Friday 30 November 2012

Vinod Khosla: a pioneer investor in the CleanTech market


Credit: James Duncan Davidson/O'Reilly Media, Inc.
Many think that resource-efficient and clean technology is the future of industry. It is too early to say how such technology is going to replace some of today’s most profitable industry. However, CleanTech’s potential is more and more highly regarded by investors. Among them, Vinod Khosla is a pioneer. Now at the head of his own venture capital business, he leads the way in the field of CleanTech investment.

Vinod Khosla graduated from the Indian Institute of Technology with a bachelor’s degree in electrical engineering. His passion for technology led him to the USA where he got a master’s degree in biomedical engineering from Carnegie-Mellon University and a MBA from Stanford University later on.

When he created Sun Microsystems in 1982 with some associates, Vinod Khosla had already founded a business in India and one  another in the Silicon Valley. His experience helped to make Sun Microsystems a significant player in the development of open systems and open source software. The business was to become reknowned in the computing industry.

Indian-born Vinod Khosla personifies success for business managers that have grown up in developing countries. Top-class education and remarkable business achievements allowed him to build his reputation as a world class manager and investor. After he had made Sun Microsystems famous throughout the world, Vinod Khosla focused on his investments.

Even before he joined the CleanTech sector, Vinod Khosla was a brilliant and inspired investor. When he was working at Kleiner Perkins Caufield&Byers, his name became associated with exceptional discoveries in technology as early on he made an investment in fiber optic network companies Cerent and Siara Systems. Both companies were later sold, making Vinod Khosla more than $15 billion. In the late 1990’s, after scoring substantial profits in internet technology, he became interested in the CleanTech industry.
           

He was still working for the venture capital firm Kleiner when he became familiar with the biofuel industry and made his first steps on the CleanTech market. When opening his own venture capital business, Vinod Khosla invested several million dollars in biofuel and eco-friendly technology start-ups. He experienced a few setbacks but his firm made its way. Former British Prime Minister, Tony Blair joined the business as a senior adviser and Khosla Venture became a frequent business partner for investors such as Bill Gates.

For the last ten years, Vinod Koshla has been actively investing in the CleanTech industry. He had a part in revealing some of the most talented businesses and most promising technologies. Throughout his career, Vinod Koshla has illustrated how profitable CleanTech is and contributed to make it a credible new industry and target for investors. He has been a source of inspiration for businesses as well as for investors. The next few decades will tell if the work he has achieved in the last 10 years has also initiated a long lasting trend on financial markets.

Wednesday 21 November 2012

World Bank calls an international response to global warming



In November 2012, the World Bank released a report calling for tackling the issue of global warming. Pointing out the risks of a 4°C temperature rise on Earth, this report is a significant step towards a wider mobilization.

The reality of global warming has been debated about a long time before political leaders around the world finally agreed on a consensus. Doubt about what is now recognised as one of the biggest danger of our century is no longer an option. The World Bank made a strong statement in this regard by releasing an alarming report. This document is entitled “Turn Down the Heat: Why a 4°C Warmer World Must be Avoided” and highlights the shape of the world to come if global warming is not controlled in the present years. Needless to say, the World Bank’s conclusions are gloomy. The 4°C temperature increase could very well be reached by 2100, and such an option would shattered most opportunity for global development

A further step in the recognition of global warming

“Turn Down the Heat” was realized by Climate Analytics and the Potsdam Institute for Climate Impact Research on the behalf of the World Bank. Its President, Jim Yong Kim, commented on the report’s release, saying his hope was that “this report shocks us into action”. Such a statement illustrates how seriously global warming is considered at the top of the world economic governance.  

The report is making a simple point. Considering the past and present trends of global warming, there is a 20 per cent chance that the Earth’s temperature will rise by 4 degrees Celsius (7.2 degree Fahrenheit) by 2100. These conclusions are echoing those of many researchers on the subject. For instance, they match the findings of Pricewaterhouse Coopers which stated in a previous report that limiting global warming below 4°C would require quadrupling the rate of decarbonisation.

The World Bank’s recent report includes a collection of the most up to date scientific data about climate. It confirms the risks that were pointed out by the World Development Report on climate change in 2010. “Turn Down the Heat” was released before the Intergovernmental Panel on Climate Change (IPCC) issued his own report about climate change for year 2013/2014. There is no doubt however that both of these publications will draw similar conclusions.

It is a significant symbol for world governance that an institution such as the World Bank publishes a report like Turn Down the Heat. It strands for an official acknowledgement of the emergency regarding the stake of global warming. With such a report, the World Bank simply calls countries in the world to act against climate change for their own safety.

A “doomsday scenario”

Calling to action is probably a weak word for what the World Bank aimed at triggering with this report. This document shows what Jim Yong Kim himself called a “doomsday scenario”. “Turn Down the Heat” makes a list of the different issues that would be induced by such a rise in the world’s temperature. All of them are of course a source of concern for the environment, but some of them in particular are a direct threat for human life.

Concerning water for instance, the report anticipates harder drought in Southern Europe, Africa, Southern America as well as Australia. Northern Europe, Northern America and Siberia on the contrary would be subject to wetter weather conditions. Overall water distribution on will suffer from greater geographical disparity. Such a phenomenon is expected to have a massive impact on some of the biggest human settlement and richest ecosystem on Earth. For example, the World Bank mentions the Ganges’ flow will increase by 40% because of a 4°C temperature increase whereas the Mississippi’s and the Amazon’s could decrease by 40 to 80%

The water issue also has significant consequences over food supplies worldwide. The World Bank provides a reminder of the fourth report by IPCC stating that global food production might increase along with the Earth’s temperature rising between 1 and 3°C. But the production is expected to drop in case of higher temperature rise. “Turn Down  the Heat” confirms the plausibility of this scenario, explaining that “drought-affected areas would increase from 15.4% of global cropland today, to around 44% by 2100”. Besides, salinity of aquifers might increase in some areas due to sea-level rise on coastal lands.

According to the World Bank’s report, the issues that Humanity would have to face on the Earth which temperature has raised by 4°C would simply be too huge to handle. Drought, starvation and poverty could no longer be controlled. The aftermath of this is crucial since it would most likely result in conflicts and wars and shatter decades of struggle for development in the world. “A 4°C warmer world can, and must be avoided,” said Jim Yong Kim. Along with him, developing countries already seriously anticipate the risk since global warming puts them in the first line.

Towards collaboration between developed and developing countries?

The aftermath of a 4°C rise of the Earth’s temperature would hit developing countries most badly. “Turn Down the Heat” emphasizes on the unequal impacts of such a temperature rise. South Asia, the Middle East, northern and eastern Africa are quoted among the most vulnerable areas to the adverse consequences of uncontrolled global warming. Those who have less are also those who have the most to lose in this regard and the World Bank expressed his deepest concern that climate change might destroys years of efforts and developing the poorest countries in the world.

Even though global warming was first triggered by most developed countries, the emergency is now so important that the World Bank wish developing countries to get involved in climate change policies. Any isolate attempt would undoubtedly fail to control global warming. “Only early, cooperative, international actions can make that happen” concludes the report.

Countries’ perception of global warming’s stake is changing slowly around the world. Both developed and developing countries now knows that this industry-induced worldwide catastrophe might destroy their attempt to reach satisfying levels of development. “Turn Down the Heat” is an alarming report issued by the World Bank. It also is a further step toward a better tackling the issue of global warming. The World Bank has sent a message: neither countries nor companies around the world should underestimate their responsibility in this phenomenon. And all economic actors have their part to play for solving it. Let us hope this message will be heard. Our future on Earth depends on it.