World is Green

Dear Friends & Readers,

For those who celebrate, wishing you a Merry Christmas and a Happy New Year to all.

I will be on vacation to the beautiful state of Tasmania in Australia, blogging will continue in the new year.

One of the places I am going to visit is Wine Glass Bay in Freycinet National Park.

Ray Anderson in his wonderful and inspiring book, Mid-Course Correction, provides a poem by one Interfaces’ employee - Glenn Thomas. This poem best lays out the need to work towards Sustainability.

Tomorrow’s Child
Without a name; an unseen face
and knowing not your time nor place
Tomorrow’s Child, though yet unborn,
I met you first last Tuesday morn.

A wise friend introduced us two,
and through his shining point of view
I saw a day which you would see;
A day for you, and not for me.

Knowing you has changed my thinking
for I never had an inkling
That perhaps the things I do
might someday, somehow, threaten you.

Tomorrow’s Child, my daughter-son
I’m afraid I’ve just begun
To think of you and of your good,
Though always having known I should.

Begin I will to weigh the cost
of what I squander; what is lost
If ever I forget that you
will someday come to live here too.

Glenn Thomas, © 1996

In what can be said the biggest acknowledgment of the dangers of Nuclear Energy, the EPA is considering regulations for nuclear waste for the next 1 million years.

The U.S. Environmental Protection Agency (EPA) is preparing to issue a regulation that will govern the disposal of power plant nuclear waste in the United States for the next 1 million years. “This will be the only rule that applies for such a long duration into the future,” said Elizabeth Cotsworth, the EPA director of radiation and indoor air, in an interview with National Public Radio. “Most EPA rules apply for the foreseeable future — five or six generations. This rule is for basically 25,000 generations.”

Opponents of the Yucca Mountain plan countered with a lawsuit, arguing that the 10,000-year regulation did not extend far enough into the future. The courts agreed, so the EPA extended the regulation to 1 million years—100 times longer than the period covered by the original regulation.

Increasing concerns about the acceleration of global warming have helped to renew interest in nuclear power generation—even among some environmentalists—a development that has also raised new concerns about the best way to dispose of nuclear waste that can remain toxic for 100,000 years or more.

Even as the US EPA is considering this, Westinghouse won a deal to estimated at USD 8 Billion to build China’s new nuclear plants. Just considering the need for a regulation like this puts the risk of nuclear energy far higher than anything else.

The AFP reports that 20% of livestock are in danger of extinction.

Some 20 percent of the world’s livestock species — cattle, pigs and poultry — are threatened with extinction, with one breed disappearing each month, the Food and Agriculture Organization warned.

Over the past five years alone, some 60 breeds of cattle, goats, pigs, horses and poultry have become extinct, the Rome-based UN agency said in a draft document, blaming globalization as the “biggest single factor” in the erosion of livestock biodiversity.

“Maintaining animal genetic diversity will allow future generations to select stocks or develop new breeds to cope with emerging issues, such as climate change, diseases and changing socio-economic factors,” said Jose Esquinas-Alcazar, secretary of the FAO’s Commission on Genetic Resources for Food and Agriculture.

Rearing livestock contributes to the livelihoods of one billion people in the world, the FAO says.

Livestock are the mainstay of human species. Reading livestock is one of the most important aspects of survival and growth in the world for man. Biodiversity is important in generally for a variety of reasons and in this case of global diseases it is far more important.

Business need to understand that like diverse portfolio investments in various financial assets, it is important to have a wide variety of species for overall benefit.

Women play an important role in the development of a nation. This is a good start for the politics of UAE, atleast symbolically.

A woman was elected to an advisory council in the United Arab Emirates in the first national polls in the Gulf country, in which only a tiny part of the population is taking part.Three-stage elections to fill half the 40 seats of the Federal National Council (FNC) began in Abu Dhabi and the smaller emirate of Fujairah Saturday, making the UAE the last Gulf Arab monarchy to hold a national poll.

Oil-rich UAE has 825,000 citizens, more than 300,000 over the age of 18. But only 6,595 of them — chosen by each emirate’s ruler — were entitled to vote across the country, including 1,163 women. The UAE, which has two women in the cabinet, has become the first country in the conservative Muslim Gulf region where a woman wins a mandate right from the first national vote.

As mentioned in the previous post, should the Tata group in India produce cars at a cheaper cost to enable transportation by car for many Indians or not develop as cars are the major problem in environmental degradation?

Darryl D’Monte writing in InfoChange India on WorldWatch’s new Vital Signs report comments on the lack of focus on the looming water problems in the world and concentrating the hot issue of oil.

If one wanted to pose the problem with such US-based think-tanks and their worldviews, one could ask the question: Which is more important, the shortage of oil or the shortage of water?

If one takes food itself, there is a serious underlying water dimension, as most grain-growing countries spend 70% and more of their water resources on irrigation. Only recently, the Earth Policy Institute, run by Worldwatch founder Lester Brown, reported: “Together, China, India and the United States produce nearly half the world’s grain, and these three countries plus Pakistan collectively account for over three-fourths of the world’s reported groundwater extraction for agricultural purposes.”

This shows the dramatically different needs of the developed and the developing world. Each have different environmental concerns. A NGO based in Washington targeting a large western population concentrates more on oil problems than water or sanitation.

In the same article, he connects to the issue of Food or Fuel from Lester Brown. Brown writes “Supermarkets and Service Stations Now Competing for Grain”

Cars, not people, will claim most of the increase in world grain consumption this year. The U.S. Department of Agriculture projects that world grain use will grow by 20 million tons in 2006. Of this, 14 million tons will be used to produce fuel for cars in the United States, leaving only 6 million tons to satisfy the world’s growing food needs.

With so many distilleries being built, livestock and poultry producers fear there may not be enough corn to produce meat, milk, and eggs. And since the United States supplies 70 percent of world corn exports, corn-importing countries are worried about their supply.

As the price of oil climbs, it becomes increasingly profitable to convert farm commodities into automotive fuel, either ethanol or biodiesel. In effect, the price of oil becomes the support price for food commodities. Whenever the food value of a commodity drops below its fuel value, the market will convert it into fuel.

This was a startling fact for me. The world markets are more inter-connected than ever before. Bio-fuels are better than oil, but if they increase the price of food grains it will effect 2 billion poorest people in the world, many of whom spend half or more of their income on food, rising grain prices can quickly become life threatening.

There are no easy answers to this paradox of choice. Food or Fuel?

Brown writes in a subsequent Eco-Economy update.

By the end of 2007, the emerging competition between the 800 million automobile owners who want to maintain their mobility and the world’s 2 billion poorest people who want simply to survive will be on center stage.

The attempt to solve one problem—growing U.S. dependence on imported oil—is creating another far more serious problem. Fortunately this can be avoided. The 3 percent of U.S. automotive fuel supplies now coming from ethanol could be achieved, several times over and at a fraction of the cost, by raising automobile fuel-efficiency standards by 20 percent.

On the food-versus-fuel issue, the world desperately needs leadership—a strategy to deal with the emerging food-fuel competition. As the world’s leading grain producer and exporter, as well as its largest producer of ethanol, the United States is in the driver’s seat.

Update:

Larry West from About.com - Water Now More Valuable Than Oil?

The most valuable commodity in the world today, and likely to remain so for much of this century, is not oil, not natural gas, not even some type of renewable energy. It’s water—clean, safe, fresh water.

When you want to spot emerging trends, always follow the money. Today, many of the world’s leading investors and most successful companies are making big bets on water. Do a little research, and it’s easy to see why. There simply isn’t enough freshwater to go around, and the situation is expected to get worse before it gets better.

The United Nations estimates that by 2050 more than two billion people in 48 countries will lack sufficient water. Approximately 97 percent to 98 percent of the water on planet Earth is saltwater (the estimates vary slightly depending on the source). Much of the remaining freshwater is frozen in glaciers or the polar ice caps. Lakes, rivers and groundwater account for about 1 percent of the world’s potentially usable freshwater.

GE’s strategy is for its water division to invest in desalinization and purification in countries that have a shortage of freshwater. Saudi Arabia is expected to invest more than $80 billion in desalinization plants and sewer facilities by 2025 to meet the needs of its growing population. And while China is home to 20 percent of the world’s people, only 7 percent of the planet’s freshwater supply is located there.

Clearly, natural resources like freshwater are becoming scarcer and hence, costlier.

A letter in the Economic Times today by Rahul Banerji from London:

With increase in pollution and global warming is it a responsible thing to introduce the sub Rs 1 Lakh car to the Indian market? Besides, Indian roads are clogged anyways – don’t you think this is going to lead to more chaos? Your thoughts are appreciated.

This is the classic dilemma between growth, development and sustainability. We need more cars for a better standard of living in India however, more cars at Rs 1 lakh (USD 2,200) will increase the number of cars and hence, more production and resources, oil usage, pollution, congestion.

How can Tatas work towards development and sustainability?

The Business-Standard reports the following:

Poor parents too prefer private schools (emphasis added)

The paper reports on a survey which concludes that poor people prefer to pay higher fees in private schools rather than sending their children to government schools for a bad education. Even if the government provided vouchers subsidsing half the cost of schooling that would be fine. The conclusion is not a least bit startling but the headline is.

My friend, Atanu Dey has been writing about liberalizing the education sector and vouchers for a long time now. Please read him to understand this issue better. I want to concentrate on a different one.

What startled me was the headline which contained the word “too” implying that like rich people, poor people would prefer quality too. Like the headline writer a lot of people in the communities around the world believe that poor people somehow will be content with inferior quality.

Everybody would want their children to have the best education regardless of econmic status. With 500 million Indians below 25 yrs of age India has a golden once-in-a-lifetime chance to provide a quality education to their children.

Businesses which want to serve the “base of the pyramid” need to understand this in order to succeed in this market.

Jag asks a great question regarding Innovation and Sustainability.

“Innovation is not easy, but it starts in the mind!” I completely agree with this phrase. In here we can see two kinds of innovations or crossing the roadmaps whatever you call. One, innovating the process and two, the product itself. Thats really cool. These days so-called “Innovative companies come with the innovative product” still following the age old equation of business profitability and competition. Taking this into consideration My question is how can businesses innovate the process and the product at same time keeping in mind the “vision of sustainability” ?

One theme of sustainability is that it provides an opportunity for innovation.

Looking at Nintendo, it started with the vision. If the vision of the product can be, for example, developed from the Cradle to Cradle framework, then we already have a new vision in terms of process development.

It would mean new ways to create materials in the products, new ways of designing, reverse logistics to get the product back etc.

Infact, in the book Natural Capitalism, the authors suggest that this will effect the strategy and business model of the company. The best way forward could be a business model based on “services” where products are leased by the consumers rather than buying enabling a easier way to recover the products by the manufacturer.

Innovation in products can occur in many ways.

Source:Passchal

Look at Passchal. They make handbags from used truck and tractor inner-tubes. Now that’s innovation on a grand scale.

It connects with the idea of “waste equals food” from Cradle to Cradle. So using one principle from this framework, we are able to create a new kind of product which have environmental benefits, a new type of product catering a new green customer.

So there we are, Sustainability principles can guide innovation in creating new products, new processes, new strategies and in fact, a whole new business model.

Green issues can be handled in two ways. One, as a risk management tool and two, as a step forward for Innovation. Andrew Winston at Eco-Advantage (who is the co-author of Green to Gold) blogs about the eco-risk for Palm.

Andrew mentions a Business 2.0 article on European Unions’ Restriction on Hazardous Substances on electronic goods. The WEEE and other directives ban “hazardous substances like lead, mercury, and cadmium from use in new electrical equipment.”

Palm, incidently, has not followed this and has to stop selling the Treo 650 in Europe. The effect of this on Palm’s share price has been considerable.

After Palm announced in late June that it would stop shipping the 650 to Europe - the only model it sells in the region - it forecasted sales for the current quarter at between $380 million to $385 million - about $20 million below what Wall Street analysts expected. That sent its shares down by 14% to $16.10. Although Palm has announced plans to start selling a new smartphone later this year that complies with the EU’s rules, its shares have continued to slide since then, closing Tuesday at $14.19.

Andrew estimates that this has wiped out $470 million from its market cap.

Andrew points out the benefits of using Green strategies both in risk management and innovation.

While it’s an understandable gut reaction that it might not be worth the expense to retool, by not managing environmental regulations and risk, companies can miss out on market access opportunities. That can mean a ripple of lost sales and value that far outweighs the initial expense. Not to mention that pursuing new technologies and materials to meet the regulations can drive new thinking, innovation, and eco-advantage.