Orangutans & 2007 et al.

It is fascinating to see how top blogs get top traffic. They are prolific – 3x+ per day per author; short pieces; on point. Naturally it is harder to maintain such output if one is simultaneously constructing backup spreadsheets – time is required to create the numerical model that validates the verbage. But are all types of quantitative reasoning so subject to slow-downs in output?

(Ref. Reforesting vs. Biofuel, or
Orangutans vs. CO2 Offsets)

The answer is no, unfortunately. Anecdotal and rote recitations of selective, randomly representative bits of quantitative data are appended to emotional appeals and lend unwarranted credibility to these appeals.

When numbers are nothing but disembodied trinkets to adorn emotional arguments, everything is subjective, and nothing sounding sacred or noble is ever rationally dissected. Verification is futile.

As people with faith that the truth includes the numbers, and that the truth will and should prevail – we try to traffic in strategic, intellectually honest quantitative reasoning, and the job isn’t easy.

So enough already – other than an emotionally-driven CO2 offset bandwagon, or juggernaut – unwittingly and with the best of intentions delivering oil palm planations to Borneo – and in so doing exterminating Orangutans and decimating moist rainforest so we can drive around in biofueled SUVs – what salient bits of numerical AND qualitative data might charactarize the year just past, 2007?

One observation that merits mention for 2007 is the performance and potential of publicly traded pure-play greentech stocks, what we at EcoWorld call our “Green Chips.” And photovoltaic stocks are the clear champions. During 2007, crystaline’s standard-bearer SunPower went up 3x, and thin film’s vanguard player First Solar was up 7x! Both crystaline and thin-film technologies are competitive and have bright futures.

There may be photovoltaic companies that are arguably overvalued, but the photovoltaic sector is not overvalued. Worldwide photovoltaic production can easily double each year, and with $100/BBL oil growth may run faster than that – and given $100/BBL oil, worldwide demand for photovoltaics will continue to exceed photovoltaic production potentially for decades. PV still constitutes a miniscule percentage of global energy production (way below one percent), and there is no theoretical limit to the potential of photovoltaic, or more generally, solar energy.

Another greentech sector, which enjoyed a run-up then a correction in 2007, is biofuel. At this point stocks in this sector are worth reconsidering for investment. The huge wild card is the economic viability of cellulosic ethanol extraction. If this is feasible, the biofuel sector should enjoy another wave of strong growth. Unless demonstrated yields make the predicted move from 5,000 BBLs per square mile per year to 50,000 BBLs per square mile per year, however, the biofuel sector will not easily approach the fossil fuels sector in magnitude.

Other than that, series hybrids are here, in-wheel motors are almost here, and CO2 offset certification protocols everywhere have to start restoring Orangutan habitat instead of destroying it, and this needs to happen sooner rather than later.

Leave a Reply

You must be logged in to post a comment.