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.

Computer Weekly talks about some of the simple steps that you can take to save energy, costs and improve efficiencies.

The government’s CIO Council is planning a “green” strategy for the public sector which includes cutting tens of thousands of printers, taking power consumption into consideration when buying PCs, and keeping equipment for up to two years longer.

One of those leading the green initiative is the Department for Environment, Food and Rural Affairs. Defra’s CIO Chris Chant said there has been a dramatic reduction in printers in large offices, from one per eight employees to one for every 15 staff. This cuts buying costs, electricity bills and the amount of equipment that needs to be disposed of, he said.

Defra recently decided to fund centrally only one computing device per employee - usually a thin-client desktop or a laptop. It also discourages docking stations for laptops and thousands of power-hungry CRT monitors have been replaced with flat screens.

We have been doing similar stuff at DFC. The printers have been the biggest surprises with almost 1 printer for every 2 employees in some offices. Some big savings can come out there for DFC.

The basic idea: Boosting the cost of anything containing carbon – the main greenhouse gas – would compel industries and consumers to seek cheaper alternatives. They’d switch to cleaner fuels or consume less – either by adopting more efficient technologies or simply reducing their activity. Presumably, the alternatives would be better for the environment.

The problem: No government appears willing to impose a cost high enough to actually change behaviour. And while several industry groups argue pricing carbon is a good idea, their enthusiasm is less than it seems.

For more, The Oil Drum.

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.

Today the Howard government in Australia is set to come out with its cap-and-trade system. In this context it is important to remember the “government risk” in a system like this.

Charles Morand from Alternative Energy Stocks has more on this:

…as the market for carbon emissions grows, the need for standardization and collaboration between governments and regulators will become ever more pressing. This could create problems.

The carbon market is unique in that the commodity traded derives its
value primarily from its ability to meet the requirements set by an
environmental regulator…

As the hype around emissions trading and global carbon markets engulfs you, be sure to always keep in the back of your mind the fact that one of the largest risks this market faces is governments and their regulatory agencies. Like any market, it won’t take much of a faux pas for investor confidence to be severely shook and for millions or even billions of dollars in market value to be wiped out overnight. This would be bad for the market and the environment.

Andy Morris in the Washington Times (Hat tip: Cafe Hayek) :

There is a way to improve energy security: unleash entrepreneurs. Refiners have been solving America”s energy problems since the start of the 20th century. When the U.S. faced a major gasoline shortage in 1910, entrepreneurs revolutionized refining technology and doubled gasoline yields. For the last 30 years, they”ve been boosting output from refineries, making it possible for our total capacity to rise even as older, less efficient refineries were closed.

In short, American refiners have regularly increased the quantity and quality of gasoline from each barrel of crude, and done it without Congress” advice.

If we want to increase our energy security, we”ll stop changing the rules every time a politician needs an issue for his next campaign ad. Refineries, pipelines, and oil fields are all multibillion-dollar investments that take years to earn a return. The constant shifting of government rules undermines the certainty investors need before making such a large-scale capital commitment.

If we want to make America more secure, decrease gasoline prices, have cleaner fuels, and increase the reliability of supplies, we need to get the government out of the way of the entrepreneurs who can deliver those things.

Hon Lianne Dalziel, Minister of Commerce, Minister for Small Business, Minister of Women’s Affairs, MP for Christchurch East from New Zealand provides her views on the importance of procurement to government and its connections with sustainability in a ‘CIPS’ Strategic Procurement Forum opening address.

Some excerpts from her speech:

Procurement is too important to be treated as a technical, administrative activity that sits somewhere in the finance or corporate services section with little senior management interest and attention. It is the government’s view that it is time to raise the profile of the profession.

The reality is that good procurement is essential to the government’s ability to achieve its wider policy objectives. Procurement is a strategic delivery tool and therefore requires a strategic approach.

It is important to remember that the government is a significant purchaser of goods and services. In particular sectors, such as ICT, the government is the single largest customer in the domestic market.

The total size of the government procurement market is difficult to estimate, but OECD averages suggest that government procurement expenditure in New Zealand is in the range of $14 - $20 billion per annum.

For example, by promoting sustainability in the government’s own operations and in business development New Zealand firms can lead the market for goods and services that are sustainable.

Sustainable procurement is one of a package of six projects developed in the context of the government’s aim to make New Zealand the first truly sustainable nation, and the need for long term sustainability strategies to meet the challenges New Zealand faces in the 21st century.

The project that will be of particular interest is enhanced sustainable procurement. This is again led by the Ministry of Economic Development. It builds on progress made by the Ministry for the Environment’s Govt3 programme in achieving the necessary “cultural change” within the public sector to recognise and embed sustainability factors in procurement decisions.

As well as integrating sustainability into a single government procurement policy and implementing a national framework for sustainable procurement, this project involves setting standards for sustainable procurement; developing sustainability performance indicators, targets and reporting mechanisms; and implementing a carbon costing methodology for procurement decisions.

By September this year specific standards will be mandated across public service departments. These include: paper (including recycled content and default duplexing); timber and wood products (to ensure they are legally sourced); travel (for motor vehicles and air travel versus video conferencing); and light fittings (for energy efficiency). These will be rolled out to the wider state sector over longer timeframes. A wider range of sustainability standards will be developed over time targeting areas of greatest impact, such as buildings, ICT equipment, white goods, textiles, uniforms and cleaning products.

…procurement decisions should be based on best value for the taxpayers’ dollar over whole-of-life and this will demand careful judgements by procurement practitioners over a range of factors that will inevitably include price, origin of supply and more.

India with a population of almost 1.2 billion people is growing its energy needs every day. Concern all over the world is the effect of this on carbon emissions. Rightly, the Indian concern is to provide electricity to the almost 600 million people still not connected to the electricity grid. But how can India do this without following the traditional greenhouse intensive model? What is the current state in the Indian electricity generation system?

Electricity is a given in most developed countries however, in countries like India it is a scarce commodity. For individuals it provides discomfort and decreases productivity and creates constraints in their daily life.

The Mint reports that with the summer temperatures nearing 40 degrees centigrade there is more demand for electricity however; “The fear of power cuts soars when sweltering summer heat arrives in India, spurring demand for generators as electricity-starved residents increasingly produce their own power.Except for VIPs in official bungalows, everyone from stall-holders to former ambassadors are hit by the power outages, and those who can afford it are increasingly making alternative arrangements.”

So what is the alternative in Indian cities and villages?

One such is the diesel generator.

As the IHT reports:

So for now, diesel generators remain the favorite choice of millions across the developing world — so much so that the International Energy Agency plans to assess the extent of their use as part of a detailed look next year at energy use in India and China.

Businesses are not exempt from this tyranny. A recent NyTimes article explains the troubles faced by the TCS; India’s largest IT & Outsourcing company.

Look up at the tops of buildings, and on any given day, you are likely to find three, four or six smokestacks poking out of each, blowing gray-black plumes into the clouds. If the smokestacks are being used, it means the power is off and the building–whether bright new mall, condominium or office–is probably being powered by diesel-fed generators.

This being India, a country of more than one billion people, the scale is staggering. In just one case, Tata Consultancy Services, a technology company, maintains five giant generators, along with a nearly 5,300-gallon tank of diesel fuel underground, as if it were a gasoline station.

The IHT article reports that “Big conventional power plants, even those that burn coal, are often cleaner, safer and more efficient than crude household stoves and other small systems. So many economists say that the first step in developing countries still needs to be the construction of power lines connecting as many villagers to national grids as possible.”

With increasing personal power production in India, even Coal powered plants beat the clean power index. The government has been improving the emission standards of diesel generators and there are now some estimates on how many of these are in the country and the pollution problems that they are creating.

Some other alternatives in India are “Burning wood, kerosene lamps, burning cow dung, twigs & leaves, invertors (powered by batteries) and diesel generators. All of these alternative solutions cost more, pollute more and are less efficient then the coal powered grid alternatives.”

What needs to be done is clearly is the extension of the national grid across India, improving the efficiency of generation, capping the losses in transmission and changing the politics of free power.

The next step should be the new age personal power production options like solar power, micro wind power, biomass generators, smart grids, and other alternatives. There is an increasing case for the decentralization of energy and India needs to look at these options.

Like many other cases, India has the option to leap-frog the conventional technology and move to smarter solutions in power generation which is better for the country and the world. The biggest question is the politics.

The Manglorean times reports:

Maldives President Maumoon Abdul Gayoom Sunday called for global action to combat climate change that directly impacts low-lying countries and sought more global investment to spur his country to achieve the transition to a middle-income liberal democracy.”There is no alternative but for the whole world to fight climate change. The Maldives on its part is doing what it can, but that would never be enough. Action on a global scale is a must,” Gayoom told delegates participating in the second Maldives Partnership Forum (MPF) here.

“Our focus has been on alerting the international community to the dangers that climate change and its devastating effects, including sea level rise, pose to the Maldives, and to the other low-lying countries and regions,” Gayoom stressed.

“Investing in the Maldives is about investing in growth, in the future, in ensuring environmental sustainability. It is about investing for the benefit of an entire nation,” he said.

Energy savings are an important part of resource reduction, greenhouse gas reduction and cost reduction goals.

The Australian government may be seen as a laggard in the carbon and energy reduction programs in the world, but it is bringing in small changes slowly into the system. One such initiative is the “energy efficient opportunities” program launched in 2006.

The program encourages large energy-using businesses to improve their energy efficiency. It does this by requiring businesses to identify, evaluate and report publicly on cost effective energy savings opportunities.

Energy Efficiency Opportunities is designed to lead to:

• improved identification and uptake of cost-effective energy efficiency opportunities
• improved productivity and reduced greenhouse gas emissions
• greater scrutiny of energy use by large energy consumers

The program’s goals are to identify the 250 top corporate energy users in Australia “from the mining, resource processing, manufacturing, transport and commercial sectors. These corporations are together responsible for more than 60 per cent of the total amount of energy used by businesses in Australia, and around 40 per cent of all the energy used.”

In defining a large energy user, the industry guidelines (PDF) specify that the program is mandatory for corporations that use more than 0.5 petajoules (PJ) of energy per year and provides a rough guide to what this means.

0.5 PJ of energy per year is approximately equivalent to:

• 139,000 megawatt hours of energy;
• 9000 tonnes of LNG or 10,000 tonnes of LPG;
• 13 megalitres of diesel; or
• spending of approximately $5-10 million on electricity, $1.5-2.5 million on gas or $11-
• 13 million on diesel (depending on prices).

There is a five step process for corporations in Australia. They need to determine their participation based on energy consumption (by Dec 2006), register with the Dept. for Industry, Tourism and Resources (by 31st March 2007), prepare and submit an assessment schedule (by 31st Dec 2007), conduct assessments (first assessments by 30th June 2008), and report their results publicly (first in 31st Dec 2008 and annual reports subsequently). This would run for a total of 5 years.

The website provides detailed guidelines, tools and other relevant information.

The important aspect of the program is the public reporting requirement. This will be helpful for various stakeholders (investors, customers, environmental groups, competitors, government, suppliers, consultants) to understand the current situation of the corporation. Even though the legislation does not set a specific target in terms of reduction but only aims at encouraging efficiency (which is the preferred policy of the current government) the mechanism used by the program ensures that efficient and competitive companies will reduce their energy and be ahead of the game.

For consultants working in this area this is a great opportunity to find new business and this program and its guidelines can be extended to companies consuming energy lower than 0.5 petajoules (PJ) per year but who want to have a competitive edge in the future. Rising energy prices will induce more companies to take up “energy efficiency opportunities”.

By using the Pareto Principle in prioritizing the energy reduction program, this initiative can make a difference in the energy use of Australia.