Yesterday I had the pleasure of attending a talk by Vinod Khosla at the California Public Utilities Commission building in San Francisco. He shared his visions about clean technologies in a world where the dramatic reduction of carbon emissions is necessary to combat climate change.

Khosla began by shaking up the audience and explaining that the reason some forecasts (oil prices, food prices) are wrong is because the fundamental set of assumptions used to make them are wrong. In short, we shouldn't trust forecasts too much.

Khosla's plan of attack is to address manageable material problems, not a change in human behavior. We must focus on our efficiency of coal, oil, steel, cement use because they are 75-80% of the problem in carbon emissions. Khosla says we need clean power generation and clean transportation; if we don't achieve this quickly, we're in trouble.

For several reasons, Khosla believes we need unsubsidized competitiveness in clean technology. He argues that subsidies (such as Germany's feed-in tariffs) give no incentive to reduce costs, therefore allowing widespread use of inefficient technology. Instead, Khosla would like to see renewable energy prices lowered due to competition for the price a utility like PG&E would pay per kWh.

A point that was reiterated is that trajectory matters. It is absolutely necessary to have declining cost with scale; otherwise, a clean tech product will never be cost competitive in developing countries, which is where energy needs are quickly rising. Khosla calls this the "Chindia" test.

Also cited was the importance of short innovation cycles. In a time of economic strain, Khosla argues that capital will flock to short cycle investments. It is much less likely that 20 year projects will receive support.

In global carbon reduction, Khosla thinks a cap and trade system must be effective, moral, pragmatic, and dynamic. It should not only meet global CO2 reduction targets, but also be fair while achieving the broadest possible acceptance worldwide. The system must also be dynamic, should global emissions targets change according to updated research.

Khosla pointed out that 80% per capita carbon emission reductions are not reasonable across the board. For example, Eritreans emit 0.1 ton/year, whereas Americans emit 20 tons/year. Why should Eritrea have to sacrifice economic growth when Americans contribute significantly to the problem? If developing countries are allowed to operate under Annex 1, there is a much better chance they'll agree to fight climate change because they will be given reasonable targets that allow for economic growth.

Vinod Khosla may make waves in voicing controversial points. However much one may disagree, it is refreshing to see challenges through Khosla's eyes, especially when he advocates making smart, high-impact moves in the areas that matter most. I'm sure no one supports policies that spend public money unwisely, or enable inefficiency. For a man who believes there is such a thing as too much green, Khosla seems to have his reasoning worked out.