Author: simondiv

Hot on the heels of the Carbon Disclosure Project’s 2010 report the United Nations has just released its global environmental damage assessment.

At a staggering $ 6.6 trillion – equivalent to 11% of global GDP for damage caused by human activity in 2008 – its bigger than the Global Financial Crisis.

The study projects that the monetary value – from water and air pollution, greenhouse gas emissions, general waste and depleted resources – could reach $28.6 trillion in 2050.

Other study headlines include:

• The top global 3,000 public companies were responsible for $ 2.15 trillion worth of environmental damage in 2008.
• More than 50 percent of company earnings could be at risk from environmental costs (in an equally weighted portfolio).
• Damage costs are generally higher than the cost of preventing or limiting pollution and resource depletion.

UN PRI and UNEP Why environmental externalities matter to institutional investors Executive Summary here.

The Carbon Disclosure Project (CDP) reports are now out. On behalf of 534 institutional investors, holding $64 trillion in assets under management, this is the 8th year CDP has reported. From just 235 organisations in 2003, 2,500 now measure and disclose greenhouse gas emissions – and what their actions are to manage or mitigate the impacts – to the CDP.

Importantly there are some interesting new entries. Like Nestlé which débuts  in CDP’s leadership index for the first time.

CDP is relevant for any organisation or business. It asks 10 questions of major companies. One of these is what actions are the companies taking in the supply chain. Which means any organisation involved in delivering, or wanting to deliver, a product or service to 2,500 major corporations around the world should read the CDP.

That’s most of us and there are 64 trillion reasons to do it.

Earlier this week 60 Minutes showed Bloom Energy‘s Bloom Box and the topic trended #1 on google. It’s quite a result – a high level of interest in new technical ways of generating electricity and power.

Fuel cells have great potential. This 3000 home power station in Korea is currently generating electricity and heat at 80% efficiency. It produces power at about AUD 0.23 per unit (roughly similar to the retail price of electricity in Australia) and 50% of this price is gas – a relatively expensive imported commodity in Korea. In Australia or other countries with gas resources the power could be a lot cheaper.

Fuel cells, in a world first from Australian company BlueGen, are also installed in houses. The units, about the size of 2 washing machines, promise to cut household power bills by about $1,100. Costs to the homeowners are still being worked on.

Picture: BlueGen Home fuel cell. It produces up to 75% less carbon dioxide emissions than Victoria’s current coal-fired generators – saving up to 18 tonnes of carbon per unit per year.

One of the most frequent concerns about environmental sustainability – going green – is that people will only act to maximise self-interest. There’s a body of evidence that this is not the case (links below) and Jeremy Rifkin, in this short 10 minute video, summarises some of our collaborative drivers.

The talk covers human behaviours that can deliver a real sustainable advantage to companies acting on climate change.

For some more background see Just who collaborates in the real world? and Carbon neutral companies seeing the advantages.

Walmart is consistently mentioned for it’s green sustainability initiatives. From being the first company to work with the Carbon Disclosure Project establishing an emissions strategy for its entire supply chain – over 100,000 companies – to recently with sustainable fish supplies in Brazil and ‘traceability’ for food products.

Traceability will see it bar code agricultural items. This lets customers quickly find out where food has come from, how it’s been produced and is a gateway for transparency. If we know the background for food, it’s easier to stop deforestation and other impacts of food production.

Walmart’s Héctor Núñez says: Due to all the challenges in cattle raising related to the deforestation of the Amazon rainforest, meat is the first item in this program.  

And why take such environmental steps? Fred Krupp, president of Environmental Defense Fund summed it up speaking about the supply chain initiatives: Walmart’s bold move will help companies identify steps to slash pollution and costs. Importantly, they also point out, its: good for business and good for customers!

Image: Ambalaj sustainable packaging

Just launched is this excellent summary of Climate Change from the Australian Academy of Science. It should answer everyone’s doubts or opposition to taking action. Of course it won’t,

So why do we have such difficulty in learning what we most need to know to mitigate our most destructive behaviours? Dorothy Rowe, Australian psychologist and emeritus associate of the Royal College of Psychiatrists, explains that we make decisions, about what to do, from the different interpretations each of us make.

As this New Scientist article about her recent book puts it:

we cannot see “reality” directly. All we can ever know are the guesses or interpretations our mind creates about what is going on. To create these guesses, we can only draw on basic human neuroanatomy and on our past experience. …

As a result, for global issues like climate change, no matter how much evidence we accumulate our truths will always be approximations. That is lying to ourselves about uncertainty – particularly present in issues like climate change – gives us certainty! Something we desire.

What to do? Climate Change Leadership explores motivation and we shouldn’t forget there’s significant advantages and profits to be had for countries and businesses that act.

Climate change needs political leadership. It’s an obvious requirement but a recent survey from the University of Queensland reveals some startling gaps. Out of 300 Australian federal, state and local government political leaders, 70% agreed with the statement that the planet is warming because of human activity producing greenhouse gases.

However, 17% are uncertain if they agreed or not. It raises the question of what awareness is necessary for these leaders to be informed? The survey finds that politicians say scientists are the most influential people when it comes to framing their views. Yet, less than 40% of the politicians agree with the IPCC scientists on global temperature – that a limit of 2 degrees or less of warming is necessary to avoid dangerous climate change.

It’s a global gap. For example in Sweden politicians scored 70% answering questions on climate change. But it’s more than a knowledge gap. We must hear discordant voices, multifarious human beliefs, values, attitudes and behaviours says Mike Hulme investigating climate change disagreements.

In other words knowledge is necessary but not sufficient. Understanding how people interpret this information is important.

As Centre for Research on Environmental Decisions puts it climate change solutions are workable, cost-effective technologies which permit society to improve living standards… Yet scientific, engineering, and organizational solutions are not enough. Societies must be motivated and empowered to adopt the needed changes.

Picture: Centre for Research on Environmental Decisions, The Psychology of Climate Change Communication.

If you’ve watched the BP Oil Spill in the Gulf of Mexico and the headlines – Biggest in History – you may also have wondered what it means. Just how big is big?

One comparison that resonates is, at its peak, it was the size of the US State of Kansas. This is approximately the same size as the State of Victoria in Australia, just under half the size of European France and twice South Korea‘s land mass.

It’s also spawned a few comparisons. What if BP had spilled solar panels instead of oil calculates it would be enough clean energy to power the USA, Central and South America for 25 years. The oil, as opposed to solar, is enough energy for less than one day’s power demand. The BP spilled solar panels post also calculates costs.

Clearly solar power, on its own, is not the full, comprehensive, alternative to oil. The Rocky Mountains Institute in 2007 looked at how to Win the Oil Endgame. It documents how USA (and by extension world) oil dependancy can be ended – profitably, securely and equitably – within decades. It demonstrates viable effective alternatives to oil.

Picture: BP Oil clean-up

People in many situations collaborate, for example companies setting carbon neutral targets for themselves.

But does this see the long term protection of resources? Resources that can be overused by individuals and groups resulting in much less for everyone? Like the world’s ability to absorb carbon?

The graph illustrates a great example of this in today’s world. It shows how voluntary group effort – from lobster fishing communities – has succeeded where government regulation did not.

The blue line is the catch for a degraded inshore fishery. This is in Maine, USA and the fishery is governed by legislated quotas, catch limits and, licensing etc. These rules are not credible with relatively low compliance and strong resistance to strengthening restrictions. And the fish catch, everyone’s livelihood, suffers.

Red is the Maine lobster fishery. Its governed by formal and informal groups strongly influencing state rules. The result – a lot more lobster.

The challenge is to apply this knowledge to all situations including climate change. As a signal of its importance, the joint winner of the 2009 economics Nobel Prize was Elinor Ostrom. Elinor leads much of this work. In the words of the Nobel committee she has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. … user-managed fish stocks, pastures, woods, lakes, and groundwater basins.. often see good outcomes

That is we do protect resources, voluntarily and willingly.

Graph data: Science 12-12-2003 The Struggle to Govern the Commons Thomas Dietz, Elinor Ostrom, and Paul C. Stern

Humans have to collaborate to address climate change. It’s a self-evident fact and often used as a reason for doing nothing – don’t act until everyone agrees; action, by any one individual, group or country, can be negated by another.

Yet many carbon neutral companies including Google in 2007 , News Limited Internationally by 2010, PwC in 2008 and HSBC in 2005 must see an advantage. And are willing to act beyond what many would say is the immediate self-interest of the company.

These companies hold out market results, staff and stakeholder engagement, profile, publicity and, innovation on products and services as benefits. But is there also an altruistic element? Are humans wired to collaborate?

Some of evidence comes from experiments. Give people two options:

1. to work together for the benefit of a group; or,
2. not to work and rely on everyone else in the group.

Not surprisingly there’s a tendency not to work – no benefit for anyone. But if the experiment allows individuals to punish non workers, suddenly everyone tends to work. Even when there is an individual cost for those who voluntarily sanction non workers.

Importantly, if you then allow people in a group that has no sanctions to freely shift to another group they will very quickly move into the one where there are sanctions. That is we seem to prefer just systems which is something the seemingly altruistic carbon neutral companies may also be benefiting from.

So we can cooperate for better lives and the next post’s focus is groups and societies that have, historically and voluntarily, collaborated. There’s many examples of this with groups answering shared resources issues similar to our greenhouse gas problems.

Details on collaboration experiment here. Picture: J. Sutliff from Henrich, Cooperation, Punishment, and the Evolution of Human Institutions, Science 7 April 2006