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Contributor
It’s not just the ads showing a baby-boomer couple sitting in matching bathtubs on a beach at sunset where you can find performance anxiety these days. Try looking in the hardware aisle and at the gas station.
Rather than ban inefficient incandescent light bulbs, for example, California lawmakers set an efficiency performance standard - - which was adopted by the feds - - so in 2012, you won’t be able to buy energy-wasting bulbs.
That spurred Phillips to develop and market their “Halogena Energy Saver” incandescent bulb that is 30% more efficient than conventional versions. The performance standard approach - - instead of government picking winners and losers - - clearly worked for both environmentally minded policy makers and bottom-line minded businesses.
The stealth performance standard that will hit another part of daily life - - your car - - relates to gasoline and diesel fuel. California adopted a “low carbon fuels standard” that says the carbon content of fuels sold in the state must decline 10% by 2020.
Fuel sellers can achieve that by slashing emissions from refineries ahead of other carbon regulations; by blending petroleum with lower carbon-content fuels like sustainable biofuels; by selling non-carbon fuels like hydrogen; or anything else that reduces the carbon content of the total portfolio of fuels sold.
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Senator Barack Obama embraced making this a national standard almost two years ago and many lawmakers of both parties like this technology-neutral, competition-enhancing approach to reducing carbon. Chevron, [CVX
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] Toyota, [TM
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]and several others also have endorsed this approach, because it allows them to find the cheapest ways to comply with the policy goal and perhaps to develop solutions they can market to others. Nothing like a good profit motive to accelerate public policy.
Of course this spells trouble for companies that are hoping to market fuels made from high carbon-footprint sources like the Canadian tar sands. Given that it takes up to four times as much energy to extract and refine that gunk into anything useful, it’s a sure bet the resulting products won’t find much of a market if fuel sellers are trying to lower the carbon content of their products.
An online investor news service has a list of stocks that are exposed, at least in part, to this significant/growing liability - - may be a good list to keep handy of stocks to avoid.
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Terry Tamminen, former Secretary of the California Environmental Protection Agency, is a partner at Pegasus Sustainable Century Merchant Bank and the Cullman Senior Fellow at the New America Foundation. (Cracking The Carbon Code is a registered trademark of Terry Tamminen).
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