Category: Environment


Consumers want goods, producers need cashflow

Filed Under: Business, Economics, Energy, Environment, Philosophy by tknows — Leave a comment
November 3, 2008

A recent copy of New Scientist had a number of interesting articles on the current economic growth paradigm and how it is damaging to the earth which sustains us. A common theme is the issue of consumer demand and particularly, consumption of short-lived disposable goods. Disregarding the arguments for a service based economy, changing this paradigm would appear to present cash flow problems to businesses.

In essence, the perfect product for the consumer and/or for the environment is not necessarily the perfect product for the producer. Apple would be far less profitable if it didn’t have a new model iPod, iMac, iThing out every year to make the previous model a tech toy cum fashion accessory faux pax. This is the other side of the coin that needs to be addressed if talking about the dangers of the economic growth model driven by consumption.

For a real example, we need only look to forestry, where it is the lower revenue, high volume uses such as mulch, firewood or pulp for paper that drive significant native forest logging. These activities provide the cash flow that support any higher value added uses such as structural timbers and furniture. In the case of forestry, the negative environmental impacts can be addressed by sustainable, best-practice, plantations. But the aforemented forestry products are non-durable by nature, genuine consumables. Whereas, for white goods, electronics, apparel etc., they are – or are supposed to be – more long lived, durable products that have been manufactured for obsolescence. The solutions here then must be based around extended producer responsibility and ‘cradle to cradle’ principles. For an alternate revenue model, leasing is likely to fit the above scenarios more aptly than ‘buy-to-own’. So, we will lease cars, tvs, white goods and other semi-permanent durable goods which would provide cash flow to businesses. There are still issues though since innovation will be required and innovation usually requires significant investment in R&D, which often requires prompt repayment upon product launch from high purchase prices of goods (e.g. Sony Playstation 3). Under a leasing/cash flow model, this quick payback would be more difficult, but if the money for R&D was lent on a longer term basis, then the cash flow from operations would aim to cover the debt repayments.

Sorry, went off on a bit of a tangent near the end there and lost some focus… No time to tidy things up, paid work to do!

More info:
New Scientist, 2008, “The Folly of Growth: How to Stop The Economy Killing the Planet”, 18th October.

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Australia’s missed opportunity on climate change policy ?

Filed Under: Australia, Economics, Energy, Environment, Society by tknows — Leave a comment
October 15, 2008

Europe is now at a critical point in terms of the future of climate change policy in the EU and around the world.

http://www.iht.com/articles/2008/10/14/europe/union.php

With the policy focus now firmly on the financial crisis an a looming recession, climate change is seen as risky territory for politicians. Britain provided the framework to the EU for tackling problems in the financial system, Australia could have provided – and still has a chance to provide – a framework for the world for tackling climate change.

The same issues are arising in the EU as in Australia, namely:

- Where and how should the burden fall?
- Who, if anyone, should be protected and to what extent?
- How should funds generated from pricing carbon be redistributed?
- What is the correct framework for handling countries with fewer emission ’sins’ to atone for (i.e. developing countries who are yet to emit levels that developed countries have to date, but are well on their way).

If Australia can answer the questions above when it presents its final paper on the issue (originally due early next year I believe but perhaps delayed now?), then it will do the world a great service and any actions we take will be noticed on the world stage. The Garnaut Review made some good inroads to answer these questions, although stated targets were disappointingly low.

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Modeling of Costs of GHG Abatement: A less dismal perspective

Filed Under: Australia, Economics, Energy, Environment by tknows — Leave a comment
September 26, 2008

The Garnaut Review has modeled the cost to Australia for mitigation of 1.1% of GDP by 2020 under a 550ppm scenario and 1.6% of GDP by 2020 under a 450ppm scenario. I won’t get into discussion of the correct interpretation of these figures here, although that is very important, but, I want to provide another assessment – using a different methodology to that of the Garnaut Review – done recently by McKinsey & Company, looking at the Australian cost curve for GHG abatement. They concluded that:

A signi?cant reduction in Australian GHG emissions is achievable—30 percent
below 1990 levels by 2020 and 60 percent by 2030 without major technological
breakthroughs or lifestyle changes.

Reducing emissions is affordable—with an average annual gross cost of
approximately A$290 per household to reduce emissions in 2020 to 30 percent
below 1990 levels.

And these are 1990 levels, I’d like to know what happened to using 1990 as a baseline since I thought that was the Kyoto agreed approach, yet Garnaut’s discussion focuses on reduction from 2000 levels. This could be in the report, I haven’t read it in full and may have missed this.

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Action on climate change: heading towards the cliff.

Filed Under: Business, Economics, Energy, Environment by tknows — Leave a comment
September 26, 2008

Ross Garnaut’s conclusions in the supplimentary report – targets and trajectories – are disappointing, and arguments about economic ‘costs’ misguided. The global climate issue (and wider environmental issues) is one which will require creativity and innovation to solve. Ross disappointingly concludes that global agreement on an international agreement is unlikely and so it is not economically justified for us to proceed alone in more seriously reducing emissions.

This can be likened to a driver of a car – in traffic – headed towards a cliff, resolving to not turn the wheel and change course, because nobody else is and because changing course may consume more fuel.

For policy makers out there, the following line from the supplementary draft (p.214) is important

The costs of climate change mitigation come earlier and are better
known than the costs of climate change. (p.214)

Continuing with the analogy above, this is telling us that we know what the potential extra fuel costs are, but we don’t know how far we will fall if go over the edge of the cliff. In this scenario, surely the rational choice is to choose a known risk, rather than an unknown one. Furthermore, in the same line of analysis, a very important distinction to make is that we are masters of our economy, but the scale of our economy depends on the health of the global ecosystem from which we obtain natural resources and benefit from ecosystem services. While our economic actions have an impact on the local and global ecosystems, we are not yet proven to have the skills in being the ‘masters’ of the global ecosystem. In-fact, we have – to date – thoroughly proven our incompetence in this regard. So, rather than risk damaging that which we can’t control – although can impact on -, the global ecosystem, we need to focus on changing was we can control, our economic system.

Economic development and wealth creation rely on creation, destruction and renewal (of human constructs/industries which impact on ecosystems). Innovation is the key here and if we look at the world in terms of opportunity and abundance, rather than risk and scarcity, we would see the enormous opportunity awaiting us once we get serious about tackling climate change and more broadly, embrace sustainable development. Both inaction and action will result in a vastly different global construct to that which we live in today. Inaction will result in unorganised chaos, action will result in organised chaos.

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Yes, we live in a real world, so appreciate the goose.

Filed Under: Business, Economics, Environment by tknows — Leave a comment
September 23, 2008

The current issues in the financial system highlight the need for us to remember that it is never wise to kill the goose that lays the golden eggs. All interest bearing assets are ultimately backed by an asset or transaction in the real world. This is being realised in the financial world at the moment. More broadly, this same principle applies to natural capital.

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GHG concentrations and sequestration, the conundrum of the industrial revolution

Filed Under: Economics, Energy, Environment, General by tknows — Leave a comment
August 7, 2008

I don’t have time at the moment to put any figures around what i’m about to write about, but if someone feels like doing so, please go for it (likewise if you can point out any papers or books which have covered this issue).

So, what is it that I am going to write about. Well, in looking at the issue of green house gas emissions and the relationship to global warming, forestry frequently comes up. Given the sequestration benefits which forests provide, a way to tackle climate change has been to a) slow deforestation of existing forests, b) carry out reforestation of areas cleared.

Now, an issue which occurs to me is that, this problem is multi pronged. Let us cast our minds back to pre industrial revolution times, lets start at 1800 for arguments sake. So, at this point in time, we had a certain percentage of the earth covered in forests, providing their sequestration and carbon storage benefits. Trees grow and die, releasing and re-capturing carbon in the process, this carbon was all – excuse my lack of scientific eloquence here, this is a work in progress – above ground carbon.

So, we have that base state, with a relatively stable amount of carbon in the atmosphere/earth system continually being cycled through a process of sequestration-emission-sequestration. Now, things get interesting once the industrial revolution kicks off in earnest. Firstly, we have massive amounts of deforestation to feed industrial processes, beginning at the start of the 1800s. This reduces the number of trees participating in this sequestraion-emission cycle. The result, a net increase in emissions as trees are removed from this process. Consider this the ‘left punch’.

The ‘right punch’ comes around the beginning of the 1900s and accelerates with particular voracity from the 1950s onwards. This takes the form of fossil fuel related emissions. These are in effect carbon/green house gases which were previously not part of the atmospheric/earth system and were locked away under ground. By extracting and processing these, resulting in emissions into the atmosphere, we add to the volume of green house gases in this system.

The result here, combining these two factors is that, a) greater concentrations of GHG in atmosphere from deforestation with fewer trees to sequester carbon, b) even greater concentrations of GHG in atmosphere due to new inputs into atmosphere from fossil fuels.

What is the point of all this? The point – and the issue as I see it – is that, to reduce climatic conditions back to a natural cycle representing a state with minimal anthropogenic influences, we need two things. 1) Forest coverage to be returned to pre-industrial revolution areas, 2) removal of net increases in GHG as a result of fossil fuel combustion since 1900. OR in fact, potential – and contentiously – a third option, being, to offset any climatic impacts with global scale abatement methods (giant sun ray deflecting mirrors anyone?).

I have no definite conclusions regarding these thoughts yet, just some things to ponder on and consider when people talk about reducing GHG emissions and atmospheric concentrations.

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Consumerism = De-forestation

Filed Under: Australia, China, Economics, Environment, Society by tknows — 3 Comments
June 11, 2007

We often hear about the deforestation occurring throughout the world usually in far away places such as Brazil or Indonesia (ok, not so far away). This problem is often seen (by myself at least) as being remote and a problem to be solved in the countries facing the problems by increased economic growth and education.
However, an interesting article in Scientific American highlights that most of the unsustainable and illegal logging is occurring as a result of demand tracing back to developed countries and companies. Perhaps we as consumers need to pay more attention to what we are buying and where it comes from.

In this regard, I think companies need to provide more information in the way of product provenance details. On the example of trees and timber (although it applies to many commodoties in our world), think of all the furniture in Melbourne shops such as Myer, Harvey Norman, Officeworks and other smaller retailers. How many of those stores are aware that the products they import (in the case of Officeworks, 95% of furniture comes from China) are directly linked to the unsustainable destruction of forests?

This also highlights another problem with our current society, the importance of low cost competition. Because let’s face it, we all love the fact that we can buy a $59 leatherette chair from Officeworks. In fact, I bought a table from Officeworks which for all I know traces it’s origin back to illegal logging half-way around the world. And let’s say one of the giant retailers took the lead and decided to make sure it’s suppliers only used sustainable timber (and let consumers know just how and why it was sustainable), how would this affect the price? It’s fair to say that most consumers would opt for the $79 chair – with no questions asked – over the $139 chair which uses sustainable and legal materials. The sad part is that these same people would probably go home after buying such a product and shake their heads at the rapid loss of our forests.

I would like to see more information provided to consumers on where their products come from in Australia. We have had it for food and drinks for many years. Now it is time for it to be applied to many other products.

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The Turtle Power Tale Pt.1 (Intro and Leaving KL)

Filed Under: Environment, General, Malaysia, Society by tknows — 3 Comments
May 12, 2007

Since I’ve been back in KL for over a week now, I guess it’s time to write something about my experience on Redang with the turtle conservation program. I started writing this just now and it’s become huge, I think I’ll break it up into several posts.
So, I’ll start from the beginning.

The turtle conservation program on Redang Island has it’s own private beach, Chagar Hutang…wait, too far foward… We need a geography lesson for Malaysia first. Malaysia is made up of Peninsula(West) Malaysia and East Malaysia. These are completely separated geographically. KL is located in the west of West Malaysia. My destination was Kuala Terengganu which is located on the east coast of West Malaysia, approximately 8 hours by bus away from KL. See the map below already, its great and also shows the route of the bus from KL to Kuala Terengganu (my educated guess at least);

Map

Thus, I set out on a Thursday morning to Chinatown in KL where the long distance bus station is located. I didn’t have a ticket so got there early (around 11am I think) and set about arranging a ticket. This is not so difficult at the bus station since there are roving sales people all over the place asking you where you want to go. If they work for a company selling tickets to the place you want to go, they will eagerly guide you to the promised booth. Thus, I arrived at a booth selling tickets to Kuala Terengganu(hereafter “KT”) and as lonely planet had informed me, shelled out 30 beans for a one way coach ticket leaving to KT at 10pm that night. However, they didn’t actually give me a ticket, well, it was a ticket of sorts, some scribbled notes about price, time and destination, at the time I thought it was a bit more like a ticket IOU but I thought nothing much more of it. Anyway, they told me to be back at 9pm, so, I left and set about spending 9 or so hours in Chinatown while I waited for my bus.

12:30 – 8:45 —-uneventful time. watched Pan’s Labrynth in the backpackers I stayed in when I first got to KL(great movie actually), loitered about, lost my combined flashlight/pen/laser, that’s it…oh and ate some rambutans…

8:45 arrived and it was time to head to the bus station and wait for my bus. Arriving at the booth I had patronised earlier, I presented the ‘IOU’ ticket eager to claim the official boarding pass. The service was a bit slower this time around, and only the low level spruiker type workers where nearby. They looked at the IOU and then went over to the boss who was sitting down nearby. They chatted for a bit too long which made me think there was some sort of problem. After that, the boss beckoned me over since she deemed me not important enough of a concern to interrupt her seated rest. Wanting to find out what the problem was, I went over and she said “so we’ll put you on the midnight bus ok, no tickets left for the 10pm one”. I was pretty annoyed since they had originally said the 9pm one was sold out and to get the 10pm one. Also, I had been loitering about the area for 9 hours and was thus not going to take this injustice! So, I politely but directly told them that I needed a 10pm ticket and reminded them that they had sold me one(I now found out that the IOU was like a tentative statement of agreement to trade). So, the boss said to have a seat and one of the workers went off to work something out. In the end, a 10pm ticket was found and it was all good, I don’t know what the initial problem was but I’ll definitely try to get a proper ticket when paying next time.

By this time it was about 9:30, so I sat around for a few minutes and learnt some Malay words from the people selling tickets, the only one I can remember is “gila” which means crazy/mad. So, it got to around 9:45 and I thought I should buy some snacks for the trip and then head to the terminal. I boarded the coach at about 9:55 and so was expecting it to be taking off reasonably soon. Anyway, 10pm rolled by and the bus was less than half full and no driver in sight. An African family(from Sudan I later found out) hopped on around 10:10 and with four kids were suitably snacked out. Looking at their rations compared to mine, I realised that I may have underestimated my needs for the 8 hour journey. Basically, they had twisties and as we all know twisties are great and I felt I needed some for the journey. Whatever the reason, I decided that with the bus still quite empty and with no driver to be seen, I should venture out to a nearby 7-11 to get some additional supplies. Around this time a guy hopped on to check peoples tickets, so, I thought I would have no time to go and expected to be leaving quite soon. But another 5 minutes passed and still nothing was happening, the twisties were calling and my dietary desires had to be satiated. So, I approached the ticket guy and told him I wanted to go to buy some snacks and would be 5 minutes, I asked him if this was ok and after checking his watch he said “yes, but be quick”. So (leaving my bags in the luggage hold and my initial rations on my seat) I hopped off and jogged down to the 7-11 which was within sight of the bus. I went in and efficiently paid for and purchased some Twisties (Original Cheese flavour of course), a bottle of Lipton Green Iced Tea and some Chips-Ahoy cookies. Feeling relieved with twisties and lipton green tea in hand, I exited the 7-11 and proceeded to walk on the road back towards the bus which was still visible where I had left it.

However, looking at the bus I noticed that the luggage compartment door was closed (the 7-11 was close but not exactly a stones throw away, perhaps a few hundred metres away) so I thought I should pick up the pace and that the driver was perhaps ready to roll. Although the ticket guy knew I would be back soon and I thought I should be safe, nonetheless I decided to speed things up.

Just after making this sensible decision, I saw the door on the bus close and without delay observed motion of either the earth or the bus wheels rotating (it turned out to be both). At this point, I may have muttered a profanity and proceeded to run up the middle of the road waiving – snacks in hand – at the bus, which had luckily set off in the direction I was returning from. Since Malaysian public transport doesn’t usually bother with the formal rigidity of designated stops, my desperate motioning of the driver were enough to cause him to slow down and let me (re)board in the middle of a three lane road.

The seriousness of the trouble that I would have experienced had I missed my bus, and thus said goodbye to all my things, did not really hit me. I have a strange naivity when travelling and nothing that bad has really happened to me so far. I think it has something to do with submitting to “The Way”, I recommend you try it. Anyway, I was more struck by the comic nature of the entire event and was relieved to be Twisties in hand on my way to KT.

You can see in the picture below my elation at having caught my bus with adequate rations in hand! Yay, peace! or V for victory in Asia.
Me on the bus (small)

Ok that will do for now, Pt.2 should cover a little bit about the trip on the bus (nothing interesting really) and then some things about KT I guess.

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Under the rader, down by the sea

Filed Under: Environment, Malaysia, Trip by tknows — 2 Comments
April 19, 2007

On a beach with sea turtles, is where i’ll be.

That’s right, I’m heading to Redang island (Pulau Redang) on the east coast of western Malaysia tomorrow and will be returning on the 28th or 29th.  I don’t have tickets there or back yet, but only have to be there by saturday morning so will surely find a way there.  My options are bus or train (and perhaps plane on the way back) as I would like to see some of the country side and have a sense of the distance travelled.

Anyway, just to let everyone know.  For those of you who don’t know, i’m going there for a turtle conservation program.

“But what about school?” you say…  Well I say, what about the turtles, what about the turtles!  Seriously though, I have made sure it won’t be a problem and it’s an opportunity I wasn’t going to miss, should be great!

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Still with the resources…

Filed Under: Australia, Economics, Energy, Environment, General, Uncategorized by tknows — Leave a comment
March 23, 2007

Australia is continuing in it’s tradtion of being a resource focused economy with a ban lifted on uranium mining and along with bilateral support by the two major parties.  Now, my post isn’t about the suitability or otherwise of nuclear as far as our energy/environmental problems are concerned, that is a complex issue that I’ll avoid here.

My point is mainly that it is disappointing to see that Australian governments still have such a resource focused mentality – as opposed to knowledge and technology, value adding etc – and that along with support for nuclear power, they should be suitable encouraging other alternatives to coal or gas fired power generation.  Namely, renewables such as solar and wind.

The reason this came to my attention was because of an article I read recently (actually one of three) about a solar researcher who is leaving Australia because of lack of financial support for his solar based approach to large scale power generation.  Australia has had and still continues to have a competitive advantage in the research and development side of solar power.  If backed by suitable government support and initiatives, we could become a world leader in this area not just academically, but economically.  Anyway, for now it seems there is no interest in this from the current government, lets hope that as well as supporting uranium mining, the opposition Labour Party will also support other ernergy and economic alternatives.
Articles about David Mills leaving Australia and why:

http://www.abc.net.au/ra/innovations/stories/s1860693.htm

http://www.abc.net.au/rn/scienceshow/stories/2007/1841239.htm

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