02 October 2011

Sustainable energy *with* all the hot air

Of course it is not all unicorns and sparkles here at Booming Back, no indeed. Once in a while, in between all the jaunts away to exotic climes (and/or Tipperary), the near-daily deliberations on the nature of Art and/or Politics, the stalker-esque appreciation of the musical stylings of the Warp label and the occasional gripe about the unfairness of life and the hilarious tricks it likes to play with one's internal organs, once in a while we turn our sights firmly on the mundanities of the really-real world and hope not to alienate too many of you in the process.

Those of you who know me in the really-real world may be aware that over the last few years I have invested in, and mentored, a number of early stage start-ups in fields ranging from small-business networking to film production. As someone who is, to say the least, not a fan of Capitalism, Venture or otherwise, this has led to a rather atypical investment strategy whereby I have sought to form a longer-term partnership with any group that I am working with rather than seeking a traditional easy-out exit plan. I don't write that much about it because a) its not as fun as ranting about political malfeasance, b) association with my grumpy-but-lovable curmudgeonly online persona could have detrimental affects on the future success of a given start-up and c) I try to maintain a strict separation of Church and State, wherein "State" is my bread and butter and "Church" is the jam and clotted cream that sits on top and passes for fun in my life (though technically clotted cream is on the verboten list along with alcohol, caffeine, fat and Tiramisu, although strictly Tiramisu shouldn't need its own entry as it contains alcohol, caffeine, fat and little else, however after a recent "Due" incident in Venice it seems prudent to add it to the list in big, bold, letters).

This might go some of the way to explaining how it was that I came to find myself sitting in Chartered Accountants House, home of Chartered Accountants Ireland, attending the inaugural Dublin Investment Summit on Friday morning. Despite its location neither it, nor I, had anything to do with accountants, chartered or otherwise, the building merely playing host to the event. Supported by Dublin City Council and The Sustainable Energy Authority of Ireland, the Summit aimed to bring together a number of investors and those seeking investment, wrapping it all up in a series of presentations on the state of innovation and investment in different sectors in Ireland (Green Energy, Clean-tech, Health/Pharma etc) that would be of interest to a wider audience.

Though strictly there as an observer (being not yet fit to once again either invest and/or ment) curious to see what has been going on while I enjoyed my medically-induced sojourn, as I watched a series of presentations by engineering firms working in both wind and wave energy, a thought struck me: Ireland has few historical or geographical advantages, but the wind and wave energy we have access to seems too great to be ignored. We have the potential to be a global leader in wind and wave technology and there is a real opportunity for the nation to not only gain energy self-sufficiency, but to sell on this Green energy to the UK and beyond. Unfortunately this and any notion of a Green Tech revolution as the solution to all our problems is almost certainly doomed to failure because of the inherent flaws in, and catastrophic results of, our Celtic Tiger infatuation with hyper-capitalism.

Throughout the morning presenter after presenter told a tale of reaching a certain plateau in the development of their technology or service, and needing additional financial investment to sustain their program. However banks are unwilling to lend money because a) they are highly risk-averse after their bonus-driven executives gambled it all away on the property market and b) they have no money left after their bonus-driven executives gambled it all away on the property market. Venture Capitalists are short-sighted, seeking something that will deliver maximum profits in the minimum timeframe and are unwilling to invest in something without a definable 3-5 year exit strategy (its a pity America doesn't let its wars be run by investment firms, oh, wait, they do), and Green Tech can take considerable longer than that to mature or become cost-efficient. With our previous government bankrupting the nation for generations to come by bailing out private equity banks, the State itself is no longer in a position to financially support longer-term plans, and with the Greens banished from government it seems we are no longer even paying lip-service to the concept of a Green Economy. So we have arrived at a point where both the innovation and the skills are present to kick-start a Green Tech revolution in Ireland, but because of the inherent short-sightedness of the hyper-capitalist system it will never happen.

Now to my mind there are an awful lot of things that need to be fixed in this country before we worry about the Green Tech sector (like our crumbling education and health care systems), but if you were to try to do something one simple solution would be to increase the tax on the profits of multinationals who use Ireland solely as a tax-haven and channel the new revenue into a dedicated innovation fund. It always infuriates me when I hear the Government talk about our 12.5% Corporate Tax rate like it is the sacred foundation myth of our nation, especially given the fact that no multinational based in Ireland is actually paying anything like 12.5% tax on their laundered profits. Introducing an Innovation Solidarity Levy of even 0.1% on the profits of multinationals who pay an effective tax-rate of under 3% thanks to the Double Irish and Dutch Sandwich tax loopholes will hardly cause them to fly away home where they face a tax rate of close to 40%, and channeling this Innovation Solidarity Levy into a dedicated fund from which native Irish companies could draw down grants to support long-term Green/Clean Energy and Tech development programs free from the short-sighted whims of both Venture Capitalists and the stock market, could be exactly what is needed to create a viable Green economy, providing jobs, exports and the intellectual capital necessary for it to be sustainable and self-sufficient.

Before you laugh at the naivete of this, remember how farcical talk of a Tobin Tax seemed only three years ago, the notion that financial institutions would be charged even a 0.5% levy on international currency exchanges both to dissuade currency speculators and to fund development projects overseen by a central authority (like the World Bank or IMF, but we'll ignore that part for the moment). Now we have Nicolas Sarkozy (hardly a card-carrying communist) openly calling for such a levy at the G20.

As I have said, there are much higher priorities in the grander scheme of things, but the resources are there for this and other projects if only someone in government had the strength to tap them. In emergency budget after emergency budget the citizenry have been asked to shoulder extra burdens for the sake of our nation's future, isn't it about time we asked our corporate citizens to do the same?

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