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Wednesday, 11 November 2009
Is there a peak oil cover up?
Until recently I've been agnostic about 'peak oil' - I've been in the "we'll only know when it happens" camp, but as the issue has moved steadily from the fringe to centre stage, I've started siding with the peak oil brigade. Last year International Energy Agency Chief Economist Fatih Birol stated that production could "plateau" by 2020 and a recent report by the UK Energy Research Centre concluded that a peak could occur before 2020. But then yesterday The Guardian reported allegations that the IEA has been exaggerating the future reserves of oil under pressure from "the US". One insider stated "we've already entered the peak oil zone".There is one good reason for this cover-up (if that's what it is) - to stop panic buying and even resource related conflict, but I suspect that denial and inertia are the dominant drivers. In particular, the oil industry has a massive vested interest in avoiding talk of a peak. If reserves are seen to be depleting then shareholders will dump their shares - the 2004 reserves scandal nearly did for Shell. The sensible thing to do would be to diversify quickly into new energy technologies. The sort of cash that Big Oil could pump into renewables and efficient technology could drive us quickly to a low carbon economy, resilient to both climate change and peak oil, but instead they seem wedded to pursuing expensive and destructive forms of oil extraction like tar sands. If I were an investor, I'd start backing a different horse - and indeed investment in renewables exceeded that of fossil fuel exploration in 2008.
There's a great political opportunity here. The resistance to cutting carbon emissions in the US and elsewhere is mainly based on a suspicion of the political motives of the green lobby ("an excuse to raise taxes", "eco-communism", "red-green alliance" etc). If the world wants to maintain its standard of living once oil has peaked, we'll need those low carbon technologies anyway, irrespective of your views on climate change evidence. John Kerry has been promoting the business opportunities green innovation to persuade reluctant US politicians to sign up to President Obama's climate change bill. Maybe he should ask them "what will your voters say if you let the pumps run dry?" instead.
Labels: barack obama, climate change, iea, peak oil
# posted by Gareth Kane : 15:18
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Thursday, 20 August 2009
Whole Foods Boss Does a Ratner
Whole Foods Markets claims to be the world's leader in natural and organic foods. A look at their website shows a family, planet, people-friendly business extolling the benefits of their products and their values in a confident, engaging way. So far, so good - the sort of business paragon we like to use as examples to our clients.But CEO John Mackey seems to have blown a hole in the ship below the waterline. An op-ed article in the Wall Street Journal attacked President Obama's healthcare plans and proposed a free-market alternative that some have described as 'Darwinian'. The reaction has been brutal - a Facebook group calling for a boycott of Whole Foods has over 19,000 members as of this morning and the story is all across the popular press. The last time we saw something like this was when UK highstreet jeweller Gerard Ratner brought down his business by joking in a speech that the company's performance was "not bad for selling crap".
Top management guru Tom Peter has commented that it would be a shame if CEOs couldn't give personal opinions in the future, but I think he his missing the point. The Whole Foods brand makes a big fuss over its progressive values and their core customer base is exactly the sort of person who would support Obama's plans. I can't see why the WSJ would have bothered publishing the article if Mackey wasn't CEO of Whole Foods. The gulf between the values being projected to those customers (we understand and care for you and your family) and the values expoused in the article (I think you're a bunch of loony socialists) makes the Grand Canyon look like a crack in the pavement. Result - potentially fatal brand damage, and all for what?
So, lessons to be learnt:
- customers really don't like feeling that they've been swizzed
- the press and the blogosphere thrive on perceived hypocrisy
- if you are going to expouse values, it's helpful if you really believe in them yourself
- if there is a gap between your personal values and your corporate values, don't use the business as a platform to promote the former (is that not really obvious?)
Labels: barack obama, green business, john mackay, values, whole foods
# posted by Gareth Kane : 07:58
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Friday, 26 June 2009
Obama's big moment
Barack Obama is about to put his climate change bill to Congress (the news story in this month's Low Carbon Agenda was a little premature). It has been battered, swollen with compromises and slightly watered down, but given this is the home of Big Oil, big cars and big bellies we are talking about, it would be unreasonable to expect even the saintly Obama to execute a handbrake turn in this mother of all economic supertankers. A key moment, and one which will resonate around the world.Meanwhile the UK Government is working up a strategy for financing the shift to the low carbon economy for the Copenhagen conference later this year. Details are a bit sketchy so far, but it appears to be based on a form of contraction and convergence. Cynics may suggest that they need to focus on national leadership as well as making international noises. But overall, there is the impression of building momentum for a post-Kyoto settlement and one which will really deliver.
So, if dawn breaks on a brand new low carbon world, will you be ready for it?
Labels: barack obama, climate change, copenhagen, low carbon economy
# posted by Gareth Kane : 10:09
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Monday, 6 April 2009
What planet is the energy industry on?
I've written a couple of posts recently about the retail and automotive industries seeing green as the way out of the recession, but the rather exceptional exception to this movement is the energy industry with BP, Shell and Centrica all divesting themselves of renewables interests in recent months.What on earth are they thinking?
Obama has made major green energy pledges, the UK Government has a huge raft of low carbon legislation coming on board and the climate change negotiations in Copenhagen this year make the Kyoto protocol conferences look like a vicar's tea party. Even though the G20 meeting in London largely steered clear of climate change, it did get some of the less enthusiastic nations to agree to take part in Copenhagen.
Low carbon pledges mean investment in, and incentives for, low carbon technology. So why on earth is Big Oil going back to, erm, oil?
It has been said that when the transistor came along it was ignored by the then dominant vacuum tube (valve) industry and, as a result, none of those companies is still in business. Big Oil should take note - they could end up as the fossilised fuel industry.
Labels: barack obama, bp, copenhagen, energy, renewable energy, Shell
# posted by Gareth Kane : 14:11
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Wednesday, 4 February 2009
A Five Point Plan to Build a Green Economy
Every political leader from Barack Obama to the head of the smallest district council appears to agree on one thing - that we should be taking advantage of the current economic downturn to build a new green economy. Saving the planet, rebuilding the economy and creating jobs at a single stroke is a very attractive goal, but it will take much more than words to make it happen. Here's a five point plan to make this dream a reality:1. Bold Leadership
Leadership is setting an objective and sticking to it through thick and thin. Saying one thing and doing another creates cynicism and distrust - Gordon Brown has made much of the green job revolution then approved the third runway at Heathrow, losing all credibility at a stroke. It remains to be seen whether Barack Obama will be able to deliver the very precise promises he has made to boost the green sector.
2. Provision of Incentives
Financial incentives for the green sector are currently fitful and bureaucratic in the UK eg complex grant applications and enhanced capital allowances. We need simple incentives to ease development and uptake of technologies. Germany's famous Feed In Tariff makes it easy for anyone to connect renewables to the national electricity grid and receive a preferential rate. It has boosted the amount of energy from renewables to 12% and created over a quarter of million jobs.
3. Removal of barriers
On the other hand, there are plenty of legislative barriers and 'perverse incentives' in place which slow the development of green industries. Connecting small scale renewables to the UK grid is a bureaucratic nightmare, the Animal By Products Order makes composting of food waste extremely difficult, and airlines do not pay tax on their fuel unlike other, greener modes of transport. These barriers have got to go.
4. Provision of Information
The public cannot be expected to make environmentally favourable choices without sufficient reliable information on which to base their decision. Experience shows that third party accreditations are required to avoid vagaries and greenwash. The EU energy label is undoubtedly the most successful eco-label in the world being clear and simple. Since the label was introduced for white goods in 1996, A-rated products have soared from 0% to 76% of the UK market.
5. Building Markets
The public sector and the enlightened private sector can use their buying power to build and strengthen green industries. The public sector can and should demand the highest environmental performance in buildings, vehicles and sources of energy. Local foods and recycled materials should be given preference while toxic material is phased out. This is a great opportunity for leaders to put their money where their mouth is.
Labels: barack obama, gordon brown, green business, recession
# posted by Gareth Kane : 07:00
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A highly accessible, practical guide to those who want to introduce sustainability into their business or organization quickly and effectively.
