Global Sustainabilty Index – The Winners and Losers

The annual review of the Dow Jones Sustainability Indexes has welcomed 48 new companies and deleted 46. The biggest deletions by market capitalisation are Toyota Motor, Royal Dutch Shell and UniCredit. BP had previously been cut. SAM, the investment boutique focused exclusively on Sustainability Investing, together with Dow Jones Indexes, a leading global index provider, earlier this month announced the results of the 2010 annual review for the Dow Jones Sustainability Indexes.

Giles Parkinson in Climate Spectator (19 September 2010):

The $US200 million spent by BP on its “Beyond Petroleum” marketing campaign seems to have come to nothing. Although the campaign was responsible for its inclusion in a slew of environmental, ethical and sustainable stock indices, BP is now firmly on the outer, courtesy of the gulf oil disaster and attention focused on a litany of environmental disaster across its portfolio.

Its latest exclusion comes from the FTSE4Good index for ethical companies which, in its semi-annual review last week, cited the company’s poor response to the oil spill, as well as “the environmental and social impact and its history of similar incidents.”

BP had previously been cut from the Dow Jones’ sustainability index and from Calvert Investments ethical SAGE fund, which said in June that the oil spill and its “almost unfathomable environmental and economic impacts are due first and foremost to the irresponsibility of BP, but also to critical lapses by key agencies of the US government.”

Ins and outs

Meanwhile, the annual review of the Dow Jones Sustainability Indexes has welcomed 48 new companies and deleted 46. Among those included are Standard Chartered, Morgan Stanley and ArcelorMittal, while the biggest deletions by market capitalisaton are Toyota Motor, Royal Dutch Shell and UniCredit.

The annual review of the DJSI family is based on an analysis of corporate economic, environmental and social performance, assessing issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labour practices. Australian companies cited as sector leaders include ANZ Banking Group (banks) and GPT Group (real estate). AGL & Origin Energy are the only Australian companies to be included among the 13 companies in the electricity sector. There are a total of 18 Australian firms on the Index for 2010/11.

New item

Professor Ruyin Hu, the head of research at the Shanghai Stock Exchange – the world’s sixth largest stock m

arket by market capitalisation and the largest outside the US by turnover – gave some interesting insights into environmental and governance issues during a presentation at the Responsible Investment Association of Australian conference in Sydney last week.

Hu says the exchange has introduced new rules to make it harder for polluters to access capital markets, requiring any company conducting an IPO or a secondary market offering to undergo a full environmental assessment by the Ministry of Environmental Protection. He said stiff penalties, trade suspension and plant closures were being applied to companies that failed to promptly disclose environmental incidents, and one third of companies – mostly those with dual listings overseas and those on the SSE corporate governance index – had issued separate CSR (corporate social responsibility) reports.

One of the problems, though, was a lack of uniform CSR reporting standards, and the need for standard guidelines on environmental disclosure for companies in extractive industries. “The challenge for us is how to make disclosure practical and effective, because if we require too much information, some of the information might be useless.,” Hu says. “We need to make sure it is useful.” Hu says that socially responsible investment in China accounts for about 1 per cent of the total by mutual funds, which is not far off the global average. He says the SSE is to launch a sustainable development index of 40 companies, in conjunction with sustainability research company ECPI.

Source: www.climatespectator.com.au

SAM and Dow Jones Indexes announce results of the Dow Jones Sustainability Indexes Review 2010

SAM, the investment boutique focused exclusively on Sustainability Investing, together with Dow Jones Indexes, a leading global index provider, earlier this month announced the results of the 2010 annual review for the Dow Jones Sustainability Indexes.

Following SAM’s largest global analysis of corporate sustainability leadership, 48 companies will join the Dow Jones Sustainability World Index (DJSI World), while 46 firms will be deleted – resulting in a total of 318 index components. The largest additions (by free-float market capitalization) to the DJSI World include Standard Chartered, Morgan Stanley and ArcelorMittal while the biggest deletions (by free-float market capitalization) from this index are Toyota Motor, Royal Dutch Shell and UniCredit.

The review also results in 27 additions to and 19 deletions from the European Dow Jones Sustainability Europe Index, 19 additions to and 22 deletions from the Dow Jones Sustainability North America Index, as well as 36 additions to and 25 deletions from the Dow Jones Sustainability Asia Pacific Index. All changes will become effective with the opening of equity markets on September 20, 2010.

The DJSI follow a best-in-class approach and include sustainability leaders from each industry on a global and regional level respectively. The annual review of the DJSI family is based on a thorough analysis of corporate economic, environmental and social performance, assessing issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labor practices. It accounts for general as well as industry specific sustainability criteria for each of the 57 sectors defined according to the Industry Classification Benchmark (ICB).

In addition, SAM also identified the top company for each of the 19 Supersectors that the 57 sectors roll up to. The new 2010/2011 Supersector leaders are Air France-KLM (Travel & Leisure), AkzoNobel (Chemicals), ANZ Banking Group (Banks), BMW (Automobiles & Parts), EDP Energias de Portugal (Utilities), GPT Group (Real Estate), Investimentos Itaú (Financial Services), Lotte Shopping (Retail), Nokia (Technology), Pearson (Media), Philips Electronics (Personal & Household Goods), Roche (Health Care), Sasol (Oil & Gas), Siam Cement (Construction & Materials), Swiss Re (Insurance), Telefónica (Telecommunications), TNT (Industrial Goods & Services), Unilever (Food & Beverage) and Xstrata (Basic Resources).

For more information on the Dow Jones Sustainability Indexes and the changes resulting from this year’s review, see the website source.   

Source: www.sustainability-indexes.com

Danish Company In Chinese Bio Fuel from Plant Waste Venture

In a laboratory in northern China, technicians are breeding billions of micro-organisms in test tubes to create enzymes — proteins that can turn plant waste into clean-burning biofuels. The facility near the port city of Tianjin belongs to Novozymes, a Danish biotechnology company and one of a growing number of foreign firms in China benefiting from Beijing’s massive investment in green energy. Beijing has pledged to spend US$738 billion developing clean energy as it seeks to meet a target of generating 15% of its energy from renewable sources by 2020.

Allison Jackson in Sydney Morning Herald (20 September 2010):

In a laboratory in northern China, technicians are breeding billions of micro-organisms in test tubes to create enzymes — proteins that can turn plant waste into clean-burning biofuels.

The facility near the port city of Tianjin belongs to Novozymes, a Danish biotechnology company and one of a growing number of foreign firms in China benefiting from Beijing’s massive investment in green energy.

“The situation has never been better,” Michael Christiansen, president of Novozymes China, told AFP in an interview.

Beijing has pledged to spend 738 billion US dollars developing clean energy over the next decade as it seeks to meet a target of generating 15 percent of its energy from renewable sources — mainly wind and water — by 2020.

China’s vast market, deep pockets and favourable policies for clean technology — a key theme of last week’s World Economic Forum’s “Summer Davos” in Tianjin — are attracting a growing number of foreign companies which face a severe funding shortage in their home markets due to the global crisis.

“I think China is seen as a very good market to commercialise technology at scale and there is a great market to try to generate long-term competitive advantage around clean technology,” Ernst & Young analyst Ben Warren told AFP.

China leapfrogged the United States to become the most attractive market for renewable investment this year, the global accounting firm said in a report published this month.

It was also the most attractive market for investment in wind power after Beijing announced plans to launch 90,000 mega-watts of wind capacity by 2015, the report said.

Beijing’s pledge last year ahead of global climate talks in Copenhagen to reduce carbon intensity — the measure of greenhouse gas emitted per unit of economic activity — by 40-45 percent by 2020 based on 2005 levels has been a beacon to foreign companies, analysts said.

“Things are tough for companies here (in the West) — we have a shortage of debt financing,” said Nicholas Parker, executive chairman of US-based clean technology research firm Cleantech Group.

“The money for deployment, for building wind farms or for building a factory where you tend to use debt financing, has dried up due to the crisis on Wall Street. That shortage doesn’t exist in China.”

Local government officials — threatened with the loss of their promotion if they fail to meet energy reduction targets — are falling over themselves to attract foreign investment in clean technology, offering firms free land and money for research and development.

State-owned banks also offer loans to green technology firms at much lower interest rates than those available in the United States, according to a report by US think tanks Breakthrough Institute and the Information Technology and Innovation Foundation.

“China currently has what seems like the most aggressive incentives for production of renewable energy and the closest thing to a coherent policy,” said Michal Meidan, an analyst at political risk research firm Eurasia Group.

Demand for financing in the clean energy technology industry could reach two trillion yuan (297 billion US dollars) in the next decade, the China Daily reported this month, citing a government official.

To meet these growing needs for money, China could create a market for yuan-denominated “green bonds” to support the environmentally friendly sector, said Gao Cailin, a finance official in the northeastern province of Jilin.

China — whose pollution woes have been worsened by decades of rampant economic growth — is pushing harder than Western governments to develop clean energy technology because it is “mission critical”, said Parker.

“This is essential in China whereas Western countries think maybe today, maybe tomorrow,” he said.

Despite its eagerness for foreign investment, Beijing has sought to protect certain domestic industries such as wind power from overseas competition.

“They only let companies in when they think they can benefit from it,” said Thomas Maslin, an analyst at IHS Emerging Energy Research.

Foreign companies also face significant challenges in China such as the lax protection of intellectual property and policies favouring Chinese companies.

Novozymes has been in China for 15 years and now counts the market as its second biggest after the United States, underlining the potential for growth in the world’s second-largest economy.

“China has the interest and the policies and the funding to drive green technology,” said Christiansen.

“This is not the flavour of the day — it will last for many, many years. We are just seeing the start of it.

Source: www.news.smh.com.au

Sustainability on Show: Green Zone Drive & Pixel Building

Melbourne’s Green Zone Drive public event, from 1-8 October, offers a unique experience for Melburnians, allowing them to physically test and touch the cars and drive the Melbourne Green Zone circuit. Also in Melbourne, concrete is one of the ”bad guys” when it comes to greenhouse gas emissions, so when Grocon set out to build its Pixel building in Melbourne as a sustainability landmark, the company had to find a solution.

Lord Mayor Cr Robert Doyle Launches World-First Low Emissions Vehicle Event

Melbourne’s Lord Mayor Cr Robert Doyle earlier this month launched the Melbourne Green Zone, a world first, low emission car event that will offer the public a chance to test-drive the cars that are the future of sustainable and clean motoring.

The Melbourne Green Zone Drive public event, which runs from 1st to 8th October, offers a unique experience for Melburnians, allowing them to physically test and touch the cars and drive the Melbourne Green Zone circuit. The event is supported by the RACV, Victorian Department of Transport, Future Climate Australia, and EPA Victoria.

The Melbourne Green Zone Drive website (www.greenzonedrive.com.au) was launched at Green Zone HQ in the Docklands and Lord Mayor Cr Robert Doyle said he was excited that Melbourne is again leading the way.

“I’m delighted to be a part of this initiative, and am proud that Melbourne is the first city in the world to hold an event such as this,” Cr Doyle said.

Cr Doyle also said that Melburnians lead the way when it comes to issues concerning the environment and that Green Zone is a perfect opportunity to experience the future of clean motoring.

“Melburnians are at the forefront of taking action against climate change and the Green Zone drive is something that will be embraced by all people in the community,” Cr Doyle said.

Christopher Zinn of Consumer Group Choice, who was also present at the launch hailed the Green Zone as the best new initiative in green motoring.

“Allowing the consumer to physically see and test the cars is a world leading idea and I applaud the Melbourne Green Zone for offering Victorians the chance to make sustainable choices,” Zinn said.

A wide variety of Australia’s lowest emitting vehicles will be available for the general public to sample; from the diesel-powered Volvo C30 DRIVe, to the Toyota Hybrid Camry, and the petrol powered Hyundai i20, including the zero-emission Mitsubishi i-MiEV electric car. Vehicles from Audi, BMW, Citroen, Ford, and MINI will also be available to test drive.

The public event will run from 1st October to 8th October – anyone interested in booking a test drive, log on to the website.

Source:  www.greenzonedrive.com.au

Philip Hopkins in The Age Business Day (20 September 2010):

Concrete is one of the ”bad guys” when it comes to greenhouse gas emissions, so when Grocon set out to build its Pixel building in Melbourne as a sustainability landmark, the company had to find a solution.

Concrete is a mix of cement and aggregate – coarse rocks, pebbles and fine sand – and production of a tonne of cement creates about a tonne of carbon dioxide emissions. It’s probably the most energy intensive industrial manufacturing process in the world.

This is mainly due to cement’s ingredients – shale and clay, limestone and chalk – being burnt in a kiln to form clinker, which is then ground down into Portland cement. The chemical reaction arising from this heating process and the energy used to drive the kiln creates the carbon dioxide.

Howard Titus, technical manager of Grocon Constructors, knew he faced a big challenge when asked to work on Pixel. As the company’s concrete expert, he has been involved in many of Grocon’s big city projects of the past 20 years – 120 and 101 Collins Street, Eureka Tower, Park Hyatt, Crown Casino, AXA, Media House and the MCG, to mention a few.

Mr Titus identified the reclamation and re-use of concrete waste as a key way to cut emissions. Working with Boral Concrete, the Grocon team after 12 months of intense trials came up with ”Pixelcrete”, which uses 60 per cent less cement and 100 per cent recycled and reclaimed aggregate. Up to 92 per cent of the weight of a cubic metre of the concrete is industrial waste, recycled or reclaimed material.

”The emphasis was on recycling, but we also made concrete innovative. For the first time, we used plasticised concrete for suspended post-tension slabs,” Mr Titus told BusinessDay.

The process required strict quality control due to the high variability in the quality of recycled aggregate; the low cement content meant there was a high margin for failure in concrete strength; and care was taken on the ratio of water to cement. ”Too much water can be poison for concrete,” he said.

The concrete was pumped but took longer to settle. The result was a workability identical to standard concrete that satisfied official Australian standards, he said.

The mix achieved the three points required under the Green Building Council of Australia’s concrete credit scheme.

Pixelcrete was used for piles, groundworks and slabs, post-tensioned suspended slabs and columns in the $4 million Pixel building on the old CUB site at the northern edge of the CBD.

It achieved a six-green-star office design rating – the GBCA’s highest award rating – and aims to achieve similar ”green” ratings from the British and American schemes.

Pixel’s other sustainability measures include extensive use of rainwater, a green roof with wetland edges, double-glazed windows with external shade panels that block solar heat and glare, an under-floor air distribution system, wind turbines, and solar panels that track the optimal sun point in the sky.

Source: www.theage.com.au

There was a full report and interview on By Design on Radio National ABC last Saturday:

The Pixel building, as it is known, is the new Melbourne city headquarters for the developers Grocon – known for many of Australia’s major buildings. Eureka building on Melbourne’s Southbank is one of their most prominent. This is considered one of the tallest buildings in Australia. The Pixel building, though, is small, and an experiment in all things green. The building’s architects Studio 505 are one of Australia’s most innovative and thoughtful firms, with the co-founder Dylan Brady coming out of LAB Architecture, the firm that designed Melbourne’s Federation Square. For the full report go to the source.

Source: http://www.abc.net.au/rn/bydesign/stories/2010/3005828.htm?site=gippsland and http://www.pixelbuilding.com.au/

Dutch treats: Making Concrete Green & Technology Clean

Scientists at Eindhoven University of Technology in the Netherlands have developed a paving material that actually eats pollution, claiming it could soon become a crucial tool for improving air quality in urban areas. While three Dutch scientists say that scarcity, climate change and pandemics are examples of global problems that are caused partly by technology. But they can also be solved by new technologies, according to their book “2030: Technology that will change the world”.

Published on: 16 September, 2010

Scarcity, climate change and pandemics are examples of global problems that are caused partly by technology. However, they can also be solved by new technologies, say Technische Universiteit Eindhoven (TU/e) scientists Rutger van Santen and Djan Khoe, and journalist Bram Vermeer in their book “2030: Technology that will change the world”, published by Oxford University press.

The need to write the book sprung from the urgent realization that for the first time in human history, certain crises are genuinely global in scope, say the authors. The 2007 food shortages occurred in Asia, Africa and South America simultaneously, for example. 2008’s recession was global, and after the flu outbreak in 2009 it took the virus only days to travel the world.

For their book, Van Santen (professor Catalysis and former Rector at TU/e), Khoe (professor Electro-optical Communication) and science journalist Vermeer interviewed a large number of authoritative experts. Among the interviewees are Hans Blix (head of the UN research in Iraq), Craig Venter (explorer of human DNA), Susan Greenfield (brain scientist) and Hans Joachim Schnellnhuber (climate scientist).

The book’s creators started out by listing the greatest problems facing the world today. After having done so, they selected independent experts and asked them: What kind of technological and scientific breakthroughs are needed to prevent these threats from manifesting themselves? The authors confess some of the solutions that are put forward in the book to be ‘controversial, yet realistic’. They hope their book can give some direction to the global research agenda.

The English book will be on sale as of today at Oxford University Press. A Chinese translation is planned for 2012 (Mandarin Chinese), after the release of a Korean edition in 2011.

2006 already saw the publication of a Dutch precursor to the book, titled ‘Intelligent pills and other technology that will change our lives’*. It was written on the occasion of TU/e’s 50th anniversary. Still, the writers felt the need to tell the whole world about their ideas. The new book is a thoroughly re-written version of the 2006 publication, and includes a greater number of renowned international experts.

Rutger van Santen has been a professor at TU/e since 1988. From 2001-2005, he held the position of Rector at the university. He was awarded the Spinoza Prize in 1997, which is the highest scientific award in the Netherlands. Professor Djan Khoe is Fellow of both the Institute of Electronic and Electrical Engineering and the Optical Society of America. With his research group at Philips Research, he set the world record for data transport via fiberglass in 1995. In collaboration with Keio University, he subsequently beat the world record for data transport via polymer optical fibers several times.

Source: w3.tue.nl/en/

By Matt Ford, for CNN eco solutions:

Concrete isn’t usually considered an environmentalists’ friend, but a remarkable new technology could soon be turning the gray stuff green.

Scientists at Eindhoven University of Technology in the Netherlands have developed a paving material that actually eats pollution, claiming it could soon become a crucial tool for improving air quality in urban areas.

The problem in many cities is that vehicle exhausts emit nitrogen oxides, which cause acid rain and smog that damages not only human health and quality of life but also the fabric of buildings.

But the new concrete is coated with titanium dioxide, which is a photocatalytic material, meaning it removes the nitrogen oxides and uses sunlight to convert them into harmless nitrate that is washed away by rain.

Air regulations are becoming stricter, and in many busy streets the air quality standard is still failing.
–Professor Jos Brouwers

“In our tests we have found nitrogen oxide reductions of 35 to 40 percent in areas paved with the new concrete,” Professor Jos Brouwers of the Department of Architecture, Building and Planning at Eindhoven University of Technology told CNN.

Titanium dioxide is already commonly used to coat surfaces that are hard to clean — it is a component in some paints — because it functions as a self-cleaning chemical, meaning the new concrete has the additional advantage that it breaks down algae and dirt so its surface stays clean.

Brouwers’ discoveries are part of a race to explore new ways of using new technology to mitigate pollution. Chinese researchers are believed to be experimenting with nanotech polymers to coat exhaust pipes, and others across the world are experimenting with titanium dioxide.

Following extensive laboratory tests the pollution-eating concrete has now been trialed in the Dutch town of Hengelo, where 1,000 square meters of the road’s surface were covered with air-purifying paving stones.

As a control, another area of 1,000 square meters was surfaced with normal concrete paving slabs. Samples were then taken from the air at between 0.5 and 1.5 meters above the surface.

“The air-purifying properties of the new paving stones had already been shown in the laboratory, but these results now show that they also work outdoors,” said Brouwers.

“[The concrete] could be a very feasible solution for inner city areas where they have a problem with air pollution. We will continue measuring to the end of the year because the authorities need to be convinced it is a feasible technology.

“Air quality is an important issue and they know it is something important to consider.”

The paving slabs used in the tests have been made by, and co-developed with, manufacturer Struyk Verwo Infra, and are already available for use. But the applications of the technology are not limited to paving. Where an asphalt surface is required, the concrete can be mixed with normal asphalt and, according to Brouwers, it can also be used to make walls.

“You can apply it very easily in the normal production,” says Brouwers. “It doesn’t require any maintenance; it doesn’t wear off with normal use.”

Predictably the material is around 50 percent more expensive than normal concrete, but Brouwers is adamant that when the total cost of fitting is included, the overall increase in cost is only 10 percent.

“Sure, it is slightly more expensive, but if you look at the total pavement costs where the stone is one part — there is also labor, foundations etc. to calculate — then you are only looking at a slightly higher cost,” he says.

Some may argue that it is more important to try and tackle pollution at the source rather than mitigate its effects. But Brouwers sees the new concrete as a pragmatic response to a very real problem — a second line of defense — and one element in a suite of measures that should be adopted to improve air quality in our cities.

“Cars are subject to more and more stringent regulations all the time, and they are becoming cleaner; so are factories,” he says.

“But at the same time air regulations are becoming stricter and stricter and in many busy streets the air quality standard is still failing, so [the concrete] is a valuable addition.

“Of course you have to treat [pollution] at the source, but standards are so strict now and air quality regulations are still not met, so [the concrete] can be useful.”

Source: www.edition.cnn.com

Acronyms Which Count: PES, UNEP & CNN

One of the biggest dilemmas for conservationists is that preserving the environment often conflicts with the needs of the poorest communities who live there. In many areas, forests of outstanding biodiversity are being chopped down by poor subsistence farmers in need of firewood and land to grow the food they need to survive, ecologists say. Enter Payments for Environmental Services, or PES. CNN Eco Solutions reports.

By Catriona Davies for CNN eco solutions:

London, England (CNN) — One of the biggest dilemmas for conservationists is that preserving the environment often conflicts with the needs of the poorest communities who live there.

In many areas, forests of outstanding biodiversity are being chopped down by poor subsistence farmers in need of firewood and land to grow the food they need to survive, ecologists say.

Enter Payments for Environmental Services, or PES, an idea gaining popularity among conservationists as a way of allowing communities to benefit from conservation of their environment.

The idea is to that local communities are paid depending on the outcome of agreed objectives, such as stopping forest clearance, poaching and wildfires.

The United Nations Environment Program is testing PES in several countries as a way of reducing deforestation. While many conservationists like the idea of PES, few have tested empirically whether it actually works.

We don’t want to make anyone worse off than they were at the start.

Scientists from the University of East Anglia are carrying out a controlled experiment in Rwanda to compare how the forest is conserved in communities that receive payments compared with those who do not.

The three-year ReDirect Rwanda project, which began last year, involves eight villages around Nyungwe National Park, one of the largest mountainous forests in Africa. Four of the villages receive payments — paid to every individual household — if woodcutting, bamboo cutting and snaring are reduced in their areas, and four villages do not receive payments.

Nicole Gross-Camp, a researcher on the ReDirect Rwanda project, said: “In my previous ecology work, I always felt there was a disconnection between conservation and the communities, usually subsistence farmers, living on the periphery of national parks.

“I found PES an intriguing concept that could marry these two aims of development and conservation. This is an empirical study to see how well PES can do that.

“The major issue is whether conservation and development are compatible and whether we can address these issues simultaneously. That is, whether people can find alternatives to what they are currently using.

“The outcome will be far-reaching for other potential places where this could be established.”

She said Rwanda was a suitable place to test PES because it is one of the most densely populated countries in Africa, mainly made up of poor subsistence farmers. The Rwandan government has made a strong commitment to conservation, and Nyungwe National Park has a high biodiversity and a number of endemic species, she added.

Some local people carry out illegal wood collection, bamboo collection, snaring of animals and honey collection in the national park in order to survive, Gross-Camp said.

Bamboo is widely used for building homes, roofs, furniture, bedding, baskets and crafts. Animals, such as Gambian rats, duikers and bush pigs, are snared for food. Honey collection harms the forest because people usually cut down trees and smoke out bees, which often starts wildfires, Gross-Camp said.

“There are alternative sources of these products, but whether they are sufficiently accessible and affordable remains a question,” she said.

Gross-Camp said that so far the project seemed to be working, with all but one of the communities reducing harmful activities in the forest.

She added: “Now we need to assess how this has affected the communities’ livelihoods. We don’t want to make anyone worse off than they were at the start.”

One of the challenges for PES is to be sustainable in the long term. The ReDirect Rwanda project has funding from the European Research Council, but if people are to make lasting lifestyle changes, their payments need to be guaranteed beyond the end of the project.

“Who will continue to pay when we finish?” said Gross-Camp.

The answer, conservationists hope, is that large businesses will make the payments to offset their environmental activities.

However, Josh Donlan, director of the U.S.-based Advanced Conservation Strategies, said it might take regulation to persuade large businesses to contribute.

“More and more countries are looking into PES programs run by governments, but I think a lot of people would like to see more payment programs with the private sector as the ‘buyer’, said Donlan.

“It’s hard to persuade the private sector to engage in PES schemes voluntarily, so that might have to be through regulation.”

Neil Burgess, Professor of Conservation Biology at the University of Copenhagen, Denmark, advises the WWF and the United Nations Environment Program on PES. He is working on several UNEP-led pilot projects in Tanzania testing forest carbon payments to local communities.

Burgess said: “These projects have the potential to work and are starting to work, in that money is moving from companies and capital cities to local people — which has never happened before.

“That gives us hope for the future that big companies may start paying more farmers to change their land use.

“The biggest problem is actually getting the money to poor people in rural areas who do not have bank accounts or Internet banking.

“It becomes quite inefficient if you need staff to drive around in cars distributing money to individuals.”

In the case of ReDirect Rwanda, the project coincides with a government campaign to increase the use of bank accounts, so all payments are being made into bank accounts.

Still, some people have a day’s walk to reach their nearest bank, Gross-Camp said.

Source: www.edition.cnn.com

Lucky Last: Suddenly, green’s back in fashion

We have lift-off. Business wants a price put on carbon sooner rather than later and a chastened federal government, clinging to power with the aid of the Greens and three far-sighted independents, is getting the message.

The climate naysayers are diminishing and will soon be left behind altogether. There is no dodging the issue. World greenhouse gas emissions need to peak before 2020 and drop quickly thereafter. There is no time to lose, says Paddy Manning in Business Day.

Australia is a crucial player as the 15th largest emitter and a leading exporter of climate change. We are also one of the best-placed economies to shoulder the cost of climate mitigation and adaptation, and make the jump to a zero-emission future. Read More

Paddy Manning in Business Day (18 September 2010):

The need to save our environment is on the political agenda again.

WE HAVE lift-off. Business wants a price put on carbon sooner rather than later and a chastened federal government, clinging to power with the aid of the Greens and three far-sighted independents, is getting the message.

The climate naysayers are diminishing and will soon be left behind altogether. There is no dodging the issue. World greenhouse gas emissions need to peak before 2020 and drop quickly thereafter. There is no time to lose.

Australia is a crucial player as the 15th largest emitter and a leading exporter of climate change. We are also one of the best-placed economies to shoulder the cost of climate mitigation and adaptation, and make the jump to a zero-emission future.

Whatever combination of solutions you choose, we have options galore: abundant gas and uranium, and massive renewable energy resources that are economic to develop, especially wind and solar.

We have one of the world’s biggest retirement savings pools searching for predictable, long-term returns and a crying need for government bonds. Shovelling super into the sharemarket doesn’t cut it any more. If we choose to build genuinely clean energy infrastructure we can fund it, privately or publicly.

In June ANU climate scientist Will Steffen said he was increasingly advising investors who wanted to switch to low-carbon-emitting energy technologies. ”Our private sector sees that if we don’t start moving fast we could easily become a stranded country in a stranded economy … sitting on a big pile of coal no one wants.”

Economist Ross Garnaut, author of Australia’s Climate Change Review, told ABC radio on Thursday he reckoned coal demand would peak before 2020. That’s soon. Australia’s coal rush can’t last and, given rising food insecurity, it would be madness to let the coal industry push further into some of the best farmland in the country.

So, good on BHP’s chief coal miner Marius Kloppers, whose Wednesday speech was well timed to put climate action back on the political agenda.

That does not mean we should do what he says. We shouldn’t. Kloppers’s suggested ”mosaic of initiatives” would, in practice, lower the bar for industry, even below where it was set by the government’s failed carbon pollution reduction scheme.

Kloppers called for not one carbon price, but two: ”A combination of a carbon tax … and limited trading system – for example, for stationary electricity production only – is both easy to implement and effective”.

The combination of a carbon tax on liquid fuels (levied on petrol or diesel wholesalers, for example) and an ETS on the electricity sector and other forms of stationary energy (i.e. industrial use of gas or coal, not for power generation) would cover about 65 per cent of our emissions. But it would exempt trade-exposed emissions-intensive industries such as LNG and coalmining, aluminium smelting and alumina refining – which will account for roughly 20 per cent of the country’s carbon pollution by 2020.

Kloppers proposed a ”trade-friendly” regime that would rebate emissions costs for trade exposed industries in full, to prevent so-called ”carbon leakage” – when heavy polluters move offshore – until there is a global agreement on climate. Critics say this would remove any carbon price signal for exporters. Under the government’s proposed ETS, they would have received free pollution permits – initially equal to 94 per cent of annual emissions (or 66 per cent in the case of the LNG industry), and dropping gradually from there.

Although that high level of compensation was criticised heavily, the free permits at least gave polluters some incentive to reduce emissions. If they did reduce emissions, they could sell their unused permits.

A full cash rebate of emissions costs removes that incentive altogether. One market analyst described the proposal as ”extraordinary”.

The upshot? BHP pays less of any carbon tax, of course.

Whoopee for BHP’s Worsley Alumina refinery in Western Australia, for example, or its export LNG business which includes stakes in the North-West Shelf and Browse Basin joint ventures.

The company argues carbon rebates would be wound down in the transition to a full international agreement on carbon pricing. Maybe so. But the lack of an early price signal for heavy-polluting export industries is inconsistent with Kloppers’s desire for a broad-based system.

There’s a bit of inconsistency going around. While Kloppers is talking up the need for action on climate change, BHP is failing miserably to meet its own greenhouse targets because, according to a source close to the company, its main focus is on ”production, production, production”. In 2006 then chief executive Chip Goodyear said BHP would cut greenhouse gas emissions per unit of production by 6 per cent by 2012. By 2009 they were tracking at 3 per cent above the 2006 baseline. Carbon-based energy use per unit of production was supposed to fall by 13 per cent over the same period. Instead it has risen by 8 per cent. BHP’s report offered no excuse.

But Kloppers has given our post-election climate debate a kick-along this week, as did key players such as AGL Energy’s Michael Fraser and Business Council president Graham Bradley, who said a form of carbon price was ”inevitable”.

Resources and Energy Minister Martin Ferguson told G-Biz business was making a ”strong statement about the need for certainty for the purpose of guaranteeing investment in Australia, especially in electricity generation. More and more, the only section of the community with their heads in the sand are members of the Coalition led by Tony Abbott.”

All aboard.

Source: www.businessday.com.au

Turning over a Green Leaf?

This really is a case of thinking global and acting local, and even a bit of the reverse, this week. Strong words at the World Green Building Congress in Singapore for global action, while recognition at home and abroad for the sustainability and affordability of earth building. The World Economic Forum takes an Asian approach for its meeting in China, while the Major Economies Forum on Energy and Climate meets in New York next week. The UK Environment Minister tells it the way it is on climate and big business leaders in Australia finally accept the need for a price on carbon. Greg Combet gets the top Climate Change job in Australia but wants to stay loyal to coal! Malcolm Turnbull supports his leader but stays true to his climate credentials. Even confirmation that women get the climate science better than men and Spain gets the wind up in China. Nay, there’s a new way to sleep green. “Perchance to dream”, as Shakespeare would say.- Ken Hickson

Profile: Greg Combet

As Australia’s newest Minister of Climate Change and Energy Efficiency, former union leader Greg Combet has vowed to bring “common sense” to the climate change debate. And he has warned that he will fight for coal industry jobs as he pursues a price on carbon. An impossible task?  Or is he the one person who can do it?

Samantha Maiden in The Australian (13 September 2010):

THE nation’s new Climate Change Minister, Greg Combet, has vowed to bring “common sense” to the climate change debate.

And he has warned that he will fight for coal industry jobs as he pursues a price on carbon.

The former union leader has predicted the coal industry “absolutely” has a future as he pursues his three key policy reform objectives: pursuing renewable energy; energy efficiency; and the development of a carbon price for Australia.

Insisting the Climate Change portfolio was an economic reform challenge, he said: “You don’t take the back of the axe to the fundamentals of the Australian economy.”

Julia Gillard yesterday moved to stamp her authority on her new government after elevating her predecessor, Kevin Rudd, to the senior portfolio of Foreign Affairs and shifting Stephen Smith to Defence.

With 42 ministers and parliamentary secretaries, the front bench and junior ministry now outnumber Labor’s own back bench. Among the biggest winners were Senator Penny Wong, who was shifted from Climate Change to the important Finance portfolio, and Peter Garrett, who takes up the Schools portfolio, despite the insulation scheme debacle happening on his watch as environment minister.

Mr Combet’s new role puts him in cabinet for the first time.

As part of its deal to secure government, Labor signed a formal alliance with the Greens, whose policies include the eventual phasing out of the coal industry, Australia’s biggest export earner.

But in an interview with The Australian, Mr Combet said his background as a former coal engineer, union official and MP with coal workers in his NSW electorate meant he did not believe his job was to shut down the coal industry.

“I don’t agree with that. That’s not part of my job at all,” he said.

“I am acutely aware of the challenges that this policy presents. But people jump to these absolute positions, and I just don’t think that’s appropriate.

“I’ve got a responsibility to support those people’s jobs. The coal industry is a very vibrant industry with a strong future. What you’ve got to do is look to how we can achieve in the longer term things like carbon capture and storage for coal-fired power stations.”

Greens leader Bob Brown has described Australia as being like a heroin addict “feeding the habit” of the world’s reliance on coal. The party’s stated policy is to oppose development of any new coalmines or the expansion of existing coalmines and to phase out all existing coal subsidies. It wants to work towards stopping the development and granting of export licences for all new coalmines.

But in a statement last night, Greens senator Christine Milne, who has the party’s portfolio responsibility for climate change, said she did not intend to rehash the policy differences with Labor as she sought to build “trust” with the new Gillard government. “I have put in a call to Greg Combet to congratulate him and begin the exciting conversation,” she said.

“In the meantime, I hope we can all respect the delicate process of building trust between people coming from different policy positions so we can achieve the best outcomes possible for the climate.”

Mr Combet said his job as minister was to build a stronger, deeper consensus on climate change issues, including election campaign policies to develop efficiency standards.

During the election campaign, the Prime Minister vowed to ban new coal-fired power stations that use “dirty” technology and require that any power station built can be retro-fitted with developing clean-coal technology.

“We will never allow a highly inefficient and dirty power station to be built again in Australia,” she said. “If we are re-elected, Labor will ensure that all new power stations have to meet world’s best practice.”

But yesterday, Mr Combet said he was not in the business of applying the adjective “dirty” to coal.

“People will use whatever language they want. But you won’t hear me using it,” he said. “You do not take the back of the axe to the fundamentals of the Australian economy. We just work through it very carefully with reforms such as energy efficiency improvements, where you can reduce emissions quite significantly. With investment in renewable energy sources, which will help us reduce emissions significantly and work towards introducing a carbon price. The key thing about a carbon price, from my point of view, from the outset is that it created an incentive to reduce emissions . . . but do it sensibly. And we did do it with the CPRS (carbon pollution reduction scheme), with all the negotiations we had with industry. We’ve got to keep it on it a commonsense frame.”

Mr Combet said he believed he knew the industry “very well” but conceded he had a lot to learn, particularly about international negotiations.

He declined to criticise Senator Wong or Mr Rudd’s failure to deliver on an emissions trading scheme in the previous term, describing it as a complex area.

“I am certainly not going to criticise any of my colleagues. I mean, I’ve been involved in the portfolio over the past 18 months. People can criticise me too if they wish,” he said. “There’s no doubt that Kevin Rudd was fundamentally committed to dealing with climate change. The new PM is fundamentally committed. We were so close to getting it through.”

Source: www.theaustralian.com.au

Editorial in the Geelong Advertiser (14 September 2010):

“I’ve got a responsibility to support those people’s jobs. The coal industry is a very vibrant industry with a strong future. What you’ve got to do is look to how we can achieve in the longer term things like carbon capture and storage for coal-fired power stations.”

So says incoming Climate Change Minister Greg Combet.

Anyone unclear about the Gillard Government’s surrender to the bitter economics of tackling its erstwhile greatest moral challenge should be in the picture now.

Coal exports, like other resources exports, are holding this country’s finances together. And Australian coal’s contribution to greenhouse emissions is far greater among our customers than it is here.

The Government’s coffers, with their serious shortfalls, need everything they can get. Curbing coal-sourced revenue, especially without a new extra mining tax, is anathema to the Government. Never mind that jobs might suffer, too.

Greg Combet’s stance is pragmatic, pure and simple.

But, by necessity, his overtures toward a carbon price, renewable energy and energy efficiency through such efforts as carbon capture and storage will be longer term.

The fact right now is that the Government can’t afford such environmental advances unless it can sell more resources, like coal, overseas and cash in on the practice.

Source:www.geelongadvertiser.com.au

Be Prepared for Unavoidable Climate Change

“It is vital that we carry on working to drastically cut our greenhouse gas emissions to stop the problem getting any worse,” the United Kingdom Environment Secretary Caroline Spelman says. “But we are already stuck with some unavoidable climate change. Because of this, we need to prepare for the best and worst cases which a changing climate will entail for our country.”

By Louise Gray, Environment Correspondent, The Guardian  (13 September 2010):

Climate change is inevitable, says Caroline Spelman

For the past few years Government policy has concentrated on trying to make people turn off lights and grow their own vegetables in an effort to bring down carbon emissions.

But as global greenhouse gases continue to increase, with the growth of developing countries like China and India, and the public purse tightens, the focus will increasingly be on adapting to climate change.

The Government will set out plans to protect power stations from flooding and ensure hospitals can cope with water shortages during dry summers.

Since the beginning of the industrial era, the temperature has already risen by 0.8C, according to the Met Office.

Temperatures are expected to rise further because of greenhouse gases that are already “locked in” but will take decades to warm the atmosphere.

In her first speech on climate change since taking office Caroline Spelman, the Environment Secretary, will speak about the need for Britain to adapt to rising temperatures.

“It is vital that we carry on working to drastically cut our greenhouse gas emissions to stop the problem getting any worse,” she will say. “But we are already stuck with some unavoidable climate change. Because of this, we need to prepare for the best and worst cases which a changing climate will entail for our country.”

However environmental groups are nervous about the change in direction. They fear that the move away from tackling climate change is motivated by spending cuts rather than saving the planet.

They also point out that no new money is being offered to help companies or the public sector adapt to climate change, preferring to leave it to ‘the Big Society’ and forward thinking businesses to come up with the cash.

Lord Peter Melchett, policy director of the Soil Association, said it was dangerous to rely on adaptation rather than trying to mitigate the effects of climate change.

“If Caroline Spelman makes her first speech about adaptation and nothing about mitigation it spells out significant danger for all of us,” he said.

Mrs Spelman will be speaking in response to a hard-hitting report from the Committee on Climate Change (CCC), due out on Thursday.

The committee, set up to advise the Government on tackling climate change, is expected to recommend specific actions to protect against global warming. For example flood defences in coastal areas at risk of rising sea levels. Emergency plans are recommended for coping with heatwaves in the summer that could kill thousands of elderly people and more floods throughout the year.

The Confederation of British Industry (CBI) is also producing a report on the risk of climate change, which will also call for more efforts to prepare for the impact of rising remperatures.

The powerful group of businesses leaders will call for a new public information bank, easily accessible online, that explains the risks in the local area to companies and individuals. People will be able to type in a postcode and be told the likelihood of floods and droughts over the next few decades.

The CBI said the current information available needs to be simplified so that businesses and home owners can protect themselves in future.

In a speech to the CBI, Lord Henley, the climate change minister, will warn that business, public bodies and each individual will have to adapt to climate change.

“One way or another, climate change is going to affect every organisation and every individual in this country. If we are to thrive as a society, every organisation and every individual must adapt,” he will say.

Professor Beddington, the Government’s Chief Scientific adviser, will be in conversation with Sir David Frost today at the Garden Party to Make a Difference.

The festival in the grounds of Clarence House has been organised by the Prince of Wales to highlight the ways ordinary people can help to tackle climate change by reducing emissions.

In the “Frost on Sunday” style talk, Prof Beddington and Sir David will debate the arguments of the climate change sceptics that Prince Charles branded “extraordinary” last week.

Source: www.telegraph.co.uk

Global Green Building Boosted in Singapore

Chairman of the World Green Building Council Tony Arnel made a call for the property industry and governments to join forces and pick up where the international community had failed on climate change, while the Singapore Green Building Council President Lee Chuan Seng pointed to the strong collaboration between private and public partnership frameworks, as he announced that Singapore would need 18,000 green building trained personnel to deliver on the government ambitions for the sector. Tina Perinotto reports for the Fifth Estate from the Global Green Building Congress in Singapore.

By Tina Perinotto reporting from Singapore for the Fifth Estate (14 September 2010):

Chairman of the World Green Building Council Tony Arnel used his opening speech at the WGBC International Congress in Singapore on Monday to call for the property industry and governments around the world to join forces and pick up where the international community had failed on climate change.

Through the proven ability of industry and government to co-operate on green building developments it was possible to shift the market and create huge momentum for change, and much lower greenhouse gasses, he said.

Speaking at the Sands Expo and Convention Centre, Mr Arnel pointed to the huge potential for better building outcomes in the fast growing South-East Asian region.

South-east Asia was the world’s fastest growing region and green building was the fastest growing industry, Mr Arnel said.

In Singapore the nation’s government had already shown that it was willing to seize the opportunity to position its country as a hub for the region from which to spread expertise and showcase demonstration projects.

A key mechanism for the spread of the idea, Mr Arnel said, was the growth of green building councils themselves.

There were now almost 80 GBCs and a tool for the development of green building councils, available through the WGBC website, had shown high downloads, he said.

Another key mechanism was sectoral agreements that would create a framework for green building development between industry and government, with international harmonisation.

The theme dominated the first day of talks in “closed door” sessions between leaders of the world GBCs and pointed to the potential for business drivers and market demand from tenants and investors for more sustainable investment options, to cut through where political leaders have failed.

Green Building Sectoral Agreement

A sectoral agreement plan, now in draft form and distributed to the delegates, would “establish a clear and compelling case for tackling greenhouse gas emissions from the building sector by way of a multilateral agreement that is supported by industry, governments and other stakeholders.”

Mr Arnel said it would open the way for developed nations to use existing mechanisms, such as the United Nations’ Clean Development Mechanism, to invest in sustainable building in developing countries.

He said that too often, the objectives of emissions reduction and those of developing nations were often seen as being in conflict with each other, yet this was a way in which they could be aligned.

What was clearly needed, he said, was “national and international cooperation.”

“As we know only too well, in the current international structures for tackling climate change, buildings have been largely overlooked. “

The failure of last December’s Copenhagen Climate Change Conference to reach a binding agreement on emissions targets had delivered the built environment the “perfect platform to assume leadership in the low cost abatement arena.”

Updated International Panel on Climate Change data showed that that “aggressive implementation of current technology and practices could reduce building related emissions by between 40 and 70 per cent, which is far more than originally predicted.”

And the United Nations Environment Programme said that no other sector has such a high potential for drastic emission reductions as building.

Promoting the Common Carbon Metric

Essential to the framework would be to achieve a common carbon metric, currently under development by the WGBC, the Sustainable Building Alliance and United Nations Environment Protection Sustainable Buildings and Climate Initiative, or UNEP-SBCI.

This would harmonise the underlying methodology of measuring carbon used by the various rating tools around the world such as LEED from the United States, BREAMM from the United Kingdom and Green Star from Australia.

“The WGBC is working with UNEP-SBCI and SBA to provide methodologies for governments to use building performance data to establish baselines that give them an accurate picture of their building stock,” Mr Arnel said.

“This is critical for governments to be able to make commitments and take action to reduce their overall carbon footprint.”

Singapore is on board with green

On Singapore, Mr Arnel said that the government had already demonstrated it wanted to pursue a greener building agenda.

The government had supported the establishment of the SGBC, and had set a target to green 80 per cent of the building stock by 2030, with an allocation $100 million to assist in the task.

President of the Singapore Green Building Council Lee Chuan Seng, in his opening remarks to the Congress, also pointed to the strong collaboration between private and public partnership frameworks in his country.

Mr Seng announced a new product certification scheme to support the industry and said that Singapore would need 18,000 green building trained personnel to deliver on the government ambitions for the sector.

Already, he said, there were about 500 green buildings in the country, about 8 per cent of the building stock, and all new buildings were required to achieve certain levels of sustainability depending on their size.

The Government is holistic in its approach. Later in the Congress it outlined a target of 35 per cent reduction of energy use in buildings by 2030 based on 2005 levels and incentives for more sustainable buildings that included greater density bonuses.

Through his role as Victorian Building Commissioner Mr Arnel said he had been involved in the signing of a memorandum of understanding between the Singapore Government (through the Building and Construction Authority) and the Victorian Government on formal collaboration on building regulation.

“The MOU represents practical linkages where both the BCA and the Building Commission have much to offer each other and the region in a general building sense,” Mr Arnel said.

“Ongoing collaboration will see us develop energy efficiency and green building standards that can translate into use throughout Asia Pacific – for the benefit of the region and the world – and share our experience in market transformation to a low-carbon and sustainable built environment.

“It is very much in line with the WGBC model, which works with, connects and strengthens, green building councils around the world as they transform their marketplaces toward green buildings.”

He also said that the WGBC was “delighted to have worked closely with Singapore’s Building and Construction Authority and the Singapore construction industry as they have nurtured the SGBG through its formative stages to its graduation to established green building council status.

“The SGBC conference and the WGBC Congress, and their outcomes, will be integral to defining the role the green building sector plays in delivering meaningful cuts to greenhouse gas emissions – securing the future of the planet no less.

“I can assure you the WGBC is steadfast in its determination that the building sector is the key catalyst for change.”

Mr Arnel promised the councils would be continue to grow a collective voice on the world stage, especially leading up to the Cancun Climate Summit in December.

The Fifth Estate was a guest of the Green Building Council of Australia for WGBC International Congress, Singapore 2010

Source: www.thefifthestate.com.au