World is Green

The Australia hosted APEC summit in Sydney has come to an end with 21 world leaders agreeing to “aspirational targets” for cutting down greenhouse gases, and this non-binding agreement is called the “Sydney Declaration”.

Even though condemned by some as lacking any strict targets I think the declaration is meaningful. Considering the scale of change required it is not easy to convince 21 countries to do anything, especially international co-operation on uncertain effects 75 years into the future.

The declaration has the following actions:

In summary, and without prejudice to commitments in other fora, we have decided to:
• highlight the importance of improving energy efficiency by working towards achieving an APEC-wide regional aspirational goal of a reduction in energy intensity of at least 25 per cent by 2030 (with 2005 as the base year);
• work to achieve an APEC-wide aspirational goal of increasing forest cover in the region by at least 20 million hectares of all types of forests by 2020 – a goal which if achieved would store approximately 1.4 billion tonnes of carbon, equivalent to around 11 per cent of annual global emissions (in 2004);
• establish an Asia-Pacific Network for Energy Technology (APNet) to strengthen collaboration on energy research in our region particularly in areas such as clean fossil energy and renewable energy sources;
• establish an Asia-Pacific Network for Sustainable Forest Management and Rehabilitation to enhance capacity building and strengthen information sharing in the forestry sector; and
• further measures in trade in environmental goods and services, aviation transport, alternative and low carbon energy uses, energy security, the protection of marine biological resources, policy analysis capabilities and a co-benefit approach.

It has for the first time made possible for China and the US to agree to some targets and importantly, to work under the current United Nations Framework Convention on Climate Change (UNFCCC); thus not creating another rival framework. (Incidentally, China played a major role in this)

John Howard’s experience in the last decade in managing Australia’s greenhouse gases through agri-management has provided the impetus for forest cover targets. In fact, the Stern review has suggested that forestry management (afforestation and reducing deforestation) is a good way to tackle climate change. Considering the costs of changing current economic systems, in the short term this is a valid strategy.

The effort on improving energy intensity is a good one. Even though this may not ultimately reduce actual consumption it will improve the efficiency of all countries involved. The importance of trade of economic and social development is well known. These principles are being supported in the declaration.

This declaration is also a good step forward because it acknowledges that “differences in economic and social conditions among economies” and that this would mean “differentiated responsibilities”. Also the emphasis on adaptation is important. As Schelling has suggested,

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 that sense, trade and economic development is the key to adaptation for climate change.

More importantly, Schelling talks about inputs and outputs.

One striking contrast between NATO and the Kyoto Protocol deserves emphasis: the difference between “inputs” and “outputs,” or actions and results. NATO nations argued about what they should do, and commitments were made to actions. What countries actually did — raise and train troops; procure equipment, ammunition, and supplies; and deploy these assets geographically — could be observed, estimated, and compared. But results — such as how much each NATO nation’s actions contributed to deterring the Warsaw Pact — could not be remotely approximated.

The Sydney declaration takes a small step towards “inputs” — energy intensity, forest cover, trade barriers, clean technology — and this makes it a valid strategy as it is not possible to guarantee the exact emission reduction (outputs) in 10-15 years.

Overall, I think that the Sydney declaration is a good step forward in tackling climate change.

Chian’s need for development rights in view of climate change:

China said Tuesday it was working hard to increase its use of renewable energy, but needs to be given some leeway in the global effort to reduce greenhouse gasses.
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“I hope the international media will give us some development rights, some development space and not overly blame us,” said Chen Deming, vice chairman of the National Development and Reform Commission, China’s top planning agency.
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However, Chen said China shouldn’t be held overly accountable because its has only recently become a major producer, contributing just 9 percent of global CO2 emissions between 1950-2000. China’s per-capita rate of CO2 production also remains low given its population of 1.3 billion, he said.

Chen also reiterated a goal of producing 15 percent of total energy supplies from renewable sources such as wind, hydropower and biofuels by 2020.

A similar argument can be made for India. Thomas Schelling made a strong argument for current economic growth and development as the adaptation plan for developing countries. (Check this link and go down the article where he mentions Singapore)

Artisans around the world create products of high quality however, like any product unless there is a marketplace for their products there is no way to realise that value in money, fame and prosperity.

Ebay and World of Good has initiated a project called Project Good, where the products are from craftsman around the world and the money spent on these products will be making a family better off.

The important thing in this kind of a project is the quality of the products. Due to the people behind this project, the social story can be believed upon. This combination can be very good in driving sales.

However, for me it is important that consumers buy products based on “their needs” and these could be design, quality, fun, price, and other economic aspects. The social story should be a “free prize inside” and it will drive sales. But in the longer run, sustainable consumer buying should come from the quality and design of the craftsmanship.

Bill Shannon of Shannon’s way explains how Toll Holdings used corporate responsibility strategically.

How does a company go about setting a CR strategy? The Australian Institute for Corporate Responsibility - formed by the alliance of Shannon’s Way, Deloitte and Our Community - has developed a framework based on CR initiatives in eight areas. For each, a range of best-practice actions are recommended, ranging from low-cost, low-effort starters to those that are high-cost and high-effort.

By tackling all areas simultaneously, a company can achieve an integrated, sustainable CR strategy. The areas are environmental sustainability, human rights, community engagement, workforce, socially responsible investment, good governance, addressing systemic disadvantage, and social marketing.
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One corporation, Toll Holdings, is setting an example. Ten years ago, Toll became involved with “The First Step Program”, a not-for-profit organisation that provides support services for people who are dependent on drugs and alcohol.

Toll encouraged its employees to apply their skills in areas such as business management, HR and IT services to help First Step develop into a fully functioning, well-resourced drug recovery program.

Toll went ahead to employ from this organization. The Australian Institute of Corporate Responsibility explains the eight pyramids and the opportunities available in each one of them.

All businesses should be implementing the most basic practices - the “Dead-Set Winners” - in each of the eight Pyramids: reducing energy, paper and water consumption; not discriminating against employees or potential employees; supporting the local community; enforcing strict health and safety standards; etc.

As you develop and refine your corporate responsibility programs and practice, you can begin to work your way up through the “Good Practice” ideas - those which require moderate investment - and on to the “Cutting Edge” ideas. Assess which of the eight pillars best align with your company’s values and work to embed and consolidate your efforts in one or two of those areas before moving on to the others.

Businesses aiming for an integrated and defendable corporate responsibility strategy should be working across all eight focus areas - environment, human rights, community, workforce, investment, governance, systemic disadvantage and social marketing - simultaneously. It is unlikely that you will reach to the top in all areas at once. Once you are working across the middle sections of the pyramids, assess which of the eight pillars best align with your company’s values and work to embed and consolidate your efforts in one or two of those areas before moving on to the others.

Micro-finance is a growing movement around the world which suggests that it can solve the poverty issue. One major example is Grameen Bank and its founder Dr. Yunus who received the Nobel Peace Prize recently. In fact, my contribution to the WorldChanging book was on Microfinance.

Reuben Abraham, a friend with whom I worked with in Deeshaa, writes about his view on this. Reuben Abraham is the Director of the Base of the Pyramid learning lab at the Indian School of Business in Hyderabad, India. So he knows what he is talking about.

One of the widely-circulated and key ideas in the international development arena of late is the celebration of entrepreneurship among the poor in developing countries. The assumption seems to be that the poor could successfully run these small micro-businesses, if only the slightest amount of help could be offered, especially financial help. The thinking goes like this: Nagamma would be able to buy two cows if she had access to $200, then she would be able to supply milk to the community, make money, repay the $200 at 25% p.a., and have money left over to scale the business to a point where she can buy more cows, make it a viable business etc. This is the sort of thinking that forms the basis for the current hype for micro-finance and social entrepreneurship, though one most also add that real-world practitioners of micro-finance (some of whom are very good friends of mine) typically are free of any such delusions. I must also confess that I personally flirted with the ideas around micro-entrepreneurship for a while, before thinking through the problem and arriving at a different conclusion.

I think the fundamental problem with the thought process is the conflation of real entrepreneurship with micro-entrepreneurship. Entrepreneurs of the Nagamma variety are forced into entrepreneurship because they have no other alternative. In other words, survival becomes entrepreneurship. That does not mean, however, that Nagamma possesses the skills required to be a real entrepreneur. True entrepreneurship is a specialized skill which requires a very high degree of risk-appetite, and I’d argue that less than 1% of the population have these skill sets and risk appetites. I should know, having been involved in two start-ups in the mid-90’s. I was an entrepreneur because I don’t really like taking orders from others and I have always lived for the thrill of doing something very new. I am also extremely well-networked to knowledge, capital and people with solid management skills. To compare an entrepreneur like me with Nagamma is a bit absurd, isn’t it?

The fundamental problem in developing countries is the creation of employment, self or otherwise. The micro-finance movement revolves around the idea of self employment and as Reuben suggests this is not for everybody.

I think it is important to distinguish between the “entrepreneur” who innovates and the “small businessman” who runs a business.

What India and other developing countries need are programs where skills are provided to individuals which will enable them to secure jobs. One of the biggest learnings for me in coming to Australia was the education levels, skill sets and business ideas working in Australia.

Considering that Australia is a developed country the first impression would be that you would find highly educated people everywhere. But this was not true at all. People did have the basic schooling till 10th or 12th standard. This provided the literacy, numeracy and communication skills necessary in any field. However, after this period there is a very interesting development.

Australia has developed a skill training network of institutes called TAFE across the country. TAFE insititutes provide valuable skills in areas which are demanded by the industry. For example, from the TAFE in Queensland.

We offer over 800 programs covering areas such as business, engineering, construction, management, information technology, e-commerce, arts, media, tourism, hospitality, sport and recreation.

With over 120 years of history, a network of institutes and over 100 campuses, TAFE Queensland is the largest, most experience provider of vocational education, training and adult learning in Australia’s Smart State, Queensland.

You want to become a book keeper, you go to TAFE. An electrician, a cook, and what about a receptionist? TAFE provides a unique set of courses at rock bottom prices (subsidized by the govt.).

TAFE provides a practical way of learning skills which are valuable once you are out in the job market. It is helpful to the individual and the Institution, both. Discussing with people who are studying in TAFE and especially with people who have experienced both TAFE and university education; it is clear that TAFE education is superior in imparting skills. University is more about knowledge and understanding.

The most important part is that employers across Australia respect and value TAFE graduates. In India by contrast even the most menial of jobs require high qualifications. The outsourcing sector where I worked in India had business graduates from good institutions and even MBAs doing finance jobs which were performed by 10th or 12th standard educated individuals in the US. Not all jobs are that bad, but there is a tendency to go for high qualifications in India.

As Reuben provides the example of Cab drivers, a TAFE like institute can do that in India easily.

Reuben suggests in his blog post that real entrepreneurs are only 1% of a population. If you consider this; then the issues with micro-entrepreneurship comes to the fore.

In Australia, in terms of businesses, I have read that Australia has the highest franchises per capita. The franchising system creates a well oiled, successful system of business management created by one of those 1% entrepreneurs and anybody who is willing to learn and follow the system can run his own small business. This can actually generate self employment.

The international development community needs to look at Australia and other similar countries to create new systems in developing countries.

Reuters reports:

Ren Wang, director for the Consultative Group on International Agricultural Research (CGIAR), told Reuters that new crop varieties, such as drought-resistant rice, were crucial for securing food supply, especially as populations continue to grow.

Creating new species, which would allow farmers to adapt to increasing extreme weather conditions, is possible only via enforced partnerships, the Chinese scientist said.

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“We have seen increased incidents of droughts and flood. All of these pose particular threats to the world food supply,” Wang said this week via telephone.

“We have seen dramatic increases in prices of corn or wheat … Indonesia faces a really severe shortage of rice supply.”

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He said a new sorghum developed at a CGIAR centre in India contained more sugar in its stalk, raising hopes of growing biofuel crops to boost farmers’ income without endangering food supply.

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But among conventional new varieties, developed by CGIAR, Wang expected drought-resistant, high-yield rice to be introduced in the next 3-5 years in India, where many fields are not irrigated.

Submergence-tolerant rice, developed last year, will also reach farmers in Bangladesh, India, Laos, Vietnam and Cambodia.

Adaptation is crucial in the coming years, especially for poor and developing countries. Technology can assist greatly in this endeavour and help combat poverty.

Incentives matter. China has been promoting and rewarding its local officials around the country based on GDP growth figures. This incentive model has played a part in the creation of the great Chinese growth miracle of the last two decades.

The Age reports that China has changed its incentive model:

CHINA has announced a new promotion system under which local officials’ careers will be judged by their performance in meeting environment protection and energy efficiency targets. The move comes as fears China’s surging economy is overheating and domestic unrest about environmental damage mount.

The State Council, China’s cabinet, is working on an environmental veto system under which green performance will be decisive in determining the futures of Government and Communist Party officials, a senior policymaker has told China Daily, the Government’s English-language newspaper.

This is a good major step taken by China. Even though with a communist background China has been clever enough to use some of the most important principles from Capitalism to drive its economic growth.

It goes back to the idea which Schelling talks about that government’s even though wanting to meet targets and deliver outcomes; the best they can and should do is concentrate on inputs and direction. In this case, the energy efficiency targets set by the central government will be supported by the green incentives to the party members. Hopefully this deliver the required outcomes. The bottomline is that this is a better model than mandating targets.

Martin Wright in the Green Room at the BBC:

Remember when carbon offsets were cool? When everyone from Coldplay to Fifa banged on about their carbon neutrality?

Now you can hardly mention them without incurring a great howl of derision. Almost overnight, offsets have slumped from being a dream solution to the mother of all futile gestures.

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Most people out there aren’t champing at the bit to make revolutionary lifestyle changes, much as the activist might wish. But they’re more than happy to make some small payment in return for a dose of feel-good.

To them, it’s pretty unimportant whether or not this totally and utterly neutralises their carbon. They just want to do something useful.

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There’s a need for rigour, sure, but it would be a shame if that came at the price of inspiration.

The sort of inspiration which comes from knowing that you’ve helped a woman in Nepal get a biogas cook-stove, freeing her from walking three hours a day to fetch firewood from dwindling forests, and then spending the rest of her waking hours in a kitchen filled with enough woodsmoke to give her and her kids chronic lung disease for life…Or from learning that you’ve helped install a simple treadle pump which allows poor Indian farmers to grow crops throughout the dry season - so avoiding the need to uproot their families, taking their kids out of school, in search of sporadic work as day-labourers on building sites in cities far from home.

These are the sort of projects, funded by small-scale, voluntary offsets, which can make a tangible difference both to carbon levels, and the quality of life of some of the world’s poorest people - none of whom give a damn whether they’ve precisely balanced your emissions or not.

Each of them are among the winners of an Ashden Award for Sustainable Energy, which focuses on schemes which simultaneously tackle climate change and poverty.

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Meanwhile, it’s surely better to replace a single kerosene lamp with a solar light, than to sit there, principles intact, cursing the darkness.

The Supreme Court of India is considered by many to be the most environmentally friendly court in the world. We do not know how this assertion has come about but it points to other things.

Before we go ahead lets check out what the Court has accomplished.

The Indian Supreme Court has been most effective in protecting the environment. It is considered as one of the most environmentally friendly courts in the world. The Supreme Court of India has delivered landmark judgements. It has protected the Taj Mahal, which is one of the wonders of the world, has protected the Ganges, which is one of the holiest of holy rivers, from pollution. The Court also directed that every day on television and radio networks in the country at least seven minutes programme on environment should exclusively given and one prime programme should be given at prime time each week on environment.

The Daily Pioneer editorial discusses the request of the Indian government to the Supreme court to stop interfering in environmental matters.

The Union Government has made an outrageous demand to the Supreme Court that it should wind up its ‘green’ bench and stop ‘interfering’ in environmental matters…What the Supreme Court has wisely done is to expand the fundamental right to life to include the right to live in a healthy environment through its enforcement of the various environmental laws. In contrast, the record of the executive in relation to the ecosystem is far from satisfactory. One does not have to look too far, for the facts about India’s vanishing tigers are in the open, and shrinking forest cover, widespread pollution and a host of other issues that plague India are the result of executive bungling and corruption.

The Supreme Court has done some important work in the environmental area however, this points to a bigger problem of law making, execution and managing environmental issues in the country.

However, this suggests (PDF) the following:

The judiciary, a spectator to environmental exploitation for more than two decades has recently assumed a pro-active role of public educator, policy maker, super-administrator, and more generally, amicus environment. We can say environmental law in India as the story of India’s judiciary responding to the complaints of its citizens against environmental degradation and administrative sloth.

I am no expert on law making and definitely not environmental law but this constant tinkering is not the solution.

Economic development is generally considered the most important aspect of the development a country. However, as Amartya Sen; the Nobel laureate has explored many years ago in his book ‘Development as Freedom’; the relationship is not that straight forward and it is important to understand the role of freedom and development.

Freedom is both constitutive of development and instrumental to it: instrumental freedoms include political freedom, economic facilities, social opportunities, transparency, and security, which are all different but inter-connected.

Once we understand this then it is clear that concentrating on economic development is not the only goal for development. Development can be better termed as well-being.

We need to remember here that it is easy to understand this in the context of a developed country. However, for a developing country the sequence of freedoms are important too.

One explanation on this is from Atanu Dey:

I don’t know why but some people just draw good cards from the random draw that is life. Singaporeans are lucky. I am sure there are those who will immediately retort that the Singaporeans don’t have the freedoms that are normally associated with a liberal democracy. And I am also sure that the person making that statement is sitting comfortably well-fed in his nice office or home accessing the world wide web for knowledge and entertainment. For the average schmuck in a third world country, he would any day trade in his imaginary freedoms for a decent shot at a full stomach, a roof over his head, and a chance to get his children educated. After the average schmuck has achieved those basic necessities, he would ask for all sorts of goodies that a liberal democracy provides. And that is when the society should become a liberal democracy.

The sequence is important.

In this context, lets look at Geoff Wells’ post about the study by the New Economics Foundation on the relationship between national well being and carbon emissions.

It’s often been assumed that a heavy carbon footprint is highly correlated with levels of national development. Moreover, it’s assumed that economic development is an essential part of building national well-being. The logical conclusions of such propositions is that national well-being must decline if carbon emissions are to be cut…

nef begins by rating countries in the EU on a well-being index, which combines life satisfaction and life expectancy measures…nef then rates these countries by carbon footprint, the amount of resources used by each European nation to support its lifestyles.

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Combining the two indices gives a picture of how well countries are doing in delivering well-being to their citizens with low impact on carbon emissions. Scandinavian countries stand out, as having some of the lowest per capita carbon footprints while delivering high levels of economic, social and personal well-being. Iceland rates highest in Europe, along with Sweden and Norway. The UK sits at 21st (out of 30), just behind France and Germany, with only transition countries such as Portugal, Greece and Luxembourg doing worse. Latvia, despite being a transition country, come a respectable eleventh.

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nef concludes: “Individuals, communities, governments and societies at large can afford to greatly reduce their levels of consumption without it needing to undermine the well-being of the citizens of Europe.”

Once we combine the view point of Sen and this study; it becomes clear that carbon emission reduction is not that worrisome as originally stated.

The majority of the emissions are from the developed countries and it is these countries that need to cut down their emissions. The consequences of carbon reduction has always narrowly concentrated on economic development. Even then the various modelling studies suggests that the effect of carbon reduction will not have a large effect on economic growth in the long run. Considering Sen’s point of instrumental freedoms; developed countries have the option of improving the well-being of their citizens even with a slight reduction in economic development and at the same time reducing their carbon emissions.

I have yet to see this viewpoint of well-being and ‘freedom as development’ discussed in the climate change debate. Carbon reduction has a greater chance of acceptance in this scenario.