No Hot Air

You can listen to this post as a podcast. Find The Sustainable Futures Show here: http://www.anthony-day.com/sustainable-futures-show/  

Somebody asked me the other day whether there’s really enough to say about sustainability to fill a weekly podcast. The truth is that there’s so much going on that most of it has to be left out. For example, this week is Paris Climate Week, incorporating the 2-day Business and Climate Summit. Earlier this month there was a Responsible Business Summit in Singapore, Morgan Stanley have issued a new report on sustainable investment, in New Zealand consumers are calling for greater transparency from suppliers and Apple is preserving forests. But why did I call this episode “No more hot air”? Two reasons. First, “Sustainable Energy without the hot air” published by David Mackay in 2009, is now more relevant than ever. I've mentioned it a couple of times and suggested you read it. In case you haven't had time I’ve rounded off this episode with a summary of the main points. The second reason for calling this episode “No more hot air” is that it’s time for action on CO2 and climate change, not talk. No more hot air.

First, a few sustainability stories which caught my eye.

Responsible Business

Sustainability strategies may be increasingly adopted by a growing number of companies worldwide, but communicating these efforts and engaging both internal and external stakeholders remain a challenge for many, especially if they want the stakeholders to come on board and be part of the efforts.

At the first Responsible Business Summit Asia held in Singapore this month, one of the issues discussed was the need to get a company’s sustainability efforts understood by its target audience – whether it is an internal or external stakeholder group. This is because a company’s ability to communicate its efforts and engage stakeholders could determine the success of its sustainability efforts.

“What we are trying to do now is to tell our story better,” said the head of corporate social responsibility at Chinese firm Huawei, the world’s largest telecommunications equipment maker.

“This way, we can grow our partnerships, work with more people and have an even bigger positive impact in the communities we operate in,” she said. “We can’t do it on our own.” A spokesman from Diageo, the world’s largest producer of spirits, confirmed that good community relations were essential to sustainable business.

Business and Climate Change

Meanwhile, in advance of the Paris Business and Climate Summit this week,  Paul Polman, chief executive of Unilever, said governments must set clear CO2 targets to force low-carbon innovation. He said Unilever had faced business costs €300m-to-€400 million higher than normal due to extreme weather. He said "The reality is, if we don’t tackle climate change we won’t achieve economic growth.”. Polman called on other chief executives to join him to lobby governments on the issue. Clearly he has COP21 in view - that’s the United Nations Climate Summit taking place also in Paris, in December this year. One hundred and ninety-six countries will come together to agree an international policy on carbon emissions and climate change. Many believe that this could be the last opportunity to take action to prevent global temperatures rising by more than the critical 2℃. Unsurprisingly, companies relying on cheap energy from fossil fuels and the producers themselves of oil, gas and coal are firmly opposed to carbon controls and are lobbying strongly. On his side Paul Polman is supported by The B Team, a group which urges governments to bring greenhouse gas emissions to zero by the middle of the century. B Team members include Virgin’s Richard Branson and industrialist Ratan Tata.

Investors

What do investors think about sustainability? Bankers Morgan Stanley have established an Institute for Sustainable Investing. For the moment they find that sustainable investment is being held back by misperceptions of potential returns. In fact they make a strong business case for sustainable investment. Key resources such as water, clean air and soil are underpriced. Minerals and energy are increasingly scarce and at the same time demand for all these things is growing as population grows by a forecast 2 billion by 2050. More than that, the global middle class, with expectations of western consumption patterns - western diets, western travel, western consumer goods and so on -  is expected to accelerate demand by growing by 2.5 billion by 2030. “Sustainable Business is business, not philanthropy,” states Morgan Stanley. Well they would say that, wouldn’t they? Even so, if they can persuade investors to make a business of decarbonising the global economy that can’t be bad for humanity.

Apple's Trees

Apple are in the news for preserving forests. Are these forests of apple trees? No, these are the trees this high-tech firm needs to assure sustainable supplies of paper and packaging for all its products. Apple have announced a plan to work with the World Wildlife Fund to improve the management of 1m acres of forests in China. This follows their announcement last month to donate money to Conservation Fund to buy and protect 36,000 acres of forests from commercial development other than forestry product production in Maine and North Carolina. Did you listen to the Sustainable Futures Show episode on the Green Supply Chain? (20th February 2015) Apple is making the point that we are all dependent on all parts of our supply chain. Some elements might be quite remote and not obviously connected to the core business, but they are important nonetheless. Apple is not only securing its supply chain here but it’s showing itself to be an environmentally responsible business. Given the almost cult following that Apple has among millions of consumers world-wide, that message is immensely strong.

The Paris Business and Climate Summit ended yesterday. 200 days before COP21, the UN Paris Climate Conference, French president Francois Hollande called for a miracle in December. A miracle to achieve consensus among all 196 participating nations to agree on measures to control carbon emissions and keep the increase in global temperatures below 2℃. He called upon the business community for support, with carbon capture and storage, new clean technologies and enhanced energy efficiency. If it’s difficult to achieve consensus within one country it’s certainly a challenge to achieve consensus among 196 countries. Nevertheless he believes it can be done. However, Tony Hayward, chairman of Glencore, the world’s largest supplier of  power station coal clashed with representatives of the solar and wind turbine industries, indicating the sort of debates which are likely to rage between now and December and indeed will be crucial in reaching an agreement. Hayward’s point was that renewables could never provide alternatives to coal for the process industries of countries such as India. Kerry Adler of Skypower and José Manuel Entrecanales Domecq, chief executive of Spain’s Acciona group, a large wind power developer, disputed this. With advances in electricity storage there is no reason why renewables should not provide base load power. The debate continues.

Sustainable Energy - the book

And so to Sustainable Energy without the Hot Air. This book was written by David MacKay, Fellow of the Royal Society and Regius Professor of Engineering at the University of Cambridge. Shortly after publication he was appointed Chief Scientific Advisor to the Department of Energy and Climate Change. In the book he has analysed the energy consumption of the average UK citizen. This covers not just the energy we use for heating, lighting and transport, but the energy we use to provide the food we eat, to run our public services and defence forces, to manufacture and deliver all the goods we buy and to run all the equipment and gadgets that we own. Against this he looks at the potential output from the various renewables, ranging from solar panels and wind turbines to tides, waves and geothermal energy. Even though each section is meticulously researched and presented in detail, it’s written with the general reader in mind. The author uses clear examples, simple illustrations and approximations to make things easy to understand. At the same time his assumptions and data sources are listed in notes to each chapter. The conclusion is that the average Brit needs 125kWh each day to maintain our current standard of living. That’s not electricity, it’s power from oil to drive our cars, from gas to heat our homes, from coal to run our power stations and so on. Although the theoretical maximum output from renewables could come close to matching this, the practical reality comes nowhere near. We cannot cover every roof with solar panels, we cannot instal wind turbines on every spare piece of land, we cannot put barriers across every tidal estuary. What we can do will yield about 14% of what we need. 

And the rest? We eliminate fossil fuels from our transport fleet by converting all vehicles to electricity. We convert our central heating to electricity, not with electric radiators or storage heaters but with heat pumps. For every unit of electricity used by a heat pump it’s possible to extract around three units of heat from the air or the ground, depending on the type of pump. We exploit the renewables we have, to provide renewable electricity. In the short term at least, we use clean coal with carbon capture and storage and we use nuclear energy to provide additional electricity with no additional carbon emissions. The final piece of the jigsaw is imported electricity from distant solar farms in foreign deserts. Technically this is feasible; politically it could be problematic. Theoretically enough solar energy falls on only a small part of the Sahara Desert to power the whole of Europe and provide 125kWh of energy to everyone in North Africa as well. If the countries meeting in Paris this December are serious about cutting carbon emissions then they will have to consider ambitious solutions. No shortage of investment opportunities there!

That’s all for this week, but what do you think? How likely are we to get a sensible agreement in December? What do think of David Mackay’s suggestions? As I mentioned before, his book can be downloaded free of charge at withouthotair.com. 

I’m always keen to hear from you about this or any other sustainability issues. mail@anthony-day.com Let me know what you think, let me know what you’d like to hear more of, let me know if you’re an expert and you’d like to be interviewed for the Sustainable Futures Show. 

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?

Vote, vote, vote for Sustainability!

Who will you vote for tomorrow, to give us a sustainable Britain? I've been looking at the manifestos to find out what's on offer. Go to the Sustainable Futures Show to hear more: 

http://www.anthony-day.com/sustainable-futures-show/ 

The Conservatives will seek full endangered species status for the polar bear, they will help you to insulate your home and will seek a strong global climate deal in Paris in December. Labour will do most of these things too, and they will freeze your domestic energy bills until 2017. The Lib Dems are almost greener than the Greens. They aim to fight climate change with five green laws listed on the front page of their manifesto. UKIP will abolish the Department for Energy and Climate Change, repeal the Climate Change Act, rejuvenate the coal industry and keep our coal-fired power stations burning. The Greens are very green, closing all coal power stations by 2023 and abandoning growth in favour of a circular economy. The SNP doesn’t say much, except that it wants to keep Longannet coal-fired power station going as long as possible. It’s the oldest in the UK and one of the dirtiest sites in Europe.

Labour and the Tories avoid the f-word, but UKIP has no such scruples: “Time to get fracking!” Absolutely not, say the Greens and the SNP, but Conservatives, Labour and LibDems will all use it to create various wealth funds. They’re going to keep them next to the crock of gold at the end of the rainbow. 

Hear more at http://www.anthony-day.com/sustainable-futures-show/   then go out and vote early and vote often. If you’re in one of the 23 key marginals your vote might just make a difference!

Lucky for some!

Yes, it's Friday the 13th! Lucky for some, and lucky for you, you’ve found another episode of the sustainable futures show. You can listen to this as a podcast here: https://itunes.apple.com/gb/podcast/sustainable-futures/id313473372?mt=2&uo=4

The objective of the sustainable futures show is to send the message that green business is good business. And I'm not just talking about business, we’re talking about the public sector, we’re talking about schools, we’re talking about hospitals, we’re talking about all sorts of organisations and even about what you’re doing at home.

This week I've had a very busy week in a sustainable sort of way. I've been to some fascinating presentations, I've met some very interesting people and I hope to be able to introduce them to you in future episodes. In this episode I'm going to talk about bio renewables, about the biggest manufacturer of frozen French fries in the world, about fracking and about sustainability in schools. And I'll also mention sustainability in business schools and the sustainable cities index, and the global divestment movement. What’s that? You’ll have to wait to find out!

First of all, Insider Media hosted a biorenewable breakfast this week. The panel consisted of Joe Ross, director of the bio renewables development centre, Ernst Kloosterman, managing director industrial biotech network Norway, Mark Chesworth, managing director, Vivergo Fuels, and Harold Vandenberg, director, critical processes limited. A bio economy strategy for the UK will be published later this month. This follows the report to the House of Lords science and technology select committee, published in March last year. This document starts with the arresting statistic that 300 million tons of waste per annum are generated in the UK. This is equivalent to 200,000,000 cars or slightly more than six times as many cars as we have in the UK. A large part of any bio renewable strategy is to minimise the amount of waste which goes to landfill. On the panel we had representatives of two organisations dedicated to knowledge transfer: one from the UK, one from Norway. We had Vivergo Fuels, which takes feed wheat and produces bio ethanol and animal feed. We had Critical Processes, an organisation developing techniques to extract usable material from previously un-recyclable waste, and then scaling these processes to industrial levels. Every member of the panel had a story to tell and I want to bring these to you in more detail in a future episode. But two messages came across strongly to me. First, we need engineers. There's a shortage in the UK of engineers, particularly process engineers and chemical engineers. Secondly, we need public awareness. The potential of the bio renewable sector is very difficult to explain, but the potential in terms of saving organisations money by saving costs of landfill and the potential of creating new materials to be fed back into the circular economy is enormous. After this week’s meeting at least the 100 or so people in the audience have a much better idea of what bio renewables are all about. Watch this space and I’ll bring you more!

Next I went to hear the corporate affairs director of McCain Foods talk about his organisation’s sustainable path. McCain is the biggest supplier of frozen French fries in the world. One in every three French fries is one of theirs. This is a major global corporation and it is committed to sustainability, because sustainable business is good business. McCain is a family company and it prides itself on family values. It has adopted ISO 14001, the environmental management system standard, across the group and is in the process of upgrading to the revised version of the standard recently issued. In the UK it works with 300 potato farmers, and with many more across the world. It helps its farmers develop best practice with techniques including water reduction, carbon footprint measurement and shared equipment helping growers to reduce their capital investment. It offers a guaranteed price for a quality product. At the factory there is emphasis on managing energy, water and transport. Moving 750,000 tonnes of potatoes on vehicles with a capacity of 27 tonnes means there are just under 30,000 vehicle movements per year. And presumably that’s just the raw materials. Careful management of logistics reduces road miles, reduces fuel use and reduces the transport carbon footprint. £16 million has been invested in renewable energy. Three 120 m turbines produce 70% of the energy required by the factory. An anaerobic digester produces methane which in turn produces another 10% of the electricity requirement. McCain sends less than 1% to landfill. Potato waste goes to animal feed, cooking oil to biofuel, surplus food to a food bank, recycled soil, compost and the digester residue go back to the land, and starch goes to the paper industry. The bio renewables panel would be proud! One message. We need to train more engineers. There’s a shortage of food engineers.

On to a presentation by Liam Herringshaw of Durham University on Fossils and Fracking. The F-word, (the second one) assured a packed house. This was a dispassionate account of the geology of shale and the process of fracking to extract oil and gas. We learnt about the vast quantities of water needed for the process, the fact that about half of it seeps away we know not where and that the rest needs specialised treatment. Apparently waste water from Quadrilla’s test site in Lancashire was passed through the local sewage farm, which was unable to stop the radioactivity being flushed away into the Manchester Ship Canal. Although the government is very much in favour of fracking, the British Geological Survey has severe reservations about how much of the reserves could actually be recovered. The audience included several people with clear and strong views, but the discussion which followed was well-informed and constructive. See refine.org.uk for more about the research on fracking and shale carried out jointly by Newcastle and Durham Universities. My own thought is that with oil hovering around $50/barrel, half what it was six months ago, it will be hard to make fracking economically viable. Quite apart from whether we can justify producing more fossil fuels. Whatever happens, we surely need more engineers!

Where are we going to get the engineers and technologists to carry us forward to a sustainable future? Only from our schools and universities. Next month I shall be speaking on sustainability in schools at the education show at the National exhibition Centre in Birmingham. I'll be talking about running schools as sustainable businesses, about engaging students with the idea of sustainability and environmental responsibility and about career opportunities in a sustainable world. I believe there are some in engineering.

This week I met Harriet Ennis who leads the environmental and sustainability initiatives at Bootham School in York. The school itself aims to be energy efficient through careful energy management and has also installed solar panels on new buildings. Bootham School is part of the eco-schools network. It will shortly receive its fourth green flag award, it has ambassador school status and will host part of the eco-schools roadshow in July. Many activities take place after school, but the ethos of environmental and social responsibility goes on all the time, coordinated by students appointed as eco-reps. Students are involved at all levels and gain experience of the difficulties of managing change. Activities range from offsetting the carbon footprint of school trips, through collecting waste, to the Dangerous Game, a computer-based attempt to solve the world’s problems with real-world consequences. For example, people who get it wrong get only a lettuce leaf and some rice for lunch. Thing I really liked was Terracycle. This is an organisation which takes low-level waste like biscuit wrappers, transforms them into useful products - great for the circular economy - and awards points which can be used to support third-world development projects. Look at terracycle.co.uk. In this world of scepticism and denial it is so encouraging to find an organisation taking issues seriously and encouraging students to do something about them. I expect some of them will become engineers.

And if not engineers, perhaps some of them will go to business school and become the leaders of the future. According to The Guardian this week sustainability is now a key selling point for business schools attracting students. Students used to consider sustainability in business irrelevant and would resent paying fees to learn about it. However the attitude seems to have changed, reflecting changed attitudes in boardrooms. This is good news after the mixed messages which came out of Davos. If you remember, Al Gore made a presentation on the threats from climate change, but at the same time the PwC global CEO survey excluded climate change altogether.

Also in the news, the sustainable cities index published a report. Frankfurt is now the world’s most sustainable city, with London coming second. It was interesting to see how different parts of the press presented this.”Frankfurt beats London to most sustainable city title” says The Guardian. “Only one city in the world is more sustainable than London” says The Telegraph.

And finally, what’s all this about the global divestment movement? We’ve heard how the Rockefeller Institute, certain universities, the Vatican and the Norwegian Sovereign Wealth Fund are all selling their fossil fuel investments. The Global Divestment movement exists to encourage everyone to abandon fossil fuels. There’s no doubt that we have to do this if we’re going to stop catastrophic global warming. It’s not something we can do overnight, but we need to start making plans now. Which means we need to make governments start making plans and taking action, now. Today and tomorrow mass demonstrations are planned across the world. It will be interesting to see how much support they get and whether the press picks up on it. gofossilfree.org

That ends a quite busy week. Well, for podcasting anyway - I’ve still got a lot of other things to do. Have a great weekend, a sustainable weekend, and I’ll be back with you with another episode of the Sustainable Futures Show next Friday. 

Do you need to worry about ESOS?

Probably not.

You may not qualify and even if you do the reporting deadline is not until 5 December 2015.  

ESOS is the energy savings opportunity scheme. It implements art. 8 of the EU Energy efficiency directive.  It's a regulation but the Department of Energy and Climate Change (DECC) say that they will operate it with a light touch. Certainly it's very different from CRC. It's not a tax and although there could be penalties they will only apply in exceptional cases.The objective is to save energy, to make organisations more efficient and therefore more competitive, although in the face of collapsing oil prices and falling coal and gas prices the urgency of this may not be immediately apparent. Of course, to a large extent reducing energy usage reduces the nation's carbon footprint which is high on the priority list for DECC.

So is your organisation covered by ESOS?

If your organisation is in the public sector then it is excluded. If you operate in the private sector you are covered by ESOS if you employ more than 250 staff or you have a balance sheet total of more than £34 million or an annual turnover of more than £40 million. The reference date for this is 31st December 2014. ESOS applies to all UK operations which meet the criteria even if the ultimate owner is overseas. It also applies to non-profit organisations which fulfil the other criteria.

Assuming that you are covered by ESOS,  the first requirement is for you to identify the energy that you use in your buildings, your industrial processes and in transport. You must calculate the total use over a 12 month period and present an audit trail to justify your figures. If appropriate, you can use data from other schemes like the CRC or the EU emissions trading system to back up your results.You then have to audit at least 90% of the energy used by your organisation in accordance with the ESOS criteria.Your audit plan must be approved by your lead assessor. This may be an employee or an external consultant. Either way, the lead assessor must be qualified and appear on the Approved Register held by iema (Institute of Environmental Management and Assessment) or by a number of other Approved Organisations. A full list of Approved Registers is on the GOV.UK website.

 Once your audit is complete the report must be signed off by your lead assessor and by a director of the company. It must then be submitted to the environment agency not later than 5 December 2015. The environment agency is the scheme administrator. The next stage is to act on the ESOS audit recommendations.The whole objective of the process is the help organisations find ways of being more efficient and making better use of energy, so this step is arguably the most important. 

The Environment Agency will review a sample of audit reports and may possibly wish to review yours. Apart from that, your only obligation is to produce your next audit report in four years’ time: 2019.

At the time of writing, 15th January 2015, the oil price is around $47/barrel. That means it’s more than halved since the summer. Some say it’s down for the long term and I talk about that in "Energy - the story of 2015". For the moment, ESOS is designed to help save energy and that must sharpen your competitive edge, whatever the energy price. And designing and implementing energy saving strategies now is protecting your organisation against the day the price spikes back up again.

Want to know more? Go to www.gov.uk and search for ESOS, or drop me an email: mail@anthony-day.com 

Energy - the Story of 2015

Predict the oil price this time next year! Email your forecast to me at mail@anthony-day.com before the end of January 2015 and we'll see who's right!

I make no apology for talking once again about energy. Yes, this is the Sustainable Futures blog but everything we do and everything sustainable depends on energy. How we generate it determines our impact on the environment. Fossil fuels and CO2 emissions affect climate change. How we generate our energy determines the cost of energy and its impact on economic activity. As always, your question is “So what - what’s in it for me?” Monitor your energy use and seek out opportunities for saving. Protect yourself, because some commentators expect energy to get vastly more expensive by this time next year, and it might be more difficult to get as well. Here’s why.

In the last couple of weeks several significant events have occurred which make me believe that energy will make the news throughout this year. You remember stranded assets? That was the title of one of my podcasts last month. I was talking about a report issued by the Carbon Tracker Initiative three years ago which stated that we could not exploit all the remaining fossil fuel reserves without making the planet uninhabitable because CO2 emissions would raise global temperatures to unsustainable levels. At the time of my podcast I was concerned that nothing seems to have been done since then. Suddenly we have two more reports on this very topic. The first is an announcement from Mark Carney, governor of the Bank of England, that the Bank will monitor the financial risk of unburnable carbon. What he means is that if companies include coal or gas or oil as assets on their balance sheets as things of value which they own, there is a risk that they later find that these assets cannot be used and their value collapses. If these assets have been used to secure loans then the lenders suddenly find they have no security. Investors in fossil-fuel industries may not get a return and may not even get their money back. Did somebody say “Sub-prime”? We could be looking at another global financial crisis. 

The problem with the short-termism of markets is that traders are not interested in the jobs and industries and assets behind their stocks and shares and bonds. Their aim is to play pass the parcel until everything goes wrong and ensure they’re not holding the toxic assets when the music stops. There’s the dilemma of governments. They can either put sanctions on fossil fuel use, effectively devaluing the assets and torpedoing the economy, or let things go on as they are until global warming is out of control.

The second report which caught my attention was published by Christopher McGlade and Paul Ekins of the Institute for Sustainable Resources at University College London. They looked at how restricting fossil fuel use would affect different parts of the world. For example, if we are to keep global warming below a 2℃ temperature rise then 99% of the coal, 61% of the gas and 38% of the oil in the Middle East must be left in the ground. Canada must stop exploiting oil from tar sands and Russia must limit its Arctic oil production. China, India, Brazil, Mexico and the US must all abandon significant fossil fuel reserves. Even the UK must decide between fracking and continuing North Sea oil production. The political pressures at the next IPCC meeting, scheduled for Paris in December, will be immense. Up till now such pressures have always proved insurmountable.

The big energy news which is going to resonate throughout 2015 is of course the collapse in the oil price. It has fallen from over $100 to just over $40 in less than six months. Although this a dramatic and unprecedented fall there has been little comment about it, except to celebrate falling petrol prices at the pump and to complain that they are not falling even faster. For the motor industry in the US it has been a year of record sales, and the best sales were of gas-guzzling sports cars and 4x4s. The fall in oil prices is a significant part of the fall in UK inflation - down to 0.5%. But what is the reason for the fall? What are the true consequences? And is $40 the new norm?

The basic reason for the fall is on oversupply of oil. Fracking has led to vasty increased production in the United States and Saudi Arabia and the Middle East producers have decided not to reduce their production levels. In the past OPEC, the confederation of mainly Middle Eastern oil producers, was big enough to control the oil price. If OPEC caused a shortage the price went up. They managed the price to give themselves an adequate return without bankrupting their customers. Now there are many more producers around the world and OPEC’s power is limited. Clearly they may not be able to raise prices but they can certainly drive them down by expanding supply. Why would they do this? 

According to the French newspaper Le Figaro the Saudi minister of oil has said that he is ready to drive the price as low as $20. Some say that OPEC is working with the US to “punish” the Russians and Iran, both of whom rely heavily on oil revenues. More probably this is about market share, because the Americans too are suffering from the low price. Saudi and the OPEC producers want to force the Americans to reduce production by making much of their shale gas and oil uneconomic. Congress and the president are currently wrangling over the Keystone XL pipeline. This is an extension to a pipeline which will transport oil from Canada across the US to refineries in Texas. The oil comes from Canada’s extensive tar sands, but at a price any less than $100 it’s not economical to extract. And in that case the pipeline is irrelevant. There have been crisis meetings in Aberdeen because at current prices much North Sea oil is uneconomic as well. Today BP has announced that it is cutting 200 jobs and 100 contractors from its North Sea operations. Shell has abandoned a $6.5bn petrochemical venture with Qatar Petroleum. Most renewables are difficult to justify economically if they are to compete with oil costing less than $100/barrel.

OPEC actions have already bankrupted small fracking operators in the US. They want to push down US supply so that they can regain market share. History suggests that if a business is successful in eliminating its competitors its next action is to push up prices. However, if OPEC did this it would make competing investments viable again. Maybe a sensible strategy would be to set a price around $50: too low to make a lot of shale oil viable but high enough to give the OPEC countries a reasonable income from a restored market share. BP predicts that oil will stick at $50 for the next three years.

In the second half of the year we learnt that the Rockefeller Foundation had decided to divest its holdings in fossil fuels. A bit of a surprise as the foundation’s wealth all came from Standard Oil. In hindsight it looks like a remarkably sensible strategy, given the way that oil company share prices have followed the oil price down. Rockefeller is not alone. California’s Stanford University is avoiding fossil-fuel investments, echoing actions taken by universities and others against South Africa before the end of apartheid. They hope that a boycott will change behaviour. Others argue that selling out will have little effect. They believe that investors can only influence the fossil fuel companies by staying invested, acting as shareholders and demanding that companies change their ways. But Bill McKibben, a prominent US environmental activist, rejects this. If you’re not happy with the way Apple treats its workers or Amazon’s position on tax avoidance you can put pressure on them to change their ways and build a better business. On the other hand fossil fuels are like tobacco. They are all noxious substances and there is no clean, green or socially responsible way of running such industries. We don’t want them to change, we want them to close down.

Of course it would be naive to suggest we could eliminate fossil fuels in anything less than a generation. Nevertheless, the debate has clearly started. If the market does not bring energy prices back up governments may raise them by taxing carbon. Such a tax is probably electorally suicidal, but unless we take carbon seriously there is little hope for our future.

What’s my conclusion? Consider energy as though it’s going to be incredibly scarce and outrageously expensive. Look at every way you use it and every way you can cut that use. If prices don’t rise you’ll still save money. If prices do rise you’ll save a lot of money!

A final thought. What’s your estimate of the oil price this time next year? Today, 15th January 2015, Brent Crude is around $47. My prediction for next January is $65. What’s yours? Send your prediction to me at mail@anthony-day.com by the end of January 2015 and this time next year we’ll see who’s right. There will be a valuable prize!

Towards a new York

York Business Conference took place this week. That’s York in Yorkshire, the original one! 

What’s that got to do with sustainability? It’s about the city of the future and the way we’ll all live. Some groundwork to do first, of course.

First of all, there was a power cut which threatened to derail the whole event. Nothing to do with the scare stories in the press; apparently it was a substation fault, but it did black out some 26,000 properties across the city. It just shows how dependent we are on electricity.  Fortunately power was restored after less than an hour and we all filed in to the auditorium to talk about economic prospects for York. It's a vibrant place with a long history which everybody knows about and a lot of scientific and academic resources that very few people seem to know about. We have FERA, the Food and Environment Research Agency, a research lab with a global reputation. We have a tremendous amount of research going on in our York universities, but speakers complained that there was far too little contact between universities and business and indeed between schools and business. A number of speakers said that the the media constantly give business a bad press. In drama it’s always the businessman who is the villain, and Lord Rose said that Lord Sugar’s Apprentice was a total misrepresentation of what business was truly about. 

We had a presentation from York Core, an organisation which brings ultra high speed data connectivity to homes and businesses throughout the city. York Core is provided by City Fibre - see cityfibre.com  - spreading high-speed data networks across the UK from key centres  in York,  Aberdeen, Peterborough and Coventry. The UK pays the penalty of leading the industrial revolution in that it has a legacy infrastructure. The copper telecommunications network which was revolutionary in its time is no longer fit for purpose, yet there is no UK fibre strategy. In terms of connectivity we are way behind Sweden, Lithuania and Latvia. 

We had a range of speakers telling us about the potential of York and the industrial expansion which could and should be achieved. They talked about devolution and decentralisation although nobody came to any conclusion as to what we should be doing about it. One point that was made most forcibly is that we should dual the outer ring road without delay. At the moment the delays on the ring road are unacceptable. I say unacceptable, but clearly many people do accept them because if they weren't sitting in traffic jams on the ring road there would not be any traffic jams on the ring road. If we are going to dual the ring road and increase its capacity - and this applies not just to York but to all the bypasses and road improvements around the country - we are assuming that as the future develops we are going to need to move more goods and more people. Is that true? One solution which could be implemented much more quickly than by building a new carriageway, would be to impose a toll on part of the ring road. I got a very negative reaction to this: “What? I'm going to have to pay to drive home?” If you had to pay in order to be able drive home at least you would find the road reasonably empty. And if the predicted growth of goods and people doesn't actually happen we won't have wasted the investment on a new carriageway.

The principal speaker at the conference was Lord Stuart Rose, formerly of Marks & Spencer. He was interviewed by Martin Vander Weyer of the Spectator magazine. I was particularly interested in Lord Rose’s views on sustainability and so submitted a question in advance. Unfortunately the interviewer decided to paraphrase it rather inelegantly and present it as one of his own. This is what I actually wrote: “You are the architect of Plan A, the M&S policy of environmental responsibility and carbon reduction. With former Environment Minister Owen Paterson saying we should suspend the Climate Change Act because the dangers of global warming are exaggerated, with George Osborne incentivising fracking to produce more fossil fuels and with David Cameron rejecting environmental concerns as green crap, isn't that now a lost cause?” I intended it to be controversial and Lord Rose rose to the bait. He said that companies had a huge responsibility and he was disappointed with the government’s attitude. Sustainable business is good business. Sustainability demands innovation and there will be serious problems if we don’t act now. The solutions are not always obvious or simple. For example, the carbon footprint of flying in vegetables from Africa could be lower than growing them in heated poly-tunnels in the UK. At the same time we need to remember our responsibilities. If we source supplies from Africa, in many cases we are building a community totally dependent on our business.

Later on Lord Rose went on to say that the high-speed rail projects HS2 and HS3, and a third runway at Heathrow were all essential if the UK wanted to compete in the 21st century. If we’d asked him he’d probably have said that we should dual the ring-road as well. Not sure how this fits in with sustainability. Are we really going to travel more and more and commute longer and longer distances? Apart from anything else, is travel what life’s all about? We’ve seen that York Core is bringing gigabit data speeds to York and to cities all over the country. Do we need to move ourselves and our goods as well? 

Data connectivity is a recurring theme in a number of events I’ve attended in the last couple of weeks. We’ve been talking about smart cities, the cities of the future. I’ll tell you what I’ve learnt about smart cities in a future episode.

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.

Can we trust the IPCC?

Let's be clear first of all, I'm talking about the Intergovernmental Panel on Climate Change and not the Independent Police Complaints Commission. And yes, after all the work that goes into reviewing their reports, I do think we can trust IPCC.

Last month the IPCC issued the fourth part of its Assessment Report No. 5 together with a synthesis report and guide for policy-makers. Piers Forster is Professor of Physical Climate Change at Leeds University and one of the lead authors of the report. He spoke at York University last Friday and explained how the final version of these documents was created.

Apparently Margaret Thatcher and Ronald Reagan did not want the United Nations to have unrestricted control over the IPCC, so they specified that all reports should be signed off by representatives of all the 120 countries that were involved. Rather than stifling the work of the IPCC this has given it greater prominence, as countries have taken a close interest in all the documents. Before this latest document was released in Copenhagen there were detailed negotiations on exactly what the content of the report should be. There were some 30,000 review comments and the final text was negotiated line by line and word by word. Some sentences were rejected altogether and the favourite justification for this appears to have been that the language was too complex for policymakers to understand. But surely if policymakers are confused by terms such as “CH_4” - the chemical formula for methane - and by “black carbon”, which were deleted, they’ll have even more trouble with “forcing agents” and “mitigation strategies”, which were retained. In my view, if they have difficulty with any of these terms they must be in the wrong job.

As one of the lead authors, Professor Forster was in Copenhagen with 20 or 30 colleagues whose role was to provide the international delegates with scientific advice. The country representatives were to negotiate an acceptable text and in theory the lead authors would not take part in the negotiation, but would advise whether the changes to the text were consistent with the science. In practice, the lead authors were sought out by the delegates who in some cases were aggressive and demanding. Much of Forster's time was spent on negotiating a narrow range of points. Delegates put the authors under extreme pressure. Some of the delegations had as many as 25 members so they could work in shifts. On the other hand, the authors had to be available at all times, working till 3, 4 or 5 in the morning or even all night. Any agreed amendments to the synthesis report had then to be reflected in the main report which itself had already gone through four revisions. 

The Saudi Arabians were most determined to amend the report and negotiations became close to deadlock. Rajendra Pachauri, chair of the IPCC, achieved consensus and a final agreed text through subtle diplomatic manipulation.The Chinese were also robust negotiators although they respected the science even if they didn't like the conclusion that it led to. After this much negotiation I believe we certainly can trust the IPCC.

Only a few days after the issue of the report the US mid-term elections took place. As a result it is expected that Senator James Inhofe will take over the chair of the Environment and Public Works Committee. Inhofe is a notorious climate change denier. He has held this post before and has made Michael Crichton’s novel State of Fear required reading for committee members. He thus prefers to base US environment policy on a work of fiction rather than on peer-reviewed science. Despite this, Professor Forster believes that there will be a positive outcome from next year's Paris meeting. He believes that the Chinese and the Europeans will work together to deliver a constructive result regardless of pressure from the United States. Let's hope he's right! For too long meetings in this series have closed without commitments, except a commitment to look at the issues in greater detail next time. 

It’s worth repeating Ban Ki- moon’s remarks at the press conference launching the latest report:

“Science has spoken. There is no ambiguity in their message. Leaders must act. Time is not on our side.” 

Will we all freeze in the dark this winter?

We’ve had a number of people warning us about blackouts this winter. Strange. I read a report 10 years ago called “Mind the Gap” which predicted that the lights would go out in 2015. Now we’ve heard from the heads of npower and edf, and the National Grid has just published its annual Winter Outlook Report. Ed Davey, Environment Secretary, has told us that there’s absolutely no cause for alarm, so now we know it’s really serious! Or do we?

Our problem is that electricity demand grows year by year and our power stations get older and older. As they get older they get less reliable, and this year we’ve had two major fires and four stations taken off-line for urgent boiler repairs. If there’s another breakdown, will we be plunged into darkness? And is darkness all we have to worry about?

National Grid is responsible for the distribution of gas and electricity across the United Kingdom. It doesn’t generate power and it doesn’t sell gas or electricity to consumers. It just provides the energy super-highway, and the generators and the energy companies pay to use it. National Grid must balance supply with demand and ensure that power is available wherever and whenever it’s needed. December and January are the months of greatest demand; hence the Grid publishes a Winter Outlook Report. The press have made much of the suggestion that the safety margin, the amount by which supply exceeds maximum demand, has fallen from 17% three years ago to only 4.1% now. 

These statistics, as always, have to be looked at in context. The 4.1% margin is against Average Cold Spell (ACS) demand, the coldest part of winter. Winter weather is unpredictable, so we could have a cold spell which lasts longer and is even colder than predicted. National Grid admits that it cannot predict the weather, but then, even the Met Office struggles at times. Apart from bad weather, the other risk factor is power station breakdowns. Although some are much bigger, the average power station accounts for around 1% of supply. So theoretically we could lose four of them, in the coldest weather, and still struggle by. Of course, this is a very unlikely scenario, and National Grid has in any case taken steps to increase the safety margin. Three power stations that were mothballed have been recommissioned and placed on standby. Two of them are gas turbine plants and can come up to full power very rapidly. 

On the demand side, National Grid has agreements with major industrial users to accept power cuts if usage exceeds available supply. Taken together, these measures bring the safety margin, in the worst weather, up to 6.1%.

So is everything all right then? Probably a lot better than the tabloid press might make you think, but there are surely underlying problems. As economic growth continues, energy demand increases. Many of our power stations are due for replacement, but energy policy from all governments has been fragmented and vague. It’s difficult to plan a power station with a 30 or 40 year life if the politicians’ horizon goes no further than the next election. My prediction is that things can only get worse, because there is no quick fix to a shortage of generating capacity. Even with a 6.1% safety margin National Grid can’t rule out localised blackouts, although they do expect to hold them to no more than 36 minutes. 

The popular reaction to blackouts is to rush out and buy candles, and that is certainly what we did when we had regular power cuts in the 1970s. The world has changed dramatically since then. We didn’t have mobile phones and we didn't have cash machines. We certainly didn’t have computers. Many families still kept warm in front of open fires. Remember, you may have gas central heating, but it goes off when the electricity goes off because all the controls are electric. Quite a lot of infrastructure has back-up generation. For example, you’ll usually find a diesel generator tucked away at the back of your supermarket. Generators support mobile phone masts - the remoter ones, anyway, - but a blackout is likely to close ATMs. If the weather turns really cold, make sure you stock up on cash. And it might be worth buying a camping gas stove so you can have a hot drink. And a wind-up lantern is so much safer than candles! In business, data is your most precious resource. You do always back up, don't you? Keep your laptop and your phone charged up. And a UPS - uninterruptible power supply - should be in place to let your larger computers power down smoothly if the power goes off.

All this is about electricity, but National Grid is responsible for gas as well and we use a lot of that in a cold winter; for industry, for central heating and for generating electricity. We still get gas from the North Sea, but it’s declining and we now import a significant proportion of our gas. The predictions of the Grid’s Winter Outlook are that we have a substantial margin of reserves and production over maximum demand - around 24%. The key risk factor here is political. Russia is a major supplier of gas to Europe and much of it is routed via Ukraine. If Russia restricts supplies to Ukraine, as it has done in the past, then the rest of Europe suffers. The UK does not import gas directly from Russia, but if supplies to Europe were cut any imports to the UK from the Netherlands or Belgium would probably be cut as well. 

The Winter Outlook takes this into account and assumes that any shortages would be made up by increased imports of Liquefied Natural Gas (LNG). Last year just under 20% of our imported gas was LNG and most of that came from Qatar in the Persian Gulf - not the most stable region politically. National Grid makes the point that we could maintain supplies by increasing these imports, but only by paying world prices which are highly likely to escalate if there is a shortage. As far as gas supply is concerned, we’re in a secure position. Cost is something else, so turn down the thermostat a degree or two, fit that double glazing and roof insulation, upgrade the boiler and enjoy as much heat as you can from as little gas as possible.

The supply and distribution of energy to the UK is clearly a highly sophisticated operation. Now there’s another factor to add to the risks from breakdowns, bad weather and politics. This week the Intergovernmental Panel on Climate Change (IPCC) published its fifth assessment report (AR5), warning that we must cut co2 emissions by drastically reducing fossil fuel use. Launching the report, Ban Ki-moon, UN General Secretary, said, “Science has spoken. There is no ambiguity in their message. Leaders must act. Time is not on our side.” At the moment, well over half the electricity in the UK is generated from fossil fuels - coal and gas. The UN urges nations to divest from fossil fuels and invest in renewables to prevent global warming from exceeding a 2℃ rise. The report shows how this path can improve economic performance. 

This is a big issue for the UK, where the government is offering substantial tax incentives and subsidies for the development of fracking. Fracking produces oil and gas securely, free from interference by foreign governments, but oil and gas are fossil fuels. Should we be going this way, when even the Rockefeller Foundation, based on the fortunes made from Standard Oil, is selling off its fossil fuel investments and investing in renewables? Surely the tax breaks and subsidies should be going into continued development of renewables. 

Whatever happens, we need some hard and urgent decisions made by government. Unfortunately the present government seems inclined to ignore the evidence, pushing on with fracking, talking about “green crap” and the “green blob” and with a former environment minister calling for our Climate Change Act to be suspended. Despite all this we need decisions. 

Decisions which will determine whether or not we spend our future winters freezing in the dark!

Preparing for the Perfect Storm

The UK faces a crisis because UK business lacks the skills to deal with the challenge of sustainability. This is the message of a report issued today by the Institute of Environmental Management and Assessment (iema). At the same time, a poll of members of the Institute of Directors reveals that for 70% of respondents their sustainability priorities are affected by the economic climate. 

The conclusion from this poll is that for many companies sustainability is just a “nice-to-have”, not a necessity. Maybe it’s because “sustainability” as an idea is still widely misunderstood. All too many people’s thoughts go - sustainability - environment - green - beards and sandals - protest - fluffy polar bears: leave me alone I’ve a business to run!

But the iema report makes it clear that sustainability is at the heart of any business. The headline message is that the UK has a sustainability skills shortage, and the underlying truth is that we need these skills to meet sustainability challenges and opportunities. Drawing on research by the World Economic Forum, the United Nations, the IPCC, the OECD and many others, the report shows how critical pressures are building up from population growth, climate change, water shortages, resource scarcity, unsustainable levels of waste and ballooning demand for energy. It shows too, that of some 1,000 companies polled by iema only 13% were very confident that they could compete in a sustainable economy. And of course that’s not a choice. The sustainable economy is rapidly becoming the only game in town: in the world!

In crudest terms a sustainable business is one that stays in business. In reality a sustainable business is an organisation that can adapt to these rapid and radical changes, can meet customers’ evolving expectations while relying on suppliers which may themselves be way behind the curve. Procurement is a sustainability issue, finance is a sustainability issue, product development is a sustainability issue, and so are training, sales and marketing. Many organisations do not realise there is an issue, and therefore have not taken any steps to react. It’s the business-as-usual syndrome. 

It’s not all bad news. Major household names have taken sustainability on board. They include Jaguar Land Rover, Kepak Convenience Foods, (you may not know the name, but you’ll have eaten their products!), Network Rail, Rexam, Ricoh and Rolls-Royce. They recognise that there’s a sustainable business case. They save energy, they save materials, they cut waste. And it all saves them money. Not just manufacturing and construction companies are involved. The Innovation Group is in insurance claims management and software; HW Fisher is an accountancy firm; PHS provides hygiene services and we’ve all heard of the NHS. All these organisations have taken an active sustainability policy on board.

The challenge now is to spread the word to the vast number of organisations that are not yet on side or even aware that there’s an issue. We need to do it before the perfect storm engulfs us in a perfect disaster.