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May 6, 2001

Can Entrepreneurs and Environmentalists Mix?


By AMY CORTESE


MANY Americans consider economic interests and environmental protection about as compatible as, well, oil and water. Bob Epstein is out to change that perception.

A Silicon Valley private investor and entrepreneur best known as a co-founder of Sybase, the database maker, Mr. Epstein believes that good environmental policy can make good economic sense. His organization, Environmental Entrepreneurs, or E2 for short, tries to bring business people and logic into the debate about how best to balance business needs with environmentalists' concerns.

Mr. Epstein's vision is to link the entrpreneurial fervor of places like Silicon Valley with the environmental movement.

''I saw it as a business problem,'' said Mr. Epstein, who founded E2 a year ago with Nicole Lederer, a friend and environmental activist. A sustainable environment along with a growing economy, Mr. Epstein said, ''will only happen through the promotion of ideas, not by maintaining the status quo.''

From the start, E2 was intended to appeal to executives pressed for time. It promises to take just 10 minutes of a member's time a month -- asking them to write letters or to make well-placed phone calls. And it holds teleconferences and ''eco salons,'' or discussion groups about the environment, to brief members on issues. Members must donate at least $1,000 to the Natural Resources Defense Council, the environmental organization based in New York that is collaborating with E2.

But the biggest contribution by the members may be their influence. Watching politicians stream through Silicon Valley over the last few years, Mr. Epstein realized how much power entrepreneurs had -- and how often, in his view, they squandered it.

E2's members, predominantly venture capitalists and chief executives, have lobbied for policies ranging from preserving old forests to opposing petroleum-company desires to drill in the Arctic National Wildlife Refuge.

''It's unfortunate that all business gets painted as wanting to oppose the environment and slow change,'' said Robert Fisher, the former president of Gap Stores and an E2 member. ''There are a lot of people who want to leave their children with a world that is in better shape.''

MR. EPSTEIN is certainly not the first technology entrepreneur devoted to environmental causes. Among the most prominent examples, Gordon E. Moore, co-founder of Intel, has committed more than $30 million to Conservation International, a group based in Washington. Paul G. Allen, co-founder of Microsoft, has established a foundation to preserve forests.

E2's efforts come as stereotypical attitudes about business opposition to environmental causes have sometimes been reinforced by the new Bush administration. President Bush has taken steps to overturn some regulations and policies opposed by big business but cherished by the environmental movement.

In the next few days, Vice President Dick Cheney is expected to issue a report prepared by his energy task force. He has indicated that it will call for heavier reliance on oil, natural gas and nuclear power and less on conservation.

While some of the more contentious proposals, including one to permit drilling in the Arctic Refuge, are unlikely to gain enough legislative support to be passed, environmentalists fear that damaging deals will be brokered privately.

Mr. Epstein and his colleagues contend that environmentalists must speak the language of business if they want to get through to the Bush team, which prides itself on its M.B.A.-style approach to governing.

E2 conveys ''the kind of message that's going to resonate with this administration,'' said Greg Wetstone, director of advocacy at the Natural Resources Defense Council.

The council and E2 have sought to make a persuasive case for ecologically friendly policies, stressing long-term benefits and savings over near-term appeasement of business interests.

One issue involves air-conditioners. The Bush administration wants to lower the federal efficiency standard required for residential air-conditioners, but the council says that proposal would increase electrical consumption nationally by 14,000 megawatts -- equal to what is generated by more than 50 midsize power plants. E2 members have lobbied to keep the higher standard.

Good environmental policy can often save money, advocates say. They point to regulations on tires as one possibility: While the tires on a new car are subject to fuel efficiency standards, replacement tires are not, and they can significantly reduce a vehicle's gas mileage. But a 3 percent increase in the fuel efficiency of replacement tires could save the equivalent of all the oil that could be produced in the Arctic, according to the resource council's studies.

Critics within the oil industry contend that groups like E2 have noble goals but are naïve, particularly about energy problems.

''Gimmicks like better tires are minor; of course it's always good to improve tires,'' said John H. Lichtblau, chairman of the Petroleum Energy Research Foundation, a group in New York that is supported by the oil industry. ''That's not going to have much of an effect. Oil demand is rising.''

Still, findings like the council's tire study have energized Mr. Epstein. And he has tried to practice what he preaches. He said he had cut the energy consumption costs in his own Berkeley, Calif., home by 15 percent over the last six months, largely by repairing his clothes dryer so it works more efficiently and by using energy-saving light bulbs. And he drives a Toyota Prius, a hybrid car that uses both electric and gasoline power. The car gets 44 miles to the gallon and cuts emissions by as much as half, Mr. Epstein said, and is quiet and comfortable. It cost no more than his last car, a Honda Accord.

Rather than throwing more supply at the energy-shortage problem, which he called a Bush administration solution, Mr. Epstein contended that reducing demand would have a more profound effect.

THAT message appears to be resonating with more executives like Mr. Epstein. Gary Hammer, an entrepreneur whose latest start-up, Great Circle Water, recycles waste water, attended an E2 eco-salon in February, at which topics ranged from California's energy crisis to global climate change. It was held at the Palo Alto, Calif., home of an E2 member, Sandra Slater, who gave a tour of her house, which generates 80 percent of its own energy.

Mr. Hammer was immediately sold on E2. ''I sent a check within a week,'' he said.

Many E2 members said they had long wanted to be more active in causes they considered important, but had not known where to start. Alan Buder, the chief operating and financial officer at Addwater, a San Francisco-based marketing company, said that when Mr. Epstein, a friend, told him about E2, ''it just struck a chord.''

''Bob makes it very easy to do good things,'' he added. ''It's all teed up for you.''

So far, E2 has attracted 200 members, many of whom had never been part of an organized environmental effort.

In running E2, Mr. Epstein has borrowed many techniques from start-ups: invest in a team you consider good, like the resources council; build a network; and make effective use of capital. The current task, he said, is to scale up. ''I see this as a great opportunity to encourage innovation, drive markets for new products and lower costs,'' he said.

Incidentally, he suggested, that is not a bad way to jump-start the economy.


 

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