COP21 The Talking Continues

An audio version of this episode was published on 11th December 2015 and is available at www.susbiz.biz

This week the Energy Minister and the Prime Minister have been under fire as COP21 moves forward. While the main negotiating sessions continue, many other meetings take place as well. Mark Carney of the Bank of England has a view. The group of 77 nations  (G77) plus China has a view as well, and so do the 48 Least-Developed Countries. Caroline Lucas of the Green Party is concerned. Can we standardise climate change? Is emissions trading the answer? George Monbiot believes that that's attacking the problem from the wrong end. Jeremy Leggett is not at all happy with Minister Amber Rudd as you will learn from the latest chapter of his book, and the week will end with a massive march through the streets of Paris. I’m a member of iema and that entitles me to a daily update on the conference from the environmentalist magazine. Non-members can subscribe at  environmentalistonline.com. But we have our own man on the spot in Paris. You’ll hear from Richard Lane later on.

First of all: it’s beginning look a bit like - 99p for a litre of petrol by Christmas. The oil price has fallen 60% since summer 2014 and Goldman Sachs are still predicting the $20 barrel. This week Brent crude was at $42 and West Texas Intermediate down to $38. Since 2011 the Chancellor has suspended the fuel price escalator. In the face of falling oil prices an additional 1p on a litre of petrol or diesel would be pretty painless. But the government estimates that freezing the escalator has reduced taxation income by some £23bn over the life of the last Parliament. Isn’t that approximately twice what the Chancellor intends to take out of the welfare budget? You can make up your own mind as to whether this was the right place make cuts.

The Prime Minister and cabinet members have been criticised this week for flying to the Paris climate change talks, rather than taking the more environmentally friendly Eurostar train. David Cameron and Energy and Climate Change Secretary Amber Rudd flew the short trip to the opening day of the talks last Monday. International Development Secretary Justine Greening and her team also took a flight for her short trip to the COP21 talks on Saturday

According to Eurostar, a short haul return flight from Heathrow to Charles de Gaulle airport emits 122 kilograms of CO2 per person, compared with the 10.9 kg CO2 emitted per Eurostar passenger travelling from St Pancras to the centre of Paris. On such a short journey, city centre to city centre times are likely to be shorter by train than by air. Most of the team went back by train, so perhaps the criticism worked.

According to Independent Catholic News, Catholic campaigners have called on the UK government to heed the message of Pope Francis as the Secretary of State arrives in Paris to join the second week of the climate talks.

"David Cameron's speech last Monday,” they say, “called for a strong deal that guarantees adequate climate finance for the world's most vulnerable people and a five year review mechanism to measure and improve progress. We look forward to Amber Rudd rolling her sleeves up and getting involved to make this deal happen."

And Caroline Lucas of the Green Party has a message for Amber Rudd as well. Her open letter to the minister starts like this:

“HUMAN RIGHTS AND GENDER EQUALITY IN THE PARIS AGREEMENT ON CLIMATE CHANGE

“I am writing to express my concern regarding reports from the COP21 negotiations that the language on respect for human rights and gender equality is at risk of being removed entirely from the operative section of the Paris Agreement. Climate change represents a gross social injustice, and establishing overarching principles of climate justice, human rights and gender equality at the heart of the climate agreement will be a prerequisite for effective climate action. I urge you to ensure that the UK in particular is playing a constructive role in upholding a strong EU position on this issue.”

Paul Polman, chief executive of Unilever, aims to make the company "carbon positive" by 2030, using only renewable energy. He didn’t mention Amber Rudd. Well, not directly.

Speaking to BBC News this week he said he was concerned that the government's decision to remove financial support for wind and solar power would send the wrong signal. Subsidies cannot be permanent, but equally they should not be withdrawn at short notice. There is a risk that cutting subsidies sends the wrong message to investors, who are looking for stability. The government has been inconsistent. 

“We deal with 2bn consumers every day,” says Polman. “No government deals with 2bn consumers. If we are all to achieve our targets, government and business must work together.”

It seems pretty clear that without private sector support, governments will struggle.

So what’s been happening in Paris? Apart from the governmental negotiations there are many other organisations which have come to Paris to lobby and discuss climate change. A great deal has happened. For example,

Ninety businesses and 19 governments have signed up to a World Bank coalition to support the introduction of carbon prices. BT Group, EDF, Lafarge, Nestlé, SSE, Unilever and Veolia are among the companies joining the coalition, which will collect and share best practice, mobilise business support and convene talks with global leaders to overcome barriers to more widespread use of carbon pricing. 

They are backed by the governments of Sweden, the Netherlands, Ethiopia and Mexico, among others. Canadian environment minister Catherine McKenna announced that the country’s government, elected last month, would support the coalition. 

World Bank president Jim Yong Kim pointed to China’s plans to introduce a carbon price in 2017, and said: “Anyone who wants to do business with China will have to change the way they work.”

According to the Financial Times, the preferred solution is a cap and trade system. Such schemes already exist. EU ETS, the European union emissions trading scheme, is an example. Unfortunately, it's a bad example because it has done nothing to reduce carbon emissions. Cap and trade involves governments issuing carbon credits which are effectively a licence to emit carbon dioxide. The idea is that the cost of extra credits will put a burden on old and dirty plants, reduce their viability and lead them to be phased out. More efficient plants will need less credits and may even have a surplus to sell, giving them a financial and competitive advantage. In practice, EU ETS has been subject to fraud and manipulation. The price of carbon credits, which has collapsed to less than €4 per tonne, provides  little incentive to industry to clean up.

This week the International Standards Organisation (ISO) and the Greenhouse Gas Management Institute (GHGMI) held a panel discussion on the sidelines of the Paris talks. 

Tom Bauman, co-founder of the GHGMI and chair of a technical committee working on climate change mitigation and adaptation standards at the ISO, said that it had received a large number of requests over the past 18 months for new climate change standards. 

Nick Blyth, policy and practice lead at IEMA, said that the demand for new standards was driven partly by a general increase in awareness of the impacts of climate change as well as the publication of the revised ISO 14001 environmental management standard. The revised 14001: 2015 standard requires organisations to consider the impact of the environment, including climate change, on their operations as well as their impact on the environment.

“The revised ISO 14001 should introduce more people to climate change, which will then lead them into the scope of other GHG standards,” he said. 

More than 324,000 organisations worldwide were certified to 14001 in 2014, according to the ISO’s latest figures. The high rate of use is bringing climate change into mainstream environmental management systems, Blyth added. 

The negotiations are not all about mitigation; measures to reduce or slow down climate change. They are also about dealing with the consequences. Discussions over which countries will pay for damage caused by climate change are slowing down negotiations, with the G77 plus China group issuing a new warning that the issue threatens chances of a deal.

The G77 plus China negotiating bloc, which now consists of 134 countries, including Saudi Arabia and South Africa, complained about attempts by developed countries to widen the pool of donor nations that would contribute finance. The developed nations argue that developing countries “in a position to do so” should also contribute to funds to pay for climate change damage. 

In a strongly worded statement, ambassador Nozipho Mxakato-Diseko of South Africa, which chairs the bloc, said: “The G77 and China is deeply concerned with the attempts to introduce economic conditions in the finance section currently under negotiation … Any attempt to replace the core obligation of developed countries to provide financial support to developing countries with a number of arbitrarily identified economic conditions is a violation of the rules-based multilateral process and threatens an outcome here in Paris.” 

Countries most at risk from climate change joined the debate and warned that there would be no overall agreement in Paris unless a mechanism to deal with the impacts of climate change beyond adaptation is agreed.

The Least Developed Countries (LDC) negotiating bloc comprises 48 of the world’s poorest countries including many African countries and low-lying island states. Its members face severe disasters from climate change that are predicted to cause damage for which adaptation will not be possible. This is known as “loss and damage” and includes salination of agricultural land and loss of land to the sea.

Pa Ousman Jarju, minister of environment and climate change for the Gambia, said: “We do not foresee an outcome in Paris without loss and damage. It is a red line for us.”

Jarju said that the bloc had been encouraged by some of the statements by world leaders made at the start of the Paris talks, but said that this had not filtered through to negotiations. “We have seen a lot of bracketing,” he said, referring to the practice of using square brackets throughout the draft text to indicate options on the table where no decision has been reached. More about this in a moment.

Last Friday, Mark Carney, Governor of the Bank of England, launched the Task Force on Climate-related Financial Disclosures (TCFD) to develop voluntary, consistent climate-related financial risk disclosures by companies. This would provide lenders, insurers, investors and other stakeholders with important long-term information, he said. Carney has already warned about the danger from stranded assets, fossil fuel reserves which cannot be exploited without emitting unsustainable levels of emissions and which are therefore potentially worthless.

The taskforce will be chaired by UN special envoy for climate change and former mayor of New York Michael Bloomberg. It will consider what constitutes effective corporate financial transparency on climate change to understand the physical, liability and transition risks, and will review and learn from existing disclosure processes. 

Paul Simpson, chief executive of the CDP, (formerly the Carbon Disclosure Project), which has been working on climate change-related disclosures for investors for 15 years, welcomed the announcement. “We see it as a way of elevating our work and some of the information we collect right into the heart of financial markets and central banks. Carney is governor of the Bank of England and chair of the Financial Stability Board so that’s a much stronger angle into banks on climate than there’s been before. It will take disclosures to the next level,” he said.  

Proposals by the Treasury to scrap regulations requiring companies to report greenhouse-gas emissions in their financial reports as part of its business energy efficiency tax review were very worrying, Simpson said. But these could now be under review following Carney’s high-profile speech to the city and the creation of the taskforce, he added. 

“We very much hope that due to Carney’s focus on this issue, Osborne and the Treasury will see sense and realise that investors need this information, in fact they need more information than just GHG emissions. We’re hopeful that it will cause a u-turn from Osborne.” 

Not another u-turn, surely.

More than 100 companies including Ikea, Coca-Cola, Walmart and Kellogg have pledged to set emissions reduction targets in line with scientific assessments on how to keep temperature rises below 2°C.

Corporate science-based targets are being advocated by a coalition consisting of the World Resources Institute (WRI), the CDP, the UN Global Compact and WWF.

Speaking at a side-event on science-based targets at the UNFCCC talks in Paris, Kevin Moss, business centre director at the WRI, said typically, companies would set emission reduction targets in line with what they thought they could achieve, and then stretched themselves slightly so they knew they would meet the target.

“Science-based targets start with the principle that what we are trying to do is solve the problem of catastrophic climate change and there isn’t really a half way point to avoiding catastrophic climate change, you’re either on a trajectory to meet it or you’re not.

“If you’re making the effort to reduce emissions, it’s worth making that little bit extra effort to avoid catastrophic climate change,” he said.

A new draft agreement was announced at COP21 this week. I heard that the previous 50 pages had been reduced to 20. The copy I downloaded ran to 48 pages - still full of bracketed alternatives. For example:

. Article 2bis (GENERAL)

1. [All Parties [shall] regularly prepare, communicate [and implement] [intended] nationally determined [contributions][components] [on [mitigation] and adaptation]…

…you get the idea. And that’s just one clause. Still plenty to do before the close of business on 11th December. And I think it will take a long time to understand what the final agreement actually amounts to.

George Monbiot is a climate campaigner, a Guardian columnist and author. Last Friday he appeared on Any Questions, the BBC Radio 4 current affairs debate. He stated that the UK has a legal requirement to exploit fossil fuels, which seems totally at variance with managing emissions. I tracked this down to an article he wrote in January, referring to what is now the Infrastructure Act 2015. Article 41 of this Act is indeed headed “Maximising recovery of UK petroleum” and it requires the Secretary of State to produce one or more strategies for enabling that objective to be met. That’s the same secretary of state who is responsible for reducing carbon emissions. Also in the article, George Monbiot takes issue with the idea of reducing carbon emissions by penalising the consumer. Instead we should tax the producer of fossil fuels. In his words, “Let’s control carbon emissions at the wellhead, not the tailpipe.” Whether that will happen in Paris is open to question. For the moment a carbon cap and trade scheme seems more likely, with all its shortcomings.

I suggested last week that the US would resist any agreement that was legally binding. The good news is that President Obama said he would accept a legal obligation to review the progress towards carbon reduction every 5 years. That’s a start, but in my view reviews should begin much sooner and be more frequent. On the other hand, the Indian Environment Minister said that his country was embarking on a 10-year project and there would clearly be no need for review for 10 years. What business could set out on a 10-year plan without review? If there are any you’ve probably never heard of them because they failed in the first few years.

The latest episode of Jeremy Leggett’s book “The Winning of the Carbon War” came out this week. It’s a free download from jeremyleggett.net. It’s nearly finished. The last chapter will be out in January and will end with an assessment of what was achieved by COP21. Jeremy leads one of the original and biggest solar energy companies in the UK. He is has it in for Amber Rudd as well. Here’s a quotation from his latest chapter.

“The government is engaged in a scorched earth assault on solar now, it seems. They want no opposition to gas and oil, fracked from British shale or otherwise produced at home and abroad. They seem unembarrassable by their willingness to shovel large subsidies to shale and nuclear while torpedoing solar subsidies.

“Two days ago somebody in either the civil service or the Tory party leaked a letter from Amber Rudd to ministerial colleagues. It shows that in June, when she insisted that the UK was on track for its legally binding European commitment for renewables in the energy mix, she misled Parliament. Now she admits that the government is on course to miss the target by some distance. She suggests some shameful ways of wriggling out of the commitment, like somehow creating renewable energy credits abroad so as to claim the targets have been met.

“Today, facing calls for her resignation, she has given an interview insisting that she still has the confidence of the renewables sector. I know of no leader in the renewable sector whose view deviates much from derision. The whole spectacle has descended beyond farce.”

Well, all this is politics, horse-trading and shenanigans. Does it really matter to you, me and the man in the street what goes on in Whitehall or what gets decided in Paris? Yes, it does. Is there anything we can do about it? It’s the difference between mitigation and adaptation. Governments and global corporations can mitigate. You and I have to adapt. Having said that there are many brave people in Paris running parallel events and demonstrating their demands for a fair and effective agreement from COP21. The short-term interests of the less-than-1% cannot determine the futures of the rest of the world, they say. Next Saturday, 12th December, they take to the streets of Paris to demand that all countries should keep to the pledges made at COP21 and ideally do even better. No, I won’t be there. No excuses and I’ll probably regret it. It’s going to be part of history. I’ll be there in spirit.

One person who is there is Richard Lane, President of York Community Energy. Here’s his report:

"Basically: almost everything we're doing is wrong! The Clean Development Mechanism and the Green Climate Fund are both deeply suspect and causing the sort of popular resistance that we have seen when huge windfarms get imposed on people without their consent in the UK. The draft text of the Paris agreement only mentions the word "energy" once - that's in the phrase "International Atomic Energy Agency". The US has been fighting against the inclusion of a clause referring to the "loss and damage" due to climate change (which would of course signify the recognition of responsibility), but more recently has given way on this issue provided it is made clear that there will be no means to make them liable for any sort of reparation. The South African spokesperson of the G77 has been very outspoken, resulting in a lot of behind-the-scenes threats and pressure being applied to other G77 members to rein her in. At the moment it looks like this approach is being successful in breaking up the unity of developing countries.

"A new version of the text will be released on Wednesday 9th December. There is still hope that the final target could be 1.5degC but there is no hope of a legally binding treaty - or indeed any updating of INDCs that would get us closer to that from the current 3degC or so.

"I actually missed the daily debrief today because I was due to videocall in to the York Environment Forum meeting which nearly didn't work due to a combination of technical problems & lack of skill their end and difficult environment my end.

"I met a lot of activists in community energy - there are moves to try to connect up the community energy movement worldwide.”

More from Richard, I hope, later in the week.

Meanwhile, back at work, back in the office, are you confident of the future, or do you have a 10-year plan which means you don’t have to worry about anything for another 9 years or so? If you want a review before then, if you want to chat about sustaining your business and bolstering your competitive position for even more than the next 10 years, give me a call, especially if you’ve still got some mince pies left.

I’m Anthony Day and I’m on 07803 616877.

That was the Sustainable Futures Report. This is Anthony Day. There will be another episode next week.

Revolution - a film by Rob Stewart

Watch the trailer here: http://ykr.be/hn62dkp6v 
This review also available on The Sustainable Futures Show (podcast)

What’s it all about?

This film will appeal to anyone who is concerned about the environment, sustainability or climate change. Anyone else could well tune out and switch off in the first few minutes.

What’s it all about? It’s a film about our relationship with sharks. No, wait, here’s Rob Stewart mugging to the camera home-movie style. It's a documentary about making a documentary about sharks. No, wrong again, we’re now talking about coral reefs, the acidification of the oceans and the threat to fish stocks. Now we’re looking at global forests, at the destruction of some 75% of the world’s forests and its effects on the production of oxygen. And finally - it’s about CO2 emissions, it’s about man-made climate change, it’s about mega-corporations, coal and particularly about Canadian tar sands.

There is so much information in this film. There’s some amazing photography, especially the underwater scenes. There are some pretty disturbing scenes. There are things everyone should know. I had no prior knowledge or expectations of this film and we could have done with some signposting. It would have helped if I’d seen the trailer beforehand. Why watch this film? What’s it going to tell us? Why is it important? How does it affect me? Without answers to some of these questions I’m afraid the general viewer will just switch off. There is no clear thread at the start. 

The later part of the film shows how concerned citizens took their message to COP15, the 2009 United Nations Climate Change Conference in Copenhagen, and how the conference closed with no real result. We saw anti-coal protesters outside the White House in Washington. There was detailed coverage of the protests at COP16, the 2010 conference in Cancun, Mexico. Again, little was achieved and this time the protesters were expelled.

My main criticism of this film is that it lacks a strategy for action. The filmmakers suggest that if you don’t like what the government is doing on climate change you should elect another one. (We tried that in the UK last week and it didn’t work. Climate change and the environment were never discussed in the election campaign. Public awareness is the first challenge. People don’t know so people don’t care.)

This film reminded me of Al Gore’s “An Inconvenient Truth”. They both give an account of the threats and risks to our planet and to our life on earth, but they don’t say what we should do about it. “The Age of Stupid” was a similar film. “How could we have been so stupid as to get into this mess,?” it asked, but it didn't suggest any solutions. If you wait to the end of Al Gore’s film, as the credits roll you see little hints like, ”Drive a smaller car” or “Turn the heating down 1 degree”.

If you wait to the very, very end of Revolution, after all the credits - which are extensive - after the Canadian tax status statement, the very last line before fade to black  reads: “Open your eyes. Be brave. Fight for something.”

What? Fight for something? Is that it? If we don’t know what we’re fighting for we’re certainly not going to achieve anything.

The most memorable statement in the film for me came from Dr Patrick Moore (no, not the astronomer) A former Greenpeace activist and now an advocate of exploiting the Canadian Tar Sands. He said: “Tomorrow morning 300m vehicles in America need to start up to keep civilisation running. If they don’t get their oil from here, they’ll get it from somewhere else.” You can’t argue with that. At least, not in the short term.

The film criticises the negotiators at the Climate Conferences for all talk and no action. But we could criticise the activists and the filmmakers for all protest and no solutions. Ban coal, ban oil, but what then? And the Cancun conference was in 2010. Why nothing about the conferences which have taken place since? Why nothing about COP21, the next major UN Climate Change Conference coming up in Paris in December?

If you’re interested in the environment, in sustainability and climate change, you should see this film. It will remind you of the issues and probably add to your knowledge. If you’ve never taken an interest in these issues, you too should watch Revolution. It’s hard work to start with, but it provides a wealth of information. Make up your own mind as to what the action points should be. It’s not time for panic, but it’s no time complacency either.

Of course, you might turn round to me and say, “Right, if you’re so clever what course of action do you recommend?” And I could respond that I’m just the reviewer of the film; it’s not up to me. 

That’s  tempting, but it’s too easy, so here’s what I suggest.

We need to lobby governments to commit to clear targets for agreement in Paris in December. 

• A global fixed price for carbon, increasing year by year would be a start. 
• All those 300m vehicles, and all the others in the rest of the world, need to start up every day until we can create alternatives. Tax incentives must encourage rapid innovation in transport.
• We need to decarbonise electricity production by 2050, maybe earlier. This means that no-where in the world will we use fossil fuels to generate electricity. It’s a big ask, but many experts believe it’s possible. Make no mistake, to do this we will have to manage demand as well and eliminate waste so that demand can match supply.
• Governments must implement a public information programme so that people understand the reason for changes. This is probably the biggest challenge of all, because many politicians themselves do not understand the issues and quite a lot of them don’t want to believe the facts, for whatever reason.
• The international community must recognise that in the short term at least, poor countries and poorer people in developed countries will be hardest hit by the change from fossil fuels. Steps must be taken to protect them, for two reasons. One is that we have a moral duty to help those worse off than ourselves, and if you don’t buy that then if we neglect the poor there’s good chance that they will all rise up and destroy what we’re trying to do.
• Finally, it’s all very well to demonise mega-corporations, but given the vast proportion of the world’s assets that they control, it’s unlikely that we will achieve a low carbon world without their involvement. Governments must give them incentives to reinvent themselves, and penalise business as usual.

What do you think?

With Legal Force!

With legal force! That’s the phrase of the week.

This week, China and the United States have come to an agreement on climate change - Chancellor George Osborne has said he will set up a sovereign wealth fund for all the riches which will be generated from fracking in the north-east - and at the NextGen 14 conference in Derby I had the pleasure of hearing Rohit Talwar give us his take on some pretty amazing futures.

This week President Obama visited China and issued a joint statement with the Chinese Premier stating that the two countries would work together on a climate accord. 

There's been some scepticism in the press but I've read the press release from the White House and to my eyes at least this looks like something different. The most important bit is where it says that the two Presidents will work together to adopt a protocol with legal force at the United Nations Climate Conference in Paris in 2015. With legal force. If they truly achieve that it will be groundbreaking. Every conference since Kyoto in 1997 has come out with advisory protocols, apart from those which came out with no conclusions at all. Obama and Xi Jinping talk about climate change as one of the greatest threats facing humanity. They talk about specific reduction targets. They talk about paying specific attention to vehicles, smart grids, carbon capture, energy efficiency, greenhouse gas data management, forests and industrial boilers. They even talk about promoting trade in green goods. 

We have to hope that this is not mere rhetoric. With both the US Senate and the House now in the hands of the Republicans there has to be some question over what President Obama can actually deliver. What is clear though, is that if the Americans do not go through with this they will be out of line with the global community and out of line with China, now the biggest emitter of greenhouse gases. You may remember from an earlier episode that Professor Piers Forster, one of the lead authors of the IPCC report, believes that China and Europe will push the United States into supporting the consensus for a binding decision. 

Of course some people are very sceptical about China and we constantly hear the question, “Why should we do anything if the Chinese are opening a new coal power station every two weeks?” The truth is that the Chinese government has realised that this cannot go on, but a radical change can never happen overnight. China has already introduced regulations to control the quality of coal which it imports. It restricts the sulphur content so although it will continue to burn coal, it will be slightly cleaner coal and the smog should be reduced to some extent. China has said that all coal-fired power stations within the Beijing area must close by 2020 because of the chronic smog conditions. China is rapidly becoming a world leader in renewables technology. Maybe it has something to do with the fact that some, if not all, of the Chinese government ministers have engineering degrees. And we shouldn't forget that one reason why China has become the world biggest emitter of greenhouse gases is that many of us in the west have outsourced our manufacturing to China. Their factories are pouring out pollution to manufacture goods for our western consumers. We pat ourselves on the back for reducing our emissions, but a lot of this is achieved by outsourcing our manufacturing. China’s plan is to bring its greenhouse gas emissions to a peak in 2030 at the latest, by that stage to create 20% of its primary energy from non-fossil fuels and to continue to phase fossil fuels out.

Chancellor George Osborne seems obsessed with another type of fossil fuel

 – the oil and gas recovered through fracking. We've already seen tax breaks for the drilling companies and promised bonuses to the local authorities that permit fracking to take place. Now he's talking about setting up a sovereign wealth fund based on the riches which will be developed in the north-east of England from these fossil fuels. Fracking is attractive because it will release resources within our own country. It can't be interfered with by the Russians or by Somali pirates and theoretically it will be available whether or not the wind is blowing or the sun is shining. There is, however, increasingly vocal opposition to the idea of fracking from many people who don't like the idea of drilling beneath their homes. There are also concerns about the vast amounts of water required, about what will happen to the waste water and whether there is a risk of pollution to groundwater and drinking water supplies. 

We can't say too often that the oil and gas recovered from fracking are fossil fuels and continued use of fossil fuels can only make it more and more difficult, even impossible, for us to achieve our national carbon reduction targets. The British Geological Survey has expressed doubts about the size of the recoverable reserves and until exploratory drilling is carried out they cannot be verified. This week the UK Energy Research Centre was equally sceptical of the Chancellor’s claims. Even exploratory drilling is targeted by the protest groups. 

Why not put the subsidies into renewables? 

It’s secure because nobody can interfere with our wind, waves or solar power. And while renewables are not a constant source of power there are methods of storing energy and as part of the mix, renewables can keep our power generation carbon footprint down. We need a carefully thought-out energy policy. We need to base it on the best expert advice. We need to recognise that we are talking about 30 to 50 year timescales and despite all the political pressures, we must have a constant and consistent policy that stands firm for decades at a time. As I noted in an earlier episode, if we don't have a proper energy policy then the chances of us sitting in the dark in the winter become more and more real.

This week I attended the NextGen 14 conference in Derby 

- and I had the pleasure of listening to Rohit Talwar, the futurist and strategic advisor. Find him at fastfuture.com. Fast is certainly the word. He gave as a whole array of facts and ideas packed into a 30 minute presentation. I certainly won't attempt to repeat them all; just a few of the examples. The fundamental message is that the world is changing and is changing radically. And this has fundamental implications for how we make our future a sustainable future. Apparently if you are under 50 you may well live to 100 and your children will probably live to 120. I'm sure this will have implications for population statistics and it's something I will investigate for future episode. If organisations are to be future proof, they need to plan on three horizons. Very short, 1 to 2 months, the medium-term 1 to 3 years, and the long-term: anything from 4 to 10 years plus. I'm with you there Rohit! I run a workshop called “Planning to survive – sustained success in challenging times.” It's about making broad predictions about the future and then assessing whether your present business model will be viable in that scenario. If it will, which is highly unlikely, then you need do nothing. If it won’t, which is more likely, you need to take action now so your organisation morphs gently into something which is always relevant in a changing world.

Innovators are by-passing the system. 

Think of BitCoin, which is a currency controlled by no governments and no central banks. Think of Uber, the app which has upset taxi drivers from London to Berlin and delighted passengers. Think of 3D printing which has moved some manufacturing from distant factories to the point of use. But also think of HS2, the high-speed rail line based on the assumption that Britain’s industrial landscape will still be the same as today’s, when it opens in 2035. Oh, and apparently we’re not far off from uploading a human brain into a computer. Does that mean I could be around forever? (All those in favour!) Of course he said much, much more than all this. Have a look at fast future.com and hear him speak if you get the chance. He closed with 

“Step into your fears. Standing back achieves nothing.” 

This article is also available as the Sustainable Futures Podcast.

I’m Anthony Day, and if you’ve enjoyed this, please write a comment. And if you don’t like it, please let me know why - mail@anthony-day.com. Use that address too if there’s a particular topic you’d like me to cover. Next week I’m attending a conference to be addressed by Sir Stuart Rose, the CEO who brought Plan A to Marks & Spencer. I’m also presenting my Sustainable Futures Keynote to postgrads at the University of Huddersfield. After that I’ll set about the next episode of the Sustainable Futures blog.

Is this the end of fossil fuels?

No, of course not, at least not yet, but there are some interesting straws in the wind. Glasgow University has become the first in Europe to sell off its investments in fossil fuels. At £18 million that's not even a drop in the bucket. Insignificant in financial terms but much more important from a PR point of view is the deal between Lego and Shell. Lego carried the brand on many of its sets but following a campaign from Greenpeace with a video which went viral Lego has agreed to end its relationship with the oil company. The focus of the Greenpeace campaign was Shell’s plans to drill for oil in the Arctic. It was both about putting the Arctic wilderness at risk and about producing more fossil fuels which lead to worsening climate change.

The most significant news is that the Rockefeller Foundation announced last month that it was going to sell off all its investments in fossil fuels. That's the Rockefeller that was founded on Standard Oil, ESSO in the UK. If they are now selling out of the fossil fuels which made their fortune maybe we should start to take notice. As professional investors they are likely to be selling out because they foresee a market decline.

So, is this the end of fossil fuels,? It could well be the beginning of the end. People, important people, are finally realising that we cannot exploit all the remaining fossil fuel reserves without setting off climate change which will make the world uninhabitable in a few short decades. However, we still need energy and it must be clean energy. The race is on to develop carbon-free alternatives. And no doubt that’s where the smart money will be going!

http://www.theguardian.com/environment/2014/oct/08/glasgow-becomes-first-university-in-europe-to-divest-from-fossil-fuels

http://www.theguardian.com/environment/2014/oct/09/lego-ends-shell-partnership-following-greenpeace-campaign

http://www.bbc.co.uk/news/world-us-canada-29310475

Climate Change not an important issue for the Institute of Directors

Graham Leach, the previous Chief Economist at the Institute of Directors, wrote in the Director magazine of February 2014: ”10 years from now man-made global warming will have been exposed as a myth.” When James Sproule, his successor, visited Leeds last month I asked whether he endorsed that view. His response and my comments are below. I spoke to him again  this morning and he told me that climate change was not an important issue for the IoD.

In response to my question James Sproule said that there was disagreement within the IPCC (Intergovernmental Panel on Climate Change) between scientists and economists. The economist view is that it is reckless to plan for what might happen in 100 years’ time when so much has radically changed in the last 100 years and so much more will change in the next.

Here's what I think.
First of all, Graham Leach was not commenting on the planning cycle, when he said “man-made global warming will have been exposed as a myth.” He was rubbishing the science, which he is surely not qualified to do. His remark is reckless in that it could lead the uninformed to believe that there is nothing to worry about and nothing need be done. The report from the IPCC last month shows that it is 95% scientifically certain that we are on the threshold of a problem which will have serious consequences far sooner than 100 years hence. 

Secondly, not all economists suggest that we should sit on our hands and wait and see what happens. Lord Stern published his report in 2006 where he stated that a relatively small investment of global GDP could mitigate the worst effects of climate change if action were taken promptly. Since then he has written that things are worse than he then thought, and since not much action has been taken the cost of mitigation is now very much greater.

Third, CDP, the Carbon Disclosure Project, is an organisation backed by more than 750 global institutional investors who have assets worth $US92trn under management. Each year they request information on greenhouse gas emissions, energy use and the risks and opportunities from climate change from thousands of the world’s largest companies. If they take the trouble to do this they surely believe there is an issue and that the information will enable them to take action - else why collect it?

In my view the future is sustainability. Sustainable business is essentially efficient business, and there is nothing new in examining each stage of the production process to see what improvements or cost savings can be made. Carrying out this analysis from a sustainable viewpoint could mean assessing the availability of key materials and redesigning products to make less use or no use of them. It could mean embracing new technologies such as 3D printing, where there is minimal waste and large parts of the supply chain can become redundant, so transforming some industries. The circular economy will become increasingly important as producers redesign not just to make less use of materials but to produce items that can be disassembled, remanufactured and re-used, thus saving the costs of new materials and the cost of waste disposal. Sustainable business is good business. Developing renewable energy is sustainable from the energy security point of view. Nobody controls our wind and no one can cut off our sunshine. We don’t get much gas from Russia, but we do get 20% of it from Qatar by sea. As the North Sea declines we’re a net importer of oil. A generation ago we were self-sufficient in energy. We can be again. (Without fracking.)

We have challenges. Climate Change is just one of them, but we need a clear understanding, a clear direction and a positive lead on the whole sustainable future. The “greenest government ever” has failed to develop coherent policies. I would like to think the IoD could inject some informed realism into the debate. 

If you can spare 9.33 minutes, have a look at this video http://youtu.be/zORv8wwiadQ 

Business Success in a Changing Climate

Yesterday I went to EcoFair14, an exhibition and conference with six parallel presentation streams. It was great to meet friends and make new contacts; to see established products and find out what has been developing over the last year.

My first session was Business Success in a Changing Climate by John Chubb of yourclimate.org  Rather than business success, he was talking about business resilience which of course is equally important. He started with the statistic that 80% of organisations without emergency continuity plans never fully recover from a disaster. And he reminded us that there had been severe weather incidents every year since 2000 in the UK. We've seen freezes, floods, water shortages and heatwaves. In that time the Great Yorkshire Show had to be abandoned and there was the East Coast surge; ice and snow closed roads, schools and businesses and some agricultural crops were wiped out. What is certain is that extreme weather events will be more frequent in the future and a move to a low carbon economy won’t change it. We can expect warmer, wetter winters; hotter, drier summers and it’s far cheaper to prepare than to react. (Didn’t Lord Stern say something like that back in 2006?)

John gave us case studies: the chemicals firm that moved its IT to the first floor and its electrics to the roof, bolted down its bulk tanks to stop them floating away and built a bund to keep all but the worst of the water out. He told us about the plant hire company that was unable to hire out pumps in a flood because its own premises were under water. A firm that survived - but only just.

Resources

John gave us all his excellent guide to Weathering the Storm. If you contact him via yourclimate.org maybe he’ll send you one. He pointed us to the Association of British Insurers, which publishes advice on flood prevention and also looks at the future from an insurance point of view https://www.abi.org.uk/Insurance-and-savings/Topics-and-issues/Join-the-debate/Identifying-the-challenges-of-a-changing-world If you want to know if you’re in a flood risk area the Environment Agency has the answer: https://www.gov.uk/prepare-for-a-flood . Sometimes we get a heatwave which can be dangerous for the elderly and very young and can cause problems at work. More advice from the NHS: http://www.nhs.uk/Livewell/Summerhealth/Pages/Heatwave.aspx and from the Health and Safety Executive: http://www.hse.gov.uk/temperature/  You can assess your business resilience at businessresiliencehealthcheck.co.uk from Business in the Community. There are Local Resilience Forums, where businesses can get together to assess risks and work together to meet them. This is the one on the Humber: heps.gov.uk 

John’s final points were that customers increasingly need to know that their suppliers are secure. (See my Green Supply Chain workshop!) The impacts of extreme weather are neither equal nor fair.

A great start to the event. More about other presentations to follow.

Climate Change, life and death

Professor John Broome, of the University of Oxford and author of “Climate Matters”, delivered the Royal Institute of Philosophy lecture at York University this week.

His is a philosophical approach to climate change. How is that relevant? The United Nations Framework on Climate Change sets out to avoid “dangerous anthropogenic interference with the climate system.” To achieve this it needs to:

1. Identify the level of emission concentration in the atmosphere low enough to prevent dangerous interference
2. Define acceptable global annual emissions
3. Allocate these annual emissions fairly  among nations

Moral philosophers are involved in stage 3, but stages 1 and 2 are decided by scientists, economists and politicians. Professor Broome disagrees with this because value judgements are involved at all three stages and he doesn’t believe that scientists, economists and politicians are much good at making such judgements. He is concerned that the UN Framework on Climate Change suggests that decisions on what constitutes dangerous climate change are value judgements and should be “determined through socio-political processes.” He doesn’t think the result of this process can be readily supported. The IPCC has set a target of a maximum emission of 1 trillion tonnes because that gives a better than 2/3 chance of keeping global warming below 2°C. Why 2/3? Why 2°C?

Professor Broome believes that decisions should be made on expected values, not on likelihood. For example, the likelihood of the average house burning down is very small but the consequences are likely to be very serious. Because of the value of the catastrophe, it makes sense to buy a fire extinguisher.

How can we evaluate the harms and benefits of climate change? People are already dying as the result of climate change. The effects of weather are significant, leading in turn to poverty, malnutrition and disease. The fact that people die as a result of climate change is negative in itself, but as a consequence of their deaths there are fewer descendants and future generations are smaller, even to the extent that human extinction becomes an increasing possibility. The effect of climate change on the population - and vice versa - is largely ignored by governments. Some argue that changes in population levels are ethically neutral: Broome challenges this, but admits that we have no consensus on how to take these changes into account. The population elephant remains in the room.

Questions at the end of the session drew the comment that being nice is not good enough. We need to promote green virtues, but there are not enough virtuous people, so the only answer is government coercion. 

One questioner suggested that burning all the fossil fuel reserves in the world would not have serious consequences. He couldn’t quote supporting figures. Professor Broome disagreed but could not provide opposing figures and neither could I. However, it’s all here: 

http://eye.carbontracker.org/analysis-reports/view?analysisReportId=15552

Keeping the Lights On

Back in October I predicted major power cuts on 18th January 2013. In the event, some 5,000 people in Wales lost their electricity as the result of bad weather, but nothing catastrophic happened. This weekend's weather caused power cuts for 10,000 people in Scotland and up to 200,000 in Northern Ireland. 

There are two issues here. One is the ability of the network to stand up to bad weather. The other is whether the system can cope with increased demand. 

Running out of Gas?

Saturday's papers were full of government denials that we're going to run out of gas. Apparently we have some of the smallest reserves of any country in Europe, and they are down to 10% of capacity. That's not a problem as long as gas flows into the system at least as fast as it's used up. The key issue is where we get the gas from. Yes, we still get about half of what we use from the North Sea. About 20% comes from Norway and about the same from the Middle East in ships. All our gas, whether it comes from the North Sea or elsewhere, is governed by world prices. Middle East gas - mainly from Qatar - is also governed by Middle East politics. The US is rapidly increasing its domestic production by exploiting shale gas and by 2030 could no longer need the Middle East. Who will attempt to keep the peace there then? Norway is a friendly, stable nation but its government already recognises that its gas may last little more than another 10 years. The biggest reserves in Europe are in Russia, at the end of a very long pipeline from the UK. In recent years Russia has been in dispute with Ukraine and others about gas prices and has simply cut the gas off - affecting innocent countries down the pipeline as well.

Powering the Future

In view of all this it's a bit of a worry that George Osborne has announced a policy of building a fleet of gas power stations. They are cheap and quick to build, they can react rapidly to fluctuating demand, but although they are much cleaner than coal they still burn fossil fuels and still create CO2 emissions. And where is the gas going to come from, George? Why not shale gas like they've discovered in the US? George announced special deals for "fracking" in the budget, and fracking installations which extract the gas from shale are likely to be fast-tracked for planning. (Locals will not be involved in the planning decision.) Why not? I'll tell you why not.

1. Although there has been test drilling, shale gas reserves have not been proved in the UK.
2. There are suspicions that the test drilling caused an earth tremor near Blackpool. 
3. There are fears - yet to be proved or disproved - that the fracking process can contaminate the water table. Certainly it generates a lot of dirty water which has to be dealt with somehow.
4. Shale gas, like any natural gas, is a fossil fuel and releases CO2 when burnt.

In the short term the question is whether existing systems and existing supplies will keep the lights on in the face of this terrible weather and increased demand. (Did anyone ever predict the consequences of rising emissions and resulting climate change? Wasn't there something about unseasonable weather? Did you read that Sir John Beddington, retiring chief government scientist, says that climate change is more serious than ever?) 

The Nuclear Option

Of course planning permission was awarded last week for a new nuclear power station at Hinckley Point, but that will take at least 10 years to build. All but one of our existing nuclear plants are scheduled to close by 2020. 

And if we run out?

What will happen if the nation does run out of gas? Probably, the lights will go out. That's because it's very much easier to turn off a major gas user like a power station than thousands of individual users. Let's hope it doesn't happen, because the consequences would be horrific. Last time we had nationwide power cuts - which, incidentally, brought down the government- was in the 1970s. At that time we had no ATMs, no computers, no barcode scanners, no electronic tills, no mobile phones. Which of those would you be happy to go without? And remember, your gas central heating has electronic controls and an electric pump. You won't just be sitting in the dark, you'll be sitting in the cold as well!

Cheer up, it's Spring!  

Low Carbon Futures - The Prince's May Day Summit

Last Friday I attended the Prince’s May Day Summit. That’s the Prince of Wales’s third annual convention of businesses committed to a low carbon future, sponsored by Carbon Action Yorkshire, CE Electric UK and KCom Group. The event links London to regional centres all round the country, at least the first one did two years ago. We voted on issues, shared the results with the nation and spoke direct to the national audience. A bit like the Last Night of the Proms, actually, with big screens and reporters across the country. Not this time, though. This year we watched as the Prince and other speakers addressed what looked like a very small London audience. And we only watched - there was no feedback from the regions.

Strange - and disappointing - because since the Carbon Budget and Obama’s green grandstanding, low carbon and climate change are almost mainstream. I was at the regional session in Hull, an enthusiastic meeting ably chaired by Peter Hobday. If we hadn’t had the London link I’d have come away encouraged that more and more people were on side. In Hull the presentations were positive. They didn’t minimise the climate change risks and they showed us best practice and they showed us opportunities. They made us realise that the world is fundamentally changing, that established and accepted business models may suddenly cease to be relevant and unimagined models may suddenly steal your market. Think Amazon. Think iTunes store.

Case studies showed how companies are actively reducing their carbon footprint, and doing it for business reasons. Ariel low-temperature detergent was developed because more CO2 was released through heating water in the washing machine than in the rest of the production, distribution and usage cycle. Marshalls the paving people were the first to footprint all 500 of their products - the nearest competitor has footprinted nine - and they now know how and where to cut carbon further. Their customers know that this is a company which is serious about the environment. ASDA recycles, sources locally and deals with sustainable suppliers. KCOM engages with staff to support its green initiatives.

We learnt about scenario planning; not as a means of predicting the future nor as business continuity planning. Scenarios ask “What if?” What if your key materials double or quadruple in price? What if energy rises by a factor of 10? What if your major customer goes bust? Examining such scenarios helps your company be prepared. The value is in the process, not the result; the process of questioning unquestioned truths, establishing the consequences, weighing the risks and defining the options.

One statistic that I won’t forget showed that while material wealth has steadily grown in the UK since 1960, satisfaction has stayed at the same level. Apparently, we do not need material wealth for a fulfilling life. The problem is that growth has been the only goal for more than a generation; we have no alternative vision and people are scared to give up what they have.

So here’s the challenge. Let’s stop scaring people with global meltdown, climate catastrophe and the end of the world. Let’s draw up our low carbon futures and show people how they can be more relaxing, more fulfilling and maybe more stimulating than the ambitions we have now. At least I came away from the May Day Summit believing that we certainly have the people who can imagine these futures - and the people able and determined to make them reality.

Is the future of your business a low-carbon future? It’s got to be! If you want to talk about how, give me a call - 01904 654986.

Sustainable Savings

SUSBIZ Sustainable Business Strategies.

A few notes on how climate change and sustainability affect business. I’m going to talk about the Archbishop of Canterbury, Lord Stern and the Institute of Directors. I’m running a teleclass with a few places left on Tuesday, and next week I shall be going up to the Low Carbon Best Practice Exchange in Newcastle. The RPI has come down, the CPI has gone up but the COBRA Matrix will help you deal with it, and at the beginning of May the Prince of Wales has his Mayday Summit on Climate Change.

Although the economy is in a state that nobody has seen for many, many years, it hasn’t pushed climate change and sustainability off the agenda. Pressure is coming from all quarters. The latest is the Archbishop of Canterbury who said that the case for action on climate change was a moral as well as a practical one. On Tuesday’s Radio 4 Today Programme he warned that billions could die if governments and individuals did not take moral responsibility for climate change now. Didn’t James Lovelock say much the same a few weeks ago? This comes after Lord Stern’s presentation to the Copenhagen Climate Conference when he said that the situation was very much worse than he had thought when he prepared his report on the economic consequences of climate change back in 2006.

But let’s not be negative! At a recent Institute of Directors event addressed by IOD environment spokesman David Boomer and by Todd Holden from Enworks we were told how adopting environmental policies could lead to a direct improvement in the bottom line. On the basis of studying more than 2000 companies it’s been shown that they saved 8% on energy, 2% on materials, 13% on water and up to 50% on waste. You can do a lot of this without spending any money. Apparently 70% of savings come from behaviour change. If you do need to invest to save, there’s a range of low carbon grants and soft loans. I’ve recently been looking at the work of Bob Willard who is a specialist in sustainable business based in Canada who also talks about the savings on staff costs which can be made from environmental policies; from improved morale and productivity to lowered recruitment costs and less turnover. It all depends on the structure of your business, of course, but anything that can make a quantifiable improvement to your bottom line, particularly in the present economic climate, must be valuable regardless of where it comes from.

Next Tuesday 31st March I’m running a teleclass which will cover these points and expand on them. This event is by invitation only but there are one of two places still available so if you want to take part please log on now to this link and you’ll find full details. The session will take place at 18:00 BST but if you can’t make it there will be a recording which will be available the following day.

Next week on 2nd April I shall be running a roundtable discussion session at the Low Carbon Best Practice Forum in Newcastle. If you haven’t already registered for the event go to www.Carbon–innovation.com

The big news this week is that inflation is going up, or at least it is as far as the Consumer Price Index is concerned. It’s risen from 3% to 3.2% while the Retail Price Index has declined to zero; no change. The difference is that the RPI includes housing costs which have been falling as house prices fall and mortgage rates are cut. Both these inflation indices are very crude instruments; it all depends on your lifestyle as to whether your costs are rising or falling. The other issue is the oil price. It peaked at $147 last July and crashed to $36 in January. Now it’s on the rise again - and after adjusting for the exchange rate in the UK it’s halfway back to last year’s peak.

In business, each organisation has its own set of risk factors and I’ve derived the COBRA Matrix to help managers balance impact against possibility. I’ll be covering this in Tuesday’s teleclass and there will be examples of the COBRA approach in the accompanying working papers. Download them here.

As I said to start with, pressure and the realization of the impact of climate change are coming from all quarters. On 1st May the Prince of Wales’s Mayday Summit on Climate Change takes place for the third year running. It brings together businesses at regional centres all over the country to report on progress and to commit to Carbon Reduction and environmental improvements for the year ahead. You can sign up here.

Government regulations demand that business become environmentally responsible and despite the economic environment, consumers are continuing to demand that organisations are green as well. You can find details of a survey published by the Carbon Trust here.

You don’t have to look far to find people who say how dreadful, how terrible, how earth-shattering the risks from climate change are. I prefer to concentrate on the opportunities for staying in business and staying in profit. In the coming weeks I shall be interviewing people from the Carbon Trust and Virgin Media among others to reinforce the positive message.

If you want to add your comments I look forward hearing from you. Add them to this blog or give me a call.
My name’s Anthony Day and my number is 01904654986. I hope we’ll talk soon.