Monthly Archives: August 2007

Green is Hot

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Jupiter Research on the growing green trends.

Banking Green Online
One-fifth of the online population are so-called green financial services consumers, i.e., consumers would buy more financial products from institutions that are committed to protecting the environment. Among the five major banks included in the survey, Bank of America’s customers express the highest satisfaction with the bank’s environmental efforts. Other institutions should raise their green profiles by launching both image-enhancing and sales-supporting initiatives.

Green Grown-Ups
Green adults (21 percent of all online adults) skew older than average and are not necessarily affluent. They are also more engaged with user-generated content (UGC) than are overall online users. Marketers must understand their usage of this content to avoid misplaced campaigns.

Green Teens
Green teens (15 percent of online teens) are popular, engaged in school activities, and a little artsy. Music and entertainment programming and social media will appeal to them, and they’re likely to respond positively to online marketing.

Remember, you need to pay to access the research though.

Congestion management and IBM

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In IBM goes Green, we reported that IBM has found a new growth sector in the green sector combining its consulting and IT divisions.

“From an overall business opportunity perspective, this is absolutely huge, though I couldn’t put my finger on how big now,” said Sharon Nunes, the vice president in charge of developing the Big Green Innovations business. “I don’t think we know truthfully all the problems that are to be solved.”

“There is a demand for people to understand how to account for carbon, how to reduce energy usage, because IBM’s already done a tremendous job internally,” Davies said. “I haven’t seen too many people offering services focused on how you do this on the ground.”

Now, Thomas Friedman writes about IBM’s involvement in congestion management for big cities.

Probably the biggest green initiative coming down the road these days, literally, is congestion pricing — charging people for the right to drive into a downtown area. It is already proving to be the most effective short-term way to clean up polluted city air, promote energy efficiency and create more livable urban centers, while also providing mayors with unexpected new revenue.

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But what does this have to do with I.B.M.? To make congestion pricing work, you need technology — cameras, software and algorithms that can read auto license plates as they flash by and automatically charge the driver or check whether he or she has paid the fee to enter the city center. (The data is regularly destroyed to protect privacy.) That is what I.B.M. is providing for the city of Stockholm, which, after a successful seven-month trial in which traffic dropped more than 20 percent, will move to full congestion pricing in August.

[...]

O.K., Friedman, so I.B.M. is now in the traffic biz. Who cares?

I care, because it underscores a fundamental truth about green technology: you can’t make a product greener, whether it’s a car, a refrigerator or a traffic system, without making it smarter — smarter materials, smarter software or smarter design.

A whole new area of growth is available for companies who want to start using the environmental lens.

Gunns, Cousins, Wood and Turnbull

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Well, the story of the pulp mill proposed by Gunns in the state of Tasmania in Australia is the story of many names, environmental issues, political plots and cost-benefit analysis.

Starting with the names. Gunns is proposing the cleanest and greenest pulp mill in the world. Wood is the owner and millionaire founder of wotif.com; one of most successful internet travel site. Cousins was the politicial consultant to John Howard, the prime minister of Australia for a decade and is the Government-appointed member of the Telstra board. He also sits on big company boards like Seven Network and IAG. Turnbull is the $125 million  (2005, BRW) worth businessman turned Environmental minister of the Howard
government.

Gunns proposed a pulp mill in Tasmania which was fast tracked by the Premier of Tasmania and the Federal government along with the approval of the Labour opposition. With Labour losing 3 marginal seats in the 2004 election in Tasmania over its timber policy; current opposition leader Kevin Rudd was not ready to sacrifice the seats.

However, what changed in the entire game is the combination of big and small businessmen along with the Greens to campaign against the proposed Gunns mill.

Gunns is proposing to build the greenest pulp mill in the world in the beautiful Tamar Valley, north of the city of Launceston. I visited Tasmania last Christmas and Launceston is a beautiful town. Tasmania as a whole has one of the most well preserved natural beauty in Australia. And tourists like myself are a big growth industry.

As the Australian explains: While zoned industrial, the Long Reach site is on the Tamar Valley wine route, renowned for its world-class cool-climate wines and successful tourist industry built on fine food and quality produce.

With Cousins joining Wood and others in this campaign it is becoming one set of businessman against another busieness. And why is this happening?

However Tasmania’s peak wine group, Wine Industry Tasmania, which has a Gunns representative on its board, has bluntly warned the mill’s allowable emission of odours and air pollutants threaten to “devastate” the region’s 27 vineyards, visited by 150,000 tourists each year.

Tasmania’s peak fishing body, the Fishing Industry Council, has made similar dire predictions about northern rock lobster, abalone, scallop and shark fisheries if dioxins contaminate seafood stock.

Both industries are frantically lobbying Turnbull and the Upper House to ensure, at the very least, Gunns faces automatic fines and mill shutdown if it breaches the guidelines. But such controls appear absent from the state permit conditions.

Adding the 150,000 tourists who visit this area every year, this becomes a significant business issue for all those involved there. Interestingly, the only cost-benefit analysis conducted on the pulp mill has concluded negatively against the mill.

Gunns claims the mill, which will create 290 full-time jobs once fully operational, will add $6.7 billion, or 2.5 per cent to the Tasmanian economy and an additional $894 million in extra tax revenue between 2008 and 2030.

The roundtable assessment – the only cost-benefit study done on the project – concludes Gunns has double-counted the tax benefits and failed to show $847.3 million in subsidies to the project. It puts dollar figures on impacts predicted by the tourism and fishing industries and health impacts of emissions predicted by the Australian Medical Association.

“If you add up risks to health and other (local) industries, plus the costs and subsidies, the total is $3.3 billion,” it concludes. “On a range of realistic scenarios, the pulp mill project may cause an economic loss to the state. The proposed mill does not represent sustainable development for Tasmania.”

The entry of Cousins is significant in this as he is taking this to Turnbull’s marginal seat in the coming Federal elections in Sydney.

Yesterday he (Cousins) told The Australian that he and others planned a campaign in Mr Turnbull’s eastern Sydney seat of Wentworth to inform voters about the minister’s “total cop-out” in approving the mill, which he said would devastate Tasmania’s tourism industry.

“A number of us are looking very carefully at Malcolm Turnbull’s failure to handle this matter in what we think is the appropriate way,” Mr Cousins said.

A bigger story was published in the Telegragh which calls it “Paradise Razed”.

On the Australian island of Tasmania, primeval forests are being felled and then napalmed, protected species poisoned, and water sources contaminated with pesticide – all to satisfy a rapacious logging industry, and all with the blessing of the government. Richard Flanagan reports on an ongoing saga of greed, corruption, political cowardice and ecological catastrophe.

It needs to be seen what happens in the end, but with the fight between the big names out in the open it is a very different ecological campaign.

Save-a-Watt

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Thomas Friedman writes about the new Save A Watt proposal from the CEO of Duke Energy, Jim Rogers.

 Mr. Rogers’s proposal is based on three simple principles. The first is that the cheapest way to generate clean, emissions-free power is by improving energy efficiency. Or, as he puts it, “The most environmentally sound, inexpensive and reliable power plant is the one we don’t have to build because we’ve helped our customers save energy.”

Second, we need to make energy efficiency something that is as “back of mind” as energy usage. If energy efficiency depends on people remembering to do 20 things on a checklist, it’s not going to happen at scale.

Third, the only institutions that have the infrastructure, capital and customer base to empower lots of people to become energy efficient are the utilities, so they are the ones who need to be incentivized to make big investments in efficiency that can be accessed by every customer.

As Rogers explains, “Energy efficiency is the ‘fifth fuel’ — after coal, gas, renewables and nuclear,” and it is important that a incentivized plan like the ‘Save a Watt’ proposal is implemented. Some of the highest pay back gains in energy will come from energy efficiency. For more on this check out Negawatts vs Megawatts.

Happy Birthday WordPress.com

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I have been blogging for some years now. Started with the old Blogger in 2003 and then moved onto Movable Type with the help of a friend and then moved to WordPress.org, the open source installation.

After the hiatus in blogging I came back to check out the various options that are available, especially the hosted ones. And lo and behold, I found WordPress.com. A freee service from Automatic which provides you with all the basic features that a blogging platform needed. The best part was the innovation that can be seen every week/month here. That really changed everything. Now WordPress.com has turned 2 and I wish them a very happy birthday and a job well done.

With big blogging stars like Om Malik, Scobleizer, and media publishers like the Ny Times, About.com and even Yahoo use this platform. If you are thinking of blogging or moving to a new platform think no further than WordPress.com.

Happy Independence Day, India

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India celebrates its 60th Independence Day today.

Greening India is as much about social and economic development as it is for the environment. In some ways due to the current social situation a cost-benefit analysis of issues for India and other developing countries show that they would get more bang for their buck in investing in health, education, and sanitation like issues than climate change.

In the following video, Bjorn Lomborg asks the question: If you have $50B in the next five years where would you put the money to solve the problems of the world.

The Mint in a special edition, India at 60, provides data on the social, economic and environmental aspects of India’s development till date.

Amit Varma asks the question of freedoms that matter after political freedom.

The story of our freedom struggle was not the story of a Gandhi here or a Nehru there – it was about millions of people who rose up because they wanted to be masters of their own destiny. The British empire was naturally the focus of that struggle, and when we were rid of them in 1947, the relief must have been enormous. The tragedy is that for most Indians, political independence was freedom enough. What else was there to fight for?

Discussions about sustainability in developed countries like Australia would revolve around the issue of decreasing economic growth and possible decrease in prosperity. In countries like India the issue itself is basic economic growth; the challenge of poverty and the provisions of essential services.

Sustainability issues are not the same everywhere and solutions need to match the local/global balance.

A good example of is this article on electricity and ambition in India from the IHT. (Hat Tip: The Other India)

…Satellite television is beaming urban India’s new cravings and anxieties into Umred’s living rooms. Relatives who migrated to cities are returning home with tales of lucrative jobs and trendy nightclubs. The Internet has emboldened the young to hunt beyond the town for jobs, life partners and ideas….

“Electricity is essential to ambition,” said Ravindra Misal, the 26-year-old owner of an English-language academy here, “because I need it to do my homework, I need it to listen to music if I am a dancer, I need it to listen to tapes of great speakers, I need it to surf the Internet… But I cannot, so people get angry. They have bigger expectations, but electricity is becoming a hurdle on their path.”

Atanu Dey writes about the need for economic freedom identifying the three most important areas to concentrate on for India.

Quoting Galbraith; Atanu suggests the need for change should come from the people.

John Kenneth Galbraith in an interview to Outlook in 2001 said, “that the progress of India did not depend on the government, as important as that might be, but was enormously dependent on the initiative, individual and group – of the Indian people. I feel the same way now (as I did some forty years ago) but I would even emphasise it more. We’ve seen many years of Indian progress, and that is attributable to the energy and genius of the Indian people and the Indian culture.”

The Three priorities:

I think that the three most broadly defined critical sectors where liberalization is a must are infrastructure, energy and education. Currently they are the brakes and they have the potential to be the engines of growth.

[...]

Energy independence is possible…Solar power research and development is costly but the paybacks are enormous because once developed the technology has immense returns on investment. India can be a solar power superpower…Infrastructure can gain from privatization. Roads, ports, airports, and railroads. I think the emphasis has to be on a modern efficient fast rail transportation system…Finally education. The world of the past was essentially static compared to today’s world… A centrally controlled education system could have served a limited purpose in a static world but in a dynamic world it is impossible for the old education system.

The Politics of Climate Change

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Dweep at the Indian Economy blog points to this article on FT by Eric Posner and Cass Sunstein.

Although most nations now consider climate change a serious problem, they cannot agree on how to tackle it.

The US has been made out as the chief bad guy, but here is an open secret: most of the world’s significant operators have been motivated by self-interest. The US would have had to bear up to two-thirds, or more, of the cost of Kyoto – probably more than all other nations combined. According to current projections, the biggest losers from a warmer planet, in terms of economics and health, will be Europe and developing nations; hence the stronger stands in those parts of the world.

China and the US appear to be less vulnerable, and Russia might even gain from increased agricultural productivity. Russia did ratify Kyoto, but only because it was essentially paid off with rights to emit greenhouse gases that are worth a fortune.

Nations usually enter treaties to help themselves, not others. In 1987, the US pushed hard for the Montreal Protocol, which restricted ozone-depleting chemicals. It did so not out of altruism but after a cost-benefit analysis convinced President Ronald Reagan that the US would gain far more than it would lose. Bans on ozone-depleting chemicals were not burdensome for US companies. By contrast, developing nations strongly resisted the protocol. They demanded and received a large side payment from the rich nations.

Value Networks

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From the Wikipedia:

Value networks are complex sets of social and technical resources. They work together via relationships to create economic value. This value takes the form of knowledge, intelligence, a product (business), services, innovation or social good. Examples of business value networks are research, development, design, production, marketing, sales, organizational learning, procurement and distribution (business). Value networks exhibit interdependence. They account for the overall worth of products and services. Companies have both internal and external value networks. External facing networks include customers or recipients, intermediaries, stakeholders, complementors, open innovation networks and suppliers. Internal value networks focus on key activities, processes and relationships that cut across internal boundaries, such as order fulfillment, innovation, lead processing, or customer support. Value is created through exchange and the relationships between roles. Value network operate in public agencies, civil society, in the enterprise, institutional settings, and all forms of organization. Value networks advance innovation, wealth, social good and environmental well-being.

Verna Allee on the origin:

I have no idea where the term originally was used, but it began to come into general usage in the late 1990s in the supply chain world, e- commerce, customer relationship management,  and industry analysis. There was some interest in the KM community but most of the network thinking there is still focused on communities of practice and knowledge networks, which are best understood with social network analysis. The term seems to resonate with a growing interest in understanding organizations as complex adapative systems.

There are a couple of other books on value nets (Bovet and Martha, Cinzia Parolini) and many that include the topic either directly (Christensen’s Innovator’s Dilemma) or indirectly (Iansiti and Levie, Keystone Advantage). Stabel and Fjelstad also are known for comparing value networks and value shops and there is an academic group in Finland that also does work in value networks. A complementary method was developed by Jeff Shuman and Jan Twombly that is described in Collaborative Communities and Everyone is a Customer, but their method is proprietary other than what lis in their books. Their includes a similar value network mapping method and an analysis table configured for understanding the value exchanges with customers and stakeholders. Jeff teaches at Bentley College in the Boston area.

Most other methods seem to fall into two categories. The first is the process view of the world where value network is a term used to refer to complex supply chains. Such methods build on process tools, the most common of these being value stream mapping, which is used a lot in Lean. The Parolini value net method, which is quite solid work, also comes from the same perspective.

The second category is a type of cluster analysis which looks at various attributes and relationships of stakeholders in industry clusters. Cluster analysis has been around for quite some time and is of course complementary to value network analysis, as are all of these other methods. Christensen’s work would fall into this category I believe and we recently saw a draft of a good critique of his work that we hope to include on the www.value-networks.com site when it is finalized.

Participatory Governance

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Social sustainability at the Boulder City Council:

We believe it’s critical for the health of our community to acknowledge these real barriers and seek to reach those who cannot easily reach us. To us, not being able to participate is a true reality of our community, not apathy.

We have developed a process that we believe will ensure that Boulder is sustainable into the future, not only from environmental and economic perspectives, but also socially.

Social sustainability means participatory governance with deliberate and inclusionary processes — considering the needs of all community members. This requires strengthening representation of all people in the decision-making process. The greater the participation in the governance process, the more well-informed policy decisions are and the better long-term outcomes are for meeting city goals. Understanding what a broad spectrum of our community thinks about a broad spectrum of issues requires mechanisms for input beyond what is allowed during public participation at council meetings.
[...]
The community dialogue we’re about to launch will reach out to all segments of the community by using traditional survey techniques as well as non-traditional methods. First, a scientific, random-sample survey printed in English and in Spanish will be mailed to 3,500 Boulder residents.
[...]
A second, less-traditional method is called “Meetings-in-a-Box.” The meetings are small group gatherings hosted by individuals, organizations, groups or businesses, where residents with all sorts of interests and backgrounds are welcome.

Carbon exposure and Subprime meltdown

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Erik Mather, managing director of Regnan:

…there were parallels between the subprime meltdown in US markets and questions about carbon exposure and prices. In both cases, he said, risks and exposures were spread so wide that no one knew exactly where they lay.

Institutions would put pressure on companies for fuller disclosure because the market demanded certainty, he said.

“What we have learned is that markets are good at pricing risk but they are lousy at pricing uncertainty,” Mr Mather said. As a result, superannuation funds with holdings across the entire market were now more likely to put more heat on companies for disclosure on environmental, social and governance issues. The issue of carbon pricing and carbon taxes alone could affect share prices.