Prosperity Without Growth

Keywords: smart growth, sustainable growth, sustainable business, Edward D. Hess, Strategy+Business

In the latest issue of Strategy and Business, David K. Hurst reviews Smart Growth by Edward D. Hess. The review is below. For more on growth and sustainability see:

Nobel Laureate Joseph Stiglitz on Sustainability and Growth

Prosperity without Growth: A review of Smart Growth by Edward D. Hess

Edward D. Hess, professor of business administration and Batten Executive-in-Residence at the University of Virginia’s Darden School of Business, has a heretical thought: Growth may not be good. In Smart Growth, he questions the four major assumptions behind the conventional wisdom of corporate success, which he calls the “growth mental model” (GMM): that businesses must grow or die, that growth is unequivocally good, that growth should be smooth and continuous, and that quarterly earnings are the primary measure of success. In addition, he supplies a series of trenchant questions for managers to ask themselves about how, why, and even whether their firms should grow.

In nine crisp chapters, Hess demonstrates that the GMM is neither possible in practice nor feasible in theory, and that attempts to meet its demands can create insurmountable obstacles to corporate sustainability. His arguments are supported by a series of case studies showing that growth is usually uneven and episodic — impossible to sustain for more than relatively short periods of time. Thus, attempts to “implement” the GMM result either in profitless growth, especially through acquisitions, or in ersatz earnings produced via a wide variety of financial manipulations. To test whether the concept of the GMM is supported by theoretical perspectives on growth, Hess turns to economics, organizational strategy and design, and biology. He finds that neoclassical economics is the framework that is most sympathetic to the GMM, but its assumptions do not hold up in the real world; that the strategic and design perspective offers little support for the GMM; and that biological theories are notable for the stress they put on the limits to growth. So there is little support for the conventional wisdom in theory.

Hess’s conclusion is that corporations should aim for sustainable or “smart” growth by asking some key questions, especially regarding the resources most needed to support such growth. Following economist Edith Penrose’s resource-based theory of the firm, he contends that the true limit to growth is usually defined by the capabilities of the firm’s managers — supporting this argument with the well-documented case of Starbucks’s overreach, in which the rapid expansion in the number of stores caused liabilities to rise precipitously and diluted the value of the brand.

All this makes good sense. The only shortcoming may be the author’s failure to examine why the GMM is so robust in the face of all the evidence against it. Is it because there are large constituencies in the economy that generate revenue by pushing the GMM and thriving on the turmoil it creates? If so, is there a need for public policy addressing it? And what risks do firms run if they eschew the flawed GMM in favor of smart growth?

Author Profile:

David K. Hurst is a contributing editor of strategy+business. His writing has also appeared in the Harvard Business Review, the Financial Times, and other leading business publications. Hurst is the author of Crisis & Renewal: Meeting the Challenge of Organizational Change (Harvard Business School Press, 2002).

Reprinted with permission from the strategy+business website. Copyright 2010 by Booz & Company. All rights reserved.

More on Smart Growth at

Top Business Leaders Deliver Clean Energy Plan

Keywords: clean energy, business leaders, climate change, american energy innovation council

What do Americans spend more money on – potato chips, or energy research and development? See video below for the answer.

Seven business leaders, founders of American Energy Innovation Council, delivered a Business Plan For America’s Energy Future. The leaders are:

  • Norm Augustine, former chairman and CEO of Lockheed Martin
  • Ursula Burns, CEO of Xerox
  • John Doerr, partner at Kleiner Perkins Caufield & Byers
  • Bill Gates, chairman and former CEO of Microsoft
  • Chad Holliday, chairman of Bank of America and former chairman and CEO of DuPont
  • Jeff Immelt, chairman and CEO of GE
  • Tim Solso, chairman and CEO of Cummins Inc.

The US is the largest consumer of energy in the world. The American Energy Innovation Council makes the case that there is a pressing need for energy innovation, and we need to invest in that innovation.
Energy R&D Spending as a Share of Sales

Though energy is a key strategic component of any countries wellbeing, US energy R&D spending has been in decline.

Energy R&D Spending

Though the US is the worlds largest energy consumer, it spends less on energy R&D than China, France, Japan and Korea.

Energy as a Share of GDP
The council’s recommendations:

  • Create an independent national energy strategy board
  • Invest $16 billion per year in clean energy innovation
  • Create Centers of Excellence with strong domain expertise
  • Fund ARPA-E at $1 billion per year
  • Establish and fund a New Energy Challenge Program to build large-scale pilot projects

The full report can be viewed here, and for more on Bill Gates call for Zero Carbon emissions, see Bill Gates on Climate Change and Renewable Energy.

Bill Gates on Climate Change and Renewable Energy

Keywords: Bill Gates, climate change, energy, renewable energy, TED, zero carbon emmissions

Many newspapers and blogs are reporting on the Technology Review interview with Bill Gates (highlights below). Though that interview contains some good information, Gates’ presentation at TED was the stake in the ground that set the stage for this Technology Review interview. At TED, Gates called for reducing carbon emissions to zero. The presentation is worth watching. Considering that Gates is one of the most public faces of big business, his statements at TED are noteworthy:

  • climate change is real
  • climate change is the most important challenge on the planet
  • carbon emissions need to be reduce to zero as soon as possible, his goal is by 2050
  • increased investment in energy R&D is essential, and can be done at reasonable levels
  • zero carbon energy production makes business sense

Highlights from Technology Review interview with Bill Gates

On US Investment in Energy

TR: You are a member of the American Energy Innovation Council, which calls for a national energy policy that would increase U.S. investment in energy research every year from $5 billion to $16 billion. I was stunned that the U.S. government invests so little.

BG: I was stunned myself. The National Institutes of Health invest a bit more than $30 billion.

On Carbon Tax

It’s ideal to have a carbon tax, not just a price on carbon, which is this fuzzy word that includes cap-and-trade. You’re using the tax to create a mode shift to a different form of energy generation. And then you just take all the carbon-emitting plants, you look at their lifetime, and you say on a certain date this one has to be shut down and when a new one is put in place, it has to be low-CO2-emitting.

That’s a regulatory approach, and it’s very clear. Innovators are designing things for the power-plant buyers 10 years from now, who are looking at the regulatory and tax environment for the next 40 years. If you said to a utility company executive, which is more likely to stay in place: a cap-and-trade thing, whose price will vary all over the map, that will have some international things that will be shown to be a waste of money? Or a tax and a regulatory framework for plant replacement over the next 50 years? We should have a carbon tax. What we owe the developing world is this: we’re willing to pay high prices for energy plants above coal and drive prices down the curve so by the time they need to buy them, they don’t have to pay the high price.

Which is more likely: a carbon tax with all sorts of markets and options and uncertainties about prices, and traders in the middle, and confusion about who initially gets the most advantage? Or a regulatory thing and a 2 percent tax to fund the R&D so that utilities know they can buy a plant that’s emitting hardly any CO2? Raising energy prices by 2 percent and sending it to R&D activities seems easier in a weak economy than raising them 20 percent. Now, 0 percent is the easiest option of them all, but unfortunately, that doesn’t get us the solution to this problem.

The CO2 problem is simple. Any amount you emit causes warming, because there’s about a 20 percent fraction that stays for over 10,000 years. So the problem is to get essentially to zero CO2 emissions. And that’s a very hard problem, because you have sources like agriculture, rice, cows, and small sources out with the poorest people. So you better get the big sources: you better get rich-world transportation, rich-world electricity, and so on to get anywhere near your goal. If X or Y or Z gets you a 20 percent reduction in CO2, then you’ve just got the planet, what, another three years? Congratulations! I mean, is that what we have in mind: to delay Armageddon for three years? Is that really it?

The U.S. uses, per person, over twice as much energy as most other rich countries. And so it’s easy to say we should cut energy use through better buildings and higher MPG and all sorts of things. But even in the most optimistic case, if the U.S. is cutting its energy intensity by a factor of two, to get to European or Japanese levels, the amount of increased energy needed by poor people during that time frame will mean that there’s never going to be a year where the world uses less energy. The only hope is less CO2 per unit of energy. And no: there is no existing technology that at anywhere near economic levels gives us electricity with zero CO2.

On Renewable Energy

Almost everything called renewable energy is intermittent. I have another term for it: “energy farming.” In fact, you need not just a storage miracle, you need a transmission miracle, because intermittent sources are not available in an efficient form in all locations. Now, energy factories, which are hydrocarbon and nuclear energy–those things are nice. You can put a roof on them if you get bad weather. But energy farming? Good luck to you! Unfortunately, conventional energy factories emit CO2 and that is a very tough problem to solve, and there’s a huge disincentive to do research on it.

I think Gates approach to energy storage and transmission is too brute force. We are early into innovating alternative energy, and already there are some good innovations showing up that provide solutions to wind and sun intermittence. See Using Water Heaters to Store Excess Wind Energy for a good example of innovations that use existing infrastructure for storage and transmission.

Using Water Heaters to Store Excess Wind Energy

Keywords: energy management, energy storage, smart grid, wind energy, renewable energy

Wind PowerThe Bonneville Power Administration (BPA) is recruiting one hundred homeowners in Washington for an experiment on how to store surplus wind energy. The BPA is testing a promising smart-grid concept that would use residential water heaters to help manage the fluctuations of wind energy generation.

The project will address two problems experienced on the grid: shortage of power during peak times and surges of power during windy periods, when the energy isn’t needed.

The BPA, working with Mason County Public Utility District Number 3, will install special devices on water heaters that will communicate with the electrical grid and tell the water heaters to turn on or off, based on grid conditions and the amount of renewable energy that’s available.

Electric water heaterWhile homeowners will be able to override the control device at any time, it’s unlikely that they would even notice a change in temperature.

The water heaters in effect become energy storage devices — turning on to absorb excess power and shutting down when demand ramps up —leveling out the peaks and valleys of energy use. Benefits include:

  • no need for expensive and toxic battery storage
  • no need for fossil fuel burning power plants to fill in low wind energy gaps
  • water heaters provide distributed storage, avoiding point loads on grid
  • smart water heaters can be manufactured economically, for just a few dollars more.

Wind power is the fastest growing source of renewable energy, accounting for about 3 percent of US electric generation. About 53 million homes in the United States, or 42 percent of the total, use electric hot water heaters. Added up, they account for 13 percent to 17 percent of nationwide residential electricity use.

In the Pacific Northwest, home of the BPA, it’s estimated that there are 4.3 million water heaters that can store 2,600 megawatt-hours by allowing the storage temperature to vary by five degrees. (NB: For a detailed analysis see the Northwest Power and Conservation Council report prepared by Ken Corum.)

The Northwest Energy Coalition does a nice job detailing the background, and benefits of this approach to storing excess wind energy. Highlights of their articleUsing simple smart water heaters to integrate intermittent renewables, are below.

Highlights of Using simple smart water heaters to integrate intermittent renewables


Wind-generated power is clean, relatively cheap and available in large quantities. But the wind itself is quite unpredictable, so much so that for each average megawatt (aMW) of wind power we need, we must erect about 3 megawatts of turbine capacity, since actual output could be anywhere from 0 to 3 megawatts at any instant.

Suppose our region, which consumes about 21,000 average MW of electricity each year, wants to get a third of its power from wind.  We’d have to build about 21,000 megawatts (MW) of turbine capacity to get 7,000 average MW of electricity.  Given weather variability and the geographical spacing of wind projects, over time the actual production of those 21,000 megawatts of turbines will vary from about 1,000 MW to 15,000 MW due to weather fronts and daily warming patterns. Problematic 3,000- to 4,000-megawatt swings can occur in as little as 10-30 minutes.

To deal with large variations in wind, grid operators use some expensive tools now at their disposal, generally limited to ramping natural gas-fired combustion turbines and/or hydro generation up and down. Ramping up is fairly easy; today’s grid has ample reserve capacity on which to draw.

Ramping down is another matter. When wind generation suddenly spikes during periods of low demand (at night or during mild weather hours), the system can have less flexible generation on-line (nuclear and coal plants) that cannot be cut back to make room for the wind. The region’s inflexible “baseload” coal plants and one nuclear plant, which together provide more than a quarter of our electricity, cannot be economically ramped up and down in response to wind variability.

Previous Transformers and NW Energy Coalition’s Bright Future report have addressed wind-integration issues, noting – in particular – that the problems will lessen as we progressively eliminate coal-fueled power from the Northwest grid, as renewable projects grow and become more diverse and geographical dispersed, and as “smart grid” deployment provides a new back-up resource.

Smart grid to the rescue

In a Feb. 10, 2009, presentation to the Northwest Power and Conservation Council, Council staff member Ken Corum provided a powerful example of how one relatively simple smart grid innovation – using electric water heaters as temporary storage devices — could help the grid integrate large amounts of wind power at very low cost. We expand on Corum’s example below.

The Northwest power system serves about 4.3 million electric water heaters. If all were running at once, their loads would total more than 19,000 MW. Of course, they don’t all run at the same time.  Actual demand might be just a few hundred megawatts in the middle of the night, surging to more than 5,000 MW around 8 a.m. when people take their showers. Use drops during the day, and then peaks again at about 3,500 MW around 8 p.m. as people come home and wash dishes, clothes, etc.

Now imagine that as part of the smart grid, each water heater contains a chip that can receive signals from grid operators to raise or lower the water temperature by a few degrees. As wind generation picks up, the grid operator slightly raises the temperature set points on millions of water heater thermostats, thus “storing” the wind power for later use. Should the wind suddenly drop, the operator lowers the temperature points, causing many water heater elements to click off for a time.

Most people won’t even notice the small temperature changes. But spread over millions of water heaters, those few degrees of difference are enough to avoid ramping fossil-fuel and hydro generation up and down, thus improving system-wide fuel efficiency and leaving more water in the river for migrating salmon.

Once the infrastructure — smart meters that can communicate with both the utility and home appliances — is in place, manufacturers could start installing computer chips, adding perhaps $5-10 to the cost of a water heater, Given the system savings the water heater controls would generate, utilities could afford to cover the additional cost, and/or offer customers a rate discount or other incentive in exchange for limited control of their water heaters.

Currently, for example, Idaho Power pays residential customers $7 per month to participate in its A/C Cool Credit Program, which slightly backs down air conditioning power during peak demand periods.

Water heaters are a great choice for smart grid applications because of their relatively short life spans. Over about 12 years, the current stock could be totally replaced with smart water heaters.

Shifting peaks – and keeping the lights on

Aside from facilitating the integration of thousands of megawatts of wind power, controllable water heaters (and other appliances and equipment that draw electricity 24/7) provide two other benefits:

1. Reliability. Major power lines and generating plants occasionally suffer sudden outages due to fires, ice, wind or equipment failure.  Turning down a few million water heaters could quickly shave demand enough to cover the power loss and avoid a major blackout.  In fact, the chips discussed above can be made to automatically and instantaneously detect frequency changes in the electricity they use without any operator intervention. The chip reacts to a sudden change from the standard 60 cycles per second by instantly turning the heater on or off to keep the grid stable.

2. Money. Utilities spend a lot of money following the daily peaks and valleys of human activity.  Thirty to 40% of their generation capacity sits idle for much of each 24-hour day.  Another 5-10% come on only during very extreme weather — the hottest or coldest days.  But utilities must cover the capital and maintenance costs of all these resources, no matter how little used.

Controllable water heaters would rarely go on during system peaks and could help utilities respond to system emergencies … at huge cost savings. Utilities would be able to spread demand more evenly throughout the day, increasing power line and substation efficiency and avoiding the costs of some mostly idle generation resources. These actions could lower bills substantially and/or provide savings to fund additional smart grid investment.

And that’s just one example

Though this article has focused on electric water heaters, similar controls can be installed in freezers, air conditioners and electric furnaces.  Electric and hybrid-electric vehicles are other examples. Their charging rates can be altered while the vehicles are plugged into the grid. The opportunities are only starting to reveal themselves.

Allowing grid operators access to our appliance controls raises issues of cybersecurity, privacy and the potential for short-circuiting due process (e.g., automatic shutoff for non-payment of bills). Those issues must be adequately addressed. But the smart grid can help move the Northwest quickly and affordably to a bright energy future.

Google: Implications of California’s Proposition 23

Keywords: Google, California Proposition 23, Vinod Khosla, William Wiehl, cleantech, A.B. 32

Vinod Khosla
Vinod Khosla

Google convened an event at their Silicon Valley campus to discuss the implications of California’s Proposition 23, an attempt to rollback the state’s ambitious climate legislation (A.B. 32). In an article at Greentech Media, panelists, including venture capitalist Vinod Khosla, sounded upbeat on contributions California cleantech ventures will make toward solving US energy and climate challenges.

Highlights from Google’s Implications for California Proposition 23 Event

  • Khosla stole the show with his outlook for the clean-tech innovation and energy use. “In 10 to 15 years, we will be shutting down (power) plants” because of an excess of electricity in this country, Khosla said. There is an “infinite” opportunity for technological innovation.
  • Khosla’s firm is backing companies that hope to cut energy use in lighting and data center server racks by 80 percent.
  • Regarding China’s serious investment in cleantech, Khosla said “I won’t say China is winning the cleantech race,” he says. “But they are clearly paying a lot more attention to the race.”
  • Asked if there was an advantage to creating companies in Silicon Valley rather than China, Khosla was emphatic. “No question about it. The people are here. The markets are here.”
  • According to Khosla, nuclear power no longer has an advantage over renewables. There hasn’t been a nuclear plant build in recent years that can beat $7,000 a kilowatt. That makes wind and solar (in some parts of the world) competitive, he says.
  • Proposition 23 is a threat because it will kill the clean-energy markets that California’s A.B. 32 created. Both Khosla and Google Green Energy Czar William Wiehl concur on this point. Proposition 23, which will go to the ballot in November, would suspend A.B. 32 [see note below for background on A.B 32] until the state’s unemployment rate drops to 5.5 percent or less for four consecutive quarters. Texas oil companies Valero and Tesoro back the measure. A.B. 32 sets reporting guidelines for polluters, establishes a statewide limit for carbon, and guides emissions back to 1990 levels by 2020.
  • A.B. 32 has helped create 500,000 cleantech jobs in California, Wiehl says.
  • Google, adds Wiehl, has made strides with energy efficiency. The company builds its own data centers and servers. As a result, data center energy use is half of what it would be if the company followed industry-standard best practices, he said.
  • As to the next Google — “There is no doubt in my mind we will see 10 of these” in cleantech, says Khosla. “Today, California has the pole position to win that race.”


California’s major initiatives for reducing climate change or greenhouse gas (GHG) emissions are outlined in Assembly Bill 32 (signed into law 2006), 2005 Executive Order and a 2004 ARB regulation to reduce passenger car GHG emissions. These efforts aim at reducing GHG emissions to 1990 levels by 2020 – a reduction of approximately 30 percent, and then an 80 percent reduction below 1990 levels by 2050. The main strategies for making these reductions are outlined in the Scoping Plan. Also provided here are links to state agencies and other groups working on climate issues which are being coordinated by the state’s Climate Action Team.

More on the California’s Prop 23 initiative here:

California’s Prop 23 Morphing into Prop 26

Jeremy Grantham: Everything You Need to Know About Global Warming in 5 Minutes

Jeremy Grantham, savvy dean of US money management, has boiled climate change down to thirteen essentials.

Jeremy Grantham is Chairman of the Board of Grantham Mayo Van Otterloo (GMO), a Boston-based asset management firm. GMO is one of the largest managers of such funds in the world. Grantham is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets, and is particularly noted for his prediction of various bubbles.

Grantham’s Everything You Need to Know About Global Warming in 5 Minutes appeared in GMO’s Quarterly Letter, published July 2010.

Everything You Need to Know About Global Warming in 5 Minutes

  1. The amount of carbon dioxide (CO2) in the atmosphere, after at least several hundred thousand years of remaining within a constant range, started to rise with the advent of the Industrial Revolution. It has increased by almost 40% and is rising each year. This is certain and straightforward.
  2. One of the properties of CO2 is that it creates a greenhouse effect and, all other things being equal, an increase in its concentration in the atmosphere causes the Earth’s temperature to rise. This is just physics. (The amount of other greenhouse gases in the atmosphere, such as methane, has also risen steeply since industrialization, which has added to the impact of higher CO2 levels.)
  3. Several other factors, like changes in solar output, have major influences on climate over millennia, but these effects have been observed and measured. They alone cannot explain the rise in the global temperature over the past 50 years.
  4. The uncertainties arise when it comes to the interaction between greenhouse gases and other factors in the complicated climate system. It is impossible to be sure exactly how quickly or how much the temperature will rise. But, the past can be measured. The temperature has indeed steadily risen over the past century while greenhouse gas levels have increased. But the forecasts still range very widely for what will happen in the future, ranging from a small but still potentially harmful rise of 1 to 2 degrees Fahrenheit to a potentially disastrous level of +6 to +10 degrees Fahrenheit within this century. A warmer atmosphere melts glaciers and ice sheets, and causes global sea levels to rise. A warmer atmosphere also contains more energy and holds more water, changing the global occurrences of storms, floods, and other extreme weather events.
  5. Skeptics argue that this wide range of uncertainty about future temperature changes lowers the need to act: “Why spend money when you’re not certain?” But since the penalties can rise at an accelerating rate at the tail, a wider range implies a greater risk (and a greater expected value of the costs.) This is logically and mathematically rigorous and yet is still argued.
  6. Pascal asks the question: What is the expected value of a very small chance of an infinite loss? And, he answers, “Infinite.” In this example, what is the cost of lowering CO2 output and having the long-term effect of increasing CO2 turn out to be nominal? The cost appears to be equal to foregoing, once in your life, six months’ to one year’s global growth – 2% to 4% or less. The benefits, even with no warming, include: energy independence from the Middle East; more jobs, since wind and solar power and increased efficiency are more labor-intensive than another coal-fired power plant; less pollution of streams and air; and an early leadership role for the U.S. in industries that will inevitably become important. Conversely, what are the costs of not acting on prevention when the results turn out to be serious: costs that may dwarf those for prevention; and probable political destabilization from droughts, famine, mass migrations, and even war. And, to Pascal’s real point, what might be the cost at the very extreme end of the distribution: definitely life changing, possibly life threatening.
  7. The biggest cost of all from global warming is likely to be the accumulated loss of biodiversity. This features nowhere in economic cost-benefit analysis because, not surprisingly, it is hard to put a price on that which is priceless.
  8. A special word on the right-leaning think tanks: As libertarians, they abhor the need for government spending or even governmental leadership, which in their opinion is best left to private enterprise. In general, this may be an excellent idea. But global warming is a classic tragedy of the commons – seeking your own individual advantage, for once, does not lead to the common good, and the problem desperately needs government leadership and regulation. Sensing this, these think tanks have allowed their drive for desirable policy to trump science. Not a good idea.
  9. Also, I should make a brief note to my own group – die hard contrarians. Dear fellow contrarians, I know the majority is usually wrong in the behavioral jungle of the stock market. And Heaven knows I have seen the soft scientists who lead finance theory attempt to bully their way to a uniform acceptance of the bankrupt theory of rational expectations and market efficiency. But climate warming involves hard science. The two most prestigious bastions of hard science are the National Academy in the U.S. and the Royal Society in the U.K., to which Isaac Newton and the rest of that huge 18th century cohort of brilliant scientists belonged. The presidents of both societies wrote a note recently, emphasizing the seriousness of the climate problem and that it was man- made. (See the attachment to last quarter’s Letter.) Both societies have also made full reports on behalf of their membership stating the same. Do we believe the whole elite of science is in a conspiracy? At some point in the development of a scientific truth, contrarians risk becoming flat earthers.
  10. Conspiracy theorists claim to believe that global warming is a carefully constructed hoax driven by scientists desperate for … what? Being needled by nonscientific newspaper reports, by blogs, and by right-wing politicians and think tanks? Most hard scientists hate themselves or their colleagues for being in the news. Being a climate scientist spokesman has already become a hindrance to an academic career, including tenure. I have a much simpler but plausible “conspiracy theory”: that fossil energy companies, driven by the need to protect hundreds of billions of dollars of profits, encourage obfuscation of the inconvenient scientific results.
  11. Why are we arguing the issue? Challenging vested interests as powerful as the oil and coal lobbies was never going to be easy. Scientists are not naturally aggressive defenders of arguments. In short, they are conservatives by training: never, ever risk overstating your ideas. The skeptics are far, far more determined and expert propagandists to boot. They are also well funded. That smoking caused cancer was obfuscated deliberately and effectively for 20 years at a cost of hundreds of thousands of extra deaths. We know that for certain now, yet those who caused this fatal delay have never been held accountable. The profits of the oil and coal industry make tobacco’s resources look like a rounding error. In some notable cases, the obfuscators of global warming actually use the same “experts” as the tobacco industry did! The obfuscators’ simple and direct motivation – making money in the near term, which anyone can relate to – combined with their resources and, as it turns out, propaganda talents, have meant that we are arguing the science long after it has been nailed down. I, for one, admire them for their P.R. skills, while wondering, as always: “Have they no grandchildren?”
  12. Almost no one wants to change. The long-established status quo is very comfortable, and we are used to its deficiencies. But for this problem we must change. This is never easy.
  13. Almost everyone wants to hear good news. They want to believe that dangerous global warming is a hoax. They, therefore, desperately want to believe the skeptics. This is a problem for all of us.

Global warming will be the most important investment issue for the foreseeable future. But how to make money around this issue in the next few years is not yet clear to me. In a fast-moving field rife with treacherous politics, there will be many failures. Marketing a “climate” fund would be much easier than outperforming with it.