Friday, July 18, 2008

Green Growth

Information can make Massachusetts greener

There are a lot of promising efforts under way in Massachusetts to direct private and public funding toward building a regional clean technology cluster. However, we should also be making much more use of one of the most cost-effective tools for driving change:  information. 

The power of information to enable, encourage and accelerate change often is underestimated when designing government programs and regulations. But the history of green markets shows us how important information can be — information about available solutions, current performance and products, for example.

The simplest effort would be making it easier for business managers to know what green options they have and what the business benefits are for each option.  At a recent breakfast meeting on clean tech, Travis McCready of the Massachusetts Convention Center Authority spoke about the challenges he has faced in trying to manage more responsibly the MCCA’s operations. Travis put the time and effort into learning about some of his clean-technology choices. Yet the time and effort required was significant, clearly more than many managers would have committed.

There are some existing efforts to help managers learn about these kinds of options. The Environmental Protection Agency’s Energy Star program and the Massachusetts Energy Efficiency Partnership are two good efforts to build an information foundation. However, it’s not enough. Even a moderate amount of effort put into developing comprehensive “buyers’ guides” ­— listing, describing and evaluating potential energy-saving technologies for manufacturers, commercial building owners and others — and then backing them up with outreach to major energy users in the state, could pay big dividends for the state and the region.

Information can also be used to focus attention on the biggest opportunities for “green-up” programs.  In the mid-1980s, the launch of the Toxics Release Inventory (TRI) revolutionized the way toxic emissions were dealt with.  TRI was a simple idea — just require public disclosure about the biggest sources of toxic emissions, even when the emissions levels are within legal standards. TRI neither imposed stricter emissions levels nor created any other mandates on businesses. It just made more data available to the public. The impacts were almost incredible. One study found that toxic releases covered by TRI went down by 46 percent over the first eight years of the program — all because more information spurred more community action. In many cases, business managers had never thought about the implications of all that waste and found ways to save money by reducing emissions.

With TRI as an example, Massachusetts could produce an energy-consumption inventory:  a public database with information at the individual facility level to help identify the biggest energy users in the state. It wouldn’t be difficult or costly because energy is already a regulated industry, with a few concentrated distributors. So the data is already kept somewhere, it’s just not made public yet. 

When corporate officers have to sign a public document attesting to how much energy their facilities consume, it prompts valuable discussion. Sure, some businesspeople will argue that it would reveal competitive information, but the same arguments were made about TRI. What TRI really did was prompt business owners with high emissions to take a look at all the wasted money that represented, and it ended up being a valuable business tool in addition to a policy tool. 

There are other ways information and financial support for innovators can work together. For an entrepreneur just getting started, government grants can be an important source of early financing.  But getting information on available funding and forging the relationships to make that funding accessible aren’t things entrepreneurs know about. The MIT Venture Mentoring Service does a great job of connecting startups with such information and would be a great model for a state-level effort.

Many more examples use information to promote change:  eco-labeling programs, demand-side management programs, and connecting lenders with building owners to help them finance their investments in energy-efficient equipment. All essentially are information-based efforts, and all could use more regional support. 

So while it’s great to see the efforts to apply financial resources to building a regional clean-energy cluster, let’s not forget just how powerful — and inexpensive — information can be as an accelerator of change.

 

Rob Day is a Boston-based principal with @Ventures, focused on investments in the clean tech sector, and co-leader of the Renewable Energy Business Network. You can reach him at cleantechvc@gmail.com.