Gary Kendall – Are we starting to ‘get’ the oil question?

An opinion piece by Dr Gary Kendall, CPSL SA Deputy Director and author of ‘Plugged In: The End of the Oil Age’

As unrest in North Africa and the Middle East enters a fifth month since the first sparks of the Tunisian Revolution last December, oil prices are starting to dominate the political discourse. In the UK, Energy Secretary Chris Huhne warned of a 1970s-style oil shock that could cost the UK economy £45billion over two years. Closer to home, last week’s Financial Mail cover story on oil – the three letters that threaten economic growth – argued that a sustained high oil price threatens to completely stall the global recovery.

History doesn’t repeat itself, but it does rhyme. A little less than three years ago, within the space of a few weeks, oil prices hit a record $147/bbl, Lehman Brothers collapsed into the largest bankruptcy in history, and the global economy fell into a ravine from which it has scarcely emerged. A recent article by Jacob Weisberg in Slate magazine discussed the cause of the economic crisis by examining “the 15 best explanations for the Great Recession”. Surprisingly, the price of oil did not feature in that long list of persuasive explanations. It’s surprising because in the prevailing economic system oil is the economy.

Until quite recently, many economists and the mainstream financial media didn’t seem to ‘get’ the profound significance of oil. True, it was widely acknowledged that economic slowdowns – particularly in the United States, the largest oil consumer on earth – tended to be preceded by spikes in the oil price. But the clear correlation between high oil prices and recessions did not, in itself, prove any causal relationship. As far as 2008 was concerned, surely Wall Street’s wizardry and former US Federal Reserve chairman Alan Greenspan’s laissez-faire approach to regulation were the real culprits. Surely the rising oil price was just another ‘derivative’ of the bewildering world of credit default swaps and collateralised debt obligations. Better still, by pinning it on these suspects we could even appear to be clever by pretending to comprehend the unintended consequences of ‘innovative financial products’.

Though we live in an increasingly fast-moving, interconnected and complex world, it remains a truism that the simplest explanations are often the best ones. First, consider that the economy is ultimately about the movement of people and stuff. Expressed as GDP – the market value of goods and services produced – it is difficult to envisage economic activity taking place to any great extent without people and things moving around. Whether it’s raw materials being hauled from the point of extraction to a processing plant, or from there being distributed onwards to retailers, whether it’s customers accessing goods, or employees getting to and from their places of work, very little of our globalised economic system functions without motorised transport.

Second – and here’s the rub – worldwide, 95% of the primary energy that moves people and stuff from place to place – in cars, vans, trucks, buses, trains, boats, and aeroplanes – comes from a single source. Transport is uniquely dependent on oil, meaning the economy is uniquely dependent on oil, or rather on the liquid transport fuels – such as diesel, petrol (or gasoline), kerosene – that we obtain from oil refineries. So when the oil price goes up, the price of transport fuels increases and virtually everything that counts towards economic activity is impacted, either directly or indirectly. Of course, in the case of oil companies, rising oil prices have a beneficial effect, at least in the short term…more of which later.

Intuitively it’s easier to understand this effect on the cost of physical goods that actually get shipped around. But why should high oil prices impact the service economy, and aren’t advanced economies more service-oriented than ever? Again, the simple answer may be sufficient for our needs. As household transportation costs increase – and, crucially, they are inelastic because most of us cannot or will not change our abode or place of work according to the forecourt price of petrol – all discretionary expenses experience downward pressure. Food bills climb as oil-dependent agricultural commodities track the price of crude, an effect exacerbated by the gasoline substitution potential of corn-based ethanol in the US. Debt repayments are more or less fixed, give or take fluctuating interest rates. What remains is a shrinking domestic budget: quieter shopping malls, fewer evenings at the restaurant, one less trip to the hair salon. Economic activity experiences a general slowdown – this is the very definition of recession, and not an ‘innovative financial product’ in sight.

Anyone doubting the importance of liquid transport fuel to the health of the prevailing economic system – and therefore to maintaining social cohesion and political stability – need only recall what happened in the UK in September 2000. Truckers and farmers protesting the relatively high pump price of diesel staged blockades of refineries and fuel terminals. Diesel and petrol supplies slowed to a trickle as the public queued at forecourts to top up their tanks “just in case”. Within a few days, 90% of filling stations were bone dry, just-in-time supply chains unravelled and people were fighting over loaves of bread among bare supermarket shelves. The UK had staged a compelling if entirely accidental social experiment.

Conclusion: five days of petroleum separate an advanced civilisation from savagery. Note that we didn’t even run out of oil, we merely panicked!

Returning to the companies that maintain our oil flows: perhaps uniquely in the global economic village, they do rather well when oil prices are on the up. For instance, in 2008 – the year in which oil spiked to $147/bbl – ExxonMobil posted an annual profit of $45 billion, the largest in corporate history. That same year, oil companies accounted for six of the seven largest global corporations, as measured by revenues. (The outlier was Wal-Mart, an enterprise utterly symbolic of the economy’s dependency on relatively cheap and free-flowing transport fuel.)

In this context, it should not surprise anyone that oil companies are somewhat reluctant to allow the Oil Age to draw to a graceful conclusion, as the transport system inevitably electrifies to become several times more energy efficient and compatible with the full range of sustainable renewable energy sources. Not vested in the electricity generation game, oil companies continue to lead us astray. BP recently argued that biofuels are “the only game in town”, the only major way to decarbonise road fuel, possibly contributing around 12% of the road transport fuel mix by 2030. Or to put it another way, within twenty years if BP have their way the transport sector will be only 88% dependent on oil.

BP is missing the point, of course. The question is not only how we can decarbonise the transport sector, rather it is how we can achieve this while meeting the primary objective: gaining independence from oil. How can we divest ourselves of turmoil in the politically fragile oil exporting regions of the world, and insulate our economic and social stability from events over which we exercise no control? Ultimately, independence from oil means getting off liquid transport fuels, which won’t be achieved by shifting to 12% biofuels over the next two decades.

To paraphrase BP, electricity is the only game in town.

This article was first published in Business Day, 7 April 2011

Jorgen Randers – Green paper fails to address climate change challenges

Prof Jorgen Randers,  professor of climate strategy at the Norwegian School of Management and a faculty member of the University of Cambridge Programme for Sustainability Leadership

The deadline for commentary on the government’s green paper on climate change recently closed with many commentators agreeing that it is a vague document that does not present a sufficiently detailed or coherent plan for addressing the looming challenges of climate change.

The paper is yet more evidence that the democratic process may not be able to deliver the pace and scale of change needed to confront the problem. The perception is that the imperatives of economic development and the pressures of big business will always conspire to prevent governments from taking the long-term view.

The hard truth is that South Africa – in common with the rest of world – is faced with the challenge of simultaneously having to grow its economy and protect natural systems – including a stable climate – that are vital to that growth.

In a country like South Africa economic growth is the most effective way – in the short term probably the only way – of providing social goods such as increased employment, poverty alleviation and security in old age.

The challenge is to find a way to grow the economy while addressing very real climate change threats. The good news is that this is entirely possible.

While world governments remain sceptical, evidence is that economic growth with a reduction in carbon emissions is fully doable using existing technologies. Furthermore, it is not very expensive – consumption levels may fall by perhaps 1 percent of gross domestic product (GDP).

This means that countries that pursue climate friendly strategies will be as rich in June 2020 as they would have been in January 2020. It may be even cheaper than that as fresh levels of innovation kick in.

In principle there are no limits to economic growth and growth need not be a threat to sustainability. The real problem is that humanity tends to be too slow in deciding to push back the resource constraints that will stop growth if left unattended. Examples of actions that can be taken include finding climate friendly substitutes for oil, or cutting greenhouse gas emissions to sustainable levels. This can be done from a technical and economic point of view. But it takes time – the decision to act must be made decades before the solution is needed.

Societal decision delay is the real problem. That is what is dangerous, not that the world has a limited capacity, not that we are growing too fast, but that the hard decisions that need to be taken to ensure that we can survive this growth are not being taken early enough because politicians are not given a mandate to sacrifice short-term gains for long-term security. The biggest obstacle is a lack of political will caused by non-existent voter support, as the green paper illustrates so well.

Unfortunately, unpalatable as it might seem to a Western audience, those who are getting it right are the institutions that are free of the worst aspects of democratic governance. For example, the Chinese Communist Party is successfully growing the economy and raising the standards of living of its population, while reducing carbon emissions relative to GDP – which should be the goal of governments everywhere.

China is very aware of the dangers of climate change. Temperatures over large areas are already up by an average of 2°C and rainfall patterns have shifted radically.

The Chinese are responding by, among other things, investing in green technologies such as electric cars, alternative energy and carbon capture and storage and will soon be world leaders in these fields.

When we get to 2020, the politicians in democratic countries may very well still be debating whether we can afford measures to curtail climate change.

By that time the Chinese may equally well have solved the problem, and be profiting from selling the solutions back to these democracies.

The European Commission, which by virtue of the way it is structured is still not completely controlled by the European Parliament, is also able to take decisive steps, as evidenced by its bold announcement that Europe will reduce emissions by 20 percent by 2020, regardless of whether others do likewise.

More such examples are needed. The challenges facing the world now are considerable. The global economy is set to quadruple in size by 2050, and world population will continue to grow for another few decades before it stabilises.

In the same time frame, emissions must be reduced by at least a half in order to avoid widely predicted and potentially catastrophic temperature rises.

This means that on average all countries and companies need to reduce greenhouse emissions per unit of value added (Geva) by 5 percent a year to know that they are “doing their bit”.

But if history is anything to go by, the decisions needed to effect these changes will not be made in time so long as the democratic process holds sway.

The failure at Copenhagen and Cancun is likely to be repeated in Durban if all 190 nations are to agree. It may take a climate crisis to galvanise democratic governments into action.

In the meantime, business is starting to move on its own. In the UK and the EU, the Corporate Leaders Groups on Climate Change – supported by the Cambridge Programme for Sustainability Leadership – were launched in 2005 and 2006, respectively, when prominent chief executives came together to try and provide the political space necessary for progressive climate policy with the belief that investing in a low carbon future is a strategic business objective – whether their governments recognised it or not.

Similar moves are afoot in South Africa as businesses and individuals start to realise that, while we cannot do without the democratic process entirely, action needs to be taken at other levels to protect the environment without sacrificing economic growth.

The economic imperative is that business in South Africa needs to grow like crazy. The mind shift needed to accommodate this is that it does not have to come at the expense of sustainability – quite the reverse; growth that does not maintain and restore the natural systems underpinning our economies is suicidal.

And if one wants a simple way for businesses and government departments to measure adequate progress along this path, use a target of 5 percent annual reduction in Geva.

Jorgen Randers is a professor of climate strategy at the Norwegian School of Management and a faculty member of the University of Cambridge Programme for Sustainability Leadership (CPSL). He is co-author of the highly influential Limits to Growth, which first appeared in 1972 and was in South Africa as a guest of the South African office of the CPSL in February.

This article was first published in Business Report of 13 April

Peter Willis – The importance of a Sustainability Strategy

Peter Willis, the South African Director of Cambridge Programme for Sustainability Leadership, was recently interviewed by Chris Whitfield for GIBS FN. They spoke about the importance of a sustainability strategy.

“Actually the way we frame it is we are talking about the sustainabilty of the human project.”

Click here to download Part 1 of the interview (audio or video). Part 2, download here.

Jeremy Baskin – SA has compelling reasons to cut hothouse emissions

SA has no detailed climate change policy, as the government acknowledges. It is too late to develop one before next month’s Copenhagen conference. This is disappointing, given that SA is a Group of 20 economy and the world’s 13th-biggest CO² emitter, but not fatal as long as detailed, informed policy measures are in the pipeline.

Most troubling is SA appears to be going into Copenhagen with a position arguably not in the national interest, nor in the interests of combating climate change. It is also hard to square with some of the strong policy signals given by the government to date.

I write as a South African living abroad, who has for the past eight years worked on issues of climate, development and business risk and watched the policy debates in a number of countries closely.

Southern Africa is likely to be among the world’s hardest-hit regions when it comes to the physical, human and economic effects of climate change. These effects will vary between regions, districts, towns and suburbs (the details urgently need more research). But all indications are that changes in temperature, weather patterns and rainfall are likely to be especially nasty in Southern Africa and affect the livelihood and physical existence of millions of people. So SA has a strong self-interest in achieving the maximum possible mitigation and the highest possible global emission-reduction targets.

Without cuts from all major emitters, including developing countries such as China, the biosphere won’t get the reprieve it needs to avoid dangerous climate change. It is vital to encourage deep cuts by China, the US and Europe, which together account for more than 55% of global emissions. Our focus in international talks should be on maximising the extent of overall global mitigation.

In relation to global mitigation targets, it is in our interests to bridge the developed/

developing country divide, notwithstanding our historic and emotional identification with the Third World. There is, of course, a real issue of climate justice. The argument is ethically persuasive that most developing countries are not responsible for historic emissions, and they need emissions headroom to develop and financial assistance to adapt.

This is the position adopted by the African bloc, and argued strongly by, among others, India and China. There is certainly a valid argument to be made by, say, Mali or Bangladesh or even India (which emits less than two tones of CO² per capita a year).

These are all poor countries using less than their share of a scientifically credible global carbon budget. On any consideration of equity, they deserve our support for special consideration. But even China (with about half SA’s per capita emissions) is not a credible member of this group, a fact it implicitly recognises when it makes major emissions- reduction commitments even as it avoids the language of targets.

We delude ourselves to think we are in this special category. We are already a high-emissions country, one of the highest per capita emitters both historically and today. The science now suggests that, if we are to reduce the risk of dangerous climate change, the biosphere can only tolerate concentrations closer to 350ppm than to the more commonly cited 450ppm. This, in turn, equates to a global carbon budget of about two or three tones per capita emissions by 2050, about a fifth of SA’s current emissions.

Other than in the very short term, we will not get away with the argument some in government are voicing, that we be allowed to increase emissions in the name of development and get financial assistance to cut later. We will be accused, as the middle class is in India, of “hiding behind the poor”. Not only will we not get away with it, but we risk undermining our primary interest, which is to see the highest possible global mitigation efforts. The most we can expect, and what we should push for, is some financial assistance to transition to a low-carbon economy now.

It is true that our average emissions, like our middle-income country status, conceal deep inequalities. This is an argument for ensuring our domestic adaptation and mitigation policies, at the very least, reduce inequality. It is not an argument for being given space to ramp up our emissions. Many countries have seen growth and development and still have lower emission profiles today than we do — South Korea, Brazil, and post- war Japan to name but a few.

To be credible in pushing for global reduction SA needs strong domestic mitigation targets. From outside it appears SA may be diluting its previously announced targets. This would be unfortunate. “Growth and development first, climate later” may be in the interests of the fossil fuel industry, or convenient for politicians facing other challenges. But it is a false dichotomy ultimately not in the national economic interest.

The truth is that globally we are seeing the emergence of a price on carbon. The price is still low, but the trend is clear and it is upwards. As one of the world’s most carbon- intensive economies, SA is highly exposed. Traditionally, we have used the lure of cheap electricity to attract investment and mineral- beneficiation projects. We are unlikely to do so in future if our electricity remains carbon intensive. Future aluminium smelters, for example, will gravitate to countries such as Iceland, Brazil or New Zealand, which have extensive geothermal or hydropower.

Our exports are vulnerable. Markets such as Japan, the US, Germany, China and the UK have signalled their carbon pricing intentions. A carbon tariff is emerging. Agricultural producers and component suppliers will have been asked by customers to account for the carbon-intensity of their products. If SA’s wine producers, for example, are not already planning to slash their footprint and lobby the government for low-carbon electricity they should sleep uneasily in the knowledge that their competitors in other countries are.

Given SA’s unemployment, the evidence globally is that renewable energy is substantially more employment friendly per megawatt hour or per rand invested than carbon-intensive alternatives. Viewed from afar, it is impressive SA is putting so much effort into fleshing out its climate policies and starting to pay more attention to the neglected challenge of adaptation. The devil will be in the detail and affected by electricity- sector investment, support for renewables at scale (such as pilot concentrated solar power plants), energy efficiency regulation, forestry policy, tax incentives, and so on.

It is in our interests to transition to a low- carbon economy sooner rather than later. notwithstanding our deep reliance on the resources sector, the best hope for the future is a low carbon one. It is not an easy route, and will involve higher energy prices and difficult structural changes. Handled skilfully it could also help to reduce inequality in the country. Those who argue, in relation to climate, “not us, not much, and not now” are being shortsighted and do the country a disservice.

* Jeremy Baskin is the Director of Cambridge Programme for Sustainability Leadership’s Australian office.

Original article: Jeremy Baskin. Business Day. 9 November 2009. Read more…

Paul Gilding – The Climate Giant Awakes. Have we turned a corner?

Regular readers may be a little surprised by this column. I am regularly arguing that the science shows we are inevitably approaching, or may have past, a tipping point where widespread, rolling ecological and economic crises take hold.

But there’s another critical tipping point, of a very different character – where the world’s political and business leaders turn firmly towards action. Here’s the surprise – I think we may be at this tipping point already.

Scientists have become increasingly alarmed in recent years, as climate change reality has raced ahead of the political response. They point to countless examples of accelerating feedbacks, such as the reduction in the ocean’s ability to absorb CO2 and rapid Arctic melting.

While they regularly point these out to our political masters, many of them express despair at the slow response.

So on what basis do I think the global political system has started to turn?

I think we have recently seen a number of developments that, taken together, indicate a profound shift is under way. When such a shift takes hold, it will rapidly accelerate – with significant implications for campaign and business strategy in this area over the years ahead.

The most significant and encouraging shift is what Tom Friedman in his recent NYT column called the shift from Red China to Green China. The Chinese leadership has for many years been talking about the need to act on climate but has in recent months shown serious potential to lead on this issue.

The rationale for them to do so is certainly there. As they have reeled under the negative economic and social impacts of pollution, China has accepted that the growth model followed by Western capitalism cannot work for them. Will they now pursue clean energy so vigorously they will dominate this new global market? Could climate even provide the issue on which China can manifest its global leadership ambitions?

I increasingly think the answer to both questions is likely to be yes, with far reaching economic and geopolitical implications. There is a good summary of recent developments and this potential for leadership, including China’s potential to see its emissions peak by 2030 in the article “Peaking Duck” by the Centre for American Progress’ Julian L. Wong.

Another important indicator is the recognition in the US political debate that the strength of the Chinese response is an economic threat to the US. The fear is growing that the resistance to change in the US may leave that economy floundering in what will be the largest economic transformation in history. As argued by Tom Friedman in the column referred to earlier, while America is currently strong on innovation, research ultimately follows the market. Friedman pointed out that “America’s premier solar equipment maker, Applied Materials, is about to open the world’s largest privately funded solar research facility — in Xian, China.”

The goal posts are also shifting in the science. An increasing number of scientists are coming to the view that the global CO2 target should be closer to 350ppm rather than 450ppm. In recent months we’ve seen this get global credence in response to the 350.org campaign, with eminent figures like the climate economist Nicholas Stern and the IPCC Chair Pachauri coming out in personal support of the 350 target. They would both be well aware that such a target would require cuts far more dramatic than anything on the table now. With such a goal, the task becomes the elimination of net CO2 emissions from the economy rather than their reduction.

At a deeper level, Stern also lent his considerable intellectual weight to the debate on economic growth, stating what was previously heresy – that economic growth itself must now be questioned. He recently put the case that there were probably only 20 years left for further economic growth before the earth was full.

Equally important as these scientific and political developments are shifts in the business community. While debates are raging in Western economies including in the US, Japan and Australia on climate policy, there are signs of a profound underlying shift emerging in corporate attitudes. Symbolising this in the United States is the rapid withdrawal of major companies from the US Chamber of Commerce over their lobbying against action to regulate greenhouse gases. In recent weeks, major corporates such as PG&E and Apple have resigned, Nike has quit the Board of the organisation and GE and Johnson & Johnson have both publicly distanced themselves from the Chamber’s anti-climate action lobbying efforts.

Another example was a recent initiative by Cambridge Program for Sustainability Leadership’s Corporate Leaders Group, with 500 companies signing on to the Copenhagen Communiqué which endorsed strong action on climate by the world’s governments including keeping warning below 2 degrees and urging early action. “There is nothing to be gained by delay”, the communiqué states.

Many other countries previously in the background on the global climate debate like Indonesia (which is the world’s 3rd largest net emitter due to its extensive deforestation) recently announced its intention to cut emissions by 26% by 2020 compared to Business As Usual and by 41% if they get international financial support to go further. They also believe they can turn their forests into a net carbon sink by 2030.

And of course there is a storm of grassroots campaigning erupting around the world in the lead up to Copenhagen with campaigns like 350.org and many others.

Many of you will have the correct response that these are all only words – that we are yet to see action of real substance. That’s certainly true. Words are early signs, not conclusive evidence. But I think I can smell it now, and when these things do turn, they do so remarkably quickly – as we saw when governments responded to the recent financial crisis.

Of course this does not mean we can relax and it will all be OK! The climate system is now rapidly descending into crisis and the consequences will be felt for decades even with strong action now. What it does indicate however is that we will not be the proverbial boiling frogs who just sit here passively as the system collapses around us. It is only early signs of the turn, but it gives us an indication of what’s coming.

So we mustn’t back off, not even a little bit, with the pressure being applied to the system to encourage change. But we should perhaps reconsider tactics.

I think some of our energy should be focused for example on developing an emergency plan to fix the climate. The science clearly lays out what a stable climate looks like and it requires the elimination of net CO2 emissions from the economy within decades. Any rational analysis says this is going to require the equivalent of a war plan to achieve it. In future columns I’ll be saying a great deal more on that topic.

But for now, take a look around. The world is turning our way and while the crisis is still coming, the crisis response may not be as far behind it as we thought.

Original article: Paul Gilding. www.paulgilding.com. 8 October 2009. Read it…

TRUTH or COMFORT?

On Reading James Lovelock’s “The Vanishing Face of Gaia – A Final Warning”

By: Peter Willis

If I look back on the many moments of challenge and disturbance in my life it’s clear that a critical question at such moments has always been “How much truth am I willing to expose myself to?” I think it’s fair to say that the only reason I’ve been able to come through some of those challenges and move on has been because I’ve opened myself to a fresh degree of truth, usually truth about my character, assumptions or behaviour. This is always uncomfortable as it involves having to acknowledge that some aspects of my self with which I was perfectly content have in fact been causing problems for others and if I want the benefit of good relations with those others the old behaviours will have to change. And giving up on a view of myself that used to work just fine (at least, so I thought) is a hard wrench.

Of course there is always the option of denial, to which I am no stranger. I simply discount the new, challenging information and re-affirm that I am fine just as I am and it is the others who have misunderstood the situation. It is usually possible to find evidence that validates this ‘status quo’ and allows me to carry on in my groove. That is, until the next time, when the challenge tends to arrive with much greater force.

If you are wondering why this bout of psychological introspection, it is because I have just read “The Vanishing Face of Gaia – A Final Warning” (Allen Lane 2009), written by one of the greatest living earth scientists, James Lovelock. At the age of 90 Lovelock is a master with no need to prove anything to anyone. An independent scientist and inventor for the past 45 years, reliant not on government grants but what he could make from his own inventions and advisory work, he speaks about the future of human civilization on Earth with a breadth of knowledge and a freedom of perspective that comes like a breath of fresh air…and fresh truth. I cannot remember when I was so challenged by a single, short book.

Lovelock is widely known as the creator of Gaia theory, named after the ancient Greek goddess of the Earth. Gaia theory states that, rather than life taking place on an inert planet made up of rocks, gases and other lifeless elements, living organisms (including us) form an interactive system with these elements in order to create the conditions for further life to emerge and flourish. For example living organisms will use all their evolutionary ingenuity to, for example, create and maintain an atmosphere that favours their own survival and growth. The idea that plants, microbes and animals could influence the atmosphere has been a hard one for most physicists, geologists, chemists and others to accept, maintaining as they do that the atmosphere is made up of a mixture of inert gases and particles driven primarily by the power of the sun. Indeed it has taken all of 40 years for the wider scientific community to allow the validity of this theory and even now its full implications are far from being grasped by both mainstream scientists and certainly the wider public.

So why is Gaia theory important, and especially now? Any scientific theory is only as important as its ability to predict how the system that it refers to will behave in future. Look at how successful the theory of Gravity has been in predicting how and where objects will fall, even though nobody fully understands why gravity operates in the way it does.

Gaia theory is critically important now because it has been pointing all along to a strong link between the health of the Earth’s living systems and the state of the climate. Nobody doubts that a hotter climate will have big impacts on living systems like agriculture, forests, water and indeed us humans, but Lovelock has for years been saying the opposite as well – that the more we interfere with (i.e. destroy, pollute or build over) nature’s complex eco-systems, the less able they are to do their work of regulating atmospheric temperature. One of the predictions he made using Gaia theory was that tropical and boreal forests play an important role in regulating global temperature. This has been proven and is now generally accepted, hence the growing focus on preserving what we have left of these forest systems.

But as a student of the field of sustainability for the past twelve years all of this on its own would not have been enough to surprise or shock me. What has stopped me in my tracks is Lovelock’s argument that we humans have done so much damage to eco-systems and have put so much CO2 up into the atmosphere at such an extraordinary speed during the past 200 years that we have overwhelmed nature’s ability to regulate the atmospheric temperature at an optimal level and he believes that we are very close to witnessing a swift rise of 5°C in global average temperature, from which it will take thousands of years to retreat back to our current ‘normal’. Such a ‘hot state’ will make it impossible for human settlement to continue in many parts of the world as agriculture will fail. This will almost certainly result in mass migration, conflict over shrinking resources and much premature death. By the second half of this century Lovelock sees the Earth carrying only about 100 million people instead of the current load of about 6,3 billion, a culling of 62 out of every 63 people now alive.

Those who survive will, he suggests, be clustered in the few areas still blessed with an ability to grow food. His hope is that, from this new, stable ‘hot state’ human civilization will be able – if all goes well – to partner with Gaia much more consciously and help ‘her’ to become a more fully intelligent planet with a much longer life span than she might otherwise manage.

He reminds us that since humans first emerged on earth about 1 million years ago there have been seven extreme climatic shifts, from cool to warm and from warm to cool. Each of them was devastating to the humans alive at the time and some geneticists believe that one of the incidents caused the human population to sink as low as around 2,000 people, a period known as “the genetic bottleneck”. Lovelock believes our enormous population growth and burning of fossil fuels have made it likely that the coming transition will be more violent than any before, requiring all our best qualities of leadership and collective compassion and ingenuity to avoid it becoming the end of human civilization altogether.

When one of the finest scientific minds our species has produced makes an assessment like this after 90 years of life and still in full possession of his brilliant faculties (see his fascinating interview about the book on YouTube) one must take notice. Though he would be the last to say he had discovered “the truth” about our future, his arguments for predicting a very rough time ahead are based on rigorous scientific method and a lifetime of experiment and engagement with the great scientific minds of his age. Though he comes across as a cheerful man, Lovelock has clearly thought deeply about the consequences of what he is seeing. Being responsible, he shares what he sees with us.

What we do with his unpalatable information is, of course, up to us. I’ve taken the decision to hold his analysis in the front of my mind from now on (until it is superseded by something even more convincing) and not do what I’m strongly tempted to do, which is to sweep it under the rug and go on believing that we are merely facing a set of severe problems to which we may, if we work hard and swiftly at it, soon find the solutions.

I am now working on the assumption that we have passed that point. There is nothing we can currently conceive of doing that will preserve a remotely decent life – indeed any life at all – for between 6 and 7 billion people on earth. How soon will the large-scale destruction of life-supporting systems begin? Interestingly, Lovelock sees this coming not next year or even necessarily within the next 5-10 years, but he believes that once it begins “it will be very rapid indeed”.

So where has this left me? Two thoughts predominate for me as I write this – one looks backward, the other looks forward. First, I am profoundly struck by the realization that we humans, in what has been our ‘grand project’ of the past seven millennia, to settle the earth and achieve the comfortable living of our dreams, have failed comprehensively. For just as that dream appears within our grasp (look at the extraordinary levels of comfort in which about 1 billion people now live all over the world) it is revealed to us as being built on illusory foundations. Before we embarked on agriculture we barely disturbed Gaia, in fact probably contributed to the evolution of her self-regulatory systems. Once we learned how to create food surpluses and started altering large landscapes we began to weaken other aspects of the Gaia system. With the Industrial Revolution we slammed our foot to the floor and have not lifted it since.

As Lovelock puts it, “If there were only 100 million of us on the Earth we could do almost anything we liked without harm. At 7 billion I doubt anything sustainable is possible or will significantly reduce fossil fuel combustion; by significantly I mean enough to reduce global heating. Seven billion living as we do, and aspire to do, is too many for a planet that tries to self-regulate its climate.”

This being the case, I look around me at so many examples of human success (technological, institutional, cultural, etc.) and ask “How can we judge anything a success if the whole project of human civilization is basically a failure?” Something in me refuses to take this in fully. I still find pleasure and joy in small things human and man-made – I am still terribly attached to my tribe and its achievements. But in the harsh reckoning of the likely near future so many of my tribe’s successes are going to look so very hollow.

The second thought that arises for me is about what is worth doing now. For despite feeling a disabling sense of grief and near despair, I also feel moved respond by taking action. Each of us has a different gift to bring to the world and mine, I think, is to do with bringing diverse people together to think beyond their normal boundaries. So I am thinking about how to draw together people of influence from all corners of South African society to start thinking through the practical implications of what Lovelock and other systems scientists are telling us. I have no illusions that this will be easy – my own attempts to imagine what it might be like to plan for mass migration away from low-lying coastal areas, to take just one example, show me that this is no picnic, and as the great early 19th century philosopher Bertrand Russell once said, “The average man would rather face death or torture than think.” But I believe that once any group of intelligent, responsible people is given the chance to engage with the science and start their own personal journey of grasping what may lie ahead, they will become available for creative, humane leadership, of which we will need plenty.

I am not sorry to have been shaken out of my comfort. I fully expect to seek out fresh comfort in different forms for the rest of my life – I think it’s part of my nature – but I also acknowledge that comfort can bring great danger and to be shaken out of it by an exposure to new truths is a necessary part of being fully alive and enables me to play my own modest, ephemeral part in this much greater story of Life.

2 August 2009

Jonathon Porritt – Prosperity without growth

At last, the Sustainable Development Commission’s magnum opus has landed. Prosperity Without Growth? was launched on Monday, representing the culmination of five year’s work. Tim Jackson, our Economics Commissioner has produced an absolute ‘tour de force’. And there’s a lot riding on this for the Commission.

Way back in the mists of time, through the 70s and into the early 80s, there was an extremely lively debate about the compatibility between economic growth and big-picture resource and sustainability issues. Heavyweight economists batted academic papers back and forth; party political conferences formally debated the pros and cons of economic growth. All this was nicely stoked up by the two Opec-induced oil shocks, and even the media were all over it. Then oil prices came plunging back down, Jimmy Carter got stuffed by Ronald Reagan, and free-market fundamentalists began their long march through the knackered ranks of superannuated Keynesians.

The consequence of which has been hardly any serious discussion about economic growth and sustainability since then. Unbelievable, in retrospect, as even a fool could tell you that if you continue to grow both the number of human beings and the volume of goods and services consumed by each of those human beings, on a planet with limited resources and stressed-out life support systems, then you are heading inevitably for a bust. Sooner or later.

Politicians of all persuasions have hugely enjoyed their 20-year leave of absence. But it’s an inexcusable dereliction of duty to go on avoiding this crunch point in the light of what’s been happening over the last few years – with oil going to $147 a barrel, food reserves at their lowest level for decades, chronic water shortages the world over, accelerating climate change and so on. Paradoxically, the collapse in the global economy gives us some breathing space – but not much. If it’s back to business-as-usual, growth-at-all-costs as the sole route to progress, then biophysical reality will not long be delayed.

Politicians have got used to using one get-out clause in terms of avoiding any intellectual encounter with that crunch point: decoupling. Just decouple the benefits of economic growth from its costs (or externalities, as economists call them) through technology-driven resource efficiency, and all will be well.

If only. One of the toughest messages in “Prosperity Without Growth?” comes in Tim Jackson’s clinical critique of “the myth of decoupling”. The reality is that even progress on relative decoupling (reduced environmental impact per unit of GDP) has been limited, whilst progress on absolute decoupling (reduced environmental impact, full stop – which is what we have to achieve) has been non-existent.

That isn’t to deny the critical significance of decoupling. We desperately need far more of it than anything we’ve seen so far. Which means governments have got to do it, rather than just talk about it, even as they come to the inconvenient conclusion that it won’t be enough on its own anyway.

Politicians may not want to hear these messages. But it’s our task to broadcast them much more loudly and much more clearly than we’ve done over the last 20 years. And “Prosperity Without Growth?” is what you need to make that happen.

Article by: Jonathon Porritt. www.jonathanporritt.com. 31 March 2008. Read it…

Paul Gilding – Scream Crash Boom (2)

AND so the moment arrives.

In my first Scream Crash Boom letter of 2005 I forecast the inevitable crash of the global ecosystem. I said the resulting economic and social crises would then drive an investment boom in a new industrial revolution and economic transformation. I thought I was forecasting events a decade or two away. Now, just three years later, look around us. The global economy is trembling under its own weight. We see:

• riots and political crises across Asia as surging food prices, driven by extreme climatic events and surging economic growth, put severe pressure on the daily lives of billions of people;
• protests, strikes and political upheaval across the world as oil prices respond to the reality of limited supply, threatening recession, or worse;
• global financial markets lurching from crisis to crisis as complexity, greed and interconnectedness drives the financial system to the edge;
• debate about external military intervention in countries that can’t deal with the humanitarian consequences of extreme weather, such as Burma;
• scientists mystified by dramatic increases in melting at the Northern Polar and Antarctic icecaps, at rates way beyond their forecast models;
• and countless more impacts with floods and fires in the USA, droughts and dying rivers in Australia, melting glaciers all over the world, and on and on.

The ecosystem crash I thought was decades away is now underway and the resulting economic crash is not far behind, perhaps the slide has already begun. As our global market empire eats its way through the natural resources of the planet, stealing from our children, it now overextends, as all empires do before they decline. Desperate for more resources to feed its hungry masses, to shore up the middle class’s wealth, to keep the elites supportive and to protect itself, the system makes promises of continued riches. Promises it can no longer keep. Look how our system responds to oil prices – a response so ridiculous it’s almost funny. We see that our addiction to a non-renewable, polluting resource threatens the economy. Our solution? To try to increase supply and reinforce our dependency.

Madness surrounds us now. This empire has no emperor. There is no senate, no central committee, no board of directors. No-one is in charge and no-one can control what happens next. The system is too complex and intertwined and the momentum is too great. The system is breaking down and we need to prepare for what’s coming. When we look back, 2008 will be a momentous year in human history. Our children and grandchildren will ask us “What was it like? What were you doing when it started to fall apart? Could you see it? What did you think? What did you do?

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Paul Gilding – Market Wimps

THE latest calls for delays to action on climate change in Europe and Australia shows just how weak our captains of industry and their political supporters are when it comes to their commitments to markets. It exposes their Stalinist, command and control tendencies and reminds us, despite their protestations otherwise, they really are more comfortable with oligopolies and private gatherings in the old club, than with the rough and tumble of a genuine market.

The transformation of the economy to a low carbon one requires change driven by new incentives. This should be music to the ears of anyone who believes, as I do, in the innovative power of people and markets when given the right incentives. Yes, change can be hard work and must be managed, but it sorts out those who are innovative and courageous, those prepared to have a go, from those lazy, over protected sections of the economy that need shaking up for the greater good.

This of course is what our captains of industry argue about markets, that if we expose our ideas, technology and management capacity to the rigours of an open process of capital allocation then the best will rise to the top. That is why many of them are so nervous and now scream for protection, because they fear that their day is coming to an end and more innovative technologies and companies will replace them. So they seek any excuse to slow down that process.

A classic example of this is the debate over trading vs taxes. The corporate sector argued strongly for trading as the most effective and efficient method of identifying where capital should be directed to cut CO2 emissions. They were right to do so as a well-designed market for carbon, without free allocation of permits, is the right answer. It lets government guarantee a steadily reducing level of CO2 pollution (the cap and trajectory) and lets the market find the right price to achieve it.

Having argued for this, many so called market advocates then wimped out and started complaining about “certainty” – that they would face uncertainty on price. Well duh, that’s what markets are, a way to set the price given limited but unknown supply. So now the market advocates seek government intervention – compensation, price caps, longer term trajectories and delay – anything to avoid this being a real market.

There are notable exceptions, such as Grant King at Origin Energy. Origin has long recognised the inevitability of a carbon price and argued strongly in favour of one, even when it was very unpopular in the corporate sector to do so. King was a part of a small group of CEOs – the Business Roundtable on Climate Change – that pushed the Howard government to act, despite derision from the conservative members of the BCA.

Beyond policy advocacy, Origin saw the writing on the wall and invested in gas and renewables and positioned their brand as a green one with consumers. So now while the market wimps are calling for protection and delay, Origin is saying “bring it on”. Their recent submission to the government called for stronger targets than Garnaut. No wimps there.

The business community needs to decide if they want a market solution or not. Either they face up to the market and let it do its work or get out of the way and let government regulate a command and control solution. You can’t have it both ways and if we don’t get to work on the market approach soon, the heavy hand of government will be the only option left.

Original article: Paul Gilding. www.paulgilding.com. 17 October 2008. Read it…