The necessity of talking the industrial world to its next stage of evolution is not a disaster – it is an amazing opportunity. How to seize the opportunity, how to bring into a world that is not only sustainable, functional, and equitable but also deeply desirable is a question of leadership and ethics and vision, courage, properties not computer models. To speak of them we – the authors – need a chapter break here. We need to turn off our computers, put away our data and scenarios and reappear in chapter 8, where we will conclude with insights that have come as much from our hearts and our intuition as the have come from our scientific analysis…."
"It’s time to do some truth-telling on this issue. The world’s leaders do not know any better than anyone else how to bring about a sustainable society; most of them don’t even know it’s necessary to do so. A sustainability revolution requires each person to act as learning leader at some level, from family to community to nation to world. And it requires each of us to support leaders by allowing them to admit uncertainty, conduct honest experiments, and acknowledge mistakes. No one can be free to learn without patience and forgiveness. Finding the right balance between the apparent opposite urgency and patience, accountability, and forgiveness is a task that requires compassion, humility and, clearheadedness, honesty and that hardest of words, that seemingly scarcest of all resources-love."
“Not everything bears repetition, but truth does – especially when that truth is both denied by entrenched interests and verified by new information”
Herman E. Daly, former World Bank senior economist and Professor. School of Public Affairs University of Maryland.
Good video summarizing conclusions:
Bent Flyvbjerg, Nils Bruzelius and Werner Rothengatter
“Never in the history of humankind have we built more or more expansive, infrastructure projects and never have such projects been more central to establishing what sociologist Zygmunt Bauman calls ‘independent from Space’ and Bill Gates ‘frictionless capitalism’. Yet when actual versus predicted performance of megaprojects are compared the picture is often dismal. We have documented in this book that:
The aim is to decrease the risk of government, taxpayers and private investors being led- or misled, as often turns out the case – repeatedly to commit billions of dollars to underperforming projects.
Causes: more and bigger projects, lack of accountability in the decision making process, (“no skin in the game”), Promoters have actually been able to dodge risk and accountability. The tactical under-and overestimation of effects in the initial stages. Rent seeking behaviour and the associated ‘appraisal optimism’- are not in the interest of those whose money is put at risk, be the taxpayers or private investors. Nor are they in the interest of those concerned with environment, safety, democracy and the public interest.
Cures: 1)Risk and the accountability should be more centrally placed in megaproject decision making than is currently the case. Not only just better and more rational information, but also the right checks and balances are required to ensure accountability. New methodologies for risk management such as the most likely development analysis (MLD), break-even and worst case scenarios should be combined with the mentioned accountability.
2) Governments often play various roles such as promoters, guardian of public interests, which results in a conflict of interest in which accountability suffers. Borderlines of public and private involvement should be redrawn, shifting the risk form the public to the private sector and establishing a substantial clearer role for governments by means of arm’s length principal and shifting government involvement from project to promotion to formulation and auditing of public-interest objectives to be met by megaprojects.
There is little evidence that efficiency and democracy are trade-offs for megaproject decision making quite the opposite.
3) The authors propose, four basic instruments of accountability to be employed in megaproject decision making:
i) Transparency: Stakeholder involveme
nt and participation of the public sector. Against the convention argument that public participation slows down decision making and results into suboptimal decision making, mega projects that have tried to get by without publicness and participation have often into such heavy opposition that the decision making process were destabilised and second-best solution procedure and outcome forced upon actors and projects.
ii) Performance specification: The use of performance specification implies goal-driven approach to megaproject decision making, instead of the conventional technical solution driven one. The use of a performance specification approach means that as far as possible, all requirements with respect to a possible project are to be decided before considering various technical alternatives for the project before appraising it. Focus on the ends rather than the means. Forces stakeholder into a constructive role, and undermines the creditability of criticism directed at megaprojects simply because they happen to be megaprojects.
iii) Explicit formulation of regulatory regime, should be defined upfront as far as possible and will make governments carefully review issues and identify all costs before decisions are made. Furthermore, the choice of the regulatory regime will influence the risk of the project and both costs and risk should be central to any feasibility study and appraisals. Finally, if part of the financing of the project is to be mobilized (as proposed by the authors) from risk capital, this could only take place if the regulatory regime is set out, and risk which are of political nature are identified, and where relevant, as far as possible eliminated.
iv) Involvement of risk capital, by requiring that a substantial commitment in the form of risk capital is made, the ordinary citizen will be required to carry no, or only limited risk. Involvement of risk capital will ensure a high degree of involvement by the lenders during the final design construction and operation of a project and more effectively monitoring. As a consequence, better cost control can be expected. The authors propose two alternative models for megaproject decision making. One based on the state-owned enterprise approach (SOE), the other on the build-operator transfer (BOT). Depending on the specific project one will be better than the other.
Oxford Photovoltaics is an Oxford University spin-out company that is developing a low cost, sustainable transparent solar cell coating that can be printed on building glass. Less toxic than traditional solar cells, it can be used on the glass facades of commercial buildings to convert sunlight to electricity.
Here a few links with more information on the technology and a video from the founder:
Taleb and Tetlock (2013) argue in their paper “On the difference between Binary Prediction and True Exposure” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2284964, that we have to be aware of the difference between “binary” (only two possible outcomes) and “vanilla” (multiple outcomes) scenarios. Vanilla exposures are sensitive to Black Swan effects, model errors and prediction problems, while binary are more immune to them. Indeed we might see fewer fat tails events, but their impact will get stronger. This is also an issue for climate change models and we have to be aware of our limited perspective if we argue the effects of climate change such as the discussion around the Stern Review (http://en.wikipedia.org/wiki/Stern_Review).
The following article is based on the book "Cradle to Cradle" from Michael Braungrat and William McDonough.
“The GDP as measure of progress emerged during an era when natural resources still seemed unlimited and “quality of life” meant high economic standards of living. But if prosperity is only judged by increased economic activity, then car accidents, hospital visits, illnesses (such as cancer) and toxic spills are all signs of prosperity. Loss of resources, cultural depletion, negative social and environmental effects , reduction of quality of life- these ills can all be taking place, an entire can be in decline, yet they are negated by a simplistic economic figure that says economic life is good. Countries all over the world are trying to boost their level of economic activity so they, too, can grab a share of the “progress” that measurements like the GDP propound. But in the race for economic progress, social activity, ecological impact, cultural activity and long term effects can be overlooked.”
According to Prof. Braungart “less bad” referring to more efficiency and more eco-friendly productions and a bit of social activities is not enough. We really have to understand the triple bottom line: profit, people, and planet in a holistic way. This means to include all goals right into the whole life cycle of the product. A successful story is the Swiss textile mill Roehner and its aesthetically unique fabric that is also environmental intelligent. Here a link to the case study: http://www.iehn.org/publications.case.rohner.php
In the following I will write down the key steps to get there according to the book (pp 165-186).
“Step 1 get free from known culprits
Do everything in an environmental and social friendly way right from the beginning. From the materials to the manufacturing to the product only use materials not harmful for our health and the environment (such as PVC, cadium, lead and mercury). You do not need to worry about any regulations and will save costs in the long run, your employees will be happy to work in your factory (reduced health risks) and you will gain a long term competitive advantage, because the cost of “technical” and not truly recyclable waste will increase exponentially over the years to come.
Step 2 follow informed personal preferences and prefer ecological intelligence
Prefer respect, this is at the heart of eco-effective design. It is difficult quality to quantify: respect for those who make the product, for the community near where it is made, for those who handle and transport it and ultimately the customers. Prefer delight, celebration, and fun. Add the element of pleasure and delight. It’s very important for ecologically intelligent products to be at the forefront of human expression. They can express the best of design creativity, adding pleasure and delight to life.
Step 3 create a passive positive list
Create a detailed inventory of the entire palette of materials used in a given product, and the substances it may give off in the course of its manufacture and use. What, if any, are their problematic or potentially problematic characteristics? Are they toxic? Effects on local and global communities?
"Passive positive" lists – lists of materials used categorised according to their safety level
The Gray List – problematic substances that are not so urgently in need of phasing out
The P List – the "positive" list, substances actively defined as safe for use
Step 4 activate the positive list
Step 5 reinvest
Do more than designing for biological and technical cycles we are recasting the design assignment: not “design a car” but design a “nutrivehicle”. Instead of aiming to create cars with minimal or zero negative emission, imagine cars designed to release positive emissions and to generate other nutritious effects on the environment. The car’s engine is treated like a chemical plant modelled on a natural system. Put it even further design a new transportation infrastructure! The planet will be crawling with cars, and we need other options. Sounds fanciful? Of course, but remember the car itself was fanciful notion in a world of horse and carriage.
For example Nike is testing clean new rubber that will be a biological nutrient and could likewise have a revolutionary impact on the industry.
The final point has no absolute endpoint and the final product may be totally different as the one you began to work on. Transformation to an eco-effective vision doesn’t happen all at once and it requires plenty of trial and error- and time and effort.
Finally signal your intention and restore! Drive for “good growth” and not just economic growth.
Except intergenerational responsibility
In 1789 Thomas Jefferson wrote a letter to James Madision in which he argued that a federal bond should be repaid within one generation of the debt, because as he puts it, “The earth belongs…to the living…No man can by natural right oblige the lands he occupied, or the persons who succeeded him in that occupation, to the payments of debt contracted by him. For if he could, he might, during is own life, eat up the usufruct of the lands of several generations to come, and then lands would belong to the dead, and not the living.” The context is different, but the logic is beautiful and timeless. Ask: How can we support and perpetuate the rights of all living things to share in a world of abundance? How can we love the children of all species- not just our own- for all time? Imagine what a world of prosperity and health in the future will look like, and begin designing for it right now. What would it mean to become, once again, native to this place, the Earth- the home of all our relations? This is going to take forever. But that’s the point.”
Criticism according to Wikipedia:
Experts in the field of environment protection have questioned the practicability of the concept. Friedrich Schmidt-Bleek, head of the German Wuppertal Institute called his assertion, that the "old" environmental movement had hindered innovation with its pessimist approach "pseudo-psychological humbug".
I can feel very nice on Michael's seat covers in the airplane. Nevertheless I am still waiting for a detailed proposal for a design of the other 99.99 percent of the Airbus 380 after his principles.
In 2009 Schmidt-Bleek stated that it is out of the question that the concept can be realized on a bigger scale.
Some claim that C2C certification may not be entirely sufficient in all eco-design approaches. Quantitative methodologies (LCAs) and more adapted tools (regarding the product type which is considered) could be used in tandem. The C2C concept ignores the use phase of a product. According to the Variants of Life Cycle Assessment the entire life cycle of a product or service has to be evaluated, not only the material itself. For many goods e.g. in transport, the use phase has is the most influence on the environmental footprint. E.g. the more lightweight a car or a plane the less fuel it consumes and consequently the less impact it has. Braungart fully ignores the use the phase.
It is safe to say that every production step or resource-transformation step needs a certain amount of energy (Newton's second law). Even the highest Cradle to cradle certification requires only 50% of energy for production to come from solar sources.
The C2C concept foresees an own certification of its analysis and therefore is in contradiction to international ISO standards 14040 and 14044 for Life Cycle Assessment whereas an independent and critical review is needed in order to obtain comparative and resilient results. Independent external review.
What is your opinion?
Alois Flatz (Partner Zouk) talks about clean tec 2.0.
-Large utility companies are in trouble
-Shift to offshore wind will require even a stronger balance sheet due to high risk/ return profile (Germany)
-New business models should be focused on fast cash flow generation
-Business model of new clean tec companies should be flexible and more independent from regulatory framework (still difficult to avoid)
-Dependence on strong gatekeepers (smart grid, utilities and E-Mobility, car makers)
-China is working differently and has a strong impact on development
-In the long run industries becoming less dependent on energy, resource efficiency
-Clean Tec 2.0 will be digital
A cool example for Clean tec 2.0 is NEST:
Anne-Maria Slaughter wrote a good article on the recent Munich Security Conference at Project Syndicate. Interesting points also in relation to the global energy market.
Here the link:
by Fabian Leonhardt
The answer to this question is simple. The production factor nature is more or less free. Regulaters and economic theory did not take care of the fact that this will lead to an exploitation of nature by markets in the long run. Markets will not be able to solve this problem at least not without high costs for future generations.
The dilema can only be solved according to econmists by privatizing nature. This is a very theoretical argument, which would probably not work in the real world and might result in further negative effects for future generations.
What we need is a global institution or a worldwide legal framework insuring that nature has its price (good book by Prof. Radermacher Welt mit Zukunft on this). In the long run we will see an exponetial increase in the costs of nature as a production factor for society and next generations. This will give companies focusing on sustainability to date a strategic advantage and might provide good investment opportunities. Furthermore additional fundamental investments into reserach and subsidies from governments are very important and urgent.
On the other hand before we will see the clean tec market becoming the next kondratieff cycle a bubble in this field over the next 10 years is highly likely as well. Hopefully we will see a bubble, because financial speculation is necessary here to develop the new green paradigma. (George Soros Theory of Reflexivity)
Interesting additional opinion/facts by Janaway:
“Yet the next new economy can already be defined in broad strokes. Like the digital one we are currently still learning how to exploit and enjoy, that low carbon economy can be built only on a base of substantial state investment and agreed rules of engagement across both public and private sectors. To advance the frontier of needed innovation, much science remains to be done. A host of technologies – batteries and solar cells and fuel cells, among them – require extended investment to improve both absolute performance and the ratio of performance to costs. And the protocols for bringing alternative renewable energy sources online into the intelligent grid that is yet to be designed, let alone deployed, well need to be standardized, as where the networking and internetworking protocols of the digital economy. However, no significant private-sector investment in the new infrastructure, let alone the speculative funding necessary to finance deployment at scale, can be expected while return on that investment remain exposed to the volatile markets of conventional energy sources. Only collective state action- the prospect for which is not at all visible – can protect the new alternative energy technologies and accelerate the step-function to increases in thermal efficiency necessary to compete with conventional sources without state subsidy. In parallel, advances in materials and in information technologies to reduce the carbon content of consumers goods and services are similarly required and at risk.
By the way by 2010 China’s investment in Clean-energy technologies was estimated to have reached $54.4bn more than 50% above the US level in an economy less than half the size.”
…Along this dimension, the successive East Asian “miracle” economies, from Japan to China by way of the “Tigers”, generated growth initially through protection and subsidy and then once a sufficient degree of competitive maturity has been established backed off and opened up.” More particularly, by endowing multiple players in the Three-Player Game (State, Financial Markets, other sectors) with access to scientific and technological sources of innovation, the state can sponsor the open-ended process of trial and error that alone has the potential to explore new economic space.”
… Recognition that technology spill overs are key to generation of economic growth goes far back as Keynes’s mentor, Alfred Marshall, and resides at the core of New Growth Theory.
Janeway, W. H., (2012). Doing Capitalism in the Innovation Economy. Cambridge: Cambridge University Press. pp 277-278
Timber has always been an interesting asset class for wealthy people this comes with some reasons: stable long term returns, diversification in terms of inflation. At frist glance investmenst into forest in asia makes in general sence to fight the pollution issue. The markets in asia still have a long term growth perspective and further incentive systems with financial benefits for the investors are highly possible.
The investment objective of the currently first time fundraising Asia Renewable Resources Fund is to achieve long term capital growth through investment in high value forestry assets and land opportunities to develop sizeable returns from forestry operations. The Asia Renewable Resources Fund may also invest in transferable securities to enhance liquidity and diversification.
The Asia Renewable Resources Fund will target annual total returns equal to or greater than the S&P Forestry index.
(WOOD — S&P Global Timber and Forest Index (NASDAQ:WOOD) – seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Timber & Forestry Index (the “Underlying Index”). The Underlying Index is comprised of approximately 25 of the largest publicly-traded companies engaged in the ownership, management or upstream supply chain of forests and timber lands. These include forest products companies, timber real estate investment trusts, paper products companies, paper packaging companies and agricultural products companies.