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Greening America 20th February 2012
Cities fit for cycling 13th February 2012
UK Aviation Policy 6th February 2012
The Great Transformation 30th January 2012
More UK Airport Capacity 20th January 2012
Blue Monday 16th January 2012
Zayed Future Energy Prize 9th January 2012
Fly and be Damned 2nd January 2011
Greening America 20th February 2012
‘Environmental policies must be carefully structured and predictable if they are to enhance rather than undermine competitiveness.’
So begins an article in the current edition of Harvard Business Review, ‘Green Rules to Drive Innovation’ by Daniel Esty and Steve Charnovitz. To paraphrase the article, they write about energy and climate policy from a viewpoint that this has to be done so let’s do it right. Looking across the pond from Europe, companies in Europe should be concerned. Europe is well advanced in putting a cost against carbon dioxide emissions, considerable investment is flowing into the low-carbon economy and there is growing confidence that making the early moves in green technology will pay off handsomely. But what if America, the slumbering giant so far resisting calls for action on climate change, wakes up to the opportunities? The ability of America to reinvent itself and steal a march on Europe is a very real threat to European companies.
In the article it is argued that without a coherent framework for pricing greenhouse gas emissions, American companies have been unable to make rational decisions about investments. Spending on factories, equipment, and product design where there are significant energy implications becomes fraught with difficulty. ‘This uncertainty has cast a pall over the entire U.S. economy... dampened innovation and put U.S. companies at a serious disadvantage.’ The authors argue that U.S. business is put at a disadvantage compared with businesses in countries where clear policies have sharpened the corporate focus on waste and inefficiency and spurred innovation.
If America enters the international competition for green and renewable technologies, it would be a game changer. The nation that put a man on the moon could turbo-charge green innovation. For example in aviation, U.S. companies have the technology to launch the next Golden Age of aviation, but there is little sign that the U.S. government will allow it. The necessary action includes putting a price on carbon and tax on aviation fuel, but such proposals are greeted with deep suspicion in America. With a presidential election looming, politicians will not be campaigning for increasing the cost of carbon dioxide emissions.
At the time of writing, the HBR article on green innovation does not appear to have grabbed the attention of U.S. business leaders, not appearing on the list of the most popular articles on HBR.com. Perhaps European business can rest easy that competition from the United States will not be mobilized anytime soon. That would be wrong; the United States has the capability to catch up, over take and forge ahead.
For the sake of the planet I would like to see a race for who can lead in green technology. However it is not a two-horse race; both the United States and Europe should be concerned that China could take the lead. For those who think green innovation is a waste of money; think again, the new economy will depend on it.
© Peter McManners 2012
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Cities fit for cycling 13th February 2012
Cities for People: Removing Cars from Urban Life.
This is the title of a paper I presented at the London School of Economics in 2007. My paper received considerable support and also opposition which I will explain but first, I will mention the Times campaign to improve safety for cyclists in London. Cities fit for cycling came about after Times journalist Mary Bowers was badly injured on her way to work. To succeed this campaign has to be more than pro-cycling it has to also be anti-car. My words will immediately incense car drivers seeking to defend their ‘rights’. Such reaction is understandable from city residents who know only the city of today but it is very short sighted. Policy that deliberately and specifically gives the city back to its people (on foot, by bicycle and on public transport) leads to better cities for everyone across society.
When I spoke at the LSE five years ago it was part of a conference about the future of cities in the developing world. I expected push back from delegates from the developing world objecting to my call to deny them the ‘benefits’ of car infrastructure and ownership. In fact these delegates were mostly in support; opposition was lead by World Bank officials asserting that investment in roads had the best return on investment. The real problem seemed to be that people living in advanced Western economies find it hard to envisage life with much fewer cars.
In London, at least it is acknowledged that there is a need for much better provision for cyclists but this is only a beginning; there is still huge opposition to reducing the reliance on cars, even though this is the sensible policy if only we think deeply and plan carefully.
On a personal note, I know first hand the problem that has set off the Times campaign. Some years ago I was hit by a car, was badly injured and went through two years of rehabilitation. The driver was prosecuted, found guilty and fined but I do not blame him. The policy makers who design the infrastructure are to blame. The priority is simple and obvious; people should have more priority than cars.
© Peter McManners 2012
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UK Aviation Policy 6th February 2012
The UK government has a difficult and important task to craft policy for aviation. It is difficult because of widely divergent viewpoints and multiple stakeholders. It is important because aviation policy has long-term consequences with decisions taken now influencing the type of aircraft and the associated ground infrastructure that will be operating in the middle of this century. The key stakeholders, in approximate order of the political power they wield, are:
Business – concerned that in a globalised world it is important to have an efficient transport infrastructure.
Passengers – a large proportion of the electorate enjoy, and would like to retain, cheap flights.
Airlines – working to tight margins with fuel a high proportion of operating costs.
Airport Operators – concerned that they will run out of capacity, particularly in the South East around London.
Environmentalists – providing the inconvenient grit in the negotiations, concerned at the growth of emissions from aviation as a cause of climate change.
Politicians tend to make decisions with input from focus groups, which in this case would be drawn from the stakeholder groups listed above. However if politicians were to take a principled approach, they would be assessing the priorities asking the question what is the key issue that has long-term consequences. Despite the protestations of other stakeholders, that issue is the rapid growth in emissions. On a principled long-term basis, the environmentalists have logic on their side. In reality that counts for little; the electoral cycle sets the timeframe and the first four categories of stakeholder have louder voices. What is very strange about this particular policy stalemate is that putting long-term environmental concerns as the foundation of aviation policy will lead to a golden age of aviation. The price is severe disruption in the short-term but the outcome is better for all stakeholders.
Fly and Be Damned: What now for aviation and climate change?
Politicians should read my book, and take a principled approach launching the next golden age of aviation.
© Peter McManners 2012
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The Great Transformation 30th January 2012
The 42nd World Economic Forum in Davos has closed and the rich, powerful and famous have returned home. The theme of this year’s annual meeting was ‘The Great Transformation: Shaping New Models.’ The opening day set the scene with accusations from Sharan Burrow, General Secretary of the International Trade Union Confederation (ITUC) that widening income inequality and high unemployment, especially among young people, are an indication that the capitalist system has failed society. David Rubenstein, Co-Founder and Managing Director of the Carlyle Group, a private-equity firm offered a defence of capitalism using the old adage “Capitalism may be the worst economic system except for any of the others.” The problem, he explained is not capitalism but a lack of investment in education and failure to promote innovation and creativity. We have heard all this before but where does it leave us in the search for a new model of capitalism?
Has the Davos Economic Forum made progress with setting off a great transformation? I fear not; despite the good words and recycled arguments there was little sign of breakthrough ideas or even a willingness to acknowledge deep rooted problems with the global economy and world society. It seems to have become fashionable to talk about each of the challenges the world faces, complete the conversation and move on to the next issue. An example which illustrates the point is ‘climate change’. Already there is danger I will lose the reader at this point – “Oh no, not climate change again, we did that a few weeks ago, let’s move on”. Climate Change may not be the most severe problem we face but it is high up on the list of important and intractable problems. Following the Durban climate talks, there is now an agreement to start discussing an agreement to be finalised by 2015 to come into force by 2020. The conversation is regarded as closed and discussion moves onto more immediate urgent issues such as the financial crisis in the euro zone. There is confusion between what is ‘urgent’ and what is ‘important’.
It is time that world leaders stopped continually hopping between the issues responding to the apparent urgency of immediate crisis and use forums like Davos to focus on the really important issues and the tough choices that have to be made. The world badly needs real-world solutions and a new model for the economy and society. I argue that the new model is ‘proximization’; it is my model so it is not for me to decide if it is the best model but it is better than the alternatives. In a world of many problems and few solutions, ‘proximization’ of human society and the economy truly does offer the prospect of a great transformation.
© Peter McManners 2012
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More UK Airport Capacity 20th January 2012
Extrapolation of growth trends in aviation leads to the conclusion that the South East of England will run out of airport capacity sometime before 2020. But predictions of continued growth of conventional aviation are based on the assumption that aviation will remain largely exempt from policy to reduce carbon emissions (noting that the inclusion of aviation in the EU ETS will have little real impact).
The arguments put forward in defence of business-as-usual, range from ‘aviation is vital to the economy’ to ‘emissions are only 2-3% of global emissions’ so policy makers should look for reductions elsewhere. These are attractive arguments, allowing policy makers to ignore the challenge of drafting sustainable aviation policy. As the UK government shapes its new aviation policy through 2012, I hope it does not take this easy detour but tackles the issue head on and grasp the opportunity to move aviation into a new era.
Until policy makers carry out the research and deep analysis and that should underpin sustainable aviation policy, the current debate about building new airport capacity is at best premature, at worst just froth and posturing by vested interests. Green campaigners are no better, refusing to acknowledge that engineers could transform aviation to dramatically reduce the environmental impact allowing us to fly with a clear conscience – if politicians give the engineers an appropriate policy framework. Greens should be arguing to change policy, not arguing against flying per se.
The environmental impact of aviation can and should be reduced. This must be the foundation of sustainable aviation policy. Accepting this, would be a big step forward to a real debate.
© Peter McManners 2012
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Blue Monday 16th January 2012
High debts, high anxiety and highly polarised society are all good reasons to be blue, coupled with high pressure over the UK giving cold weather and Christmas holidays a distant memory remembered only by an expanded waistline. This is the day of year when we are at our lowest ebb.
Today is also the day of publication of ‘The Pursuit of Happiness’ a report by the Institute of Economic Affairs (IEA), commissioned by UK Prime Minister David Cameron. It is expected to refute the results of previous research reported in Green Outcomes in the Real World: Global Forces, Local Circumstances, and Sustainable Solutions:
‘increases in average individual income correlate with measures of quality of life up to an annual income equivalent to $10,000; the relationship no longer applies with increases to income beyond this level. We get richer but we do not get any happier.’
According to the Sunday Times, the team of academics who wrote the IEA report have concluded that ‘there is no evidence’ for a ‘satiation point’ beyond which income is not linked to an increase in happiness. This will be seized upon by those who believe that GDP is the only true measure of progress to justify a narrow focus on economic outcomes in government policy. Where the authors of the report are correct is that attempting to use government policy to control happiness is not likely to succeed but I stand by my assertion that GDP is too limiting:
‘I leave it to others to work out what might be the best parameters, but we can be sure that GDP will be a poor measure of how we are doing when it comes to building a sustainable world. Governments should move away from using growth in GDP as their prime measure of success. GDP is, indeed, likely to continue to grow but it is the wrong measure and the wrong target.’
Imagine that the IEA report writers did their research whilst traveling on the Titanic enjoying good food, good company and the prospect of a safe luxurious journey. Sitting in the Dining room it would be easy to refute ideas that something terrible might be on the way and ignore the safety briefing about muster points and lifeboats. If they had gone up to the bridge and surveyed the ocean, the cold, the icebergs and the speed of the ship, they might have drawn a different conclusion. Looking through the lens of sustainability, taking in a wide range of factors, is like being on the bridge of the Titanic. We need to slow down and ensure that we don’t crash the ecosystem on which we rely to live well; that means reining in consumption and moving away from the uncertain assumption that monetary wealth correlates with happiness.
© Peter McManners 2012
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Zayed Future Energy Prize 9th January 2012
The Zayed Future Energy Prize will be awarded at the World Future Energy Summit in Abu Dhabi, 16-19 January 2012.
‘Through the prize, we honour the legacy of environmental protection and concern for conservation established by Sheikh Zayed bin Sultan Al Nahyan, the late ruler of Abu Dhabi and the Founding Father of the United Arab Emirates. By honouring and rewarding those people who are tackling the energy crisis today, we hope to educate and inspire future leaders and innovators. Creating a sustainable energy future is the surest way to combat the impending threat of climate change and global warming, and to ensure a clean, liveable environment for future generations.’
This prize is a fitting legacy for a good man. Sheikh Zayed was the founding father of the United Arab Emirates (UAE) and President until his death in 2004. It was rumoured that he was the world’s richest man with control of something like 10% of the world’s oil reserves. Despite great wealth he lived a pious life and ruled with compassion and tolerance. He shared the wealth with his people and was a champion of conserving the biodiversity of the desert environment. This legacy of environmental sensitivity and concern for the conservation is the driving force behind Abu Dhabi's focus on clean energy.
The extreme wealth of the oil nations of the Middle East is a temporary aberration which will last as long as there remains oil to pump, or as long as the world remains addicted to oil. Which will come first, the end of oil or the end of the world’s craving? Either way the rulers of the Middle East have to plan a sustainable future for their people beyond the era of oil; and the rulers of Abu Dhabi are leading attempts to find a way.
Zayed Future Energy Prize is a small part of Abu Dhabi’s search for a sustainable future. The main investment into a more sustainable future is the Masdar project, reflecting Abu Dhabi’s vision for 2030. It comprises a number of elements including a research institute, a renewable power company, investment fund and the iconic centre piece, Masdar City. Aspiring to be one of the most sustainable cities in the world, situated close to Abu Dhabi, Masdar City is a ‘high-density, pedestrian-friendly development where current and future renewable energy and clean technologies are showcased, marketed, researched, developed, tested and implemented’.
‘The city, which at full build out will house 40,000 residents and hundreds of businesses, will integrate the full range of renewable energy and sustainability technologies, across a living and working community.’
Abu Dhabi has bold ambitions and massive oil wealth to be able to deliver the vision but it will still be a huge challenge. Whilst oil revenue flows, Masdar will grow and expand but it will have to be sustainable beyond the era of oil. Abu Dhabi has the potential to be an oasis of high-tech, high quality green living in the deserts of the Middle East. Each country will have to find its own route to sustainable living and it is perhaps fitting that the winner of the Zayed Future Energy Prize will be decided by a jury chaired by a world leader with a different challenge: Ólafur Ragnar Grímsson President of the Republic of Iceland.
© Peter McManners 2012
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Fly and be Damned 2nd January 2011
From 1 January 2012, airlines are included in the EU Emissions Trading Scheme. This requires airlines flying into Europe to hold EU Allowances to cover carbon emissions from their flights and operations. The bulk of these will be provided free based on the airline’s historical aviation emissions averaged over the calendar years 2004, 2005 and 2006. Additional allowances will have to be purchased. With the price of EU ETS Carbon Trading Permits hovering around €8, this will cost airlines up to €1bn ($1.4bn) in 2012 rising to perhaps €10bn ($14bn) by 2020.
The additional cost to airlines is minor compared with their fuel bill but the measure has met with a barrage of complaints from the aviation industry. US airlines are particular opposed arguing that the measures represent a tax and therefore contravenes international law that prevents countries from levying tax on aviation fuel. In a letter dated 16 December leaked to the Financial Times, Hillary Clinton, US Secretary of State wrote to her counterpart at the European Commission, Catherine Ashton, to express US displeasure warning that the US government will be “compelled to take appropriate action” if ETS application to US carriers is not removed.
One of the more bizarre complaints comes from The International Air Cargo Association (TIACA). The group wrote to EU climate commissioner Connie Hedegaard claiming the scheme would divert investment away from cleaner technologies, such as biofuels or more efficient engines. This is an odd claim to make in an industry that pays no tax on its fuel. Taxing fuel or carbon, or both, is the way to drive forward investment in more efficient engines and more efficient aircraft. To attempt to persuade politicians otherwise makes the industry look ridiculous.
The airlines will pay up and get on with their business. The inclusion of airlines in the EU ETS will have very little effect on airline profits and very little effect on the emissions from aviation. The huge furore has been more about holding back future action over aviation emissions. The industry is terrified that the EU ETS could be a trip wire to a process leading to real action over aviation and climate change.
My immediate advice to the aviation industry is to invest in purchasing all copies of the first print run of my book Fly and be Damned: what next for aviation and climate change when it comes out next month. Delaying copies getting into the hands of the politicians will give airlines a little more breathing space. When politicians and policy makers digest its contents they will understand that the EU ETS is not the end but only the first small step on a long journey to a sustainable aviation industry.
© Peter McManners 2012
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