Scots help to establish a green future by pooling resources

Published Date: 16 May 2009
By Charles Henderson

BUYING the odd bottle of whisky could be all the economic support most "Scottish" North Americans will ever give their ancestral homeland. Similarly, most Scots may never exchange their pounds for dollars for a US trip.
But there is a growing group of Scots and people of Scottish ancestry who are helping shape the global green economy and low-carbon industries. Scots and Americans are fast realising that closer partnerships will drive stronger economic growth and provide secure energy.Two and a half centuries ago, thousands of Scottish families packed into creaking boats to sail across the Atlantic. They took with them the new Enlightenment learnings of medicine, science and economics to help establish the New World.Today, another new world order is being established. The need to tackle climate change is driving a transformation in the ways we generate energy, the lifeblood of modern societies and economies.This year of homecoming coincides with the run-up to December's pivotal Copenhagen summit on climate change. Agreement is being sought on the architecture for global carbon reductions that will shape the roles that countries and regions play as knowledge centres, green-tech manufacturers, renewable electricity exporters and carbon traders.California is shaping up as one of the hubs. At stake is a rush for the green gold of low-carbon technologies, bigger than that of the dotcom era and, this time around, sustainable. Many of Barack Obama's policy advisers are prominent Californians. This hasn't happened by accident – high-level diplomacy and lobbying helped pave the way.Scots have played their part. Doreen Reid, from Glasgow, moved to San Francisco in 2000. On behalf of the Climate Group, an advocacy organisation, she helped encourage the signing of the AB32 Global Warming Solutions Act of 2006. "Winning hearts and minds with a show of support was really important," she explains, recalling one high-level meeting. "To help convince Governor Schwarzenegger we had Sergey Brin of Google, Richard Branson of the Virgin Group and Lord Browne, then chairman of BP, in the room. The eventual outcome was positive, passing the policy into law."Scotland's, and the UK's, influence have been due in part to their advanced climate legislation, giving them the upper hand for negotiation. This includes the climate bills of both parliaments that set a long-term goal of 80 per cent carbon reduction by 2050, and interim targets on the way. Did being Scottish help the negotiations? Doreen Reid says: "From a business perspective, having a Scottish accent helped. Some people would call just to hear my voice." The US is looking to Scotland for investment and expertise, too. Laura Meadors, whose great-great-great grandparents moved from Scotland to Indiana in 1816, works at the British consulate in San Francisco. She liaises with Scottish Development International, a division of Scottish Enterprise. "Our role is to promote trade of high-value renewable technologies between Scotland and the US," she says.She organised a trade delegation on wave power from the UK to the US. She explains: "With the US west coast having a similar geography to Scotland, UK companies are looking here for marine energy investments."Mrs Meadors is enthusiastic about the potential of this collaboration: "It's early days, and looking promising," she says. "Last year, Pentland Energy, a Californian company, opened an office in Edinburgh. I have 15 active leads, of which we are confident seven to eight will land."Key to attracting these businesses are incentives, on which the UK and US have different approaches. In the UK, power companies are required to generate a proportion of electricity from renewable technologies (the "Renewable Obligation"). For each eligible megawatt hour of renewable energy generated, a tradable certificate called a "renewables obligation certificate" (ROC) is issued by Ofgem. Some fledgling technologies, such as wave power, are awarded "double-ROCs", twice the market incentive of established power such as on-shore wind. Scotland is considering "quintuple-ROCs" to attract projects to its shores."In April 2010, a feed-in tariff, guaranteeing a payment for renewable electricity to the grid, will draw further US interest to the UK. In the US, the recent stimulus package has helped kickstart some technologies. However, with all money due to be spent in 18 months, this is a short-term response. Longer-term incentives include the production tax credit extension, encouraging renewable electricity generation by two cents per kWh, and a loan guarantee policy for large-scale technology projects. These variances in approach are creating interesting dynamics between the two fledgling green economies. Andy MacRitchie has worked at a high level in renewable energy on both sides of the pond. He moved from Scotland to California in 1998 to merge Scottish Power and PacifiCorp, and introduced, in 2003, costing into PacifiCorp's decision making process. He is now a partner in Aequitas private equity firm, based in Oregon, which invests in smaller US renewable energy markets such as biomass and wind. He explains the differences between Scotland and the US: "Scotland and the UK are transferring knowledge and know-how to the US. This will change in the next couple of years. The US is unlikely to lead on policy – there are too many vested interests. But there is a huge entrepreneurial and technology driven culture. With private investment, green tech will be the next big thing."Of the opportunities for Scotland, he says: "Wave power is still up for grabs. There is no leading technology in this sector, yet, although Oregon is picking up."The recession may be a force for positive change in the job market: "An unprecedented number of people are going to renewable-tech job fairs," says Mrs Meadors. "They ask how to get a green job. They see it as a sustainable sector. There is tremendous excitement."One message for Scotland is that it must look outward and form close alliances. Andy MacRitchie says: "Scotland must invest in wide networks and partnerships. It must invest in intellectual capital."If Scotland continues to invest in low-carbon technology, we could see a 21st-century green homecoming.