Jon Bonnano has gone up the creek without a paddle. In November the former greentech lead at the Keiretsu Forum announced he was leaving his post to found Principle Power, an independent renewable power provider. Bonnano was halfway through raising his first $1.5 million when he announced the company's first project - a series of nine small hydro plants on the McKenzie River in Oregon. In committing to this project, Bonnano placed himself squarely in the Khosla school of greentech, arguing "if we cannot beat the true cost of burning wood, coal, or dung, which includes their emissions costs and without subsidies, we have lost." But Joe Bonnano would have more than flaming bags of dog poo to contend with...

Tony Hayward, BP's baby-faced CEO, has seen the future. And it's got nothing to do with moving beyond petroleum. As part of a cost cutting scheme during which the oil major will shed 14,500 jobs and cut nearly $1 billion in overhead costs, BP will also eliminate many of its renewable energy projects. At the company's annual investor presentation next Wednesday, Hayward is expected to announce the company is getting back to basics - expanding its CAPEX from $19 billion in 2007 to around $22 billion in 2008 with a focus on bumping up oil production. The British energy giant recently signed on to a joint venture with Husky Energy, a Canadian firm operating in Alberta's tar sands. Apparently the lure of oil on the high side of $90 is too much for BP to ignore, regardless of long term impact. Following John Browne's dubious departure after 12 years of leading the company into renewables, Hayward's back to business moves are both disappointing and short sighted.

Kevin MacLeod of the Clan MacLeod, Western GeoPower CEO and immortal warrior, is not happy. Late last week MacLeod terminated a 25.5 MW PPA between his company and PG&E, citing the California Public Utilities Commission's failure to certify the agreement on time. The PPA was a big deal for everyone's favorite utility, as it represented PG&E's first major renewables agreement, as well as the first one to die before consummation. See what happens when you mix Viagra and nitrous tablets? PG&E had contracted in May with the geothermal company to buy power from their Western GeoPower Unit 1 power plant, which is slated to come online in 2010. In December the CPUC issued a blanket approval for 585.5 MW of renewable power for PG&E as part of their 2006 RPS commitments, but the approval came too late for MacLeod's taste. Clearly this broadsword-wielding c-suite executive is not to be messed with.

In 2006, nearly 600,000 homeowners in coastal areas of the United States found themselves with a little more pocket change than in the previous year. The insurance industry, which spends as much time analyzing the weather as the IPCC, deemed the ongoing, climate change-related risks to these homes too great and revoked their policies. The message from insurers was clear: "we're not gonna take it anymore." Following a year-over-year doubling in weather-related insurance losses from $30 billion in 2004 to more than $60 billion in 2005 in the United States, the insurance industry began to fight back against global warming. Globally, this number jumped from $145 billion in 2004 to over $200 billion in 2005. In December 2005 20 of the largest investor groups in the U.S., including most major state employee and union pension funds, forced the 30 largest American insurance companies to disclose their climate change-related financial exposure. The results were, needless to say, not pretty.

Bottom-line pressures affecting the insurance industry are growing at a rapid pace. A June 2005 report from the Association of British Insurers (pdf) tells us that expected losses due to the expected jump in extreme weather could amount to increases of 75 percent in the U.S., 66 percent in Japan, and 15 percent in Europe by 2080. The ABI expects a non-extreme weather-related increase of 66 percent overall year to year by that time. That's an additional $27 billion a year, every year, for the next 75 years. What is unique about this situation is that insurance companies, which comprise the world's second largest industry in terms of assets, are creating forward-looking climate models. This is a break from the historical trend of assessing weather-related risks in terms of historical patterns. The admission here is that the climate is in fact changing for the worse, and it's going to cost alot. Insurance companies have their fingers in a lot of different pies, yours and mine included, but also in coal plants, cement factories, and vehicle fleets. Pressure from the industry has turned up in a lot of different places, including last week's announcement of The Carbon Principles. Insurance companies are penalizing policy holders for engaging in activities that worsen the climate because the future consequences of these actions will end up costing them in the end. The good news is that they're also rewarding good behavior. This includes offering discounts on policies for hybrid cars and LEED certified buildings. Extending these benefits to project development in the greentech sector is the next logical step. Using corporate pressure to force the government's hand is necessary - that kind of green doesn't grow on trees.

Deep Throat's admonition to "follow the money" couldn't ring truer than in recent signals on climate change sent out by the big banks. The Carbon Principles, a set of guidelines addressing investment risk in electric power plants, were launched today by Citi, Morgan Stanley, and JP Morgan. While the guidelines themselves are high on fluff and low on actual guidance, they presage highly anticipated GHG regulation and provide a glimpse at what's ahead for advisers and lenders in the traditional power gen industry. The biggest development in today's announcement is the enactment of a so-called Enhanced Diligence framework, essentially a process allowing potential investors to evaluate risk factors in new plant construction. Power companies incorporating energy efficiency, carbon capture and sequestration, and/or renewables into new construction are assessed less risk than those that do not. With the Enhanced Diligence framework, the banks are sending a clear signal to power companies that business as usual construction will be penalized under any future regulatory framework. This is clearly not a cost the banks are willing to bear. What The Carbon Principles tell us is that the big banks - old pros at following the money - are ready to begin thinking critically about technologies enabling a low carbon future. Power plant construction is a multi-billion dollar business, and investors and lenders stand to lose big time if they get caught with their pants down after the initiation of GHG regulation. But The Carbon Principles are more than hedge against future regulatory uncertainty. They're also a smoke signal to Washington that the train is leaving the station. Most major American banks have already built carbon trading practice groups with eyes towards London (and Hong Kong). If the government blows this one, profits won't be the only thing we lose.

FTSE's new ET50 index, which tracks the 50 largest pure play greentech companies by market cap, has picked up Sweden's AP7 as its first benchmarking fund. The ET50, which debuted last week with a $170 billion market cap, tracks companies in power gen and energy efficiency (68%), water tech and pollution controls (15%), and waste and resource management (17%). It's five largest holdings are Vestas (11.34%), SunTech (7.25%), First Solar (6.03%), Gamesa (4.99%), and Iberdrola (4.08%), with the top 10 companies comprising nearly 50% of the index. ET50's geographic distribution is heavily weighted towards U.S. companies (41.19%), with Denmark (14.97%) and Spain (10.57%) rounding out the top three. While other major indices, such as WilderHill and Clean Edge, focus primarily on power gen