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.

COP21 - The Talking Begins

An audio version of this episode was published on 4th December and is available at susbiz.biz and on iTunes.

Yes, COP21, the Paris climate change conference, is finally here. No results expected before the end of next week so I'm going to take the opportunity to review what this conference means for us, for our businesses, for families and for our future. Also in this episode, the minister takes control of fracking, business views of the climate conference and plans for a ministry of the future.

Welcome to the Sustainable Futures Report, the new, improved and upgraded Sustainable Futures Show brought to you without advertising, sponsorship or subsidy. So I can say what I like.  And a special welcome to friends and listeners on their way to Paris to take part in the official or unofficial events surrounding COP21. It's Friday 4th December 2015 and this is Anthony Day with news, views and ideas, and by the way your news, views and ideas are very welcome and important. Please get in touch and share them. I’m at mail@anthony-day.com. 

First this week, what’s this COP21 conference all about then, and why is it important? It's the UN conference on Climate Change, it involves 195 countries and 145 of them sent their prime ministers or heads of state to the opening ceremony where they each reiterated their country's commitment to cutting green house gas emissions. It’s important to you because if these leaders take truly effective action it’s likely to drive up energy costs in the short term. They will have to put a price on carbon, which means taxing or surcharging anything which emits greenhouse gases. Petrol will be more expensive at the pump. It will cost more to heat your home. Those extra costs will be added to existing production and distribution costs. Almost anything you buy will cost more - from food to fashion, from pharmaceuticals to furniture. The alternative, according to the scientists, is catastrophic climate change: drought, famine, floods and failure of food supplies. At first this will be worst in the developing nations, but our supply chains are global. We’ll be affected by what happens in far-off countries of which we know little. To start with we’ll see higher prices. As the situation worsens we’ll see shortages. As distant nations become uninhabitable will see massive movements of refugees across the world; far, far more than the numbers causing so much argument at the moment. 

The solution is twofold - mitigation and adaptation. Mitigation to stop climate change getting worse: adaptation to cope with and control the effects that are already here. Adaptation involves financial support to the developing nations which are suffering the worst effects of climate change even though they have done little to cause it. An agreement on financial support to these nations by the developed nations will be an important outcome of COP21.

Mitigation, to stop climate change getting worse, depends on a radical change in the way we produce and use energy. Everyone can protect themselves against rising energy prices. Driving more slowly saves fuel. Turning down the thermostat and wearing an extra jumper saves gas. Insulation keeps your home warm for less. It’s more difficult with industrial processes. Bread won’t bake and chemical reactions won’t react except at specified temperatures. Perhaps the answer here is greater efficiency through economies of scale. Beyond that we have to look at new forms of supply which don’t involve burning fossil fuels. Despite scepticism, renewables are becoming more and more viable, producing 25% of the UK’s electricity for the third quarter of this year. I spoke last week about the solar power station in Morocco which stores heat in molten salt and can generate electricity 20 hours per day. Battery storage is becoming more efficient. Domestic stores are already available from Tesla in the US, Sonnen in Germany and Powervault in the UK. If you have solar panels you can save some of your energy for use at night. Energy can also be stored as heat as with the Moroccan power station, as potential energy as in the Dinorwic pump storage scheme in North Wales or stored in massive flywheels. Apart from wind turbines and solar panels, a 320MW tidal power station is planned for Swansea Bay and there is potential for geothermal energy all over the world, including parts of the UK. It’s time to invest in these new technologies. Actually, these generation technologies are not that new. It’s time to invest in developing, refining and perfecting them. It’s time to invest in storage science, like the lithium-air battery under development at Cambridge University.

The fact that the vast majority of the world's leaders took time out to travel to Paris shows they think climate change is important. On Sunday 29th November 50,000 people marched in London to show that they thought it was important too. But people marched not just in London, but all over the world. In more than 2,000 cities - a million of them. It's probably the biggest international march ever. Not in Paris, though. In view of the security situation marches were banned. Instead, people left shoes, thousands of pairs of shoes, in la Place de la République, to symbolise the march they would have made. The Pope sent a pair of shoes. So did UN Secretary General Ban Ki Moon. What do all these people want, and what's in it for you? They all want nations to work together to stop global warming by reducing greenhouse gas emissions and thereby avoiding dangerous climate change. How are they going to do that? Good question. 

Of course the politicians have to balance short-term politics with the need to save the planet. At the opening ceremony of COP21 President Obama said

“I’ve come here personally, as the leader of the world’s largest economy and the second-largest emitter, to say that the United States of America not only recognises our role in creating this problem, we embrace our responsibility to do something about it.”

“Let’s show businesses and investors that the global economy is on a firm path towards a low-carbon future.  If we put the right rules and incentives in place, we’ll unleash the creative power of our best scientists and engineers and entrepreneurs to deploy clean energy technologies and the new jobs and new opportunities that they create all around the world.  There are hundreds of billions of dollars ready to deploy to countries around the world if they get the signal that we mean business this time.  Let’s send that signal.”

He went on to say,

“I believe, in the words of Dr. Martin Luther King, Jr., that there is such a thing as being too late.  And when it comes to climate change, that hour is almost upon us.  But if we act here, if we act now, if we place our own short-term interests behind the air that our young people will breathe, and the food that they will eat, and the water that they will drink, and the hopes and dreams that sustain their lives, then we won't be too late for them.”

In his speech, David Cameron asked what we would say to our grandchildren if the conference failed to reach an effective agreement.

“But they would ask us why is it difficult to reach a legally binding agreement when in 2015 there are already 75 countries …. that already have legally binding climate change legislation? …countries that are thriving with that legislation.”

“Why, they’d ask us, is it difficult to have a review after 5 years?

“Would we really be able to argue that it was too difficult?

Too difficult to transfer technology from rich countries to poorer countries?

Our grandchildren would rightly ask us: what was so difficult?

You had this technology, you knew it worked, you knew that if you gave it to poor and vulnerable countries they could protect themselves against climate change – why on earth didn’t you do it?

“What I’m saying,” said Mr Cameron, “is that instead of making excuses tomorrow to our children and grandchildren, we should be taking action against climate change today.”

Can’t argue with that.

But his grandchildren weren’t there to ask why his government has effectively banned new on-shore wind turbines, why it will only support new offshore turbines if they dramatically cut their costs, why it has cut the subsidy for clean solar energy at short notice, why it has terminated the low-carbon homes initiative, why it has modified the renewables obligation to work against renewable energy, why it has removed business start-up tax breaks from community energy projects and why it has withdrawn its financial support from carbon capture and storage, the only way of cleaning up coal and gas power stations. They weren’t there to ask why his government supports fracking, a technique for extracting carbon-emitting natural gas, either.

I expect somebody will ask those questions. Hopefully before it’s too late.

What can we expect from COP21? The majority of nations have submitted an INDC, an Intended Nationally Determined Contribution. A contribution to reducing global GHG emissions. These documents take various forms - different starting points, different end points, different percentage reductions. They have been analysed and the overall effect, if they are all achieved, will be to limit global warming to a 2.7℃ temperature increase over pre-industrial levels. That’s more than the 2℃ which is widely considered the danger level, but much better than the current trend which is rising towards 4℃ or 5℃. An overall draft agreement has been submitted to the conference. As I mentioned in a previous episode, this is really just a template. Every word, every phrase, almost every comma is presented with an alternative. This will be negotiated over the coming days and will determine how the nations will fulfil their INDCs, although not the specific measures that each nation must take. For an insight into the negotiation process listen to “Can we trust the IPCC?”, an episode of the Sustainable Futures Report from November 2014. Search on IPCC at susbiz.biz . In this episode Professor Piers Forster, one of the lead authors of AR5, explains the pressures and compromises involved in agreeing the final text of that document.

David Cameron calls for a binding agreement and we must support him on that. Unfortunately, the word is that the Americans will not accept it. This is because they believe that climate sceptic Republicans would block such a measure.

COP21 rolls on until Friday next week. Since I record these episodes at least a day in advance I won't be able to report on the final outcome in the next scheduled episode. I may possibly issue a special supplementary report early in the following week, or I may defer the next episode altogether until then.

In the meantime I suggest you have a look at “The most terrifying video you'll ever see.” It isn’t really terrifying. It’s a clear and logical examination of whether we should take action on climate change and what would happen if we didn’t. It just looks at our options: climate change is either real or not real and we have the choice to take action or take no action. It’s been up on YouTube for several years and been viewed by over 6 million people. It’s just as relevant as it was when it was first posted. Here's the link: https://youtu.be/zORv8wwiadQ 

Still to come: business views on climate change and a clear view of the future. First, fracking.

The Rt Hon Greg Clark MP, Secretary of State for Communities and Local Government, has announced that he will make the decision on whether Cuadrilla can frack for shale gas in Lancashire. You will remember that Lancashire County Council refused permission back in the summer. The minister says he is now calling the case in and will make the decision himself in the national interest. Not unexpected. Greenpeace are raising a petition in protest but that’s unlikely to change anything.

There was nothing in the Autumn Statement about the proposals to slash feed-in tariffs, so I suppose that we must assume that they will go ahead.

Last Friday Greenpeace sent an open letter to David Cameron in support of renewable energy and asked the government to “commit and put forward policies to support the growth of the UK renewables sector through the 2020’s, consistent with the critical role of the power sector in addressing carbon budgets under the Climate Change Act.” This letter was jointly signed by Unilever, Vodaphone, Nestle, Thames Water, BT, IKEA, M&S, Kingfisher, Tesco and Panasonic.

Other business voices were raised as COP21 started. CBI, the Confederation of British Industry, has published a report on what it would like to see from the conference. 

Rhian Kelly, CBI Director of Business Environment policy, said:

“We all know there is no easy answer to climate change. But, business and industry are part of the solution - developing innovative new products and services, and leading the way in cutting emissions, to propel us towards a low carbon future.

“Firms need confidence to invest in this future though, so the Climate Change Conference is a golden opportunity to create the long-term frameworks that businesses crave. This means a clear sense of direction, support for carbon pricing that can drive investment and getting finance and technology flowing.

“So much effort has been put into agreeing frameworks ready for Paris, we simply cannot afford to fall at the last hurdle, and delay a lasting, global plan for climate action. All businesses, especially energy-intensive industries, will be looking for an international deal which helps create a level playing field, and that keeps the UK competitive.”

“Clear sense of direction.” Let’s hope that the government one day comes to understand that short-notice changes of policy discourage investment. Maybe we should have a Ministry of the Future to concentrate on the long term. Sounds a silly idea? Ian Birrell, writing in the i newspaper, describes the Ministry of the Future which has been set up by the Swedish government to look 50 years ahead. Its head, Kristina Persson, says, “There is a need to see any dangers in time and create a narrative that holds together.” There are policies where the long view is essential. Climate change is one. Benefits, energy, pensions, health and social care all demand a long-term view.  Looking beyond the short term might have made us think twice about the interminable debt burden that is PFI. We now have a National Infrastructure Commission. That could be a step in the right direction, but we need a body with a wide perspective as well as a long view, and we need politicians who will listen. 

Meanwhile, are you taking the long view of your business prospects? Climate change, energy shortages, supply chain pressures - have you factored them into your business plan? Yes the future is always uncertain, but there’s nothing more uncertain than a future unexplored. 

Why not give me a call and we can talk through the type of things which could put your organisation at risk and decide how best to be prepared. Maybe we could talk about putting the issues into focus through scenario planning. The number is 07803 616877  or drop me an email at mail@anthony-day.com. Give me a call and a cup of coffee and I’ll tell you what I think. If you call me now we can get something in the diary before Christmas. Oh, and I’ll expect a mince pie as well. Black Friday? Cyber Monday? This is the bargain of the week. Here’s to Sustainable 2016.

Yes, that’s it, another episode of the Sustainable Futures Report in the can. I’m off to the North West sustainable Business Quarterly meeting in Manchester shortly, kindly hosted by Anthesis anthesisgroup.com at the Bruntwood Tower. I usually meet interesting people there. I’ll tell you about it. 

But for now, this is Anthony Day and that was the Sustainable Futures Report.

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!  

CRC Update

More than 4,000 organisations still to register - less than 12 weeks to the 30th September cut-off - more time for disaggregation - PFI: who’s responsible? - landlord and tenant - Early Action Metric - monitoring carbon footprint - buying allowances - evidence pack and audit - super-smart metering to save energy and save cost.

The total number of CRC full participants was estimated at 5,000 and according to the Environment Agency only 651 have so far registered. That leaves less than 12 weeks for the remaining 4,349 to complete the process by 30th September. Of course you may already have started, but if you’re waiting to clear up some minor query or you have some doubts about your particular case the Environment Agency urges you to register now and sort out queries and errors later. No doubt there will be increasing pressure on the system as we get closer to the cut-off.

Good news if you were planning for disaggregation. The Environment Agency has extended the initial deadline until 31st July, although all your SGUs still have to be registered on their own account by 30th September.

Some organisations operate facilities provided under PFI and the PFI company has claimed that the organisation which uses the facilities is responsible. The Environment Agency has now made it clear that the “counterparty to the supply contract” principle applies, so if the PFI company is paying the bill then the PFI company is the participant.

CRC remains an issue for landlords. Remember, if you bought more than 6,000MWh of half-hourly electricity in 2008 you are a full participant even if you sold that electricity on to your tenants. When we get to the reporting phase, the landlord is responsible for reporting the total carbon footprint from all energy sources, including energy used by tenants. Can you negotiate an amendment to the lease? The CRC legislation gives you obligations, but no additional rights vis-à-vis the tenant.

If you are a tenant and taking steps to improve your energy efficiency, will the landlord pass on the benefit of lower CRC costs to you? Again, can you re-negotiate the lease?

Your Performance League Table position and your total CRC cost are both affected by the Early Action Metric and it’s not too late to get the benefit. The earlier you put in voluntary AMRs (automatic meter reading) the better, because the benefit is calculated on the proportion of your total energy that flows through them in 2010/11. Don’t forget gas meters. You have until 31st March 2011 to achieve the Carbon Trust Standard. As long as you have it in place by that date you qualify in full. The Environment Agency has just approved CEMARS as an alternative to the Carbon Trust Standard. Other standards are under review.

Quite apart from the Early Action Metric and your league table position, the surest way to reduce your CRC costs is to improve your energy efficiency and cut your energy bills. Have I told you about the super-smart metering that gives you instant feedback and detailed analysis for close cost control? Give me a call on 07803 616877 and I’ll tell you more!

Once registration is complete the next task is to prepare for the annual report and for the purchase of carbon allowances in April 2011. You need to have an evidence pack, and 20% of all participants will be audited. Have you been monitoring your carbon footprint since April? Have you got detailed records and an audit trail?

If you would like to discuss any of these points in more detail please give me a call on my direct line: 07803 616877. Together with strategic partners, Cyber Associates can help and advise on CRC registration, obtaining benefit from the Early Action Metric, monitoring your carbon footprint and establishing an employee engagement programme to maximise your energy efficiency.

I look forward to talking to you!

Best wishes,

Anthony Day

PS NoWatt, our super-smart metering partners, have a window in August due to customer holidays. If you want a rapid assessment and installation we can help you to start saving money on energy in a matter of weeks. Call me on 07803 616877!

The Age of Stupid

Do we need another misery movie?

Review: The Age of Stupid - premiere at Leicester Square and 65 cinemas across the country.

In The Age of Stupid Pete Postlethwaite addresses us from the wrecked planet of 2055 and asks how we could be so stupid as to let climate change destroy humanity. He flicks through endless archives showing us the obvious clues to catastrophe from 2009 and before. It seemed a long film, partly because technical problems meant that about 30 minutes of footage was played twice. Partly, too, because it replayed the breast-beating and lamentations already seen in Al Gore’s An Inconvenient Truth, Leonardo di Caprio’s The Eleventh Hour, The Day After Tomorrow and all the rest.

What these films lack, and that includes the live debate following The Age of Stupid, is a credible call to action. Watching this film you might conclude that the best thing to do is to run your car on chip fat, live self-sufficiently on a small holding and protest against the nasty nimbies who oppose wind farms. It goes without saying that there’s not enough chip fat and not enough smallholdings. The effectiveness of wind farms is also very much in doubt. After the film Pete Postlethwaite pledged to give back his OBE if the government approved the proposed new Kingsnorth coal-fired power station. Ed Milliband was there to respond, but they let him off extremely lightly by not once mentioning government support for Heathrow’s third runway. Surely that’s a much more powerful national political issue than some power station down in Kent.

Sustainable economic growth is still possible in a low carbon economy, but if we are going to solve this problem we must all drive less, heat less and consume less. Life will be very different - potentially much more pleasant - if we take the low-carbon route. The Age of Stupid has missed the opportunity to show what ordinary people can do to safeguard our future, and to show what sort of future we can all enjoy if we act now. Certainly the showing raised enthusiasm both in Leicester Square and in the cinema where I was, but I fear that people will be rushing off to protest, rather than rushing off to change their lives.

Footprints in the sky

Private air travel is growing dramatically. Charter passengers, including those using private jets, have risen from 3.5 million to 34 million in the 10 years from 1996 to 2006.

A private jet is attractive to those who can afford it because it saves time. You don’t need to head for a major hub like Manchester, Birmingham, Heathrow or Gatwick – you can leave from your local airfield. You can arrive 15 minutes before departure and embark without all those hours of security checks. At the destination your driver can meet you on the tarmac. It may be more expensive than business class, but for some people it’s worth it. London’s position as the leading financial centre in the world means that there are many wealthy people who will spend their money to save their precious time. Not just for business trips either: private jets make it perfectly possible to have weekends at the villa or on the ski slopes.

And what about the carbon footprint? The whole idea of one family jetting off in a private plane seems reckless, irresponsible, profligate. On the other hand, to paraphrase a well-known saying, the rich are always with us. And the rich would say that they create an enormous amount of the wealth of the UK that keeps people in jobs, funds the infrastructure through taxes and allows others to afford their own holidays in the sun. What these people don’t have is much time, so they spend their money to get the most out of it.

The wealthy people who take these flights can do so precisely because they are successful. They are the people who get things done and they are the people who will be crucial to taking the actions that will address climate change. We cannot afford to meet them head on. All we can do is present the evidence, suggest alternatives, map out the consequences. We all need to work together on this.

I hope we can reach consensus in time.

US to act on climate change?

In advance of the G8 summit, where climate change will be a prominent issue, George Bush has announced America’s commitment to action. This has been met with some cynicism, given that apart from Australia the USA was the only country to refuse to ratify the Kyoto Protocol. The view of the present US administration has always been that specific emission targets would hamper the American economy, and while China was doing nothing to cut emissions America could not afford to put itself at a disadvantage.

Kyoto did not put restrictions on China or any of the other developing nations because their per capita emissions are so much lower than those of the western world. China is accused of building coal-burning power stations – the most polluting form of energy – and opening a new one almost every week. On the other hand it still has 3 million citizens without electricity, it has very little oil or gas, it will produce clean electricity from the Three Gorges Dam and it is a leader in solar power. Every member of the Chinese cabinet is an engineer, so the consequences of climate change and energy shortages are not lost on them. Much of what China produces is destined for the American market, so it could be argued that they are making American emissions by proxy.

At the end of the day the important issue must be to cut energy use and cut emissions, not argue about who is doing what and why. George Bush is talking about a policy to be in place by the end of 2008. Even if we suspect his motives we must welcome the fact that he is talking about the issue, even if 2008 is probably too late if those who say we have only 5 years left to save the planet are correct!