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


Alternative Energy newsclips for 29 January 2010: Google buying and selling electrons; Canadian biofuel impact; and negawatts opportunities

Canada to study biofuel's environmental impact

(Embedded image moved to file: pic45502.jpg)Reuters, 7 January 2010 - The
Canadian government has ordered a study of the environmental impact of
making ethanol and biodiesel just as a government regulation mandating fuel
blending is set to take effect.

The study, ordered on Wednesday, comes after evidence of harmful
environmental effects from ethanol plants and amid growing criticism of
biofuel technology, according to a government document from the environment
ministry, Environment Canada.

"Experiences in the U.S. and Brazil now suggest that existing biofuels
production facilities are responsible for the generation of a range of new
air- and water-related problems as well as recent concerns over human
health," the document states.

The study will help government scientists understand the environmental
implications of making biofuel, it states.

Canada has invested heavily in the biofuel industry as a way to reduce
greenhouse gas emissions. It has committed to distributing subsidies for
biofuel plants totaling up to C$1.5 billion ($1.45 billion) over nine

In September 2010, a federal mandate takes effect requiring 5 percent
renewable content in gasoline.

A spokesman for Environment Canada was not available for comment by late
Thursday afternoon.

On Wednesday, the Canadian Press quoted department spokeswoman Paula
Franchellini as saying: "The commissioning of this study does not
presuppose that there are any harmful effects from these facilities, nor
does it change the government of Canada's commitment to renewable fuels."

Gordon Quaiattini, president of the Canadian Renewable Fuels Association,
was unavailable for comment.

Canadian plants make ethanol from corn and wheat and make biodiesel from
animal fat, soybeans and canola. Canadian biofuel production is expected to
grow by 76 percent before the end of 2011, according to the document.

Environment Canada also ordered on Wednesday a study of the environmental
impact of using "marginal lands" -- such as contaminated sites and buffer
strips along roads and rivers -- for the production of biofuel crops or for
production plants. The U.S. and European biofuel industries have come under
criticism for taking up traditional farmland to grow biofuel crops,
Environment Canada said.

($1=$1.03 Canadian) (Reporting by Rod Nickel; editing by Peter Galloway)

Google wants to buy, sell electricity in US

(Embedded image moved to file: pic56873.gif)AFP, 8 January 2010 - Internet
search giant Google is seeking government authority to buy and sell
electricity in the United States, a further expansion of its operations
aimed at boosting renewable energy.

In a document filed last month with the Federal Energy Regulatory
Commission and obtained by AFP, Google indicated that its Google Energy
unit asked for "market-based rate authority."

Under that authority, "Google Energy will engage in wholesale electric
power and energy transactions as a marketer," the filing said.

The move marked an additional step by the California-based Internet giant
to reduce its carbon footprint.

Google announced in 2007 that it would invest in renewable energy. It has
already launched a free software, PowerMeter, that allows individuals and
businesses to monitor their energy consumption.

The company in mid-December pledged on its blog "Going green at Google"
that it was going to make its operations carbon-neutral and reduce
greenhouse gases blamed for global warming.

Niki Fenwick, a Google spokeswoman, told specialist website CNET that the
company wanted to become a player on the power grid.

"Right now, we can't buy affordable, utility-scale, renewable energy in our
markets," Fenwick said.

"We want to buy the highest quality, most affordable renewable energy
wherever we can and use the green credits," she said.

"We don't have any concrete plans. We want the ability to buy and sell
electricity in case it becomes part of our portfolio."

US energy savings: Opportunities and challenges
There is great potential to reduce energy consumption and minimize its
total cost by using existing technologies?and without changing the everyday
habits of consumers.

January 2010 ? Jon Creyts, Hannah Choi Granade, and Kenneth J. Ostrowski
Source: Climate Change Special Initiative

The specter of more expensive energy, along with concerns about its
availability and environmental impact, has renewed interest in finding more
efficient ways to use it. For executives, this shift could bring not only
new challenges, including stringent regulations, but also new business
opportunities. And for society as a whole, the potential savings are huge:
more than $1 trillion in the United States alone.
Many people focus on opportunities that require high-tech new systems or on
conservation efforts that reduce the benefits from energy. Yet there is
great potential to reduce its consumption and minimize its total cost by
using existing technologies?and without changing everyday habits. So why
haven?t these prospects been realized already? Four fundamental barriers
stand out. Energy efficiency typically requires large upfront investments
to achieve savings that accrue later. In addition, it has low mindshare,
and opportunities are fragmented across billions of devices in more than
100 million locations. Finally, the organizations that would be primarily
responsible for implementing energy efficiency find it hard to measure,
which makes them less motivated to act.
Realizing the full range of savings may require a comprehensive energy
policy,1 but regardless individuals and companies alike must become more
aware of the importance and profitability of change.2 This article
therefore focuses on the broad range of opportunities and challenges our
research has uncovered in three key sectors.
The residential sector
Let?s start with the residential sector, which accounts for 35 percent of
the end use potential for energy savings. The incremental investment to
make 129 million US homes?and the appliances, devices, and climate control
systems in those homes?more energy efficient would be $229 billion,
providing present-value savings of $395 billion. Upgrading building shells
and heating and cooling equipment, mostly in existing homes, represents the
largest opportunity (71 percent). The rest would come from upgrading
devices and appliances.
We divided US homes into three clusters?existing homes of low-income
people, existing homes of other Americans, and new homes (those built after
January 1, 2009). At all income levels, energy-efficiency upgrades to
shells of existing homes (for example, through insulating basements and
sealing air leaks) offer the largest opportunities. Similar savings could
be achieved in new homes at half the cost, but few such homes will be in
place by 2020.
Still, the barriers are significant. Homeowners typically know little about
their energy consumption or how to reduce it and end up underestimating
savings from retrofits. They may also move before recouping the upgrade?s
cost?a barrier that undermines 40 to 55 percent of these opportunities. And
for most families, allocating funds for such money-saving measures is
difficult: core spending absorbs 90 percent of average household budgets,
so a ?typical? retrofit costing $1,500 absorbs 30 percent of annual
discretionary spending. If the expense isn?t a deal breaker, homeowners
face high transaction costs researching upgrades and finding suitable
contractors. Poorly installed and operated equipment?some reports conclude
that contractors install 90 percent of it suboptimally?can hike
air-conditioning and heating costs by 30 percent.
Nonetheless, solutions have recently emerged. In New York, the Long Island
Green Homes program, an innovative approach to financing, provides capital
for upgrades. Monthly repayments smaller than the savings they generate are
paid through utility bills or property taxes, so the beneficiaries?future
owners or current tenants?bear the costs. Even so, while product labeling
and voluntary standards have been effective for new homes and may work for
existing ones, full penetration will take years. Energy-efficiency
improvements could also be mandated?say, when houses are sold or renovated.
Since the 1980s, the mandatory Residential Energy Conservation Ordinance
(RECO) in Berkeley, California, has prompted upgrades to about 500 homes
annually at a typical cost (to home sellers) of $400 to $1,300. Austin,
Texas, by contrast, requires home assessments, not improvements. Realizing
such solutions on a national scale represents a business opportunity for
investors and business leaders.
Devices, small and major appliances, and lighting
Although smaller devices and appliances, notably TVs and PCs, offer only 19
percent of the 2020 residential opportunity, capturing it would require
just $3.4 billion in incremental capital, with possible present-value
savings of $65 billion. Neither consumers nor manufacturers think much
about these devices? energy consumption, since it doesn?t loom large on
electric bills. In fact, an existing energy-saving feature of PCs?the
low-power standby mode?is enabled in only 15 percent of home office
computers. The power that devices consume on standby can account for up to
90 percent of the total energy used, so a general standard makes sense.
Voluntary standards could be developed faster than mandatory ones and might
smooth the way.
Energy consumption by lighting and major appliances (such as water heaters
and refrigerators) is expected to decline on an absolute basis by 3.3
percent from 2008 to 2020, mostly thanks to more efficient lighting.
Further savings are possible; lighting constitutes 15 percent of this
cluster?s energy consumption but 82 percent of the savings potential,
largely from the faster-than-mandated adoption of compact fluorescent
lights (CFLs) in the near term and the subsequent spread of LED lighting as
its costs decrease. Even now, average homes could save up to $180 or more
annually by switching from incandescent bulbs to CFLs, though 42 percent of
consumers still distrust them. For appliances, mandatory standards have
proven their value: from 1987 to 2005, they saved US consumers $30 billion
in energy bills. And the voluntary labeling of many appliances through
Energy Star?a joint program of the US Environmental Protection Agency (EPA)
and the US Department of Energy?has saved 1,790 trillion BTUs.3 As the
experience with CFLs shows, to capture many of these opportunities
manufacturers must ensure that the customer experience remains unchanged or
The commercial sector
Because several commercial clusters?especially new homes and office
devices?resemble their equivalents in the residential sector, we?ll stress
the differences. The net present value?positive upgrades would require a
$125 billion investment and provide present-value savings of $290 billion.
Buildings and the devices used in them offer 87 percent of the opportunity.
We divided US commercial structures among three clusters: existing private,
existing government, and new private buildings. Two barriers have features
specific to the private sector. The first, threatening a fifth of its
potential, is the expectation of most companies that efficiency investments
should pay back in one to four years?a problem for deeper retrofits.
Second, energy-efficiency programs often arouse resistance because they may
increase debt and divert money from revenue-enhancing projects.
Financing through public?private partnerships might solve these problems,
especially in private commercial buildings: for an appropriate premium, a
credit-enhancement fund that shares the default risk with lenders could
direct private capital toward energy-efficiency projects. This approach has
worked in other markets, particularly student loans. Similar credit
insurance rates, totaling $2 billion to $4 billion, would guarantee the $73
billion in capital this cluster needs. A strong effort by banks or energy
service companies (see the next paragraph) to lobby for the creation of
such a fund and then to implement it would enable significant financing to
The efficiency opportunity for government buildings is greatest in those of
localities (counties, cities, and towns) and, secondly, of states.
Unlocking it would require investments of $19 billion and $7 billion,
respectively, and provide present-value savings of $36 billion and $13
billion, respectively. One barrier specific to government buildings is the
fact that many states limit the use or effectiveness of performance
contracting?a business model in which a third party (sometimes called an
energy service company) finances and implements efficiency measures and
recovers its investment by sharing in the customer?s savings. As for new
commercial buildings, the same observations that apply to new homes apply
to them.
Office devices
People often resist focusing on their energy use because they consume it in
drips and drabs. Office devices exemplify this problem: there are hundreds
of categories?PCs, medical and lab equipment, cash registers, and data
servers, to name just a few?and the consumption of each of these devices is
usually limited. Nonetheless, they offer among the most cost-effective
opportunities: present-value savings of $57 billion for an $8 billion
Perhaps more odd than the failure to address small (but collectively large)
opportunities is that fact that many purchasers in the commercial sector
focus on acquisition rather than life cycle costs. In fact, sometimes costs
of any kind seem unimportant. In data centers, where energy use could
triple from 2008 to 2020, risk-averse managers overinvest in servers: 30
percent of them might consume electricity on a given day, even if only 3
percent were in use. Total-cost-of-ownership purchasing criteria could help
capture much of this opportunity.
The industrial sector
The processes, support systems, and buildings of the US industrial sector
not only consume more energy than the others combined but also offer the
greatest NPV-positive energy-efficiency opportunity (3.65 quadrillion
BTUs)?although the smallest (18 percent) as a percentage of end-use
consumption. Capturing this opportunity would save $447 billion though
present-value investments of $113 billion.
Varied industrial processes provide 67 percent of the sector?s
energy-efficiency potential; energy-consuming support systems (motors,
buildings, and steam systems) and the recovery of their waste heat make up
the remainder.
The largest opportunity lies in energy-intensive processes (such as
bleaching, in pulp and paper, and hydrocracking, in refining), which
require upfront investments of $51 billion for present-value savings of
$182 billion. Payback times of less than 2.5 years could be realized in
about 42 percent of these projects, which involve measures such as
implementing more energy-efficient processes, upgrading current ones, and
improving maintenance and monitoring. Systematically recovering waste heat
would improve the energy efficiency not only of processes that are energy
intensive but also of processes that aren?t?within industries such as foods
and plastics. Such industries offer $96 billion in present-value savings
for a $28 billion investment.
Energy-consuming industrial-support systems, including steam systems,
motors, and buildings, could provide present-value savings of $164 billion
for a $34 billion investment. Although these represent a smaller
opportunity, it could be easier to pursue because boilers and the like are
more standardized than industry-specific process equipment. For boilers and
other steam systems, the opportunities include (again) waste-heat recovery,
better-insulated distribution systems, and valve and fitting improvements.
Pumps, process equipment, and other systems driven by electric motors can
become more energy efficient if factories match the power of components
with their load requirements. Opportunities for industrial buildings
resemble those for commercial ones.
Even in the industrial sector, energy often represents a relatively small
fraction of costs, so top managers may resist serious investments. As in
the commercial sector, payback times, capital constraints, and procurement
can be problematic. Industrial sites, for example, generally have tight
budgets, and many companies now require a one-and-a-half- to
two-and-a-half-year payback, although even a two-and-a-half-year timeline
cuts the sector?s potential by only 46 percent. Managers may ignore
attractive energy-efficiency projects because companies fear to hurt their
credit ratings by raising debt. Fear also causes risk-averse plant managers
to replace failing equipment with the same models rather than more
up-to-date and energy-efficient ones?but inventory-carrying costs prevent
many distributors from offering them anyway. And even many
industrial-procurement operations focus on upfront rather than total costs.
An energy manager properly empowered through top-management and financial
support can help companies realize 8 percent of the total industrial
savings identified above. In some facilities, energy managers have
delivered savings of 20 to 30 percent. Increasing the penetration of the
kind of corporate programs that energy managers implement is the focus of
the EPA?s voluntary Energy Star Partnership. The US Department of Energy?s
voluntary Save Energy Now initiative, which aims to reduce
industrial-energy intensity by 25 percent in ten years, has already helped
2,100 US manufacturing facilities cut their energy costs. Efforts to
clarify the industrial sector?s energy criteria for purchasing and using
equipment could save significant amounts of money, without the staff
reductions typical of other cost-cutting moves.
Financial incentives can help companies allocate capital for
energy-efficiency plans, lengthen payback times, and make energy-efficient
products more available. Wal-Mart Stores? Company of the Future supply
chain initiative, for example, offers suppliers in seven product categories
not only incentives to cut their energy use and emissions but also support,
such as subsidized energy audits. Direct incentives from equipment
manufacturers and distributors, governments, or utilities would promote
upgrades of process and support systems. Such upgrades are now rare because
early adopters face large risks.
Within specific industries, efficiency targets or equipment standards can
help boost capital allocations, lengthen payback times, create awareness
among executives, and make many products more available. Voluntary
agreements, for example, have induced the participants to cut their energy
consumption in return for receiving financial rewards, gaining exemption
from some regulations, or avoiding stricter ones. Many regulators value the
flexibility and fast implementation of voluntary agreements. From 1998 to
2006, for example, one such understanding raised a Dutch chemical
industry?s energy efficiency by 23 percent.
McKinsey has looked long and hard for ways to obtain an affordable, secure
energy supply while controlling climate change. Energy efficiency stands
out as the single most attractive and affordable component of the necessary
shift in energy consumption. Although significant challenges stand in the
way, solutions not only exist but can also be scaled up to a national
level, which would cut the US energy bill by 23 percent and save a net $680
billion by 2020. But that isn?t very far in the future, and each wasted day
makes this?or any goal whatsoever?more difficult to reach.
(Embedded image moved to file: pic07264.gif)

About the Authors
Jon Creyts is a principal in McKinsey?s Chicago office, Hannah Choi Granade
is a principal in the Stamford office, and Ken Ostrowski is a director in
the Atlanta office.
Back to top
1 For more information, see the full report, Unlocking energy efficiency in
the US economy, available free of charge on
2 Sheila M. J. Bonini, Greg Hintz, and Lenny T. Mendonca, ?Addressing
consumer concerns about climate change,?, March 2008.
3 British thermal units.
4 Community infrastructure, such as telecom facilities, would provide the

CSR newsclips for 29 January 2010: H&M's PR disaster in NY

Unsold H&M clothes found in rubbish bags as homeless face winter chill
Megastore at the centre of a storm of protest after New York graduate
student discovers bags of cut up garments
Ed Pilkington in New York, Thursday 7 January 2010 18.40 GMT
(Embedded image moved to file: pic25471.gif) larger | smaller
(Embedded image moved to file: pic45119.jpg)A graduate student discovered
bags of cut up clothes from a New York H&M store.
A graduate student discovered bags of cut up clothes from a New York H&M
store. Photograph: Timothy A Clary/AFP
The clothing megastore H&M has found itself at the centre of an angry
protest after one of its leading outlets in Manhattan was accused of
cutting up unsold garments and dumping them in rubbish bags on the street.
The claim that the global chain was destroying unused clothes in the middle
of one of the bitterest winters and deepest recessions to have hit New York
in many years led to an outpouring of angry comments on Twitter.
The company, based in Sweden, said it was looking into the incident and
emphasised its commitment to community responsibility.
Rubbish bags full of pristine clothes were found by a graduate student of
the City University of New York, who came across them one night as she
walked to the subway.
The student, Cynthia Magnus, tracked them to the 34th Street H&M store, a
popular venue for tourists and New Yorkers in the centre of Manhattan.
Inside the bags were gloves with the fingers cut off, socks, patent leather
shoes with the instep cut up, and warm men's jackets slashed across the
body and arms. "It was a very frigid night, and there were bags upon bags
of warm winter clothing not 50 feet away from where a homeless man slept on
cardboard boxes," she said.
Shocked by what she had found, she took some of the bags home to Brooklyn
and tried to salvage the clothes. She contacted H&M's Swedish headquarters
complaining about the dumping, and when she received no reply took the
story to the New York Times. She also exposed an alleged dumping exercise
carried out by a contractor of America's largest retailer, Wal-Mart, on the
neighbouring block.
According to the Coalition for the Homeless, the number of people sleeping
rough in New York city has reached its highest level since the Great
Depression of the 1930s. There are thought to be about 39,000 people who do
not have a home, including more than 10,000 families and 16,500 children.
Homelessness has been exacerbated by the economic downturn, which has
pushed the number of families in receipt of food stamps in the city to
record highs. A cold snap has also meant outdoor night temperatures in New
York of -10C (14F).
Paradoxically, five blocks away from the H&M store is a group called New
York Cares, which mobilises support for the community by co-ordinating
volunteers wanting to help homeless and poor families in the city. It holds
an annual drive that distributes 70,000 secondhand winter coats to needy
The group points out that nine in 10 homeless adults need to replace their
winter coat each year because they have no place to store it during the
Nicole Christie, of H&M, said the company took responsibility for how its
operations affected people and the environment across its 200 US stores and
worldwide. She said garments not meeting quality thresholds were regularly
given to aid groups, including the UNHCR and a branch of Gifts In Kind.
Globally, last year, 500,000 clothing items were given away, she said. She
said H&M was looking into the "isolated incident" reported.
Wal-Mart said it too was investigating.

Green newsclips for 29 January 2010: Glaciers melt faster and faster, but calls for more transparency after IPCC error on Himalayan glaciers; Booz states in 2010 that 'Green is a strategy'

Green Is a Strategy
Five steps to ?differentiated? sustainability for a full embrace of
by Rich Kauffeld, Abhishek Malhotra, and Susan Higgins
In 2004, when General Electric Company CEO Jeffrey Immelt presented a plan
for a green business initiative to 35 top executives at the company, they
voted against it. Perhaps it was inevitable: GE had a spotty environmental
record up to that point, and its leadership had consistently declined to
voluntarily address high-profile problems, such as the company?s role in
polluting New York?s Hudson River with PCBs from an upstate electronics
plant. But Immelt refused to take no for an answer and overruled his team.
Today the initiative, called Ecomagination, is one of the most widely
recognized green programs in the corporate world.
By the end of 2008, Ecomagination had delivered US$100 million in cost
savings to GE?s bottom line while reducing the company?s greenhouse gas
emissions by 30 percent. The program has yielded a portfolio of 80 new
products and services ? including energy-efficient MRIs, locomotives, and
lightbulbs ? generating $17 billion in annual revenue. Going green ?has
been 10 times better than I ever imagined,? Immelt told journalist David
Magee (as reported in Magee?s book Jeff Immelt and the New GE Way:
Innovation, Transformation and Winning in the 21st Century [McGraw-Hill,
Like a handful of other companies ? Dell, Kaiser Permanente, and Nike,
among them ? GE views going green as an essential strategy in a global
commercial landscape increasingly contoured by environmental policies,
regulations, and attitudes. These companies recognize that consumers?
concern for the environment has morphed into buying behaviors that are at
least somewhat recession-resistant. A 2008 survey of 6,000 global
consumers, conducted by public relations firm Edelman, found that 87
percent believed it was their ?duty? to contribute to a better environment
and that even in a recession, 55 percent would pay more for a brand if it
supported a cause in which they believed. In turn, retailers and
manufacturers are demanding greener products and supply chains. In 2007,
Wal-Mart Stores Inc. announced that it would begin a transition in its U.S.
stores toward selling only concentrated laundry detergents, which use much
less water and therefore require less packaging and space for transport and
storage. By 2009, this changeover was complete, with every major supplier
in the detergent industry involved, including Procter & Gamble (Tide), Dial
(Trend), Sun (All), and Church & Dwight (Arm & Hammer).
Government actions are also driving the shift to green initiatives. In the
2009 stimulus package, the Obama administration and the U.S. Congress
earmarked $70 billion for the development of renewable and efficient energy
technologies and manufacturing. The European Union has set targets for
reducing emissions to 20 percent of 1990 levels by 2020. And in a September
2009 address to the United Nations, Chinese President Hu Jintao said his
country would generate 15 percent of its energy from renewable sources
within a decade. In part because of the urgency expressed by government,
venture capital money is pouring into renewable energy projects. In 2008,
as much as $4.1 billion in seed money was contributed by private investors
to 277 so-called clean-tech startups, which was 52 percent more than the
year before, according to data from the National Venture Capital
Association, PricewaterhouseCoopers, and Thomson Reuters. Employees are
also encouraging their companies to formulate and pursue sustainability
campaigns. In a 2008 National Geographic survey, more than 80 percent of
U.S. workers polled agreed that it was important to work for a company or
organization that makes the environment a top priority.
As is the case with most corporate priorities, going for green makes sense
in financial terms. For many years, the widespread adoption of solar energy
systems was hampered by the high cost per kilowatt-hour of using
photovoltaic (PV) cells compared with other energy sources. But as the
price of traditional energy skyrocketed, low-cost thin-film technology
(which had existed since the 1970s) was commercialized and began replacing
first-generation crystalline silicon PV installations. A similar transition
is taking place today: Third-generation PV technologies that promise to
combine cost-effectiveness with higher productivity are under development.
In general, the savings that can be captured in green initiatives are
proving to be meaningful, even in small increments. Since 2006, U.S.
health-care provider Kaiser Permanente has recovered $4.8 million from its
IT budget by purchasing only hardware and software registered with the
Green Electronics Council?s electronic product environmental assessment
tool (EPEAT), which evaluates electronic products on the basis of their
environmental attributes.

A Deeper Shade of Green
In companies adopting green strategies today, the state to aspire to might
be called differentiated green. This phrase describes companies that have
moved beyond complying with regulations, reducing their energy use, or
marketing ecologically safe products. Such companies make pro-environment
policies the cornerstone of their business and a defining corporate
strength. Companies that have embraced this approach pursue green
strategies throughout their operations and opportunistically use them to
enhance performance. For example, Kaiser Permanente is building new
hospitals with rubber flooring (instead of vinyl) and PVC-free carpeting,
thus promoting health-care facilities that are actually healthy. The
company expects to obtain long-term paybacks from a healthier patient
population and increased market share.
The transition to differentiated green is gradual. Typically, companies
begin by lowering their costs and reducing their negative environmental
impact with nascent green programs, thus gaining internal and external
credibility and beginning to build the capabilities required to drive green
business at the highest level. To adopt a differentiated green approach,
organizations must take five steps.
1. Elevate sustainability to a core business strategy. Green awareness must
be a cultural trait throughout the organization, always on the agenda of
the senior leadership team. To the highest degree possible, the company?s
products or services should be marketed as environmentally friendly. Often
this means making public statements that make the company accountable. For
example, computer maker Dell Inc. has announced that it is committed to
becoming ?the greenest technology company on the planet.?
2. Embed green principles in innovation efforts. Green initiatives require
fresh ways of looking at problems. For instance, when designers at Nike
Inc. first tried to manufacture shoes in an environmentally safe way, they
generally failed because they held on to traditional materials and
specifications. Nike overcame this roadblock by developing a series of
product engineering concepts it called ?considered design? principles.
These aim to reduce environmental impact by eliminating waste, using
environmentally sustainable materials, and eliminating toxins in
manufacturing processes and the shoes themselves. Nike plans to apply
considered design standards to all its products by 2020 and estimates that
doing so will reduce waste in its supply chain by 17 percent and increase
its use of sustainable materials by 20 percent.
3. View the entire product life cycle through a green lens. In its ultimate
form, differentiated green seeks a ?cradle-to-cradle? life cycle, in which
products or their components can be used again and again with zero waste.
(The phrase comes from the book Cradle to Cradle: Remaking the Way We Make
Things, by William McDonough and Michael Braungart, published in 2002 by
North Point Press.) Dell has launched a program called Design for the
Environment that seeks to minimize the company?s deleterious impact on the
environment by controlling raw material acquisition, manufacturing
processes, and distribution programs while linking green policies with
consumer use and disposal. This framework encourages Dell?s product
designers to consider the full product life cycle, and it provides them
with a platform for collaborating with suppliers, supply chain experts, and
external recycling experts and other downstream partners to help them fully
understand the environmental implications of their design decisions.
4. Consider green principles in making major decisions. Business decisions
have always involved trade-offs, but traditionally, green considerations,
such as carbon emissions, the use of renewable energy sources and recycled
materials, energy efficiency, and material yields, have not been given
proper weight against risk, cost, growth, service, and quality.
Differentiated green companies not only continually take these factors into
account but are also willing to undertake green initiatives that may add
incremental costs to the business and have long payback periods. PepsiCo
Inc. has adopted sustainability as a criterion in determining capital
expenditures and tracking expenses. All funding requests of more than $5
million must include a review of environmental concerns and green
5. Integrate sustainability into corporate and brand marketing and
messaging. This is particularly important for attracting and informing
stakeholders, including customers, employees, investors, and regulators.
Walmart?s recently announced sustainability index, which will evaluate all
consumer products for their environmental impact, represents a good example
of how green initiatives can be structured and communicated in ways that
bolster corporate credibility. The company will not own the index, but it
will participate in and finance its creation. ?The index will bring about a
more transparent supply chain, drive product innovation and, ultimately,
provide consumers the information they need to assess the sustainability of
products,? explains Walmart CEO Mike Duke. ?If we work together, we can
create a new retail standard for the 21st century.?
When differentiated green companies promote their sustainability efforts,
they must be prepared to have all their practices and products scrutinized
by the public and by environmental advocates. If they fail to live up to
expectations, companies can be accused of ?greenwashing,? which can damage
corporate and brand reputations. Some of the major oil companies have made
themselves vulnerable to greenwashing charges by heavily advertising their
commitment to renewable energy sources, when in reality their renewable
initiatives receive little managerial attention and represent only a tiny
fraction of their business.
To avoid such problems, companies should not proclaim a green identity
unless they can withstand the scrutiny that will ensue. Even
environmentally aware companies should recognize that public expectations
about corporate sustainability efforts are continually rising. A message
might be positively received today, but could easily be perceived next year
as too little, too late.(Embedded image moved to file: pic13714.gif)
Rich Kauffeld is a Booz & Company partner based in New York. He focuses on
corporate and business unit strategy, supply chain management, and
transformational improvement programs for consumer products companies and
Abhishek Malhotra is a Booz & Company partner based in Mumbai. He focuses
on business and operations strategy for consumer products companies.
Susan Higgins is a Booz & Company senior associate based in New York. She
focuses on green strategy and supply chain strategy for consumer products
and health-care companies.

World's glaciers continue to melt at historic rates
Latest figures show the world's glaciers are continuing to melt so fast
that many will disappear by the middle of this century
Juliette Jowit, Monday 25 January 2010 17.26 GMT
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(Embedded image moved to file: pic60993.jpg)Aerial view of the Siachen
An aerial view of the Siachen glacier, which traverses the Himalayan region
dividing India and Pakistan. Glaciers are seen as a leading indicator of
how much the planet is heating up. Photograph: Channi Anand/AP
Glaciers across the globe are continuing to melt so fast that many will
disappear by the middle of this century, the World Glacier Monitoring
Service (WGMS) said today.
The announcement of the latest annual results from monitoring in nine
mountain ranges on four continents comes as doubts have been cast on how
much climate scientists have exaggerated the problem of glacier melt, which
is seen as a leading indicator of how much the planet is heating up.
Last week the head of the Intergovernmental Panel on Climate Change (IPCC)
apologised for "a paragraph" in its four-volume 2007 report which warned
there was a "very high" risk that the Himalayan glaciers, on which at least
half a billion of the world's poorest people depend for water, would
disappear by 2035.
However the director of the WGMS, Professor Wilfried Haeberli, said the
latest global results indicated most glaciers were continuing to melt at
historically high rates.
"The melting goes on," said Haeberli. "It's less extreme than in years
[immediately before] but what's really important is the trend of 10 years
or so, and that shows an unbroken acceleration in melting."
Haeberli also repeated his warning that many glaciers are set to disappear
in the next few decades, due to an expected continuation in the rise of
global average temperatures. The most vulnerable glaciers were those in
lower mountain ranges like the Alps and the Pyrenees in Europe, in Africa,
parts of the Andes in South and Central America, and the Rockies in North
America, said Haeberli.
"We are on the path of the highest scenario [of global warming] in reality,
but if you take a medium scenario in the Alps about 70% will be gone by the
middle of the century, and mountain ranges like the Pyrenees may be
completely ice-free."
Glaciers at much higher altitudes - particularly in the Himalayas and
Alaska, where it was colder and global warming could increase snowfall -
could grow in the short term and were likely to last "centuries", said
Haeberli. "But even for the large glaciers, for a realistic [mid-range
warming] scenario, it's centuries, not millennia, and not many centuries,"
he added.
The WGMS records data for nearly 100 of the world's approximately 160,000
glaciers, including 30 "reference" glaciers, with data going back to at
least 1980. Scientists also use methods from geology to photos and travel
journals and other data to estimate glacier sizes further back in history.
The latest preliminary figures for 2007-08 show the average reduction in
thickness across all the 96 glaciers was nearly half a metre, and since
1980 they have collectively lost an average of 13m thickness. During that
year 30 of the 96 glaciers gained in mass.
Two years ago the WGMS preliminary figures revealed the biggest melt-rate
in one year on record. The figure was later revised so it was slightly less
"catastrophic" than the other extreme year in 2002-03, said Haeberli.
The IPCC uses WGMS data throughout its report, but the offending statement
regarding 2035 was blamed on a quote from a scientist given to a
journalist, and never presented in a peer-reviewed journal.

Science chief John Beddington calls for honesty on climate change
(Embedded image moved to file: pic15741.jpg)Polar bears in Alaska

The IPCC's 2007 report that the glaciers would disappear by 2035 has
exposed a wider problem with the way that some evidence was presented

Ben Webster, Environment Editor
The impact of global warming has been exaggerated by some scientists and
there is an urgent need for more honest disclosure of the uncertainty of
predictions about the rate of climate change, according to the Government?s
chief scientific adviser.
John Beddington was speaking to The Times in the wake of an admission by
the Intergovernmental Panel on Climate Change (IPCC) that it grossly
overstated the rate at which Himalayan glaciers were receding.
Professor Beddington said that climate scientists should be less hostile to
sceptics who questioned man-made global warming. He condemned scientists
who refused to publish the data underpinning their reports.
He said that public confidence in climate science would be improved if
there were more openness about its uncertainties, even if that meant
admitting that sceptics had been right on some hotly-disputed issues.
He said: ?I don?t think it?s healthy to dismiss proper scepticism. Science
grows and improves in the light of criticism. There is a fundamental
uncertainty about climate change prediction that can?t be changed.?
He said that the false claim in the IPCC?s 2007 report that the glaciers
would disappear by 2035 had exposed a wider problem with the way that some
evidence was presented.
?Certain unqualified statements have been unfortunate. We have a problem in
communicating uncertainty. There?s definitely an issue there. If there
wasn?t, there wouldn?t be the level of scepticism. All of these predictions
have to be caveated by saying, ?There?s a level of uncertainty about
Professor Beddington said that particular caution was needed when
communicating predictions about climate change made with the help of
computer models.
?It?s unchallengeable that CO2 traps heat and warms the Earth and that
burning fossil fuels shoves billions of tonnes of CO2 into the atmosphere.
But where you can get challenges is on the speed of change.
?When you get into large-scale climate modelling there are quite
substantial uncertainties. On the rate of change and the local effects,
there are uncertainties both in terms of empirical evidence and the climate
models themselves.?
He said that it was wrong for scientists to refuse to disclose their data
to their critics: ?I think, wherever possible, we should try to ensure
there is openness and that source material is available for the whole
scientific community.?
He added: ?There is a danger that people can manipulate the data, but the
benefits from being open far outweigh that danger.?
Phil Jones, the director of the University of East Anglia?s Climatic
Research Unit and a contributor to the IPCC?s reports, has been forced to
stand down while an investigation takes place into leaked e-mails allegedly
showing that he attempted to conceal data.
In response to one request for data Professor Jones wrote: ?We have 25 or
so years invested in the work. Why should I make the data available to you
when your aim is to try and find something wrong with it??
Professor Beddington said that uncertainty about some aspects of climate
science should not be used as an excuse for inaction: ?Some people ask why
we should act when scientists say they are only 90 per cent certain about
the problem. But would you get on a plane that had a 10 per cent chance of
Mike Hulme, Professor of Climate Change at the University of East Anglia,
said: ?Climate scientists get kudos from working on an issue in the public
eye but with that kudos comes responsibility. Being open with data is part
of that responsibility.?
He criticised Rajendra Pachauri, the IPCC chairman, for his dismissive
response last November to research suggesting that the UN body had
overstated the threat to the glaciers. Mr Pachauri described it as ?voodoo
Professor Hulme said: ?Pachauri?s choice of words has not been good. The
question of whether he is the right person to lead the IPCC is for the 193
countries who make up its governing body. It?s a political decision.?
Blowing hot and cold
The IPCC says its statement on melting glaciers was based on a report it
misquoted by WWF, a lobby group, which took its information from a report
in New Scientist based on an interview with a glaciologist who claims he
was misquoted. Most glaciologists say that the Himalayan glaciers are so
thick that they would take hundreds of years to melt
Sea levels
The Potsdam Institute for Climate Impact Research says sea levels could
rise by 6ft by 2100, a prediction based on the 7in rise in sea levels from
1881-2001, which it attributed to a 0.7C rise in temperatures. It assumed a
rise of 6.4C by 2100 would melt the Antarctic and Greenland ice sheets.
UK Climate Projections, published last year by the Government, predicted a
rise of one to two feet by 2095
Arctic sea ice
Cambridge University?s Polar Ocean Physics Group has claimed that sea ice
will have disappeared from the North Pole in summer by 2020. However, in
the past two summers the total area of sea ice in the Arctic has grown
Global temperatures
The Met Office predicts that this year is ?more likely than not? to be the
world?s warmest year on record. It claims the El Niño effect will join
forces with the warming effect of manmade greenhouse gases.
Some scientists say that there is a warming bias in Met Office long-range
forecasts which has resulted in it regularly overstating the warming trend

Carbon Management newclips for 29 January 2010: Some for more carbon controls, some against, but the let-down from Copenhagen is visible. Plus, measuring Scope 3 emissions: the WBCSD's proposed approach is adopted by 60 companies

EU industry protests against carbon "benchmarks"

(Embedded image moved to file: pic53495.jpg)Reuters, 22 January 2010 -
European Union proposals to curb carbon emissions will put EU manufacturers
at a disadvantage to less-regulated overseas rivals and must be loosened,
industry group BusinessEurope said.

But environmentalists said any such move would hand windfall profits to
polluters in sectors such as steel, paper, cement and glass.

The EU aims to cut carbon dioxide emissions to 20 percent below 1990 levels
over the next decade. Its main tool for doing that is its Emissions Trading
System (ETS), which forces companies to buy permits for each tonne of
carbon they emit.

Carbon output is capped, and year by year that level is ratcheted down.

BusinessEurope, which represents 20 million European companies, said the
complex process of "benchmarking" under the ETS would cause EU
manufacturers excessive pain.

The ETS is expected to force a 21 percent cut in emissions from the
industries it covers, many of which have complained the costs will hurt
their competitiveness and force them to relocate factories to less
regulated regions overseas.

To prevent that happening, some sectors will be given free permits under a
revised system from 2013.

But to avoid handing free permits to the biggest polluters, the EU has
created a system known as "benchmarking", now the subject of heated debate
among technical experts in Brussels with billions of euros at stake.

Benchmarks are set as the average emissions of the most efficient 10
percent of installations in any sector. Only the factories that exceed the
benchmarks will receive all their allowances for free.

Less efficient factories will receive only some of their allowances for
free, according to a sliding scale.

BusinessEurope, said its first analysis of the proposed benchmarks showed
they were as much as 30 percent higher than the average performance of some

"This would translate into an overall reduction obligation far more
stringent than the minus 21 percent... and thus expose large parts of the
EU economy to unsustainable and unilateral carbon costs," the group said in
a recent position paper.

"Excessively low allocations to sectors will take investment funds away
from companies at the very time they are trying to make improvements," it

But environmentalists disagree.

"There is no conclusive proof that giving a company allowances for free
does anything other than subsidise bottom line profits," said WWF
campaigner Sanjeev Kumar.

"Industry has already made significant windfall profits from free
allocation in the EU ETS," he added. "Industry must have stringent
benchmarks to drive innovation and, at the very least, provide governments
with additional income that can be used in the national interest."

(Editing by Keiron Henderson)

World economic growth at odds with climate targets
As the UK is expected to emerge from recession, the New Economics
Foundation says endless growth is pushing the planet's biosphere 'beyond
its safe limits'
Kathryn Hopkins
The Guardian, Monday 25 January 2010
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Economic growth is not compatible with climate change targets for rich
countries, according to a new report out today.
The New Economics Foundation (NEF) warns that global economic expansion is
not possible if the world is to restrict the temperature rise to 2C ? the
EU's agreed political objective.
The NEF found that this would require unprecedented ? and probably
impossible ? reductions in the carbon intensity of a growing economy. None
of the models or variations it looked at could square the circle of global
economic growth with climate safety.
Andrew Simms, policy director at the NEF, said: "Endless growth is pushing
the planet's biosphere beyond its safe limits. The price is seen in
compromised world food security, climatic upheaval, economic instability
and threats to social welfare. We urgently need to change our economy to
live within its environmental budget. There is no global, environmental
central bank to bail us out if we become ecologically bankrupt."
As economists and politicians expect the UK to emerge from recession
tomorrow after a year and a half, Roger Bootle, Deloitte's economic
adviser, warns today that fiscal policy will be a greater drag on growth
than elsewhere. He expects Britain's economy to grow by just 1% in 2010,
compared to growth of 1.5% in the eurozone, 3% in the US and Japan and 3.5%
"The constraints on the strength of the global recovery over the next
couple of years look set to bite particularly hard in the UK," he says.
However, he added that after a difficult period over the next couple of
years, he sees no reason why the UK cannot return to being a "relative
Meanwhile, Ernst & Young said that despite profit warnings from British
companies tailing off during 2009, UK plc still faces a "bumpy ride".
Andrew Wollaston, restructuring partner at Ernst & Young, said: "Given the
depth of the slump, recovery has certainly come quicker than we might have
anticipated. This rapid economic recuperation, along with previously
depressed earnings forecasts, is helping companies beat expectations and
keep profit warnings low. Good news for UK plc, but this is not the end of
the story. Rapid recovery costs and 2010 is when we start paying. Brace
yourselves for a bumpy recovery."

The Case for a Climate Bill

The conventional wisdom is that the chances of Congress passing a bill that
puts both a cap and a price on greenhouse gases are somewhere between
terrible and nil. President Obama can start to prove the conventional
wisdom wrong by making a full-throated case for a climate bill in his State
of the Union speech this week.

Washington has been forecasting the likely death of a climate bill with
renewed certainty since Massachusetts elected a Republican senator who
promised to block pretty much anything Mr. Obama wants. But even before
then we were hearing two reasons why a bill could not pass: The Senate
won?t have any strength left when it finishes with health care, and the
nation cannot afford a bill that implies an increase in energy prices.

The first reason is defeatist, the second greatly exaggerated. The climate
change bills pending in the Senate would not begin to bite for several
years, when the recession should be over. The cost to households, according
to the Congressional Budget Office, would be small. A good program would
create more jobs than it cost.

The list of reasons to pass a climate bill, on the other hand, is long and

Start with timing. The long-term trend in greenhouse gas emissions is up
(the decade ending in 2009 was the warmest on record), and the sooner
emissions decline, the better. The bill passed by the House last year calls
for emissions in 2020 to be 17 percent lower than they were in 2005. This
is the bare minimum required to give the industrialized world a fighting
chance of achieving an 80 percent reduction by midcentury, which most
mainstream scientists think will be necessary to avert the worst
consequences of global warming.

Then there is the race for markets. China is moving aggressively to create
jobs in the clean-energy industry. Beijing not only plans to generate 15
percent of its energy from renewable sources by 2020, but hopes to become
the world?s leading exporter of clean energy technologies. Five years ago,
it had no presence at all in the wind manufacturing industry; today it has
70 manufacturers. It is rapidly becoming a world leader in solar power,
with one-third of the world?s manufacturing capacity.

Finally there?s the question of credibility: Mr. Obama said in Copenhagen
that the United States would meet at least the House?s 17 percent target.
Success in the Senate is essential to delivering on that pledge. Failure
would undo many of the good things he achieved in Copenhagen, and it would
give reluctant powers like China an excuse to duck their pledges.

The jobs argument should impress the Senate. Yet many Democrats as well as
Republicans seem willing to settle for what would be the third energy bill
in five years ? loans for nuclear power, mandates for renewable energy, new
standards for energy efficiency. These are all useful steps. But the only
sure way to unlock the investments required to transform the way the
country produces and delivers energy is to put a price on carbon.

Some senators understand that. John Kerry, Joseph Lieberman and Lindsey
Graham are trying to forge a bill with a price on emissions as its core and
enough other bells and whistles to attract the necessary filibuster-proof
60 votes. They will need help. Mr. Obama is the best person to provide it.

Cities face wrecking ball to meet carbon targets
(Embedded image moved to file: pic14704.jpg)Newscastle

Newcastle, many of whose city centre buildings
date from the Sixties and Seventies, is seen as
a problem area for refurbishment

Rebecca O?Connor, Property Correspondent
Huge expanses of British town and city centres built in the Sixties and
Seventies may have to be torn down to meet carbon emission standards for
In an interview with The Times, the Government?s new chief construction
adviser said that there may be no choice but to demolish buildings put up
in those decades because it is impossible to refurbish them to a
sufficiently high standard.
Paul Morrell, who took up his new post at the Department for Business,
Innovation & Skills at the end of November last year, said: ?In the
Sixties, everything was built cheaper, faster and nastier. If you are going
to try to fix buildings, then really you won?t have too many problems with
anything built earlier than the Fifties or after the Eighties.
"Although you can do some things to buildings from the Sixties and
Seventies, like replacing the roofs, there are probably some places that
need to come down entirely.?
Mr Morrell has been charged with ridding the construction industry of
carbon to meet a government target to cut UK carbon emissions by 80 per
cent by 2050, compared with levels in the Nineties. He said that problem
areas were likely to be places such as Newcastle city centre, where a lot
of buildings went up in the Sixties and Seventies.
Other towns that could undergo an eco-makeover could include Slough and
Aylesbury, visited by Janet Street-Porter for Channel 4?s Demolition
programme, broadcast in 2005.
Mr Morrell said: ?The buildings that pose the most difficulties are
semi-industrialised, highly inefficient, badly insulated and so ugly that
they are not worth refurbishing.?
Property is responsible for 50 per cent of the UK?s carbon emissions,
according to the British Property Federation. The Government has a target
for all new commercial buildings built from 2018 to be zero-carbon, but a
strategy for how to deal with existing stock has yet to be established.
The Policy Exchange, the public policy think-tank, has estimated that
Britain would need to spend about £400 billion on new and refurbished
infrastructure by 2020 to address historic underinvestment and to
kick-start transition to a low-carbon economy.
Mr Morrell?s comments will be a blow to fans of retro architecture. The
brutalist style that characterised the Sixties and Seventies has gained a
following in recent years, as more such buildings have been torn down.
Its devotees may be reassured to learn that listed buildings from any era
are likely to remain exempt from carbon targets, according to English
Heritage. The listing authority said that many modern refurbishment
measures, such as plastic windows and wall insulation, were not suitable
for historic buildings because the measures do not allow the buildings to
breathe, increasing the risk of mould and rot.
However, many adaptations ? such as better boilers and loft insulation ?
are equally applicable to new and most historic houses.
Property landlords are starting to deal with incoming requirements that
will force them to spend millions of pounds to improve energy efficiency in
their buildings, or to redevelop them. Increasingly owners favour
refurbishing stock rather than starting from scratch, according to GVA
Grimley, the property consultancy, partly because it is usually cheaper.
Mr Morrell, who cited the refurbishment of Hampshire County Council?s
Elizabeth II Court building in Winchester as a successful example of how a
property can be improved, said: ?The problem is weighing up whether it is
more energy-efficient to knock something down and start from scratch, or
refurbish it. We don?t have the methodologies for weighing that up in all
Francis Salway, the chief executive of Land Securities, Britain?s biggest
commercial landlord, said that the company was using a combination of both
approaches. He said: ?We have refurbished some smaller buildings, but it is
quite high-risk to refurbish larger stock.
"It is generally cheaper to refurbish, rather than redevelop, but sometimes
the numbers come out surprisingly close. Refurbishing is sometimes more
complex and less effective than starting from scratch.?
The Government committed itself last week to a consultation on the
introduction of display energy certificates (DECs), which show offices? and
shops? energy use.
Responding to the Committee on Climate Change?s first progress report,
ministers said that DECs should be rolled out to give everybody a better
understanding of carbon emissions.
The British Property Federation said that DECs were necessary because they
were based on actual energy use.

Copenhagen dampens banks' green commitment
Banks are pulling out of the carbon-offsetting market after Copenhagen
failed to reach agreement on emissions targets
Tim Webb, Sunday 24 January 2010 20.06 GMT
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(Embedded image moved to file: pic42530.jpg)green copenhagen carbon
The lack of progress at Copenhagen has meant some banks are stalling on
lending to carbon emissions-offsetting projects. Photograph: Joe
Klamar/AFP/Getty Images
Banks and investors are pulling out of the carbon market after the failure
to make progress at Copenhagen on reaching new emissions targets after
Carbon financiers have already begun leaving banks in London because of the
lack of activity and the drop-off in investment demand. The Guardian has
been told that backers have this month pulled out of a large planned
clean-energy project in the developing world because of the expected fall
in emissions credits after 2012.
Anthony Hobley, partner and global head of climate change and carbon
finance at law firm Norton Rose, said: "People will gradually start to
leave carbon desks, we are beginning to see that already. We are seeing a
freeze in banks' recruitment plans for the carbon market. It's not clear at
what point this will turn into a cull or a rout."
Paul Kelly, chief executive of Eco Securities, which develops clean energy
projects, said that while markets had not expected a definitive post-Kyoto
Protocol deal at Copenhagen, they had expected some progress.
"The lack of regulatory certainty in the post 2012 world affects the
market's view of what CERs [carbon credits from clean energy projects] will
be worth and subsequently will constrain financing for projects. If you had
an agreement at Copenhagen with a bit more detail, people would be more
willing to take risk."
After two weeks of extenuating talks, world leaders delivered an agreement
in Copenhagen that left campaigners disappointed as it failed to commit
rich and poor countries to any greenhouse gas emission reductions.
Banks had been scaling back their plans to invest in carbon markets before
Copenhagen. Fewer new clean energy projects need to be financed as, because
of the recession, there are fewer global emissions to offset. The price of
carbon credits has also fallen, while plans to introduce national trading
schemes, particularly in the US and Australia, remain uncertain.
Two sources said that Australian bank Westpac had scaled back plans to
increase its carbon desk in London. A bank spokeswoman denied there were
plans to recruit more staff in London, adding: "We have always said that we
would look to grow this business organically as carbon markets develop and
that remains the case."
Carbon markets were central to the Kyoto Protocol, which expires in 2012
and obliged developed countries that exceed their targets to purchase
credits from clean energy projects in the developing world. Policymakers
will meet again in Mexico in November in an attempt to revive the climate
change talks.

Climate Bill Setback Forces Clean Development Rethink
Country: UK
Author: Michael Szabo
(Embedded image moved to file: pic20171.jpg)Climate Bill Setback Forces
Clean Development Rethink Photo: Larry Downing
The U.S. Capitol Dome on Capitol Hill in Washington, January 14, 2010.
Photo: Larry Downing
LONDON - Still reeling from disappointing UN climate talks in Copenhagen in
December, clean energy project developers were dealt another blow this week
when U.S. Democrats lost their Senate supermajority, potentially killing a
federal cap-and-trade scheme for years to come.
Although the passage of a U.S. bill to cap greenhouse gas emissions in 2010
was far from certain, the election of a Republican in Massachusetts to the
Senate on Tuesday derailed any momentum President Obama had following his
healthcare push toward introducing a cap-and-trade scheme this year.
This, coupled with a disappointing UN climate summit in the Danish capital
last month where leaders from over 190 countries failed to agree a
legally-binding pact to succeed the Kyoto Protocol, is causing concern for
some clean energy project developers and forcing them to reassess their
game plan.
"I'm not as bullish as I was a year ago," said Sascha Lafeld, an executive
board member at First Climate AG. "The U.S. pre-compliance market is
cautiously developing, so our strategy is also one of caution ... We're on
hold, we'll keep our two U.S. offices open but we're not expanding this
Frankfurt-based First Climate has a global project portfolio of some 250
projects, including around 20 projects in the U.S., that generate carbon
offsets by cutting carbon dioxide.
Observers say the spotlight in the U.S. now shifts back to state and
regional schemes launched by a handful of states during George W. Bush's
presidency, when the prospect of a federal U.S. carbon market was a distant
"It's not ideal but we welcome this as a fallback solution," said Alexander
Sarac of JP Morgan-owned EcoSecurities, one of the world's biggest
aggregators of carbon offsets.
"Some states are prepared to address climate change rather than defer
action, (but) we urge legislators to set up these regional schemes in a way
that they can be easily linked to a national one."
Sarac, general counsel for EcoSecurities, said the company was confident
about its U.S. approach. "Our strategy has been to get to know the market,
work on our brand and develop a product that U.S. buyers like, so no reason
to change that," he added.
Under these regional schemes, polluters like steel plants and power
generators can outsource their carbon cuts by buying offsets, making it
cheaper for them to meet emissions targets.
Lafeld said the most promising is California's Assembly Bill 32 (AB 32),
which established statewide emissions reduction targets of 1990 levels by
2020, and cutting that by 80 percent by 2050. "AB 32 looks like the future.
We believe California will be the U.S. hub for emissions trading," he said.
The bill recommends launching a cap-and-trade programme by 2012, covering
85 percent of the state's emissions, that would link to the Western Climate
Initiative (WCI), a collaboration between seven U.S. states and four
Canadian provinces.
Another scheme called the Regional Greenhouse Gas Initiative (RGGI) was
launched in 2009 by 10 northeastern U.S. states, but critics say its loose
emissions caps will keep carbon permit prices low and limit offset demand.
RGGI currently allows offsets from five different types of clean energy
projects including capturing methane from landfills and livestock manure,
while WCI is considering a similar list.
Developers said these two schemes have already sparked U.S. demand for
offsets and, remembering the barren regulatory landscape under President
Bush just over a year ago, said too much focus was suddenly put on the
prospect of a federal bill.
"While some debate whether a federal market will exist or not, there's
already a deep market for offsets," said Sindicatum Carbon Capital CEO
Assaad Razzouk, adding that his firm gets strong interest for every offset
its U.S. projects generate.
Sindicatum has a portfolio of 20 clean energy projects in the U.S. and
With so much uncertainty in the U.S., many developers have maintained a
focus on the Kyoto Protocol's larger, more lucrative Clean Development
Mechanism (CDM) offset market.
Worth $6.5 billion in 2008, the CDM is the main source of offsets for
Europe's emissions trading scheme, allowing participants to procure from a
wide range of carbon-cutting projects in countries like India, China and
But that scheme's future was thrown into jeopardy following the Copenhagen
talks' failure, meaning the CDM could expire along with Kyoto in January
Scott McGregor, CEO of Camco International, said although Copenhagen fell
short of what he expected, there was no clear opposition to keeping the
CDM, so Camco will continue to develop projects and originate offsets.
"There will be healthy demand for offsets from the EU and we see other
countries like Australia being very keen on them as well, so in terms of
developing CDM projects our strategy is still one of expansion," First
Climate's Lafeld said.

Sixty Corporations Begin Measuring Emissions from Products and Supply

(Embedded image moved to file: pic46862.jpg)Geneva, 20 January 2010 - Sixty
corporations today begin measuring the greenhouse gas emissions of their
products and supply chains by road testing a new global framework that is
part of the Greenhouse Gas Protocol Initiative.

Developed by the World Resources Institute (WRI) and the World Business
Council for Sustainable Development (WBCSD), the two new GHG Protocol
standards ? the Product Life Cycle Accounting and Reporting Standard and
the Scope 3 (Corporate Value Chain) Accounting and Reporting Standard ?
provide methods to account for emissions associated with individual
products across their life cycles and of corporations across their value

Jonathan Lash, president of WRI, said, ?We are encouraged by the
overwhelming response from the private sector seeking to road test the new
standards. There were more than 120 applications across a broad array of
sectors and regions worldwide. The road testing will provide critical input
in ensuring that the standards generate credible and meaningful data for
business and government decision-makers, while considering the practical
challenges that businesses and programs will face during implementation.?

?Increasingly, companies are looking beyond their own boundaries and
developing strategies to reduce GHG emissions in their supply chains and in
the products they make and sell,? added Bjorn Stigson, president of the
WBCSD. ?By taking a comprehensive approach to GHG measurement and
management, businesses and policy-makers can focus attention on the
greatest opportunities to reduce emissions within the full value chain,
leading to more sustainable decisions about the products companies buy,
sell and produce.?

While many companies have been measuring the emissions from their own
operations and electricity use, the Scope 3 Standard will, for the first
time, allow companies to look comprehensively at the impact of their
corporate value chains, including outsourced activities, supplier
manufacturing, and the use of the products they sell. Road testers of the
Product Standard will measure the climate change impact of products ranging
from magazines, food and jeans to computers, wind turbines and steel.

Ashley Crepiat, environmental footprint and economics manager for
road-testing company Airbus, said, ?Managing the transition towards a
low-carbon economy is now a true concern for corporations. Airbus
understands that beyond reducing its direct GHG emissions from its
operations, evaluating emissions throughout the whole value chain is also a
major challenge. By road testing the GHG Protocol?s Scope 3 Accounting and
Reporting Standard, we believe this will help establish harmonized
international guidelines enabling a common and robust framework for Scope 3

Michael Kobori, Levi Strauss & Co.?s vice president of Social and
Environmental Sustainability, said: ?Levi Strauss & Co. is thrilled to be
road testing the GHG Protocol Product Life Cycle Accounting and Reporting
Standard. If this method becomes widely accepted, it will enable us to
better calculate and share the climate change impact of our products. Being
able to credibly measure and communicate that product impact to consumers
can unleash the power of the market to address climate change on a global

The draft standards were developed over the last year through a global,
collaborative multi-stakeholder process, with participation from over 1,000
volunteer representatives from industry, government, academia and
non-governmental organizations. The road testing process will provide
real-world feedback to ensure the standards can be practically implemented
by companies and organizations from a variety of sectors, sizes and
geographic areas around the world. The final standards are scheduled to be
published in December 2010.

Companies participating in the road testing represent 17 countries from
every continent and more than 20 industry sectors. The companies include:
3M Company; Acer Inc.; Airbus S.A.S.; AkzoNobel; Alcan Packaging; Alcoa;
Autodesk, Inc.; Baoshan Iron & Steel Co. Ltd.; BASF SE; Belkin
International; Bloomberg LP; BT Plc; CA, Inc.; Coca-Cola
Erfrishungsgetränke AG; Colors Fruit SA (Pty) Ltd.; Deutsche Post AG;
DuPont; Eclipse Networks (Pty) Ltd.; Ecolab; The Estee Lauder Company; Ford
Motor Company; General Electric; U.S. General Services Administration;
Highways Agency (UK); Hydro Tasmania; IBM; IKEA; Italcementi Group;
JohnsonDiversey, Inc.; Kraft Foods; Lenovo Corporation; Levi Strauss & Co.;
Mitsubishi Chemical Corporation; National Grid; Natura Cosméticos; New
Belgium Brewing Co.; Otarian; Pinchin Environmental Ltd.;
PricewaterhouseCoopers (Hong Kong); Procter & Gamble Eurocor; Public
Service Enterprise Group, Inc.; Rogers Communications, Inc.; SAP AG; SC
Johnson; Shanghai Zidan Food Packaging & Printing Co., Ltd.; Shell
International Petroleum Company Ltd; Swire Beverages (Coca-Cola Bottling
Partner); TAL Apparel Limited; Tech-Front (Shanghai) Computer Co.,
Ltd./Quanta Shanghai Manufacturing City; Tennant Company; Veolia Water; VT
Group Plc; Webcor Builders and WorldAutoSteel.

For more information on the GHG Protocol Product and Supply Chain
Initiative and to download the draft standards, visit

The World Resources Institute is an environmental think tank that goes
beyond research to find practical ways to protect the earth and improve
people?s lives.

The World Business Council for Sustainable Development is a CEO-led, global
association of some 200 companies dealing exclusively with business and
sustainable development.

The Greenhouse Gas Protocol Initiative, a partnership between the World
Resources Institute and the World Business Council for Sustainable
Development, brings together businesses, non-governmental organizations,
governments, academics, and others to develop internationally accepted GHG
accounting and reporting standards.

Water Management newsclips for 29 January 2010: Smart Meters, Regina, and the business opportunity in water management

33% of Water Utilities Adopting Smart Meters
Posted By Environmental Leader On January 11, 2010 @ 6:00 am In Charts,
Hi-Tech, Research & Technology, Water | 1 Comment
(Embedded image moved to file: pic61755.jpg)oracle waterAbout a third of
water utility managers say they are in the early stages of adopting smart
meters, despite the fact that 71 percent of water users say that having
more detailed information on their water consumption would promote better
water conservation, according to a report from Oracle [1].

Still, water utility managers do see the long-range benefits in adoption
smart meters.

About 68 percent said it would be critical for water utilities to adopt
them, according to the report ?Testing the Water: Smart Metering for Water

Water utility manager listed the following benefits to adopting smart

- enabling early leak detection ? 62 percent

- supplying customers with tools to monitor/reduce water use ? 35 percent

- providing more accurate water rates ? 24 percent

- curbing overall water demand ? 19 percent

- improving the ability to conduct preventative maintenance ? 18 percent

Those considering or already implementing smart meter technologies said
their top concerns were capital costs (75 percent), operating costs (62
percent), reliability of the technology (56 percent), incremental costs to
customers (54 percent) and service quality (50 percent).

The Network for Business Sustainability [2]?s Leadership Council listed [3]
identifying business risks associated with water as one of the top seven
trends in sustainability in 2010.

In an EL guest column [4], Sharon Nunes, Vice President of IBM Big Green
Innovations, said that too many companies are overlooking water, what she
wrote ?could become the most critical green initiative of them all.?

Article printed from Environmental Leader:

URL to article:

URLs in this post:
[1] Oracle:
[2] Network for Business Sustainability:
[3] listed:
[4] EL guest column:

Gestion de l?eau : une expérience pilote à Régina (Canada)

mercredi 06 janvier 2010 15:50
Améliorer la gestion des réseaux de distribution d?eau dans les villes et
les villages de la région canadienne de Régina : c?est l?objectif du
travail mené en commun dans des « laboratoires vivants » réunissant
organismes publics, entreprises, collectivités locales et chercheurs.

  © Conseil national de
recherches Canada

La gestion de ressources hydriques toujours plus rares constitue l?un des
défis mondiaux du XXIe siècle. Grâce au développement et à la mise en ?uvre
de technologies et de systèmes informatisés appropriés, il est possible de
mieux gérer les systèmes de distribution d?eau et de fournir de l?eau
potable d?une manière plus durable. Lagrappe technologique dirigée depuis
Regina, en Saskatchewan, au Canada, en fournit un bel exemple; en effet,
les projets multipartites réalisés dans le cadre de cette initiative font
progresser la gestion des infrastructures municipales, notamment des
réseaux de distribution d?eau et d?égouts. Le Conseil national de
recherches du Canada (CNRC) est l?un des partenaires clés de cette grappe
technologique et des réussites qu?elle engrange.

À l?Institut de recherche en construction du CNRC, le programme
Infrastructures urbaines d?Ottawa et le Centre de recherche sur les
infrastructures durables (CRID?CNRC) de Regina développent des modèles
novateurs, des technologies et des outils rentables destinés à améliorer la
prévision de performance, la conception, la réhabilitation, l?évaluation et
la gestion des réseaux d?eau et d?égouts et d?autres ouvrages civils et


Sur cette toile de fond, la Ville de Regina et d?autres collectivités de la
Saskatchewan jouent le rôle de laboratoires vivants. Ces villes et villages
ont servi de bancs d?essai pour la démonstration de technologies
émergeantes qui misent sur les nouvelles technologies de l?information et
des communications (TIC).

L?étude des causes de bris des conduites maîtresses de la Ville de Regina,
dont les taux étaient préoccupants pour les canalisations vieilles de 30 à
50 ans, fournit un bel exemple de réussite. La numérisation et l?analyse
des anciens registres sur papier et des données d?entretien plus récentes
ont permis d?évaluer les principaux mécanismes de défaillance. On a
constaté une prédominance d?argiles gonflantes, qui sont sensibles aux
changements des teneurs en humidité et de volume associés aux périodes de
sécheresse extrême ou aux fluctuations des conditions semi?arides. La ville
et le cabinet d?experts?conseils à son service ont conçu un plan de gestion
des conduites maîtresses à partir des résultats de l?étude.

Parallèlement, le CNRC, de concert avec des chercheurs universitaires et
ses partenaires de la ville et du secteur privé, évalue l?emploi de
capteurs en ligne pour assurer un suivi continu des teneurs en humidité et
d?autres propriétés importantes dans l?optique de réduire les bris de

Un projet de recherche réunissant le CNRC, 19 municipalités et services
publics nord-américains et l?American Water Research Foundation porte sur
la conception d?outils d?évaluation et de gestion des conduites maîtresses
en amiante-ciment. L?objectif final est de disposer d?un réseau de capteurs
souterrains peu coûteux reliés à des modèles informatisés qui simulent le
comportement des conduites face aux mouvements du sol afin de pouvoir
prendre des mesures proactives pour réduire au minimum les bris de
conduites et prolonger la vie utile de celles?ci.


D?autres projets conjoints ont été réalisés à Regina dans le secteur
d?activité des technologies d?évaluation et d?analyse de l?état des
réseaux : des réseaux de capteurs sans fil ont été installés pour mesurer
les débits dans les canalisations d?égout et dépister en continu les fuites
dans les conduites maîtresses, des travaux de numérisation et d?analyse de
bandes vidéo archivées d?inspections antérieures ont été menés en vue
d?estimer les taux de détérioration des conduites et leur vie utile
résiduelle et des techniques d?essai et d?évaluation non destructives de
l?état des conduites de distribution d?eau ont été mises au point. Ces
projets feront appel aux TIC pour relier les outils conçus au système
d?aide à la décision de la municipalité, créant ainsi des infrastructures «
intelligentes ».

Managing water strategically: An interview with the CEO of Rio Tinto
Tom Albanese explains how Rio Tinto is adapting its operations to a future
when climate change may make the world?s dry parts drier and wet parts
January 2010
Water management has become a strategic issue for Rio Tinto, one of the
world?s largest mining groups, whose operations tend to be located in areas
that are either arid or plagued by torrential rains. In this video
interview, CEO Tom Albanese discusses the economics of water, the role of
climate change, and how Rio Tinto is adapting its operations and seeking to
make water management a source of advantage. Bill Javetski, an editor with
the McKinsey Publishing group, conducted the interview with Tom Albanese in
Durham, North Carolina.
Watch the video, or download a PDF of the transcript.

The business opportunity in water conservation
For many companies, water efficiency is a long-term requirement for staying
in business, a big commercial opportunity, or both.
December 2009 ? Giulio Boccaletti, Merle Grobbel, and Martin R. Stuchtey
Source: Climate Change Special Initiative
In a world where demand for water is on the road to outstripping supply,
many companies are struggling to find the water they need to run their
businesses. In 2004, for instance, Pepsi Bottling and Coca-Cola closed down
plants in India that local farmers and urban interests believed were
competing with them for water. In 2007, a drought forced the US Tennessee
Valley Authority to reduce its hydropower generation by nearly a third.
Some $300 million in power generation was lost.
Businesses everywhere could face similar challenges during the next few
years. A larger global population and growing economies are placing bigger
demands on already-depleted water supplies. Agricultural runoff and other
forms of pollution are exacerbating the scarcity of water that is clean
enough for human and industrial use in some regions, and changes in climate
may worsen the problem. Scarcity is raising prices and increasing the level
of regulation and competition among stakeholders for access to water. To
continue operating, companies in most sectors must learn how to do more
with less.
Achieving that goal is an opportunity as well as a necessity. Many of these
same companies are developing products and services that can help business
customers raise their water productivity. In agriculture, improved
irrigation technologies and plant-management techniques are yielding ?more
crops per drop.? New approaches now rolling out will help oil companies,
mines, utilities, beverage companies, technology producers, and others use
water more efficiently. Closing the gap between supply and demand by
deploying water productivity improvements across regions and sectors around
the world could cost, by our estimate, about $50 billion to $60 billion
annually over the next two decades. Private-sector companies will account
for about half of this spending, government for the rest. Many of these
investments yield positive returns in just three years.
Making a business out of improving water efficiency won?t be easy.
Successful providers will have to migrate from selling equipment and
components to selling solutions aimed at helping business customers reduce
their water and energy use. The providers will therefore have to develop
new skills and capabilities, particularly in marketing and sales, to
identify and capture the higher-value-added solutions that
business-to-business markets need. They must also engage more actively in
shaping the regulations that will define this market?standing on the
sidelines is no longer an option. Nearly every sector will be affected,
whether a company is improving its own water productivity or selling
equipment and services to help other companies do so.
Doing more with less
Many countries face a growing gap between the amount of water they can
supply reliably to their economies and the amount they need. Assuming
continued economic and population growth, by 2030 water supplies will
satisfy only 60 percent of global demand (exhibit) and less than 50 percent
in many developing regions where water supply is already under stress,
including China, India, and South Africa. Closing the gap by increasing
supply?through desalination, the drilling of deep wells, or transporting
surface water?will be extremely difficult and expensive. More likely,
governments will need to manage demand, either by raising the price of
water or by capping the amount of it that users can draw.

(Embedded image moved to file: pic09021.jpg)
Back to top

(Embedded image moved to file: pic50365.jpg)
The water gap: Case studies
Case studies of three countries and one region show that
there is no single water crisis?each area faces a unique
set of problems.
Launch Interactive
Back to top

These moves will have a direct impact on local and multinational
businesses. They need water?often in large quantities?for their processes,
products, and operations. Their global assets reside in countries where
rules governing water usage and prices will vary, along with access to
Take Chile, for example?one of the world?s most important mining centers
and also among the driest spots on Earth. Here the authorities allocate
fresh-water rights among companies strictly, closely monitor their usage of
water, and pressure them to use less of it; for example, the country?s
third-largest copper mine, Xstrata?s Collahuasi operation, was asked to
reduce its rate of water extraction to 300 liters a second by 2010, from
750 liters now. To make up the difference needed to remain in operation,
the company has considered building a desalination plant or shipping in
water to the mine. It is also deploying new technologies and processes,
such as using less water to separate waste rock (called tailings) from ores
and recycling more of the water used in the process.
Companies in several sectors are improving their water productivity. The
Swedish pulp-and-paper producer SCA,1 for instance, aims to reduce its
overall water consumption by 15 percent from 2005 to 2010. SCA tracks its
performance through a resource-management system that collects and
aggregates data on energy, water, transport, and raw-material use, as well
as waste and emission levels from both production sites and business
divisions. The brewing conglomerate SABMiller launched a water footprint
study to compare its total water usage, from crop to consumer, in different
countries and has used the findings to target improvements throughout the
value chain. By 2015, it hopes to use 25 percent less water per liter of
beer produced.
Several other big corporations, such as Ford Motor Company, Nestlé, and
P&G, have been reducing their water usage too. The first step is usually to
study where their processes use water and how much of it. Often, these
companies discover a few areas where they can make significant improvements
for a small outlay. A mining company, for example, found that more than 30
percent of the expense associated with water came from potable water. By
fixing leaks in a single pipeline leading to a mine, the company cut the
cost of potable water by 5 percent. After examining the total costs
associated with water usage, it discovered that 40 percent of them came
from the energy needed to run pumps.
Few companies, however, look beyond near-term water constraints, as
important as they are, to a more comprehensive assessment of the
longer-term business risks associated with water scarcity. Bottling
companies are among the exceptions, in part because water scarcity already
influences their strategic decisions, such as where to locate operations.
More and more decisions about where to put assets involve such
environmental considerations.
Where the opportunities are
Many solutions that will help companies use water more efficiently in their
operations?from farms to semiconductor fabs, bottling plants to nuclear
ones, steel mills to oil rigs?will be new products and services under
development today. Global industrial players, such as ABB, GE, and Siemens,
already have large water businesses and continue to develop new products in
this area for large industrial users and water utilities. IBM provides
technologies to measure and track water efficiency efforts and to improve
water treatment and irrigation. A few oil companies are thinking about
getting into the water market by selling the pumping technology they?ve
developed for their own operations.
Roughly speaking, the broadest range of opportunities for new products and
services falls into three areas: improving the productivity of water
treatment and distribution, of water-intensive industrial and power
processes, or of water usage in agriculture. These segments are evolving on
different time lines and involve different sets of solutions, but a broad
range of companies could be successful in any of these areas.
Treatment and distribution
Municipal or private water utilities and many large businesses spend
hundreds of billions of dollars a year making water fit for human
consumption and industrial activity and then transporting it, through pumps
and pipes, from treatment plants to points of use. The costs include
expenditures on new infrastructure, such as a new treatment plants?China
and India alone are building hundreds of them to treat water and
wastewater?and on operating and maintaining systems. Two-thirds of this
spending occurs in developed countries, but much of the growth in new
systems will take place in Asia and other developing regions over the next
two decades. Trillions of dollars will be spent on technology, equipment,
and services.
Meeting this growth with existing technologies is a huge business in
itself. In China alone, we estimate, the market for the current membrane
technology used to clean wastewater will grow by more than 30 percent a
year over the next two decades. Introducing new technologies and services
will eventually be an even bigger opportunity, both for existing players
and new entrants.
In many European and US cities, for instance, the same sewage systems
collect residential and commercial wastewater, runoff rainwater, and melted
snow. Singapore, by contrast, collects different gradations of discharged
water separately and can redirect some of it to uses (such as watering
lawns and gardens) requiring lower levels of quality. Then it goes on to
treatment plants for cleaning and reuse in other applications?a far more
efficient approach. In Masdar City, a planned community under construction
in Abu Dhabi, urban designers hope to recycle as much as 80 percent of the
water the community will use. And new desalination technologies are
reducing the cost (and the extensive energy) involved in desalinating
water, as well as increasing its quality. As water needs grow in the
developed and developing world alike, and regulations and water prices come
to reflect the need to manage demand, new solutions could provide
significant value to public and private buyers.
Companies already active in this space have many opportunities to introduce
new products, including devices that collect wastewater from sinks to reuse
for flushing toilets, technology for collecting and reusing condensate from
air-conditioning systems, more water-efficient appliances, and ultraviolet
disinfection technology adapted for home use (for instance, to wash clothes
with treated rainwater). Hong Kong?s water department has developed systems
to use seawater in toilets and may soon use it to cool commercial
buildings. There are also opportunities for innovators. On the drawing
board today are ideas for recycling desalinated brines, low-energy
technology that separates industrial waste into irrigation-quality water
and valuable chemical by-products, and ways to condense fog into usable
Industrial efficiency
Power and industrial companies use significant amounts of water in
production processes and as a coolant?16 percent of global demand today,
rising to 22 percent by 2030, with about 40 percent of this growth in
China. Moving water at these volumes and using it in some processes (such
as steel making or power production) requires a great deal of energy, so
using less water to do more also means using less energy. One bottling
company, for example, is starting to deploy a new technology, called
radical water, to clean bottles.2 The traditional process requires about
five hours of cleaning; with the new one, the company can clean the same
number of bottles in just 30 minutes, using significantly less water and
Other technologies that can help businesses to reduce their water usage and
energy costs include thickening paste tailings3 in mines, closed-loop
systems in pulp and paper plants, and flow control and automatic shut-off
valves in textile production. These solutions sometimes require trade-offs,
however. Dry or closed-loop cooling systems in power plants, for instance,
use up to 97 percent less water but are also less efficient. (In South
Africa, Eskom uses dry-cooling technology because of the looming prospect
of water shortages, but in another climate the efficiency trade-offs may
not make sense.) Emerging new technologies also help companies in
industries such as power to use water more efficiently in energy-intensive
processes. The market for these solutions will grow dramatically in just a
few years as regulations and increased water prices make using large
amounts of water more costly.
Finally, many manufacturers don?t have the information they need to manage
the water that flows through their processes?information that is critical
for improving productivity. Technology providers are starting to develop
products that can help these industrial companies improve the way they
track their water usage and monitor their progress.
Farming accounts for 71 percent of global water withdrawals, a proportion
that we project will decline only slightly, to 65 percent by 2030. Water
scarcity is tied both to the growing and the trading of food. India, for
instance, now has just half of the water it will need in 2030, and
agriculture will account for about half of the growth in water demand over
the next two decades. It will account for about half of all water use in
China by 2030 and for about a third in Brazil?and neither country will have
enough water for all its needs in 20 years.
Finding ways to use water more efficiently in agriculture is critical.
Agricultural companies are already looking for ways to design seeds and
fertilizers that require less water, and better drip irrigation
technologies will keep farmers from overwatering their fields. Many other
sectors can provide valuable solutions under the right economic conditions.
A large industrial company, for instance, could provide farming communities
with pumps that it now sells to water utilities, broadening its customer
base while improving efficiency in agriculture. IT solutions can help as
well. They are too expensive for subsistence farmers, but water scarcity
may promote consolidation and the emergence of larger farming groups that
would need?and could afford?efficiency tools.
Even raising the water productivity of farms in rainy locales is a critical
piece of the puzzle. Maintaining rain-fed land and improving its
productivity are particularly important, since to the extent that
agriculture uses water from rain, it is unnecessary to extract water for
irrigation. In India, this source provides 17 percent of the total
potential for agriculture to close the gap between demand and supply. The
opportunities include a better fertilizer balance in fields, integrated
pest management, and improved drainage systems.
Finally, financial institutions and investors can benefit from efforts to
boost water productivity in treatment, efficiency, and agriculture. Banks
will need to provide capital for many water productivity investments,
especially when the public sector can?t. The investment can be attractive
for lenders, but they will have to know where and how to play. In India,
for instance, some drip irrigation projects could help farmers reduce the
cost of certain inputs (such as fertilizer) by up to 50 percent, depending
upon the crop. Investors could capture a share of this value either as
lenders or as equity holders in companies active in the drip irrigation
value chain. China needs about $1.8 billion a year in capital to reduce
leakage in municipal water systems. With a 22 percent rate of return, these
investments could be an attractive solution for municipal utilities and
their lenders alike.
Winning in water
Water is a large market, but as it grows, the rules for winning will
change. Buyers of water-related goods and services, ranging across the
public and private sectors, have very different needs. For many years,
water has been largely a ?pull? market: utilities and businesses request
bids on new equipment, and the companies making it respond. As the market
grows and novel technologies become available, profitable new opportunities
will emerge. Today, by meeting only the minimum standards of customers, an
equipment provider has little opportunity to prove that it can give them
better service, with lower costs and lower levels of risk over a life
cycle. New technologies will change that.
Providers will also need to engage more actively with regulators, which
over the next five years are going to design water-management policies that
will determine which new technologies succeed or fail. What?s more, capital
costs for many projects are so high that purchases of new technologies
often depend on a public buyer?s ability to put together complicated deals
for capital financing. Tomorrow?s winners will have to tackle these issues.
Developing a sales and marketing approach
Even large industrial players in the water market have found it difficult
to grow in this sector. Their sales efforts, reflecting the diversity of
customer segments, suffer from fragmentation across different business
units. Public-sector buyers often have slow, exacting procurement
processes. Corporate buyers of new water facilities often want not just
components but also integrated solutions for managing water in production
processes?requiring significant levels of niche-sector expertise from
sellers. Highly fragmented agricultural buyers favor low-cost solutions,
while desalination players are few in number and put a premium on
technological innovation. Meeting these different needs requires a variety
of approaches.
For this reason, large industrial suppliers typically organize their sales
efforts by sector, with water-related equipment as part of the mix of
solutions they provide to buyers in it. The trade-off is focus. Frequently,
sales of water products take a back seat to sales efforts for higher-ticket
items, such as power equipment. With no specific focus on water as a
business, these suppliers feel no pressure to expand it. As a result, they
are vulnerable to new entrants that specialize in the water market.
One industrial company, recognizing the opportunity to grow along with the
water market, is trying to change its approach: it has created a special
initiative in which sales and marketing employees across sector-based
business units identify and target new opportunities. The initiative
reports directly to a top executive, and team members have incentives to
increase sales in water markets rather than just their respective
sector-focused businesses. Over time, the company believes, a focused sales
force will find new openings for higher-value services and integrated
Engage on regulation
What will shape the sector?s economics, separating winners from losers, is
regulation. Many water users are already actively clarifying critical
positions with regulators. Water utilities, for instance, are
capital-intensive businesses that make money selling water. In a world
where regulators want to reduce demand for it by pricing it higher or
establishing caps on its use, these utilities will need new models and a
reasonable way to transition from old ones. In the United Kingdom, where
water utilities have mostly been privatized, their executives are helping
leaders of Ofwat, the UK Water Services Regulation Authority, to understand
the nature of competition in the sector, the impact of demand management
and pricing issues, and other matters that will shape the water market in
coming decades. Similarly, some mining companies are working with
regulators to determine the economic impact of the use of water and the
options for consuming it more efficiently.
Sellers of water products and services too must participate in these
debates, as some large industrial companies in the water space already do.
They recognize that if regulators in a region favor water reuse as a
strategy for conservation (as Singapore does), this preference will tilt
the market odds in favor of companies that offer those technologies. The
public-affairs units of some such companies are trying to understand how
they could engage in conversations with regulators in a given region about
new regulatory strategies.
Inescapably, water will become a strategic factor for companies in most
sectors. All businesses will need to conserve, and many will make a market
in conservation. Tomorrow?s leaders in water productivity are getting into
position today.
(Embedded image moved to file: pic35534.gif)

About the Authors
Giulio Boccaletti is an associate principal in McKinsey?s London office,
Merle Grobbel is a consultant in the Cologne office, and Martin Stuchtey is
a principal in the Munich office.
Back to top
1 Svenska Cellulosa Aktiebolaget.
2Radical water, or electrochemical-activation (ECA) technology, to use its
scientific name, creates unique properties in water molecules, resulting in
an extremely potent yet environmentally friendly biocide. Trials and
considerable R&D have proved that ECA solutions are efficacious against
numerous bacteria (including MRSA), viruses, fungi (including their
spores), yeasts, and many waterborne protozoa. ECA technology is
particularly effective in the removal and ongoing control of biofilm,
which, left unchecked, is most often responsible for the continuous
contamination of the processing environment.
3 A way to thicken tailings and any remaining process water. By 2030, this
technology could save as much as 4 percent of the projected gap between
water supply and demand in South Africa, or 125 million cubic meters
annually. It offers savings of approximately $0.60 per cubic meter of
water, with payback periods of one to two years.


The green product revolution: is Canada ready?

Thanks to Kevin for forwading this on

----- Forwarded by Jean-Francois Barsoum/Markham/IBM on 2010-01-27 10:26 -----
Hi Jean-Francois – I hope all is well  - I thought your network might find this speech interesting  – I gave it last week at a banquet for the School of Public Policy and Public Administration at Carleton University – it focuses on the characteristics of the green product revolution and whether Canada is ready. I have tried to consolidate twenty years of learning into it.


Peer reviewed impacts of global warming

Interesting email from Skeptical Science

----- Forwarded by Jean-Francois Barsoum/Markham/IBM on 2010-01-26 12:15 -----
From: Skeptical Science <>

Peer reviewed impacts of global warming

If the IPCC's mistaken prediction of disappearing Himalayan glaciers taught us anything, it's that we should always source our information from peer reviewed scientific literature rather than media articles. Consequently, I've spent the weekend overhauling the list of positives and negatives of global warming so that all sources were peer reviewed. The list is by no means comprehensive and I welcome any comments mentioning other impacts of global warming found in peer reviewed papers (good or bad). Please include a link to either the abstract or if possible, the full paper. Note to skeptics - here is an opportunity to pad out the positive column if you can find peer reviewed papers outlining any benefits of global warming.

Positives Negatives
Agriculture Agriculture
  • Decelerating tropical forest growth (Feeley 2007)
  • Increase of wildfire activity ( Westerling 2006)
  • In! creased range and severity of crop disease (Evans 2008)
  • Encroachment of shrubs into grasslands, rendering rangeland unsuitable for domestic livestock grazing (Morgan 2007)
  • Decreased water supply in the Colorado River Basin (McCabe 2007)
  • Decreasing water supply to the Murray-Darling Basin (Cai 2008)
  • Decreasing human water supplies, increased fire frequency, ecosystem change and expanded deserts (Solomon 2009)
  • Decline in rice yields due to warmer nighttime minimum temperatures (Peng 2004, Tao 2008)
  • Winter deaths will decline as temperatures warm (HPA 2007)
  • Health
    • Increased deaths to heatwaves - 5.74% increase to heatwa ves compared to 1.59% to cold snaps (Medina-Ramon 2007)
    • Spread in mosquite-borne diseases such as Malaria and Dengue Fever (Epstein 1998)
    • Increase in occurrence of allergic symptoms due to rise in allergenic pollen (Rogers 2006)
    Arctic Melt
  • An ice-free Northwest Passage, providing a shipping shortcut between the Pacific and Atlantic Oceans (Kerr 2002, Stroeve 2008)
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  • Arctic Melt
    • Loss of 2/3 of the world's polar bear population within 50 years (Amstrup 2007)
    • Melting of Arctic lakes leading to positive feedback from methane bubbling (Walter 2007)
    • Less compacted ice, hazardous floes and more mobile icebergs posing increased risk to shipping (IICWG 2009)
    • Drying of arctic ponds with subsequent damage to ecosystem (Smol 2007)
  • Greener rainforests due to higher sunlight levels due ! to fewer ! rain clouds (Saleska 2009)
  • Environment
    • Rainforests releasing CO2 as regions become drier (Saleska 2009)
    • Extinction of the European land leech (Kutschera 2007)
    • Decrease in Adélie penguin numbers  (Ducklow 2006)
    • Disruption to New Zealand aquatic species such as salmonids , stream invertebrates, fishes (Ryan 2007)
    • Oxygen poor ocean zones are growing  (Stramma 2008, Shaffer 2009)
    • Increased mortality rates of healthy trees in Western U.S. forest (Pennisi 2009)
    • More severe and extensive vegetation die-off due to warmer droughts (Br eshears 2009)
    • Increased pine tree mortali! ty due to! outbreaks of pine beetles (Kurz 2008)
    Ocean Acidification
  • Oceans uptake of carbon dioxide, moderates future global warming (Orr 2005)
  • Ocean Acidification
    • Substantial negative impacts to marine ecosystems (Orr 2005, Fabry 2008)
    • Inhibiting plankton development, disruption of carbon cycle (Turley 2005)
    • Increased mortalities of sea urchins (Miles 2007)
    Glacier Melt Glacier Melt
  • Severe consequences for one-sixth of world's population dependent on glacial melt for water supply (Barnett 2005)
  • Economical
  • Increased cod fishing leading to improved Greenland economy (Nyegaard 2007)
  • Ec! onomical
    • Economic damage to poorer, low latitude countries (Mendelsohn 2006)
    • Billions of dollars of damage to public infrastructure (Larsen 2007)
    • Reduced water supply in New Mexico (Hurd 2008)

    Post Comment 24 January 2010

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