greenwash, vol. I

nowadays we´re all committed to help the environment... many of us are also willing to pay more for goods and services that have been produced according to specific ecological criteria.

so honda wants to increase its sales by giving out a "eco reward" of CHF 500 targeted at environmentally concerned bikers. just bring in your old motorbike and buy a new honda motorbike that complies with the euro III norm (see ad taken from a swiss daily)




what used to be a mere discount to gain more market share is now called an "eco reward". the whole thing is a customer leg-pull as regards the associated better environmental specifications of the motorbike: it is not above average. all motorbikes being sold in switzerland have to comply with euro III since beginning of the year 2006...

Read more!

playing energyville, destroying the planet

recently, i've been seduced by a very professionally crafted, frank and topical infomercial. it is called energyville, an interactive online game to illustrate the trade offs to be made to power a fictional city. the game had been developed together with the economist intelligence unit, the advisory and consulting branch of the internationally respected the economist group, and is part of a massive $ 40 mio international public relation campaign of chevron to polish its green credentials (source: chevron watch by oilwatchdog)

as an early fan of simcity and civilization, naturally i felt very compelled to engage as mayor of this city. even more so as an energywise interested citizen. later i learn, that this game is part of a continued greenwash effort that actually really is aimed at persons like me which are classified as more of the "potentially antagonistic socially concerned types". sadly, the game gets boring after 5 minutes since i do not really get options to manoeuvre around and work feverishly on my own energy policy. oddly enough, too, during the game i also never have to consult my co-citizens regarding my public decisions. they also never protest like in simcity when i plant a nuclear power plant next to their door. might this be related to the chevron way of doing business?

the first thing that really put me off though, is that i cannot affect any of the demand patterns. the game allows you only ex-post to choose between undifferentiated "low-cost energy efficiency" options which have so and so impacts as regards your economic and environmental score. "these measures will become increasingly important for the future as individuals and businesses try to limit costs and environmental impact", so the online game reasoning. this scenario is set for the second round of the game, 2015 until 2030 (!). don't we need action now?!

and, to emphasize the underlying assumption of the game, it is clearly stated at the beginning that current lifestyle patterns will have to prevail also in the far future. so, that means no discussion about whether a suv- & mcmansion, 12 ton CO2 emission per capita is the sound and sensible lifestyle to power on in the future...

i also liked the unexpected outside events that affect the deployment of various energy sources to power your city. around 2025 i am assured by a bulletin board that "breakthrough technology alleviates fears over oil supply". so after all, why do i really need to try to get off the oil hock since technology will eventually solve all my sorrows over oil supply concerns? well, the sad truth is that a high oil price is as much a peril as a bon to the environment. the higher price encourages for sure the development of alternative fuels and cleaner conversion technologies (let´s call them renewable sources of power) but as well makes it economically feasible to exploit oil from bitumen sands and oil shale. the end of cheap oil does not mean that we consume less oil in absolute measures. it means that we pay more for our oil use while alternative fuels and/or renewable power do not substitute oil but add to the total primary energy consumption. in relative terms we might rely less on oil.

my city also had to endure an "accident at a nuclear facility". but, too, this event did not diminish in any way my ability as mayor to plant more nuclear power plants next to the city. 2015 there was also a terrorist attack on a gas pipeline. i wonder if there is any correlation between foreign policy and attacks on energy infrastructure assumed in the game? but this would, of course, go beyond the parameters of the game. wouldn't it?

dirtyville vs. cleanville
to get to to know the game a little bit better, i decided to test two totally divergent energy deployment strategies. first i created "dirtyville". this was done by using only the dirtiest energy sources and conversion methods on the market available while never approving of any conservation efforts (i kept on adding coal power stations like we do today). the resulting energy mix by the end of the game in 2030 is displayed on the left side.
a major event occurred in 2010 when "major countries joined the kyoto protocol". further the message read that "additional major powers put their full political support behind the kyoto protocol, while others that have already joined meet their targets". this event was responsible for 25% decrease in my coal environment impact (!). another major event occurred 2022 when "enormous reforestation efforts ramps up sequestration of carbon emissions". this lead to another 10% decrease in my coal environment impact.

the final environmental analysis of my game (the impact was given a "high") explained me that "continued use of fossil fuels may exacerbate global warming and lead to even greater environmental impact". i scored around 579 millions points against an average score of 630 million points. this means that dirtyville is a only slightly weaker strategy (92% of average score) than the average energy strategy.

eagerly i went on the create "cleanville". this was done by adding the cleanest available energy source and conversion method as allowed by the game parameters. mainly i did this by relying for base power on hydro stations as much as i can as well as adding plentiful of solar and wind power. i was reminded by the game that transportation requires oil so i had to construct an oil platform and refinery. when i exhausted the possibilities of water, solar and wind i continued by adding biomass until cleanville was fully powered. needless to say, i also adopted always the strictest conservation efforts available.
i scored 5% above average, reaching 663 millions points. my environmental impact is stated as "medium". i am reminded that "the decision to use cleaner sources of power has to be weighed against the potentially negative impact of incurring higher short-term energy costs associated with renewable sources of energy".

i wish i could have a look the highest scoring cities to examine their strategies. sadly, this option is not given.

learnings from dirtyville vs. cleanville?

• first, we are playing games with the planet.
  the kyoto protocol event of 2012 displays it as a version of the prisoner's dilemma. i understand now better why the united states and australia, among others, do not join the treaty. "after all, all countries will enjoy the benefits of a stable climate whether they have helped to bring it about or not" explains an excellent article on exactly this topic by the economist (which belong to the same owners as the economist intelligence unit which developed the game for chevron)
• secondly, a clean strategy only scores slightly better than the dirty strategy.
  knowing how much effort it takes just to change the existing unsound energy structure and policies a little bit towards a more rational, decentralized and ultimately lower intensity energy system, the game obviously wants to imply the uselessness of pursing a cleaner strategy. i have to admit: a clean strategy is not feasible if we have to power our current lifestyle patterns and its associated structures.
• thirdly, go about your daily business.
  because climate change is not here yet and technology will eventually solve all our problems. we either just massively plant trees to get rid of excess carbon emissions or new technologies allow use to exploit also the plentiful available sources of unconventional oil. too, i strongly noticed the undercurrent of the game's analysis to reduce the relationship between global warming and massive use of fossil fuels to a still hypothetical nature.

greenwash not real options
i would like to remind you why chevron needs this expensive public relation campaign, which i can only label with one word: greenwash.

there are two strings to my explanations:

1. first, the company's strategic investments, its actions not its words, are heavily focused on fossil fuel technologies: it is about sourcing more conventional and especially more unconventional oil sources (oil sands, shale oil) as well as synthesizing fuels from gas. in 2007, the company estimates to invest about $ 14.6 bn for exploration and production activites for deepwater drilling projects in the gulf of mexico and oil sands projects in canada among others (source: chevron 2006 annual report). this is feasible due to structurally higher oil prices (now hoovering around $ 80 per barrel, $3 per gallon at the average joe's gas station) and highly profitable.
   to be correct, chevron is a leader in the development of geothermal power but it could not depict the real figures the company invests in a future beyond petroluem...
   
2. secondly, the company's environmental footprint is close to catastrophic, so it really does need a public relations clean up. the lawsuit "aguinda v. chevrontexaco" documents how chevron-owned companies have probably created one of worst environmental disaster on the planet, so the new york times, by spilling approximately 30 times more oil in the ecuadorian forest than in the exxon valdez event. too, it is asserted that the exploration company systematically dumped more than 80 billions liters of highly carcinogenic toxic waste into pits (source: chevrontoxico). see below a oil separation station in the ecuadorian rain forest, close to the town of shushufindi.

clear is, that chevron is not interested in change to the current game and its rules. if they want to engage the public on the "tough choices" we have to face, why all this greenwash? anyway, we need real options. and the bastard of corporation called chevron surely will not help along the way.

Read more!

goldcoast community goes co2 free. really?

the super rich municipality of herrliberg with 5'600 citizens, 3'400 cars, 42% vote for right wing conservatives and residence of multi-billionaire and member of the bundesrat, chrigel blocher is beautifully located at sunny side of the lake zurich. this sunny side is also called "goldcoast", a euphemism for its massive accumulation of bigwigs. the tax heaven is not too far located from the city of zurich to enjoy the benefits of an urban center, but enough far in order to not have to share the burden of an urban center.

recently, the municipality announced that it will power its local grid with 100% carbon dioxide-free produced electricity. this electricity will then be provided by the cantonal monopoly provider (ewz) through the local utility which, for lack of competition, still is not allowed to get its juice from somewhere else.

herrli.naturpower, as the product has been named, is certified as naturemade basic. supposedly, this quality label should guarantee that the electricity has been produced only through renewables sources and has a neutral carbon dioxide balance. additionally, 5% of all electricity has to come from qualitatively very high rated sources such as solar, wind and biomass power.


the announcement made some news in the local media. that's the way forward! a sceptical reader of the neue zürcher zeitung (see his reader comment below, in german) commented that the municipality is now actually emitting more carbon dioxide under the herrli.naturpower plan...

the fact is that the normal mix which any household (and so every municipality in the canton of zurich) is getting is a almost carbon dioxide free mix of 50% nuclear power and 50% hydro power. according to a study (250 kb, pdf) of the renowned paul scherrer institute, which calculated co2 emissions along the entire energy supply chain, only hydro power (4 gr of co2-equivalent/kwh) beats nuclear power (8 gr of co2-equivalent/kwh). wind and solar follow with 17 respectively 78 grams.still, it is an encouraging start when municipalities begin to actively think and change their electricity contracts. they might find pleasure in choosing and therefore become supporter of a more liberalised electricity market.

beyond that, i actually really wanted to highlight the beauty of grumbling readers that add much to rational and lively democratic decision-making. and, last but not least, this is surely not a plea for nuclear power!

Read more!

my best friend´s new car

my best friend is a son of a car dealer. even though he loves his parents and supports them actively in the success of their small business, he is not really passionate about cars themselves. actually, i would say that he would agree that cars are not the best solution to our modern transport needs and problems. consequently he always supported smarter mobility solutions. be it by commuting by train to his work place, by using his trendy bike where ever suitable and, last but not least, by approving important popular referendums and initiatives that promote public transport.

but now, due to his own success in his young professional career, he is being forced by his new employer to buy a representative middle class car. he may choose the model, which then will be financed by the company. but he may not choose the way he travels. and behind that there is an intricate system of structural misalignments, wrong incentives and utterly harmful status thinking. and then there is the highly urgent and pragmatic question: "what should he do?"

whatever car he will choose to buy, be it a more efficient or less efficient one, it will add up to the existing car insanity in multiple ways.

1. first, and most importantly, is is not about the (fuel) efficiency of his new car, but about how effective this means of transportation is from an environmental and economical viewpoint.
   
2. secondly, this little example will show us once again how difficult it is to promote really sustainable change in the way we move from A to B.

but first about the effectiveness and economics of this new car. the fact is that my friend will, sadly, turn with time into a normal car user as regards his car usage habits. this would then imply that his car will stand about 96% of the time idle in a parking space. further, when using, he will "only" transport his roughly 80 kg of brain and meat in a 1.5 t steel cage by burning precious fossil fuels with a low energy conversion rate of roughly 25%. this process will emit per year, assuming that he will drive it around for about only 10000 km per year in the beginning, around 2.5 t of CO2 (assuming a fuel economy of 8l per 100km). there is nothing new to these facts but it just disturbs me so much because they would have not have occurred were he allowed to go about with his very sensible mobility usage pattern of the past!

how would that alternative of the past would have looked like? he would take public transit for his every day´s commuting to work, take first class to client visits (also in order to be able to work during this time) and, if it is important for "representative" matters or for reasons of unattractive availability of public transport, have used a car from the company´s fleet or a business car from mobility.ch. that this alternative also makes a lot of practical sense to the company is obvious since it would save the investment cost from the car and gain valuable working time of its highly paid staff.

why then are so many companies promoting such a stupidity?

• first, because it always has been so and successful business guys need big business cars (probably a very important reason). a freaking self-fulfilling prophecy!
  
• secondly, because so many countries allow corporations to deduct their investments in cars from the tax bill and promote commuting by car with similar tax schemes.
  
• thirdly, a local case, the otherwise highly effective public transport operator is not actively and professionally enough going after companies with special offers (e.g. mobility packages for employees, etc.).

so what should he do?
i wonder if he would have gotten the job, using my rhetoric and arguments (see also the older post: "my carbon battle of the year"). grudgingly accepting this, we will have to talk about the question of what car to buy... anyway, so what car should he now buy? assuming that he will be forced to buy a new car i forced myself into this issue. with some surprising results...

when i started going after this particular issue i soon found some very helpful ranking from the government (see graphics below, click to enlarge) as well as from non-governmental organizations (www.umweltautoliste.ch) which give handy and practical information regarding the environmental impact of cars in their respective class. so, that's easy, i think: he ought to buy the most fuel efficient that currently exists.


i got then a little bit aroused about this because it really pissed me off again. this is how environmentalism works... buy greener cars and you´ve done your best. buy more, save the environment? this cannot be it! this issue is at heart of this whole blog: mostly, small relative product improvements will not change the trajectory of an already unhealthy, unsustainable development path.

the biofuel scam
and upfront, another suggestion which i would not convey to him: choosing a so-called flexfuel engine that allow to power your car with biofuels. this is not a solution but a deterioration of the whole thing! i do not want to add more here but refer for further reading on this topic to the widely read essay "five myths of the agro-fuels transition" as well as the results from a recent oecd study ("is the cure worse than the disease?"; PDF, ca. 650 KB) and empa study regarding environmental impact on biofuels.

in between the lines: driving your average SUV with biofuels makes the insanity plain out cynical. mr. darbellay, swiss president of the conservative party cvp is powering his porsche cayenne with biofuel... i cannot resist to add that mr. darballey´s example is also the clue to the overwhelming success behind the agro-fuel boom: vested farming interests for massive re-arrangement and expansion of otherwise already so harmful farm subsidies. but this is another topic...

natural as well as biogas are as well not adequate solutions in this specific situation. they might make sense to power public bus fleets in huge cities with an appalling air pollution problem like found in Jakarta or other Asian megacities (natural gas burns very clean as regards many air pollutants). but due to their lower energy density and better suitability for other purposes (heating and electriciy generation) they are no solution to my friend´s car choice problem.

so what car to buy now ?!
so then just buy one of those hybrids!
i always dismissed the hype about the hybrid car, aka a car (symbolized by the toyota prius) powered by one or more electro motors which are either powered by an internal combustion engine or battery. it achieves a higher fuel efficiency than normal cars because during downhill and breaking fleeing energy can be brought back into practical work via the battery. i dismissed this technology because it throws so much new technology at a problem without really achieving significant gains.

1. first, we have cars that run on 3l for 100 km already for so long and
   
2. secondly, individual car transport itself does not make great environmental and economic sense to me.

we do not furhter discuss later point but want to elaborate further the relative environmental improvement: the fact is that a toyota prius and other hybrids such a honda's civic add more technology, new complex systems (the battery) as well as more weight in order to master a higher fuel efficiency. why so complicated if we already have so highly fuel efficient cars such as the volkswagen polo and others?

eureka!
light struck me when i came across rechargeIT.org, a google sponsored project to turn hybrids into so-called plug-in electric vehicle (phev). a phev is a car with a connection to the electricity grid, which allows so recharging from the grid as well as from fuel in the tank (through an internal combustion engine or fuel cell) and is able to drive in electronic mode only.

the so incredibly "cool" perspective that struck me, is that this simple twist to this otherwise environmentally only incrementally better prius will eventually provide a path to massive penetration of renewable power. massive new capacities of wind and solar power cannot come online today because of their intermittent nature. "intermittent" means that they only provide power at certain times of the day and under certain conditions.

since it is not possible to store energy massively in any economically feasible way, the grid operator would be forced to invest ever larger sums into upgrading the existing grid to handle the more volatile power generation mix. these additional investment costs are probably never assumed when discussing the rapidly improving economic feasibility of renewable power such as solar and wind.

plug-it in
the solution to the biggest barrier to furhter large-scale development of renewable power is to treat the plug-in hybrid as a massive distributed power generation and storage system. all these phevs are leading the way to a merger of the two most massive energy conversion systems that humans have ever developed over time: the electric utility system and the light vehicle fleet. this would also correspond with the historic trend of converting more and more primary energy into the versatile form of electricity.

so when more and more phevs that are coming on road they would be able to provide more and more storage and backup power for renewable energy, thereby allowing the transition to a fundamentally more sustainable energy system.

so the little toyota prius is in itself only a small incremental improvement but it will eventually lead to a tipping point in the transformation of the otherwise decrepit and rotten car industry. after turning the car more and more into an electronic appliance we will now turn it into a massive energy backup power and storage system. in the future, fleet manager such as avis, hertz or mobility.ch will manage the availability of their fleet as well as sell vehicle to grid (v2g) power from the phev under their management to the grid operator. further, local utilities and/or car manufacturers will start to aggregate the collective v2g power of many phev they take under contract, e.g. provide free battery replacements to phev owners for reaping most of the power sale profits... so many new business opportunities emerging, even for the car bastards from detroit and stuttgart (by the way, the guys from japan are not treehuggers, either. recently toyota has joined the detroit three in lobbying against thougher us fuel standards as tom friedmann reports in the new york times.)

willett kempton of the university of delaware is the foremost thinker and researcher on this issue and lucidly presents and develops this idea further is his papers. he calculated with a eventual 25% penetration of phev to the overall car market in order to allow for a convergence of the two energy systems as well as to enable renewable power to come online in massive capacities. if i combine this sensible calculation with my demand-side objections to the car itself, we could envision a future with massively fewer cars. let's say we do away with the remaining 75% of the non-phevs...

i say this for the first time in my life: in this way, cars really could make sense!

next steps
we are not there yet, though. prius exists and are selling successfully. but toyota and honda, the two most successful hybrid producers, advise so far against the remodelling of their hybrid cars into plug-in hybrids since the batteries are not yet (big point) made for constant recharging and vehicle to grid operations. but some private freaks, corporate sponsored projects such as rechargeIt.org and eventually profit-driven business of existing hybrid producers (to see how they react to the new opportunity, go here) and others will bring phev and v2g business models to the market.

so, my dear friend, i would say: buy a hybrid. thereby you promote environmentally the most promising development option, rewarding the risks taken by the producers and leading to better understanding of the technology and falling unit costs. hopefully, the hybrid is one of those few incremental relative product improvements that lead the way to a disruptive innovation.

i hope though, that you will continue to play guitar and drink beer whilst riding train together with the blogger. that, by far, is the best additional fringe benefit of using public transport.

Read more!

swiss & lufthansa go offsetting with myclimate

just recently i received an email from my most favorite way of emitting co2: swiss international airways.

it reads as follows:

Dear Mr. Pedretti,

SWISS has long been committed to reducing the per-passenger level of CO2 emissions its aircraft generate, and has invested and implemented measures accordingly. We now offer our passengers the opportunity to make a voluntary contribution to compensating CO2 output as a means of supporting our efforts to protect the environment. To do so, we have teamed up with “myclimate”, the renowned Swiss foundation.

- For every booking, you can have your flight’s CO2 emission calculated and compensate for it voluntarily.

- With your contribution you support projects selected by SWISS. These are conducted in accordance with internationally recognised criteria and have been awarded the Gold Standard, currently the highest ranking for CO2-compensation projects.

With every booking on SWISS.COM you have the opportunity to compensate your flight’s CO2 emissions.

Yours sincerely,

Thomas Benz
Senior Manager
Head of Marketing Switzerland

behind the eco-marketing hype...
well after many years of outright denial by the aviation industry that their business has any siginificant impact upon our climate and after even more futile attempts (and years) of myclimate and similar private CO2 offset businesses to get a foothold within the airline industry to offer this kind of "voluntary service", it seems that everything now is coming to a positive end.


finally, the aviation industry's C02 emissions are coming under attack. it is highly likely that the industry will become included under the european emission trading system (eu-ets). mandatory emissions cut are not anymore very far away. so much to the context of swiss's press announcement...

first there such be no doubt, that offsetting is NOT a solution to global warming even though wwf's cdm gold standard assures that high quality additional renewable power projects are coming online (which then are called offsets). so myclimate does deserve credit for its pioneering role in the aid industry.
and you could even make a point that it makes some sense to concentrate most of the offsetting efforts on air travel since this means of transportation really only works with high-density fuels. it cannot be powered with other, "cleaner" fuels. for more on this reasoning, see wwf masterplan (750 KB, page 15)

secondly, the problematic should be reframed: the european airline industry is currently rolling out a very professional and well-funded public relations and lobbying campaign to hinder regulation of its co2 emission as well as other sensible measures such as a tax on kerosene...
now they speak of self-regulation... which is just another attempt to postpone regulation and, even worse, to hide the true environmental and economic costs of the unchecked air travel boom.

the fundamental issue is all about smarter mobility, less flying, and not about voluntary offset possibilities! swiss (and lufthansa's) environmental measures such better technology, improved resource efficiency of operations and infrastrucutre are not enough. the real facts are that increasingly cheaper and cheaper air travel for persons and goods and thus rapidly increasing overall air traffic is offsetting by large all relative gains made through more efficient turbines, better airways management etc.

a simple but effective trick of the industry with young fleets (such as swiss) is to highlight the low fuel consumption per 100 flown person kilometers . swiss currently boasts an average of only 3.8 l (see image on the left, taken from here). sounds too good! the problem is just that with ever more cheap flights we add up those miles so fast that NO relative improvements will ever be able to make a dent! a simple calculation: a economy return flight to bangkok generates over more than 18'000 km more than 1.8 t CO2. and then we add some cheap short-haul trip to london and mallorca, let's say, just another 3'500 km and 0.35 t... to put this in a context: if i drive an average middle class car with 7l per 100 km consumption for 20'000 km i will have emitted about 4.7 t

so the swiss & lufthansa offsetting initiative it is just another cheap eco-marketing measure not real eco-business innovation... it is "cheap" because it does not change the rules of the game, rethink the business concept, but better segment from a customer groups and reap additional sales profits from that.

for futher reading in these matters, i strongly suggest the ten reasons of planestupid.com, a coalition of uk citizens, on bringing the planes back to earth.

Read more!

biogas not gazprom

A recent academic study of the "institut für energetik und umwelt of the university of leipzig", financed by the german green party and by a local utility, claims that euroland has the potential to produce enough biogas in order to be able to fully substitute russian gas imports. and that this could be done by 2020.

the central idea is to promote growth and thermal conversion of energy crops alongside the existing gas pipeline network. the resulting biogas would, after upgrading, be inserted into the gas grid and further delivered to industrial and retail clients.

of course, such a development would be of interest to agribusiness as well as many companies from the energy industry, mostly those already involved in the (german) biogas market.

and the whole thing would take off, if only biogas production and inserations into the existing gas network would be equally promoted with feed-in tarifs as already known in germany for electricity from renewable power sources...

even being a "biofuel", biogas makes environmentally much sense compared to other biofuels such as ethanol or biodiesel. first, because it is not wasted as transport fuel but would be mainly used for heating and industrial process purposes (with substantially higher energy efficiency rates) and secondly, because as already mentioned, biogas and associated conversion (gasification) technology has the best environmental bottom line as regards net CO2 emissions (as more and more studies conclude, for example this one benchmarking biofuels against gasoline: EMPA 3.2 MB)


meaning: all fuels within the green area are environmentally speaking performing better in comparison to gasoline. gaseous biofuels made out of waste products as well as wood are the big winners.

read for yourself (in german). here and here
.

Read more!

what is your worldview?

Yet another important tool to disperse useful time. I scored as a Existentialist... try it for yourself on quizfarm.com

Existentialism emphasizes human capability. There is no greater power interfering with life and thus it is up to us to make things happen. Sometimes considered a negative and depressing world view, your optimism towards human accomplishment is immense. Mankind is condemned to be free and must accept the responsibility.

Existentialist		81%
Materialist		81%
Postmodernist		81%
Idealist		81%
Modernist		69%
Cultural Creative		63%
Fundamentalist		56%
Romanticist		31%

Read more!

My Carbon Battle of the Year

It was a lousy Friday morning. I have barely slept in the last two nights. Acknowledging the missing usefulness of rolling around in my bed, I finally decided to get up at 4 am and do some surfing. Later I took a shower, got dressed, and got into the early morning taxi to the airport. after a quick check-in i stand somewhat displaced among all those grey business men at the gate, waiting to board the plane to frankfurt. i ask myself if I look the same to the the two small boys strolling around there. business accordingly i read the business paper and take a short coffee in the plane.


less then 2 hours later I have taken a seat in a luxurious office, lurking out of the window, overseeing the skyline of frankfurt. i sit next to two nervous applicants which do not know what to do with their hands and bodies. but in contrast to the two present partners, they still look healthy. the parters tell us about work-life-balance and flying business class.

so, that's what they live for. then the standard iq test. and another coffee break. why doesn't anyone eat? i take up my additional role as food conveyer. the real battle starts in the following interviews. they start pounding my brain with math puzzles and questions. everything okay. but then the cases emerge. two of the three interviewing partners come from the automotive practice. and my cases relate to their field.

and there they come with their wonderful cases: the german automotive sector is facing three scenarios of a carbon dioxide emissions tax or cap. three scenarios how the cap and tax will eventually look like. what are the implications? what are the costs? what does it mean to profit, sales, the entire product portfolio? what measures to take? So Mister, how would you proceed? I am delighted! This is my world, i am truly fascinated by this problem. So I try to structure, analyze, lay out, synthesize. A wonderful task, indeed. How to succedd in carbon-constrained economy.

But those guys are not interested in any solution, especially not to a questioning of their basic assumptions. To challenge me, they revert back to math problems to put the carbon question in a more "relevant" context. I have to calculate how much CO2 a human emits over a year through breathing. then the same for a car. 300 versus 2500 kg on average as results. the consultant is happy, we've put the whole thing in a new perspective. i tell him that the difference is 2500 kg in emissions (and not 2200 Kg). he is puzzled. anyway, he says, carbon dioxide is good for plant growth (no more arguments?!) so he let's me calculate the approximate wood growth volumes of swiss forests.

but eventually we battle back to the case. we look more closely at how costs are piling up for certain categories of cars, get to an average additional product cost which then has to be handed over to the customers, if possible. i ask if it is fair to assume that we take the average expected addititional product cost for all categories of cars, since the small cars already are below the cap... the consultants gets furious... this thing went on for almost three hours...

of course, we found a solution to the case. i even think that we agreed to disagree. fact is, this star-rated (how to heck did they get those stars?) international top management consultancy is not here to truly find new solutions but to work for the mighty automotive industry to do everything possible to not have to change the existing business model. they are losing. demand is breaking away (e.g. 11% of young tokyo urbanites still want to buy a car... nzz folio, 10/2007, p. 66). more nimble competitiors are carving away more and more of the market. entirely new mobility concepts are emerging (mobility.ch or V2G idea of transforming cars into electronical appliances and merging them as vast decentralized battery and backup / peak load power system with the conventional electricity grid) but instead of moving ahead they fight incredibly wasteful battles (seen from a resource perspective) to at least be able to somewhat go on...

should those losers be compensated for eventual losses stemming from this rearrangements in the industry. in order to loosen their resistance?

i am incredibly thankful for this day. seldomly i have learnt so much as regards the real challenges of enforcing caps and changes in the way we do business and conduct our life.

Read more!

business in a carbon constrained world

a carbon-constrained business environment is now rapidly approaching since it has become an entrenched bureaucratic issue a couple of years ago. regulators on all levels, international, supra-regional and national are in full gear. they are keen on their increasing power and will use it, first incrementally, later extensively. but the real clamp down will come from smarter competitors. examples are manifold.

caps everywhere
see what is happening next door: there is a rapidly expanding european cap and trade system, the swiss are starting to put limits on passing freight through the alps, maximal start allowances allotted to airports and maximum emissions allowances per km are being forced upon car manufactuerer. caps are emerging everywhere.
this new paradigm has already initiated structural changes to the underlying forces of competition. competitive advantages are being redistributed. who will be on the winning side? the new, and now much hyped but much misunderstood, business frontier is defined by an absolute limit on the emissions on carbon dioxide and equivalent greenhouse gases from our value-adding transformation of material inputs into goods and services.

from greenwash to real business opportunities
many businesses, so the common impression, are grasping the trend. but are they really changing? i would argue that they are not really acquiring new competitive advantages as regards the fundamental shift in the business environment. almost all of them are "simply" adopting defensive postures by either cleaning up or improving their overall productive efficiency. they are throwing all their might behind the concept of relative (environmental) improvements of their products (and in the back they are wasting lots of money and efforts to lobby politicians to abandon those plans or at least postponing them). this is being done in order to continue with their same old business concept. to sell more of this or that good. this is a dead end since a cap implies logically a limited - or even a shrinking - pie. so a purely defensive posture ("compliance") will not secure but destroy opportunities for long-term individual business growth.

a game beyond business
this change, a cap a on certain emission, is not the first of its kind. most markets are shaped by regulation that limits certain kinds of emissions. we could even say that almost all modern product markets exist partly because of stringent regulation.

what is different this time? carbon dioxide is a very good proxy for energy consumption. so finally we have reached a developmental level which requires limiting the use of energy to comfort our lives (actually, we have reached a developmental level which threatens the long-term prospects of our civilization). so far, gdp growth is closely related to growth in primary energy input consumption. even worse, considering that gdp is basically a defunct measure for human welfare and has become a meaningless end for itself, we will have to do with less. a shrinking pie. a fundamental paradigm shift. think growth or value creation with less material inputs.

back to business
what does that imply for securing long-term individual business growth prospects? change your business concept by adopting a new value proposition: not goods are sold but flows of services bundled and packaged into new solutions. it means, nothing new, a new focus on the real needs of your customers. taken with new lenses. your customer does not need to buy bulbs and electricity but she needs a lightening service and I do not need 1.5 ton car to move my 80 kg around but a sound mobility solution to meet people and see places and i also do not need every two year a new laptop but access to computing and storage.

what will it mean for the building supply chain actors when in 2030 all new construction has to be build against, e.g, minergie p standard? what will it mean for the automotive sector when due to new spatial laws, mobility concepts and stringed CO2 caps per km demand eventually brakes away? what will it mean for business models reliant upon global supply chains when transport suddenly becomes a big cost factor again?

focus on relative environmental improvements of existing products will then not be enough to really succeed in these scenarios. it is a purely technological approach which does not alter the business model, not even really changing the manufacturing process. relative improvements have to be cast within an absolute limit. to transcend those new limits a new mindframe is needed. if a business wants to create and capture the future value it will have again to radically separate form and function of its current products and reshape its functions into new services that satisfy the customers needs while leaving behind the limitation set by a carbon-constrained business environment. smart solutions abound, for sure.

Read more!

Environment: Random Graphic of the Day

Read more!