World is Green

Dave Douglas in a Op-Ed in Business Week writes about the carbon or sustainability opportunities available for companies. Dave is the vice-president for Eco Responsibility at Sun Microsystems and like other Sun executives he writes a blog which makes for good reading.

Dave writes about the growing interest in Carbon Neutrality, which is impossible in actual reduction of carbon to zero. What we can do is increase efficiency and buy green energy and offset the rest.

Dave writes that working only for carbon neutrality is a missed opportunity.

It’s good for companies to invest in others’ good deeds, but right now it’s absolutely critical that companies invest in creating more sustainable versions of themselves. More than ever, we need the innovation that comes from competition and open markets. We need companies that view climate change not as a threat but as an opportunity—and are pursuing it with the enthusiasm that big opportunities engender. We need companies to go beyond carbon neutrality to something I call “carbon advantage.”

You can create a carbon advantage for your company in two ways: First, you can use efficiency and resource reduction to provide a fundamental cost advantage in your operations and products. Second, you can use innovation in green products and services to offer customers a competitive advantage, thus differentiating your offerings.

This has been my learning and the theme of my writing for some time now. I believe that there is a great top-line opportunity in this area rather than just risk reduction, cost savings or bottom line increases only. This is where sustainability and carbon become a business strategy.

Incidentally, it seems that Business Week’s subtitle on carbon offsets missed the point and Dave clarified his position again on this weblog. Business Week seems to have changed the sub title now. It just shows the exact point that Dave was trying to make - to move away from just Carbon neutrality and concentrate on carbon opportunities.

“I think the trick with clean energy is not to be able to charge more. Because you can’t see global warming, I don’t think people are willing to pay more for it. It’s got to be a viable investment if it’s going to be successful.”

- WSJ

The Environmental Magazine - E, has a list of 10 Green jobs to look at. The specific jobs are not important. What is important to understand is the potential of ‘green’ jobs.

“People think there is some kind of mystery, ‘Where are the ‘green’ jobs?’” says Marie Kerpan, founder of consulting practice Green Careers, “There are a bazillion companies where you can take your skills and put it to work in a ‘green company.’”

So how do you do this?

There’s no secret to getting a job in the new green economy. It’s as basic as applying the job skills you’ve already developed (web design, sales, management) to a nonprofit or sustainable industry, or coordinating sustainable practices from within a corporate entity. Sometimes, as in green building or solar panel installing, these green jobs require a specific set of skills—and classes are organizing to fill the growing need. Other times, as in the organic food industry, ecotourism or sales and marketing of energy-efficient technology, anyone with a good work ethic can get in and create a great green career.

This is exactly my thinking. As there are opportunities in different organizations to reach and embrace this green opportunity, there are avenues for people to do the same. This is the same thinking I am using for myself.

From the Eureka Report:

Will China’s growth impact on your investment decisions?

I think China is an absolute powerhouse. The world has underestimated China for far too long even though there are all these platitudes now about how important China will be in the global economy. America has a serious problem because China will emerge as a global power. They have high educational standards and are hard-working people. Their biggest issues will be their inefficient use of resources and a big pollution problem. China is a well of opportunity for energy, which is what my speciality has been, and the energy sector up there has massive potential. I’ve got contacts working in China and I’m constantly monitoring its economic growth. The reason why I haven’t invested to date is that firstly, I don’t have enough money to play in the game up there and secondly, the risk of doing business up there is heightened by the lack of a proper legal system. I think this poor legal system has been their Achilles heel and has really impeded their growth. Compare that with the US, parts of Europe and Australia, which are very rules-based.

What about India?

I think India has huge potential but is a very different scenario to China. It has a very large middle class and an English legal system, which has served them well. It has the same type of potential and issues as China in relation to resources and pollution. I think the biggest problem with India (and this is also happening in Australia) is their huge paper-based bureaucracy.

Businesspeople and entrepreneurs just hate red tape with a passion and the bureaucrats want you to fill in forms all day.

What’s your view on alternative energy investments in Australia like wind farms and solar energy?

Alternative energy is quite limited in Australia because we don’t have the regulatory or economic climate to encourage investment in that direction. We have some of the cheapest electricity in the world down here and that gives no incentive to begin any large-scale alternative energy projects. My experience with the wind farms is a case in point. But on a global scale there are massive opportunities in the sector. I’ve been looking at solar energy and the feeling seems to be that it’s nearly there as an investment opportunity. There are lots of countries getting into alternative energy (including solar), like Brazil, parts of Europe, Germany and Holland. These will turn out to be great investments because people will start to deliberately buy their energy needs from alternative and green sources.

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.

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.

In Green jobs with Growth potential; I wrote that; “Makower has some good advice. It is important to gain a skill and then have a green tinge to it and not get pigeonholed into a environmental division… In that sense, environmental divisions will become redundant. The environmental lens will become part of the other lenses used by executives.”

Now ‘The forex blog has more on how to green (environmental and social aspects) your financial career:

If you’re interested in a financial career, you might be curious about how your interests can lead to reconciliation between your job and your belief system…Social finance means that financial instruments are used to promote social goals. Financial instruments used to accomplish these goals include credit, savings, investments, and loans, among other devices.

[...]

Social finance careers have expanded to the point where you can attend a school in London that focuses solely on social entrepreneurship. Whether your interests lie in a nonprofit or for profit participation in this specialized industry, you might wonder where your opportunities lie. Some social finance positions might include:

Community Investor: The community investor works with other individuals to gather, oversee, and direct capital to community investment opportunities in local or regional areas or abroad.

Micro-Financier:This individual seeks to provide impoverished individuals or communities with the means to invest or borrow money for business or community development.

Nonprofit Sector: The nonprofit sector is also the most diverse when it comes to opportunities. While some individuals are content to volunteer for nonprofit efforts, you can also seek a career as an executive or work as a freelance grant writer or project coordinator.

Social Entrepreneur: Unlike venture capitalists, social entrepreneurs provide innovative solutions to difficult social problems usually without seeking personal profit.

[...]

If you want to incorporate a social angle to your career objective, you will also need to expand your skills and experience through education and work. You can expect to gain the following:

Interdisciplinary Skills:You can also focus on technological, environmental, or leadership facets to social financial careers. Your interdisciplinary needs will depend upon whether you want to focus more on social or financial aspects within this field.

Leadership Opportunities: Social financing is a means to create innovative ways to improve social environments, and this field needs creative leaders who can take the initiative in many situations.

Flexibility: Careers in social financing currently may be definitive or broad and fairly undefined. You many find a way to travel the globe, or you may seek a situation where you’re alone and surrounded by books and archival materials.

Global Knowledge: Even if you end up in a back office surrounded by social financing accounting books, you will learn much about how people live in other communities around the world

David Douglas is the VP of Eco Responsibility at Sun Microsystems. On his blog he provides some tips on how to talk like a Corporate Environmentalist.

#1 - Focus on The Improvement, Not What’s Left to Fix

You’ll never hear a corporate environmentalist get up and say “We’ve cut our methane emissions from 423 to 420 gzillion tons per year”. People back at HQ will freak out if you say something like that. Instead, focus on the positive: “We’ve made dramatic methane emissions reductions of 3 gzillion tons per year!”. Doesn’t that sound better?

#2 - Make Emissions Accessible, but Not Too Accessible

It’s really hard to visualize a ton of CO2 or a gigawatt of electricity, so its important to give your audience analogies that help make your statistics real. The basic approach is to compare to things people know, like cars or houses, as in “This reduction is the same as taking 13,000 cars off the road for a year”, or “That’s enough electricity to power 10,000 homes for a month. The problem is that someone in the audience might actually know some of these factoids, so you have to actually do the research and the math to make sure your comparisons are accurate - yuck!

Instead, experienced speakers will make comparisons which sound real, but are much less likely to ever be checked. The key is geographic locations and timescales which will demotivate even the most ardent fact checker. Recognizable, but not huge cities (e.g. Topeka, Milwaukee, Edinburgh, Columbus, Dresden), Canadian provinces and recently formed Eurasian countries are all great targets. “That’s enough energy to light the homes in Estonia for 16 months” - wow! “That’s the same as taking all of the cars in Alberta off of the road for a fortnight” - incredible!

Forbes has a collection of possible green jobs which have a future in the coming years.

The greening of industry is creating a constellation of new careers, and they’re not your everyday forestry professions. Many of them are environmental twists on old professions, like law, or in Makower’s case, journalism. Others are engineering careers tied to research in renewable technologies like wind energy and ethanol production. For instance:

– Emissions brokers: In a market economy, credits to emit greenhouse gases can be traded on an exchange, and brokers facilitate the deal. If the U.S. ever moves to a mandatory trading system, expect this field to boom.

– Bio-mimicry engineers: This new branch of science uses Mother Nature as a model for solving engineering problems. For example, Atlanta’s Sto Corp. created a self-cleaning paint that repels dirt whenever it gets wet, just like the lotus leaf does.

– Sustainability coordinators: Corporations from AstraZeneca to Wal-Mart are now employing managers to oversee the economic and environmental components of company efforts.

– Green architects: With an increasing focus on energy-efficient buildings, a growing number of architects and developers are getting certified to become specialists in green design.

Universities–particularly business schools–also see opportunity. Schools such as Stanford, the University of Michigan, the University of North Carolina and the University of Michigan offer joint M.B.A./environmental science masters degrees. Derrick Bolton, director of admissions at Stanford’s Graduate School of Business, says many students are taking positions with corporations that have a commitment to the environment.

Makower’s advice to students pursuing a green job is to learn all they can about business. The most exciting things are happening in product design, research and development, manufacturing, and buildings and grounds. “If you go into the environmental part of a company, you become ghettoized,” he says.

The slideshow has more jobs. If you follow the jobs; a pattern emerges. A green job is not a new kind of job except say, a Sustainability Coordinator, but it is more of a twist on the old jobs. A emissions trader is a trader first; a bio-mimicry engineer is a engineer first and so on.

Makower has some good advice. It is important to gain a skill and then have a green tinge to it and not get pigeonholed into a environmental division. If the current trend continues then environmental/sustainability principles will become part of business (like quality standards, customer focus, financial analysis). Good design will have sustainability principles but there cannot be one ‘green designer’. In that sense, environmental divisions will become redundant. The environmental lens will become part of the other lenses used by executives.

Writing this blog post, I realise that I need to rethink of where I am going!

It’s been raining Khosla for sometime now here. In a Gristmill article, Timothy E. Wirth, Vinod Khosla and John D. Podesta write about the economic rules that create new markets and how they can make a difference in the clean energy market.

Voters, investors, activists, business leaders, and policy experts are pushing for clean energy to create jobs, limit climate change, and reduce America’s dependence on foreign oil. And yet, progress is slow: oil imports and carbon emissions continue to rise. Why?Because the rules of the game — the laws, regulations, subsidies, and tax credits that shape the energy market and the way it acts — continue to make fossil fuels a less expensive, more convenient choice for consumers.

These rules are both the heart of the problem, and the key to a solution.

…Change won’t come until the price is right. That price is set by the market, the market is shaped by rules, and the rules favor fossil fuels.

If we want to change the future, we have to change the rules…

The rules today give oil and gas companies — the most profitable industry in the history of the world — billions of dollars in tax breaks and research subsidies…The rules perpetuate our energy habits…We need new rules that will make the best choice for the country also the best choice for consumers.

…Today, we are on the cusp of a similar revolution in energy, but the old rules are still in place. There is a lot of money ready to invest, but too few good investment opportunities. To enable those emerging products and technologies to succeed, the most important thing we can do is change the rules…

The future of energy is not terribly complicated to envision:

• Clean energy: We’ll use new, renewable sources of energy: more biofuels and less oil, more wind and solar, and less coal and natural gas.
• Energy efficiency: Our homes, office buildings, cars, and appliances will require less energy, and we’ll have better ways to manage that use.
• Carbon capture: Emissions from coal-fired power plants will be captured and pumped underground.
• A “smarter” grid: Digital technology will finally come to the electric power grid, making it more efficient, more reliable, and better able to draw on renewable resources. It should become a national grid, like our highway system, so any renewable or non-renewable electricity generated in any part of the country can be transmitted to market.

Here are five more rule changes that would reduce emissions, give consumers new choices, launch new businesses, and accelerate the profitable transition to new energy technologies:

Put a price on carbon.

Putting a price on carbon dioxide — through a cap-and-trade system similar to the one that reduced acid-rain pollution at low cost — would end the use of the atmosphere as a free garbage dump and create a market for any technology that reduced global-warming emissions.

Set “carbon efficiency” standards for vehicles.

The debate over fuel efficiency standards has bogged down in finger-pointing between Washington and Detroit. To break the impasse, Congress should pass tough standards for “carbon efficiency.” If companies had to reduce the average carbon emissions of their fleet, it
would encourage them not only to build lighter, more efficient vehicles, but also to build cars that can run on biofuels and on electricity — rather than simply updating the internal combustion engine.

Make energy efficiency the business of utilities.

Today, in almost every state, utilities make more money as their customers use more energy. We should flip those incentives. Utility companies in California are compensated for helping their customers reduce their energy use. They make money by helping customers install better insulation and use more energy-efficient products. When a utility can make more money helping people save energy rather than use energy, that’s a smart set of rules.

Modernize the electric power grid to be more efficient and better deliver clean energy.

Nearly every sector of the economy has been made more efficient with the introduction of information technology — but not the electric power grid, which still operates on 50-year-old technology. A modernized, digitally connected national electricity grid will be more secure, reliable, and resilient, allowing quicker restoration of power after outages and the ability to avert large-scale blackouts. Renewable electric power should be given priority access to such a grid.

Increase government support for clean energy.

No industry of any consequence to the country has grown and thrived without government support. According to the Government Accountability Office, the oil industry alone received more than $140 billion in subsidies and tax breaks between 1968 and 2000. In the 21st century, the U.S. government has just as much interest, if not more, in the success of clean energy.

These five rule changes will help build a market-based system in which companies and consumers can advance the national interest by acting in their own self-interest.

…We can try to scold people into embracing sacrifice — and change nothing — or we can offer the kind of choice that can change the world, which is choice that is cheaper, cleaner, better. Choice is what markets do best, but not if government is standing in the way with old rules that favor the industries of the past.

Climate change and oil dependence are pushing us toward a clean, renewable, efficient energy future. The profits to be made in making and selling these technologies are pulling us in the same direction. With one strategic leap, we can wipe out two of the biggest threats to our children’s well-being while creating the high-tech industries that will employ them in the future.

If we just change the rules.