World is Green

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 Bear with me if some of the information is obsolete as the contents have not been updated during the last five years.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.

The BBC reports on a new report from Greenpeace on the challenge faced by India, Bangladesh and Pakistan.

It estimates that 75 million people from Bangladesh will lose their homes.It predicts that about 45 million people in India will also become “climate migrants”.

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“Most of these people will be forced to leave their homes because of the sea-level rise and drought associated with shrinking water supplies and monsoon variability. The bulk of them will come from Bangladesh as most of the parts of that country will be inundated,” Dr Sudhir Chella Rajan, a climate expert and author of the study, told the BBC.

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Several large cities within the low elevation coastal zone like Bombay (Mumbai) and Madras will go under the sea if the present growth rate of greenhouse emissions continue.

Greenpeace could well be right in the estimate. The solution for this is however, what Schelling proposes. He says, “The sooner Malaysia can become like Singapore, the sooner it can worry less about the impact of climate change on health, comfort, and productivity.”

In this sense, the sooner Bangladesh can grow economically, build better infrastructure and create new cities inland to support this migration the lower the impact will be. This is the same for India and Pakistan too.

Rediff has an interview with Joseph Massey, Deputy Managing Director, MCX in India which recently started trading in Carbon credits.

India and China are likely to emerge as the biggest sellers and Europe is going to be the biggest buyers of carbon credits.

Last year global carbon credit trading was estimated at $5 billion, with India’s contribution at around $1 billion. India is one of the countries that have ‘credits’ for emitting less carbon. India and China have surplus credit to offer to countries that have a deficit.

India has generated some 30 million carbon credits and has roughly another 140 million to push into the world market. Waste disposal units, plantation companies, chemical plants and municipal corporations can sell the carbon credits and make money.

Carbon, like any other commodity, has begun to be traded on India’s Multi Commodity Exchange since last the fortnight. MCX has become first exchange in Asia to trade carbon credits.

Few people have influenced me like Atanu Dey and Rajesh Jain when I worked with them at Deeshaa Ventures. I consider the 1+ year that I have spent with them as  a “black swan” moment.

According to the Wikipedia:

In Nassim Nicholas Taleb’s definition, a black swan is a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations.

Rajesh writes in his blog on Turning 40 and his goals for India and Atanu’s influence on him. An inspiring read.

Three Goals

Here are three things I’d like to do in the rest of my life and which will require investments of hundreds of millions of dollars. This is not about philanthropy, but about building the right systems and foundation - in a sort-of self-generating way. Ideally, the Indian government should have been the enabler - but I don’t see that happening with the politicians we have. Indian business has started taking the lead but is not doing this fast enough - and in some cases, is not even doing it right.

First, ensuring access to quality education for hundreds of millions of Indians. Education is a life-enhancer - and nothing comes close. My father was helped by his education to get out of the village he grew up in and created opportunities for himself. How can we do the same for millions in India who are otherwise resigned to a life devoid of opportunity? This is not about trying to build the world’s best school or college, but ensuring that a sustainable and scalable system to provide quality education for everyone in India. For more, read Atanu Dey’s series on Doing Education Right.

Second, we need to build hundreds of new cities to house the hundreds of millions of people who we need to get out from the villages. Our current cities are bursting at the seams. Creating urban slums in not the answer. We need 600 new cities of a million each or 6,000 towns of 100,000 each - or a mix of both. But there is no way we can provide any reasonable future to pockets of 1,000 people living in 600,000 villages. In other words, India cannot afford its villages - and needs to urbanise fast. Else, the demographic dividend will turn out to a big nightmare. Creating these new cities right - in a clean, green, and self-sustainable way - is what I’d like to see us do. For more, read Atanu Dey’s series on Creating India’s New Cities.

Finally, I want to create a Santa Fe-like institution in India. It should be a place where multi-disciplinary thinking is the norm. It should be a magnet for smart people to spend time interacting with the best in different areas so they can forge multiple mental models which can then go out and solve problems right. We go wrong in solutions because we have partial knowledge and so we do not understand the real problem. This leads to what I call brain-dead decisions. An institution like this will ensure that we make the right decisions for the future. It will create a platform for the innovations we will continue to need.

The day after we had sold IndiaWorld for $115 million in November 1999, my wife, Bhavana, told me: “We are custodians of God’s money. If God has given us money at such an early age, there must be something He has in mind for us. We have to utilise this wealth for the greater good.” These are words which have formed the bedrock of my life since then. Till then, I was an entrepreneur trying to prove that I could, even after repeated failures, be successful at least once. Since then, I have come to believe that what good we need to do, we have to do in our present life - while we still have the physical and mental energies.

Apart from his vision, his and Bhavana’s belief that whatever good that needs to be done is now, when they are at their prime of their life is the most inspiring and the right thing to do.

The Financial Times business education section has a small video lecture series from the Indian School of Business on the “base of the pyramid“. Reuben Abraham, a friend of mine, is a Professor at ISB and Director of the Base of the Pyramid Learning Lab. He provides the introduction and has some interesting ideas.

Ramesh Ramanathan writes in The Mint about the ingenuity of the new car from Tata and how those same principles can be used to meet some of the challenges in health care, housing and public transportation in India.

 But the larger point is the inspirational lamp that the Tata Nano story lights. There are hundreds of challenges in India where the lessons of the Tata Nano can be applied—design innovation, scale efficiency, vendor networking and so on. I want to talk about three illustrative examples.

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Imagine if we could get a CT scan cost down to Rs500, offer a heart surgery for a few thousand rupees or a gall bladder surgery for under a thousand. This requires a fundamental redesign of all the parts of the health- care delivery system—from re-engineering individual components such as the CT scan, to embedding these into scaled health “cities” that can get a critical mass of 10,000 outpatients a day.

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Imagine the kind of demand that can open up if we can change the engineering specifications, reduce the cost-per-unit by scale economies, improve the construction process, and deliver a product that might not have marble floors, but doesn’t compromise on quality.

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I think of the public bus system in our cities. If the experience is bad for passengers, it’s worse for the bus drivers, having to navigate these Noah’s arks through the narrow Indian streets. We need buses designed for Indian conditions: our roads, our traffic, our people. With environmental challenges thrown in, we are looking at a fundamental redesign of the Indian bus. Can we create an icon like the London Routemaster?

Last month I quoted an article by Michael Backman writing about population and emissions. Backman assets that population is the major contributor to emissions growth.

Two commentators on the article did not agree with Backman.  John Brisbin comments that  ”The only obvious thing about sustainability is the per capita resource usage”. He wants to believe in a world where “20 billion living in peaceful resonance with the planet and requiring only the simplest of material inputs?”

I think that is next to impossible. The past has shown that people cannot be expected to behave like that.
It is tough, I know that from personal experience.

The consumer culture is all fine to moan about however, we need to remember that it is the present culture. There is a limit to what you can expect people to change. We need to work with what we have…and what we have is an increasing consumer culture all around the world.

Also, we need to remember that population as such creates problems in other areas - public health, infrastructure, provision of other services, standard of living etc.

And the second comment from Dani where he angrily writes that “Getting rid of all americans will drop carbon emissions far more quickly than all the population control in South Asia.”

What we need to think about is the future. I think we should not take Backman’s analysis personal. I am an Indian and I do know where you would come from.

We cannot change the past. Can we rid of all the Americans? Totally not possible and not ethical. We need to work with what is possible. Controlling population in South Asia is a very good thing in many ways.

Atanu helped me understand the consequences of population growth many years back. Lets read what Atanu Dey has to say on this:

In 1965, about 40 years ago, there were less than 500 million of us. By 2004, the population of India has more than doubled. The effect of this incredible increase has been a falling standard of living in general, shortages, untold misery and conflict. It is foolish to expect that we can provide a decent standard of living to so many in such a short time. The vast majority of us do not have adequate drinking water, sanitation, health care, education and job opportunities. The preceding statement does not even begin to indicate the amount of human misery and sorrow which it implies. It hides within it the teeming millions who suffer without the slightest hope of ever seeing a future remotely human.

Read the entire article. Atanu talks about the limited time available to create a standard of living for a huge population. In another post he quotes Joel Cohen’s book How Many People Can the Earth Support? (1995). Here Cohen explains the finiteness of time.

The finiteness of time, the second thread in the book, limit’s the abilities of individuals and of societies to solve problems. For each human being, time is finite. I want to eat and drink today. As a privileged inhabitant of a wealthy country, I can postpone buying a new car for several years, but the requirements of poor people for subsistence are not so elastic in time. Those who want firewood to cook a meal today will break branches from the last tree standing if they believe that otherwise their children may not surive to lament the absence of trees 20 years hence. In the American legal system, the finiteness of time to satisfy basic human wants is recognized in a phrase: justice delayed is justice denied.

Efforts to satisfy human wants require time, and the time required may be longer than the finite time available to individuals. There is a race between the complexity of the problems that are generated by increasing human numbers and the ability of humans to comprehend and solve those problems. Educating people to solve problems takes time. Developing traditions of stable, productive cooperation takes time. Building institutions with the resources to make educated people into productive problem-solvers takes time. Even with educated, cooperative people and appropriate institutions at hand, understanding and solving problems take still more time.

Re-read the paragraph above twice. The difference between the commentators and Cohen’s and Atanu’s arguments  is that they accept human wants as a given. And secondly, they work with current statistics and situation in many parts of the world. This is not a Malthusian type of argument for sure. It is far bigger than that.

Michael Backman in his latest Age column writes about the issue of population and its connection to greenhouse gases.

WHAT is the ultimate cause of greenhouse gases? Excessive reliance on cars? Coal-fired power stations? Clear-felling forests? The answer is none of these. The ultimate cause is people and population growth.

Having one child with your partner instead of two or more is the biggest contribution to reducing greenhouse gases you can make. Have one child instead of two and you will be directly responsible for cutting your family’s greenhouse gas emissions by about 50% in the next generation.
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Determining which countries have been responsible when it comes to population growth generates a different picture when it comes to developing countries. China is a big and growing greenhouse gas emitter. But it has one of the lowest population growth rates in the region due to the success of its one-child policy and also due to its rising wealth levels — richer people tend to have fewer children.

India, on the other hand, is not yet as big a gas emitter as China. Gas emissions per head are about three times less — but its population is growing much faster than China’s. Its population will overtake China’s in the 2030s, when both countries can be expected to have populations of about 1.5 billion. But South Asia, taken as a whole, is already the clear winner in the population stakes. Had partition not taken place in 1947, then India would have overtaken China for the No. 1 spot years ago. The combined population of pre-partition India today (India, Pakistan and Bangladesh) is 1.4 billion, compared with China’s population of 1.3 billion.
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Indeed, the population of pre-partition India is expected to rise by another 900 million people in the first half of this century. Changing to energy-saving light bulbs will be a drop in the ocean compared with this

More TATA news. Yesterday, it was about TATA Motors plan to create viable eco-friendly cars. Now, it is about the small car. The TATA’s have plans to launch a small car in the Indian market valued at Rs. 100,000 (USD 2,600).

Economic times has more:

Mr Mashelkar also revealed how the small car concept first struck Ratan Tata, who’s now in the race to acquire two iconic British brands — Jaguar and Land Rover. “You know how ‘Ratan’ (Ratan Tata) thought about this small car. He talked to me on several things. One day, he was going on the road and saw a family of four getting soaked in the rain. That was when he decided to create a small car for all,” he said. “Just a month ago, I was at the Tata Motors’ factory in Pune, talking to their engineers and their fantastic team there. It was there that I had the privilege of sitting in that small car — the Rs 1-lakh car that they plan to roll out at Singur. It is incredible,” said Mr Mashelkar. “I sat in that car by the way, and it was amazing,” he said.

“I am a six footer and it’s spacious both in the front and in the rear. In terms of acceleration, it is equivalent to a Maruti 800 and has an incredible design finished by indigenous Tata Motors’ engineers,” Mr Mashelkar added.

Talking on the potential of economics of this car, the top-notch scientist said: “It will create a paradigm shift in low-cost transport and the whole world is looking forward to a car that efficiently runs 25 km on a litre of petrol and offers international specifications. These kind of fuel-efficient cars will be in demand as pollution is on the rise, climates are changing and fossil fuels are running out. People are looking at a new global eco-car and I have a feeling that this can be the new eco-car not only in the country but elsewhere — in other countries. I feel a sense of pride that it will be manufactured in India.”

At 25 km a litre it will be a great car for city driving if it matches the international standards. I have deep respect for the TATA group and especially Ratan Tata. If anybody can do it, it is his team. 2008 will be a year to look for.

Update:

NyTimes has more on the Tata’s bid to acquire Jaguar and Land Rover from Ford.

The combination of luxurious, specialized products and cheap, commodified ones may seem like an unlikely business model, but the Tata Group, the sprawling family-run conglomerate that owns a third of Tata Motors, is full of similar contradictions.

The group’s Taj Hotels command some of the highest rates in the world — one night in a luxury suite in the Taj Mahal Palace in Mumbai costs 110,000 rupees ($2,795) in high season. But the group is building no-frills hotels around India, with rates as low as 1,499 rupees ($37.95) a night for a double room in some cities.

Tata owns a chain of high-end jewelry stores, Tanishq, and makes fertilizer though its Tata Chemicals unit. The company has an exclusive charter airplane business, serving clientele like chief executives and Bollywood stars, and owns Tata Sky, which beams business news and hit movies into a million Indian households.
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As in many family-run conglomerates, there is a “strong emphasis on the long-term perspective,” said Subir Gokarn, Standard & Poor’s chief economist in Asia. Tata focuses on building institutions, on social responsibility and ethics, and on fair dealing with government, he said.

But it is also highly profitable. After-tax profits at Tata Motors, which is publicly traded, increased 21 percent in the first half of this fiscal year, to 9.94 billion rupees ($253 million).

With all the big automobile majors and even new upstarts like Tesla Motors in the green race it is not far away when the forward thinking Indian conglomerate, the house of TATA, is going into building eco-friendly cars.

Money Morning has more:

The new vehicle line would showcase cars capable of running on electric, hydrogen and other alternative and organic fuels.

Most of Tata’s efforts have been focused around the company’s Indica, a compact hatchback, popular in India and Europe. According to the Times of India, the company wants to produce five electric variants of the Indica using lithium ion batteries that will run up to 200 km on a single charge. It is also interested in building an Indica hybrid, which would combine electricity and petroleum-based fuel to average 20 km per liter.
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Now, Tata is gearing up to roll out India’s first hydrogen-fueled vehicle in a partnership with the Indian Space Research Organization (ISRO). According to a recent report from DNA Money, the vehicle in question will be a mini- or microbus scheduled to debut in 2009. ISRO will provide its recently tested cryogenic engine technology.

“We have been successful in adapting the system for a bus or car engine and are fine-tuning it. The vehicle will be ready in two years. It will emit only water vapor and will not pollute the environment,” ISRO chairman G Maharani Nair told DNA. A car is rumored to be next in line.