Tuesday, September 26, 2006

Branson's $3B climate pledge

Toronto Star
Sep. 22, 2006. 06:59 AM

British multi-billionaire and Virgin Group founder Richard Branson says he'll invest an estimated $3 billion (U.S.) over 10 years in renewable energy projects and technologies that help crack down on global warming.

Ironically, the money is the anticipated profits of his emission-spewing travel businesses, such as airline Virgin Atlantic and railway operator Virgin Trains, both heavy users of fossil fuels.

Branson announced the financial commitment in New York yesterday on the second day of the annual Clinton Global Initiative summit, hosted by former U.S. president Bill Clinton.

The money will be managed through a new investment company called Virgin Fuels.

"I really do believe the world is facing a catastrophe and there are scientists who say we are already too late, but I don't believe that is the case," said the 56-year-old entrepreneur.

"We have to wean ourselves off our dependence on coal and fossil fuels. Our generation has the knowledge, it has the financial resources, and as importantly, it has the willpower to do so."

In a statement, he described the contribution as a "small way to enable our children to enjoy this beautiful world."

Former U.S. vice-president Al Gore's public fight against climate change seems to be gathering deep-pocketed and loyal followers. Branson said that Gore visited his home several months ago and inspired him to action.

The flamboyant Brit, whose financial commitment is believed to be the largest amount yet targeted at climate change, joins a growing club of high-profile "green" investors that includes Microsoft Corp. co-founder Bill Gates and Google co-founders Sergey Brin and Larry Page.

Gates, through his investment company, recently invested nearly $100 million toward the construction of ethanol refineries in the United States. Brin and Page have investments tens of millions of dollars in clean-technology ventures, including solar-cell maker Nanosolar Inc. and electric car manufacturer Tesla Motors Inc.

Google, the search engine company, has also created a for-profit philanthropic organization called Google.org that has been given $1 billion for investments that tackle everything from global warming to world disease.

According to a report in The New York Times last week, one of Google.org's first projects is aimed at encouraging auto makers to design low-emission hybrid cars that can be plugged into a power socket and run on ethanol when necessary.

Branson has his eyes on similar initiatives. In the January issue of Fortune magazine, he hinted at the possibility of developing a Virgin hybrid car, on top of investments in ethanol and other alternative fuels and energy technologies.

"Hopefully we will build a fuel company that is a major competitor to oil companies," he told the magazine.

Virgin Fuels has already invested $60 million (U.S.) in California ethanol producer Cilion Inc., which plans to have eight production plants in operation by 2008.

In the next 10 years, Branson said, Virgin Fuels will invest in renewable energy projects within the Virgin Group and make outside investments in biofuel research and development, production and distribution.

The $3 billion contribution is "groundbreaking," said Clinton. "Richard's commitment is groundbreaking not only because of the price tag — which is phenomenal — but also because of the statement that he is making: clean energy is good for the world and it's good for business."

Down the street from Clinton's conference in midtown Manhattan, venture capitalists attending one of the largest clean technology conferences caught wind of Branson's news.

"It's the buzz in the back alleys," said Nicholas Parker, chairman of the Cleantech Venture Network, organizer of the conference.

"Everybody's wondering how Branson's going to put the money to use."

Parker said there's a question of whether Virgin's travel businesses will actually produce $3 billion in profit over 10 years. But accounting aside, he called Branson's financial pledge another mainstream indication that industrial capitalists are concerned about fuel availability, prices and emissions.

"People are saying that it's time to stop mucking around on climate change, and that we're going to give leadership on this."

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