Listen to this article
The web has been buzzing this weekend with discussion of Sir Richard Branson’s decision to devote $3bn to alternative energy, announced at the Clinton Global Initiative. Chris Hughes explained in Saturday’s FT how this “amounts to a massive ‘asset allocation’ switch out of transport and into green energy” and he went on to ask if this was wise. But the bloggers (see below) have been providing their own answers.
There has been a very sensible discussion on the Warwick University blog site about whether Branson’s move was philanthropy or business.
Other bloggers are clear that this is business, pure and simple. “The man is a genius, he can’t lose!” according to Wonko’s World. “The State of California has just launched a lawsuit against major car companies over climate change and the oil market is volatile, not to say finite. Biofuels are a renewable source of energy and can be grown by or for the company that produces it. Biofuel is cheaper than oil-based products and cleaner to make. A large percentage of the Virgin empire is transport-related and cheap fuel will improve the profitability of those businesses. On top of that, I expect that Virgin Fuels will retain the patent on new technologies they develop meaning that they can rake in the cash in from selling the technology to other people.”
Moonage Spacedream picks up the theme. “Branson is making a very prudent, well thought out, business decision. Instead of paying someone else for 700 million gallons of gasoline every year, he’s going to make his own fuel,” he says. “Plus, he’s going to get tax credits [….] for doing it (see Clear Skies Initiative), tax credits for building the plants, tax credits for using the fuel, and even more tax credits for buying the waste to make the fuel. This is an absolute no-brainer for a forward thinking business genius like Richard Branson. Plus, he’ll get every tree-hugger on the planet flying Virgin. Slam dunk business decision.”
And Andy Rowell, on Oil Change International, says Branson’s plan amounts to “clever green marketing”. He goes on: “Air transport was exempted from the Kyoto protocol on climate change, provided that airlines sought a way to reduce emissions through a trading scheme by 2007. With that deadline fast approaching and no agreement in sight, the prospect of taxes on aviation fuel or airline travel is becoming more realistic. This latest scheme by Branson could be a clever move to pre-empt that.”
Others are more critical. “Throwing $3 billion out there without goals, commitments, and initiatives doesn’t do anything except get publicity,” says Idioticblog.
Yet, says, Kyla’s Economics blog: “Some people may say that this is just for publicity and to gain more fame or power, but even if it is that, which I do not fully believe, he is still doing a huge favour to our environment. So I say thank you, and I also say stop being so lazy people and actually start doing something!”
Confessing Evangelical wonders whether Branson is not simply misguided. The blog cites an article in the New Scientist which says: “Far from solving our problems, say the dissenters, biofuels will trash rainforests, suck water reserves dry, kill off species and raise food prices. They will also accelerate the corporate takeover of agriculture, create famines and could leave fuel importers as dependent as ever on other countries. Worst of all, many biofuels will barely slow global warming at all if the technology behind them does not improve.”
We have fresh stories, of course, for tomorrow’s paper. Norma Cohen and Sarah Spikes have been checking out news in The Sunday Times of merger talks between the London Stock Exchange and Icap, the inter-dealer broker run by Michael Spencer. A story is running on FT.com now (the talks were brief and are now off) but we will have more analysis on Monday morning, online and in print. We also have a couple of good scoops of our own on derivatives, hedge funds, pensions, the business of the internet and plenty more, all of which will be on FT.com later.
Get alerts on Columnists when a new story is published