World is Green

Malcolm Turnbull, the current liberal leader current liberal member (thanks Julie White for the correction) in Australia and the former Environment minister under the Howard government gave a recent speech on Climate Change and Economics. (Hat tip: Green Link Central)

During my time as Environment Minister three points about climate change became very clear to me and you will have heard me making them often. They bear repeating today.

The first is obvious: climate change is a fact, not a theory. By that I mean that whatever reservations people might have about the science, policymakers must, as Rupert Murdoch once observed, “give the planet the benefit of the doubt.”

The second point is less obvious. Given that so much of our emissions are from sources that are likely to be very hard to abate either at all or at realistic cost, the emission reduction goals we are setting ourselves for 2050 will mean in practical terms that we will need in 42 years to have a world where all or almost all of our energy comes from zero emission sources and where deforestation, currently the source of 20 per cent of global emissions, is replaced by a global programme of reforestation – an initiative I was proud to have pioneered while Environment Minister in the Howard Government last year.

This would mean that there would be no coal fired power stations unless the CO2 was captured and stored safely under the ground. Automobiles would be electric – a whole energy hungry world would have to undergo an industrial and technological transformation of a kind never seen before in its global scope and scale.

The third point is that there is no prospect of achieving the massive global reductions in emissions that science demands unless all of the major emitting nations both in the developed and developing world play a part. Until a few years ago that was a controversial statement, but as always the relentless logic of arithmetic has won the day. Indeed, as we saw at the US President’s first Major Economies Meeting on climate last September even if the developed world cut its emissions by 100 per cent by 2050, to achieve a global reduction to 50 per cent of 2005 levels, the developing world would need to cut its
emissions by 47 per cent.

Carbon trading scheme to exceed federal bonds

Anthony Collins…

“The value of the permits is likely to be issued over the first 10 years [and] is likely to exceed $100 billion,” he said.

“That’s going to be larger than the value of Commonwealth Government bonds on issue today.”

Harold Lubansky has suggested a radical way to control inflation in Australia and at the same time fund green projects.

From The Age:

Mr Lubansky proposes the creation of a National Climate Change Savings Scheme into which Australians earning a net income of $38,000 a year or more would contribute.

Instead of the Reserve Bank needing to lift interest rates in a bid to control inflation, the central bank would be given powers to order a payment into the climate change fund.

“What it does is work to soak up excess liquidity. Raising interest rates limits the amount we have to spend, spending less elsewhere decreases the pressure on supply and that decreases the upward pressure to raise prices. This would act similarly,” Mr Lubansky said.

Under the Lubansky proposal, those earning $38,000 a year would be charged $250, or 0.66% of net disposable income, instead of paying 0.25% more on their mortgage. It rises to $2500, or 1%, for those earning $250,000 a year.

Unlike mortgage repayments which are never seen again, the money paid into the fund would be returned to individuals to spend on legislated carbon abatement measures such as solar panels, the differential cost on hybrid cars and infrastructure for green power.

I am not qualified enough to comment on this but it does sound an innovative way. Any comments?

The Martu people are Australian Indigenour people living in the western desert. The Age reports that they have formed a deal with Reward Minerals, which will reward them with 7 million options at a strike price of 50c, valid for 4 years, amounting to 10% of the shareholding of the company.

This deal is being suggested a landmark deal in terms of securing appropriate compensation and ownership to the traditional owners of the land, the Martu people. The share price traded up to tis highest ever and at the current share price, the deal is is worth a little above $ 5 million.

The indigenous community believes that “the presence of a generous indigenous equity component as part of the transaction is the way of the future in mining negotiations,”.

This could well work out in a positive way, depending on the development of the mine. It may also act as a blueprint for deals in India where tribal people are being evacuated for industrial and mining projects with payments in cash now. With many issues around compensation arrangement including the sensible use of cash for the financial inexperienced tribals, a cash+stock compensation option may be a good deal.

Over the past year or so I have been covering the green industry to understand it better. Over the course, it became apparent that the biggest stories are about the people behind these initiatives.

In the course of being in this industry and writing on the blog I have come across some interesting people who are trying to make it big in this industry in their own way. In order to tell their story, I have decided to conduct an interview with them. The idea is to understand the stories at a more personal and knowledgable level.

I have no specific publishing schedule, but would try to do about 3 interviews a month.

Our guest today is Sreenivas Ghatty. Sreenivas is the founder and CEO of Tree Oils India. With all the interest in Biofuels Sreenivas believes that there is a great future for using them as an alternate fuel of choice.

Thank you for giving me this opportunity. I have a Masters in Agriculture and was a corporate banker in India and Dubai for 18 years until I entered the Biodiesel industry in 2003. I live in Melbourne with my wife and two daughters and keep travelling to India and other countries regularly.What is your company about?

Tree Oils India Limited was established in 2003 to produce Biodiesel from non-edible oils. Please visit our web site (www.treeoilsindia.com) to learn more about this company. Bear with me if some of the information is obsolete as the contents have not been updated during the last five years. As non-edible feedstocks were not available in sufficient quantities and at reasonable pricen at the time, we started with plantation activity. As there were no tested varities of these tree species and knowledge of agronomy was limited, we started an R&D farm to begin with. So, as of now, we are a technical-know-how company, trying to develop non-edible oil-bearing trees such as Pongamia, Jatropha etc.

John O’Brien, a friend of mine and the Managing Director of Australian Cleantech launched the Australian Clean Tech Index. This is the first time anybody has grouped together all the sectors which comprise clean technology and environmental services in Australia.  

Mr John O’Brien, Managing Director of Australian CleanTech, said concerns about climate change and energy consumption have led to greater interest in the cleantech industry and an increase in the economic value of clean technologies.

“For the first time we will be able to provide a picture of the Australian cleantech industry’s growth in a single measure,” Mr O’Brien said.“In 2007 a trialled ACT Australian Cleantech Index outperformed both the ASX 200 as well as the ASX Small Ords,” he said.

“The growth of the renewable energy sector in Australia will be driven by the Federal Government’s commitment to achieve 20 per cent of energy generation from renewable sources by 2020.”

The ACT Australian Cleantech Index includes over 75 companies, large and small, from Sims Metal Group with a market capitalisation of over $3 billion to Skydome Holdings with a market capitalisation of $5 million – plus a few outstanding performers with CBD Energy posting a 147 per cent increase in returns over a six-month period to December 2007.

I am planning a new series of interviews with people working in the Green sector. In the coming weeks, John O’Brien will be interviewed.

A fascinating story is developing in South Australia’s energy demands.

This is where BHP steps in. The world’s biggest miner owns Olympic dam in South Australia. This mine is one of the largest mines in the world filled with copper, gold and uranium.The mine is supposed to drive the state’s economy in the coming decades. With estimates of $1 trillion, the mine can drive the growth of SA’s economy, jobs and population. In fact, Roxby Downs, a town near Olympic Dam was created to support this and has seen one of the biggest property boom in recent times.

One of the biggest needs is the demand for energy for the mine to operate. But the recent news is that there is a much greater need for this energy, upto 690 MW per year within 10 years to expand the mine. This incidentally is half of the energy requirement of the entire city of Adelaide!

This brings to question the source of power. The Greens in SA believe that the state can become a “greenhouse pariah” due to Olympic dam.

As we have seen before, Geothermal energy has an interesting future. We know that the hot rocks can generate energy with the promise of no fuel, no emissions, no waste.

I recently attended the Clean Tech session of the 12 part Climate Change 2030 seminars at Adelaide University. One of the discussions was on the Geothermal projects in South Australia. It was claimed that Adelaide is the center of the world in terms of Geothermal projects and technologies.

The speaker, Prof. Richard Hillis, who is a director at Petratherm talked about the entire issue as an optimization problem. The parameters for success for different companies were hot rocks, nearer to the grid, depth of drilling, or near to a major consumer. Each company is working on a different paradigm.

But, there is a great new opportunity for Geothermal producers to supply the “no emission” energy to this large consumer. The race is on.

Roger James in the Business Spectator:

There was a time when green beer was something strange they did with the brews in Irish pubs on St Patrick’s day. Not any more. Green beer is now a deadly serious marketing strategy, with Foster’s and Lion Nathan releasing products which they say reach the consumer being fully carbon offset in their production, packaging and distribution. Foster’s even goes to the trouble of printing its labels using inks made from vegetable oils.

Will consumers change their beers, perhaps even their brand, in response to this? There is no doubt that being carbon neutral, having carbon offsets or reducing your carbon footprint are all issues that have recently sprung to the fore in business, in marketing and in the community.

A new target market for a new beer.This initiative raises a lot of questions about green marketing strategies.

Will consumers select beers based on their green credentials? A question for Seth Godin I guess. Here’s my take. Consumers may change products like dish washing liquids or even clothes based on their green credentials. Cars come into this category too. However, beers are different. They are personal, taste based and connect to past preferences and habits. Lion Nathan and Fosters may be better off spending their green dollars on other initiatives.

Here’s a thought: what if your most popular beer is made “green”; would that make a difference? Will it get more customers to choose that beer, bring in a new customer?

What if the company developed a greener supply chain and manufacturing systems and built their overall green image. Will that create a blanket of goodwill on all their products? Is that better?

What is a better strategy? New green products, green old products or green the company?

Adelaide, the city where I live, hosts the Solar Cities Congress this year.

The goal of this congress is:

The objectives of the International Solar Cities Initiative are to support UN energy and climate policies by stimulating the interest of cities into becoming benchmark cities that commit to ambitious emission reduction goals; help cities systematically integrate renewable energy and energy efficient technologies and industries into environmental, economic and city planning; and provide scientific support for the validation and design of effective measures and policies for Solar Cities.

I did check out the possibility of attending this however, it costs about $1200 which was a bit dear and then I had to take leave for atleast 3 days which was tough.

Anyway, today I walked into the Adelaide Convention Center where the sessions where conducted. Today is the business day sessions including Keynote address by Robert F. Kennedy Jr in the afternoon. The convention center is located right beside our office building. Most of the sessions were in progress and I picked up some pamphlets and brochures which were freely available.

There were people from all over the world. I saw a large number of young people which was very encouraging. As expected there were carbon offsets advertisements for $5 per attendee. There was strict security and I could not spend anymore time.

As I wrote yesterday, there is a growing interest from consumers to move towards solar electricity is growing. This congress may bring about more business offerings in this area. For those interested, I found an interesting presentation on Geothermal Energy by petratherm.

 Things are improving but need to go further:

The annual Pilot BeGreen Office Audit, to be released today, says 70% of Australian businesses use continuous air-conditioning while 10% leave office lights on at night.

More than a third of office workers said they left their computers on at night and 86% said they unnecessarily printed documents instead of reading them on screen.