Sustainablog

This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.

11.3.06

Sunny Days Ahead -- 2005’s top three tech IPOs were all solar companies



IN PRINT: Sunny Days Ahead
Tired of hearing about high oil prices? Get used to it. They’re not going down. That’s why a growing number of consumers and investors are looking at alternative sources of energy, especially solar. Here’s proof: 2005’s top three tech IPOs were all solar companies, and last year the solar market hit $12 billion. Some analysts think it could reach $40 billion by 2010. While that’s still a paltry sum compared to a fossil fuel industry worth more than a trillion dollars, solar continues to heat up. But the sun’s not shining everywhere. Bubble theorists cite boom-bust cycles and unstable growth supported largely by high prices of fossil fuels and heavy government subsidies. Will solar continue to show promise? Red Herring takes a closer look at the future of solar power in this week’s cover story, “Sunny Days Ahead,” on newsstands Monday. Here is a peek into the rest of our lineup, which appears along with our regular features:

 

Power to the people: Iqbal Quadir pioneered wider access to mobile phones in Bangladesh. Can he do the same for electricity and clean water?


Power to the people
Mar 9th 2006
From The Economist print edition



Iqbal Quadir pioneered wider access to mobile phones in Bangladesh. Can he do the same for electricity and clean water?



AS A young boy in rural Bangladesh in 1971, Iqbal Quadir walked ten miles to collect some medicine for a sibling who was unwell. But when he arrived at his destination, the medicine man was not there, so he had to walk home empty-handed, having wasted an entire day. Many years later, having moved to America and become an investment banker, Mr Quadir was reminded of this episode when the network at his New York office stopped working. Without communications, he realised, people are far less productive, whether in a modern office or a rural village; a simple telephone call could have prevented him from making that unnecessary round trip all those years earlier. As he waited for the e-mail to start flowing again, Mr Quadir was seized by the idea that “a telephone is a weapon against poverty”. He decided to dedicate himself to making telephones more widely available to the poor in his homeland. “I didn't know anything about telecoms,” he says. “But maybe that was helpful.”

It was only after having many fruitless meetings with firms and policymakers that Mr Quadir finally hit upon the right approach. He was inspired by Grameen Bank, a Bangladeshi organisation well known for supplying “microcredit”, or small loans, mainly to the rural poor. In a typical example, a woman borrows enough money to buy a cow, and then repays the loan using the profits that result from selling its milk. The loan is repaid, the woman earns an income from the cow, and her neighbours can buy milk. Mr Quadir looked at this model and realised that “a cell phone could be a cow”. He formed a consortium with Grameen Bank and Telenor, a Norwegian mobile operator that provided the required telecoms expertise. He was then able to secure loans from development banks and aid agencies, and won a licence from the Bangladeshi government. GrameenPhone launched its service in March 1997, and today has more than 6m subscribers, making it the country's largest telecoms operator. Bangladesh now has six mobile operators and more than 9m subscribers in what has become a booming market.

Around 200,000 of GrameenPhone's subscribers are “telephone ladies” who provide access to telephony in more than 50,000 rural villages, with a total population of 80m people. Despite accounting for a small proportion of the mobile phones in circulation, these “village phones” account for one-third of the traffic on the network, since they are shared between a large number of users. By making telephony widely available, says Mr Quadir, GrameenPhone has increased the country's GDP by a far greater amount than repeated infusions of foreign aid. Mobile phones promote economic activity, prevent wasted journeys, make it easier to look for work, and widen access to markets. GrameenPhone is not a charity, but a profitable venture: it made net profits of $101m in 2004. Its approach is now being replicated in other countries in Asia and sub-Saharan Africa, including Uganda and Rwanda.

GrameenPhone's success is a striking endorsement of Mr Quadir's unusual approach to promoting economic development. The problem with the traditional top-down approach of supplying developmental aid to governments, he complains, is that it widens the gap between politicians and the people, by increasing the power of central authorities. “The key to economic progress in Bangladesh does not lie in foreign aid, but in the hands and brains of its masses,” he says. “We need to find technologies that can activate those hands and brains for productive purposes.” Using technology to empower citizens from below, as mobile phones do, is a far better way to promote development, says Mr Quadir: “Top-down approaches do not work. The bottleneck is at the top of the bottle.”


Between the geek and the meek

There are historical precedents for this bottom-up approach, notes Mr Quadir, who lectured in technology and economic development at Harvard University's Kennedy School of Government for four years from 2001 and has recently moved to the Massachusetts Institute of Technology, where he is establishing a new programme in development entrepreneurship. In medieval Europe, innovations such as spectacles, water wheels, clocks and printing had the effect of empowering people from below and stimulating economic development, often in the face of opposition from church and state. Similarly, the industrial revolution was the result of entrepreneurial, bottom-up activity, not government planning. Having proven the effectiveness of his approach with GrameenPhone, Mr Quadir is now working to apply the same combination of technology and bottom-up entrepreneurship in other areas, starting with the supply of electricity. “I see myself as an entrepreneur between the geek and the meek,” he says.



“The aim of his new venture is to establish small, neighbourhood power plants in Bangladesh.”



The aim of his new venture, Emergence Energy, is to establish small, neighbourhood power plants in Bangladesh that can provide electricity to a handful of homes, shops and businesses. This time he has teamed up with Dean Kamen, an American inventor best known for creating the Segway electric scooter. During 2005 they conducted a six-month trial in two rural villages in Bangladesh of prototype generators, created by Mr Kamen, based on a design called a Stirling engine.

The generators can be powered by biogas extracted from cow manure. The idea is that one entrepreneur, funded by a microcredit loan, sets up a business to turn manure into methane gas and fertiliser; another entrepreneur, also funded by microcredit, buys the methane to power the generator, and sells the resulting electricity. This will, Mr Quadir hopes, unleash all kinds of economic activity. “Energy gives you the power to empower,” he says.

The trial was intended as a test, to find out what people would use electricity for, and whether there was an economically viable business model. The results were promising: the scheme proved to be technically feasible, there was strong demand for electrical power, and consumers were willing to pay for a regular supply. The main use of electricity was for lighting, says Mr Quadir; using low-power bulbs, each generator, which produces one kilowatt of power, was able to light up 20 households or shops.

This allowed shops to stay open later, enabled students to study for longer hours, and let people enjoy television and other forms of entertainment. Surprisingly, Mr Quadir found that some households already had televisions, powered using car batteries. Such batteries are also used to recharge mobile phones. This suggests that the potential “chicken and egg” problem that there would be no demand for electricity, since nobody owns any electrical appliances, will not arise. Access to a regular supply of electricity should, however, promote the wider adoption of electrical devices of all kinds.

The next step is to mass produce the generators so that the scheme can be launched commercially. Mr Quadir says he hopes to convince a manufacturing company to license Mr Kamen's design and set up a factory in Bangladesh to build the generators. This would have several advantages over simply importing the technology (as happened with the mobile phones): it would create jobs, avoid import tariffs that would otherwise make the generators less affordable, and the resulting transfer of technology and skills would ensure that the machines could be fixed by locals, rather than having to rely on foreign technicians.

To finance the purchase of the generators by entrepreneurs, Mr Quadir is working with BRAC, another microcredit lender. The generators will cost several thousand dollars, far more than a mobile phone. But microloans are already being used to finance larger purchases, such as houses, says Mr Quadir, so he is confident that the microcredit model can be applied to the new venture. The result, as entrepreneurs start to install generators in villages, will be to produce electricity, fertiliser and jobs.


Bubbling up

At the same time, Mr Quadir is pursuing two other bottom-up initiatives. The first, CleanWater, is dedicated to supplying safe drinking water to Bangladeshi villages, where arsenic contamination is a grave problem. Rather than relying on aid agencies or governments to install equipment, Mr Quadir hopes to license a chemical preparation that can remove arsenic from water and make it safe to drink. The chemical would then be distributed and sold, like salt, via a network of local entrepreneurs; Mr Quadir estimates that buyers would have to spend around $3 per person per year on the chemical to ensure a safe water supply, which is well within reach of most villagers. Again, this initiative would create jobs, provide a wider societal benefit, and give people the means to solve a serious problem themselves.

The second initiative, developed by Mr Quadir's brother Kamal, is called CellBazaar. The idea is to create an electronic marketplace that can be accessed via mobile phones—a phone-based equivalent of newspaper classified advertisements. If somebody wants to sell a bicycle, for example, they can list it in CellBazaar, where it will be visible to potential buyers, says Mr Quadir. This will also have the effect of making price information more transparent and widely available. The system is designed to be as simple as possible: it will not handle transactions, but will simply put buyers and sellers in contact with each other via mobile phone. It will be possible to access the system using just text messages. Electronic commerce could prove to have even greater appeal in developing countries, where the transport infrastructure is often poor, than in developed ones.

Trying to change things from the ground up is more effective than lobbying authorities, insists Mr Quadir. “Without necessarily introducing enlightenment or new arguments, technology can quietly initiate novel ways of making things or trading them, potentially redistributing economic and political clout,” he says. Just as economists invoke the “invisible hand” of the market, he likes to speak of a technology as an “invisible leg” that can move an economy from one state to another.

And even when a government adopts a sensible policy, there is no guarantee it will be implemented. Before the establishment of GrameenPhone, for example, the Bangladeshi government's stated policy was to promote universal access to telecommunications; but in practice not much happened. The clear success of GrameenPhone, however, prompted the government to issue more mobile licences, which led to today's thriving market. Technology, in short, makes it possible to change the facts on the ground first, so that government policy can then follow, says Mr Quadir. Power to the people, indeed.

Energy technology: Following the success of hybrid cars, which run on both electricity and fossil fuels, attention is turning to hybrid planes


Flight of fancy?
Mar 9th 2006
From The Economist print edition



Energy technology: Following the success of hybrid cars, which run on both electricity and fossil fuels, attention is turning to hybrid planes

HYBRID cars—powered by a mixture of novel electrical and conventional fossil-fuel technologies—are flourishing. So what about hybrid aircraft? The idea is not as far-fetched as it might sound. As with cars, the high cost of aviation fuel, not to mention concerns about aircraft noise and emissions, has created a clamour for greater energy efficiency. At the same time, aircraft are becoming ever more demanding of electrical power, and not just for avionics and entertainment systems. Boeing's new Dreamliner, due to enter service in 2008, will use electrical components in place of some pneumatic and hydraulic systems. This will improve performance and durability, and may also reduce weight, says Bill Glover, an environmental guru at Boeing.

At the moment, electricity on board aircraft is provided by an auxiliary power unit (APU)—a small gas-turbine engine that handles lighting, air-conditioning and pressurisation of the cabin, and even helps to start the main engine. (The APU accounts for the constant whirring noise that airliners make when sitting on the tarmac, even when their main engines are switched off.) The current designs for hybrid aircraft involve replacing the APU with a far more efficient system based on a fuel cell—a device that combines a fuel with oxygen to produce electricity. This approach has strong advantages over combustion: fuel cells are quiet, efficient, and produce far fewer emissions. Boeing estimates that the efficiency of the APU in converting energy from fuel into electricity could go from 15% today to as much as 70% with fuel cells.

This is a different approach to that of the hybrid car, of course, where electrical power (currently from a battery, but potentially from a fuel cell in future) is used for propulsion at low speeds, and to provide occasional bursts of acceleration. It is true that AeroVironment, a firm based in Monrovia, California, successfully flew a fuel-cell-powered aircraft called Global Observer last year. But it was an unmanned, lightweight design built for surveillance work; nobody expects electrically propelled airliners to take to the skies in the near future.

For years, Boeing has been trying to build a small, single-seater plane, driven by an electric motor and a fuel cell. Working with Intelligent Energy, a British firm, its researchers in Madrid now hope that such an aircraft will make its maiden flight later this year. “It's been a good learning experience for us,” says Mr Glover. But this pure-electric approach does not scale up to larger aircraft, which suggests that, as with cars, the hybrid model has more promise, at least for the time being. Hence Boeing's interest in fuel-cell APUs.

Don't rush out to buy a ticket for a hybrid airliner just yet, however. The company is still only at the stage of doing laboratory tests and preliminary design work. Mr Glover reckons that it will be “probably in the neighbourhood of 15-20 years before you see it in your local airport.” For its part, Boeing's main rival, Airbus, says it is looking at fuel cells in a “fairly intensive way”, but expects the technology to take hold in cars first, before spreading into planes.

So what are the remaining hurdles? For many years, the problem was one of weight. Early fuel cells were simply too heavy for aircraft, since they were developed for trucks and buses, where weight is not such a constraint, notes John Fielding, an aircraft-design expert at Cranfield University's School of Engineering, in England. But now, he says, fuel cells are steadily becoming lighter, more powerful and less costly, which makes them more suitable for use in aviation with every passing year.

The real challenge turns out to be integrating fuel cells into aircraft. “It's the system, stupid,” says Ted Wierzbanowski of AeroVironment. The difficulty of integration is the main reason that Boeing's single-seater fuel-cell aircraft, in which the electrical systems are retrofitted into a conventional airframe, has taken so long to get off the ground, says Mr Glover. This is not a problem unique to aviation. As the appetite for fuel cells spreads—they are being incorporated into everything from laptops to locomotives—each industry must figure out how to build the new power source into their existing products. So although hybrid aircraft will take off eventually, at the moment they still have a long runway in front of them.

Wired Magazine: Using nanotechnology, the M1 stomps all over today's cells


Thanks to Matt for this one

----- Forwarded by Jean-Francois Barsoum/Markham/IBM on 10/03/2006 11:25 -----

Super Battery 
The M1 stomps all over today's cells.

It's what drill-wielding DIYers have craved for ages: More power! And a new line of teeth-rattling 36-volt cordless saws, rotary hammers, and drills from DeWalt, a division of Black & Decker, finally delivers. The potent black-and-yellow beasts have twice the power of standard 18-volt tools and run for twice as long per charge. How? Each packs the M1 battery, a hand grenade of electrons that promises to transform mobile power.

The M1, based on the same lithium-ion technology used in your cell phone and laptop, is the first product from MIT spinoff A123 Systems. Cofounder Yet-Ming Chiang, a materials science professor, succeeded in shrinking to nanoscale the particles that coat the battery's electrodes and store and discharge energy. The results are electrifying: Power density doubles, peak energy jumps fivefold (the cells pack more punch than a standard 110-volt wall outlet), and recharging time plummets. Going nano also solves a safety problem. Regular high-capacity Li-ion batteries tend to explode under severe stress, like if they're dropped from a ladder.

The rechargeable battery industry, dominated by Asian giants like Sanyo, Sony, and Toshiba, is worth more than $6 billion a year. A123 - whose inves­tors include Motorola, Qualcomm, and the Pentagon's VC arm, OnPoint Technologies - aims to radically expand that market, by both cutting the cords on conventional plug-in tools and home appliances and powering brawny electric versions of everything from lawn mowers to military surveillance drones.

A123's real target, however, is your car. Chiang says A123's cells could lighten a Toyota Prius' 100-pound battery by as much as 80 percent and help boost any hybrid's performance. The quick recharging time - the M1 takes five minutes to reach 90 percent capacity - plus high peak power also would be ideal for plug-in versions of gas-electric vehicles. With a bit more research, the world's roads may someday see fast, zero-carbon autos that zip past gas guzzlers and tank up from the grid faster than a rest-stop Starbucks can serve you a latte. - Spencer Reiss

10.3.06

Sir Hans Singer, development economist, died on February 26th, aged 95


Hans Singer
Mar 9th 2006
From The Economist print edition



Sir Hans Singer, development economist, died on February 26th, aged 95



THE poor are always with us, said Jesus. But they are not always fashionable. Few people have been such indefatigable thinkers about the economics of poverty as Sir Hans Singer, a British development theorist who was born a Jew and brought up in a Catholic area of mainly Protestant Germany. He came from “a minority in a minority in a minority”, he liked to say, with a smile that belied how much he cared about the world's marginalised.

Sir Hans—then plain Mr Singer—was planning to become a doctor when, in the early 1930s, he was won over to economics by a series of lectures by Joseph Schumpeter and Arthur Spiethoff, respectively Austrian and German economists. A year after Adolf Hitler's rise to power in 1933, Schumpeter persuaded John Maynard Keynes to accept the newly married asylum-seeker from Nazi Germany as one of his earliest PhD students at Cambridge.

It would prove a life-changing introduction. Not only did Keynes intervene personally when Sir Hans was interned by the British government early in the second world war, and thus help to win his speedy release, he placed before the young German an intellectual panorama that would inspire Sir Hans's thinking for the next 70 years.

Sir Hans's career began just as the Bretton Woods institutions were finding their feet. How to rebuild Europe's shattered societies, how to harness the economies of the third world—these were questions of crucial importance. As the World Bank and the United Nations agencies got going, Sir Hans moved from new department to new department, energetically offering practical suggestions while also elaborating the theoretical underpinnings of the new economics of development.

Sir Hans's best-known work, developed during his early years at the UN and published in 1949, concerned the long-term deterioration of poor countries' terms of trade. It analysed why, in the long run, the price of primary products tended to decline relative to that of manufactured goods. Sir Hans's conclusion was that the benefits of trade were distributed unequally between the countries that imported agricultural commodities and those that exported them, to the disadvantage of the exporters. The proposition became known as the Prebisch-Singer thesis, though it is now recognised that Sir Hans rather than his Argentine collaborator, Raul Prebisch, did most of the work.

Though the thesis was dismissed by several of the leading American trade theorists of the day, citing the boom in commodity prices that followed the Korean war, the experience of coffee-growing countries, such as Brazil and Kenya, and of cocoa-producers like Côte d'Ivoire suggested that Sir Hans's ideas could not be rejected out of hand. Yet their consequences were generally damaging, giving third-world countries licence to pursue import-substitution schemes behind protective tariffs as their main development strategy. The Prebisch-Singer thesis became all the rage, and was seized on by neo-Marxists, such as Paul Baran and A.G. Frank, who tried—wrongly and unsuccessfully—to claim Sir Hans as one of their own.


Such sweet reason

Instinctively practical rather than ideological, Sir Hans liked to base his theoretical work on observations, not dogma. And in argument, as in chess, he would always show a charming acquiescence. This deceptive meekness may have been reinforced by his short stature and cherubic curls. To Sir Alec Cairncross, a friend and (taller) colleague, he gave “the impression of a troubled, uncertain but reasonable man who [was] used to being contradicted but would not dare himself to contradict.”

In fact, Sir Hans was rarely contradicted. His was the voice of sweet reason. Seeing that the world's poor could not afford market interest rates, he argued for an agency that would offer soft loans and outright grants to the poorest countries. For this, Eugene Black at the World Bank and Senator Joseph McCarthy both regarded Sir Hans as one of the “wild men of the UN”, and a communist to boot, but his ideas took hold. He thus helped to set up the International Development Association (the World Bank's soft-loan agency), the UN Development Programme and the World Food Programme.

Retirement from the UN at the age of 59 allowed Sir Hans to take up the offer of a fellowship of the Institute of Development Studies at the University of Sussex and further develop his academic work. Writing again under his own name—rather than the umbrella authorship of the UN—he produced another 30 or more books and nearly 300 other publications on subjects ranging from food aid to the role of the economist, with a fluency that led a rival academic to describe him, somewhat unkindly, as “the Edgar Wallace of modern economics”.

Sir Hans did most of his work in a golden age of simplicity in development economics, when progress for poor countries seemed assured. No longer: while many countries in Asia have recently bounded forward, many in Africa have slipped back. Sir Hans, however, never gave up the search for explanations. Indeed, he was in such a hurry at the end of his life that, at the age of 86, he signed up for a speed-reading course.

GM sees hydrogen cars on market by 2010-2015


GM sees hydrogen cars on market by 2010-2015

AFP, 2 March 2006 - General Motors Corp. has made major steps in developing a commercially viable hydrogen-powered vehicle and expects it can get the emission-free cars into dealerships in the next four to nine years, a spokesman told AFP.

GM also expects it will be able to "equal or better gas engines in terms of cost, durability and performance" once it is able to ramp up volume to at least 500,000 vehicles a year, said GM spokesman Scott Fosgard.

GM has partnered with Japanese rival Toyota Motor Corp. for a number of years on developing the experimental fuel-cell technology.

On Thursday, the automaker announced that while it will continue its tie-up with Toyota on other advanced technologies, it will no longer be sharing its fuel-cell research.

"Because of the advances we made that type of technology is passing from the research phase to development," Fosgard said.

Fuel cells produce electricity through a chemical reaction between hydrogen and oxygen, leaving water as the only by-product. They are far more environmentally friendly than the currently popular hybrid gas-electric engines which merely reduce the amount of gas needed to power the vehicle.

There are still a number of barriers to the commercialization of hydrogen-powered cars. One is the infrastructure cost of building refueling stations. Another big challenge is reducing the cost of obtaining hydrogen itself, which has to be extracted from fossil fuels, such as carbon, or from water.

The International Energy Agency has said that if conditions were right, hydrogen and hydrogen fuel cells could play key roles in weaning energy users away from oil, gas and coal.

"In the most favourable conditions, hydrogen fuel-cell vehicles would enter the market (in mass numbers) around 2025 and power 30 percent of the global stock of vehicles by 2050 -- the equivalent of about 700 million vehicles," the IEA said in a recent report.

"The oil saving would then be equivalent to some 13 percent of global oil demand, or five percent of the global energy demand."

GM and Toyota will continue to work together on technology that will help to save lives, Fosgard said.

The world's largest automakers have been collaborating since 1999 on developing safety systems and advanced technologies. The partnership was set to expire at the end of the month and has been extended to March 31, 2008, GM said.

The latest agreement covers information exchange and collaborative research in areas such as energy usage and emissions, intelligent transportation systems, vehicle infrastructure integration and vehicle-to-vehicle communications. It also allows for joint research projects in other areas.

9.3.06

EU to issue warning on foreign energy use: critics say the 20-page strategy paper missed a chance to tackle Europe's real energy predicament.


EU to issue warning on foreign energy use
By Judy Dempsey International Herald Tribune

MONDAY, MARCH 6, 2006




BERLIN The European Commission will warn governments Wednesday that they are failing to adequately curb fuel consumption and develop alternative forms of energy, a trend that may push Europe's reliance on foreign energy sources to dangerously high levels in coming decades.
 
But critics said the 20-page strategy paper, to be unveiled by the European Union energy commissioner, Andris Piebalgs, amid a growing debate about the continent's energy security, missed a chance to tackle Europe's real energy predicament.
 
The document, obtained by the International Herald Tribune, is meant to help EU energy ministers define a common energy policy at a crucial meeting later this month. Amid pressure from automotive and industrial interests, however, it does not address controversial energy consumption issues, like the automobile's pre-eminence and the industrial sector - Europe's two largest users of energy. It also avoids looking at attempts by France, Spain and others to shield their companies from foreign bids to create national energy champions before the EU's energy market is fully opened to competition in mid 2007.
 
Instead, the commission presents a largely grim assessment of Europe's growing demand, warning that "around 70 percent of the Union's energy requirements, compared to 50 percent today, will be met by imported products."
 
"The new energy policy lacks vision and proposes a do-nothing approach," said Claude Turmes, coordinator of the industry, research and energy committee in the European Parliament.
 
"There are two main problems with the paper," added Turmes, who is also vice president of the Greens and the European Free Alliance in the European Parliament.
 
"It is not possible to build a European market while leaving competition control on the national level," he cited as the first problem.
 
Turning to the second problem, Turmes said: "It is impossible to address energy policy without tackling the issue of transport, since 96 percent of energy used in the transport sector is oil. Yet transport is not even one of the priority issues in the paper."
 
His group is to meet on Tuesday in Vienna to present a counterstrategy.
 
Roughly half of the natural gas consumed by the European Union comes from Russia, Norway and Algeria. If present consumption patterns continue, the commission said, imports would increase to 80 percent over the next 25 years. To meet this energy demand and to replace an aging infrastructure, investments of around €1 trillion, or $1.2 trillion, will be needed over the next two decades, according to the policy paper.
 
A failure to curb Europe's growing appetite for energy is taking its toll on the climate. The commission said world energy demand and carbon dioxide emissions - the main culprit for global warming - could be approximately 60 percent higher by 2030.
 
To meet these challenges, the commission outlined a three-point plan calling for governments to enhance the security of energy supplies, increase competitiveness within the energy market, and raise the bar on environmental protection.
 
To secure Europe's energy supplies, the commission recommended that the Union adopt "a clear policy on diversifying natural gas supplies."
 
It suggested building a new infrastructure, including terminals for receiving liquefied natural gas and independent pipelines from the Caspian region and North Africa "into the heart of Europe."
 
It also proposed establishing a single European grid and increasing the energy interconnections between the member states to allow a European electricity and natural gas market to develop cooperation because another agreement was struck in 2002 has so far "not been satisfactory."
 
The commission was less specific on how to create more competitiveness in the energy sector - despite threats last month by the Competition Commission to start legal proceedings against companies that hinder competition by denying smaller producers easy access to the distribution networks.
 
It called for "open and competitive markets" and insisted that the creation of a "truly competitive single European electricity and gas market represents a major opportunity for Europe."
 
The paper expressed concern that "many markets remain largely national and dominated by a few companies. Many differences remain between member states' approaches to market opening, preventing the development of a truly competitive European market."
 
But the paper offered no solution to the problems.
 
On renewable energy, the commission adopted a cautious approach, suggesting a long-term efficiency campaign, including efficiency in buildings but omitted mentioning a more integrated railway network and more investment in cars not based on oil.
 
On the other, it recognized that the Union's renewable energy market was one of the fastest-growing sectors. It accounts for half of the world market and employs more than 300,000 people.
 
There are differences, too, among member states over how far governments are prepared to invest in renewable energy sources, like biofuels and wind and solar power, and a European- wide railroad network.
 
Over the past few weeks, most of the member states have submitted proposals to the commission, and analysts said that that explained the generalized and often cautious stance.
 
The French proposals played down efforts for an integrated network, while Germany called for the liberalization of the electricity and natural gas markets and more diversification over how energy is transported.
 
The member states from Eastern Europe that depend almost completely on Russia for their oil and natural gas said that they wanted a much stronger and more united European approach. They said that the principle that member states are responsible for the security of their own power supplies was no longer sufficient.
 
 
BERLIN The European Commission will warn governments Wednesday that they are failing to adequately curb fuel consumption and develop alternative forms of energy, a trend that may push Europe's reliance on foreign energy sources to dangerously high levels in coming decades.
 
But critics said the 20-page strategy paper, to be unveiled by the European Union energy commissioner, Andris Piebalgs, amid a growing debate about the continent's energy security, missed a chance to tackle Europe's real energy predicament.
 
The document, obtained by the International Herald Tribune, is meant to help EU energy ministers define a common energy policy at a crucial meeting later this month. Amid pressure from automotive and industrial interests, however, it does not address controversial energy consumption issues, like the automobile's pre-eminence and the industrial sector - Europe's two largest users of energy. It also avoids looking at attempts by France, Spain and others to shield their companies from foreign bids to create national energy champions before the EU's energy market is fully opened to competition in mid 2007.
 
Instead, the commission presents a largely grim assessment of Europe's growing demand, warning that "around 70 percent of the Union's energy requirements, compared to 50 percent today, will be met by imported products."
 
"The new energy policy lacks vision and proposes a do-nothing approach," said Claude Turmes, coordinator of the industry, research and energy committee in the European Parliament.
 
"There are two main problems with the paper," added Turmes, who is also vice president of the Greens and the European Free Alliance in the European Parliament.
 
"It is not possible to build a European market while leaving competition control on the national level," he cited as the first problem.
 
Turning to the second problem, Turmes said: "It is impossible to address energy policy without tackling the issue of transport, since 96 percent of energy used in the transport sector is oil. Yet transport is not even one of the priority issues in the paper."
 
His group is to meet on Tuesday in Vienna to present a counterstrategy.
 
Roughly half of the natural gas consumed by the European Union comes from Russia, Norway and Algeria. If present consumption patterns continue, the commission said, imports would increase to 80 percent over the next 25 years. To meet this energy demand and to replace an aging infrastructure, investments of around €1 trillion, or $1.2 trillion, will be needed over the next two decades, according to the policy paper.
 
A failure to curb Europe's growing appetite for energy is taking its toll on the climate. The commission said world energy demand and carbon dioxide emissions - the main culprit for global warming - could be approximately 60 percent higher by 2030.
 
To meet these challenges, the commission outlined a three-point plan calling for governments to enhance the security of energy supplies, increase competitiveness within the energy market, and raise the bar on environmental protection.
 
To secure Europe's energy supplies, the commission recommended that the Union adopt "a clear policy on diversifying natural gas supplies."
 
It suggested building a new infrastructure, including terminals for receiving liquefied natural gas and independent pipelines from the Caspian region and North Africa "into the heart of Europe."
 
It also proposed establishing a single European grid and increasing the energy interconnections between the member states to allow a European electricity and natural gas market to develop cooperation because another agreement was struck in 2002 has so far "not been satisfactory."
 
The commission was less specific on how to create more competitiveness in the energy sector - despite threats last month by the Competition Commission to start legal proceedings against companies that hinder competition by denying smaller producers easy access to the distribution networks.
 
It called for "open and competitive markets" and insisted that the creation of a "truly competitive single European electricity and gas market represents a major opportunity for Europe."
 
The paper expressed concern that "many markets remain largely national and dominated by a few companies. Many differences remain between member states' approaches to market opening, preventing the development of a truly competitive European market."
 
But the paper offered no solution to the problems.
 
On renewable energy, the commission adopted a cautious approach, suggesting a long-term efficiency campaign, including efficiency in buildings but omitted mentioning a more integrated railway network and more investment in cars not based on oil.
 
On the other, it recognized that the Union's renewable energy market was one of the fastest-growing sectors. It accounts for half of the world market and employs more than 300,000 people.
 
There are differences, too, among member states over how far governments are prepared to invest in renewable energy sources, like biofuels and wind and solar power, and a European- wide railroad network.
 
Over the past few weeks, most of the member states have submitted proposals to the commission, and analysts said that that explained the generalized and often cautious stance.
 
The French proposals played down efforts for an integrated network, while Germany called for the liberalization of the electricity and natural gas markets and more diversification over how energy is transported.
 
The member states from Eastern Europe that depend almost completely on Russia for their oil and natural gas said that they wanted a much stronger and more united European approach. They said that the principle that member states are responsible for the security of their own power supplies was no longer sufficient.

Only radical solutions will overcome the energy and environmental crises while promoting equality: "Lula"'s article in the Guardian


[From Matthew Davies - JFB]

Join Brazil in planting oil

Only radical solutions will overcome the energy and environmental crises while promoting equality


Luiz Inácio Lula da Silva
Tuesday March 7, 2006

The Guardian

The 21st century will be marked by a crucial debate: how can we make economic and social development compatible with the preservation of our natural environment?

The challenge is faced by developed and developing countries alike, but the burdens need to be more equally shared. The width of the divide between rich and poor countries has doubled over the last 40 years. While the developed world has benefited from the prosperity generated by economic progress, poor countries suffer the consequences of environmental degradation resulting from uncontrolled growth. Rich countries have unsustainable patterns of production and consumption. They are responsible for 41% of total carbon dioxide emissions, and their overall consumption of raw materials is four times greater than that of all other countries combined. With those conditions, there is no possibility of a sustainable future.
The scale of Brazil's natural assets is extraordinary: the Amazon region contains 20% of the planet's fresh water, and almost two-thirds of the country is still covered by natural vegetation. Against this backdrop we have been implementing policies that directly address our most pressing environmental concerns.

When I began my term of office, the rate of deforestation in Brazil had been increasing by an average of 27% per year. From the second half of 2004 onwards, however, we put measures in place to monitor tree-felling and to address the issue of land distribution, with the result that the rate of deforestation has fallen dramatically. In a country that suffers from profound social inequalities, however, the success of environmental policy ultimately depends more than anything on economic and social measures that are themselves geared towards the preservation of our environment.

Over the next 10 years we will place an additional 13m hectares of the Amazon region under a management regime that will guarantee the forest's regeneration cycle. And our commitment to a responsible approach extends well beyond our own territory. It is imperative that we put into practice the commitments of the Kyoto protocol to combat the potentially devastating impact of global warming.

In the search for new, sustainable economic models, the international community is coming to recognise the need for a radical rethink in relation to the generation of energy, and Brazil is responding by using clean, renewable, alternative energy sources to an ever-greater extent. More than 40% of Brazil's energy comes from "green" sources, in comparison with around 7% in rich countries.

The ethanol Brazil produces from sugar cane is attracting worldwide interest, for it is one of the cheapest and most dependable types of fuel derived from renewable sources. Three-quarters of the cars now being produced in Brazil have "flex-fuel" engines, capable of running on either ethanol or petrol, or any mixture of the two.

The government has implemented environmental initiatives that are also bringing social benefits - for example in the form of the biodiesel project. Produced from oil-bearing plants, biodiesel is significantly less polluting than conventional petroleum-based diesel. As it can easily be produced by small farmers in some of the poorest regions of the country, the project combines environmental protection with rural development, and reduces social inequality. There is a great potential for biodiesel in Africa.

Brazil is actively preparing itself for a new development paradigm that will meet the environmental and social challenges of the coming decades. Ethanol and biodiesel are the key components of our approach, and we are determined to "plant the oil of the future". I invite you to join us in our endeavours.

· Luiz Inácio Lula da Silva is the president of Brazil. Email: imprensa@planalto.gov.br

8.3.06

Launching a Sustainable Business: Lessons from the Field


Launching a Sustainable Business: Lessons from the Field
Source
Jason E. Smith
URL:
http://www.greenbiz.com/news/columns_third.cfm?NewsID=30483

I won't receive my MBA degree until later this year, but I've already racked up some active experience in starting a new venture. As CEO of DriveNeutral, an enterprise of the Presidio School of Management that helps individuals, organizations, and events offset their CO2 emissions, I've gathered some experience that I'd like to pass on to other sustainable-business entrepreneurs. Here are some pointers I wish someone had shared with me as I took the wheel at DriveNeutral, hoping to turn an original idea into a viable offering in the open market.

Practice the Pitch


Let’s start where most conversations about your business will begin: the pitch. The more innovative and novel your product or service offering, the more important your pitch becomes. For example, pitching DriveNeutral’s core offering involves for many potential customers a quick lesson in economics, i.e., how does neutralizing one’s greenhouse gas emissions relate to a market exchange platform? Distilling that information into a clear and compelling message took an enormous amount of testing and revision. (A clear example of how important the perfect pitch can be is one that
Presidio provost Ron Nahser uses frequently: When cars first came into the market they were not sold as a new and exotic form of travel but rather as "horseless carriages.")

Practice the pitch early and often among friends and colleagues. Learn to persuasively communicate the most important features of your business in fewer than ten seconds, because often that’s all the time you’ll have to make your case. The utility of this approach hit home for me during media interviews on DriveNeutral. For radio, communicating in snappy sound bites works best. In magazine or newspaper interviews you’re more likely to get a carefully crafted message in print if it’s short enough for a journalist to jot down quickly. If it’s not possible to reduce your core product or service into a succinct series of sound bites, create a secondary pitch for time-crunch situations. Or, you may need to reconsider your business -- a great idea that’s too complicated to explain is a great idea that’s unlikely to receive venture capital or other financial support.

Consult with the Devil’s Advocate


As a sustainable business entrepreneur, you must be prepared for intense, often skeptical scrutiny from the marketplace. With DriveNeutral, we first introduced our business idea to the Presidio School of Management community -- people who are deeply committed green consumers and sustainable business practitioners. Receiving feedback from our friends and colleagues first helped us hone our message for potentially less receptive audiences down the line. As we found out, the harshest criticism from Presidio was based on a mistaken understanding of how DriveNeutral and our partners at the Chicago Climate Exchange work. This feedback helped us pinpoint which messages were getting through and which needed adjustment.

The fact is, criticism is almost always constructive if you’re willing to be flexible and attentive to your audience. If a group is less than wowed by certain product or service attributes or the way you communicate the offering, don’t get stuck -- simply modify your message. This sense of "non-attachment" allowed me to better incorporate feedback while staying committed to DriveNeutral’s core service offering. As long as you are true to the essential business idea, you can make smart adjustments to meet your customers where they live. Your business model should go through several iterations, responding actively and constructively to criticism, before it is delivered to the larger market.


Benchmarks, Timelines, and Exit Strategies


Because the future of any new venture is unknown, the successful entrepreneur must get relatively comfortable with uncertainty. This has definitely been the case with DriveNeutral. In order to alleviate some of this stress, I have mapped out timelines and benchmarks to determine the progress of the business as it develops. If the plan does not appear to be unfolding as well as anticipated, I know when to walk away from the whole experience. This knowledge gives me the confidence to continue taking well-calculated risks.

At the beginning of a start-up it’s important to know how long you can afford to stay committed to the business before it shows signs of promise. It’s all too easy to fruitlessly push uphill when there are no prescribed timelines and no metrics to assess the viability of the venture. Once you have decided what needs to happen and when in order to safely stay in the game, you will know when to leave if your benchmarks are continually missed. On the positive side, you’ll also know when it’s time to raise a toast to your organization’s achievements.

The Dual-Purpose Enterprise


A related issue for green-minded entrepreneurs is the dual purpose of the endeavor. This means that you must be able to speak in terms of raw financials and yet remain passionate about the mission, all the while being careful not to confuse the two issues. The last thing potential investors want to hear about are the environmental and/or social consequences of not funding your business idea, regardless of how serious these realities may be. The reverse is true for potential customers who are, for example, probably unconcerned about the amount of units that you need to sell in order to break-even. The bottom line is to know who to say what to and when.

Staying Creative and Committed


When selling a business idea to investors or trying to earn your first customers, you can’t fake your enthusiasm or allow it to wane. Therefore, I would like to end this column with one last admonition: Don’t forget to breathe.

Whatever you do, make sure that you have a routine in your day that is all about you. Most entrepreneurs find this relief in some type of physical activity, be it going to the gym, taking a yoga class, practicing martial arts, or going hiking every weekend. You’ll burn out too quickly if you don’t diversify your lifestyle at least enough to maintain your calm, focus, poise, creativity, and personality. These traits are critical to your business’s success. Best of luck to you and your enterprise!

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Jason E. Smith will complete his MBA in Sustainable Management from
Presidio School of Management in June 2006. He has been featured as CEO of DriveNeutral, Presidio’s first student-run enterprise, in the Christian Science Monitor, USA Today, Roanoke Times, and Air America Radio. Jason also has experience in sales and marketing within sustainability-driven business and education.

Base of the Pyramid: Sustainable Business from the Bottom up


Base of the Pyramid: Sustainable Business from the Bottom up
Source
Robert S. Katz
URL:
http://www.greenbiz.com/news/columns_third.cfm?NewsID=30405

Martin Fisher and Upendra Bhatt are two of the most important people you've never heard of. And that's fine by them. They would rather be popular among poor Kenyans and Indians than featured in the Western press. What do they do that's so important? They are social entrepreneurs: Fisher's KickStart and Bhatt's Aavishkaar harness the poor's ingenuity and entrepreneurship to build profitable businesses serving basic needs; from efficient irrigation and kerosene stoves to IT-enabled dairy cooperatives, they work with poor communities to generate needed incomes without sacrificing social and environmental considerations along the way.

Fisher and Bhatt are part of a growing BOP (base or bottom of the economic pyramid) movement, whose common call is to alleviate poverty while generating sustainable profits for companies large and small. Poverty alleviation and profit making are rarely considered complementary activities. BOP practitioners -- social entrepreneurs such as Fisher and Bhatt -- seek a middle ground where the private sector's power is brought to bear on persistent social, economic, and environmental problems.

Social entrepreneurs must be grounded in reality. The reality of rural Africa and India is that people need money to send their kids to school, buy medicines, and put food on the table. Poverty alleviation starts with income generation. And pollution-neutral income generation is the building block on which social entrepreneur-led organizations like KickStart and Aavishkaar operate.

Kickstarting the Supply Chain at the Grassroots Level


KickStart (until recently called ApproTec) was founded by Martin Fisher and Nick Moon, former aid workers searching for an alternative to top-down poverty alleviation strategies. Their Kenya-based company develops and promotes technologies that entrepreneurs can use to establish and run profitable small scale enterprises. According to Fisher, "appropriate technology is crucial to the creation of millions of small businesses and jobs."

Those technologies include oilseed presses, a stabilized soil block press for home-building, and a highly successful line of treadle pumps sold under the brand name MoneyMaker. A MoneyMaker pump retails for under $100, and allows a Kenyan farmer to irrigate up to 400 percent more of his land, increasing his yearly income by a factor of ten.

KickStart's success is documented by a stringent monitoring program -- and the company reports that its pumps have created over 29,000 new jobs and $37 million in annual wages and profits to pump operators. "Every person in the world today lives in a cash economy, and their most important need is to make money," notes Fisher.

The developmental benefits of KickStart’s technology are obvious -- so why not make them widely available through government and aid agency programs? Fisher’s quick with a response: "We’ve realized it’s much better to sell things to individual people, using the existing private sector." KickStart prefers a self-sustaining supply chain to handouts, so it helps set up manufacturers and retailers to sell the pump. Their ultimate goal is to get out of Kenya -- leaving behind a robust infrastructure to continue making, selling, and using its technology.

Some critics in the environmental and development communities worry that MoneyMaker pumps threaten scarce sub-Saharan water tables, but the pump is not a well; it draws water only from the top 20 feet below ground, a level replenished by seasonal rains. Furthermore, Fisher notes that "once people get our pumps, they start growing trees. They start having more money, which means more time to get involved in community environmental projects."

"If you get people out of poverty, they will care for their environment more than they would otherwise." Emphasizing sustainable irrigation practices as well as a flourishing supply chain, KickStart exemplifies how poverty alleviation and profit generation can happily co-exist.

Aavishkaar: Funding Budding Entrepreneurs in Rural India


At first glance, the only things coexisting in rural India are poverty and poverty. The patchwork of farming villages throughout rural India is a landscape in which poverty can be passed down from one generation to the next. Aavishkaar’s Upendra Bhatt has a different view: rather than a network of persistent poverty, he sees rural India as a hotbed of innovation.

Unfortunately, many innovations that come out of rural India never reach significant scale. While big businesses have easy access to diverse sources of funds, small entrepreneurs find it extremely difficult to raise money. Capital constraints prevent many promising innovations from making it to the market.

Aavishkaar fills an important role: it is positioned between microfinance and traditional venture capital funds with its promise of equity support to small businesses. According to Bhatt, "we try to create an enabling ecosystem of entrepreneurs, whom no one else is willing to fund." To create such an ecosystem, Bhatt and his partners raised over $1 million to start a "micro-venture capital" firm.

M. Mukundan was one of Aavishkaar’s first investments. Through connections in rural areas, Mukundan had come across locally-developed kerosene stoves and a hyper-efficient irrigation rain gun. Working with local villagers, he developed a business plan to distribute both throughout rural India. Microfinance institutions were interested, but what Mukundan really needed went beyond the $1000 annual loan he was offered.

Aavishkaar stepped in when his loan application was turned down, conducting professional due-diligence and market research studies before taking a 49 percent equity stake in the start-up company. With a sophisticated marketing and distribution plan in place, both the rain gun and kerosene stove are being sold throughout India, saving at least $500,000 in fuel and water costs for the more than 70,000 BOP customers who have purchased them.

Bhatt is the first to acknowledge that "BOP consumerism has its limitations. The solution must enable the BOP to be a producer as well," he says. Another Aavishkaar investment sets up village-level dairy cooperatives with simple computer technologies that could revolutionize the dairy industry in India.

The Dairy Cooperative Societies use computerized scales and milk analyzers to process greater quantities of higher quality milk, while also saving money through reduced staff requirements. For farmers, lines are shorter, less milk is spoiled and payment is quick and accurate. The systems are successfully being used at more than 750 dairy cooperative societies spread throughout the Indian states of Gujarat and Maharashtra.

Aavishkaar responds to the gap between microfinance and formal capital in the Indian system by making profitable investments in rural innovations. It invests exclusively in socially and environmentally responsible firms, since, as Bhatt claims, “any BOP business must be socially and environmentally responsible in order to survive. Period. Unless that business is doing something useful in the community, they’re not BOP.”

The work of Kickstart and Aavishkaar are two small examples of a vital new approach to business and to ecosystem management. Natural resources are still -- and will remain for the foreseeable future -- the primary assets of the rural poor. Proper management of these assets is critical not only to those who rely directly on agricultural land, or forests, or freshwater or oceans, but also of course, to all of us. Social entrepreneurs like Fisher and Bhatt are pioneers, showing us how to live out the promise of sustainability -- providing for today’s needs while protecting the earth’s environment and its capacity to provide for the needs and aspirations of current and future generations. And they are doing it by applying ingenuity and sound business practices that suggest we can be green while catalyzing economic growth for low-income communities at the base of the economic pyramid.

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Robert S. Katz is a research analyst with the World Resources Institute. He researches “base of the pyramid” business approaches to poverty, and is an editor of and frequent contributor to the NextBillion.net -- Development Through Enterprise Web site and blog. His current research documents unmet human needs in low-income communities and identifies the corresponding market power of the poor.