Green Wombat

Paul Zeven, CEO of Philips Electronics’ North American operations, dropped by Business 2.0 yesterday to chat with Green Wombat about the the future of LED lighting and the company’s support of a campaign to eliminate planet-warming incandescent light bulbs. In March the electronics and lighting giant called for the phase-out of traditional light bulbs in the U.S. by 2016 in favor of compact fluorescent bulbs, which use 70 percent less electricity and last about a decade. But going green in this case would seem to be the equivalent of going out business, given that incandescents comprise 95 percent of Philips’ (PHG) worldwide light bulb market. But Zeven says Philips is positioning itself for the future with its CFL products and LED technology. (Philips owns Lumileds, a Silicon Valley company that makes LEDs.)  In any event, he says the phaseout of incandescents is inevitable, citing the growing movement to ban the bulb: Australia is outlawing traditional light bulbs, Ontario recently moved to do the same while California is considering legislation to bar the sale of incandescents beginning in 2012. Zeven notes that Philips has also been in discussions with European Union officials about phasing out traditional bulbs. "What we’re seeing is that consumer demand, the actions of the retailers and the media are making this an issue and that alternatives are needed," says Zeven, a dapper native of the Netherlands who runs Philips’ North American operations from New York.

A few hours before our meeting Wal-Mart (WMT), which aims to sell 100 million CFLs by 2008, announced that it was working with Philips, GE (GE), Osram Sylvania and Lights of America to slash the amount of toxic mercury used in the high-efficiency bulbs to reduce their environmental impact and increase consumer acceptance. "Wal-Mart can have a tremendous impact," says Zeven. He was in San Francisco to give a speech at a conference and afterwards he said a woman approached him to say she had replaced all 129 light bulbs in her house with CFLs and had given a package of the bulbs to her father. "Two to three years ago most people had not heard of CFLs," he says.  The impact on global warming from something as simple as changing a light bulb is staggering: If the United States switched to CFLs it would save $18 billion a year in
electricity costs and eliminate 158 million tons of carbon dioxide
from the atmosphere –  the equivalent of shutting down 18 coal-fired
power plants, according to the Lighting Efficiency Coalition, coalition of environmental groups and corporations.

But Zeven sees CFLs as an intermediate step until LED technology can be perfected and the cost lowered for mass home and office use – something he predicts is another 10 or 20 years away. An LED – light emitting diode – is essentially a semiconductor chip and uses less electricity than even a CFL. LEDs theoretically can last for decades, dramatically lowering greenhouse gas emissions. Lights that virtually never burn out, of course, also changes the economics of the lighting business. "It’s a whole new ballgame for us as an industry," Zeven says, noting that there will always be new demand as cars, televisions and other gadgets increasingly rely on LEDs.