Archive for February, 2012

Sustainability’s Megatrends and Megaforces

Posted by admin on February 20, 2012
Posted under Express 161

Sustainability’s Megatrends and Megaforces

We have been saying for a while that sustainability makes real good business sense. Now there’s a Harvard Business Review study which confirms it. Go sustainable and go for the long term. And we draw attention to 10 Global Sustainability Megaforces.  Energy efficiency regularly gets the star treatment here too. Europe has to put its money – what little is left – where its mouth is. It will help the Euro and jobs. How about three smart solutions to deal with climate change and rising temperatures or three good news items from the auto industry? People in the news: R.K.Pachauri, and Muhammad Yunus. Nike is dying to go green, while the Heartand Institute springs a leak.  Singapore Airshow was the place to see more than aircraft –a row over aviation emissions and Europe’s plan to tax international airlines. Australia is looking at solar as a way to make a big switch from coal fired to renewable energy, while China’s big carbon schemes come under more scrutiny.  Last word is about some leaders who are lost to the climate cause, but hopefully not for good. – Ken Hickson

Profile: Professor Muhammad Yunus

Posted by admin on February 20, 2012
Posted under Express 161

Profile: Professor Muhammad Yunus

Using innovative social business and micro credit  models, Grameen Bank founder and 2006 Nobel Peace Prize laureate Professor Muhammad Yunus has shown how “bottom of the pyramid” market opportunities can be successfully served. He is also joining hands with the Indian Institute of Management to float a fund to seed social ventures. He shares his experience and insights at the National University of Singapore Business School this week, which also goes on a live webcast.  Read More

National University of Singapore Business School:

925 million people around the world do not have enough to eat and 98 percent of them live in developing countries (2010 United Nations). Using innovative social business models, Grameen Bank founder and 2006 Nobel Peace Prize laureate Professor Muhammad Yunus and other social entrepreneurs have shown how Bottom of the Pyramid (BoP) market opportunities can be successfully served.

This forum brings Prof. Yunus together with the leaders of some global corporations to share their experience and insights at the National University of Singapore (NUS) Business School.

Co-organised with the Asia Centre for Social Entrepreneurship and Philanthropy (ASCEP) at the NUS Business School, this Forum brings Prof Yunus together with the leaders of a number of these far-sighted global corporations to share their experience and insights in embracing social business models to do good AND do well.

Live webcast 22 February 10am Singapore time (GMT+8)

At the end of the Forum, selected innovative social businesses being incubated by GCL@NUS will showcase their social ventures and pitch to potential corporate partners and social venture investors.

Professor Muhammad Yunus established the Grameen Bank in 1983 which gave loans to the poor. The 2006 Nobel Peace Prize was jointly awarded to Prof. Yunus and the Grameen Bank “for their efforts to create economic and social development from below”.

Ahona Ghosh in The Economic Times, India (16 February 2012):

Professor Muhammad Yunus, the father of microfinance and chairman of the Yunus Centre in Bangladesh, has finally found a taker for his brand of social businesses in India. He is joining hands with the Indian Institute of Management, Ahmedabad (IIM-A) to float a Rs 50-crore fund to seed social ventures.

He will help raise the corpus and mentor social entrepreneurs. “I am in talks with several industrialists (in India),” Yunus said. He met some of Mumbai’s biggest industrialists during his visit to the city this week.

For the uninitiated, Yunus defines a social business as one that pays no dividend to shareholders, but ploughs all profits back into the company whose purpose is to serve social needs. “It’s a new class of non-dividend business done in a serious way to solve social problems,” he said.

Yunus has pioneered many such social businesses, including a JV with Danone that sells fortified yoghurt to poor children for 6 Bangladeshi Taka; Veolia that sells clean water to 100,000 people across five villages for 1 taka (for 5 litres); and a third JV with chemicals multinational BASF that sells long-lasting insecticidal nets and multi-micronutrient sachets to the poor.

His alliance with IIM-A fructified after one year of discussions with its Centre for Innovation Incubation and Entrepreneurship (CIIE).


We are exploring a collaboration with Yunus to build a stronger ecosystem to support fledgling entrepreneurs who are creating innovative solutions in the social sector,” Rakesh Basant, chairperson of CIIE and professor of economics at IIM-A, said.

The CIIE has been involved in incubating early-stage enterprises across the healthcare, education and livelihood space. They will collaborate with the Mumbai-based arm of Grameen Creative Lab (GCL).

GCL, which seeds social businesses, is a joint venture between the Yunus Centre and circ-responsibility, a consulting company in Germany.

The CIIE and Yunus will collaborate to create a strong mentoring network, an incubation program to be designed by GCL to help entrepreneurs identify and build viable social business options.

The CIIE’s initial idea was to raise a Rs 5-10 crore fund, Basant said. But Yunus raised the bar with the proposal for a Rs 50-crore fund. “Fund-raising has not started yet and we don’t yet know how much we will be able to raise,” he added.

This is the Nobel Laureate’s second visit to India in the past 26 months. He has been building the case for Indian industrialists to start social enterprises that do not return profits to shareholders. None has responded yet. Hence, the plan for a Rs 50-crore fund. Yunus hopes to raise the corpus from Indian corporate and philanthropic foundations.

“Rich industrialists in India prefer charity than investing in business without any return expectations,” says Vineet Rai, founder and CEO of Aavishkaar, which invests in social impact enterprises with a profit motive. India as a country has only now started discovering the risk-reward paradigm and it will be a few more years before the Yunus model will find takers, he said.

Anu Aga, director on the board of Thermax, a $1-billion engineering solutions company, who met the professor in Mumbai last Sunday, is intrigued by the model but is not yet ready to try it out.

There are some exceptions, though. Recently, Piramal Group Chairman Ajay Piramal and Dr Reddy’s Laboratories Founder K Anji Reddy independently started working on social businesses similar to the Yunus model. Reddy’s project provides villagers with pure drinking water. Piramal has a low-cost healthcare delivery model and a rural BPO. Both do not expect returns, but plough profits back to scale up the businesses.

Yunus’ personal journey in this sector has been long, and controversial in the recent past. On April 2011, Bangladesh’s highest court dismissed Yunus as managing director of Grameen Bank, the path-breaking microfinance institution he founded. But Yunus is undeterred and has set up three international joint ventures and about eight social business enterprises over the last five years.

Muhammad Yunus was born in 28th June, 1940 in the village of Bathua, in Hathazari, Chittagong, the business centre of what was then Eastern Bengal. He was the third of 14 children of whom five died in infancy. His father was a successful goldsmith who always encouraged his sons to seek higher education. But his biggest influence was his mother, Sufia Khatun, who always helped any poor that knocked on their door. This inspired him to commit himself to eradication of poverty. His early childhood years were spent in the village. In 1947, his family moved to the city of Chittagong, where his father had the jewelery business.


In 1974, Professor Muhammad Yunus, a Bangladeshi economist from Chittagong University, led his students on a field trip to a poor village. They interviewed a woman who made bamboo stools, and learnt that she had to borrow the equivalent of 15p to buy raw bamboo for each stool made. After repaying the middleman, sometimes at rates as high as 10% a week, she was left with a penny profit margin. Had she been able to borrow at more advantageous rates, she would have been able to amass an economic cushion and raise herself above subsistence level.

Realizing that there must be something terribly wrong with the economics he was teaching, Yunus took matters into his own hands, and from his own pocket lent the equivalent of ? 17 to 42 basket-weavers. He found that it was possible with this tiny amount not only to help them survive, but also to create the spark of personal initiative and enterprise necessary to pull themselves out of poverty.

Against the advice of banks and government, Yunus carried on giving out ‘micro-loans’, and in 1983 formed the Grameen Bank, meaning ‘village bank’ founded on principles of trust and solidarity. In Bangladesh today, Grameen has 2,564 branches, with 19,800 staff serving 8.29 million borrowers in 81,367 villages. On any working day Grameen collects an average of $1.5 million in weekly installments. Of the borrowers, 97% are women and over 97% of the loans are paid back, a recovery rate higher than any other banking system. Grameen methods are applied in projects in 58 countries, including the US, Canada, France, The Netherlands and Norway.

Source: and

Sustainability Pays in the Long Term

Posted by admin on February 20, 2012
Posted under Express 161

Sustainability Pays in the Long Term

When Harvard Business School studied the performance of 180 companies over 18 years, it found that those firms (90 of them) which adopted environmentally and socially responsible policies significantly outperformed their peers. Even so, in the current space, it’s difficult to identify companies that are really doing something in terms of sustainability rather than claiming to do something. The report is the most rigorous attempt yet to identify which companies were transforming themselves in sustainable ways before sustainability was “cool.” Read More

By Tom Randall for Bloomberg (18 February 2012):

For most investors, “sustainability” isn’t about doing the right thing. The conversation has evolved. It’s about doing the smart thing. This demands an answer to the fundamental question: Does it pay to invest in sustainability?

Early results are in.

The chart, drawn from a Harvard Business School study – –  tracks the performance of 180 companies over 18 years. The 90 firms that adopted environmentally and socially responsible policies significantly outperformed their peers. Every dollar invested in a portfolio of sustainable companies (blue line) in 1993 would have grown to $22.60 by 2011. That beats the rise to $15.40 for a portfolio of companies less focused on sustainability (purple line).

The Harvard report is the most rigorous attempt yet to identify which companies were transforming themselves in sustainable ways before sustainability was “cool.” It’s also the first study to follow companies’ performance for decades — the kind of time frame needed to evaluate transformative long-term strategies — authors Robert Eccles and George Serafeim said in an interview.

“These things take time to pay off,” Serafeim said. “If you are short-term oriented, is this a good strategy? No, it won’t pay off. But if you are patient, it will.”

The pressures on the planet are vast. The global middle class is set to nearly triple to 4.9 billion consumers in 2030. That’s a lot of stuff people will buy and use and throw away. The challenge to companies and governments is how to satisfy the new markets without using up strategic resources or breaking the tenuous balance between humans and the environment.

Measuring corporate sustainability is tough; the long-term pressures from resource constraints are unique to every business. Many attempts to rank sustainability efforts have underperformed. In the last decade, the gold standard Dow Jones Sustainability World Index has climbed 41 percent, falling short of the 70 percent gain for the Standard & Poor’s 500 Index.

The Harvard study took some unusual steps to determine which companies were enacting sustainable strategies in their formal policies and corporate cultures. They scoured company filings, websites and sustainability reports and interviewed executives. They weighed dozens of metrics, including whether companies had policies to reduce emissions, used environmental criteria in choosing suppliers, took steps to improve energy or water efficiency, and tied environmental performance to executive compensation.

They even analyzed old conference calls to find the ratio of references to time periods of more than a year to those of less than a year to determine whether a company was more focused on long- or short-term prospects.
Corporate sustainability means investing for the future. Such investments can reduce margins and weigh on performance in the short term.

In some ways, the challenge of identifying and measuring sustainability is harder today than it was 20 years ago, Harvard’s Serafeim said. “In the current space, it’s difficult to identify companies that are really doing something in terms of sustainability rather than claiming to do something and really doing nothing,” he said.

The business case for sustainability is at the heart of a report released yesterday by Generation Investment Management — and authored by former U.S. Vice President Al Gore and former Goldman Sachs executive David Blood. Drawing in part from the Harvard study, Gore and Blood recommend investors identify “stranded assets” whose value could change significantly under certain scenarios, such as a price being set for carbon or for water. They say investors should use environmental, social and governance data like those used in the Harvard study to augment the financial data typically used to value companies.

Gore draws an analogy between climate change and the subprime mortgage crisis: “These subprime carbon assets have an asserted value based on the assumption that it’s perfectly OK to put 90 million tons of global warming pollution into the atmosphere every 24 hours,” Gore told Bloomberg News reporter Simon Clark. “Actually it’s not.”


EU Must Invest More in EE Policy To Boost Euro & Jobs

Posted by admin on February 20, 2012
Posted under Express 161

EU Must Invest More in EE Policy To Boost Euro & Jobs

Energy efficiency and low carbon investment is gaining traction as a financial asset class, but to deepen confidence the European Union must deliver “investment grade policy” a senior executive at HSBC said. European Commission figures have shown improved energy efficiency could create around half a million jobs and 34 billion euros ($44.94 billion) in Gross Domestic Product in 2020. Read More

By Barbara Lewis for Reuters (13 February 2012):

Energy efficiency and low carbon investment is gaining traction as a financial asset class, but to deepen confidence the European Union must deliver “investment grade policy” a senior executive at HSBC said on Monday.

He was speaking on the eve of a debate by energy ministers on the EU’s draft Energy Efficiency Directive, on which Denmark, current holder of the rotating EU presidency, hopes to get a political agreement by the end of June.

Without policy reform, the EU is likely to only half meet a policy goal set in 2007 of a 20 percent improvement in energy efficiency by 2020 through measures such as better building insulation.

Nick Robins, head of HSBC’s Climate Change Centre of Excellence, said the EU would be delivering clear signals, or “investment grade policy”, provided it met Denmark’s deadline.

Robins, who is also co-chair of the United Nations Environment Programme (UNEP) Finance Initiative Climate Change Working Group, said negative sentiment on green investment was “bottoming out” after being depressed by economic crisis.

“We have the beginnings of a case for being more quietly optimistic. We are recognizing the case for energy efficiency,” he told Reuters on the sidelines of a conference.

European Commission figures have shown improved energy efficiency could create around half a million jobs and 34 billion euros ($44.94 billion) in Gross Domestic Product in 2020.

They also put the cost to the energy companies at only one euro cent for every kilowatt hour of energy saved.


Still the draft efficiency directive has attracted heated debate and environmental groups are worried it could be derailed by hundreds of highly technical amendments.

One of the proposed amendments seeks to address the weakness of carbon on the EU’s Emissions Trading Scheme (ETS), which could fall further if improved energy efficiency added to a surplus of carbon permits caused by recession.

At less than 8 euros a ton, carbon prices are already far below the level needed to spur green investment.

Robins said the EU ETS had a role, but it was “just one of many tools” on green energy.

Other speakers at Monday’s conference organized by the European Alliance to Save Energy underlined the significance of low carbon for the investment community.

A director from the BT Pension Scheme – Britain’s largest with 36 billion pounds ($56.86 billion) under management – said the shift to a low carbon economy touched all assets.

“The issue of carbonisation is totally embedded into every single asset class,” Donald MacDonald, a trustee director of the BT Pension Scheme, told Reuters.

“Failure to take this up in investment policies could be a failure of fiduciary duty.”

(Reporting by Barbara Lewis; Editing by Tim Dobbyn)


Who Should Pay the Price of Pollution in Europe’s Airspace?

Posted by admin on February 20, 2012
Posted under Express 161

Who Should Pay the Price of Pollution in Europe’s Airspace?

The Singapore Airshow became the scene for a battle between Asian airlines and the European Union over plans to charges all airlines for their greenhouse gas emissions. Mr Siim Kallas, vice-president of the European Commission and its Transport Commissioner said there is now a sense of urgency among the various parties to tackle the reason behind the scheme – the need for airlines to put in place concrete measures to reduce carbon emissions. Boeing is playing its part by introducing its cleaner, greener jet, the Dreamliner, which it showcased in Singapore. Read More

By Karamjit Kaur, Aviation Correspondent Straits Times, Singapore (14 February 2012):

THE European Union (EU) will stick to its guns on its unpopular carbon emissions scheme, unless the aviation industry can propose a concrete alternative, a key official said yesterday.

Mr Siim Kallas, who is the vice-president of the European Commission and its Transport Commissioner, added that some good has come out of all the unhappiness over the scheme.

He noted that there is now a sense of urgency among the various parties to tackle the reason behind the scheme – that is, the need for airlines to put in place concrete measures to reduce carbon emissions

‘At least, the issue has become much more high-level. It has also become much more urgent now due to the declarations from countries to introduce retaliatory measures,’ he said.

He was speaking to The Straits Times at an aviation conference ahead of the Singapore Airshow 2012, which opens today.

In 2008, the EU made known its intention to charge airlines flying in and out of Europe for carbon emissions. It would do this by adding aviation to the bloc’s market-based carbon trading scheme.

What this means is that airlines will have to keep to a stipulated amount of carbon emissions or buy extra units from the carbon trading market.

The scheme kicked off on Jan 1 this year but airlines need to start paying for extra units only from April next year.

SIA and other carriers have so far not said how much they expect to pay.

Opposition to the EU scheme by airlines and governments has been mounting since, with the pace picking up of late.

Last week, China declared that it has banned its airlines from complying with the scheme. More than 40 other countries including the United States, Russia, India and Singapore are also objecting to it.

A few have threatened retaliation, including exploring legal action against the EU’s unilateral move. Others have accused Europe of trying to regulate the world.

Defending the EU position, Mr Kallas said that a lack of action on the global front was what drove Europe to make its decision.

He told The Straits Times: ‘This has been discussed for years and years… but it was limited only to talks.’ Thus, the EU decided to take its own concrete measures to deal with the issue, he added.

Mr Kallas, who was invited to speak at the Singapore Airshow Aviation Leadership Summit held at Raffles City, also touched on the emissions scheme in his speech.

But some of the other delegates, who included airline and airport chiefs, clearly did not buy his argument.

Mr Tony Tyler, director-general and chief executive of the International Air Transport Association (Iata), said that while airlines understood the need for measures such as emissions trading, it must be a global initiative led by the International Civil Aviation Organisation (Icao) – the United Nations arm that oversees the aviation sector.

Airbus chief executive Tom Enders said he was ‘very worried’ that the EU’s move ‘could spark a trade war between Europe and the rest of the world’.

‘What started out as a solution for the environment has become a source of potential trade conflict,’ he said during a panel discussion.

Airlines, especially Asian carriers like Singapore Airlines, have also pointed out that the scheme penalises airlines that operate long haul non-stop flights.

They are charged for the carbon they emit during the entire flight instead of just what they burn over Europe.

There was no logic to that, said Singapore Airlines’ chief executive officer Goh Choon Phong, who spoke to reporters on the sidelines of the conference.

‘In our case, we are charged for the whole Singapore-Europe journey but another carrier that has an intermediate stop is charged only from there to Europe. Who is burning more fuel? Obviously the airline that has a stop. The whole principle does not make sense,’ he said.

Asked by The Straits Times to comment on Mr Goh’s remarks, Mr Kallas was initially at a loss for words, then said: ‘You should ask the authors who wrote the directive which was adopted.’

He later added: ‘If it is the objective to reduce carbon dioxide emissions, then the scheme should be for the whole flight. Our policy is to reduce carbon dioxide emissions.’

Michael Richardson writing in the Straits Times (13 February 2012):

AIRLINES that carry passengers and cargo around the world contribute only a small, although growing, portion of the global warming gas emissions from human activity. So should they pay for their pollution and, if so, how?

This industry plays a key role in tying the world together. It contributes over US$3.5 trillion (S$4.4 trillion) to global economic activity, equivalent to about 7.5 per cent of global gross domestic product.

Yet the major players are politically divided and may be heading for a trade war, pitting Europe against a rainbow coalition of non-European states, including Asia’s leading economies.

Later this month, 26 countries are meeting in Moscow to decide how to react to a controversial new European Union scheme to start charging all airlines that land in the EU for their emissions of carbon dioxide, even though they might have flown for much of the way over other nations.

Starting this year, European law has brought all these airlines into the EU’s Emissions Trading Scheme, the 27-nation bloc’s main policy to combat global warming.

Countries meeting in Moscow strongly oppose their airlines’ inclusion in the scheme, arguing that it ‘violates the cardinal principle of state sovereignty’ over airspace laid down in the Chicago Convention governing civil aviation. Leading the fight are China, India, Russia and the United States. But other concerned countries include Argentina, Brazil, Mexico and South Africa as well as Japan, Malaysia, Singapore and South Korea. Asian representation is strong because civil aviation is growing fast in this region.

China last week banned its airlines from taking part in the European scheme if the EU continues to calculate the carbon cost over the whole flight, not just within Europe. Beijing has denounced the EU move as a trade barrier and warned that retaliatory action might follow.

In October, the United States House of Representatives passed legislation that would make it illegal to comply with EU law. Such moves could put international airlines in the invidious position of being in breach of one authority or another, severely disrupting operations and raising costs in an industry beset by high fuel prices.

The first year of the EU scheme may cost the industry between US$825 million and US$1.5 billion. Initially, airlines will be given allowances by the EU to cover some 85 per cent of their emissions. But the charge will become progressively heavier and airlines have complained the bill could amount to nearly US$24 billion over eight years.

Europe has acted out of frustration. Under the United Nations climate change negotiations, advanced economies that have signed the Kyoto Protocol are supposed to control aviation greenhouse gas emissions by working through the International Civil Aviation Organisation (ICAO), a UN agency with 190 member states.

Yet the ICAO has dithered and disagreed over how to proceed, reflecting many of the divisions – especially between developed and developing nations – that have slowed the UN negotiations on how to cope with climate change.

Meanwhile, aviation emissions are set to grow. Climate scientists advising the UN say aviation currently produces about 2 per cent of global carbon dioxide (CO2) emissions. By 2050, this figure could rise to 3 per cent. If aviation’s other greenhouse gases are included, the industry could be responsible for 5 per cent of warming by then.

However, the ICAO has so far failed to produce a credible emissions control plan. Developing countries led by China and India refuse to be bound by the same obligations as those of developed countries. The last ICAO assembly in 2010 proposed a global action plan, based on national plans to be submitted by mid-2012. It also decided that its governing council should develop a framework for market-based measures, including emissions trading, for the next ICAO assembly due by 2013.

Market-based measures to reduce aviation emissions can include a wide range of actions from increased engine efficiency, lighter aircraft and renewable energy fuel to improvements in air traffic management and airport systems.

However such advances may not be sufficient to reach even ICAO’s aspirational target of stabilising aviation CO2 emissions at 2020 levels. ICAO itself has forecast that the annual number of passengers worldwide will rise from 2.5 billion to five billion over the next 20 years, and the number of flights from 26 million to 50 million.

A 2009 report by the US Government Accountability Office concluded that even if many of the planned improvements in civil aviation performance are adopted, they are unlikely to greatly reduce global warming emissions from aircraft by 2050.

Foreign airlines landing in the EU are not due to be billed for their emissions until April 2013. So there is still time for reaching a compromise solution. One way to do so for the non-EU countries is to cut aircraft pollution and so earn exemption from the EU scheme.

However, the gulf between the two sides is wide and seems to be growing wider. It may be an uphill battle to stitch together a patchwork quilt of equivalent measures for curbing aviation emissions inside and outside the EU, in time to head off a tit-for-tat trade conflict.

The writer is a visiting senior research fellow at the Institute of Southeast Asian Studies.


Boeing made it an event to show off its dream of an airliner the new lighter weight carbon fibre shell and fuel efficient 787, while Singapore Airlines gave its jumbo jet 747 fleet a send-off.

Singapore Airshow, Asia’s largest and one of the three most important aerospace and defence exhibitions in the world, drew a record number of trade and public visitors at this year’s edition of the biennial event.

Over the six-day show from 14-19 February, Singapore Airshow 2012 welcomed some 145,000 visitors. Visitorship over the four trade days from 14-17 February stood at nearly 45,000 from 128 countries/regions, with over 30% coming from overseas.

Singapore Airshow 2012 also played host to the largest ever number of top level delegations, with 266 from over 80 countries. Tickets for the public day weekend over 18 and 19 February, were completely sold out, and Changi Exhibition Centre, the Airshow site, saw some 100,000 visitors over the two days, thronged the grounds where they were treated to breathtaking aerial displays and had the opportunity to view an impressive array of aircraft in the static display.

The aerial display included show-stopping performances from the Republic of Singapore Air Force (RSAF), the Royal Malaysian Air Force “Smokey Bandits”, the United States Air Force and the Royal Australian Air Force “Roulettes”. Australian pilot Tony Blair of Blair Aerosports also made his debut appearance in the first stunt aerobatic performance in the history of airshows in Singapore. In addition, visitors had a chance to interact with the aerial display pilots in person during autograph and photo-taking sessions. Singapore Airlines also hosted guided tours on one of their last three remaining Boeing 747-400s, which was here at Singapore Airshow to commemorate the retirement of its B747 fleet.

“Singapore Airshow 2012 has been a success for everyone. We have set a new record for the value of deals announced, as well as the number of visitors on both trade and public days. As a testament to the show’s achievements, over 70% of exhibitors have already reaffirmed their commitment to take up exhibition space in 2014. The response from the record crowd that visited the event over the two public days was also overwhelmingly positive. We are looking forward to the next show and hope to deliver a more enhanced experience for all our visitors in 2014,” said Jimmy Lau, Managing Director of Experia Events, organiser of Singapore Airshow.

Singapore Airshow returns from 11 to 16 February 2014 at Changi Exhibition Centre.


Hope for Australia’s 100% Renewable Energy Campaign

Posted by admin on February 20, 2012
Posted under Express 161

Hope for Australia’s 100% Renewable Energy Campaign

Pacific Hydro has unveiled some bullish forecasts for the rollout of solar in Australia – both PV and solar thermal – although it says it is conditional on the manner of deployment of monies from the proposed A$10 billion Clean Energy Finance Corp and on changes to regulatory rules for the electricity market. Read More

By Giles Parkinson in Renew Economy (13 February 2012):

Pacific Hydro has unveiled some bullish forecasts for the rollout of solar in Australia – both PV and solar thermal – although it says it is conditional on the manner of deployment of monies from the proposed A$10 billion Clean Energy Finance Corp and on changes to regulatory rules for the electricity market.

Pacific Hydro development manager Terry Teoh told a seminar hosted by the 100 per cent Renewables campaign over the weekend that based on projects of long term costs of energy, there could be between 5-6GW of solar PV deployed in Australia between 2013 and 2023 – a mixture of rooftop PV, commercial and industrial applications, and utility scale solar farms.

He also said that 6-8GW of solar thermal could also be deployed in Australia between 2016 and 2026. Its widespread deployment would start later than PV because it has further to travel down the cost curve.

Pacific Hydro is Australia’s largest independent renewable energy developer, with an extensive porffolio of wind interests in Australia and overseas, a growing portfolio of geothermal prospects, and a growing interest in solar – it is one of the three members of the Moree Solar Farm that was shortlisted in the Solar Flagships program, but which is currently struggling to arrange finance.

Teoh’s predictions are broadly consistent with other private sector forecasts for solar, although they do contrast sharply with government forecasts.

Bloomberg New Energy Finance expects a total of between 5-6GW of solar by 2020 (including the 1.3GW that has already been constructed, with mostly PV and some solar thermal. Suntech Australia said late last year that there could be 10GW of solar PV in Australia by 2020, by which point it would be growing at 2GW per year.

However, the federal Government’s draft energy White Paper suggested solar could play a minimal role, even by 2030, when it will provide 1.3 per cent at most of Australian energy mix, and including an extraordinary prediction that solar PV could cease to deployed once the renewable energy target comes to an end.

Teoh said later his predictions were based on several key conditions, mostly around policy. The first was that the CEFC was deployed in a manner which did not cannibalise the large scale renewable energy target, and didn’t replace private sector investment that would come forward anyway. This means that the CEFC should – at least in its initial years – focus on “enabling technologies” such as grid extensions and connections. “You can’t have one without the other,” he told RenewEconomy later.

The deployment would also depend on regulatory changes to Australia’s National Electricity Market, including connection rules. Teoh said he saw no impediment to having this much solar on the grid, as South Australia already had a wind penetration of greater than 20 per cent and could probably more to 25-30 per cent without much difficulty.

But what would be the impact of that amount of solar on Australia’s grid? The chances are that it could help dampen wholesale electricity prices, according to the latest study on the “merit order” effect from Germany.

Last week, we reported on the latest update of a Melbourne Energy Institute/BZE study on the merit order impact of solar PV in Australia, that found that 5GW of rooftop solar PV in the NEM could have depressed prices in the wholesale market by $1.2 billion in 2009 – or 12 per cent of the total market value – and $630 million in 2010 (the latter year is a smaller number because there was less price volatility due to milder weather conditions).

This conclusion was derived on modeling of how 5GW of solar PV might have impacted prices, but a new study released in Germany comes to surprisingly similar conclusions on solar PV that has already been deployed, and already had an impact on the market.

The study by Germany’s Institute for Future Energy Systems (IZES) analysed the impact of on the price of electricity by the deployment of solar PV in Germany – which at 25GW has installed more than any other country in the world – and it comes to similar conclusions than the Australian one.

The IZES survey found that solar power has reduced the price of electricity on the EPEX exchange by 10 per cent on average in the survey period – which ran from 2007 to 2011 – with reductions of up to 40 percent in the early afternoon when the most solar power is generated.

Uwe Leprich, research director at IZES, told the website Renewables International said the study found that the price of power was still rising considerably in 2007 between 10AM and 1PM as demand skyrocketed. But in the last two years, the sudden price increase no longer took place even though demand remained largely unchanged. “In addition, the differences between the base price and the peak price reduced considerably in 2010 and 2011,” he said.

“These are the two years in which the most photovoltaics was installed. At the same time, power demand did not change. We can therefore assume that photovoltaics is the reason why the base and the peak price have approached each other.” The base and peak prices used to be 20 to 25 percent apart, but that difference has shrunk to around 12 percent.

Leprich argues that this merit-order effect – which translates into an annual saving of 520 million to 840 million – has to be taken into account when discussing the cost of photovoltaics. “Of course, the effect is greater in the summer than in the winter, but it is there all year. After all, solar power is still generated in the winter – just not as much.”

IZES also comes to a similar conclusion to the Australian study, which suggested the extent of the savings gradually declines as more solar PV is installed. Leprich said solar PV will initially display more of the expensive power plants in Germany – such as peaking gas stations, two of which may face premature closure – and further deployment will increasingly cut into the inexpensive base load.

As an addendum to this, CleanTechnica reports that in the recent cold snap in Europe, Germany’s solar PV array has helped it export energy to France, whose nuclear-reliant grid has been unable to cope with increased demand, sending prices up by more than 50 per cent, and forcing the government to ask consumers to try and reduce consumption.

“Because France has so much nuclear power, the country has an inordinate number of electric heating systems. And because France has not added on enough additional capacity over the past decade, the country’s current nuclear plants are starting to have trouble meeting demand, especially when it gets very cold in the winter,” the website wrote, quoting Craig Morris of Renewables International.


Climate Action: As Easy As Falling Off a Log!

Posted by admin on February 20, 2012
Posted under Express 161

Climate Action: As Easy As Falling Off a Log!

Carbon sequestration via fallen-log burial. Black carbon reduction. Methane reduction.  Three climate change mitigation actions which could help keep the earth’s temperature increase to no more than 2 degrees. For an annual cost of US$238 billion at full scale, with the returns from enhanced crop yield and health benefits far exceeding this amount. Plus stimulation of local manufacture and employment. Not as crazy as it sounds.  Read More

3 Ways to Get Ahead of Climate Change, Without Ditching Oil (Yet)

By Kumar Venkat in Green

Published February 10, 2012

Greenhouse gas emissions are at record highs. The world’s major emitters recently failed once again to reach an agreement to limit emissions. In the midst of all the gloom and doom, it is understandable that the International Energy Agency’s latest World Energy Outlook has not received the attention it deserves.

But anyone seriously concerned about climate change needs to understand two fundamental constraints that emerge from this report. How we respond to these two constraints will determine if there is a reasonable way forward on climate change.

The first constraint has to do with trajectory of energy-related CO2 emissions required to keep the average temperature increase below the commonly accepted 2 degrees C threshold [PDF]. In the graph below, the IEA calls it the “450 Scenario” where the atmospheric CO2 concentration stays within 450 ppm.

It requires emissions to peak around 2017. By 2035, emissions in the 450 Scenario need to be just half of what we would have in the business-as-usual Current Policies Scenario. The difference between these two scenarios is as much as 22 Gt CO2 per year by 2035, about two-thirds of today’s total energy-related CO2 emissions.

Before we ponder how to find those reductions with current and future energy technologies and efficiencies, here is the second constraint that makes the task even more difficult. If we take no further action by 2017 — a likely situation — emissions locked in by existing capital stock (such as power plants, buildings, factories, and vehicles) will use up the entire carbon budget for 2035, leaving no maneuvering space to achieve the 450 Scenario.

As the graph below shows, these locked-in emissions will ramp down as older capital stock is phased out over time, but all replacements and expansions will have to be zero carbon!

The IEA estimates that demand for primary energy will increase by one-third between 2010 and 2035, and 75 percent of all the energy will come from fossil fuels in 2035. The new BP Energy Outlook concurs with this trend and estimates an 81 percent share for fossil fuels in 2030. The 450 Scenario will be out of reach without rapid breakthroughs in renewable energy, battery technologies, biofuels, and carbon capture and storage (CCS). Unless, perhaps, if we are willing to think outside the box.

What if we could find practical and affordable emission reduction and sequestration opportunities outside of the energy realm that could offset a big part of fossil fuel emissions through 2035 and buy us the additional time needed for a full transition to clean energy?

A survey of recent research shows some remarkably simple ideas that, in some combination, may have the potential to take us to 2035 on a path equivalent to the 450 Scenario. I’ll highlight three that seem down to earth, two of which provide substantial non-climate benefits:

1. Black carbon reduction. About 18 percent of global warming is caused by black carbon, a result of incomplete combustion of both fossil fuels and solid biofuels. Black carbon stays in the atmosphere for several days to weeks, and works by absorbing light and radiating out heat. The heated air molecules last longer and can move long distances. Black carbon also reduces the earth’s reflectivity (known as albedo) when deposited on snow and ice, which further increases warming.

Solutions include: reducing particulate emissions from diesel vehicles; transitioning to clean-burning biomass stoves, brick kilns and coke ovens; and banning agricultural waste burning. There are large non-climate benefits by way of avoided premature deaths and reduced health costs and, to a lesser extent, avoided crop losses. Black carbon is expected to figure prominently in the next IPCC report.

2. Methane reduction. Methane emissions from oil and gas production, gas transmission, coal mining, municipal waste, wastewater, rice paddies and livestock manure present a mitigation opportunity similar in scale to black carbon. Non-climate benefits include avoided crop losses, avoided premature deaths and lower health costs.

3. Carbon sequestration via fallen-log burial. Dead trees on forest floors decompose in about 10 years, releasing carbon into the atmosphere. Slowing down the decomposition to a longer time frame (100-1,000 years) by burying or storing the fallen logs in anaerobic conditions could potentially sequester large amounts of carbon at a relatively low cost.

The potential is estimated to be around 10 Gt of carbon each year. There are risks, however, such as nutrient lockup, habitat loss, disturbance to forest floors and soils, and the need for some road construction. If these risks are managed well, while utilizing just a small part of the potential as I have assumed here, the impact could be substantial in the short term.

I have summarized rough estimates of climate change mitigation potentials, costs and benefits (by 2035 and beyond, in today’s dollars, using current technologies) for the three solutions in the table below based on literature sources. More than half of the 22 Gt CO2 gap between Current Policies and the 450 Scenario could be closed using these three solutions alone if they are ramped up to scale before 2035.

In conjunction with advances in clean energy, efficiencies and conservation, these solutions could put us within striking distance of meeting the 2 degrees C challenge.

An approximate annual cost for the three solutions is about $238 billion at full scale, with the returns from enhanced crop yield and health benefits far exceeding this amount. Moreover, investments in these solutions would stimulate local manufacture and employment, and climate change mitigation by itself might have some additional monetary value in the future; however, the benefits are substantial even without including these.

While the non-climate benefits of black carbon reduction are greatest in the regions where much of the emissions would be reduced – particularly China, India and other developing nations in Asia and Africa – they do not necessarily go to those who might bear the costs. In addition, methane is fairly well mixed in the atmosphere and the benefits of methane reduction are more global.

This means that most of the mitigation will probably need to be funded by public means, particularly where the air pollution comes from public infrastructure, residential sources, small businesses and farms. Air quality regulations could be another mechanism to cut back on industry-generated black carbon and methane.

There are several additional opportunities at varying levels of cost, benefit and risk. Here is a sampling of some simple as well as grand ideas: soil carbon sequestration using biochar [PDF]; utilizing a larger percentage of the fallen-log burial potential; painting roofs white in regions with low winter heating needs (could be particularly effective with black carbon reduction); harvesting fallen logs to produce eco-neutral fuel for existing coal-fired power plants; and large-scale irrigated afforestation of subtropical deserts.

All of this suggests that there are plausible trajectories that can keep the long-term average temperature increase under the 2 degrees C limit. In the short term, any such path would involve readily available technologies, a highly engineered approach, modest public spending, and benefits that extend far beyond climate.

Kumar Venkat is president and chief technologist at CleanMetrics Corp., a provider of analytical solutions for the sustainable economy.


Energy in India: Boost Security, End Subsidies & Promote Efficiency

Posted by admin on February 20, 2012
Posted under Express 161

Energy in India: Boost Security, End Subsidies & Promote Efficiency

If India has to compete in the global market, it would be at a disadvantage if much of the country’s industrial sector remains lower than global benchmarks of energy efficiency. Advice from former global climate change panel boss R.K. Pachauri. With high oil prices, government should scrap energy subsidies and raise energy efficiency levels.

R K Pachauri, Director-General, The Energy & Resources Institute (TERI) in  Economic Times of India (10 February 2012):

The International Energy Agency has projected the possibility of oil prices reaching $150 per barrel by 2035. Oil price projections are fraught with uncertainties and complexities, which defy conventional analysis. It is entirely possible that the IEA’s projections will turn out to be off the mark.

But, fundamental changes in the global oil market suggest growing pressure on supply as a result of production capacity lagging behind quantity demanded.

Hence, while 2035 may not be the precise date by which prices hit $150, the trend will undoubtedly be upwards, leading perhaps to the spectre of four years ago with prices reaching $147 per barrel. The IEA’s prediction could very well occur earlier.

The Prime Minister, in his statement on New Year’s Eve, has rightly emphasised energy security as an important objective of development. This emphasis is timely and important. In a business-as-usual scenario developed through rigorous modeling by TERI, it has been projected that by 2031 India may be importing 750 million tonnes of oil and around 1,300 million tonnes of coal.

Such staggering levels of imports could run into serious physical constraints not only at the source of supply, but also in shipping internationally and port capacity and inland transportation within India.

Ideally, government policies and particularly real as well as relative prices of different forms of energy should reflect expected scarcity, so that market forces induce major improvements in the efficiency of energy use as well as the development of substitutes, thus reducing the expected dependence on imports of fossil fuels.

But given the enormous resistance to increase of energy prices, the government is unable to recover even operating costs of power supply and persists with heavy subsidies for oil products such as kerosene, LPG and diesel. It seems unthinkable, therefore, that prices would include some form of security premium to help moderate the increase in demand for imports.

Consequently, decision makers in business would not, in the immediate future, carry any part of the security burden, even as they may foresee serious difficulties ahead on account of India’s growing dependence on fossil fuels.

However, in a globalised world, businesses would need to consider how opportunities are likely to expand for renewable energy technologies as well as products, processes and production systems which are based on much higher levels of energy efficiency.

Countries like China and the Republic of Korea are making major investments in renewable and green energy technologies, not only as a commitment to a greener path of economic growth and development but also as a strategy for seeking a large share of the global market for renewables, which would emerge in the future. An important element driving action in these directions is the worldwide challenge of mitigating climate change.

Even though at the global level there is no binding agreement requiring nations to reduce their emissions of greenhouse gases (GHGs) by specified amounts, there is growing concern across the globe on the need for significant reductions. The recently concluded Conference of the Parties in Durban reaffirmed its commitment to limiting global average temperature increase to 2°C, but there was no matching agreement for reducing emissions to attain this objective.

The Intergovernmental Panel on Climate Change (IPCC) had clearly specified in 2007 that if temperature increase was to be limited to 2.0-2.4°C along a least cost trajectory, then global emissions of CO2 would need to peak no later than 2015. Indeed this is not the only pathway that the world can pursue to stabilise the concentration of GHGs, but other options may carry a higher cost and would be associated with far more serious impacts of climate change if mitigation of emissions is delayed.

While global developments and concerns clearly suggest an energy future very different from business-as-usual, any analysis of the Indian scene suggests an approach by which energy security is made not only an important element of national policy, including rationalisation of energy prices, but also a part of corporate decision-making.

This is not something that is dictated by reasons of patriotism but an acceptance of the fact that energy prices cannot continue at levels below cost in India, and that globally prices of fossil fuels are projected to increase according to every credible study.

Besides, with India’s growing demand for imports, the day is not far when at the margin India may have a significant upward impact on global prices of fossil fuels. Finally, global trends indicate a shift to much higher levels of efficiency in energy use, which would be reflected in the prices of goods and services produced.

If India has to compete in the global market, it would be at a disadvantage if much of the country’s industrial sector remains lower than global benchmarks of energy efficiency. Enlightened business policy would, therefore, require assessment of global trends and drivers of change, and implementing actions that would give Indian firms a cost advantage today and minimise the risk of facing much higher energy costs in the future. Forward looking companies would base their policies on robust assessment of the energy future facing India and, therefore, every business entity in the country.


Economy First, Environment Second in China’s Carbon & Climate Games

Posted by admin on February 20, 2012
Posted under Express 161

Economy First, Environment Second in China’s Carbon & Climate Games

What’s the reality behind China’s new, high-profile enthusiasm for a green revolution?  There’s to be a carbon tax and trial carbon trading scheme. Maybe it reflects strategic concerns that extend well beyond the boundaries of climate change and the desire for a cleaner world. Read More

Graham Lloyd in The Australian (11 February 2012):

CHINA’S new, high-profile enthusiasm for a green revolution, including a carbon tax and trial carbon trading scheme, reflects strategic concerns that extend well beyond the boundaries of climate change and the desire for a cleaner world.

Both welcomed and greeted with some suspicion, China’s internal decisions on carbon pricing  cannot be separated from the bigger questions of global trade and reciprocal market access.

China’s primary objective is not necessarily to save carbon but to bolster its economic opportunity. Being seen as a co-operative global citizen will be central to China’s long-term ability to preserve good relations while being the world’s largest emitter of carbon dioxide.

Further economic opportunity comes from using domestic markets to help underpin China’s position as the world’s leading supplier of renewable energy technologies such as wind and solar.

China’s low starting price of 10 yuan ($1.59) per tonne of carbon suggests the economic imperative and good public relations are more important than the amount of carbon emissions that will be ultimately saved.

But the carbon tax announcement builds on a commitment to pilot a cap-and-trade scheme in selected industrial regions, and is in line with China’s most recent five-year plan that, for the first time, mentions climate change as a state concern.

More pointedly, the carbon tax move coincides with a series of escalating trade wars between China and the US and European governments over wind and solar power and air travel.

In an aggressive move ahead of a summit meeting with EU leaders next week, China this week banned its airlines from participating in a European carbon tax on air travel.

China has already warned of a trade war in air travel and claims the support of other nations, including India, Russia and the US.

Meanwhile, the US International Trade Commission ruled unanimously in November that Chinese solar panel and cell imports were harming the American solar manufacturing industry, and the US Department of Commerce may impose retrospective duties on imported Chinese renewable energy products.

The US action was initiated by German manufacturer SolarWorld AG, which has seen its grip on the world’s solar panel industry destroyed by the rise of cheaper Chinese exports.

China is facing the same trade issues in Europe, where the financial performance of wind and solar stocks has been in freefall as financially straitened governments wind back taxpayer-funded subsidy schemes to promote renewable energy use.

At one level, China’s carbon tax plan can be seen as rearguard protection for its heavily state-subsidised renewable energy sector. But there are deeper messages as well.

According to John Lee, adjunct associate professor at the Centre for International Security Studies at the University of Sydney and a visiting fellow at the Hudson Institute in Washington, China’s new language on climate change recognises that it has lost its traditional arguments against taking domestic action.

These arguments are that the developed world is responsible for past carbon emissions and therefore must take responsibility for future cuts. In addition, with 800 million people still living on less than $2 a day, China’s primary responsibility is economic growth.

China’s plans remain firmly rooted in a policy of “economy first”. And the country’s lead negotiator on climate change, Su Wei, says China believes the system of different treatment for developed and developing countries should remain in place.

Lee sees China’s carbon tax plans as an attempt to win a long-standing argument with the West over who should be responsible for carbon emissions, effectively shifting the burden to the largely foreign-owned export manufacturing sector.

Su argues that China considers a carbon tax to be one of the instruments that can be used to direct the economy towards low-carbon development, and he says senior officials are still debating whether they should even use the term “carbon tax”.

“Whether we call it a carbon tax – or environment tax or resource tax or even fuel tax – we have lots of taxes already. We need to carefully redesign the category and type,” he says.

China is also looking at a plan to put voluntary labels on low-carbon products, Su says, “in order to try to give a clear signal to business and industry”.

For Lee, such measures underscore the acute embarrassment China faced when it was blamed for the collapse of the overly ambitious climate change negotiations in Copenhagen in 2009.

“I think the Chinese have lost the argument on who should bear responsibility for climate change,” Lee says. “All that is being taken into account is how much is China emitting and how much are they due to emit in the future.

“The Chinese realise that whatever arguments they put forward, the pressure will be on them to do something about it, and I see the pronouncement of a carbon tax as some sort of token effort that they are serious about it.”

Lee says disputes over renewable energy and air travel must be seen in the broader context of reciprocal market access: “Even though it is not stated publicly, I think the Americans and the Europeans are privately negotiating a separate deal with China.

“They are pushing anti-dumping measures and the currency issue, but what they really want is market access to the protected sectors of the Chinese economy,” he says. “If the US and European firms can get that, then you will see America and Europe become a lot less vitriolic about the anti-dumping measures.”

The list of protected industries has been a movable feast. It used to be sectors such as telecommunications, construction, heavy industrial machinery, mining, chemicals and media. But in the past few years China has included renewable technologies, IT platforms and the energy sector.

“The big concern the West has,” Lee says, “is that China has shown it will preserve every significant, important sector for state-owned enterprises in the name of helping national champions.”


Dying to Give a Green Tick to Nike

Posted by admin on February 20, 2012
Posted under Express 161

Dying to Give a Green Tick to Nike

“Just do it” or “Just dye it.” That might be a fitting twist on Nike’s iconic slogan after the announcement that it is adopting a waterless dyeing technology that uses recycled carbon dioxide to colour synthetic textiles. The process could eliminate the use of countless billions of gallons of polluted discharges into waterways near manufacturing plants in Asia, where much of the world’s textile dyeing occurs. Green Biz has the story. Read More

By Joel Makower in Green (7 February 2012):

“Just dye it.” That might be a fitting twist on Nike’s iconic slogan after today’s announcement that it is adopting a waterless dyeing technology that uses recycled carbon dioxide to color synthetic textiles.

The process, which the company has been exploring for eight years, could eliminate the use of countless billions of gallons of polluted discharges into waterways near manufacturing plants in Asia, where much of the world’s textile dyeing occurs. On average, an estimated 100-150 liters (about 26-40 gallons) of water is needed to process one kg (2.2 pounds) of textile materials. Industry analysts estimate that more than 39 million tons of polyester will be dyed annually by 2015.

The waterless dyeing process, developed by Netherlands-based DyeCoo Textile Systems — the name “DyeCoo” comes from conflating “dyeing” with “CO2” — will begin to show up on Nike products later this year. It utilizes a supercritical fluid carbon dioxide, or SCF, technology, so called because it involves heating carbon dioxide to above 31º C (88° F) and pressurizing it. At that stage, it becomes supercritical, a state of matter that can be seen as an expanded liquid or a heavily compressed gas. DyeCoo’s process was launched last fall after 11 years in R&D.

Water is used as a solvent in many textile pretreatment and finishing processes, such as washing, scouring, bleaching, and dyeing. Water scarcity and increased environmental awareness are global concerns. Textile coloring and treatment accounts for between 17 percent and 20 percent of global industrial pollution, according to The World Bank, including 72 toxic chemicals in water solely from textile dyeing, 30 of which are cannot be removed using conventional treatment techniques.

SCF CO2 technology already is utilized at scale in other industries such as the decaffeination of coffee and the extraction of natural flavors and fragrances. DyeCoo is believed to be the first company to successfully apply the SCF CO2 process to the commercial dyeing of polyester fabric, and research is underway to apply the technology to cellulosic and synthetic fabrics.

Making the switch “wasn’t that difficult,” Eric Sprunk, Nike’s VP of Merchandising and Product, told me recently. “The biggest resistance was an investment in the way things are done today. But I don’t think it’s going to be difficult going forward to dye textiles using zero water. That’s an easy sell for anyone in the apparel industry.”

Moreover, he said, the cost wasn’t prohibitive. While Sprunk wouldn’t disclose the price differential for the waterless technology, he said, “We’re not going to be at a cost-disadvantage almost from the get-go.”

Sprunk added: “This is a game-changer for us.”

DyeCoo hadn’t been an existing Nike supplier, a terrific case study of an innovative young company potentially disrupting global markets. “When we met up with them, they had the IP [intellectual property] and the appetite and motivation to do this on a large scale,” said Sprunk. He noted that DyeCoo, which manufactures the dyeing equipment, will sell its technology not just to companies in the Nike supply chain, but also to Nike’s competitors. “Our intention and belief is that dye houses and textile manufacturers for other brands will have access to this.”

According to DyeCoo, the environmental benefits of its technology include the elimination of water consumption and discharges, the elimination of wastewater as well as effluent from the drying process, reductions in energy use and air emissions, faster dyeing time, and the elimination of surfactants and other chemicals used in many dyes. It says that 95 percent of the CO2 used in the process is recycled.

In addition, the process requires less re-dyeing, another massive water consumer. According to Pawan Mehra, Managing Director at cKinetics, which helps early-stage companies in emerging economies adopt sustainable technologies, “We have seen 4-6 times the amount of energy and water being used by dye-houses when fabric is meant for US or EU markets, as compared to the energy and water spent for fabric going to other markets.” The reason, he says, is that US and EU buyers demand exact color-matching, requiring more frequent re-dyeing.

(Ever since Mehra first shared this factoid with me a couple years ago, I’ve wondered why some sustainably minded apparel company — a Patagonia, say — doesn’t end this practice and proudly advertise that “Our Shirts Don’t Match!” In addition to explaining why, it could point out that most of us buy only one shirt anyway — and why would we want it to look exactly like everyone else’s?)

I asked my friend, Summer Rayne Oakes — model, activist, and co-founder of Source4Style, which helps designers find sustainably source materials — about Nike announcement. She applauded the move, calling it “a manifestation of the general movement within the industry to reduce water, energy, and chemical consumption.” Oakes explained that a few other textile and apparel companies are already engaged with water-reduction techniques, including Huntsman Dyes, which recently came out with water- and energy-efficient reactive dyeing technologies for natural materials (Huntsman is a Source4Style sponsor); Levi Strauss & Co., which in 2010 launched a Water<less campaign; and Air-Dye, another waterless dyeing technology for polyester and other synthetic materials, which has done large-scale applications for brands like Jones Group, Argenti, Title Nine, MycraPac, Marks & Spencer, Asics, and Wacoal. Air Dye’s technology “allows for greater breadth of design options than Dyecoo’s because the application allows you to dye very different prints or colors on opposite sides of the fabric,” she noted.

Oakes, who recently produced two brief, fun videos on water-saving textile technologies — see here and here — added, “I believe that water is going to be — and is starting to become — one of the major focus points for apparel brands. It’s the new ‘organic’ — that is, it’s going to be a major buzzword now.”

Joel Makower is chairman and executive editor of GreenBiz Group Inc., producer of