President Obama announced $3.4 billion in awards yesterday for organizations around the country planning investments in smart grid technology. Despite all the noise surrounding this wonderful technology, I do have a question about just who is really going to benefit from its implementation.

Of course, I get the idea that smart grid technology will enable utilities to get real time information about the electrical demands being placed on their systems, giving them the ability to identify outages and other system breakdowns, confront consumers that are stealing power from the grid (I heard the other day that BC Hydro reckons it could get a payback JUST from the elimination of power theft in < 2 years on the investment required to equip its entire 1.2 million customers with smart metering technology), and, in general, manage their operations more efficiently. That's great: I'm a capitalist and fully supportive of the idea that investments in technology can greatly improve operating earnings.

However, despite the rhetoric, I'm much less clear about how the implementation of this technology will address the key sustainability issue facing us in the energy arena: reducing overall demand. Perhaps the utilities will indeed take steps to cycle off our air conditioners and/or heating systems in times of peak demand, but the idea that consumers will use smart metering devices to do things like program their dishwasher to run at 4 AM when power is cheap is a little optimistic (you can do this now with a $10 timer from Home Depot IF your power is in fact cheaper at 4 AM!). My doubts arise from the facts that most of us (1) could never learn how to program a VCR in the 90s, (2) can't even manage the simple stuff like turning out lights and electronic appliances when we don't need them and (3) would far rather sit in traffic wasting energy in our own car than take a bus or light rail to work.

So while smart grid is really smart for the utilities, I don't think we can rely on drastic changes in our behavior using this technology to move the needle on energy demand in the American economy. Maybe all those shysters currently stealing electricity from the utilities will stop using it once smart metering exposes them and they have to pay for it!!

I often hear this argument: Why should the US concern itself with trying to create a more sustainable economy when "those folks over in China" are continuing to pursue environmentally and socially irresponsible practices on a massive scale? Apart from the fact that this attitude hardly represents the kind of leadership the world expects from America, there are other good reasons why this is a seriously flawed argument.

The Chinese people are human beings just like us. As their economy builds wealth, there's every reason to believe they'll decide to spend some of it on improving the quality of their life and their environment. It's easy for us to forget the miserable working conditions in US facories 100 years ago and the fact that the Cuyahoga River regularly caught on fire in Cleveland less than 50 years ago. Why on earth wouldn't we think that the Chinese people will aspire to the same quality of life and environment improvements we ourselves have made happen in recent decades?

Just as important, it's already happening!! Take a look at this NY Times Article about Chinese progress on clean coal. Clearly, environmental and social problems associated with the rapid economic development in China are driving the development and application of new technological solutions in ways that we'd be well advised to take serious notice of instead of pointing an accusing finger. 

"The Engaged Organization" is the title of a recent report from the National Environmental Education Foundation (NEEF), which conducted in-depth studies of  companies to determine the importance of having a workforce that truly understands the importance of environmental and sustainability issues to the well being of  an organization. After interviewing 1,300 business professionals, among other things they found that:

"65 percent of respondents value job candidates’ E&S knowledge, while 78 percent of  respondents believe that the value of job candidates’ E&S knowledge will increase in importance as a hiring factor within five years." 

This is entirely consistent with CORE's view that more and more companies are recognizing that environmentally and socially responsible business is good business. This should also be good news for all of the bright young MBA and other graduate students who have made sustainability a focus of their studies in the local universities. 

Read the report.