06 Mar 2015, 00:05
A couple of weekends ago I went on a friend's stag do. The trip got off to an inauspicious start when I got into work on the Friday morning to be greeted by an email from my wife telling me I had forgotten my toothbrush. Now, stag dos are not renowned for their strict adherence to the rules of personal hygiene, but there are limits. So before heading to the station I popped into a supermarket to see if I could buy a toothbrush.
And there it was. Alongside all the standard, common or garden toothbrushes was the cheapest electric toothbrush you will ever find, and from a recognised leader in dental care too. Its recommended retail price was £9, but the supermarket in question had cut the price in half to £4.50. So for just a couple of quid more than a standard, luddite, non-vibrating toothbrush I could get an all-singing, all-dancing electric toothbrush. The future was within my grasp, and all for the price of the coffee and croissant that necessitated the toothbrush in the first place. With the words of my dentist - 'do you use an electric toothbrush? If not, you should get one' - I bought it.
It was only after I go home a few days later that I realised this humble toothbrush was possibly one of the worst products I have ever purchased; a fact I shared this week with the audience at the Resource Event in London as various speakers discussed the opportunities and challenges presented by the circular economy.
Not only is the toothbrush woefully underpowered, the brush head, which two weeks on is already showing signs of wear, is welded firmly to the handle, meaning that in a few short months the whole thing needs throwing away and replacing. Although, I can't just throw it out because it includes a battery - which is supposedly replaceable but in reality is extremely difficult to get at - and a motor, both of which have their own special waste electronic and electrical equipment (WEEE) recycling requirements.
I've looked it up and electric toothbrushes are covered by the EU's WEEE directive, meaning I have bought a toothbrush that comes with its very own legislative burden. However, I remain doubtful that the checkout assistant at the supermarket would welcome me returning it for recycling under the directive's polluter pays principle.
Of course, not all electric toothbrushes are so woefully designed. You can get electric toothbrushes where you charge them using a special holder and replace the heads when they wear out. But these cost at least 10 times more than the £4.50 I paid for my disposable environmental abomination. The idea that a simple clip mechanism, which would allow me to replace the toothbrush head when required, explains the difference in price between a £4.50 toothbrush and a £45 toothbrush is, of course, absurd. The reality is the company behind the cheap toothbrush wants it to be disposable, it wants me to replace it in six months, and the last thing it wants is for me to be able to buy a replacement for just part of it. The motor, the head, the battery, every part of it has been designed to be thrown out and replaced in pretty short order. If that were not the case I'd be able to easily replace the brush when it wears out and keep using the handle that looks like it will last for aeons once it reaches its likely landfill resting place.
I told this story at this week's Resource Event in London to illustrate a point (yes, Peter Ustinov would be proud, I am available for after dinner speaking): this kind of resource profligate design is everywhere. There are countless examples of this environmentally wasteful design, from the scourge of single use plastic bags to mobile phones where you can't replace the battery. There is encouraging progress being made in circular economy thinking, as evidenced by some of the projects now being pioneered by our leading retailers. But each and every day these same retailers are selling products that are horrendously inefficient - and we're buying them without a second thought.
There is huge potential for circular economy and resource efficient business models. From the dematerialisation of digital products to the emergence of sharing economy services and advances in recycling technology and material science, we can dramatically boost resource efficiency while growing the bottom line and cutting greenhouse gas emissions. Many companies are already doing just that.
But let's not kid ourselves, the challenge is akin to scaling a Himalayan mountain of toxic junk. Meanwhile, governments won't even tweak the tax system to reward re-use or ban the utterly wasteful practice of sending food and wood and plastic to landfill. Most businesses still seem to reckon the 'circular economy' is a business park off the north circular.
If climate change requires us to decarbonise our infrastructure, the circular economy requires that and more. It demands a complete re-engineering of global material flows, business models, and psychological consumer impulses. There is not much evidence of this happening any time soon on the scale that is required.
As a general rule I'm hugely optimistic about the prospects for the green economy and the manner in which it can improve all our lives, health, and economic competitiveness, while tackling the worst environmental threats we face. Some great work is underway to enhance resource efficiency in retail, construction, textiles, and numerous other sectors. But when it comes to the circular economy we've barely started on the journey that urgently needs to be undertaken. And if you doubt that, just look at the toothbrushes on offer in your local supermarket.
26 Feb 2015, 15:32
You would not expect a Contract for Difference (CfD) auction as part of the Department of Energy and Climate Change's (DECC) Electricity Market Reform (EMR) programme to command much attention. After all, I reckon a good journalist rule of thumb is that if you need three acronyms in the first sentence of an article you are probably on to a loser.
However, if the complexity of the EMR programme means it is unlikely to excite anyone outside the fiefdom of Whitehall energy policy wonks, the transformation it is about to enable will affect each and every one of us. You don't have to understand the finer points of CfD auction procedures to understand we are on the brink of a genuine revolution in how we generate and use energy.
Just look at the numbers. Today's award of CfDs guaranteeing power purchase prices for clean energy developers will, through one wave of projects, deliver 2GW of capacity, enough to power 1.4 million homes and cut greenhouse gas emissions by four million tonnes a year. And that is one wave of projects. Another wave will come in the autumn, and more will follow after that. The UK is firmly on track to source 15 per cent of its energy (that's energy, not power) from renewables by 2020 and could well deliver an entirely decarbonised power system within 15 years.
More important still, the concept of auctioning contracts to the developers who can put in the lowest bid (and penalising them if they deliberately bid too low and are unable to deliver as promised) has undoubtedly served to further accelerate the cost reductions the renewables' industry has already been achieving.
The £50/MWh bids put forward for two solar farms may prove to be unachievable outliers, but the £79.23/MWh for onshore wind and £80/MWh for energy from waste put them on a par with the £80/MWh levelised cost DECC estimated for new gas plants in 2013 and comfortably below the £92.50 contract offered to EDF for its proposed Hinkley Point nuclear power plant.
You could argue that gas costs only stand at £80/MWh because of the carbon price operators have to pay, but firstly, that is the taxation regime the UK currently operates under, secondly, why shouldn't fossil fuel operators pay for the pollution they produce, and thirdly, even without the carbon price some solar projects are apparently now in the same ballpark as gas. Coal may remain cost competitive (if you ignore climate change and air pollution), but the leaders of the three main political parties in the UK just agreed to work together to phase out unabated coal power, so I think it is safe to discount it as a long term option.
What this all means is that renewables industries that have existed at a commercial scale for a little more than a decade are now able to generate power at a cost that is comparable with polluting fossil fuels and a nuclear industry that has been going for half a century. Meanwhile, the renewables sector with arguably the biggest potential for providing industrial scale power, offshore wind, is clearly running ahead of schedule with its efforts to bring costs down to the nuclear competitive level of sub £100/MWh.
It will be fascinating to see how cost reduction curves evolve as the next few waves of auctions are delivered. All the evidence from clean tech manufacturers and developers around the world is that costs can keep falling. Throw in potential breakthroughs in energy storage and smart grids and costs will then fall still further. It is clearer than ever that we can decarbonise the power sector without breaking the bank.
Inevitably, the complexity created by all those three letter acronyms creates winners and losers. There is no doubt the CfD auction system has its imperfections (some would say downright flaws). The solar farm industry has got a particularly raw deal, as developers struggled to compete with the more mature onshore wind industry. Whether the falling cost of solar projects means the sector is more competitive in the next round of auctions, as some believe, or whether the risk inherent in bidding for a contract simply locks smaller developers out of market and drives consolidation in a previously competitive sector, as others warn, remains to be seen. The Solar Trade Association's complaint the sector has been exposed to full competition a year or two too early, leading to yet another boom and bust cycle, has plenty of merit.
There is also still a big debate to be had about the pace of renewables growth the government is willing to countenance and the public is willing to pay for. The cap on the CfD budget means viable projects that are ready to go will be shelved or cancelled altogether, proving a source of immense frustration for those of us who believe the threat presented by climate change requires the most urgent action possible.
It is easy to see why politicians of all stripes are wary of measures that could lead to further upward pressure on already politically toxic energy bills, but equally it can be argued that a more generous budget cap now would help further accelerate clean energy cost reduction, bringing the point at which cost parity with fossil fuels means subsidies are no longer needed even closer.
This is also where the inter-connected nature of every aspect of the energy and climate change debate comes into play. A more ambitious and effective energy efficiency strategy would reduce energy bills and create more headroom for clean energy funding. A bolder community energy strategy would provide an expansion route for those smaller renewables developers who are always going to struggle with the CfD regime. As is so often the case, failure in one area of government climate policy is creating challenges in another.
In addition, it is worth noting these policy problems are bad enough before you consider the volatile political context. Being able to compete with gas on a cost basis will count for nothing if wind and potentially solar farm developers are frozen out of the planning system by a Tory government bent on banning onshore renewables.
But while it will be of little consolidation to those companies that today missed out on CfDs the big picture outlook for the renewables industry and the wider green economy remains remarkably rosy. Wave after wave of clean energy projects are on the way, each one likely to deliver low carbon power at a lower cost than the last.
Meanwhile, other developments this week serve to hammer home the encouraging backdrop against which electricity market reform is playing out. A full blown Energy Union is on the cards across the EU, delivering new low carbon infrastructure, comprehensive energy efficiency programmes, and greater energy security. The reform of the emissions trading scheme promises to tilt cost arguments ever further away from fossil fuels and towards clean alternatives. Overseas, Obama is digging his heels in over tar sands pipelines, Shell is shelving carbon intensive projects, and China has seen coal demand drop for the first time in years.
Moreover, the UK's clean energy developers are building on increasingly low carbon foundations. As official government stats revealed today, UK energy consumption fell a staggering seven per cent last year, continuing a downward trend that started in 2000, while clean energy now accounts for over 35 per cent of our electricity share.
All these trends are well positioned to accelerate, right up to the point where the UK powers its energy efficient buildings using almost exclusively home-grown, low carbon, emission-free power. This point could well come within the next 15 years. All that is required is a bit of policy stability and continued technological ingenuity.
We are on the brink of an historic transformation of our economy and a host of other countries are willing and able to make precisely the same journey. Those confusing three letter acronyms really are more significant than they look.
14 Feb 2015, 00:05
It is the Valentine's Day gift many within the green economy had been hoping for. After several weeks of kicking chunks out of each other in what promises to be a brutal election battle, the three main party leaders have today risen above their narrow partisan interests and demonstrated some genuine statesmanship.
In delivering a joint commitment to "work together" to set new emissions goals for the UK, seek an international treaty in Paris, and accelerate the transition to a low carbon economy David Cameron, Nick Clegg, and Ed Miliband have shown real leadership.
My understanding is that each man's personal commitment to tackling climate change played a role in this agreement coming about. There is little doubt the Prime Minister would have received advice not to antagonise UKIP and his climate sceptic backbenchers, just as Clegg and Miliband would have been fully aware that signing a joint letter may help neutralise election campaign attacks on Cameron over his at times mixed record on climate change. And yet all three leaders signed on the dotted line, acknowledging there are some issues where rising above the political fray to seek genuine progress is more important than honing the next attack line.
As Unilever's Paul Polman observed, "the importance of this pledge cannot be overstated". It effectively commits the UK to seeking an ambitious and legally-binding climate treaty in Paris and it massively increases the chances of a stretching fifth carbon budget being agreed in 2016.
However, the two really significant developments are found in the third of the three pledges the leaders have made. In stating they will work to "accelerate the transition to a competitive, energy efficient low carbon economy and to end the use of unabated coal for power generation", Cameron, Clegg and Miliband have sent two important signals to investors, one specific and one general.
The specific signal is that unabated coal's days are numbered. The letter may deliberately avoid setting a date for when unabated coal-fired power stations become a thing of the past, but it makes clear that day will come and the reality is it is likely to come pretty soon. Coal businesses and investors will be aghast at what this letter does to their medium and long-term prospects.
The general signal is the latest in a long line of messages to investors and business leaders that the UK is going to decarbonise and they should prepare accordingly. The joint nature of the statement is particularly significant, as it means whoever walks into Number 10 in May has a mandate to deliver on these pledges. Whether it is Cameron or Miliband who forms the next government they will face immediate pressure to honour these commitments and anyone who tries to water them down (we're looking at you Eric Pickles) will have to acknowledge the Prime Minister was elected having declared their intention to accelerate action on climate change.
The UK is now signed up to EU carbon targets for 2020 and 2030, national carbon budgets that will continue into the 2030s, an over-arching target to cut emissions 80 per cent by 2050, an international effort to deliver a legally-binding global emission reduction treaty, and an EU effort to reform the bloc's carbon market in a way that will push up carbon prices. And now the political leaders most likely to be lead the next government have said categorically they are fully committed to continued decarbonisation.
One could ask how much more certainty do green business leaders and investors want? The direction of travel in favour of decarbonisation is as clear as it has ever been. Anyone investing in fossil fuel projects does so knowing full well the policy environment is likely to get more hostile. Anyone investing in energy efficiency, low carbon infrastructure or greener business models does so knowing the UK's main political leaders wish to "accelerate the transition to a competitive, energy efficient low carbon economy". It's not like we have not been told what is planned.
The problem, of course, is whether we believe Cameron, Miliband and Clegg can deliver on the pledges they have made. Valentine's Day is not a time for cynicism, but it has to be noted that parts of the letter smack of a guilty husband promising he'll be better next time around.
Miliband has a relatively strong record on climate change, and the coalition does not get the credit deserves for the numerous ambitious green policies it has adopted.
But if the Prime Minister and Deputy Prime Minister can sign a letter committing to "end the use of unabated coal for power generation" why did they pass up the opportunity to close the loopholes that would allow unabated coal to continue to prosper well into the 2020s? Why have they just introduced a capacity market that is handing subsidies to coal plants?
Can Cameron credibly square his heart-felt commitment to build a low carbon economy with his politically convenient opposition to onshore wind farms and solar farms, faltering progress on carbon capture and storage (CCS), watering down of energy efficiency policies, and unwillingness to challenge climate sceptic voices in his party? This letter provides green investors with significantly more political certainty, but it will not help onshore wind farm developers one iota as they wait to see if their industry is about to be devastated.
Miliband may have helped deliver the Climate Change Act, but why has he not used is stint as leader of the opposition to publicly pressurise the government into delivering more ambitious policies?
All of the three main parties have been good at signing up to climate change targets and delivering encouraging speeches, only to struggle when it comes to facing down vested interests and delivering the policies and investment that will ensure emissions targets are actually met. Those businesses and entrepreneurs who have been burned in the past by government u-turns on environmental policies will greet this letter with a healthy dose of scepticism. Once bitten, twice shy works just as well in business as it does in relationships.
Had this letter been signed by George Osborne and Ed Balls, then high carbon business leaders will have really sat up and taken notice. Without a clearer commitment in favour of decarbonisation from the men who would be Chancellor, polluting firms know there are conciliatory ears to be found amongst Treasury officials who remain firmly wedded to a narrow and unsustainable growth model.
However, those legitmate concerns are for another day. There are plenty more political battles to come that the green economy has to win, but this Valentine's Day pledge massively increases the chances of victory. When it comes to the green economy, the love is there from the men at the top.
The letter shows that for all the short term political temptations that have attempted to turn their heads our political leaders are still capable of focused leadership on climate change. It confirms decarbonisation will remain on the agenda no matter who forms the next government. It underlines how climate sceptic arguments have been thoroughly rejected by Westminster's most powerful figures. And it reveals that unabated coal is about to get dumped. Happy Valentine's Day.
13 Feb 2015, 00:05
Do journalists have a responsibility to campaign on climate change within their reporting? That was the deliberately provocative question posed this week by those heroic enviro-scamps/eco-terrorists at Greenpeace and wrestled with by a panel featuring Channel 4 News' Jon Snow and Tom Clarke, the Guardian's Zoe Williams, Buzzfeed's Tom Chivers, and Greenpeace's Li Shuo.
The general consensus was that "campaign" is too strong a word to describe how journalists should approach climate change. Politicians campaign, polemicists campaign, campaigners campaign; journalists do something different, if related.
But it's more complicated than simply answering Greenpeace's question in the negative and moving on. As Williams pointed out journalists of all stripes do campaign, in so much as everything is a campaign. Everything is political. Journalists campaign through the stories they select and reject, the primacy they give those stories, the words they use, and the angles and sources they opt for. You do not have to subscribe to a neo-Marxist critique to acknowledge all texts are political. The status quo is definitely not apolitical.
However, leaving aside that truism for a moment, campaigning is typically regarded as anathema to journalists, which makes things more than a little uncomfortable for someone like me who surfs the line between reporter, editor, and (I hate this oxymoronic phrase) campaigning journalist.
This understandable reluctance to take on the mantle of "campaigner" raises an important question. If journalists should not campaign on climate change, what should they do about it? Because what they are doing at the moment sure as hell isn't working.
The panel offered an at times brutal assessment of mainstream climate change reporting, from Snow's admission the Copenhagen Climate Summit was the most dispiriting political story he had ever reported on, as hopes were dashed and the media chased the wrong story by giving legs to discredited climate sceptic arguments, to Clarke's honest appraisal of how climate change is too slow-moving and unsexy to grab editors' attention, and Chivers' acknowledgement that the sheer complexity of climate change debates do not lend themselves to easy and accessible reporting.
How can a media that is so critical to business and public understanding of climate change and the green economy overcome these challenges?
As someone who is lucky enough to write about these issues all the time I'd argue journalists should not necessarily "campaign" on climate change, but they do have a responsibility to detail the context climate change provides for countless other stories. You don't have to campaign on climate change, just stop ignoring it.
This context is crucial because climate change impacts almost everything in some way or another. I am heartily sick of mainstream energy or economic or environment stories that fail to provide a single sentence on the direct relevance climate change has for so many of these stories.
To take just a few recent examples, if you are going to report on the impact of the collapse on the oil price on North Sea investment, you should probably mention that from a climate change perspective reduced oil exploration is a very good thing. If you are going to report on a politician forgetting to mention the deficit in speeches, you should also report when politicians forget to mention climate change, particularly if said politicians admit climate change poses an existential threat. If you are going to introduce Ed Davey, he is the Energy and Climate Change Secretary, not the Energy Secretary - the distinction matters.
If, like BBC Breakfast this week, you are going to report on the falling cost of heating oil making heating homes in this way more attractive it would be remiss of you not to mention that from a pure climate change perspective this is an appalling development. A single sentence would improve any one of these stories no end. Just an acknowledgment that there is an underlying issue that needs addressing would make a world of difference to wider understanding of what climate change means and what can be done about it.
There was a big story about eight or nine years ago where the context was not provided. Cheap money flooded global markets, complex financial products metastatised, and sharp practices became commonplace. In retrospect, everyone kind of knew something was up, but the failure to provide the true context to the business stories of this era helped usher the global economy off a cliff.
How do you go about delivering this context? Snow's proposal that journalists should be provided some kind of climate awareness training in the same way war correspondents get battlefield training is a good idea. But it is about more than that. It is about editors grasping the bigger picture - and climate change is one of the biggest pictures there is - and trusting that the audience can navigate the complexity.
It is also about recognising that there is some pent up demand for these stories. It is about balance - not the false, 'let's have a debate when an issue is all but settled', kind of balance, but the balance between light and shade, good news and bad, that the media is so reluctant to provide. Move past the banal "debate" about whether climate change is happening and there is an abundance of fascinating stories to explore, stories about politics, and communities, and technology, and scandal, and business, and tragedy, and hope, and life itself.
I'd argue there are countless great stories out there around climate change, there are even 'sexy' stories arising from the green industrial revolution we are in the midst of. As Buzzfeed demonstrates there is an audience for news that balances the good and the bad, the inspiring and shocking, if you package it in an innovative way and have a good sense of what your audience responds to. I'd wager there is huge untapped interest in currently unreported developments in everything from clean technology to potential climate catastrophe.
Should journalists be campaigning on these issues? No. They should be doing what good journalists always do, providing accurate and balanced reporting on the biggest issues of the day. Some people will call that campaigning. Well, so be it.
12 Feb 2015, 14:30
Shell chief executive Ben van Beurden's speech to delegates at International Petroleum Week tonight looks like it will be right on the money.
For example, he's right to suggest "provoking a sudden death of fossil fuels isn't a plausible plan". No one wants to wake up tomorrow and find the fossil fuel industry has been shut down; the consequences for peace, prosperity and health would be catastrophic.
He's also right to suggest reforming the energy industry through a "fossil fuels out, renewables in" strategy is "simply naive". No one wants to see the concentrated energy intensity of fossil fuels replaced immediately with nothing but solar panels and wind turbines.
He's absolutely right to say we need to "balance one moral obligation, energy access for all, against the other: fighting climate change". No one wants to deny developing nations access to energy that they desperately need.
And Van Beurden is right to say the fossil fuel industry's credibility is at stake when it is "slow to acknowledge climate change" or opposed to effective carbon pricing. No one wants to see one of the most important industries in the world indulge in anti-scientific hokum in a desperate bid to protect its outdated operating model.
The good news for Van Beurden is that almost everyone in the green economy will agree with these key aspects of his analysis. On these crucial topics there is little opposition; which is unsurprising really, because these are wilfully constructed straw man arguments designed to conceal the gaping holes in Van Beurden's wider analysis of the energy market.
Here's the problem. If, as Van Beurden suggests, the fossil fuel industry properly acknowledges climate change it smashes straight into the unanswerable logic of the 'carbon bubble' hypothesis. A logic that is very simple to understand. You. Can't. Burn. It. All.
The only way for Van Beurden to respond to this analysis is to ascribe extreme opinions to climate-savvy investors, green campaigners, and clean tech firms that they simply do not hold and hope no one notices his underlying message: "we're going to burn it anyway". Judging by the trailed quotes Van Beurden looks like his main goal is to provide a little bit of chief executive sophistication to the ridiculous and mysteriously funded cartoon this week attacking the divestment movement.
We'll have to wait and see if Van Beurden's full speech addresses the real challenges the fossil fuel industry faces, but in the interests of clarity this is what most mainstream green businesses, campaigners, and politicians want from Shell and its peer group (I stress the word mainstream in that sentence, there are some eco-warriors who do long for the immediate destruction of the fossil fuel industry, but they have little to do with modern green-thinking or the crucial 'carbon bubble' analysis).
Green investors and campaigners don't want the "sudden death" of fossil fuels. They want an orderly yet rapid transition away from unabated fossil fuels and towards the clean sources of energy that can head off potentially catastrophic climate change.
They don't want "fossil fuels out, renewables in". They want fossil fuels 'out' over time, to be replaced by a mix of clean energy sources and massive improvements in energy efficiency.
This would be "simply naive" if your goal was to achieve such a dramatic transition with nothing but the technologies we currently possess. But that is not the goal. The goal is to scale up these technologies and innovate along the way, as has happened in every technology deployment in history, resulting in ever more cost-effective replacements for fossil fuels.
They don't want to compromise "energy access for all". They want political and business leaders to acknowledge that in the vast majority of cases new energy infrastructure needs to harness clean technologies if there is any hope of avoiding climate change impacts that will devastate developing economies more than most.
And here's the real problem for Shell, BP, and the rest. The vast majority of global political leaders, many of the world's most powerful businesses, growing numbers of investors, and the bulk of the public are fully signed up to this wish list.
All of this means that fossil fuel companies that continue to invest in the most capital and carbon intensive projects are loading risk into their business model. They are trying to bring on line new supplies of fossil fuels that we may not need, particularly at the high financial price they will be made available. Highlighting this risk is not naïve, it is a sensible investment strategy. Arguing that companies like Shell should be doing much more to prepare for a low carbon economy by investing meaningfully in clean tech R&D and mapping out how it could continue to operate in a carbon-constrained world is not implausible, it is a logical response to the threats climate change presents. Divesting from those companies that fail to respond to these risks and seeking safer long term returns from cleaner firms is not counter-productive, it is a rational deployment of capital.
As the Guardian's Damian Carrington argues today, the fossil fuel industry is looking distinctly rattled by the break-neck pace of the divestment movement and the growing traction of the carbon bubble analysis. Van Beurden's latest comments suggest even this most articulate of chief execs is struggling for a plausible response.
Van Beurden says he wants a "balanced debate". But the only way to balance climate risk and fossil fuels is to fully acknowledge what deep emission cuts mean for the industry. That means ditching the straw man arguments and deliberate attempts to polarise reasonable oil men and 'naïve' environmentalists, and instead demonstrate how Shell can adapt and prosper in a world where you really can't burn it all.
ABOUT JAMES' BLOG
Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray