Imagine it’s 1908, and a skinny, middle-aged man named Henry Ford asks if you want to invest in his new company that is going to mass produce something called a “horseless carriage.”
Imagine too that you’re given the opportunity to invest in a young oil company, the Texas Fuel Company (soon to be known as Texaco) and in Harvey Firestone’s company, which makes the tires for the horseless carriages.
Then along comes a guy named Thomas Edison asking if you’d be interested in backing his new invention, the incandescent light bulb.
Those would have been fantastic investment opportunities, and they are similar to the opportunities we have today in the green investing revolution. The chance for you to build wealth for yourself, your children, and your children’s children is here—and the beauty of it is we are just getting started.
When I tell you that the “green wave” is going to be far bigger than any other trend I’ve ever tracked, believe me, I’m not just blowing smoke. Today, remarkable change is sweeping the globe, and you can be sure that its momentum will only grow more powerful in 2008 and beyond.
From solar cell manufacturers to software companies that boost IT energy efficiencies, these firms have one thing in common: They are working overtime to quench the booming appetite of enterprises and their customers who are seeking to use energy, water, and other raw materials more efficiently and productively.

Environment Protection Becomes Big Bucks

Before 1850, the Earth’s atmosphere contained about 280 parts per million of carbon dioxide. Then we began burning oil, gas, and coal. Now that figure is 380 parts per million. By 2050, it could reach 550 parts per million, according to the Intergovernmental Panel on Climate Change, the United Nations’ scientific group that shared the 2007 Nobel Peace Prize with Al Gore.
The very large and growing environmental movement is no longer the domain of hippies and a clique of low-profile scientists. Concerns about climate change and its causes are now reported daily by mainstream media.
Green thinking is fast becoming institutionalized worldwide as multinational corporations adopt new, efficient production methods and governments mandate cleaner air and water.
More importantly for individuals and investors, there are “real” green companies making “real” profits in this new environment. And that means there are real opportunities to make big profits investing in “green companies,” some of which will really surprise you.

The Goal of This Book

The goal of this book is twofold. First, I want to help you understand why the green wave has grown so strong in recent years, and why it will likely continue growing relentlessly for the next decade and well beyond.
Chapters 1 and 2 outline the catalysts driving the green wave forward, including world energy demand, carbon dioxide (CO2) emission concerns and governmental mandates. We’ll also take a look at the growth potential for the entire green market.
Beginning with Chapter 3 and continuing through Chapter 13, we get into the second goal of this book, which is to explore the possibilities, problems, profit potential, and key players in specific green sectors. These sectors include; transportation, solar, water, power grid management, eco-efficient IT, bioengineered solutions, biomass and biofuels, fuel cells and hybrid batteries, wind, green structures, food and green lifestyle products, and even old energy industries using new products and technologies to be green—and more importantly, to make green.
Chapter 14 shows you how to build your own green portfolio, and serves as a kind of green call to arms.
It’s a brave new green world out there, and with a little knowledge and a bold sense of vision, you too can be green—and make the green.

CHAPTER 1
Catalyzing into Green
WHY, AND WHY NOW?
Everything’s fine today, that is our illusion.
—Voltaire
 
 
 
 
So, why green, and why green now?
I’ve heard some people say that the greening of just about everything these days is simply a business ploy to sell more products. I’ve also heard the more cynical crowd tell me that green energy and green products are just feel-good marketing and public relations tools designed to make certain companies appear as though they’re good citizens and caring custodians of the world.
Now I am not so Pollyannaish that I don’t see that there is often more than a hint of truth to these claims. But despite the many companies and public officials engaging in green propaganda, there are real companies helping to solve real-world problems.
And what is catalyzing the world into a greener place. It is the massive challenges of what I call the “Big Three”:
1. Rising global energy demand (particularly from China and India)
2. Energy security: the New Cold War
3. Carbon concerns
To be sure, covering the intimate details of each of these factors could take up an entire book on its own. So I’ll restrict the discussion to the primary issues as to why the world is seeing the virtue of all things green.

Rising Global Energy Demand

So, we’ve heard a lot about this new era of the “global economy,” an for the most part this is a fantastic circumstance that is helping many of the 6.6 billion residents of the planet to enjoy better living conditions. Of course, with the yin there’s always a yang, and the yang here is a voracious and growing appetite for energy.
According to the Energy Information Administration (EIA)—a division of the U.S. Department of Energy (DOE)—in its International Energy Outlook 2007 report, worldwide energy demand from 2004 to 2030 is projected to increase from 447 quadrillion Btu (British thermal units) in 2004 to 559 quadrillion Btu in 2015. That number then climbs to 702 quadrillion Btu in 2030—a 57 percent increase over the projected period (DOE/EIA-0484, 2007).
Figure 1.1 World Marketed Energy Consumption
Source: Figure 8 from EIA, International Energy Outlook 2007 (Washington, D.C.: U.S. Department of Energy, May 2007), p. 5.
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Figure 1.1 shows both historical demand trends worldwide, as well as the projections made by the EIA all the way out to 2030.
The largest projected increase in energy demand is for the non-OECD (Organisation for Economic Co-operation and Development) region. Countries outside the OECD, that is, developing countries such as China and India (more on them in a moment), have projected economic growth rates and more rapid population growth than the OECD nations. The appetite for energy in the non-OECD region is projected to grow at an average annual rate of 2.6 percent from 2004 through 2030. Growth in the developed and mature economies of the OECD region—Europe, the United States and others—is expected to be slower by comparison (DOE/ EIA-0484, 2007).
Here the EIA projects energy use will grow at the much slower average rate of 0.8 percent until 2030. Interestingly, the energy appetite for the non-OECD region is projected to surpass that of the OECD region by 2010. By 2030 it could be as high as 35 percent greater (see Figure 1.2).
Figure 1.2 World Energy Use 2004-2030
Source: Figure 9 from EIA, International Energy Outlook 2007 (Washington, D.C.: U.S. Department of Energy, May 2007), p. 6. What the EIA data projections mean is that the world will be consuming energy at a blistering pace for at least the next two decades, and likely well beyond that if the past is any kind of prelude to the future.
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The Chindia Syndrome

The combined economic transformation going on in both China and India—or Chindia as I will refer to them in this book—is going to have a massive impact on the world’s demand for energy.
In the case of Chindia, size definitely matters.