Greetings from green geek heaven

11 Dec 2013

NREL building

Green geek heaven can be found a short drive outside Denver at the point where the vast Mid-Western plain meets the majestic Colorado Rockies. At this time of year the air is cold and thin, the ground is covered in snow, and the campus feels strangely quiet following the Thanksgiving weekend. And yet the environmental innovation nirvana that is the US National Renewable Energy Laboratory (NREL) remains one of the most inspiring places in the world for anyone who cares about the future of the planet.

Guiding representatives of the UK's Clean and Cool Mission around the giant campus, NREL's James Bosch stresses that it is a "living laboratory", providing both state-of-the-art facilities for the 2,500 engineers, scientists, and support staff who work at the site and the perfect demonstration site for new clean technologies.

As such, visitors to the facility are welcomed by a sign lit up with LED lights that are powered by solar cells, the multi-storey car park boasts a 1.13MW solar array on the roof and 36 electric vehicle charge points in the bays, electric and hydrogen fuel cell cars journey around the campus, and a biomass boiler fuelled by beetle-killed pine wood provides heat for many of the site's buildings. In addition, construction materials and furniture that make use of recycled materials are evident throughout, while the use of ultra-efficient lighting is kept to a minimum by building designs that optimise the use of natural light. Meanwhile, electro chromic windows respond to temperature and light to minimise glare and optimise temperatures in the buildings, so that on a freezing cold day in winter some south-facing windows automatically show black on the outside in order to help absorb as much thermal energy as possible.

Offsite a dedicated wind farm and solar farm provide both power and test facilities for new turbine and solar panel designs, while back in one of the largest buildings on campus a specially designed air-cooled data centre provides usable heat for much of the rest of the lab and boasts a data centre Power Usage Effectiveness (PUE) ratio of just 1.06. I had to double check with Bosch to confirm he had not misspoken, given PUEs for typical data centres can reach as high as 2 and some reports suggest that globally the average is still thought to stand well above 1.5. But no, for every watt of power used to drive the servers at NREL only 0.06 watts are used to power supporting infrastructure.

The use of these various pioneering clean technologies means that several of the buildings are "net zero" users of energy over the course of a year, generating more power on site than they draw from the grid - a performance that is emphasised by real time smart meter displays that demonstrate how much power a building is either drawing or feeding to the grid at any one time.

However, the green building technologies installed at NREL are just a fraction of the story at this remarkable facility. The real news is to be found in the work that goes on in these buildings.

Inside just one of the buildings a series of giant labs sit next to one another, providing state-of-the-art research facilities for work on solar cells, wind turbines, power systems integration or smart grids, ultra-efficient vehicles, energy system fabrication, materials characterisation, electrochemical characterisation, energy system sensors, batteries, and thermal storage materials, to name but a few. A dedicated hydrogen fuel cell lab provides hydrogen on tap as well as bays to test up to 15 fuel cell stacks. A lab for smart building technologies looks like an IKEA shop floor, providing full-scale mock-ups of livings rooms and kitchens for testing new green devices. And perhaps best of all a giant computer screen that looks to be at least 25 feet by 10 feet is combined with special sci-fi goggles and what looks like the largest ever Playstation controller to allow designers to model the use of new technologies in the real world. On the day we toured a wind farm was being planned that tracked the impact of turbines on wind flows, but Bosch insisted the giant modelling system could be used to predict real world environmental impacts of everything from cityscapes to nanotechnologies.

The NREL's track record is as impressive as its showcased technologies. Originally launched as the Solar Energy Research Institute in 1977 as the Carter administration responded to the first oil crisis, it was reinvented as NREL in the mid 1990s. Through both guises it has produced countless patents and Bosch argues that it can reasonably claim to have had a crucial role in many now well-established clean technologies, developing much of the underlying technology used in solar PV systems, optimising wind turbine designs to help support big gains in efficiency, and playing its part in the development of hybrid engines.

This pursuit of clean technologies is ongoing with the Lab's $325m annual budget supporting countless standalone research projects, enabling co-funded initiatives with businesses, providing facilities for corporates to test and validate new clean technologies, and allowing partnerships with around 50 labs in other countries. "We encourage working with others as we all breathe the same air and drink the same water," explains Bosch. "We are very open to institutional partnerships."

In recent years a number of initiatives have been set up to try and inform business leaders, politicians and other public figures about the grave threat posed by climate change, with Al Gore's series of lectures and workshops the most obvious example of a well-meaning and largely effective trend. But NREL highlights the need for a counterpoint to these initiatives through a series of activities and campaigns that ensure business, political, and cultural leaders are also aware of the remarkable new technologies and opportunities that are being developed to help address those same climate change threats. Perhaps Gore should consider a Convenient Truth campaign, that truth being that all of the technologies we need to tackle climate change have already been invented and are now being optimised.

Places like Colorado's green geek heaven exist, just as the group of remarkable British clean tech start-ups that made up last week's Clean and Cool Mission also exist - it is only by recognising, supporting, and nurturing them that we can avoid the nihilism that almost inevitably comes with an honest assessment of current environmental risks. Just as it is only by understanding the work that is going on at the cutting edge of clean technologies that policymakers and business leaders can avoid making short-term investment decisions that lock us into the polluting technologies of the 20th century at a time when the clean technologies of the 21st century are on the cusp of viability.

Institutions like the NREL and companies like the Clean and Cool Mission alumni with their high powered magnets, electric superbikes, and biomass breakthroughs have a responsibility to highlight their work and do everything they can to co-operate in order to provide the most effective crucible possible to accelerate the development of the cost-effective clean technologies we all need. Just as the media and NGO community also have a responsibility to let the world know that encouraging technological progress is being made to tackle the grave environmental risks that we all face.

Perhaps not every country can afford its own NREL, but the dedicated and integrated public-private approach to research, development, and real world deployment that it has pioneered is a model every government and business can learn from. The UK and the EU have several of their own world-class clean tech research institutions, but what NREL demonstrates is the myriad benefits that come from creating a genuine hub that brings together a host of different but complementary disciplines.

More broadly the US approach to creating clean tech clusters from regions that combine academic and government institutions with those start-ups which are capable of producing both cutting-edge technologies and the kind of ambitious business and marketing plans that can attract investors is something the UK should certainly seek to emulate. Without this co-ordinated approach clean tech start-ups will find it harder than it should be to raise investment, optimise technologies, and commercialise their products. A failure to build on the success of NREL threatens to deliver a hellish scenario - and not just for green geeks.

BusinessGreen was a guest of last week's Clean and Cool Mission Colorado

Going green doesn't cost the earth, not going green does

05 Dec 2013


"Going green doesn't have to cost the earth," says George Osborne. He's right, but the problem is that the opposite is also true: not going green will cost the earth, taking the economy down with it.

The Chancellor's nods to the green economy in his latest mini-budget were characteristically hostile, nakedly politically-motivated, and, most of all, utterly intellectually incoherent.

The key line was the latest outing for Osborne's oft-repeated assertion that "going green doesn't have to cost the earth." It is possible to read this as evidence that the Chancellor has finally realised green technologies are increasingly affordable and will benefit rather than hamper the economy. It is possible to argue the Chancellor has finally realised the truth in the Stern Report's conclusion that deep cuts in carbon emissions will cost just a percentage point or two of GDP, while protecting the world against losses that will be an order of magnitude larger. It is possible to conclude that the Chancellor has finally realised that he should explicitly commit to managing the low carbon transition in the most cost effective way possible. Possible, but sadly inaccurate.

Green business leaders and campaigners do not have to indulge in conspiracy theories to interpret the Chancellor's phrasing as an attempt to imply the UK's previous approach to "going green" - an approach Osborne himself has signed off on during five years in opposition and three years in government - does "cost the earth".

As David Nussbaum of WWF observed, "claiming that ‘going green doesn't have to cost the earth' is simply putting a deliberately negative spin on green technologies, in a week when the Government has clearly recognised that this industry is growing and driving down costs".

The justification for this bleak interpretation of Osborne's comments is provided by the context in which they were delivered. If the Chancellor was serious about delivering decarbonisation in the most cost effective way possible he would not have just engineered a cut in energy efficiency schemes when every analysis shows energy saving is the lowest cost means of cutting emissions. He would not be actively trying to restrict onshore wind when it is the lowest cost form of renewable power. He would not be blocking a decarbonisation target that the Committee on Climate Change has highlighted as a mechanism for lowering the cost of decarbonisation. He would not have just opposed the closing of a loophole on coal emissions that represented one of the simplest ways of cutting emissions in the 2020s. And he would not be pointedly ignoring the huge climate and energy security costs that come with a failure to decarbonise rapidly enough - it is that which will really "cost the Earth".

More generally, the line that proceeded Osborne's green cost mantra only underlined the incoherence of his approach to the green economy. "My political philosophy is clear," the Chancellor declared, as if it had ever been in any doubt. "Instead of penalising people with more taxes and more regulation, give them incentives by reducing their taxes and their bills." But here's the problem, delivering decarbonisation by focusing solely on incentives and reduced taxes is likely to prove more expensive than a more balanced approach that actually adheres to centre right free market principles and uses taxes to correct the market failure that is climate change. It is not necessarily more taxes and more regulation that is "penalising people", but the wrong taxes and regulation.

For example, the most efficient means of decarbonising remains the introduction of an effective carbon tax that puts a price on polluting externalities coupled with the phasing out of explicit and implicit subsidies for fossil fuels. Similarly, one of the most efficient means of driving down the cost of clean tech is the use of appropriate regulations and standards to help create a market for new technologies that benefit consumers through lower running costs. Both of these approaches apparently run counter to the Chancellor's philosophy - a fact underlined by the way in which, when he does decide to dish out incentives to reduce taxes and bills, he hands them to the fossil fuel industry. There is a way to incentivise "going green" while lowering people's taxes and bills by shifting taxation from employment to pollution, delivering an explicit political commitment to decarbonisation, and prioritising energy efficiency and clean technologies that serve to lower bills. Sadly, this is not the Chancellor's vision. When he talks about cutting taxes and bills he means slashing efficiency schemes and ensuring fossil fuels get ever lower taxes.

The most depressing thing about Osborne's green philosophy is it doesn't have to be this way. He could and should have celebrated how yesterday's flurry of green infrastructure announcements demonstrate that the cost of clean energy technologies is already falling and will fall further as a stable policy environment supports a UK supply chain that will create jobs, bolster energy security, and drive economic growth. He could and should have prioritised energy efficiency as a cost saving means of decarbonising. He could and should have explained how the coalition is committed to a package of long term cost effective policies that will drive billions of dollars of investment and deliver decarbonisation over the coming decades, creating export opportunities and minimising climate change costs in the process.

He could also embrace the centre-right arguments for "going green" articulated by the likes of Greg Barker, Zac Goldsmith, and, on occasions, the Prime Minister himself, and explain how a coherent and consistent approach to decarbonisation that prioritises lowest cost measures, empowers communities, and drives innovation is entirely consistent with Conservative values.

But once again Osborne chose to do none of this, instead opting to contradict his own commitment to deliver cost-effective green progress with inconsistent and incoherent policies and rhetoric, and all in pursuit of a handful of votes. As yesterday proved, the coalition does have an expanding suite of ambitious policies that are likely to help ensure that the UK does "go green" over the coming decades. But for every two steps forward the government takes the Chancellor insists on taking one step back with his fixation on fossil fuels, his undermining of effective green policies, his mixed messages on decarbonisation, and his thinly veiled denigration of the green technologies of the future.

The Chancellor is right, "going green doesn't have to cost the Earth". The problem is he clearly hasn't the faintest clue how to deliver on his increasingly tired catchphrase.

Anyone fancy some free power?

02 Dec 2013

Solar array promens rooftop site beccles 3

Free - is there a more attractive word in the English dictionary? Free speech, free markets, free wifi - we all love free stuff. It is the root of freedom, the promise of something for nothing, the politicians' stump speech and the marketeers' gold dust. We all want things to be "free".

For years the left has bemoaned the way in which the neoliberal right has annexed the word "free", equating freedom and free markets in a way that gives the freedom to do something - minimise taxes, evade "red tape", own a gun - primacy over the freedom from something - decrepit infrastructure, exploitative working conditions, not getting shot by a gun. This trick has been so successful that it has been repeated time and again in the positioning and branding of countless policies and products. So free schools are free from the "dead hand" of central state control and we'll ignore the fact that some kids are no longer free from the teaching of utter nonsense. Free online services are empowering and cost you nothing, so long as you can ignore the truth in the old adage about you being the product. And free markets ensure goods and services are distributed in the most efficient manner possible, assuming you ignore the way in which unaccounted for externalities leave us all free to pollute the atmosphere.

Like I say, many industries have been highly successful with this linguistic gambit. But there is a notable exception - clean energy. For what is renewable power if not free energy? While companies have attempted to position this energy as green, clean or secure, they have often missed the most obvious benefit, it is also free. When the UK generated a record 6GW of wind power last Friday, it was, in some important respects, free power. That is to say the marginal cost of providing it was so negligible as to be close to non-existent. The 6GW of wind power delivered on Friday afternoon meant that there was no need to fork out for 6GW worth of gas from Vladimir Putin at that point in time, because the UK was generating its own power from a fuel that is entirely free.

Now, like any use of the word "free" this is something of a trick. The fuel is free - the wind, the sun's rays, the movement of the tides cost nothing. But the means of harnessing that fuel is obviously not free, you have to invest in building and maintaining the technologies needed to exploit the fuel. That is why we face the perverse scenario where the only energy technologies that rely on genuinely free fuels are regarded as being amongst the most expensive forms of generating power (as long as you ignore the polluting externality costs associated with fossil fuels).

And yet, I'd argue providers of clean power have a justifiable case for positioning themselves as providers of "free power" as they look to build upon the already high levels of public support they enjoy.

Firstly, the calculations that compare the costs of different energy technologies are increasingly contested, and not just because of the continued failure to properly account for the off balance sheet economic, environmental, and health costs of greenhouse gas emissions. There is growing evidence from regions as diverse as Africa, Brazil, Germany and the US that wind and solar farms in the right location and the right circumstances can undercut fossil fuel power on cost even when the relatively high initial capital cost of renewables projects is taken into account. The virtually non-existent marginal cost of delivering power from renewable sources is reshaping the power market in the southern states of America and Germany in ways that not even the most astute energy analyst could have predicted. Meanwhile, the cost of many renewable technologies continues to fall, in some cases drastically, even as the cost of oil and gas remains stubbornly high in most parts of the world.

Secondly, consumers are much more savvy than many politicians and businesses give them credit for. They understand that clean energy costs more upfront, but the quid pro quo is that they then generate power from a free fuel source, meaning energy is provided at a predictable and low cost. Kirsty Alexander of the Nuclear Industries Association, which faces a similar challenge with high capital costs and relatively low and stable running costs, argues there is powerful precedent for people agreeing to pay more for a service where the costs are predictable in the form of fixed rate versus variable rate mortgages. Millions of people are willing to pay more for their mortgage for a period of predictable costs, why shouldn't the same rationale be applied to clean energy, particularly when those predictable running costs are so low?

Thirdly, and most importantly, the simple rationale that the fuel that generates power from wind and solar farms is free remains unimpeachable. People understand that the "free minutes" on their phone contract are dependent upon them buying the phone and signing the contract. They know that the "free" access to BT Sport is dependent upon them becoming a BT Broadband customer. Well, the "free" power from your rooftop solar panel is dependent upon you buying and installing said solar panel. Once the upfront cost is covered you will see your energy bills plummet as you make use of free clean power whenever it is available. That is why growing numbers of factories and corporate offices are deploying solar arrays, that is why the likes of Google and IKEA keep buying wind and solar farms, and that is why you will find no more powerful advocate of domestic solar panels than the people who have installed them. Perhaps unsurprisingly, it turns out that people like free power.

Inevitably, critics of clean energy will reject this positioning, fixating on the high capital costs of clean energy while ignoring the extent to which the current energy system is reliant on costly, volatile, insecure and environmentally damaging fuels. They will also argue, with some justification, that the "free" power provided by renewables has a sizable downside in the form of its variable nature. This is a fair criticism given we cannot guarantee that the wind will always deliver the 6GW of free power we saw last week. But grids can and do cope with high levels of variable power and they are already helping to reduce our reliance on fossil fuels that we have to pay for. Moreover, we now know we have access to large scale sources of free fuel that can provide the backbone of a decarbonised energy system if we can just develop viable storage technologies. We are one piece of the jigsaw away from power that you can justifiably classify as "free".

This understanding of the merits of free power is already evident at the individual business and household level where numerous companies and individuals are opting to deploy onsite renewables, because with conventional energy costs soaring they like having access to virtually free power whenever it is available. Solar and wind power may not always deliver high levels of output, but as growing numbers of companies and factories are finding, it is worth being able to slash your use of grid power when clean and free sources of fuel are available.

It is possible to envisage a scenario where free clean energy provides free fuel for electric cars and homes that have taken advantage of energy efficiency financing to undertake building improvements that are effectively, you've guessed it, free.

I have long argued the clean energy sector has not done nearly enough to build on its natural public popularity and aggressively market itself as an attractive, cost effective, and essential source of power for the 21st century. The term "free power" has the potential to emphasise the innate elegance and competiveness that makes fast-evolving clean energy technologies so much more attractive than spending billions digging up costly and polluting fuels. After all, we all prefer free stuff.

COP 19: The Warsaw deal and some reasons to be cheerful

25 Nov 2013

Ban ki moon and Christiana Figueres and Donald Tusk at COP 19 climate change talks in Warsaw

It is that time of year again. The global environmental movement now faces the annual sense of crushing ennui that comes with the fallout from another faltering and flawed international climate change summit. It's like listening to a Leonard Cohen album remixed by Joy Division. Actually, that sounds quite good; it's like listening to a Leonard Cohen album remixed by Katy Perry – it really is that depressing.

Warsaw followed the template perfectly. Months of increasingly grave warnings about the scale of the climate impacts the world is already facing were released in the run up to the conference –warnings that were made horrifyingly real by the Philippines typhoon. Ministers from around the world acknowledged these warnings, stressed how severe climate risks now are, and then singularly failed to deliver any commitments that could reasonably be described as commensurate to the scale of the threat. You can see why NGOs walked out; you can see why Filipino diplomat Yeb Sano felt moved to hunger strike; you can see why even normally optimistic economists and business leaders were heard to warn that progress is not being made nearly fast enough.

Ministers tried to put a positive spin on things, talking of "essential progress" and "key objectives" being met, but even their reactions felt muted. Reading between the lines of the various carefully worded reactions, you could see a recurring question: if it's this difficult to get an agreement on a timetable for negotiation that was basically already agreed last year, what hope an ambitious international treaty that reshapes national economies and distributes $100bn of financing?

However, to those lamenting the lack of real progress in Warsaw there is another question: what did you expect?

The scientific warnings and the deadly fall-out from the Philippines typhoon may demand immediate and urgent action, but, ever since the Durban Summit of 2011 restored some optimism to the UN negotiations and set out a roadmap towards agreeing a new treaty in Paris in 2015, the intervening COP summits have been relegated to the status of staging posts. Diplomats and observers can argue all they like about the critical need to make progress, but the setting of a deadline, while critical for focusing minds and political attention, has the downside of allowing each and every difficult decision to be kicked down the road to Paris.

Set against this yardstick, the Warsaw Summit was, if not a full-blown success, certainly a reasonable accomplishment. The show has been kept on the road and most nations have agreed to do their 'homework' ahead of the Paris Summit; hopes for an international agreement remain alive.

Inevitably, any sense of optimism needs to be set against a whole fleet of caveats. The one thing that unites virtually every measure discussed in Warsaw – whether the topic is finance, emissions reduction or technology deployment – is that they fall well short of the scale and pace of action needed to decarbonise the global economy. The roadmap to Paris includes a deeply worrying extension through to 2020 when the finalised treaty is scheduled to be signed, raising the prospect of tough decisions being again kicked down the road for another five years. And, most importantly, the diplomatic stand-off in Warsaw again served to crystallise the tension and distrust between some rich and poor nations.

Like any good political deadlock it looks irreconcilable, with both sides of the debate making a compelling case. On one side emerging economies and developing nations continue to argue, with complete justification, that rich nations are not doing nearly enough to shoulder their historic responsibility for climate change by delivering deeper emissions cuts and more generous climate financing. Why should poorer countries be expected to deliver emissions reductions from an already low base, when the likes of Japan, Australia and Canada are happy to tear up their climate commitments? On the other side, the US, EU and others argue that China, India and the Middle East petro-states cannot indefinitely duck making any firm climate commitments, particularly when with every year that passes their soaring emissions just cancel out the emissions savings many industrialised nations are making.

However, these challenges, while serious, do not completely overshadow the progress delivered in Warsaw. And if the diplomatic stand-off may at times look irresolvable, international circumstances can, and do, change – as evidenced by this week's breakthrough on Iran's nuclear programme.

The Warsaw Summit confirmed that by early 2015 many of the world's largest and most influential economies will set out the 'contributions' they plan to make towards tackling climate change. We also know that the US and EU had wanted countries to make 'commitments' rather than 'contributions', suggesting they could yet make some pretty bold and legally sound pledges to slash emissions through the 2020s. Moreover, China may have insisted on a text containing softer language, but it was at pains to use the Warsaw Summit to highlight its commitment to new carbon markets and soaring levels of clean tech investment.

The final text leaves way too much wriggle room for recalcitrant states to dodge making any meaningful pledges to decarbonise, and scientists will rightly continue to warn the pledges that will be made will not go far enough. But all the indications are that the world's largest economies want to deliver a new suite of climate policies for the 2020s that will be designed to build on the progress already being made on cleaner vehicles, lower-carbon energy, deforestation and climate adaptation.

The carbon bubble hypothesis, and its warning that fossil fuel assets could be left stranded by a wave of clean technologies and climate change legislation, looks even more prescient post-Warsaw than it did before the summit. Investors and business leaders should take note.

Some form of climate deal in Paris remains a possibility and we are starting to get a sense of what such an agreement could look like: ambitious emissions reduction targets from industrialised nations; similarly ambitious emissions management pledges from developing countries; a major Green Climate Fund part funded by developed nations and part funded by global carbon pricing mechanisms; concerted action on climate adaptation, technology transfer and deforestation; and some form of loss and damage agreement that recognises the need to help nations facing the most severe climate impacts, while also recognising that no individual country is directly liable for those impacts.

Inevitably, such an agreement would require the easing of centuries-old geo-political tensions, a comprehensive U-turn by some climate-sceptic governments and a degree of progressive enlightenment never previously displayed by certain petro-states. As such, at this stage the odds on a genuinely ambitious Paris deal remain long. And yet, even if an agreement backed by every country in the world is hard to envisage, a looser deal based on increasingly aggressive climate action from the likes of the EU, US, China, Brazil, South Africa and numerous other nations remains a distinct and encouraging possibility.

For green businesses and progressive investors this is good news. Despite five years of media misinformation and unarguable setbacks from countries such as Australia and Canada, there is still significant political appetite for cost-effective clean technologies and ambitious action to curb greenhouse emissions. If businesses can demonstrate over the next seven years that decarbonisation can be delivered without compromising living standards then some form of international climate treaty that helps to correct market failures and makes it easier to roll out clean technologies remains a distinct possibility. The direction of travel is clear. As savvy investors are fast realising the political and policy risk faced by carbon-intensive technologies is starting to outstrip the political and policy risk faced by clean technologies.

And even if the Warsaw Summit did not deliver the scale of ambition that is needed, those businesses and NGOs committed to building a green economy would be wise to couple their justified criticism of the slow progress with a vocal reminder to their peers that ambitious climate policies are still being planned. No media outlet chose to run with headlines from Warsaw trumpeting how the US committed to delivering a new climate plan by early 2015, how all of the biggest EU states underlined their commitment to delivering remarkably deep cuts in emissions by 2030, or how China confirmed the roll out of its first seven carbon markets – but that is exactly what happened in Poland.

Paris 2015 will not solve the climate crisis. We will still face immense and daunting environmental challenges regardless of what happens; a treaty will not, on its own, stop one tonne of carbon being emitted. But with political progress edging forward and cost-effective clean technologies making waves, the environmental movement could yet end up with some reasons to be cheerful during the second half of this decade. We may even need a new soundtrack for the annual late-November blues – Katy Perry remixed by Leonard Cohen perhaps?

Cameron's "green crap" confusion is yet another blow to UK investment

21 Nov 2013

The front door of 10 Downing Street

Four days ago, I asked a number of green industry insiders to comment on David Cameron's welcome assertion that the "sensible thing" to do was to take "preventative and mitigating steps" to tackle climate risks. This morning, I found myself asking green execs to comment on reports the Prime Minister regards many of his flagship climate change policies as "green crap". It is easy to see why The Sun, which has done more than most to push for an end to any policy with the faintest whiff of greenery, ran its splash under the headline "Cameleon" and couldn't stop itself from observing that "voters want leaders, not chameleons".

Whether Cameron really "raged" at aides instructing them to "get rid of all this green crap" on energy bills is irrelevant (although the carefully worded non-denial from Downing Street suggests The Sun's scoop is broadly accurate); what matters is the staggering mess the Conservative leadership has now managed to get itself into over "green levies" and the wider low-carbon agenda.

As I argued when Cameron first made his ill-judged commitment to "roll back" some green levies, the prime minister has backed himself into a corner from which he will simply end up disappointing everyone. The ongoing question for Number 10 is which bit of "green crap" do they want to get rid of? The warm home grants and ECO efficiency schemes that even The Sun acknowledges go to "vulnerable people"? The renewable energy support mechanisms or smart meter levies that Cameron has previously hymned to the rooftops and which are at the heart of a coalition agreement underpinning an Energy Bill that is urgently needed to stop the lights going out? Or the carbon taxes that the Treasury is banking on as a much-needed source of revenue?

The answer, of course, is none of them. For what it is worth, my instinct is that Cameron still accepts the urgent need to tackle climate change, as he elucidated only last week, and still gets the economic case for investment in clean technologies, as he quietly made clear earlier this year with his declaration that the countries that will succeed in the global race "are those that are the greenest and the most energy efficient". It is just that he wants to square the circle and find a way of delivering a low-carbon transition that costs nothing and that nobody notices. And in the meantime, he is content to merrily follow the advice of his notorious Australian election advisors and torch everything he previously stood for on the off-chance it might win him an election.

Cameron's reported "green crap" outburst is a function of the realisation that he has forced himself into a trap of his own making (with a little help from Ed Miliband's price freeze wheeze). Scrap or water down any of the renewable energy levies and he is open to charges of hypocrisy and undermining investor confidence. Target the ECO and he is guilty of undermining the kind of energy efficiency scheme that offers the only means of tackling fuel poverty in the long run – less Vote Blue, Go Green, more Vote Blue, Go Cold. Do either and you risk alienating the Lib Dems to such a degree that the last 18 months of the coalition become virtually unmanageable. There had been hopes that a compromise could be reached that would move some of the cost of these schemes onto general taxation, but that simply raises the question where does the new money come from? Cutting green levies by £50 only to raise taxes by £50 might be more progressive, but it is unlikely to impress Cameron's critics.

And then there is the real kicker. Even if Cameron did choose to get rid of all the "green crap" and take his chances with the damage to coalition unity, the loss of tens of thousands of jobs and billions of pounds of investment – and the grievous blow to his credibility that would result – the net impact for your average household would be a saving of just over £2 a week. Yes, a lot of people would be technically moved out of fuel poverty, but millions more would barely notice the difference. Moreover, the savings would be almost entirely eaten up by the next near-inevitable gas price spike – a gas price spike that the UK would be more exposed to because it would have stopped investing in homegrown renewables and energy efficiency.

You can see why Cameron might be getting a tad angry: he is in a no-win position, and he is the one who put himself there.

The problem is that while Cameron's thinking on energy and climate change policy has descended fully down the rabbit hole, those businesses and policymakers operating in the real world still have to deal with the implications of his green meltdown, and none of them are pretty.

Politically, the Tory brains trust evidently thinks green policy is a wedge issue that can help them carve out a majority in 2015. Maybe they know something the rest of us don't, but there is plenty of polling out there that suggests the public are strongly in favour of green policies, with the centrist swing voters Cameron has to appeal to among those most likely to back ambitious action on energy efficiency and renewables.

The current strategy looks increasingly like Cameron weakly caving into the right of his party and leaving himself open to justified accusations about the retoxification of the Conservative brand. It is noticeable how The Sun's story repeatedly refers to Cameron's remarkable inconsitency on a part of his agenda that was previously central to his political identity, even if it favours an end to "green levies". If they have any political nous, Labour and the Lib Dems should have a field day painting Cameron as flip-flopping on an issue he still claims to care deeply about.

However, as numerous commentators have already noted, the emergence of environmental policy as a politically partisan issue represents a major threat to the green economy, as previously stable and successful policies become largely dependent on the result of the next election.

Economically, the implications of Cameron's failure to put the national interest ahead of short-term political concerns are of even greater concern. I have lost count of the number of senior sustainability executives and green investors who have told me that regardless of how attractive a clean technology is or how attractive a green policy looks, every time political rows end up on the front pages it makes it harder for them to convince colleagues to green light capital spending. "The shifting sands and uncertainty are extremely disturbing," one industry insider told me this morning. "That kind of [green crap] statement really doesn't help anyone move forward with investment, even in organisations that are really committed to decarbonisation." Every time the Conservative leadership attempts to secure a few more votes in marginal seats by promising to scrap green policies it pushes up the price of capital and makes investment in everything from wind turbines to gas plants harder to deliver.

What, if anything, can be done? Progressive green businesses, campaigners and politicians have no choice but to continue to make the case for green investment, arguing that despite the political rhetoric numerous clean technologies and policies still represent an attractive proposition for corporations, investors and households. As I argued earlier this week there are now plenty of competitive clean technologies out there, as well as some largely successful green policies from the government, such as the Green Investment Bank and feed-in tariffs, that actively support the green economy.

Business leaders and campaigners also need to do everything in their power to explain to Cameron and his colleagues that regardless of the fixation on "green levies", the only long-term way to tackle high energy bills is through effective and ambitious energy efficiency measures. And more generally there has to be a renewed push by supporters of the green economy to force politicians to accept they cannot decarbonise by stealth. They need to get out there and make the positive case for low-carbon technologies – do so and they will quickly find that the majority of the public are more receptive than they think to green growth.

Most importantly, they need to try and help the prime minister rediscover his green backbone. Cameron's complete confusion on whether or not he wants to support the kind of measures he knows are necessary to tackle climate change is both a dereliction of duty and a prime example of the very worst kind of short-termist political cynicism. He can argue against green levies if he wants, but in that case he owes it to voters and investors to clearly spell out how he plans to decarbonise instead. Every week of uncertainty means more jobs lost, more investment forgone. The problem is that he doesn't seem to know what he wants, and that uncertainty, that failure of leadership, is at the root of the escalating crisis of investor confidence that Cameron has done so much to stoke.

The prime minister needs to recognise the wisdom of those modernising voices, such as Nick Boles, who warn the retreat to the Tory comfort zone is one of the main reasons Labour continues to lead in the polls. He needs to reject the siren voices in the right wing commentariat arguing that action on climate change can wait indefinitely in the hope that a technological silver bullet emerges. He needs to rediscover the leadership that defined his early years and explain clearly how he plans to ensure decarbonisation is delivered at the lowest possible cost, while also explaining that he is not willing to compromise on an over-arching green economic strategy that was then, and is now, in the national interest.

Until he does that, his dismissal of flagship policies that he used to support as "green crap" will only serve as ammunition for those critics who regard Cameron's default setting as one of U-turning hypocrisy. The prime minister's crass rejection of crucial environmental and social policies is undignified, but worse than that, it is bad politics, bad policy, bad economics and, most of all, it is bad for business.