TODAY’S STUDY: TRILLIONS FOR NEW ENERGY

Green Transition Inflection Point; Green Transition Scoreboard 2013 Report

March 2013 (Ethical Markets)

Executive Summary

The year 2012 was an inflection point for the green transition worldwide, with $4.1 trillion of private investments tracked in this report. Technology and innovation such as in electricity generation and transport began forcing structural changes and rethinking of business models, urban design and development toward integrated systemic approaches – still unreported in mainstream media. Global policy makers, businesses and civic society began realizing that environmental, social and human capital must be assessed and integrated into financial markets in order to achieve equitable and sustainable forms of development. The output of Rio+20 was an unprecedented reintegration of human knowledge resulting in new global shared goals and paths transitioning 191 member countries toward low- carbon, cleaner, greener, information-richer economies. Awareness grew of localization as a key principle for redesigning industrial methods, agriculture, infrastructure, sustainable communities as developed by our partner company, Biomimicry 3.8 and our joint Principles of Ethical Biomimicry Finance™.

As the green and biomimicry innovation revolution gathers speed, the year 2013 promises further shifts away from the fossil-fueled Industrial Era as illuminated by our Green Transition Scoreboard® (GTS) which tracks private investments growing the green economy worldwide since 2007, totaling in Q4 of 2012 this $4.1 trillion. The Green Transition Scoreboard® tracks five sectors: Renewable Energy; Green Construction, Energy Efficiency; Corporate R&D and Cleantech, representing broad areas of investment in green technologies, many overlapping. Each covers an area of substantial capital investment in technologies which Hazel Henderson's years of research as a science advisor and which the Ethical Markets Advisory Board expertise indicate have contributed and are contributing to a sustainable future.

While some governments and institutional investors are increasing their focus on growing greener economies, they are not included in this report. Our recommendations that investing at least 10% of institutional portfolios directly in companies driving the global Green Transition, provide a way to update strategic asset allocation models both as opportunities and as risk mitigation. Such shifts in investments will solidify the Green Transition worldwide. Many studies, computer models and reports confirm our view of investing $1 trillion annually until 2020 in material and energy efficiencies, wind, solar, geothermal and other renewable energy, sustainable land-use and forestry, smart infrastructure, transport, building and urban re- design.

This transition strategy is now on track (see our barometer) and recognized in the 2012 report by Mercer which suggested 40% of portfolios should be in Green Transition sectors. This consensus validates models indicating that investing $1 trillion annually until 2020 can scale these innovations and reduce their costs. This updated Green Transaction Scoreboard® 2013 report finding of over $4.1 trillion puts investors and countries growing green sectors globally on track to reach $10 trillion in investments by 2020.

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The March 2013 GTS report demonstrates that many other private investors are following our recommended avenue for institutional investors to shift to green sectors. Fossilized sectors are becoming increasingly stranded assets as their perverse subsidies are targeted and as low-carbon regulations are implemented and oil, coal and gas reserves become harder to exploit. Green technologies and systems investments are simply the next evolution of human societies as we learn more from the earth systems sciences and the satellites tracking the conditions on planet Earth.

Our definition of 'green' is quite strict, omitting areas such as nuclear, clean coal, carbon capture & sequestration, and biofuels from feedstock other than sea-grown algae. We are also looking closely at nanotech, genetic engineering, artificial life- forms and 3D printing, determining their green contribution on a case by case basis. For example, genetically modified microbes to produce fuels – dubious propositions for long-term sustainability. Research indicates that increasing production of crops, even inedible grasses, still require water and land better suited for range or agriculture food production.

GTS data sources include the highly respected Cleantech, Bloomberg, Yahoo Finance, Reuters and many UN and other international studies, NASA and individual company reports. Companies, organizations and the sources of financial data included in the GTS are screened by rigorous social, environment and ethical auditing standards. They can be found in indexes such as Calvert, Domini and Pax World, the PowerShares Cleantech Portfolio, Dow Jones Sustainability Indexes, London's FTSE4GOOD, NASDAQ OMX Green Economy Global Benchmark Index, ASPI Eurozone, the many newsletters from around the world we post daily at www.ethicalmarkets.com and others.

- Important to this rapidly Renewable Energy expanding sector is the growth of renewable energy in developing countries.

- This is the most conservatively Green Construction under-reported sector of this report. We are only counting green construction materials, not including labor.

- Investments include Energy Efficiency conservation efforts and initiatives and products focused on lowering energy needs or using less energy than a comparable product, as companies now recognize efficiency investments' rapid payback periods.

- Significant company investments show Green R&D sustainability is integrated into its core strategy, serving as a strong indicator for investors. This data helps identify innovative companies ahead of the curve in responding to heightening environmental risks and regulations.

- As Cleantech grows, energy storage Cleantech increases in importance, at the level of power plants and grid electricity and at retail and local levels with improvements in batteries, fuel cells, flywheels, ultra capacitors, flow batteries, compressed air as well as metering of use at all levels.

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Introduction and Overview By Hazel Henderson

Green Transition Driving Paradigm Shifts

The year 2012 was an inflection point in many ways, particularly for global energy policy. Technology and innovation in two key fields: electricity generation and transport began forcing structural changes and rethinking of business models, urban design and development toward integrated systemic approaches – still unreported in mainstream media. Even the US National Intelligence Council’s report on Global Trends 2030 noted “game-changers” in the rise of cities and emerging countries, erosion of soils and water-shortages, while seeing technology and markets having a more important impact in reducing carbon emissions than an updated Kyoto- style agreement. We agree!1

First the bad news: Anthropogenic climate change was evidenced in all the actual droughts, heat waves, floods, tornadoes and hurricanes that augured a different future for humans.2 In spite of all the denials, the billions in advertising, lobbying and funding of front groups by the incumbent fossil energy and transport industries, even mainstream media in the USA began covering the issues of climate change. Culminating in the devastations of Hurricane Sandy and the $60 billion relief passed by the US Congress in 2013, the public debate began, albeit still backing into the future looking through the rearview mirror: how to adapt to rising sea levels; how to capture and sequester CO2 from fossil fuel burning; how to strengthen levees, build floodgates and protect infrastructure and food supplies; how to compensate for losses, deal with insurance issues, and so on. The thornier issues of relocating people living in the vulnerable coastal areas and floodplains, restoring protective wetlands, heeding planetary boundary conditions3 and reforming finance, economic models and their metrics has barely begun.

Paradigms shifted in the electric utility sector as the legacy, centralized large-scale, base-load generating national grid structures were increasingly bypassed by decentralized local renewable micro- grids, rooftop solar PV (set to reach parity with grids by 2016), municipality and cooperatively owned wind generators, demand-management firms and new technologies in storage and transport.4 These shifts challenged conventional financial “big project” power generation models for nuclear and coal plants, eroding their profitability. A technical group at the University of Delaware’s computer model of energy in 13 states shows that wind and solar electricity paired with storage could power their grid 99.9% of the time more cheaply than the current system.5 Big power- generating companies have resisted solar and wind, as “intermittent,” “unreliable” and “niche” providers since these renewable sources often generate electricity difficult to integrate into base-load plants and their big grids. These assumptions force the debate into finding better big-storage beyond pumped water, compressed air, and problems of how to even out new supplies. The earlier problems of evening out demand have been routinely handled for decades.

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By 2012, these assumptions and issues were upended. The new paradigm involved how to expand use of micro-grids, smaller plants and local generation. In turn, the new focus is on redesigning systems, business models and finance for the ever- increasing supplies of wind, solar and other renewables together with efficiency, changing demand and electrification of transport. Cities are leading this paradigm shift in pragmatic ways: energy efficient retrofitting buildings, LED public lighting, pedestrian malls, bike-sharing, charging stations for electric and hydrogen fuel cell vehicles, better recycling, water re-use and enacting local standards for energy efficiency and renewables, a market worth $20.2 billion annually by 2020.6 Systemic approaches to energy efficiency in commercial and residential building, optimization of industrial processes and motivation of consumers are the next generation frontiers.7

Meanwhile, the attacks on renewable energy alternatives continued in the USA. Familiar “subsidies wars” raged with renewed efforts by fossil fuel lobbies to turn back state legislation for renewable portfolio standards and other energy efficiency measures. Efforts to defund or abolish the EPA continued, demonizing the DOE’s ARPA-E program and ridiculing renewable energy technologies and start-ups. Globally, adaptation and mitigation efforts to protect or relocate vulnerable populations in small island states became more urgent, along with curbing deforestation and other unsustainable practices. As risky, long-range schemes for geo-engineering and new kinds of nuclear power were trotted out, even the world’s most popular beverage source – Arabica coffee trees – joined the growing list of endangered species.

The deeper issue is how quickly human societies can expand our awareness and understanding of the planetary biosphere of which we are a part. Can we reintegrate our knowledge and become systems thinkers – now a necessity as we face the planetary whole-system shifts our growing population, economic systems and technologies have engendered? Can we redesign our cities, buildings, transport, factories, production methods, energy and resource systems to operate within the tolerances of our natural biosphere’s life-support systems?

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Now for some more good news!

We have begun to “connect the dots” as three global summits in 2012 illustrate. The Declaration of the G-20 nations in their Mexico Summit calls for deployment of energy efficiency and clean technologies, promoting sustainable agriculture, food security and examining price spikes related to commodity markets and speculation.8 The United Nations’ Millennium Development Goals (MDGs) have morphed into Sustainable Development Goals (SDGs), signaling a deep paradigm shift. The UN produced detailed reports on major aspects of this shift in its “A Guidebook to the Green Economy.”9 The Declaration of the United Nations' Rio+20 Summit signals more paradigm shifts in environmental and climate policy since the UN Copenhagen Climate Summit of 2009, as well as outlining the reforms of models needed in global finance since the crises of 2008. The World Economic Forum’s Green Investment Report 2013 estimates investments required for water, agriculture, telecoms, power, transport, building, industrial and forestry sectors at $5 trillion per year to 2020.10

By 2012, it became clearer to global policy makers, businesses and civic society that environmental, social and human capital must be assessed and integrated into financial markets in order to achieve equitable and sustainable forms of development and the UN's Millennium and Sustainable Development Goals. Thus, the output of Rio+20 was an unprecedented reintegration of human knowledge resulting in new global shared goals and paths transitioning 191 member countries toward low- carbon, cleaner, greener, information-richer economies.11 Over 50,000 groups attended, many others were represented by the Green Economy Coalition, of which Ethical Markets is a member, the largest global coalition and publisher of “The Green Economy Pocketbook: the case for action.”12 The National Renewable Energy Laboratory (NREL) estimates US renewable energy potential for the major technologies (solar PV and CSP, wind, hydro, geothermal) at 481,800 terawatt hours, compared with 2010 usage at merely 3,754 terawatt hours.13 This confirms our view reported in our Green Transition Scoreboard 2012 report that these renewable resources greatly exceed any needs for growing human populations in the foreseeable future. Indeed, we see the green transition as humanity’s next technological evolution. The contrast between the new thinking at the G-20 and the creativity at Rio+20 and official forecasts versus the dispirited Doha Climate Summit of COP 19-CMP8, December 2012, was stark. Doha focused on efforts to salvage the Kyoto Protocol and reforming its fraud-plagued carbon trading regime; the missed targets for CO2 caps, clashes between Tier I developed countries versus Tier II developing countries and backsliding on finance for mitigation and adaptation. This rearview mirror focus ended with a “far from adequate” reauthorizing of Kyoto even though the Protocol now only covers 12% of global emissions. 14

The significance of this multifaceted 2012 global paradigm shift remains unexamined by mainstream media. Policies for implementation, technologies and financial strategies are still being formulated and debated.

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The Fossil Fuel Sector vs Renewables

The "elephant" blocking more rapid progress has been clearly identified: the powerful, incumbent fossil fuel sectors which finance ten major US “think tanks” in their media campaigns against green energy.15 Fossil fuels are resurgent in shale-based natural gas and oil, Canada's tar sands, as well as claims of the nuclear industry (even after Fukushima-Daichi). Japan announced it will replace the Fukushima nuclear site with the world’s largest wind farm to produce 1 gigawatt of electricity.16 Nuclear and fossil fuels all still enjoy outsize subsidies from most governments. The resulting incorrect pricing is feeding the shale fossil fuel boom and leading to mis-investing in new coal plants in Europe which are unjustified on both economic and environmental grounds.17 In the Rio+20 Declaration (www.uncsd2012.org), these subsidies were identified as the key barriers to the level playing field required to fully utilize existing renewable energy technologies and speed the transition to green economies. In addition are the growing external costs of fossil fuels in health threats, pollution and other uncounted damage.18 Pledges to reduce subsidies, as well as shift government tax policies and procurement budgets to greener technologies, at Rio+20 were accompanied by commitments to reform finance and its conventional metrics, correct national accounts by reformulating GDP indicators (www.ethicalmarkets.com Beyond GDP) and internalize formerly externalized costs at all levels including corporate balance sheets and accounting practices.

The Sustainability Accounting Standards Board and UK-based Institute for Chartered Accountants of England & Wales (ICAEW) are pioneering such changes.19 A Novethic survey found that nearly one third of institutional investors managing €4.5 billion use environmental, social and governance (ESG) metrics for long-term risk management.20 A group of seasoned cleantech asset managers now see 2013 as an inflection point for the rise of the green economy.21 Wind energy, leading in renewables, will have its own label in 2013: “WindMade,” developed by WWF, the Global Wind Energy Council (GWEC), the UN Global Compact and Vestas with 50 global corporations adopting the label, including Motorola, Deutsche Bank, Bloomberg, Widex and Becton Dickinson (BD).22

Thus in 2012, the battles that I foresaw in 1981 in my Politics of the Solar Age were joined. While acceptance of earth systems science23 grew to understand the full abundance of free solar energy, wind, geothermal and see the redesign of human production systems, cities and societies became viewed as opportunities as we do in the Green Transition Scoreboard® (GTS). The fossil-fueled Industrial Era giants fought back. Their weapons are ever-larger political donations, lobbying and funding more research by intellectual mercenaries, advertising campaigns and media propagandists. They proclaim the USA as the new “Saudi Arabia” of oil and gas, promoting the International Energy Agency’s World Energy Outlook which more cautiously cited water shortages and noted that to limit global warming to 2°C, only one third of already proven reserves can be burned, citing massive investments needed in low-carbon and energy efficiency technologies.24

All this cast additional confusion on the scientific consensus on climate change and global warming developed since the 1970s, reflected in opinion polls on environmental issues.25 Such survey questions focused on environmental threats in the abstract predictably polled lower than threats to jobs, economic insecurity, budget cuts as people faced austerity policies and uncertainty. Polls focusing on green energy and specific choices continued to show majorities.26 Clearly this transition to the green economy already underway will be highly disruptive to the massive global apparatus of the fossil fuel and nuclear era. Many companies based on 19th and 20th century technologies will go under and jobs will be lost.27 The National Solar Jobs Consensus 2012 finds 8,500 jobs in installations adding to the 57,177 already employed with more growth expected in 2013.28 Bridging strategies using natural gas are already highly contested due to the huge water-use, polluted residues, methane release and other problems.29 Fossil fuels are also faced with carbon and pollution taxes, such as the $30 per ton of CO2 equivalent in Canada’s British Columbia province and the carbon tax enacted in China in February 2013.30 Carbon taxes and on all externalized pollution are the market-based solution we prefer to cap and trading emissions schemes.31 US secretary of State John Kerry, a longtime supporter of the green economy, says, “This $6 trillion market is worth millions of American jobs…and we had better go after it.”32

The International Energy Agency aims to improve the rate of reduction of energy-intensity.33 The $4.1 trillion of private investments since 2007 tracked in this latest update of our Ethical Markets' Green Transition Scoreboard® attests to the huge shifts now in the pipeline. While renewable energy stocks and start-ups have taken a beating and the falling costs and prices are driving the shake-out process familiar in all previous technological revolutions, savvy contrarians are stepping in.

The consensus at Rio+20 and that of the G- 20 in Mexico, the OECD's Global Green Growth Institute and Knowledge Platform has emerged.34 For example, 86 global companies and 50 countries affirmed commitments to using natural resources in their capital accounting. The US Commission on National Energy Policy sees energy efficiency doubling US productivity by 2030.35

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Finance in the Green Transition

US investor Warren Buffet’s Mid-America Renewables investments reached $13.6 trillion36 and the US Department of Defense is now the single most important driver of the cleantech revolution in the USA.37 The US Army now has the world’s largest solar photovoltaic facility located at the White Sands Missile Range in New Mexico.38 Solar City and Honda established a $65 million fund offering discounts on rooftop solar systems to car buyers, following Ford and Sun Power’s offer to Ford electric car buyers.39 In 2012, seven new geothermal plants came online in the USA, enough to meet the residential need of mid-size cities.40 The fuel cell and hydrogen industries had sharp increases in residential sales and overall revenues of over $1 billion.41

The rapid green transition in South Korea is covered in a new report on financial performance.42

In 2011 and 2012, nature provided ample evidence of the massive CO2 emissions' daily trapping heat equivalent to many Hiroshima-size nuclear bombs in Earth’s atmosphere. The effect of this in driving unprecedented weather conditions worldwide: floods, droughts, fires, tornadoes, heat waves, is causing huge losses and insurance costs.43 This planetary awareness is now challenging our cultural beliefs about money, wealth, scarcity, abundance and transcending financial models derived from obsolete economics. The new multi-disciplinary models and metrics I describe reassure us that in moving beyond economics and GDP, we will not be flying blind but moving to the many systems models and more accurate data from many scientific fields.44 Thus, in addition to our Green Transition Scoreboard®, Ethical Markets is launching with our partner company Biomimicry 3.8 our program for Transforming Finance Based on Ethics and Life’s Principles and our manual for asset managers and investors, Principles of Ethical Biomimicry Finance™.

This paradigm shift in economics and its financial models is proving highly disruptive to traditional capital asset pricing, modern portfolio theory, value-at-risk, discount rates and their assumptions, particularly in electric power, fossil fuel and nuclear industry finance. The deepest paradigm shift is in the popular movements worldwide to defrock conventional finance. From right-wing US Republican followers of Congressman Ron Paul, Tea Party and fundamentalist “gold bugs” to the Occupy Wall Street and democracy movements, the veils of mystery around money-creation and credit-allocation have been torn away by the financial crises of 2008. Britain’s senior financial regulator, Lord Adair Turner broke ranks and called for an end to allowing private banks to create the nation’s money at interest, but to turn this power back to the government’s public treasury so as to create new money interest free.45 This is not as radical as it sounds since the American Monetary Institute’s bill in Congress shows how such a change could be made, using a systemic model of such a transition (www.monetary.org).46

The excesses of high-frequency trading and derivatives are visible (now at an astronomical $1.2 quadrillion global notional value) while global GDP remains in the $60 trillion range.47 All this, together with insider trading scandals, LIBOR interest rate- fixing drives away retail investors now fleeing stock markets, by-passing Wall Street. Many are moving back to local banking and businesses, peer-to-peer lending, moving off-grid, and using crowdfunding such as MOSAIC, the local rooftop solar PV provider which financed three recent cooperative projects in 24 hours.48 Students, egged on by Bill McKibben’s 350.org and former US Vice President Al Gore (The Future, 2013), demand 250 universities and their colleges’ endowments divest from fossil fuel companies. While Harvard resisted, several colleges are complying and some mutual funds, including Portfolio 21 Global Equity Fund and Green Century Balanced Fund, offer fossil-fuel free portfolios. Independent research from Aperio shows little effect on the performance of such funds in simulation models and back-casting.49 Seattle’s Mayor Mike McGinn requested the city’s two chief pension funds “to refrain from future investments in fossil fuel companies and begin the process of divesting”.50 The Green Growth Alliance, tasked by the G-20 and chaired by former Mexican President Felipe Calderon calls for $700 billion for sustainable infrastructure investments annually.51

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Green R&D Accelerating

As we reported in the GTS August 2012 update, R&D into greener technologies is accelerating but difficult to fully document due to proprietary and competitive considerations, as well as our $100 million threshold for inclusion in Green R&D .

Thus, many exciting advances I reported in my earlier GTS overview were from smaller companies, many still privately held. This trend has continued, whether in more-efficiently designed products such as the upcycled vehicle tires of Lehigh Technologies or others leading the green chemistry revolution: Seventh Generation, Bioamber, Amyris, Kior, Renmatix, Pantheon, Natcore and others, to newly designed LED lighting without heavy metals.

Green chemistry, pioneered by Biomimicry, Warner Babcock, and the ACS Green Chemistry Institute is revolutionizing traditional industries in many countries, e.g., Brazil-based Natura and in the USA where the Congress is taking notice with Senator Frank Lautenberg’s (D-NJ) reintroduced Safe Chemicals Act, with support from the American Sustainable Business Council.52 Organically designed solar cells at Northwestern University; thin-film solar cells based on organic photovoltaic (OPV) technology from Global Photonic Energy Corporation (GPEC) and the University of Michigan53; Natcore’s non-toxic coating for any kind of solar panel to increase energy efficiency; V3 Solar’s spinning solar cells, all are driving down costs and leading to forecasts that 100% renewable energy is becoming the new normal, with many cities setting such goals as mentioned earlier, as well as companies including Google, IKEA and Whole Foods.54

Estonia is the first country to build a national electric vehicle charging network of 165 stations.55 Cities are following suit with London’s 300 diesel/electric buses with a further 600 on delivery in 2013 and 1000 electric charging stations. The C-40 group of 63 cities led by New York’s Mayor Michael Bloomberg is accelerating such changes in partnership with the William J. Clinton Foundation.56 All this green progress is tracked in the USA by the US Metro CleanTech Index.57 The UK’s new Green Investment Bank will be based in Edinburgh, Scotland, and in London. One of its trustees is Tessa Tennant, green investment pioneer, founder of ASRIA and member of Ethical Markets Advisory Board.

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Water in the Mix

Water and looming shortages are becoming a major focus since energy generation from fossil fuels, nuclear and shale fracturing use enormous quantities of water.58 Electric power plants in the USA account for 39% of all fresh water withdrawals – about the same amount as agriculture – or 136 billion gallons daily.59 Desalination of seawater is expensive and energy-intensive. China’s $4.1 billion facility in Tanjin began generating electricity in 2009 and by 2010 produced China’s first large-scale, main-supplied desalinated water. Yangzi River water diversion of 700 miles to Tanjin and Beijing has cost $34 billion so far and is to be completed by late 2014, after the removal of 330,000 people!60 A renewable energy powered desalination plant in Masdar, Abu Dabi, which aims to be commercially viable by 2020 is a better way.61 Water wars in the US are possible.62 In 2013, Lakes Michigan and Huron hit their lowest levels on record with urban demand clashing with the needs of agriculture and navigation. The Mississippi River became too low for some ship traffic – and record droughts may continue. Conservation and smart-use seem the best answers along with pollution prevention, recycling and re-use, as in California where recycled sewage is now cleaned to drinking water standards.

Cutting water use may not be enough. It may be necessary to radically change the “flush and forget” plumbing and sewage-treatment systems industrial societies consider as “progress.” Environmental scientist and consultant Fred Pearce explores returning to age-old methods used in the developing world – collecting human wastes and spreading them on farm land.63 Collecting “night soil” is still practiced, for example in India and many other countries pumping out septic tanks and pit latrines in African countries, and in Mexico where sewage is still used in farming. The city of Milwaukee pioneered in selling Milorganite, a fertilizer made from its citizens’ sewage. Pearce says, “realization is growing that our faeces and urine… are a valuable resource.” He adds that each human produces some 500 liters of urine and 50 kilograms of faeces annually (10 kilograms of phosphorus, nitrogen and potassium compounds). These are the three main nutrients in roughly correct proportions that plants need to grow and sufficient to produce more than 200 kilograms of cereals.64 Permaculturalist Bill Mollison demonstrated how sewage can be used safely to restore land.65

In the 1970s and 1980s, many “back-to-the- land” groups in North America, Australia, Europe and Japan turned to permaculture methods of food production and showed how using human-produced phosphorus, nitrogen and potassium can produce bumper crops safely. Others experimented with composting toilets, such as the Clivus Multrum still available from Swedish inventor Rikard Lindstrom. Rural development models include many water- saving and recycling improvements, such as several of the finalist in the global innovation KATERVA Awards of 2012.66 Companies are also re-designing processes for dying textiles without using water, by substituting CO2, as GTS reported in 2012 and in Sweden’s H&M, a big user of textiles adopting water- saving methods advised by WWF.67

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Batteries, Super Capacitors and More

New approaches to storage are producing many innovations from passive green off-grid buildings which store solar energy68 to super capacitors which store electricity differently from batteries – used in electric and hybrid cars to store braking energy.69 Giant batteries are in development for Texas wind farms by Xtreme Power.70 The future of storage, batteries, super capacitors and flywheels will be different from the past massive pumped storage of water for power-plants and huge dams and hydro-electric plants. Flexible and smaller-scale storage seems the new focus, with the advent of electrical transport, where every vehicle is also a storage “battery.” Ethical Markets TV Series explored such scenarios in its “Green Building and Design” and “Renewable Energy” programs.71

New materials are being researched at MIT, Chicago’s Joint Center for Energy Storage Research (JCESR) and Argonne National Laboratory.72 Perhaps the most unusual research on new storage for solar energy comes from a 1975 experiment at the University of Texas at Austin on the storage capacity of rust, i.e., iron oxide, which is non-toxic, abundant and cheap. New research at Imperial College London finds that iron oxide can convert solar energy to hydrogen, and others at Denison University, Ohio; Technion University, Haifa, Israel; and the Swiss Federal Institute of Technology at Lausanne (EPFL) are pursuing these storage models.73

Bringing Green Markets Home

Transitioning to decentralized and local green markets continues beyond energy and such shifts as those in Boulder, Colorado, reported in the GTS. Their municipal electric utility was bought from Xcel Energy and now is focused on phasing in renewable energy which will reduce costs as well as lowering emissions by 50%.74 The CLEAN LA Solar Program allows local businesses, residents and organizations to install renewable energy projects and sell power they produce to the utility, bringing 100 MW of local solar online in the LA service area.

US shoppers are choosing local with 66% saying they prefer local food, even over organics, according to a survey by A. T. Kearney, and another by Whole Foods Market found 47% of the 22,274 adults they polled would pay more for locally grown foods.76

In St. Augustine, Florida, home of Ethical Markets Media and our Henderson-Kay-Schumacher Library, a local renewable energy company, Solar Stik, supplies on-site, small-scale wind and solar packs for use on boats and for military bases off-grid, employing 25 local workers.

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Applying Biomimicry

Localization is a key principle for redesigning industrial methods, agriculture, infrastructure, sustainable communities as developed by our partner company, Biomimicry 3.8 and our joint Principles of Ethical Biomimicry Finance™. For example, with the guidance of Janine Benyus and Biomimicry 3.8, the city of Lavasa is rising in India, 60 miles south of Mumbai, as a set of villages of between 30,000 and 50,000 people, using their “Genius of Place” ecological designs with the architectural firm HOK.78 We at Ethical Markets focus on biomimicry and Life’s Principles which have guided successful evolution of the 30 million species on Earth for 3.8 billion years. Thus, GTS tracks biomimicry innovations as our best guide to the leading edge of the global green transition.

A key example concerns how to sequester carbon, which we have reported can be best achieved by restoring soils, rangelands and forest, as in the biomimicry research of our Advisory Board members, along with Janine Benyus; Wes Jackson, the Land Institute; Allan Savory and partner John Fullerton in the Grasslands Project in South Dakota; John Todd, University of Vermont; Gunter Pauli, author of The Blue Economy (2010); Martin Ping, Hawthorne Valley Farm, NY, and others. Now soil scientist Kenneth Olson of the University of Illinois has developed a new measure for soil CO2 sequestration, SOC, which can compare different tillage and restoration methods and monitor results.79 Allan Savory’s earlier research indicates that properly managed agriculture, rangelands and forests can absorb past and current CO2 emissions worldwide cheaply and effectively – rather than coal plant sequestration and other costly, unproven schemes.80

Biomimicry designs run the gamut from enhancing computer models (GTS, August 2012), advanced engineering software by Ansys, Dassault Systèmes and LMS International, a Siemens subsidiary, now selling pricey biomimicry-inspired software packages.81 Biomimicry is redesigning aircraft and speedboats to the array of bio-based chemicals and plastics we describe in this report. While these bioplastics cut use of fossil fuel feedstocks and produce up to 60% less greenhouse gasses, we and many other biomimicry specialists worry about over-use of biomass for wasteful or non- essential products or in plastic packaging mixed with more toxic feedstock, as well as new toxic chemicals from biomass such as benzene and toluene.82 The ramp-up of land-based biofuel production in the USA is destroying grasslands as well as competing with food, and encouraging further deforestation worldwide.83 To avoid such new dangers requires more sustainable forms of consumption and steering the global $500 billion annual advertising industry toward healthier lifestyles as we do with our EthicMark® Awards, partnering with the World Business Academy and ESPM in Brazil. Genuine biomimicry uses only green chemistry from the lightest elements in the Periodic table at room temperature, using water as solvents rather than untested nanotechnology, genetic modification, artificial life-forms or earlier, obsolete industrial methods which Janine Benyus calls “heat, beat and treat.”

As the biomimicry innovation revolution gathers speed, as in our co-sponsorship of the conference on Biomimicry Innovation and Finance, Zurich, August 2012, we will scan this exploding field for those technologies and companies that truly keep to Life’s Principles, such as the resurgence of seawater-based farming on desert lands, using the thousands of salt-loving plants researched by our Advisory Board member Dr. Mae-wan Ho84 and NASA’s chief scientist Dr. Dennis Bushnell.85 Dr. Carl Hodges pioneered such experiments in Mexico in the 1970s and later in Egypt, the Middle East and Africa with his Seawater Foundation and Advanced Biofuels production of plants for food and oils.86

The year 2013 promises further shifts away from the fossil-fueled Industrial Era, as we track additional private investments into the exciting opportunities in cleaner, knowledge-rich sectors of the worldwide green economy transition.

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Conclusion

The Green Transition is accelerating and reaching an inflection point, across sectors and countries, because of the work of decades-long pioneering, the energy of new entrepreneurs and the unfortunate climate crises which no longer allow us to ignore the consequences of our fossil-fuel addiction. The proliferation of conferences, whether local, national or global, are connecting all the players in the transition. International consensus at major summits such as Rio+20, the G-20 and others reported in the Introduction and Overview ensure global attention to greener ways going forward. Multinational corporations are responding to consumer demand as with the increasing production of hybrid and EV vehicles. Wall Street and City players such as Warren Buffet are investing in green technologies and following the many green indexes appearing on DOW, NASDAQ, FTSE and other exchanges. We are acknowledging and creating metrics for well-being that will show the way to where green investments are most needed and valued.

There is much good news that sustainability is winning and much more is in the works. The GTS team is constantly reviewing the newest technologies, assessing the next silver bullets, knowing they may in fact be dross. To our watch of nanotechnologies, artificial intelligence and bio- synthetics, we are also monitoring 3D printing.

Looking to the future, we hope to expand the GTS report to include organic agriculture, fisheries management, food distribution, seawater farming and the myriad of investments focused on feeding the more than seven billion people on our planet, whether growing food for the table or wisely managing livestock to enhance, rather than deplete, the natural biota. These projects are in the works. The Rodale Institute, Emmaus, Pennsylvania, has shown that organically-grown food production can compete with industrial agriculture while preserving soils. Allan Savory’s work shows there is a natural rhythm to rangelands which we can emulate. Seawater farming of halophytes can produce food and animal feed. We will be following these trends.

The Green Transition Scoreboard® was created as a public service to help grow the green economy and reform market metrics and improve due diligence worldwide. We have added Ethical Biomimicry Finance™ in partnership with Biomimicry 3.8 to specifically address and upgrade the metrics of due diligence in finance.

Gathering this data is also a service to developing countries where green technologies and their "leapfrog" strategies are of paramount importance. Green technologies often draw on available local resources in a more cost effective, time effective manner than fossil-fueled era, dated technologies. The GTS is an ongoing program of research made available to those UN agencies spearheading the UN's Green Economy Initiative and to advising organizations of Rio+20 of which we were a part, as members of the Green Economy Coalition.

The report is a collaborative effort from colleagues in all sectors of the global green economy, drawing on Ethical Markets Media’s daily collating and evaluating of green economy news from worldwide sources reporting on the green transition, including:

• Australia: Climate Risk Pty

• Brazil: Mercado Etico, Instituto Ethos

• Canada: Cleantech

• China: CSR China, Syntao, ASRIA

• European Union: Green Economy Coalition, Network for Sustainable Financial Markets, REN 21, HELIO International

• UK: Climate Bonds Initiative, Forum on the Future, Institute for Chartered Accountants in England and Wales, Green Economic Institute, New Economics Foundation, Responsible Investor, Tomorrow's Company, New Scientist

• USA: ACORE, American Council for an Energy- Efficient Economy, American Sustainable Business Council, Calvert, CERES, CSRWire, GreenBusiness, Greentech Media, New Economics Institute, New Energy News,121 New World Energy News, World Business Academy

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