Green Tycoons

How to turn a profit while saving the world.

A few years ago, on a warm summer afternoon beside the Rideau Canal, I was sharing a drink with a former editor of Maclean’s, when the subject of Al Gore’s An Inconvenient Truth came up. “After about 20 minutes, I wanted to slit my wrists,” he said, illustrating how a message of fear with too little hope equals despair.

What is really interesting though is how oblivious most of the world is to the building wave of clean capitalists who are too busy using markets to make the world a better place to have noticed that we are up shit creek without a paddle. In his first solo book, The New Entrepreneurs: Building a Green Economy for the Future, Andrew Heintzman introduces us to a growing tribe of green-blooded capitalists too focused on the towering magnitude of green economic opportunity to realize the supposed naiveté of reconciling the environment with its wholly owned subsidiary, the economy.

As Heintzman’s original inspiration for the book and his career, eco-capitalist Paul Hawken, puts it: “If you look at the science about what is happening on earth and aren’t pessimistic, you don’t understand the data. But if you meet the people who are working to restore this earth and the lives of the poor, and you aren’t optimistic, you haven’t got a pulse.”

Still, many of our economy’s standard bearers, subdued by the stench of ecological rot and their own sense of economic self-interest, continue to cling to the false inevitability of an outdated brand of dirty capitalism that is in fiduciary conflict with the ultimate shareholder: planet Earth.

Exhibit A: I could not help wondering what planet they were on when ministers and CEOs at the recent triennial World Energy Congress in Montreal patted “promising developments” in renewable energy on the head and, in the same breath made clear that we can expect the fossil fuel–dependent status quo to continue well into the 21st century, with the “authoritative” World Energy Outlook predicting that, by 2050, fossil fuels will still represent 75 percent of primary energy demand. Meanwhile, in the real world, for the second year in a row more money was invested in renewable energy than in fossil fuel capacity, with $150 billion invested in 2009, according to the Global Trends in Sustainable Energy Investment 2010 report published by the United Nations Environment Programme’s Sustainable Energy Finance Initiative and Bloomberg New Energy Finance.

Out of this Kafkaesque dual reality, Andrew Heintzman paints a canvas that is really a political manifesto (think Thomas Friedman’s Hot, Flat and Crowded: Why We Need a Green Revolution—And How It Can Renew America) for a green economy, disguised as a book about a new class of entrepreneurs, written in the first-person style of a journey reminiscent of Thomas Homer Dixon’s The Ingenuity Gap: Facing the Economic, Environmental, and Other Challenges of an Increasingly Complex and Unpredictable World, with a smattering of Douglas Coupland’s green futurism and Popular Mechanics–style descriptions of things such as biotelemetry, which, if you were wondering, is key to measuring and preserving our natural capital. At the end of the book, I was not sure whether to buy it for my friends or encourage Heintzman to become finance minister.

The crux of Heintzman’s idea is that green capitalists can save the world. Indeed, they are already off to a running start, and it is time for the politicians to catch up by fixing some of the design flaws that are holding up progress. And contrary to Harold Innis’s theory, which posited that Canadians are merely “hewers of wood and drawers of water,” Heintzman argues that it is this abundant blessing of the world’s biological and life-supporting potential that conveys a special responsibility for us to lead the way in honouring our natural capital.

But won’t going green drive our dirty businesses to pollution havens like China? Quite the opposite, Heintzman expounds: if we do not close our green investment gap, and fast, China is going to leave us in the dust. And he is probably right.

While conventional wisdom assumes that China stymied a global climate deal at Copenhagen last year because it is afraid of not being competitive in a low-carbon future, the reality is China wants to own it by stalling things a few years while it rapidly closes in on global green R&D leadership. As Su Wei, China’s lead climate change negotiator, told me in a stuffy tent this past December: “We have a saying in China. A feast is worth waiting for.”

To wit: China is investing $120 billion to nearly double its high-speed rail network, laying down 6,000 kilometres by 2012, and China’s richest man is Wang Chuanfu, a green capitalist pioneer of electric car batteries. With nine billion people on the horizon on a planet of finite resources, the space race for which country can make the most productive use of resources is on.

Unlike a lot of other folks who have recently pounced on the green economy lily pad, Heintzman has had his feet—and millions of dollars, through his investment firm Investeco—firmly planted on these eco-trailblazers for the better part of a decade. Heintzman got his first whiff of environmental destruction while tree planting in the interior of British Columbia, where he witnessed “an endless moonscape of burnt stumps of trees, and nothing green in sight” on his first day on the job. Later, during his stint as co-founder and publisher of Shift magazine, he took solace in the 250,000 trees he planted over three years knowing that “in some great universal equation I could say that my contribution to the earth perhaps equalled what I had consumed.” Or so he thought—until he returned to Burns Lake and the B.C. interior to scope out an investment in Triton Logging, the world’s leading company in cutting submerged forests. He saw that all the trees he had planted had been killed by the pine beetle epidemic enabled by climate change.

Not one to be discouraged, Heintzman continues to hammer away at the “great universal equation,” introducing readers to more than two dozen entrepreneurs who are making money providing solutions to preserve forests, provide green energy, conserve and purify water, sustain our food systems and roll out a battery that holds the promise of powering the world with renewable energy. Two of my favourite profiles are Shai Agassi and Tom Heintzman (the author’s brother).

Shai Agassi is a hyperactive Israeli software engineer who is piling in some of the $400 million he made selling his last company to pave the way for electric cars to go mainstream with his new company, Better Place. The biggest thing holding electric cars back is their limited range and lengthy recharge time. Agassi’s solution: create a network of battery swap stations so that instead of recharging, cars pull into the swap station, a robotic arm takes the spent battery out and replaces it with a charged one, and you are ready to roll in as little time as it would have taken to fill the tank. Five years in, Agassi has raised hundreds of millions of dollars, and struck a partnership with Renault Nissan, which has agreed to provide 100,000 electric cars to Israel and Denmark by 2016. As Agassi likes to say: “You can have any colour you like, so long as it’s green.”

Ribbit, ribbit. That’s the cell phone ring tone you can get for Bullfrog Power, a bold national play by Greg Kiessling and Tom Heintzman to prove that it is possible to convince consumers that all electrons are not made equally, and that it is worth paying a little extra for green power, in order to cover the premium that renewable power developers have to charge to develop new low-impact generation facilities.

The New Entrepreneurs is a powerful show of force of how businesses are already finding ways to make money by saving the planet, and its central thesis is spot on that green is green ($) or we are done in. But I have three quibbles: while grounded in the ethos of opportunity, the basis for Heintzman’s thesis uses the problematic language of scarcity; the green economy struggle is not connected to a broader existential imperative for both Canada and global capitalism; and there is no inkling of the vested-interest blood that will need to be spilled before this revolution is won.

The language we choose has powerful implications for how people react. According to Nancy Adler, the S. Bronfman Chair in Management at McGill University, people respond much better to challenges of doing more of something good as opposed to doing less of something bad. Instead of a new economy “defined around resource scarcity,” I would have preferred an economy defined according to more resource productivity. The framework of resource productivity plays more naturally to our market economy’s penchant for maximization.

While Heintzman makes a powerful economic case for why Canada must go green, he allocates only one line to the existential aspect. The loose confederation that holds Canada together is not strong enough to fight off the economic, climatic and geopolitical forces lining up to pull it apart. We have a vacant sense of national purpose with almost no collective intentionality against the backdrop of an Arctic scramble, looming water scarcity and a trading orientation that up until recently made it easier to import a bottle of Budweiser from the United States than a bottle of Moosehead from a neighbouring province. The green economy stakes are even higher than Heintzman argues. Our choice is to commit to a new ethic grounded in our natural abundance and backed by fitting institutions and infrastructure, or to fall into any number of eager parties’ hands. Our land is too valuable to allow otherwise. The 22nd century will either be the century of Canada or the century without Canada.

There is also an existential aspect for the global, shareholder-based capitalism struggle to find symbiosis with the planet. In 1976, the year I was born, the total value of all publicly traded companies was roughly equivalent to 10 percent of that year’s global gross domestic product. Today, publicly traded companies are an order of magnitude more important with valuation equal to GDP—which means that the business model of externalizing costs onto the rest of society is no longer viable because these companies make up a large part of society. According to the TEEB for Business report, the world’s top 3,000 listed companies are estimated to produce negative impacts or “environmental externalities” totalling around US$2.2 trillion annually and representing a third of their profits. Many of these externalities will be moved onto the balance sheet in coming years, which will have significant implications for companies that are able to make progress on their resource productivity.

The green revolution is unlikely to be of a velvet nature, as one might conclude from Heintzman’s book. At the moment, the oil sector and ExxonMobil possess more low-carbon patents than any other industry or company in the world (see Who Owns Our Low Carbon Future? published by Chatham House), and while it would be nice to think this may help spur the transition to a green economy, this is an innovator’s dilemma, where the fossil economy has considerable power to hold up a rapid transition to a green economy because it would make trillions of dollars of their assets obsolete.

Quibbles aside, Heintzman’s authentic vision for Canada’s green industrial revolution and compelling portraits of the initial revolutionaries already making it happen in the trenches is an inspiring read, whether you are an entrepreneur toiling in the garage on the next fusion reactor technology or just someone who cares about the future of our country.

At the conclusion of the book, Heintzman, who also serves as chair of the Premier’s Climate Change Advisory Panel for the Province of Ontario, exchanges his venture capitalist hat for a Laurier-esque lament for a nation:

The unfortunate truth is that, today, Canada has virtually no national strategy on renewable energy; no plans for high-speed rail lines in development; no national smart-grid plans of any consequence; no greenhouse gas emissions reductions targets of any meaning; and no energy efficiency goals. In short, Canada is lacking a coherent national strategy on the most important economic questions of our time—questions that will define our future competitiveness, productivity, and prosperity.

Each of these examples is a multi-billion-dollar missed opportunity. Looking into his crystal ball, Heintzman paints a picture of a future possible:

Alberta will have turned the oil sands from the most polluting project on the planet to the project with the largest application of sustainable technologies anywhere. Ontario will be a leader in manufacturing clean transportation options for road and rail. British Columbia will have leveraged its strength in the forestry industry to become a leader in the sustainable development of bioenergy. Nova Scotia will have developed a means to turn its tremendous tidal energy into sustainable power. Beyond all of these developments, though, the entire Canadian economy will have become dramatically more resource-efficient, using far less energy and water, and turning this efficiency into a sustainable competitive advantage.

Heintzman concludes with a plea to politicos: “Our entrepreneurs are already pointing the way. Now we must follow their lead.”