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“Green” Is No Longer the Magic Bullet: Deloitte White Paper Explores New Path Toward Clean Energy, Jobs and Security

WASHINGTON, D.C., June 7, 2010 — “Green” is no longer the magic bullet to solve our energy concerns, according to Dr. Joseph A. Stanislaw, an independent senior advisor to Deloitte LLP and founder of the advisory firm The JAStanislaw Group, LLC. Instead, says Stanislaw, a “transition from green to clean” can power the next phase of development of the world’s energy and economic sectors.

Stanislaw makes this argument in a new white paper titled, “Clean Energy 1.0: Moving beyond green to create sustainable jobs and a long-term energy strategy,” which focuses on the three interconnected mandates that are driving the evolution of clean energy in the United States: protecting the environment, creating enduring jobs and enhancing national security.

Stanislaw, who is the co-founder and former president and CEO of Cambridge Energy Research Associates, begins his white paper with historical context: “Just two years ago, when oil was levitating towards $100 a barrel and Russia was playing politics with pipelines — green energy was the holy grail of energy security. Then, when concern over climate change reached a fever pitch, it became the silver bullet to solve global warming. And, finally, when the ‘Great Recession’ struck, green energy was the panacea for unemployment and falling wages.”

This metamorphosis, he says, is part of a necessary maturing of the debate around energy because clean energy technologies must “evolve from their current 1.0 stage to a 2.0 stage and beyond.” He draws an analogy between clean energy and the high-tech industry: “Right now, clean energy is where the mobile-phone industry was in 1983, when Motorola released its two-pound, $4,000 DynaTac 8000x, or where the computing world stood that same year, when Windows 1.0 was launched.”

Stanislaw goes on to explain that the past two years alone have shown us that green energy is “no longer the magic bullet.” Clean energy, he says, can now take its “pivotal but mortal place in an array of energy forms and technologies that will power the world in the 21st century.” He claims that the ‘transition from green to clean’ will power the next phase of development of the world economy, as we race to create technologies that help us better produce energy and reduce its use.

The white paper points out that the stage is now set for a smart, long-term American energy strategy—for numerous reasons:

  • Energy is now top of mind: The federal stimulus bill has helped kick-start a massive investment in clean energy technologies and has shifted America’s psychology on energy.
  • Steering a new strategic course: Our recent immersion in clean energy has allowed us to better understand—through experimentation and debate—what our long-term energy strategy might be.
  • Clean beats green: We have come to understand that what matters most is not green energy but clean energy—whether it comes from the wind, clean coal, natural gas or nuclear. And, best of all, is Americans’ greater understanding of using less energy overall.
  • Energy is jobs policy: Policymakers have learned that energy policy cannot be separated from jobs policy—and that sustainable jobs matter most.
  • Energy improves the bottom line: The recession has underscored the pocketbook benefits of efficiency and clean energy for individuals and corporations, in addition to their positive impact on the climate change and national security. “Efficiency and clean energy are now firmly embedded in the consciousness of Americans,” says Stanislaw.
  • The public wants to go clean: Americans continue to insist that corporations “go clean,” thus shaping product development and capital allocation. “Americans should encourage policymakers to follow suit,” according to Stanislaw.

He advocates several steps to help move the United States along the clean-development continuum. First, he stresses developing a federal framework. “The absence of a federal framework is now an enormous handicap,” he says. “The federal government should not avoid mandating renewable power consumption nationwide. Whether the target is 20 percent of American energy coming from renewable sources by 2020, or something more modest, a mandate is important. Policymakers should not try to pick winners, but they should set targets.”

Stanislaw also stresses the need to reduce and manage energy demand instead of just producing clean energy. “Energy efficiency is perhaps the biggest untapped market for entrepreneurs, investors, and policymakers. It meets all the demands of those seeking to reduce emissions and increase national security, while having the potential to contribute mightily to the creation of sustainable, well-paying jobs.”
“And finally,” says Stanislaw, “research and development must rise again.” He cites an estimate that before the stimulus bill, the Federal government budget for energy research was the same today, adjusted for inflation, as it was in 1968 — about $3 billion. “This situation is made worse by a decline in energy-related research and development expenditures in the private sector over recent decades,” he adds.

“We should reverse this trend by creating market conditions to promote investments in research, development, and market penetration in energy efficiency, in new methods of consumption, and in all forms of energy, be they traditional — oil, gas, coal, nuclear — or alternative. “

Stanislaw concludes his white paper by reiterating that this is just the early dawn of the clean energy era. “Only in the past year or two has energy become a national state of mind,” he said. “But the historic importance of this can hardly be underestimated.”

He argues that businesses and governments should respond to this new reality by creating the products and services that will help Americans manage their energy consumption. Corporations, meanwhile, should realize that in addition to their core business, each and every one of them is an energy company, too — and that managing their energy usage can be critical to their bottom line. Last, policymakers can amplify these trends by creating the rules of the game and funding the research that will position the United States at the cutting edge of the clean energy evolution.

To download the white paper, visit www.deloitte.com/us/CleanEnergy.

About the Deloitte Center for Energy Solutions

The Deloitte Center for Energy Solutions provides a forum for innovation, thought leadership, ground-breaking research and industry collaboration to solve the most complex energy challenges. Through the Center, Deloitte’s Energy & Resources group leads the debate on critical topics on the minds of executives — from legislative and regulatory policy to operational efficiency to sustainable and profitable growth. The Center provides complete solutions to Deloitte’s clients through a global network of specialists and thought leaders. With locations in Houston and Washington, D.C., the Center offers interaction through seminars, roundtables and other forms of engagement, where established and growing companies can come together to learn, discuss and debate. For more information, see  Deloitte Center for Energy Solutions.

As used in this document, “Deloitte” means Deloitte LLP and Deloitte Services LP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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