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Moderator:
Paul Deninger, Vice Chairman, Jefferies & Company Inc.

"The United States is the Saudi Arabia of waste," said Jim McDermott, managing director of US Renewables Group, pointing to some calculations that the top 10 U.S. waste haulers could produce between 20 billion and 30 billion gallons of ethanol via waste gasification. America is full of green BTUs just waiting to be harnessed, panelists agreed.

Robert Kleine cited a study that said 80 percent of the electricity in the nation could potentially be provided by wind generation around the Great Lakes. Given the enormous potential for clean energy and other clean tech sectors, moderator Paul Deninger asked panelists to discuss the benefits and pitfalls that face investors.

While all panelists were enthusiastic about possibilities for enormous growth in the clean tech sector, Steve Westly suggested that "there is still too much hyperbole" and that investors and venture capitalists must focus on fundamentals. The panel generally agreed with Deninger, who said clean tech is becoming the "third leg of the stool of venture capital after IT and health technologies." But McDermott said, "Reliability trumps novelty." In many other areas of venture capital, novelty is key to allowing companies to mark up their prices and generate more revenue; in clean tech, "low-cost providers rule the day."

Lynde Coit pointed to the difference in the investment climate today vs. a year ago. Investment normally goes through several stages — from venture capitalists to private equity to other investors, but with the economic downturn, investors are no longer comfortable that the next person in the chain will be there.

Panelists agreed that government should play a role in encouraging clean-tech investment and providing some incentives against the backdrop of sometimes extreme volatility in commodity prices.

Jonathan Bloch called clean tech a good repository for money from the stimulus plan, as it is neither a straight financing deal (which would be done by a bank) nor a traditional venture capital deal. McDermott warned, however, that until the government makes the rules of the game clear and gives guidance for the markets, simply writing checks will not solve anything.

Investors will be leery about lending if they don′t know what the regulatory landscape will look like in future. Non-economic "green" mandates rather than tax incentives or other direct cash transfers may be more effective, Westly said, adding that the government would be well-advised to follow California′s lead in environmental mandates. Rather than mandating that car companies produce so many plug-in hybrids or electric vehicles, Westly and Bloch said, just mandate "fuel-efficient vehicles" and let the market determine which technology is the winner based on price competitiveness.

Clean technology is heavily dependent on government regulation and financing, making investing in the technologies unattractive to some despite the potential for large upsides. McDermott said what's missing are a coherent U.S. energy policy and a global framework for pricing carbon. "Until rules are clear and pricing mechanisms are there, I think it′s going to be a hodge-podge," McDermott said.

Moderator:
Peter Passell, Senior Fellow, Milken Institute; Editor, The Milken Institute Review

In the aftermath of the nuclear disasters at Three Mile Island and Chernobyl, nuclear energy development largely hit a moratorium in the United States. More recently, the dual threats of climate change and growing energy demand has reopened the debate regarding the nuclear option. In fact, the NRC has received 17 license applications for 26 new nuclear power plants in the United States. But both sides in the debate remain passionate and committed, and Monday′s panel was no different.

Potential energy resources can′t be taken off the table in any bid to achieve energy security and energy independence and to fight climate change, Lady Barbara Thomas Judge said. Although many issues need to be addressed including improved communication, planning, economics and resources, she firmly believes nuclear energy should be an option.

David Scott agreed that nuclear energy should be an option and said it is among the United Arab Emirates' goals of energy diversification, widespread electricity accessibility and domestic development. Although the UAE is aggressively developing solar generation capabilities, it doesn′t provide the required baseload while nuclear energy does. Nuclear energy also complements the UAE's overall decision to move forward with renewable energy options.

These views contrasted sharply with the beliefs of Amory Lovins. Lovins said the efficient use of electricity, cogeneration of heat and electricity, and distributed renewables were three options that already are cheaper than nuclear energy without safety, proliferation or waste disposal issues. He also argued that "global capital markets put $90 billion into distributed renewables and zero dollars into nuclear" for a reason. "If we take market behavior seriously," he said, we should understand that nuclear energy isn′t cost competitive with existing options that are only getting cheaper.

Judge countered that the debate over nuclear energy "is not a zero sum game." She said the world needs a multitude of resources to address the growing global demand for energy. Nuclear is one of many options that need to be considered but is by no means the only option.

Scott emphasized the UAE's aspirations to diversify power generation methods and said each planning authority must look at its requirements and decide what will fulfill them.

He also discussed the UAE civil nuclear program as the first that is working in lock-step with the West to limit the risks of nuclear proliferation. The UAE program won't centralize activities that create weapons grade materials and will insist on explicit transparency.

Lovins reiterated his skepticism that the UAE's model will stop people from using civil nuclear materials to make weapons — even without enriching materials or recovering fuel themselves.

Moderator:
Joel Kurtzman, Senior Fellow, Milken Institute; Executive Director, SAVE

The problem with green energy is not on the technology or even the technology financing side, but rather in the incentives for adoption, according to this panel. Particularly, speaker pointed to the continually changing U.S. regulatory landscape as one of the main sticking points for late-stage green technology adoption. As Boris Klebensberger of SolarWorld AG put it, every two years, utilities have to reassess which technologies are most financially viable given the new regulatory structure. "In Germany, we would say there's a new pig in town."

Klebensberger said that feed-in tariffs have driven Germany's success in the renewable energy market (Germany has 50 percent of the world market for solar power). The country first tried an American-style incentive system, in which households would receive tax credits for buying solar systems, but adoption growth under this approach was minimal. When Germany moved to the feed-in tariff — rewarding households for the energy they produce rather than what they spend on producing it — they saw adoption skyrocket.

Lee Bailey of US Renewables Group agreed that the question facing America is whether to turn to another financial system or continue "monkeying around with these two-year fixes." He suggested that it was not a lack of will or technology, but a lack of capital in the system.

Joseph Pettus pointed to Safeway's method of attaining clean, renewable energy by taking itself off the grid and producing the energy itself. Although they've been able to achieve great savings by this method, they still have to pay a $30 million per year penalty for not being on the grid. But in spite of these penalties, Pettus said Safeway is "15 years ahead of AB32 and we're making money doing it."

Moderator Joel Kurtzman of the Milken Institute chimed in that in the energy market, there are 135 regulators — some private, some municipal, some statewide or national — on top of this policy penalty of exiting the system. This makes it costly and time-consuming to navigate the regulatory system, potentially depressing uptake of renewable technologies.

G. Chris Andersen of GC Andersen Partners expressed concern about transmission, distribution and storage, which affect the price and deliverability of clean energy. He maintained that the industry will probably have to turn to unique financial structures, such as REIT financing, which could cut the cost of capital by a third.

Amory Lovins of the Rocky Mountain Institute emphasized that grid development must be done thoughtfully, with an eye to the most efficient distribution of different types of energy to different parts of the country. Lovins also maintained that worries surrounding the difficulty of integrating solar and wind energy into the grid are largely overblown; he insisted that it is cheaper than integrating new thermal plants, which is what we are currently doing. Klebensberger agreed, citing a study that says solar and wind energies are usually added to peak electricity usage, so storage is not as big of a problem as some may believe.

Moderator:
Nancy Pfund, Managing Partner, DBL Investors

Three trillion dollars.

That is the potential savings in new electricity generation costs if the G-8 countries were to double the speed at which they increase energy efficiency. This and other stark facts kicked off a discussion about how improving energy efficiency can be a profitable venture with clear potential for environmental and economic good.

A common theme was that, for homeowners, the desire for energy efficiency is not solely "dollars driven," in the words of Martha Amram. People look for ways to improve the comfort in their home, and if that can be done by increasing energy efficiency, so be it. David Arfin reiterated the point, with a slight twist, emphasizing the need to move from portraying decisions about home efficiency and renewable energy as one of "investment" to more of a no-brainer: "If I could save money and help the environment, why wouldn′t I do this?"

Toward that end, his company, Solarcity, began offering a lease-based system to reduce up-front costs and lower overall energy payments while greatly obviating a homeowner's need to navigate a complex web of regulations and financial credits on their own. The result? A tremendous take-off in home installations relative to SolarCity's major competitors.

Bill Philips said Home Depot has seen growth in "do-it-for-me" rather than "do-it-yourself" projects, in which customers contract with Home Depot for purchase, delivery and installation. Being responsible for the "envelope of the home," Phillips was naturally led into the business of energy efficiency, with items like insulation and windows playing a critical role in keeping heat and cold where they should be, resulting in lower energy bills and increased comfort.

Not all efficiency problems can be solved easily at the level of the individual homeowner. James Davis and Mark Pougnet said their businesses work with large organizations to increase their effect. In the case of Chevron, Davis described how its focus on large institutions like the federal government allows them to undertake beneficial efficiency projects with longer payback periods than a private homeowner would find enticing.

While they plan to expand to home-based sales, Pougnet's company began its business of smart metering and monitoring software by linking with utilities, with a long-term vision that a well-monitored and data-rich grid will allow for gains at both ends of the power line, helping utilities better forecast demand and allowing users to make informed decisions about their electricity use. If that happens, it would neatly link energy efficiency with the efficiency of markets.

Moderator:
Peter Passell, Senior Fellow, Milken Institute; Editor, The Milken Institute Review

As Copenhagen prepares to host the next major United Nations conference on climate change, there is renewed optimism that the Obama administration and a Democratic Congress will spur the United States to take action on controlling emissions. But to succeed, action will have to be coordinated globally, and it will have to involve not just the U.S. and the rest of the developed world but also China, India and other developing nations. And to date, only modest sacrifices have been made.

The panel was largely in agreement that a cap-and-trade system is the best approach to limiting and reducing carbon emissions, but expressed skepticism regarding the auction system of carbon permits being backed by the Obama administration, which would put revenue into hands of politicians in Washington. Robert Hahn of the American Enterprise Institute was highly doubtful that a cap-and-trade bill would pass if it contains an auction component because American industry would not sit idly by and say, "Sure, we'll be happy to give the money to the government."

Neil Eckert of the Climate Exchange solidified the feeling by stating that he prefers cap-and-trade because it generally puts the money outside the hands of the government, which may be tempted to use it for general fund purposes, and straight into financing alternative or clean energy. Andrew Treusch advocated a North American cap-and-trade system, since Canada is so economically tied to the United States; he added that the political will to implement this idea exists.

The panel also weighed in on the desired outcomes from Copenhagen. Eckert suggested setting a global long-term market, establishing a framework for the carbon market as well as providing certainty by mapping out its future. This will involve understanding that China will come to the table — but via the corporate route rather than the governmental route — and setting achievable targets.

On the topic of how to bring developing countries — specifically China, India, Brazil, Russia and Indonesia — into the fold, the panel agreed that a system of functioning, verifiable offsets are a key prerequisite. These would drastically reduce the cost of a carbon-trading system, but to work, they need a mechanism for standardized and demonstrable standards.

The discussion then turned beyond emissions controls and toward dealing with the actual effects of global warming. Do we have ways to cope? Hahn noted the obvious need to adapt but furthered that we have no idea about the costs of that process. Treusch reported that since 2oC or more is already expected, Canada is preparing for rising ocean levels, a reduction in permafrost and changes in agriculture. Eckert stressed that "we need every tool in the box." He also believes that some form of emergency liquidity would be extremely helpful. Any progress is positive but we need financial and physical adaptation, sea walls, carbon markets and taxes, etc., to counteract the threat.

Ivan Gold of Perkins Coie noted that actions taken by individual countries may have collective consequences. He believes there are too many people putting too much stress on natural resources, setting the stage for future conflicts. The panel also added that the poorest nations will be the most adversely affected by climate change, which could have costly and dangerous geopolitical consequences.

Speaker:
Vinod Khosla, Founder, Khosla Ventures

Interviewer:
Elizabeth Corcoran, Silicon Valley Bureau Chief, Forbes

"I turn every problem into an opportunity," Vinod Khosla says.

In his portfolio are 50 clean tech companies that he hopes will develop technological innovations that will revolutionize energy. Khosla said the energy problem is so massive that it can′t be solved by government funding. It must be addressed by the private sector through the proliferation of technologies that achieve unsubsidized market sustainability.

Khosla expects a carbon-constrained world, with so many legislative and political initiatives being sought to reduce the amount of carbon emissions. As a result, developing sustainable alternative fuels is critical, he said.

He expressed interest in the development of cellulosic ethanol, a biofuel made from wood, grasses or the non-edible parts of plants. Although ethanol made from corn and soybeans is a useful stepping-stone, Khosla sees ethanol made from non-food sources as a more important and useful resource to replace fossil fuels.

Khosla stressed the importance of addressing climate change through a cap-and-trade system. "We have to have cap and trade; we don′t have a choice," he said. Khosla said developing countries with smaller per capita gross domestic product shouldn′t have absolute carbon caps but could participate in relative terms.

He compared climate change to homeowners insurance. While insurance is common, climate change is a far greater risk than fires or floods and should be handled as such. In fact, Khosla argued, climate change poses a greater challenge than terrorism or nuclear proliferation.

As an investor, Khosla has been interested in improving the efficiency of lighting, batteries, motors, pumps and air conditioners because of the profit margin. He recognizes that hybrid electric cars are a step in the right direction to reduce some emissions and improve mileage, but their cost makes them a less feasible option to solve the energy problem.

He advised investors to identify the most promising trends in technology by looking at what doctoral students are studying at the top science and engineering programs.

Khosla referred to the importance of "black swans," extraordinarily rare events that completely change the paradigm. The financial downturn would be classified as a negative black swan, while technological innovations to redefine energy would be a positive black swan. "I′m a technology optimist," he said, predicting that by 2030 fossil fuels would struggle to compete with newly developed renewable energies.

Moderator:
Joel Kurtzman, Senior Fellow, Milken Institute; Executive Director, SAVE

The United States' electrical grid must be modernized before the nation can take advantage of renewable energy sources, a panel of experts said.

An updated electrical grid is "a vital component of any movement that we have toward increased use of solar and wind energy," moderator Joel Kurtzman said. Although 100 square miles in Arizona could provide all the nation′s electrical needs if currently available technologies were deployed there, it would not be feasible to transmit electricity to the entire country using the current grid, said Alan Salzman of VantagePoint Venture Partners.

Modernizing the aging electrical grid will present "enormous opportunities and returns, both for consumers and investors," Salzman said. By upgrading to a "smart grid," energy providers will have the flexibility to tap into renewable energy sources and the ability to better monitor and manage their transmission line networks.

The global investment into electrical grids is projected to be $16 trillion in the next 20 years. The industry will focus heavily on increasing power storage, electricity generation, transmission capacity and grid security.

Arnold Leitner of SkyFuel Inc. said thermal energy, such as heat contained by large volumes of salt water, is an efficient and environmentally friendly method of storing power. Currently, the electrical grid has virtually no storage capacity, so it has been difficult to make use of sources such as nocturnal wind that occurs in certain areas of the country.

Ron Stoltz of Sandia National Laboratories said there is no security oversight of the national electrical grid because of the fragmented nature of regulation. The U.S. electrical grid is regulated by more than 130 agencies at the federal, state and municipal levels. "There is no way that this country will achieve its energy requirements without a fundamental change in regulation," said Tom Casey of Current Group.

The shift toward electric vehicles also will affect the grid. "The electrification of vehicles is a certainty; everybody in the industry understands that′s where we′re going. But the grid and the infrastructure need to improve for that to occur," Salzman said.

Electric vehicles will act as mobile stores of energy and may be able return power to the grid during times of peak demand. While Leitner questioned whether consumers would be willing to put energy back into the grid, others on the panel were confident that incentives and education would encourage consumers to participate.

Moderator:
Peter Passell, Senior Fellow, Milken Institute; Editor, The Milken Institute Review

In the next two to five years, oil prices are likely to revert back to levels seen during the 2007 oil shock, as global demand vastly outpaces supply, said Scott Nyquist of McKinsey & Company. Given the amnesia the U.S. typically has with regard to the pain felt in previous oil shocks, moderator Peter Passell of the Milken Institute asked panelists to weigh in on how consumers and decision-makers should plan rationally for the future.

Panelists Mikkal Herberg of the Pacific Council on Energy Policy and Amory Lovins of the Rocky Mountain Institute both stressed that developing countries (particularly India and China, where the process of motorization speeds along) are keenly aware of their role in driving up oil prices and also worried about their dependence on imported oil. But as Lovins pointed out, they are also moving to utilize leapfrog technology as an integrated part of their policies. "China's leaders are deathly afraid of falling into the oil trap we did," said Lovins, adding that because of this, many pundits who are simply extrapolating energy demand from past demand are probably overestimating the impact. Still, the impact is not minimal. Herberg pointed out that China is adding 11 million cars a year to its fleet.

Considering the likelihood of increasing demand, Passell asked panelists to comment on the viability of "brute force drilling" to supplement supply in the U.S. Robert Hahn of the American Enterprise Institute said that a cost-benefit analysis has suggested drilling in some areas (such as the outer continental shelf) might be worth opening up. But both he and the other panelists did not believe that increased drilling in the U.S. would help to lower oil prices.

Commenting on the plausibility of drilling in the Alaska National Wildlife Refuge (ANWR), Hahn said that there are certain expectations of the future that he believes could make that profitable, but Lovins countered that it is extremely expensive and risky to drill in ANWR due to the crumbling and indefensible infrastructure of the Trans Alaska Pipeline. If someone were to destroy part of that pipeline in the winter, he warned, "all that hot oil would congeal in a couple of weeks to the world′s biggest chapstick."

Concluding that there were few supply-side solutions that are going to make much of a difference, particularly given the resource nationalism and insecurity around many of the existing proven reserves, Hahn and others said that price effects and efficiency gains would be the best ways to change demand. Herberg maintained that the U.S. will continue to be the global delinquent until we raise the cost of oil. Nyquist chimed in that the main question is whether the U.S. can weather future oil shocks, and if the government decides we can, then we should "let the market do its thing"; otherwise there may be room for interventions or mandates.

Moderator:
Jeffrey Tannenbaum, Founder and President, Fir Tree Partners

Commercial and residential buildings are responsible for 40 percent of all greenhouse gas emissions annually in the U.S. Retrofitting the nation's aging building stock would drastically reduce the carbon impact, and now there's a tool to help make it happen.

The recent emergence of Property Assessed Clean Energy, or PACE, bonds has given cities and states the tools to lead the charge for improving energy efficiency. In the PACE framework, cities and counties form financing districts that could issue bonds to provide financing for residential and commercial property owners to voluntarily retrofit buildings and make improvements such as installing solar, wind or geothermal energy systems.

Property owners would repay the loans over 20 years through a special property assessment, with the paper secured by a super-senior position, much like any property tax. Up-front costs for owners are dramatically reduced, which improves return on investment and the internal rate of return and doesn't discourage them from opting in.

Dan Probst of Jones Lang LaSalle estimates that the potential market size for retrofitting buildings is anywhere from $600 billion to more than $1 trillion. About 75 percent of commercial buildings are more than 20 years old.

Challenges to embracing PACE bonds exist on financing and legal fronts. For financing, the question relates to how you enable these relatively small-scale financings that have local, non-standardized appearances to work within the large-scale municipal bond market.

Craig Hill of Northcross, Hill & Ach Inc. said a Department of Energy guarantee would enable a standardized, marketable product. The DOE guarantee would provide a Treasury bond surrogate with related liquidity and an interest-rate reference. It also would serve as a powerful catalyst for retrofitting with virtually no long-term credit risk —the bond has a lien not only on the revenue stream of the property but also on the property itself. Amory Lovins of the Rocky Mountain Institute said the DOE credit wrap would help provide the protocol for pooling, packaging and securitizing the savings from these retrofits.

Regarding the legal challenges to PACE financing, the panel was slightly less certain, given the infancy of the initiative. Hill mentioned that trying to move the retrofit lien ahead of the mortgage note in seniority can be difficult to do unilaterally. Cisco DeVries of Renewable Funding LLC said it depends on whether you set up the assessment district in a traditional manner. Then, DeVries said, it's "just like any other tax assessment," which frequently moves super-senior without the lender's consent.

Lovins likened the retrofits using PACE bonds to a "double whammy" because they increase the cash flows of the asset, leading to lower loss reserves because risk decreases, and increase the asset's value. The bonds have a lien on both. Because the program is opt-in and needs pull-through to make an impact, the key is for cities and counties to educate property owners and help implement retrofits. The policy goal should be for a transparent, easy-to-use, standardized and correctly incentivized process for retrofitting, using PACE financing with reliable, certified vendors doing the retrofitting.

When pressed further about lenders and their appetite to embrace the super-senior position of PACE bonds, Lovins compared it to health insurance. Would a health insurance company want to encourage its enrollees to exercise and eat right? "They should!" he said.

Moderator:
Jerrold Green, President and CEO, Pacific Council on International Policy

The financial downturn has been felt in the Middle East, but the investments and growth potential in the region will make it a leading player in the world economy when the slump ends, a panel of experts said.

"As I sit in Abu Dhabi and look out from the seventh floor, the world is changing," said Peter Barker-Homek of the Abu Dhabi National Energy Company. Barker-Homek says literacy and industrial entrepreneurialism are on the rise, and a middle class is emerging. He attributes the growth to leaders who have stimulated an environment of economic freedom, high rule of law and startup-friendly policies. The Gulf Cooperation Council, North Africa, China and India may not be growing at the same pace as in years past because of the financial downturn, but these regions are still growing, he said.

Naveen El Tahri of Delta Holdings for Capital Investments agreed. "Egypt is named as one of the 10 least vulnerable countries in the world," he said. While the effects of the oil shock and worldwide economic crisis are visible — including a 61 percent decrease in what was once considered the best-performing stock market in the region — Egypt remains a safe haven for the Arab world and is being used as the "backdoor" of Europe, El Tahri said.

The effect of declining oil prices is still clearly visible in private-sector investments, panelists said. Jason Peers of the Middle East Association says the petrochemical and steel industries in particular have felt the pain.

However, reverse oil shock will not be a "mortal blow" to the region, said David Scott of the Executive Affairs Authority of Abu Dhabi. He said Abu Dhabi views this as the ideal time to invest so that "when this crisis is over, they′ll be ready and open for business … with the necessary infrastructure of a more diversified economy."

Other key issues the panelists predicted in the Middle East′s future: A shortage of natural gas, a diversion of crude oil to produce electricity, a smaller carbon footprint, and the need to invest in technology that will directly address these issues.

Moderator:
Bob Moon, Senior Business Correspondent, "Marketplace"

President Obama's plan to ask the 195 nations that ratified the U.N. ozone treaty to take up mandatory reductions in hydrofluorocarbons is emblematic of a major shift in U.S. greenhouse gas policy, a panel of experts said.

Panelists focused heavily on pending legislation for a greenhouse gas cap-and-trade system that would allow industries to swap pollution credits to keep emissions within a specific cap.

Many panelists said the battle lines around the bill are forming along geographic lines rather than party affiliation. Gregory Arnold of CE2 Capital Partners said the split is between states that derive their power from coal and those that don't.

Former California Gov. Gray Davis agreed, pointing out that California derives much of its energy from natural gas and is more in favor of a cap-and-trade system. The consensus among panelists is that a national cap-and-trade system is no longer an "if" but a "when."

Panelists explored specifics of enacting cap-and-trade, including questions of cost, complexity and flexibility. In terms of cost, Safeway′s Joseph Pettus said his company favors the system and is already taking some measures. But he cautioned against the program acting as a de facto tax on business.

On the complexity side, panelists raised concerns about gaming the system and the potential for abuses. Neil Eckert of the Chicago Climate Exchange said Europe has implemented cap-and-trade, and the results were much the same as the Y2K scare surrounding the millennium. That is to say, after much hand-wringing, at five minutes after midnight, the lights were still on.

Davis said it is important to get the bill right from the beginning to provide long-term certainty to companies and investors. While changes and adaptations could be permitted after passage, Davis said, any cap-and-trade bill should be vetted by stakeholders so a workable bill is enacted.

Chris Hunter of Climate Change Capital echoed the importance of a well-designed cap-and-trade program but noted that any system designed by humans will inevitably be subject to gaming by other humans. As a result, it's unfair to single out cap-and-trade as particularly vulnerable to manipulation.

Moderator Bob Moon of NPR's "Marketplace" concluded the panel by asking each member to predict when the cap-and-trade bill would pass. Some panelists said the U.N. climate change conference in December would act as a catalyst, forcing Congress — or at least the House — to pass a bill beforehand. The consensus was a bill would be enacted sometime in 2010 with actual implementation a year or two later.

Moderator:
Robert Bucklin, Executive Vice President and Chief Corporate Banking Officer, North America, Rabobank International

Robert Bucklin moderated this lively and interactive conversation on creating a greener future. Steve Howard of The Climate Group emphasized the need to reduce carbon aggressively, suggesting that all economic growth should either be low-carbon or carbon-free. Howard forecast that the markets for solar and wind energy are on the verge of achieving tremendous growth, a belief shared by the other panelists. Furthermore, he envisions that electric vehicles will claim meaningful market share by 2020.

Howard suggested that sustainability represents an improvement, not a sacrifice — better products that enhance the quality of life. However, he implicitly differed from other panelists in arguing that global sustainability cannot be achieved via a series of small market niches. He stated that green products can and should be better as well as less expensive. But in terms of developing nations, he suggested that localized, small-scale industries are sufficient to produce change. While the initial cost cannot be ignored, Howard suggested that the long-term economics strongly favor this type of change. Al Gore's vision, in his view, is right: a better, clean, green future that produces jobs. Howard argued a cap-and-trade system that prices carbon emissions would motivate positive change.

Profitability is the key to motivating change, stated Mike Italiano. He argued that green manufacturing is not only more profitable, but safer and better as well: green firms make more money while helping the environment. Green business, from his perspective, is a disruptive technology that challenges the status quo. As a result, he expects markets to facilitate sustainability. He suggested that regulation will also play a central role in the transition, noting that recently more than 900 coal plants were slated for construction, but local and state laws slashed that number to 10. Italiano believes a new global climate agreement is imminent, and joked there may be a future in developing "green convertible securities." He also speculated that the global economic slowdown may have reduced climate pollution by as much as 50 percent.

Audra Jones of the International Business Leaders Forum emphasized that developing economies must receive benefits from green technologies, and suggested firms can be more effective in this regard by working collectively, focusing on emerging markets and fostering consumer awareness. Jones argued that firms should willingly share proprietary technologies for the benefit of developing economies.

Firms that proactively address these issues stand to benefit, injected Matt Kistler of Wal-Mart. However, he echoed a common theme among panelists that consumer behavioral change, which requires education, is a prerequisite for sustainability. Kistler suggested that consumers, who have adopted some but not all of the desirable behaviors, need to be better educated about the underlying value propositions.

Sharon Nunes of the IBM Systems & Technology Group underscored three complementary trends: increasing regulation, increasing consumer demand for corporate sustainability and cost savings from sustainability (e.g., reduced resource consumption). Nunes argued that a sustainable water supply is critical as is IT innovation.

While she noted that some studies suggest that IT contributes 2 to 3 percent of all carbon emissions, Nunes also believes that IT has the potential to reduce emissions by many multiples of that percentage. She stated that "cross-boundary" innovation and governmental investment in green technologies is a must. Germany, she noted, is a premier manufacturer of solar systems, only because the German government first invested in the industry.