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


Heating up: A gloomy UN-backed report is published -- That the IPCC should end up with a range that vast is not surprising given the climate's complexity

Heating up

Feb 8th 2007
From The Economist print edition

A gloomy UN-backed report is published

THE fourth assessment report of the Intergovernmental Panel on Climate Change (IPCC), published in Paris on February 2nd, is important, unsurprising and will probably be uncontroversial. It is important because the IPCC is the body set up under the auspices of the United Nations so that governments should have an agreed-on view of the science on which to base policy. It is unsurprising because, although some of the figures differ from those in the third assessment report published in 2001, the changes are minimal and its broad conclusion, that something serious is happening and man is in part responsible, remains the same (though the authors now say that man is "very likely" to be responsible, rather than just "likely"). It will probably be uncontroversial because the few remaining climate-change sceptics prepared to speak out against the consensus argue not so much about the climate science as about its consequences. Those arguments will take place mostly around the IPCC's two follow-up reports, to be published later this year, on the impact of climate change and on what to do about it.

AFP Global warming's footprints

Part of the report's job is to consider studies of the speed of change so far. Warming seems to be accelerating somewhat. Eleven out of the dozen years from 1995-2006 were among the 12 hottest years since 1850, when temperatures were first widely recorded. So the estimate for the average increase in global temperature for the past century, which the third assessment report put at 0.6°C, has now risen to 0.74°C.

The sea level, which rose on average by 1.8mm a year from 1961 to 2003, went up by an average of 3.1mm a year between 1993 and 2003. The numbers are still small, but the shape of the curve is worrying. And because the deadline for scientific papers to be included in the IPCC's report was some time ago, its deliberations have excluded some alarming recent studies on the acceleration of glacier-melting in Greenland.

Some trends now seem clear. North and South America and northern Europe are getting wetter; the Mediterranean and southern Africa drier. Westerly winds have strengthened since the 1960s. Droughts have grown more intense and longer since the 1970s. Heavy rainfall, and thus flooding, has increased. Arctic summertime sea ice is decreasing by just over 7% a decade.

In some areas where change might be expected, however, nothing much seems to be happening. Antarctic sea ice, for instance, does not seem to be shrinking, probably because increased melting is balanced by more snow.


The other part of the report's job is to make predictions about what will happen to the climate. In this, it illustrates a curious aspect of the science of climate change. Studying the climate reveals new, little-understood, mechanisms: as temperatures warm, they set off feedback effects that may increase, or decrease, warming. So, as understanding grows, predictions may become less, rather than more, certain. Thus the IPCC's range of predictions of the rise in the temperature by 2100 has increased from 1.4-5.8°C in the 2001 report to 1.1-6.4°C in this report.

That the IPCC should end up with a range that vast is not surprising given the climate's complexity. But it does leave plenty of scope for argument about whether it is worth trying to do anything about climate change.

National lobbies are trying to outrun the Commission: The carmakers say that they are being made to carry too much of the burden for cutting emissions. Cutting traffic congestion, they argue, can be more cost-effective

Setting the target

Feb 8th 2007
From The Economist print edition

National lobbies are trying to outrun the Commission

YOU know a row has turned venomous in the European Union when the squabblers resort to national name-calling. The current fight pits Europe's carmakers, notably from Germany, against the European Commission, which wants to impose sharp reductions on the amount of carbon dioxide that new cars sold in Europe from 2012 may pump out. The lobbying has been ferocious. When it comes to cars, national passions run deep.

Calling for tweaks to the plan in favour of gas-guzzling cars, the German chancellor, Angela Merkel, said her country would "fight with all its strength" to get its way. The boss of Porsche talked last month of a "business war" against countries that make mostly smaller cars, such as France and Italy. Volkswagen told the Commission the cuts were unworkable.

And so at the last minute, the proposals, announced on February 7th, were watered down: they would now trim the CO2 emissions of the average new car sold in Europe to 130 grams per km driven, a cut of about a fifth from present levels. A further 10g of CO2/km would be saved with more efficient tyres, air-conditioning and so on.


On the face of it, the ferocious lobbying is rather odd. Germany pledged that the fight against global warming would lie at the heart of its current six-month shift as president of the European Union.

The whiff of hypocrisy has not escaped the EU environment commissioner, Stavros Dimas, who this month demanded that Germany should live up to its "nice speeches". In case anyone missed the point, he let it be known that he was ditching his official Mercedes in favour of a hybrid car from Japan.

That hurts. Europeans are deeply nationalistic about the cars they drive. Nine out of the top ten cars sold in France in 2005 were French. German brands achieved the same score in their own home market. In Italy, Fiat and Lancia grabbed three out of the top five spots. Swedes love their Volvos and Saabs.

Horsepower also varies widely from country to country, and that matters. For all the improvements in engine technology, there remains a link between oomph under the bonnet, fuel consumed and the amount of CO2 you leave trailing behind you. Germans, Swedes and British drivers favour relatively powerful engines, while the French and Italians make do with markedly less horsepower.

Size matters, too. French and Italian drivers may love speed, but they zoom about in relatively small cars. Practicality plays a part, and psychology. If you live in an ancient, congested city, a tiny car is all you need. You can also park it near your inamorata's flat, which is cool.

There is no inherent difficulty in making cars that emit 130gCO2/km. It is just hard to meet the target if you want a big car, or one with blistering acceleration. Italy's top two sellers, the Fiat Punto and Panda, already match or beat the proposed target. Several Peugeot, Citroën and Renault diesels do even better. But these are small cars, or mid-sized runabouts with sluggish acceleration. None of which is much help to firms with luxury and performance at the centre of their brands. The average new Porsche emits 297gCO2/km.

The commission proposal must now be considered by national governments and the European Parliament. More fights loom. Makers of beefy cars, worried that they cannot hit CO2 targets as individual companies, want average emissions calculated across the entire European market. Mrs Merkel wants different targets for different weight-classes of car.

The carmakers say that they are being made to carry too much of the burden for cutting emissions. Cutting traffic congestion, they argue, can be more cost-effective. They may win some of the coming fights in Brussels. But the European Commission is not alone in looking at CO2 emissions. National governments and local authorities across Europe are looking to link CO2 emissions to taxes, congestion charges and even parking fees. Change is coming, and big engines will not outrun it.

California, Illinois schools win $500M BP biofuels grant

(thanks again, Pete :-)

California, Illinois schools win $500M BP biofuels grant
Sacramento Business Journal - February 1, 2007
by Catherine Williams

University of California Berkeley and the University of Illinois have landed a $500 million research grant, sponsored by BP Plc., to fund an international biofuels research center.

The California and Illinois effort edged out MIT and Purdue University for the grant. The decision Thursday came after months of lobbying effort to attract the 10-year grant.

Bob Malone, BP America chairman and president, made the announcement alongside Gov. Arnold Schwarzenegger, who has promised $40 million in matching state funds to bolster support of the center.

California may have benefited from its close ties to BP. Steve Koonin, BP's chief scientist, served as the provost of the California Institute of Technology from 1995 to 2004 before joining BP. As BP's chief scientist, Koonin is responsible for the company's long-term technology plans, particularly those "beyond petroleum," according to company officials.

Koonin holds a bachelor's degree in physics from California Institute of Technology and a doctoral degree in theoretical physics from MIT.

In June of 2005, BP announced it would establish a biosciences energy research laboratory in either the United States or the United Kingdom. The aim of what will be the BP Biosciences Institute is to convert organic matter to biofuel and create new biofuel components and high-yield energy molecule plants via plant science, according to BP reports.

BP is headquartered in the United Kingdom and reports 2006 revenue of $32.6 billion.

Catherine Williams wrote a version of this story for Mass High Tech: The Journal of New England Technology, an affiliated newspaper.

Test riding first hydrogen bike: People don't look around as you approach - they just stare after you've gone past.

[Thanks Pete]

Test riding first hydrogen bike
By Richard Westcott
BBC Breakfast correspondent

Riding the world's first purpose-built hydrogen-powered motorbike may be environmentally friendly - and fun - but where does it leave its more traditional petrol-driven cousin?

Intelligent Energy's hydrogen-powered motorbike

Bike's designer: hydrogen is the future

Weird. Weird and fun. That's what it's like to ride the world's first purpose-built hydrogen fuel cell motorbike.

The only noise is from the tyres and the wind whistling through your crash helmet. People don't look around as you approach - they just stare after you've gone past.

The ENV (Emissions Neutral Vehicle, envy for short) accelerates like a 125cc scooter. It's smooth and easy to control, will do 50mph and has a range of 100 miles.

All that, and the only garbage you're belching into the atmosphere is water vapour.

Filling up

There are three great big catches though.

Firstly, the bike itself may be completely green, but producing hydrogen isn't.

At present, the bulk of it comes from using up fossil fuels. The whole process isn't as polluting as producing oil but it still has an impact.

Secondly, where do you fill up? Hydrogen is easy to buy, costs about the same as petrol, but virtually no petrol stations sell it.

So unless you're prepared to carry a spare canister around with you, you'd better be careful where you ride.

Mass production

Thirdly, the first bikes could cost you upwards of £6,000. That's a lot for a small bike.

The makers at Intelligent-Energy in Leicestershire insist all these problems will be ironed out in a few years.

They believe all the big car makers will soon be mass producing hydrogen vehicles by then, forcing the automotive industry to dream up solutions.

Now, the science bit. Hydrogen cells for vehicles have been around since the 1960s.

They work by feeding hydrogen into a chamber, where it reacts with oxygen to create electricity and the only by-product - water.

Explosive hydrogen

By the way, if you are worried about riding around sitting on a canister full of explosive hydrogen, the makers say it is no more dangerous than petrol - and you never worry about that do you?

The ENV's been around for a couple of years as a prototype but the designers hope to develop a full-blown production model by the end of the year.

By the way, I realise hardcore bikers will never give up their throbbing combustion engine, but hundreds of thousands of people also commute on their bikes and this will be targeted primarily at people in cities.

I like throbbing combustion engines too, but the ENV was a lot of fun. Weird fun.


Pablo Calculates the True Cost of Bottled Water: the manufacture and transport of that one kilogram bottle of Fiji water consumed 26.88 kilograms of water (7.1 gallons)and .849 Kilograms of fossil fuel

Interesting analysis---thanks Norbert!

Pablo Calculates the True Cost of Bottled Water
Lloyd Alter, Toronto on 02. 6.07
Science & Technology

Pablo2.jpgWe have tried to calculate the true cost of producing and transporting bottled water before, and have come up with just vague approximations, which did not take the production of the bottle into account. Over at Triple Pundit, Sustainability Engineer and MBA Pablo Päster has done a thorough and exhaustive study of the cost of bring a litre of Fiji Water to America. He starts with the production of the bottle in China, taking the bottle blanks to Fiji, and confirming that it takes more water to make the bottle than it actually holds. He then transports the bottle to the States by ship. Not even including the distribution in the States, the numbers are absolutely staggering.

In summary, the manufacture and transport of that one kilogram bottle of Fiji water consumed 26.88 kilograms of water (7.1 gallons) .849 Kilograms of fossil fuel (one litre or .26 gal) and emitted 562 grams of Greenhouse Gases (1.2 pounds).

Twenty-six times as much water used to make it than you actually drink. As much fuel to make it as there is water in the bottle. Staggering is an understatement. ::Triple Pundit

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[3] Comments | Related Tags: bottled water | carbon footprint | fiji water | pablo
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Comments (3)

Interesting, but it seems like comparing the water used ratio is skewed. How much of the water used is recycled and used again? Cooling water, ideally, for power plants is near the same temperature it was taken and otherwise unchanged. How can you count that?

Now for a real comparison, how much water and energy is used when getting water from the tap? Everything from drilling the wells, treating the water and delivering it. There will be a large difference I'd assume between city water and personal wells. Maybe include a RO unit so the end result is almost pure water.

February 6, 2007 12:11 PM | click here to report abuseflag a problem
jump to topJiltedCitizen [TypeKey Profile Page]says:

AskPablo: Exotic Bottled Water

fiji water.jpg
This week's AskPablo comes from Maryline: "I am interested to know the 'true-cost' of a bottle of Fiji water that currently sells for $1.50 in the United States. David Lazarus wrote a report on the water business in the SF Chronicle and studied the success of Fiji (January 21 edition), where 'distance and exoticism are marketed as advantages.' Fiji is now # 2 in premium bottled water, behind Evian where we have the same transportation issue. An environmental absurdity!"

I agree! I once heard Julia "Butterfly" Hill (everyone's favorite tree-sitting sweetheart) say that it takes more water to make the plastic bottle than it actually holds. We might as well put that myth to the test while we're at it. Where do we begin? Well, I doubt that Fiji has a booming plastics industry so they probably get the bottles from China. I would suspect that they get the bottles in the form of "Blanks" which are then expanded to their final size and shaped by a process called "stretch blow molding." The total mass of the empty 1 liter bottle is probably around 0.125kg (125g) and it is probably made from PETE or HDPE (Sorry, I'm not running out to the store to check). Plastics of this type typically use around 6kg of oil per kg, 200kg of water per kg, and result in around 3kg of greenhouse gas emissions per kg. So, with a quick check (200kg/kg x 0.125kg = 25kg of water) we find that Butterfly is indeed correct. Based on my assumptions a bottle that holds 1 liter requires 25 liters of water in its manufacturing process (this includes power plant cooling water).

Let's take a look at the transportation aspect to see what the total ecological impact of an exotic bottle of water might be. A container vessel uses 9g of fuel per tkm (that's metric tons carried x distance traveled), 80g of water per tkm, and releases 17g of GHGs per tkm. The distance from China to Fiji is 8,000km, which gives us exactly 1tkm ( (0.125kg / 1t/1000kg) x 8,000km = 1.0tkm). So, 9g of fossil fuels, 80g of water, and 17g of GHGs per bottle delivered to Fiji from China.

Now let's look at the trip to the US. The distance from Fiji to San Francisco is 8,700km. But this time the bottles will be full, so they will have a mass of 1.125kg each. This gives us a much larger value of 9.8tkm ( (1.125kg / 1t/1000kg) x 8,700km = 9.8tkm) which I will round up to 10tkm. So, 90g of fossil fuels, 800g of water, and 170g of GHGs per bottle delivered to the US from Fiji.

Since the fossil fuels end up being accounted for in the GHG emissions I'll ignore those values for now. The total amount of water used to produce and deliver one bottle of exotic water is 26.88kg (25kg + 80g + 1kg + 800g)! And the amount of GHGs released amount to 562g (375g + 17g + 170g), or 0.562kg, or 0.000562 tons. If you wanted to offset your annual exotic water habit (are you eco-chic Hollywood types listening?) with DriveNeutral it would cost you $1.54 (0.000562 tons/day x 365 days/year x $7.50/ton), just 4 cents more than the cost of one bottle of water.

But how much does it cost to deliver the water from halfway around the world? Let's assume that the cost of transportation is based on our fossil fuel use assumptions above and that the bottle producer and the shipping company charge double their material cost. I am not sure if these are valid assumptions, but they are just assumptions after all... So, 0.75kg of fossil fuels to make the bottle, 9g to deliver it to Fiji, and 90g to deliver the full bottle to the US. From economics we learn that fixed costs (equipment, etc.) in high-volume production are negligible in the long run so it is pretty safe to assume that the cost of making and delivering the bottled water is linked to its variable cost. In this case the variable cost is the fossil fuel (since the water comes out of the ground for free), which amounts to 0.849 kg. A standard oil barrel holds 159 liters and one liter of oil weighs 850g/liter, so one barrel holds 135.15kg of oil. One barrel costs between $40 and $70 (let's say $55, depending on OPEC's mood and other factors), so 0.849kg would cost $0.35 (1 barrel/135.15kg x $55/barrel x 0.849kg). And applying our earlier mark-up assumption, the cost to produce and deliver a bottle of exotic water is $0.70, leaving $0.80 per bottle profit for the manufacturer and the retail store.

I hope that answers your question Maryline!

Pablo Päster, MBA
Sustainability Engineer

8 International Meetings for Sustainable Energy: Biofuels and corporate climate response


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Climate challenge will heat up the global economy, Barclays predicts

Climate challenge will heat up the global economy, Barclays predicts
By Jane Padgham
Published: 08 February 2007

Climate change will boost the global economy and dominate financial markets over the next 25 years, a leading investment bank has predicted.

In a new report, Barclays Capital challenges the conventional wisdom that global warming will have a devastating impact on economic growth. It believes the need to increase energy capacity by 50 per cent by 2035, while simultaneously reducing dependence on hydrocarbons, will spark an "energy revolution" reminiscent of the technology revolution which led to the boom.

"If ever the time were ripe for such an energy revolution, it is now," said Tim Bond, global head of asset allocation at Barclays Capital, and author of the report. "And like all historical adoptions of general purpose technologies, the process should prove immensely stimulative to economic growth."

Mr Bond says that those who couch the climate change debate in terms of the cost to growth are underestimating the impact of an energy revolution. Last year's Stern Review concluded that if temperatures rise by five degrees celsius, up to 10 per cent of global output could be lost.

"All of the historical changes in energy supply - from dung to wood to coal to oil - were stimulative for the economy concerned. Every major technological change was accompanied or followed by faster economic growth." he said. Like every revolution, there will be winners and losers, with the energy sector set to reap the biggest rewards.

In the meantime, current uncertainty over US climate change policy may be deterring energy investment, the report says. Until public opinion forces the US administration to address the issue, energy scarcity will intensify and prices will continue to soar. Indeed, futures markets suggest that oil prices, already at levels last seen during the 1970s oil shock in inflation-adjusted terms, will keep rising due to a worsening supply/demand imbalance. The same is true for the other hydrocarbon, coal.

"The impact of the replacement, restructuring and expansion of our energy infrastructure cannot be ignored," Mr Bond said. "Just as the personal computer cannot be un-invented, neither can the impending energy revolution."

The report is contained in Barclays Capital's annual Equity Gilt Study, which shows that equities were far and away the best-performing financial asset in 2006, as the stock market rally continued. Last year, money invested in stocks and shares grew by 11.4 per cent, still less than the 19 per cent growth seen in 2005.

In contrast, money invested in gilts shrank by 4.4 per cent as rising inflation wiped out nominal returns. Corporate and index-link bonds also suffered, falling by 4.5 per cent and 2.1 per cent respectively. Cash returns edged up by 0.4 per cent.

Barclays Capital calculated than an investor who put £100 in the stock market in 1899 would now be sitting on £25,022 if all income had been reinvested and adjusted for inflation. The same money invested in gilts would now be worth £323. If the £100 had been kept in cash, it would have swelled to just £286, it said.

Top-end carmakers to bear brunt of drive to cut carbon dioxide emissions

Top-end carmakers to bear brunt of drive to cut carbon dioxide emissions

By Tobias Buck and Andrew Bounds in Brussels

Published: February 8 2007 02:00 | Last updated: February 8 2007 02:00

Manufacturers of luxury and sports cars are likely to bear the brunt of the European Commission's drive to cut carbon dioxide emissions from vehicles by a quarter over the next five years.

"The pressure on costs of the makers of small cars are intense. Manufacturers of bigger cars should contribute more environmentally than those of smaller vehicles," Günter Verheugen, the European Union industry commissioner, yesterday said.

His comments came as the Commission confirmed it would table legislation by the middle of next year that will force the car industry to lower carbon emissions to 120 grammes per kilometre by 2012. The industry will have to ensure that car engines emit no more than 130 g/km, with the remaining cut coming from the increased use of biofuels and other measures.

Stavros Dimas, EU environment commissioner, said: "These are the most ambitious targets anywhere."

The plans have sparked fierce criticism from the car industry, which fears the new caps will force it to shift production abroad and make it less competitive. The plan is also likely to be legally difficult since it fails to spell out how the cuts should be achieved.

The Commission has, for example, refused to specify how it intends to spread the pain of implementing the cuts among various producers. Mr Verheugen acknow-ledged that tailoring the targets to different segments of the industry would be difficult and expensive. "We are discussing here billions and billions of development costs," he said.

Groups such as Fiat and Renault will be hoping that Mr Verheugen's suggestion of lighter reduction targets for makers of small and medium-size cars will be reflected in the final proposal. But Brussels will come under intense pressure from the likes of BMW and DaimlerChrysler, whose premium cars are further from meeting the 120 g/km target.

Brussels has also refused to say if it intends to propose sanctions for carmakers that fail to meet the targets. "I suggest you ask that question one year from now," said a Commission official.

The car industry is deeply critical of the Commission's plans. ACEA, which groups all big manufacturers in Europe, including those based outside the EU, said the industry had invested heavily in developing fuel-efficient cars only to see many of them be rejected by European consumers.

Ivan Hodac, ACEA secretary-general, said: "The consumer is not interested in buying fuel-efficient cars. They look for comfort and safety."

Carmakers will now switch their lobbying firepower on to European par-liamentarians and governments, who must approve the plans. "There will bejob losses and we will see what MEPs from thosecountries will say aboutthese issues," Mr Hodac said.

Sergio Marchionne, Fiat chief executive and ACEA chairman, said 12m jobs and the core of Europe's manufacturing base were at stake.

Environmental groups said they were pleased with the broad thrust of the plans, but voiced dismay that the Commission had watered down the original target for carmakers.

"The adoption of a European emissions law for cars is welcome, but it is weaker than we had hoped. The German motor manufacturers strong-armed the EU to water down the proposals," Greenpeace said.

The proposals follow weeks of strife at the Commission and heavy lobbying by national governments, the motor industry and environmental groups. Mr Dimas had originally wanted to make carmakers solely responsible for cutting emissions to 120g/km but resistance from Mr Verheugen and the intervention of José Manuel Barroso, the Commission president, forced the environment commissioner to accept the inclusion of biofuels and other measures in that target.

Though Mr Verheugen and Mr Dimas sought to present a united front yesterday, the negotiations between the two commissioners are likely to continue.

Interview with Chilean president -- Promoting growth and social progress

Thanks to Kristina for this one :-)

McKinsey Quarterly
Public Sector: Economic Policy
Promoting growth and social progress: An interview with the president of Chile

Michelle Bachelet discusses her views on the roots of political upheaval in Latin America, and the link between economic development and the fight against poverty.

Gonzalo Larraguibel and Marcelo Larraguibel

2007 Special Edition: Shaping a new agenda for Latin America

Michelle Bachelet, President of Chile, is one of Latin America's most prominent leaders. A moderate Socialist who has pledged to combine pursuit of the country's free-market policies with social measures to narrow the gap between rich and poor, her actions and pronouncements are of special interest to the outside world at a time of turbulent political change elsewhere in the region.

Bachelet's life and political career have been significantly shaped by Chile's troubled recent past. Detained and roughed up in 1975—two years after the late General Pinochet came to power in a military coup—she spent a period in exile, first in Australia then in the German Democratic Republic (the former East Germany), before returning to Chile in 1979. Like others on the left, she was active in the battle to restore democracy to the country in the late 1980s.

A trained surgeon who has also studied military strategy, Bachelet first came to national political prominence as health minister in the government of her predecessor Ricardo Lagos, where she initiated an in-depth review of Chile's health care system. Subsequently appointed the minister of defense, she was credited with reforming the military pension system and modernizing the Chilean armed forces.

One year after her election victory as candidate of Concertación, the center-left coalition that has held power since 1990, President Bachelet faces a range of social and political challenges. The economic outlook appears robust—with GDP growth expected to rebound in 2007—and healthier-than-expected budget revenues last year (fueled by record-high copper prices) have raised hopes for social change. Political preoccupations have included street protests, a forced Cabinet reshuffle just three months into her term, and corruption scandals. On the external front the Bachelet Government has continued Chile's pursuit of free-trade agreements (FTAs).

In this interview in the Presidential Palace in Santiago, Michelle Bachelet talked with McKinsey principal Gonzalo Larraguibel and McKinsey director Marcelo Larraguibel about the climate for foreign investment, political upheavals elsewhere in Latin America, and the changes needed to make her vision a reality.

The Quarterly: How do you view the rise of populist governments in Latin America and the reduced enthusiasm in some countries for free markets and free trade? And what do you see as Chile's wider role in the region?

Michelle Bachelet: Latin America is facing an important moment. There have been 12 elections in the past year, all of them democratic, which represents a wonderful success and development of the regional political system. At the same time, economic and social indicators for the region are improving. However, there are countries where people are uneasy about the process of economic liberalization, because structural economic reforms were not accompanied by the social policies that were necessary. Therefore, many people in the region have been disappointed and are looking to see what else can be done.

The problem has not been with open economies per se but rather the lack of action in addressing poverty and social injustice. Chile has had its own experience—combining political stability, sound macroeconomic policies, and social cohesion—and we believe you cannot have one without considering the other.

When you ask about the role of Chile, it has been to share our experiences with our counterparts in Latin America. Many other leaders have been interested to know more about the experience of Chile. For example, we have brought together businesspeople from different countries and have tried to support countries that are interested in the skills our teams have acquired in negotiating FTAs. We have 54 of them, after all, giving us access to markets of 3 billion people throughout the world. We talk to colleagues about the complementary benefits these agreements can bring.

The Quarterly: Do you think other countries could give the region a bad name with their recent actions?

Michelle Bachelet: Every country has the self-determination and sovereignty to decide on their economic policies, and I would never speak about what others have done. I think that the best thing I can do is support them, continue to work with them, and be available to help.

Like any group of countries such as the European Union, Latin America has many different political, historical, and economic situations. We have been working on a South American Community, and some people even talk about a common currency. Looking at the EU, that would be a wonderful future goal. But today we have diverse countries, some with high external debt, others with low, some with very open economies, others less open. I still believe in integration, and there are working groups across the continent studying how to better connect our infrastructure and other topics such as social protection, energy, and education.

The Quarterly: What is your vision of the sort of country you would like Chile to become in ten years?

Michelle Bachelet: I would love Chile to be regarded as a modern society with a modern system of social protection and an open economy, both regionally and internationally, and also to be seen as a player on the world stage. Not, of course, in the sense of throwing its weight around, but rather as a contributor to the task of global development. We want Chile to be a country where you can find all the conditions needed to create wealth and innovate, but at the same time one that protects the vulnerable and looks after those with liabilities or those who started too far behind to benefit from the opportunities and possibilities we have here.

Over the past 16 years we have emerged from a difficult history to build a country that has political stability, economic stability, and social cohesion. In addition to social justice, everything we do is intended to promote a better quality of life and greater dignity for our people. You cannot have winners and losers—everyone has to win.

The Quarterly: It's been almost a year since you were sworn in as President. What achievements from the past 12 months have you been most proud of?

Michelle Bachelet: I think the Chilean people clearly perceive the distinctiveness of our administration—democratic strengthening, economic growth, and social protection—which is very much in the spirit of the Concertación de Partidos por la Democracia. In our opinion, there is no incompatibility between growth and a more equal distribution of wealth. Indeed, we are convinced there is a virtuous relationship between the two. International experience shows that extreme inequality is not just unfair and a source of social tension but also reduces the dynamism of the economy. Countries lose the main motor of growth—the capacity to innovate and to take risks—and populism arises.

Concrete policies in the first year have included bills for the protection of children, reform of the pension system, educational reform, new ways to encourage entrepreneurship, and a new approach to housing that not only focuses on construction but also incorporates security, health care, and child care. In the first year we have doubled the number of public nurseries and child care facilities, which had not changed much in 30 years. We have to fight inequality from the very beginning of people's lives, and this initiative also creates better conditions for women to take jobs. The challenge we have is to enable everyone to respond to the opportunities provided by globalization, which are increasing constantly.

Another positive aspect is that in 2006 we ratified and enacted our free-trade agreement with China—now our second-biggest commercial partner, after the United States—as well as our Trans-Pacific Strategic Economic Partnership with New Zealand, Brunei Darussalam, and Singapore. We successfully negotiated the same type of agreement with Japan. We also signed two additional free-trade agreements with Colombia and Peru and opened negotiations with Malaysia.

The Quarterly: Can you tell us more about the important levers that will turn your medium- and long-term vision into a reality?

Michelle Bachelet: Equal opportunities from the beginning would be one slogan, and education is the main issue here. We need to move from where we are now—with everyone guaranteed an education under the constitution—to the point where everybody gets an education of excellent quality. This is not just a matter of social justice; education is a vital economic agent. More still has to happen on coverage—notably for the 9th through 12th grades and kindergarten, where only 90 percent of children attend. We have specific goals for each age group. The same goes for higher education: about 650,000 people attend universities and colleges today, compared with about 77,000 in my day, but to develop innovation in science and technology we need to double that number. We have a particular problem in Chile because of the shortage of people with technical qualifications: in most countries the ratio is ten technical graduates for each professional. Here things are the other way round.

Education is also fundamental in attracting foreign investment, particularly in the regions of the country where we do not always have enough people with the necessary skills.

The Quarterly: It's the reform of the pension system, though, that has probably attracted the most outside attention. How will that evolve?

Michelle Bachelet: Twenty-six years ago, we made some important reforms, as you say, that have been copied in other places. The old system, based on fixed compensation, also known as a defined benefit, was replaced by an individual capitalization system, or defined contribution, and managed by private entities.

That has brought several benefits for Chile, but we now realize that there were some significant gaps. We therefore need to find ways to make the pensions industry more competitive and transparent, introduce proper incentives to foster individual and collective savings, and ensure that every citizen receives a reasonable pension. The latest reforms represent a new architecture of benefits based on the integration of these three pillars. What people did not foresee in 1981 was the way people now move between jobs, perhaps only spending nine months in one place, with a period of unemployment in between. Women have been discriminated against, and young people do not think ahead as much and have made fewer contributions. A lot of the original assumptions proved overly optimistic. It was thought that the replacement rate—the amount of pension as a proportion of final salary—would be 80 to 85 percent, but it has turned out to be much lower: 51 percent for men, less than 30 percent for women.

The Quarterly: What are your other plans to improve the competitiveness of the Chilean economy?

Michelle Bachelet: One key area is innovation, around which we are developing tax incentives to encourage more industry participation. By OECD1 standards the 0.7 percent of GDP that Chile invests in research and development for science and technology is not only low, but over two-thirds of it comes out of public expenditure. The private sector contributes very little. Our aim is to get industry more closely involved with universities, science centers, and biotechnology research centers so we can add more value to our products. Our economy is very dependent on natural resources—copper, pulp and paper, and the fishing industry represent 54 percent of exports—and we need to do more than just produce more of them.

There are some encouraging signs. I recently saw how Codelco, the state-owned copper business, has been developing advanced techniques to produce copper in a more environmentally sustainable way. The salmon-farming industry is creating new vaccines and special medicines for this species. Similar developments are happening with mining supplies and through genetic engineering in forestry. The wine industry is looking to develop premium bottles. And we are also targeting agribusiness and tourism, which has great potential given our beautiful geography, highway infrastructure, and safety record.

In all this we see business clusters as a key mode of innovation, along with increased collaboration between the public and private sectors. We are also prioritizing small and medium-sized businesses, and we are considering a range of other initiatives, including a simplification of the tax system that has just passed through the Senate. These businesses account for 70 to 80 percent of employment here, but we can do much more: if you look at Sweden and other European countries, the export capability of these enterprises is much higher. Medium-sized businesses, for instance, are responsible for 50 percent of exports there, whereas ours account for only 3 percent of the total.

The Quarterly: What is your view of further privatization in Chile? For example, would you consider the privatization of minority stakes in state companies?

Michelle Bachelet: My government is not contemplating new privatizations, among other reasons because state-owned companies such as Codelco have demonstrated that they already function very well. What we want is to improve corporate governance in public companies—their transparency, management, professionalism, and the value they add for their owners, the people of Chile.

The Quarterly: What is your view of public-private partnerships in Chile for the development of areas such as infrastructure?

Michelle Bachelet: Public-private partnerships have been fundamental in the improvement of roads, ports, and airports. The mechanism of concessions2 to the private sector not only has allowed more funds to be invested in public assets, thereby improving the country's integration and competitiveness, but has also been used to redirect limited public financing to activities with a high social impact. These are generally not profitable if one does not take that social impact into account. Concessions have also redefined the way in which public institutions work and think, allowing them to focus not only on the production of goods and services but also on their wider purpose to serve the needs of citizens. For the period of 2007 to 2010 we aim to invest more than $2.2 billion in concessioned infrastructure.

The Quarterly: That brings us to your own leadership style, notably in Chile. Do you think you bring a different perspective to change than what the country has experienced in the past?

Michelle Bachelet: It's always difficult to say if some attributes are gender linked or more personal to women and men. I know women who are very hard, who act like a man and tell you, "If you don't act like a man, you are dead." Equally, I know men who share my style. I have made a conscious choice that I will pursue a leadership style that can be strong and authoritative but can retain "womanly" attributes, if you will. That is why I push for social dialogue, because I think the best thing for the economy and the people is for everyone—owners, managers, and workers—to sit down and see how we can move forward together.

When developing the latest pension system reform, for example, I set up a commission of intellectuals and practical people—those with know-how and different political perspectives. Many people laughed and said it was because I was unable to make decisions. They were completely wrong. The same thing has been done with education and childhood reforms. In both cases there has been wonderful work that has enabled the government to make decisions based on all points of view. I admire Denmark's permanently standing Globalization Council, which consists of groups representing different parts of society, seeing how they can improve competitiveness and address social and human-capital challenges. Ultimately, this way of working results in better and quicker decisions. It is also important here because the issues we are discussing are not just for a one-term government to decide. Political parties and representative democracy are very important, but they are not enough. We have to move further.

The Quarterly: Finally, what is your message to foreign investors and CEOs looking at Chile and the region?

Michelle Bachelet: Trust Chile, believe in Chile, and invest here. It is a stable, fairly low-risk country, and we have developed serious and responsible policies. We will continue along the path Chileans have chosen democratically. Although we have done it well for the past 16 years, we are ready to make a new leap forward.

An example of responsibility is the two external funds created in response to the structural budget surplus caused by high copper prices. One is to finance the new pension system, since we know that the ratio of retired people to the productive sector is going to get bigger over the next ten years. The other fund, based on the Norwegian model, is to separate social benefits from the ups and downs of the economic cycle.

We are working on greater transparency and consistency in applying rules to local investors. We are also working very hard to get rid of any corruption—we are aware that one rotten apple can destroy the whole crop, but I do not think corruption is part of the Chilean way.

We are optimistic about the next year and probably the next two. We are working hard to ensure sustainable growth that will get us back to the normalized level of economic growth that we have had for many years.


IPCC Report: Blame for global warming placed firmly on humankind

Blame for global warming placed firmly on humankind
  • Updated 12:00 05 February 2007
  • news service
  • Catherine Brahic, Paris

Figure 1. The predicted temperature rise by 2100 is between 1.8 and 4.0°C. This is based on models representing a variety of emissions scenarios and an uncertainty of one standard deviation (grey shading). The orange line is a model where greenhouse gas concentrations were held constant at year 2000 values (Graphic: IPCC)

Figure 2. Precipitation is predicted to rise markedly at high latitudes and drop significantly in the tropics. The figure shows the predicted change in precipitation (in percent) in the decade 2090 to 2099, compared to the period 1980 to1999. Precipitation for December to February is on the left and for June to August on the right. In the coloured areas more than 90% of the models agree precipitation will increase or decrease. In the white areas, less than 66% of the models agreed.

The 2nd of February 2007 will one day hopefully be remembered as the day the question mark was removed from the debate on whether human activities are driving climate change, said the head of the UN Environment Programme at the launch of the most authoritative scientific report on climate change to date.

The new Intergovernmental Panel on Climate Change report says there is 90% certainty that the burning of fossil fuels and other human activities are driving climate change. Read the global reaction to the report here.

"The word unequivocal is the key message of this report," said Achim Steiner, executive director of UNEP, adding that those who have doubts about the role of humans in driving the climate "can no longer ignore the evidence".

The IPCC report says the rise in global temperatures could be as high as 6.4°C by 2100. The report also predicts sea level rises and increases in the intensity of hurricanes. It is the work of 1200 climate experts from 40 countries, who have spent six years reviewing all the available climate research. It was released in Paris, France, on Friday (read the 21-page summary here, pdf format). Listen to audio from today's press conference.

The last IPCC report, issued in 2001, predicted that temperatures would rise by 1.4°C to 5.8°C by 2100, relative to 1990 temperatures.

But the new report says temperature rises by 2100 could, in the most extreme scenarios, range from 1.1°C and 6.4°C. The most likely range is 1.8°C to 4.0°C (see figure 1, right), with the report predicting that 4°C is most likely if the world continues to burn fossil-fuels at the same rate (read the The impacts of rising global temperatures).

Melting, moving ice

Rises in sea levels are predicted by the new report, threatening low-lying areas of land around the world. As the oceans warm, their waters expand, while rising temperatures also increase the melting of the ice sheets that cover Greenland and Antarctica.

In 2001, the IPCC predicted that sea levels would rise by between 9 and 88 centimetres by 2100, relative to 1990 levels. The new report says rises could range from 18 cm to 59 cm. The top end of the range corresponds to a fossil-fuel intensive future (see A1F1 scenario in Modelling the future climate: the baseline scenarios).

But predictions of sea level rise are one of the most contentious areas of the report - very recent research has suggested that rises of up to 140 cm are possible (see Shorelines may be in greater peril than thought).

The problem is that the understanding of how warming affects Greenland and Antarctic ice sheets remains limited, and they are predicted to be the most important contributors to change. Estimates of the straightforward melting of ice are incorporated in the IPCC report. But warming may also accelerate the movement of ice in glaciers into the ocean, perhaps by meltwater lubricating the undersides of ice streams.

Susan Solomon, one of the report's lead authors, said there was no published research that quantified this effect, and so it was not included. But she added: "If temperatures exceed 1.9°C to 4.6°C above pre-industrial temperatures, and were to be sustained for thousands of years, eventually we would expect the Greenland ice sheet to melt. That would raise sea level by 7 metres."

Climate change is also expected to affect the frequency and strength of tropical storms and hurricanes. The latest IPCC report says the activity of tropical cyclones is "likely" to increase over the 21st century. It says "likely" indicates a probability of more than 66%. This is a bolder statement than the World Meteorology Organisation issued in January.

Precipitation patterns will change too by 2100, according to IPCC predictions (see figure 2, right). Mid- to high-latitude regions will see up to 20% more rain and snow, while the tropical regions will see less.

Humans to blame

Considering the human role in causing climate change, the IPCC report is damning: "The understanding of [human] influences on climate has improved since the [2001] report, leading to a very high confidence that human activities" are responsible for most of the warming seen since 1950, says the report's summary for policymakers. "Very high confidence" is described as "at least a 9 out of 10 chance of being correct".

Before the industrial revolution, human greenhouse gas emissions were small, and the atmospheric concentration of carbon dioxide – the main greenhouse gas – was about 280 parts per million (ppm).

Thanks largely to the burning of fossil fuels and changes in land use, such as agricultural exploitation and deforestation, the atmospheric concentration of carbon dioxide reached 379 ppm in 2005, says the IPCC.

Gold standard

The IPCC draws together the world's leading climate experts to review and assess all available research, under the auspices of UN Environment Programme and the World Meteorology Organization.

The result of their assessment, which is done every five to six years, establishes what is considered the gold standard of consensus on climate change science.

The latest IPCC report was written by hundreds of experts and reviewed by hundreds more, from 113 countries. It is being released in stages during 2007. The first chapter, released on Friday, deals with the scientific basis for climate change.

The next two parts of the IPCC's 2007 assessment, plus a synthesis, will be released throughout the year. Part 2, dealing with the impacts of climate change and our vulnerability to those impacts, will be released in April. Part 3, to be released in May, deals with how we might mitigate these impacts.

Climate Change - Want to know more about global warming – the science, impacts and political debate? Visit our continually updated special report.

Related Articles

Weblinks By Fiona Harvey

Published: February 2 2007 02:00 | Last updated: February 2 2007 02:00

Water shortages, heatwaves, storms and floods are likely to be the result of global warming caused by human actions, the biggest report yet on climate change will predict today.

Global temperatures are likely to rise by about 3°C by 2100, according to the draft of the fourth report by the Intergovernmental Panel on Climate Change, convened by the United Nations and charged with assessing -climate change science.

The rise - the "best estimate" of the scientists from a range of predictions between a rise of 2°C and 4.5°C - would be enough to put as many as 4bn extra people at risk of serious water shortages. The extent of the temperature change is illustrated by the fact that the difference between today's world and the planet's surface in the last ice age is only about 5°C.

The IPCC has produced its reports approximately every five years since 1988 but in the six years since its last findings there has been a deluge of scientific studies on global warming.

Today's report will set the tone of the debate for negotiations around the renewal of the Kyoto protocol in 2012.

Experts from around the globe have been haggling over the final wording of the document this week in Paris. Mounting evidence of climate change means today's report will say there is a90 per cent certainty that human actions - cutting down forests and burning fossil fuels - are shaping the climate. A decade ago, the IPCC was able to say only that human actions were "on balance" the likely cause.

One of the few bright spots is the prediction that sea levels are likely to rise between 28cm and 43cm. The top range of this estimate is lower than that of the previous report, in 2001, which predicted a rise of between 9cm and 88cm. Although the Arctic ice cap is at severe risk of melting, much of the Antarctic cap might survive because in a warmer world there is likely to be more precipitation, the report will say.

Today's Summary for Policymakers, drawing on -research by 2,500 climate -scientists, will deal only with the science of climate change. In April, a further section will set out the probable impacts of the warming in greater detail. A third section, dealing with ways of preventing the worst outcomes, will follow in May.

Paul Valdes, professor of physical geography at the University of Bristol and a contributor to the IPCC, said: "The report shows that changes to our current climate are happening more rapidly than expected, but it is not too late. We are already committed to some climate change but what we do in the next few years is crucial. It is possible to re-duce our emissions without endangering the economy or changing our way of life but we must start to act now."

International Herald Tribune
Scientists say humans 'very likely' cause global warming

The Associated Press

Thursday, February 1, 2007



The warning from a top panel of international scientists was blunt and dire: "warming of the climate system is unequivocal," the cause is "very likely" man-made, and the menace will "continue for centuries."

Authors of the 21-page report released Friday on why the planet is warming by the Intergovernmental Panel on Climate Change placed the onus on governments to stop prevaricating and take action.

The report highlighted "increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global mean sea level," the report said.

The report said man-made emissions of greenhouse gases can already be blamed for fewer cold days, hotter nights, killer heat waves, floods and heavy rains, devastating droughts and an increase in hurricane and tropical storm strength — particularly in the Atlantic Ocean.

The message to be taken home from the report is "it's later than we think," panel co-chair Susan Solomon, from the U.S. National Oceanic and Atmospheric Administration, told The Associated Press in an interview.

The report and the scientists who wrote it called the document conservative — only using peer-reviewed published science, edited by representatives of 113 governments that also had to agree to every word. It is a snapshot of where the world is with global warming and where it is heading, but does not tell government officials what to do.

Yet if nothing is done, the world is looking at more than 1 million dead and hundreds of billions of dollars (euros) in costs adapting to a warmer world with more extreme weather, study co-author Kevin Trenberth said in an interview.

The next step is up to public officials, scientists said. "I want to see action — not messages," said Swiss scientist Thomas Stocker, a co-author.

"It is critical that we look at this report ... as a moment where the focus of attention will shift from whether climate change is linked to human activity, whether the science is sufficient, to what on earth are we going to do about it," U.N. Environment Program Executive Director Achim Steiner said.

"The public should not sit back and say 'There's nothing we can do'," Steiner said. "Anyone who would continue to risk inaction on the basis of the evidence presented here will one day in the history books be considered irresponsible."

Another report by the panel later this year will address the most effective measures for slowing global warming.

If it looks bad now, the harmful effects during the 21st century "would very likely be larger than those observed during the 20th century," the report said.

The panel predicted temperature rises of 1.1 to 6.4 C (2-11.5 F) by the year 2100. That was a wider range than in the 2001 report, although the panel also said its best estimate was rises of 1.8 to 4 C (3.2-7.1 F). Scientists said they are more sure of temperature increases than ever before.

The projected effects of global warming would vary in different parts of the globe. The closer to the poles, the higher the temperature spikes, according to the report. Dramatic and noticeable temperature spikes are likely to be seen within 22 years in most of the Northern Hemisphere, the report showed. Northern Africa and other places will see dramatically less rainfall.

And that's just average temperature increases and rainfall amounts, something that doesn't affect people much. People experience the harshest of global warming with extreme weather events — heat waves, droughts, floods, and hurricanes — said study co-author Philip Jones of Britain's University of East Anglia. And those have increased dramatically in the past decade and will get even worse in the future, he said.

On sea levels, the report projects rises of 7-23 inches (18-59 centimeters) by the end of the century. An additional 3.9-7.8 inches (10-20 centimeters) are possible if recent, surprising melting of polar ice sheets continues.

"The situation is more dire than (at the time of the 2001 report) because we have real possibilities that the situation can be much greater than we have seen before," said Trenberth, director of climate analysis at the U.S National Center for Atmospheric Research.

A colleague from the center, Gerry Meehl, warned that continued global warming could eventually lead to an "ice-free Arctic." And when that happened 125,000 years ago, seas rose between 13 and 20 feet (4-6 meters). That is looking like a real possibility for the 22nd Century, the report said, but some scientists fear much of that may happen before the end of the 21st Century.

The report said no matter how much civilization slows or reduces its greenhouse gas emissions, global warming and sea-level rise will continue for centuries.

"This is just not something you can stop. We're just going to have to live with it," Trenberth said in an interview. "We're creating a different planet. If you were to come back in 100 years' time, we'll have a different climate."

Scientists worry that world leaders will take that message in the wrong way and throw up their hands, Trenberth said. That would be wrong, he said. Instead, the scientists urged leaders to reduce emissions and also adapt to a warmer world with wilder weather.

"The point here is to highlight what will happen if we don't do something and what will happen if we do something," Overpeck said. "I can tell you if you decide not to do something the impacts will be much larger than if we do something."

"You make a difference on hundred of years' time frame, but this is the future of the planet," Trenberth told The Associated Press. "We have to adapt to it."

Trenberth said the world is paying more attention to scientists now than in previous warnings in 1990, 1995 and 2001. "The tension is more now," he said.

The head of the U.S. delegation, White House associate science adviser Sharon Hays, called the panel's summary "a significant report. It will be valuable to policy makers."

As the IPCC report was being released, environmental activists rappelled off a Paris bridge and draped a banner over a statue used often as a popular gauge of whether the Seine River is running high.

"Alarm bells are ringing. The world must wake up to the threat," said Catherine Pearce of Friends of the Earth.

Wal-Mart in pledge to slash its carbon footprint -- CEO speech contains this clip: "Forgive the jargon, but we think sustainability is cool; and perhaps more than anything else, we see sustainability as mainstream."

Wal-Mart in pledge to slash its carbon footprint
By Susie Mesure, Retail Correspondent
Published: 02 February 2007

Wal-Mart, the biggest retailer in the world and owner of Asda, pledged yesterday to slash its carbon footprint by barring products that contribute to global warming from its shelves.

Lee Scott, the supermarket chain's chief executive, promised to take non-renewable energy "off our shelves and out of the lives of our customers". He made the commitment in a speech in London at the invitation of the Prince of Wales, who he met 18 months ago.

"Forgive the jargon, but we think sustainability is cool," he told the audience of high-level environmentalists, corporate executives and government officials. "And perhaps more than anything else, we see sustainability as mainstream."

He called on each of Wal-Mart's 1.3 million employees, including 150,000 in the UK, to make one element of their lives more green by, for example, switching to energy-saving lightbulbs or buying organic produce.

Mr Scott's speech comes 18 months after the retailer first tried to change its corporate spots in the wake of Hurricane Katrina. The storm wrought havoc on New Orleans, but enabled Wal-Mart to score some useful public relations points by stepping into the gap left by the US authorities by delivering vital supplies to survivors.

Yesterday's drive, dubbed "sustainability 360", built on Wal-Mart's initial three-pronged plan to save the world by using only 100 per cent renewable energy; creating zero waste; and selling products that sustain the environment. Asda, which Mr Scott claimed "has been leading on sustainability for some time", is seeking to send no waste to landfills by 2010.

The race to capture the green moral high ground has gone into overdrive in recent days with Tesco's Sir Terry Leahy promising to create a "carbon calorie counter" for every product the UK's biggest retailer sells, and Marks & Spencer seeking to make its business carbon-neutral within five years.

Green pressure groups have given the promises a cautious welcome but many environmentalists are treating the pledges with a generous dose of salt. Sandra Bell, food campaigner at Friends of the Earth, said Wal-Mart and Tesco's expansion policies contradicted their green agendas and questioned their commitment to cutting their carbon footprints. "In the UK, Asda is pushing to free up planning policy to build more out-of-town stores which would really damage our town centres and result in a lot more car-based travel, which will increase the amount of carbon emitted," she said.

Other initiatives Mr Scott unveiled last night included sourcing more products from ethical suppliers and cutting the amount of packaging on food sold at Asda by 25 per cent by the end of 2008. He said Wal-Mart would "invest more" in the 200-strong team at its Bentonville headquarters dedicated to ethical sourcing but declined to be specific.

Lowering the group's carbon footprint would rely on suppliers making products that rely "less and less on carbon-based energy," Mr Scott said.

He made no comment about reducing the proportion of air-freighted goods on sale, but echoed Sir Terry's goal of cutting the price of being green for the 176 million people who shop each week in one of Wal-Mart's stores spread across 14 countries.

"We want our merchandise to be both affordable and sustainable because, when it is, we empower our customers to make the right decisions," Mr Scott said.

Wal-Mart boss says he will press suppliers in race to go green

Asda owner sets target to cut packaging 5% by 2013
Sustainability now mainstream, says chief

Julia Finch, City editor
Friday February 2, 2007

The Guardian

The chief executive of the world's biggest retailer yesterday stepped up the pace in the race to be green with a series of initiatives to cut its own giant carbon footprint - and those of its suppliers, customers and staff.

Lee Scott of Wal-Mart, which operates some 7,000 stores in 14 countries, employs 1.8 million staff and owns Asda in the UK, said the current generation had a "responsibility" to live more sustainable lives to "leave a healthier humanity and a healthier planet to future generations".

Article continues

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He outlined a "six path" strategy that he insisted could be delivered without compromising growth or profits.

Mr Scott outlined his "Sustainability 360" campaign in London last night at a lecture to UK business leaders hosted by the Prince of Wales. He said the vast retailer, which is the world's second biggest company after Exxon Mobil, was determined to make its merchandise "affordable and sustainable" so that customers could "do the right thing ... for this planet".

Speaking to The Guardian before last night's lecture Mr Scott insisted the new initiative was not part of a "greenwash" PR campaign to improve the image of Wal-Mart, which is regularly accused of crushing smaller rivals, squeezing suppliers and paying poverty wages to thousands of workers.

"This is not an advertising campaign," he said. "This is not a publicity campaign. We are not sophisticated enough to greenwash. I mean, we have a hard enough time getting our true story out. This is about being a better company."

He said the group's actions would prove it was sincere about sustainability.


It was Mr Scott who kickstarted the big grocers' current focus on the environment in 2005, when he first set out a green agenda. Since then, in the UK, Tesco and Marks & Spencer have both weighed in with their own plans.

Wal-Mart's six path strategy focuses on its own environmental footprint and that of its 60,000 suppliers. It has big ambitions to cut the waste sent to landfill, build more energy efficient stores and take "a hard look at what is on our shelves".

Work with just one toy supplier to reduce packaging, Mr Scott said, had meant it required 497 fewer containers to ship the same number of items, saving 3,800 trees, 1,000 barrels of oil and $2.4m (£1.6m) a year in shipping costs. "That's just one supplier, just one product line and just 255 items," he said.

Suppliers are being asked to cut their packaging by 5% by 2013, which Wal-Mart says will cut the number of truck journeys and save 67m gallons of diesel a year.

Mr Scott said he wanted Wal-Mart to have a positive impact on communities, make sustainable products cheaper and more accessible, encourage its employees to adopt more sustainable lifestyles and create new markets for sustainable products such as organic cotton.

He insisted Wal-Mart was not shifting the burden of sustainability to suppliers: "No, this is a cooperative effort of encouragement and support and combining our energies."

Yesterday Mr Scott said the moment Wal-Mart decided to get serious about sustainability was when Hurricane Katrina devastated New Orleans. The "desperate images" of the chaos, he said, "pushed us from a learning process into taking more aggressive action."

It also provided a welcome boost to the store's reputation when Wal-Mart staff opened stores to hand out food and drugs and the retailer's relief trucks arrived in the flooded city before the US army. "Hurricane Katrina changed Wal-Mart forever," Mr Scott told last night's lecture.

In the wake of the hurricane he set three groundbreaking goals: to switch the entire group to using renewable energy; to achieve zero waste and to sell sustainable products. His new plan takes that further.

'Beast of Bentonville'

Scott acknowledged yesterday that environmental groups had at first treated the group, based in Bentonville, Arkansas, with some suspicion. "When we first approached NGOs to come into Wal-Mart they almost wanted to come in masks. The first thing they wanted to know was were we sincere. Now they really do trust us."

Not all of them, however. Mr Scott admitted there were still some environmental groups that did not want their names linked with the so-called "Beast of Bentonville". The groups "have asked that we do not highlight them", he said.

The Wal-Mart chief said sustainability was now "mainstream" and Wal-Mart could use its scale to generate big changes without increasing prices. The retailer would not have to choose between cost-cutting - its corporate mantra for more than 40 years - and strategies that help save the planet.

"I don't see that you have to have a trade-off," he said. "I see them as the same thing. By eliminating waste, you are driving out cost and by eliminating waste you are making a more sustainable planet. It's nice that you don't have to make a choice."

He admitted Wal-Mart was demanding changes from others before its own house was in order but said critics should weigh up whether it was better to have one perfect company or one company "helping thousands of suppliers, millions of associates and tens of millions of customers make billions of decisions that sustain themselves, their communities and, in turn, the earth".

Mr Scott himself walks the talk, to an extent. His family car is a hybrid Lexus SUV but he crossed the Atlantic in a private Wal-Mart jet, one of a fleet of more than 20, with just four passengers on board.

Wal-Mart, he says, needs its planes to move staff around its stores: "Quite honestly I am not oversensitive to the issue about whether or not our people fly about and whether we should have planes."

Neither was he embarrassed by the sky-high US levels of carbon emissions."Is it important to be embarrassed, or is it important that you look and say, 'this is where we are and we can do better'?"

Wal-Mart CEO Lee Scott Unveils 'Sustainability 360'
Thursday February 1, 2:00 pm ET

- Announces 'Global Innovation Project' to Help Remove Non-Renewable Energy From Products -

LONDON, Feb. 1 /PRNewswire-FirstCall/ -- As the keynote lecturer at the Prince of Wales's Business and the Environment Programme, Wal-Mart Stores, Inc. (NYSE: WMT - News) President and CEO Lee Scott today unveiled "Sustainability 360" -- a company-wide emphasis on taking sustainability beyond reducing the company's direct environmental footprint to engaging Wal-Mart's associates, suppliers, communities and customers.

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"Sustainability 360 takes in our entire company -- our customer base, our supplier base, our associates, the products on our shelves, the communities we serve," said Scott. "And we believe every business can look at sustainability in this way. In fact, in light of current environmental trends, we believe they will and soon."

As an example of this way of working, Scott also announced the company's intention to introduce "Global Innovation Projects" -- one of which is a challenge for Wal-Mart associates and suppliers to start thinking about how to remove non-renewable energy from the products the company sells.

"Perhaps the most far-reaching opportunity we have with our suppliers is a simple idea with potentially profound consequences," said Scott. "Just think about this: What if we worked with our suppliers to take non-renewable energy off our shelves and out of the lives of our customers? We could create metrics and share best practices so our suppliers could make products that rely less and less on carbon-based energy."

Recognizing ASDA's longtime leadership in sustainability, Scott highlighted how initiatives taking place at Wal-Mart's operations in the United Kingdom fit this idea, including reducing packaging on food products by 25 percent and selling more energy efficient light bulbs than standard bulbs by 2008.

Addressing the different planks of "Sustainability 360," Scott highlighted Wal-Mart's initiative to work with suppliers to reduce packaging by five percent by 2013 -- an effort that will be equal to removing 213,000 trucks from the road, and saving approximately 324,000 tons of coal and 67 million gallons of diesel fuel per year. He also talked about the company's goal to develop partnerships that help suppliers run more sustainable businesses and factories.

Focusing on Wal-Mart's work to reach out to communities around the globe, Scott discussed efforts to promote sustainable practices when entering new markets. The company's effort to make environmentally friendly products more affordable and available to customers aligns with Wal-Mart's purpose to save people money so they can live better lives.

Emphasizing that sustainability is consistent with the company's culture, Scott also discussed the integral role that associates play in helping Wal- Mart reach its objectives.

Scott acknowledged that the journey to a sustainable corporation is long, but stressed all businesses have a role to play. "We all have an opportunity to be more sustainable. But even more, we have a responsibility. We need to be sustainable companies and countries made up of people who live sustainable lives. If we do that, if we do it throughout the coming decades, I believe we will make sustainability ... sustainable. And this generation will leave a healthier humanity and a healthier planet to future generations."

The Business and Environment Programme was hosted by the Prince of Wales and attended by government representatives, officials from non-governmental organizations and business executives. The biennial lecture is the largest and longest-running executive learning program in the world on sustainable business.

For a full text of the lecture, please visit .

About Wal-Mart Stores, Inc.

Wal-Mart Stores, Inc. operates Wal-Mart discount stores, Supercenters, Neighborhood Markets and Sam's Club locations in the United States. The Company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom. The Company's securities are listed on the New York Stock Exchange under the symbol WMT.

More information about Wal-Mart can be found by visiting . Online merchandise sales are available at .

Black leaders erupt over Barclays' sports deal because of Barclays' historic support for the apartheid regime in South Africa and what they believe are profits it made from slavery

Black leaders erupt over Barclays' sports deal
By Stephen Foley in New York
Published: 02 February 2007

When Barclays agreed to pay more than $300m (£152m) to get its name on a new basketball stadium in Brooklyn, it thought it had pulled off one of the most exciting marketing coups in American sport.

But just a few weeks on, the British bank is battling to prevent a public relations disaster, as black leaders demand the deal be scrapped because of Barclays' historic support for the apartheid regime in South Africa and what they believe are profits it made from slavery.

Barclays says the allegations about its links to the 18th-century slave trade are "simply not true" - based on an inaccurate book written 60 years ago - and it is now mired in an exchange of historical documents with opponents.

Politicians, churchmen and newspaper columnists say it would be an insult to black residents to name the complex the Barclays Centre, as planned.

The basketball arena will be the new home for the New Jersey Nets, and forms the central part of a $4bn Frank Gehry-designed complex that includes 16 skyscrapers and will, according to its proponents, stimulate a renaissance in an underprivileged area of New York's outer borough.

Letitia James, a Brooklyn council member, said that accepting hundreds of millions of dollars from Barclays was like "eating the fruit of a poisonous tree". She said: "Brooklyn has been described as the 'black belt' of New York City, and because of their past practices, I do not believe it is appropriate that this deal goes ahead. We've no legal grounds to stop it, but we will be putting moral pressure on the shareholders and investors in the development project."

Barclays was forced to pull out of apartheid-era South Africa in 1986 after a long and bitter fight by equal rights campaigners around the world. It eventually calculated that the damage to its reputation was going to cost it more than selling out of what was then the country's second-largest bank.

Some opponents of the Nets development are demanding that the bank pays "reparations", saying it would be a gesture equivalent to its decision in South Africa to back Nelson Mandela's charitable foundation.

"All options should be on the table," the Brooklyn assembly member Hakeem Jeffries told the Brooklyn Paper, "including payment for past wrongs and termination of the agreement."

Barclays unveiled the naming rights to the development at a press conference two weeks ago, attended by the rapper Jay-Z, who is an investor in the Nets, and New York City's Mayor, Michael Bloomberg. The deal commits Barclays to fund community initiatives such as repairing street basketball facilities.

Bob Diamond, the bank's top US executive, said it was part of Barclays' push to get its name better known in the US. It doesn't run high street banks here, but offers financial services on Wall Street and has branched into investment funds for the public.

Ms James said opponents would reveal their research on Barclays' history at a press conference.

Peter Truell, a bank spokesman, said Barclays was sending its opponents documents showing that early Barclays family members fought against slavery.

He added the allegations appeared to have originated in a 1944 book, Capitalism and Slavery, which said the bank was founded by the Quaker slave traders Alexander and David Barclay. "Our research shows that Alexander Barclay was never a partner, employee or agent of the bank and the 'David Barclay' referred to in this book also had no connection with our bank," he said. "To the contrary, 'our' David Barclay formed a committee of London Quakers to oppose the slave trade, and later became involved with the committee in taking the Quaker anti-slave trade message nationwide within the United Kingdom."

Profits up a fifth but Shell emits more CO2 than most countries -- Friends of the Earth took out full-page newspaper adverts yesterday that demanded of Shell: "Use your profits to clean up your mess."

Profits up a fifth but Shell emits more CO2 than most countries

Terry Macalister
Friday February 2, 2007

The Guardian

ExxonMobil and Shell, two of the biggest carbon emitters in the world, reported combined annual profits yesterday of nearly £90m a day, earned largely from oil production, refining and petrol stations.

The earnings triggered protests from trade unions and fuel poverty groups as well as environmental campaigners.

Exxon's net income of $39.5bn (£20bn) last year is the largest ever recorded in US corporate history and comes amid mounting fears worldwide about the impact of CO2 output on global warming.

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Shell's profits of $25bn were up 21% on a year earlier, over a period when oil prices soared to $80 a barrel, although they have slipped back 30% since last summer.

Jeroen van der Veer, Shell's chief executive, declined to give a figure for the company's carbon emissions for the 12-month period but the company confirmed that the figure for 2005 was 102m tonnes - more than some 150 countries produce each.

Shell insisted it would be "pointless" to say how much of Shell's $23bn of capital expenditure was going into renewable energy schemes. Mr van der Veer indicated that the investment in renewables was small, saying it would be "throwing money away" to invest in alternative energy projects that were uncommercial and people could not afford to buy. "We have to put more into research and get a value proposition," he said.

Friends of the Earth took out full-page newspaper adverts yesterday that demanded of Shell: "Use your profits to clean up your mess." It pointed to gas flaring in Nigeria, leaking pipes in South Africa and endangered whales at Sakhalin as examples of environmental damage.

But Mr van der Veer said the environmental group's claims were ill informed and insulted his staff. "I do not like Shell people being portrayed as people not doing a good job," he said angrily.

The strong financial performance of Shell was helped by a strong fourth quarter but Exxon saw its profits fall slightly to $10.25bn over that period, largely as a result of a drop in natural gas prices and lower oil production volumes.

Shell said its output volumes had fallen partly due to sabotage and unrest, which has halted most production in the Niger Delta. It also said growth in output of only 1% or 2% should be expected up to 2010, partly due to the forced sale of its Sakhalin-2 scheme in Russia as well as problems in Nigeria, although it said production should increase by 3% or 4% after that.

The Anglo-Dutch group admitted that the reduced holding in the Sakhalin gas project would knock 0.4bn barrels of oil equivalents off its reserves base in 2007 when the deal should be consummated.

Shell boasted that its reserves replacement ratio was likely to reach 150% as it added more than 2bn barrels of oil equivalents for the second year in a row. But officials admitted later that much of this came from gas-to-oil plus oil sands projects - reserves that are far more expensive to produce than traditional oil and gas.

The company has been moving into increasingly tough political terrain such as Russia and even Iran, despite US opposition to investment in that country. Mr van der Veer admitted this was a "dilemma" but insisted Shell was some way off making a definite decision on the huge South Pars gas project there, which could put it on a collision course with Washington.

The Shell boss declined to completely bury continuing speculation of a possible merger between his company and the currently troubled BP. "I'm not even going to comment on those kinds of rumours," he said but had earlier stated: "We don't shy away from acquisitions ever."

Green groups were not alone in their concerns about Shell's profits, with union leaders calling on the company to spend more in the North Sea, where there have been several safety scares amid concerns that spending had been cut in the past.

Graham Tran, an Amicus regional officer, said: "It's time for Shell to evaluate its commitment to the North Sea and its staff. Offshore safety statistics are moving in the wrong direction. Shell needs to ensure its workers can operate in the safest possible environment. They will have to revisit their already committed spend on maintenance backlog, with a view to increasing it significantly."

National Energy Action, an energy efficiency charity, called on the government and Shell to use some of the "surging" profits to help fight fuel poverty.

Sainsbury's on a roll with action on tissue

Sainsbury's on a roll with action on tissue
By Susie Mesure
Published: 02 February 2007

J Sainsbury will seek to regain some lost green ground today with the news that it will be the UK's first supermarket chain to source all of its own-brand tissue from sustainable sources.

From May, every piece of loo roll, kitchen towel and tissue that the retailer sells will be made from sustainable wood fibre. That means it will only use recycled paper or paper from material with the Forestry Stewardship Council (FSC) seal of approval, the group said.

Deforestation is one of the biggest contributors to climate change and slowing the pace at which trees are chopped down is deemed paramount by environmentalists.

Sainsbury's announcement puts it ahead of Asda, which said yesterday that 45 per cent of the fibre used to make its own-brand loo roll came from FSC-certified plantations. It said that "eventually" it wanted to switch to 100 per cent sustainable timber and pulp-based products but did not set out a timetable.

Sainsbury's also said it would start selling a greener washing detergent, which claims to wash clothes as thoroughly at 30 degrees as at 40 degrees, and compostable garden sacks.

Judith Batchelar, director of Sainsbury's brand, said: "From food packaging, to toilet and kitchen rolls, to garden refuse sacks, none of these items will cost any more to customers, or to the wider environment."

Greenpeace, the World Wildlife Fund and the FSC all backed Sainsbury's move.