Monthly Archives: April 2012

Environmental issues for real

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When historians sit to appraise the environmental actions of the baby-boomer generation they will say that they tried, did some good things, but failed to grasp the big picture.

They will also record that the most important consequence of this failure was that people did not see the solutions that were there for the taking.

Instead they focused on issues that they believed were real but turned out, with the benefit of hindsight, to be only partially relevant.

I have just published a short ebook at Smashwords that takes a sideways look at 10 environmental issues and puts them into context. It collates a few examples around one core idea that may be useful to the historians of the future.

And it can be yours for less that the price of  a skim latte.

Environmental issues for real

Leadership is tricky when it comes to carbon

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It is easy to see why political leaders are reluctant to let markets run things. Unconstrained buying and selling usually gets away from itself, careering towards the lowest denominator, the financial bottom line.

Even those of a conservative persuasion who often understand how markets work can be wary of the unfettered force of rapid growth. They know that growth increases the risk of collapse when commodities of the day become scarce as they inevitably do. Unleash these volatile forces at your peril.

So here we are in Australia about to embark on a new market mechanism, the carbon price. From 1 July 2012 the top 500 emitters of greenhouse gases will, at the end of each financial year, have to pay for permits to cover their emissions.

At first the government will sell permits at a fixed price of  $24. Then, after three years, permits will be priced by supply and demand through an auction mechanism. And just to make sure the market doesn’t go haywire the government will control the permit supply and set a price floor and a ceiling for at least three years.

If the price bombs, liable emitters will have pay extra to true up to the floor price.

The carbon price mechanism also offers the option of creating credits from approved emission reduction activities under the Carbon Farming Initiative. Naturally it is not really carbon farming as the bulk of activity will be in landfill gas and tree planting.  The problem here is where the money goes. In simple terms emitters buying credits spend their money in the market but they buy permits from government. Too many credits and the revenues fail to match the commitments government has made to ensure passage of the policy in the first place.

Why all the constraints?

The answer is that this is not really a market mechanism, even though it looks like one. It is actually a policy to reduce “pollution” by using financial cost to change behaviour. The market part is just a way to try and wield the policy instrument with an even hand.

The risk, of course, is that keeping all that market power in check takes away most of the benefit too.

It’s a bit like having a guard dog on a chain. The burglar hears the growls and barks but if he trusts the chain will hold, there is no danger and he can pass into the house to pilfer the silver. Soon enough the owner realizes the risk taken by leaving the dog on a leash.

So what should happen? Well some honesty first. Despite the rhetoric, a carbon price is not about the atmosphere or saving the planet from global warming. It is the first of many steps in the transition of the economy away from dependence on fossil fuels.  A vital step it must be said, although not the only one.

Pricing carbon is a way to foreshadow the economic costs of transition, to get us used to the pain before it really starts to hurt, let’s say when oil is $200 a barrel. It also gets the transition started earlier than it might if it were left to unfettered market forces. Ironically, it also protects some of the assets that create the emissions by giving them a longer life. It is a choice of leadership that sees its role as smoothing the inevitable bumps in the economic road.

Obviously reducing emissions is also a smart hedge on the global warming issue.

Now we know what the whole business is about, maybe we can let the mechanism run.

The climate change action thing

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Here’s a thing.

The latest AustraliaSCAN survey suggests that fewer and fewer Australians are in favour of environmentalism whilst more people are saying they are against it. Environmentalism is dead?

Meanwhile the Victorian government has shelved its target to cut GHG emissions by 20% by 2020, put restrictions on wind turbines and given up on a planned ceiling on emissions from new coal-fired power stations.

And further north the new Queensland premier wants to pull out of a $500 million solar thermal project.

Rumour has it that conservative state premiers are considering challenging the Federal carbon tax in the High Court.

So, despite the international brownie points that Australia earns from having legislated for an ETS, the reality is some serious disinterest.

Now let’s take a look at the US – the Kyoto averse country that has been the climate action pariah and one of the main reasons put forward inaction anywhere else.

What’s going on there is:

  • EPA has announced proposal emissions limits on new power plants that would preclude coal-fired plants with carbon capture and storage.
  • US Energy Department set target of 75% reduction by 2020 in the price of solar energy systems to give solar a chance of meeting 14% of energy needs
  • US led the world with clean energy investment of US$56 billion
  • California, the 8th largest economy in the world, is introducing an ETS
  • tax credits of up to $7,500 for electric cars and by 2025 fuel efficiency in new cars will have to be doubled

A few years ago Australians walked across the Sydney harbour bridge for climate change action.

What happened?

Bob Brown retires

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What is the right thing to say when 67 year old who worked as a doctor for over a decade and devoted another 35 years of his life trying to keep us all environmentally honest with the last 15 of those as a beleaguered minority voice in Federal parliament?

“Thank you,” would seem appropriate.

Or maybe “Thanks Bob, enjoy your retirement. We’ll miss you” if you feel a little more familiar.

Headlinein Daily Telegraph on Bob Browns retirement

But no. Instead we get this crass headline in the Daily Telegraph.

Using the unexpected retirement of long time Greens leader Bob Brown to chirp about a tax that previously his party had blocked twice is just scraping the bottom of a very dirty barrel.

Your paper may sit as a political opposite to the Greens but there should be some common decency, a nod toward a worthy opponent however far his views may be from your own.

Imagine the uproar at home and overseas if on the back page of the newspaper  the headline was “Tedulkar quits to avoid touring Australia”, when all that happened was it was his time to retire.

In the past I have been critical of the Greens policies, especially when they blocked the CPRS. And I am not that fond of environmentalism either.

I also suspect that a party that in its essence is against things rather than for them will always be at the margins.

But when its leader and shining light decides to retire after a long and no doubt tiring time giving voice to things we would rather not know about, what we should all say is…

“Thank you Bob, it was an honour, enjoy your retirement.”

——–

My faith in the rightness of things was partially restored by this headline in the Australian, not noted for their  fondness for tree huggers…

Bob Browne - A tough act to follow

…good on them.

Last chance to see

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Stephen Fry is prolific, so much so that it is hard to avoid him. Fortunately this is entirely tolerable for the man is smart, erudite, witty, and has a passion for knowledge that is as important as it is infectious.

I did, however, find one occasion when he might have erred.

An episode of his wildlife series “Last chance to see” was filmed in Madagascar, where the unlikely adventurer went in search of the curious and elusive aye-aye, a type of lemur. The search criss-crossed the island to find the few remaining patches of forest where there might be a sighting, only to finally catch up with one in a coconut palm in a villagers back yard.

Along the way the film crew passed vast swathes of deforested land that clearly left an impression and brought forth laments on the loss of unique biodiversity once the trees are felled.

Much of the cleared land was planted to sisal that grows well in the Malagasy climate and produces a cash crop for farmers. Fibre from sisal is used in packaging in the west that is biodegradable and often labeled as green. The irony was not lost on Mr Fry.

Madagascar produces around 9 million tones of sisal, about 4% of global production, and a seemingly trivial mount in the grand scheme of things.

Surely the unique biodiversity was worth far more.

Not for the farmer, for cash is cash. And if there is, right now, a market for sisal and it is easy enough to grow then it is a profitable use of land. And if it is more profitable to the farmer than an aye-aye, then sisal it is. Not because it is the best use of the land but because, like the rest of us, the Malagasy farmer needs to make a living.

The same happened in Australia. Sheep are not the smartest use of the dry and dusty outback, but at the time there was a market for wool in Europe and wool was durable enough to travel. So like sisal, sheep production was profitable – handsomely so for some on the less marginal country.

The last chance to see is because we all want to make a living and because we make that living from the options available to us. It is hard to make a living from the sale of ecosystem services, or from forest protection or taking people to see an aye-aye; usually far too hard.

What we need to do is to be smart about the available options for making a living so that the one that is easiest does not become the default.

 

Can REDD projects address wildlife poaching?

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This question came in a forum on REDD, Reduced Emissions from Deforestation and Degradation, the somewhat controversial mechanism to tackle global warming. The idea is that because greenhouse gas emissions from clearing of land for agriculture makes up around a fifth of anthropogenic emissions, it makes sense to reduce clearing especially in tropical forests that are high on carbon and overall environmental value.

One typical pattern is that forests are first logged for commercial timber. This opens up the forest, makes access and further clearing easier. People move in to grow cash and subsistence crops.

REDD projects aim to substitute the financial returns from clearing with the sale of carbon credits that come about from the avoided emissions when forests are protected. In short local people receive payments for keeping their trees and their forest intact.

When it works there are less anthropogenic emissions, forests are protected, funds become available to help people create local economic development. Neat idea.

Since there are a few REDD projects that seem to be working pretty well in Africa, the question in the forum was about extending the concept to address wildlife poaching as well?

A successful REDD project would also protect wildlife because the financial incentive is to retain the integrity of the forest. Local communities are paid to be custodians of the resource.

A collective will would be enough to significantly reduce poaching so long as three key things happen:

local engagement is real

sufficient financial returns from the sale of carbon credits go to the local communities and

there is some long-term certainty in those financial returns

These are the key success criteria for any REDD project and, if met, then local protection of all the natural resources should follow. At least this is my experience talking to landholders in rainforests of Asia.

People everywhere prefer to live where the environment is healthy, the air is clean, the trees are green, and the wildlife free to roam. Only we need to live. Our priority is for a good life for ourselves and our families that is free from strain, risk and uncertainty. Meet this priority and any amount of environmental protection is possible.

What we have to remember is that throughout human history the forests have been cleared to meet these basic needs. So we are asking a lot to forego the route to development taken just about everywhere.

There has to be enough money in the system to meet the needs over the long haul.

The real challenge is that financial returns on REDD projects are neither certain nor comparable with the usual alternatives. Exactly why is another, long story. But I am sure you can guess the message. If we want to save trees or wildlife we have to pay a reasonable market price.

 

How many mobiles do we need?

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It is reasonably well known that despite widespread poverty and reliance on subsistence agriculture, growth in the uptake and use of mobile phones in Africa is the fastest in the world.

The opportunity to bypass the clunky fixed line option that you must wait months to have connected by going mobile has been too good to miss. Pay as you go options with tiny recharge amounts to cope with the cost just made it even easier.

All over the world and in just a few decades every man and his dog has acquired a mobile phone.

A recent techcrunch.com report has aggregated the consequences of this inevitable trend.

The headline figure is that the number of mobile-connected devices will exceed the number of people on earth by the end of 2012. And well worth a headline. Quite staggering really that we already have enough mobile devices to go around everyone.

More telling was the prediction that by 2016, there will be 1.4 mobile devices per capita. That year, there will be over 10 billion mobile-connected devices, including machine-to-machine (M2M) modules.

Pause a moment on the notion that having sufficient mobile enabled devices in circulation for one each, even though there are 7 billion of us, is not enough.

One device obviously does not cut it.

What this means is that once we have one, most likely we will get one, two, maybe several more.

Staying in touch has always meant a lot to us and, whatever way we look at it, we are a social species.  It looks like that instinct to stay on touch or to feel that we are able to connect is very important indeed – important enough to part with the funds to hire or buy multiple devices.

It may not be too late to invest in telecoms shares.