A raft of green regulations, services and incentives are to be developed for businesses in London as part of a major new action plan designed to make the city the greenest in the world.

Unveiled yesterday by Mayor Ken Livingstone, the Climate Change Action Plan aims to slash the capital's carbon emissions by 60 percent on 1990 levels by 2025 through a wide range of measures aimed at homes, private and public sector organisations, the energy network and transport infrastructure.

Livingstone said that the aim of the scheme was to make London a leader in the global fight against climate change whilst also benefiting the city's economy. "The present model of high energy production and high energy waste is utterly inefficient," he argued. "London, together with the rest of the world, must make a decisive shift to an economy in which energy is conserved, not wasted. By making London more carbon efficient we will cut emissions and put money back in Londoners' pocket."

Improvements in energy efficiency are at the centre of the Mayor's strategy for the capitals' offices and the action plan sets out a range of initiatives designed to reduce the electricity bills and carbon footprint of the capital's businesses.

Currently commercial and public sector organisations in London emit 17.9 million tonnes of CO2 per annum, representing 40 per cent of the city's total CO2 emissions. Under business as usual projections this is expected to rise to 19.6 million tonnes of CO2 per annum by 2025, but under the new strategy businesses will be asked to slash emissions to just 5.9 million tonnes.

The action plan accepts that such a drastic reduction is all but impossible without the establishment of wider EU and UK regulation, major changes in energy generation, and the development of a carbon trading scheme. However, it estimates that 7.6 million tonnes of the projected savings are achievable in the current environment through the energy efficiency recommendations made in the Mayor's plan.

The plan highlights the major cost and carbon savings firms can realise through adopting simple strategies such as turning off lights and computers, as well as more onerous changes such as refurbishing offices, signing up to renewable energy providers and changing procurement strategies.

However, it also accepts that take up of such strategies remains low due to the relatively low priority given to reducing electricity bills that account for a small proportion of most businesses' costs and the disconnect in priorities that exists between office tenants and landlords. As the strategy document observes: "the tenant benefits from the upgrade, in the form of lower energy bills, but the landlord would typically bear any building upgrade costs".

To tackle these problems the report admits that "stricter building regulations will… be an important element for catalysing change", but also outlines plans for a Green Organisations Programme designed to support and reward companies that reduce their carbon emissions. The programme will aim to reduce energy use from the commercial sector in London by approximately 20 per cent from 1990 levels by 2025, with a further 20 per cent reduction from more carbon-efficient energy supply and new buildings.

To "kick start" the programme it has also set targets for 2015 aiming to deliver energy efficiency improvements in 40 percent of companies and building improvements in a quarter of offices.

To help meet these targets the Greater London Authority will develop a Better Buildings Partnership aimed at landlords and a Green Organisations Badging Scheme that hopes to provide an incentive for organisations to "green" their operations.

Under the Better Buildings Partnership a "high level forum" will be provided for landlords and environmental building experts to meet and share best practices, while a Mayoral-endorsed charter mark for green buildings and comprehensive best practice support and guidelines for building improvements will also be introduced. Financial subsidies have also not been ruled out with the strategy document claiming "a revolving fund may be set up to catalyse the refurbishment of commercial premises".

Meanwhile, the Green Organisations Badging Scheme aims to provide a mechanism to encourage and reward those firms that reduce their carbon footprint. Details remain sketchy but the main goal seems to be to offer public recognition to those firms that reduce carbon emissions and encourage their partners and staff to do likewise.

Posted by James Murray on February 28, 2007 | Permalink | Comments (0)

Regular readers will be aware that the offices of GBN's sister publication, IT Week, was recently bombarded by a barrage of land fill tat in the form of some giant paperclips, which arrived as part of an uninspired and environmentally irresponsible marketing campaign to promote the launch of some company that doesn't merit a mention here.

Now, just in case we hadn't got the joke about the campaign being centred on the premise that some items might be bigger than you'd expect, more instant garbage has arrived in the form of some giant calculators.

These admittedly serve more of a purpose than the giant paperclips given that they actually work. But having said that I have checked and as far as I can see they work in pretty much the same manner as my existing calculator, which is a fraction of the size, still working and, of course, solar powered.

In fact, what the inspired minds at the so far nameless PR company have done is not only waste cardboard and emissions in sending us this rubbish, they have also left IT Week with a load of environmental grief.

Due to the new Waste Electrical and Electronic Equipment (WEEE) directive we can't actually throw this useless, desk hogging calculator in the bin due to the toxic electronic nasties inside – a little logo on the back tells us as much. Instead it has to go to an approved WEEE treatment facility, which means the environmentally and legally responsible thing to do is wait until July when the WEEE directive comes into force and then ask our approved WEEE recycler to take it away for us.

Of course we plan to do this, but personally I prefer my light-hearted marketing campaigns to come without compliance obligations.

So, in a vain plea for sanity, can't we please just all agree to stop this madness. Whoever you are please, please stop sending us rubbish. Seriously, the last thing anyone here wants is a giant biro or an over-sized hole punch so just stop wasting everyone's time, money and paper and leave us alone.

Posted by James Murray on February 27, 2007 | Permalink | Comments (0)

With energy giant TXU yesterday approving the largest ever private equity buy out and UK trade unionists expected to protest today against the growing role of venture capitalists in the UK economy the current debate over the merits and pitfalls of private equity groups is showing few signs of fading away.

On one side of the divide many trade unionists argue that the recent upturn in the number of private equity owned companies is economically damaging for the country, leading to job losses, increased job insecurity, a lack of accountability and transparency at many of our biggest firms, a widening of the gap between management and the shop floor, and in some cases good old fashioned Gordon Gekko-style asset stripping. They are expected to make all these points, pretty loudly, at the Super Return conference in Franfurt, where several trade unions have vowed to protest.

On the other side sit the private equity groups and many laissez faire economists, who argue that the shock treatment offered by the management teams found at these companies are often the best way of stimulating under performing firms, making them competitive again and in the long term saving jobs and delivering growth. Furthermore, they argue, the presence of private equity keeps public firms on their toes - often more effectively than distant shareholders - while the absence of stringent reporting rules and regulations frees firms up to invest in innovation. 

But amidst all the talk about the different levels of job security, innovation and growth provided by opposing ownership structure little attention has been paid to which model is most likely to deliver environmental sustainability.

Advocates of public ownership argue that being listed on the stock exchange with its quarterly reports and numerous regulations encourages environmentally responsible behaviour. Moreover, the recent increase in shareholder activism – as evidenced by organisations such as Ceres – has introduced another layer of environmental accountability for many firms.

However, these benefits have to be offset against the short termism and obsession with quarterly figures that critics claim define many listed firms. The need to constantly answer to Wall Street analysts and meet their expectations is often seen as an anathema to good long term management and makes it harder to justify investments that will take time to deliver a return. This problem is particularly acute for green investments, such as building insulation or solar panels, as they tend to be expensive up front and can take years or even decades to pay for themselves.

Equally the soft benefits associated with green business models such as staff retention or brand image may provide a valuable return, but are often hard to quantify and are unlikely to be forefront in a CEO's mind when he knows he's got a month to hit this quarters' sales target or else see the share price plummet.

Private equity backed companies, in contrast, do not face these problems – or at least not to the same extent. While still evident the pressure to deliver quarter-on-quarter is less apparent, arguably making private firms a better place to develop and execute long term plans.

Such a climate is likely to favour environmental investments, and it could be argued that the $44bn buy out of TXU provides ample evidence of this, with the private equity groups behind the bid Kohlberg Kravis Roberts and Texas Pacific Group pledging to slash carbon emissions at the company and scale back plans to build more coal-fired power stations.

The bidders have said that they would scrap seven of the 11 power stations TXU was planning, and while cynics would argue it is a political move designed to get TXU's environmental critics onside it could also be argued that the new owners are in a better position to appreciate the long term benefits of a greener strategy.

However, these potential benefits have to be balanced against the lack of corporate transparency that private ownership delivers for a firm. If private equity owners decide that green initiatives are not in their interest then it is far harder for stakeholders in the company to bring pressure to bear to change their minds.

Equally, the environmental benefits that come with private ownership depend entirely upon the exit strategy chosen by the owners. While some private equity groups may buy a company in the hope that better management and further investment in innovation will increase its value ahead of returning it to the stock exchange for a tidy profit, others are still guilty of buying an undervalued firm, slashing costs by any means necessary, sweating the assets and then breaking up the company as a means of selling the different units at a profit.

The first of these models is understandably a great environment for green business initiatives that can lower the long term cost base and increase its attractiveness to the market. The second is arguably the worse possible ownership structure for anyone trying to develop a green business strategy – management obsessed with chasing a quick buck just aren't going to be interested in solar panels on the roof.

So with neither structure ideal for green business models is there a better way of doing things?

Well, a group of the world's biggest auditing firms think there might be and last year they released a paper outlining how the quarterly reporting system should be scrapped in favour of real time performance reporting.

The vision paper from the International Audit Networks – which includes Deloitte, KPMG, PwC and Ernst & Young – argued that the emergence of the internet and increasingly sophisticated reporting tools meant that "the current systems of reporting and auditing company information will need to change — toward the public release of more non-financial information… customised to the user, and accessed far more frequently than is currently done".

The report argued that such real time reporting was needed to help restore investor confidence and prevent fraud by giving shareholders far greater visibility over every aspect of a firm's operations.

Such reporting rules would require a massive overhaul of the reporting systems of all listed firms and as such is unlikely to emerge within the next decade. However, alongside increasing the amount of environmental information firms have to disclose it would have another major green business benefit in that it would free firms from the investment strait jacket imposed by quarterly and annual reporting deadlines.

By giving shareholders access to financial and corporate information on a day by day, or even hour by hour, basis firms would be under constant pressure to maximise returns, but with no arbitrary deadlines at which they would be measured they could also plan strategies and investments for the longer term without having to constantly fit in with quarterly cycles and external targets. The large investments many firms would love to make in order to enhance efficiencies - be they energy efficiencies or process efficiencies - would be far easier to justify when they no longer have to think about how the cost is going to look in the annual report.

Such a system would cost billions to instigate and with so many vested interests in the current stock market system it may never appear. But on paper it has the ability to combine the best of public and private ownership, ensuring firms are accountable to all stakeholders while giving them greater freedom to develop the long term strategies required to achieve environmental and corporate sustainability.

Posted by James Murray on February 27, 2007 | Permalink | Comments (1)

Intel held a conference in London last week for international press where it laid out its growing green credentials, and very interesting it was too.

As the world's largest semiconductor maker, Intel comes at questions of energy efficiency and the environment from a few different angles.

First, as a consumer of power it has its own internal reasons to apply controls. Intel has 65,000 computer servers and 136 datacentres, 75 of which are the domain of chip designers. As microprocessors become ever more complex and highly integrated more compute capability is needed. Also, Intel is a regular buyer of other companies and has made 70 acquisitions since 1996, all of which adds to the financial and environmental cost of its IT operations.

To control that sprawl, Intel, like many other firms, is turning to virtualisation software so that it does not need to build every site for maximum load and can improve average utilisation from 60 percent to 80 percent.

Also, while some might see a requirement to extend server lifecycles, Intel believes it needs to accelerate refresh cycles in order to get the most from technology, and is currently upgrading many systems to - its own, naturally - Xeon 5100 and 5300 processors.

It is also scouting for new locations, having noted the savings that firms such as Google and Microsoft have achieved by using US sites located near power generation sources.

A second Intel objective is to defend the IT industry against allegations of being power hogs. It has done this primarily by investing heavily in R&D designed to enhance the energy efficiency of its processors and reduce the carbon footprint of its products.

However, Kevin Fisher, Intel's EU standards director, suggested that much of the criticism of IT's energy inefficiency failed to look at the bigger picture and that as well as being a power consumer, IT also helps save power. Online billing, auction sites such as eBay that encourage reusability and online retailers that do not require customers to visit shops are all examples of IT helping to reduce overall carbon emissions he argued.

Third, as a promoter of environmentally responsible behaviour, Intel argued that it has an unwritten duty to set a good example. In that role, it has commissioned its first "green building" in Haifa, Israel, home to some of Intel's biggest R&D brains.

Peter Banton, Intel's European operations manager, says that Intel had to spend an additional two to 2.5 percent more for the building but expects to make a return on its investment within five and a half years.

The spec is impressive: patio windows that let natural light flood in; datacentre waste heat is repurposed for heating water; condensed water from HVAC is used in showers; personal PC-based controls set heating and ventilation for individuals.

However, critics noted two oddities. First, solar panels were not used because of expense. Second, despite being located next to public-transport links, the site will have 750 parking spaces.

Well, nobody's got perfectly green credentials.

Martin Veitch

Posted by James Murray on February 26, 2007 | Permalink | Comments (0)

For years solar power has been held up as the great bright hope of the renewable energy movement, with advocates insisting that photovoltaic solar panels have the potential to solve the world's energy crisis and underpin a shift towards on site microgeneration of electricity.

But despite no little success in recent years photovoltaic solar panels have struggled to break into the mainstream. Countless firms have tried them and they are becoming an increasingly common sight on the nation's roofs, but for many they remain too expensive, too heavy, too ugly, too inefficient and too reliant on the changing weather. The solar revolution has stalled on the grounds that the technology simply is not good enough, and what's more the glare from the panels annoys the neighbours.

But now German company Sulfurcell thinks it has the answer, and last month a group of venture capitalists led by the Masdar Clean Tech Fund LP invested around $10m in funding to help it further the development of its innovative solar panels.

According to Sulfurcell, the solution to many of the solar panel industry's problems lies in the semi conductor copper indium sulphide (CIS).

Currently most photovoltaic solar panels use crystalline silicon wafers, but these have been criticised for being both too expensive and inefficient in temperate climates. Sulfurcell claims that CIS tackles these problems as it boasts significantly better absorption properties and can deliver a much higher electricity yield. This means the CIS layer can be just one percent of the thickness of traditional silicon wafers and still generate higher yields.

Speaking to GBN, Sulfurcell chief executive Dr Nikolaus Meyer said that the thinness of the CIS layer meant that it could be produced at a much lower cost than conventional solar panels.

"The CIS layer is deposited directly onto [ordinary window] glass and can deliver as effective absorption coefficient from a two micron wide layer as you get from a 200 micron wide silicon layer," he said. "It means it is easier to produce, has less material needs and fewer manufacturing process steps so costs much less to manufacture [than traditional panels]"

He added that Sulfurcell's panels were already 20 percent more cost effective than the average solar module and predicted that as the company invests its recent venture capital injection in scaling up its manufacturing capabilities it will exploit economies of scale that allow it to undercut traditional panels by as much as 50 percent.

The company - which has reportedly raised $32m in venture backing since its launch in 2001 - has also claimed it can outperform conventional modules, even at elevated temperatures or under partial shading.

But, according to Meyer it is the low cost of manufacturing the new panels that will prove their biggest competitive differentiator. "To make your money back on a solar panel in German conditions at the moment can take around ten years," he said. "We have the potential to reduce production costs and prices and make that return on investment period far shorter."

He added that the anthracite-coloured design of the new modules also gave them an edge over their rather ugly metallic-looking rivals, particularly with many corporate customers keen to incorporate solar panels into their office facades. "The modules are different technically and they have a design that is attractive to customers," said Meyer. "We are seeing a lot of interest from wholesellers."

Meyer is convinced that with other companies also making progress with CIS-based solar panels the new technology has the ability to revolutionise the solar energy industry and make the panels far more affordable for customers. With energy prices continuing to climb both business leaders and home owners will be hoping that he is soon proved right.

Posted by James Murray on February 23, 2007 | Permalink | Comments (0)

There was a wave of excitement in the offices of GBN's sister title IT Week yesterday morning as several of my colleagues arrived to find exciting looking packages on their desks.

What could it be they thought: a cutting-edge piece of new kit to review; that book they ordered off Amazon; a belated Valentine's Day box of chocolates from their loved ones; or had Microsoft dispensed with those pesky bloggers and tried to buy us off with a Vista laptop too.

Nope - it was a giant metal paper clip.

That's right - a giant metal paperclip, wrapped in two layers of thick cardboard, one of which was emblazoned with the url www.biggerthanyouthink.com. Geddit, bigger than you think, and it’s a giant paperclip, geddit.

Now you may have already guessed, but I find this kind of mindless marketing absolutely infuriating.

First up it provides further evidence, as if it were needed, that highly paid marketing execs can get away with any tired, uninspired idea as long as they give it the tag "viral marketing" and insist that it'll create "a buzz, man" (and yes, I am aware of the irony that by moaning about biggerthanyouthink - whoever they may be – I am in some perverse way evidence that this approach has worked).

But more pertinently such stunts are insanely wasteful.

Six of these pointless ornaments have been delivered to our office, replete with packaging, and I don't doubt plenty more have been sent to various magazines across the country. Now I won't pretend half a forest has been wasted because of this little marketing jaunt, nor do I want to sound like a complete killjoy, nor am I arguing all instances of direct mail marketing are futile. But quite frankly is it worth wasting a single ounce of natural resources, or indeed a single penny of marketing budget, on something quite so facile and ineffective?

It is of course unfair to highlight the lack of marketing inspiration and environmental responsibility displayed by Biggerthanyouthink - or more accurately its PR company - because they are certainly not alone in adopting this environmentally damaging, financially wasteful and tragically ineffective approach to marketing.

IT Week's offices are frequently bombarded with similar instant landfill ornaments from uninspired PR companies trying to drum up a bit of coverage for their clients; while hardly a week passes without some credit card company or another sending me a letter offering the opportunity to bankrupt myself with them.

Every single one of these letters is torn up and chucked in the recycling bin – and still they come, wasting my time, the credit card companies' money, and, when you consider that every household gets such letters, countless tonnes of carbon emissions and paper.

I am not advocating an end to all snail mail, just junk mail. It makes no sense environmentally and, while its continuing existence would suggest otherwise, I can't believe it makes much sense from a business perspective.

There is another way.

Spam filters may have (thankfully) put paid to the green dream of all junk mail going online, but technology can still play a role in limiting the environmental impact of direct mail marketing. There are now increasingly sophisticated software programmes - known as business intelligence (BI) solutions - capable of analysing customers' habits and circumstances and working out if they are likely to respond to a promotion or not.

Companies that have successfully deployed these systems have been able to simultaneously slash marketing budgets, enhance customer satisfaction and reduce their environmental footprint because they only send marketing material to those who might be interested – after all junk mail is not junk mail if the recipient is actually interested in the product.

Any credit card firm, for example, that took the time to apply such analytics functionality to their marketing databases - or if they can't afford the software just applied a little bit of common sense - would quickly realise that a customer that has never responded to a credit card application letter and has only got one credit card is probably not worth pursuing.

Such software may also help other firms conclude that there is no circumstance whatsoever when it is a worthwhile exercise to send anyone a giant paperclip. But then again, I would have thought that much was obvious.

Posted by James Murray on February 23, 2007 | Permalink | Comments (1)

The amount of venture capital invested in clean technology companies topped €1bn last year and the upward trend is showing no sign of slowing, according to new research released today.

The report from investment research firm Library House revealed that €400m of venture capital money was invested in 95 clean technology firms last year taking the total invested in Europe to over €1bn.

Overall 217 clean technology companies are now venture backed in Europe, according to Library House, with 40 percent located in the UK. The companies cover a wide range of different technologies, including renewable energy solutions, material innovation and other technologies designed to reduce carbon emissions.

Doug Richard, chairman and CEO of Library House, which specialises in providing information on innovative fast-growth private companies, said that the upward investment trend was set to continue. "Our latest numbers show there is no sign of venture capital interest waning," he said.

Darren Harper, head of the data and information team at Library House, added that the interest in green technology investments was also well spread across the whole sector. "We assess the whole energy supply chain: upstream technologies like alternative fuels, generation technologies like solar panels or wind turbines, infrastructure innovation like new batteries or fuel cells, right through to end user technologies that reduce energy consumption and enhance efficiency," he said. "The investment, especially in the UK, is reaching every part of the energy chain."

In fact, contrary to concerns expressed at this week's Tyndall Centre conference on financing green technologies Richard argued there was now little problem finding backing for green inventions. "They'll be a lot of money invested this year," he said. "If you are delivering innovations in clean technology now is the time to look for capital – we want to find out about these companies."

He added that if there is a risk of an investment slowdown then it comes from a lack of start ups, rather than a change in investors' attitudes or an absence of venture capital. According to some commentators (see the January 14th post at the Cleantech Investing blog) this scenario is beginning to emerge in the US where investors simply can not find enough green technology companies to back.

Richard also warned that if venture capitalists are to see strong returns on their investments there will have to be a maturing of the clean technology market – something he predicted would begin to happen this year.

"At the moment the Cleantech market resembles the IT industry 20 years ago," he explained.  "The landscape is full of component solutions and no commercial packages. The next step will be to see solution providers and packaged offerings that are easy for consumers to buy and understand."

"In addition, we need to see innovation companies scale up and commercialise their own innovation offerings in the face of the innate conservatism of project-finance lenders who are reluctant to lend to projects whose advantage lies in innovation. This could well mean that some big players emerge in the next 12-18 months."

Posted by James Murray on February 22, 2007 | Permalink | Comments (0)

Putting a price on carbon emissions will have limited environmental benefits and will not drive the level of technical innovation required to tackle climate change.

That was the message for delegates at the close of the Tyndall Centre's inaugural conference on financing green technology earlier this week as Dr Jonathan "Jack" Frost of Johnson Matthey Fuel Cells argued that, regardless of more recent difficulties with emission trading schemes, carbon pricing initiatives had a history of failing to deliver environmental benefits.

Frost said that in the UK there was already a price on carbon emissions in the form of fuel duty. It equates to a charge of £750 per tonne of carbon, while even in the US a tonne of carbon emitted from your car will cost you around £100. These charges had been in place for over 20 years and were meant to drive innovation in vehicle design to improve fuel efficiency and reduce reliance on volatile fuel imports. "If pricing carbon is supposed to drive innovation, this should have done it," he observed.

And yet the fuel economy of cars over the last 25 years has shown little improvement, he argued, despite this large carbon tax. Engines have improved sufficiently to have delivered efficiency improvements of 30 percent, but these savings were instead invested in enhanced performance and improved safety in the form of heavier cars.

"Another example is that it is always cost efficient to build energy efficient systems into buildings, but do we don't do it," he said. "These are straightforward investment, but it is just not important to many companies." As Frost observed a bank with a turnover of billions is just not going to be interested in the cost of heating and lighting its buildings even if putting a price on carbon caused that cost to double or even treble.

Frost argued that these scenarios were evidence that carbon pricing alone would not stimulate the innovation needed to deliver green technologies. "The market, the best mechanism we have for setting prices, hasn't been able to set a price on carbon due to externalities, but we seem to think we can set a price that'll work – it's quite an arrogant position," he said. 

However, Frost insisted that while the benefits of carbon pricing may have been overstated there was one thing governments could do to drive clean technology innovation, and that was to deliver a market.

He said that firms would invest in innovation and deliver low carbon technologies if they were more confident there was a market for their new inventions.

He cited the catalytic converter as a prime example of government driving innovation by guaranteeing a market. "When the US introduced clean air legislation in the 1970s many engineers said that cleaning up emissions from cars was impossible, but the legislation was passed anyway and new technology was invented in the form of the catalytic converter," he said. "Since then targets for clean air have kept coming down and there has been a thousand-fold reduction in emissions. There was no extra cost and no government subsidy, but there was a guaranteed market for the technology."

He argued that such bold legislation was the best hope of delivering low carbon technologies. "If you went to your board and said you had an idea for a product that was dependent on the price of carbon being high in eight years time they'd tell you to get lost," he said. "But if customers have said "I'll buy it if you make it" it completely changes the investment decision as you know there is a market."

The Australian government has just delivered such a market to manufacturers of energy efficient light bulbs, banning all incandescent bulbs by 2010 – a move bound to stimulate investment in the technology.

However, with many governments apparently unwilling to deliver such stringent legislation, Frost argued that similar success could be achieved if the public and private sector used its purchasing power to demand greener products, something that is beginning to happen.

"If you tell a firm that you want something that meets low carbon specs and you'll buy it if they build it then they will back themselves to outperform their rivals and deliver that product," he said. "It will make engineers think about carbon in the design agenda, which is something that has never really been done before."

Dimitri Zenghelis, who worked on the Stern Report, agreed that carbon pricing alone would not prove sufficient to halt global warming, but advocated a different approach, arguing that direct investment from governments was now required if we are to stabilise atmospheric carbon levels below 550 parts per million – a scenario that he warned would still result in serious levels of warming.

"Many of the technologies required to decarbonise our economies don't yet exist and the private sector will not take the risk to develop them even in a world with carbon pricing," he said. "There is going to need to be help from the public sector, particularly in putting on the large scale demonstration projects for new technologies."

Either way it seems that the confidence our leading politicians have in carbon trading schemes is not shared by everyone and if we are to stimulate innovation in clean technologies far bolder moves may well be required. 

Posted by James Murray on February 21, 2007 | Permalink | Comments (1)

A leading economist this week warned that the world's two leading carbon trading schemes are failing to deliver the expected benefits due to a collapse in the price of carbon credits - and the situation is likely to get far worse before it gets better.

Many politicians have identified carbon emissions trading schemes as the best means of tackling climate change, arguing that by putting a price on carbon emissions firms have a financial incentive to reduce their carbon footprint.

However, speaking to an audience of academics and business leaders at this week's Tyndall Centre conference on investments in low carbon technologies, Professor Catrinus Jepma of the University of Amsterdam warned that both the EU's Emissions Trading Scheme and the UN's Clean Development Mechanism were in danger of failing with prices for the carbon credits used under both schemes predicted to reach just a few cents.

"The Stern Report suggests we need a price for a tonne of carbon emissions of $20, rising to $30, $40 or even $50 to stabilise [the level of CO2 in the atmosphere] at manageable levels," he said. "But there is a good chance that the carbon credits that are meant to provide incentives for reducing emissions will be available for next to nothing."

The problems with the European Trading Scheme are well documented with the collapse in the price of a tonne of carbon dating back to May last year when it emerged that most countries in the scheme had set their carbon caps far too high, resulting in fewer firms than expected having to buy credits and causing the price of a tonne of carbon to plummet from over €30 to less than €10.

As one delegate observed "with some firms having carbon emissions capped at 110 percent of what they actually required it was always going to fail".

The EU is seeking to rectify the problem ahead of the second phase of the scheme, which starts next year, and recently rejected many member countries proposed emission allowances for the next phase as too high, ordering them to go away and come back with lower caps that will force more firms to cut emissions or buy credits.

However, Jepma argued that with no link existing between the first and second phase of the scheme the cost of carbon credits will drop to almost nothing by the end of the year. Currently the price is already below one euro meaning there is little incentive for firms to cut emissions as it is cheaper to just buy in credits to offset their pollution.

He also warned that something similar was in danger of happening with the Kyoto Protocol's Clean Development Mechanism (CDM), which is designed to allow signatories to the agreement to meet their carbon emission reduction targets by buying in Certified Emission Reductions (CERs) or carbon credits from CDM-approved carbon reduction projects in the developing world.

Jepma said the scheme was in danger of becoming a victim of its own success with over 500 projects already approved by CDM and a further 1,000 projects in the pipeline awaiting approval. He predicted that as a result over 2.4bn CERs will be available by 2012.

Meanwhile, Jepma warned that Russia and many of the Central European States are on track to be well below their Kyoto emission targets for 2012 meaning they will generate 2.8bn credits or Assigned Amount Units that they can sell to those countries unable to meet their Kyoto obligations.

This means that there will be a supply of 5.2bn tonnes worth of assorted carbon credits available under the various Kyoto carbon trading mechanisms by 2012, but the biggest polluters in the scheme – the EU, Canada and Japan – are expected to exceed their targets by just 3.6bn tonnes.

"Under the Kyoto targets the supply of credits will outstrip the demand," said Jepma. "We are going to see the same scenario as with the ETS whereby the price for a tonne of carbon starts high and then collapses to close to zero by the end of the scheme… which is precisely the wrong message."

He added that such a scenario would not only remove the financial incentive for countries to invest  in clean technologies that help them stick to their emissions targets - as it would be cheaper to continue polluting and just buy credits - but it would also discourage investment in carbon reduction projects in developing countries as they would have to pay for CDM approval only to find they could not get a good price for the carbon credits they generate. 

Jepma said the only hope for keeping the price of the various carbon credits high enough to act as an incentive for countries to hit their Kyoto targets lay with convincing the Russians to retire the bulk of their credits.

"We need to convince the Russians that if they put all the credits they have into the market they are going to undermine their own returns from the system," he said. "We need to implore them to be sensible and help push the price [of carbon] up to a workable level."

As one delegate observed what we need is a "CDM version of OPEC" to control the flow of credits onto the market. But until such an organisation emerges the success of the scheme up until 2012 rests entirely upon the goodwill of the Russian government.

Posted by James Murray on February 21, 2007 | Permalink | Comments (13)

The widespread adoption of carbon capture technology capable of catching and storing CO2 emitted from coal and gas fueled power stations will be essential if we are to successfully tackle climate change, according to a senior figure at the World Bank.

Speaking yesterday at a conference on financing low carbon technologies hosted by climate change research body the Tyndall Centre, Dr Robert Watson, chief scientist and director for environmentally and socially sustainable development at the World Bank, insisted that investment in green energy needed to focus more on improving the cleanliness and efficiency of fossil fuel-based power stations.

"Renewables are part of the solution," he said. "But because of the low price and [high] availability the US, China and India are going to use coal whether we like it or not, so we need to make it more efficient [to generate electricity from coal] and develop technologies that enable carbon capture."

Some delegates argued that carbon capture technologies would fail to deliver the level of energy security that countries could gain by shifting from fossil fuels to renewables. However, Dimitri Zenghelis, an economic advisor to the UK government and one of the authors of the Stern Review, agreed that carbon capture and sequestration must play a major role in any green energy policy.

"There are more than enough fossil fuels available to get us beyond the 750 parts per million [of CO2 in the atmosphere] level and a lot of those fossil fuels will be burnt because of their low marginal cost even in a world with carbon pricing," he said. "Therefore, carbon capture needs to play a major role."

Watson accepted there were still some technical problems with delivering carbon capture and sequestration, most notably in ensuring there are no future leaks from the stored carbon. But he argued governments needed to do more to stimulate investment in the technology.

He said that as carbon capture technologies would be for the public good with the main benefits being environmental rather than commercial there was a need for public-private partnerships to drive investment. "There is potential in the US and China to use this technology for several decades while we think about what to do next [to deliver clean energy]," he added.

Separately, Watson said that the investments required to deliver a clean energy revolution were relatively "trivial" - arguing that while we spend $1.25 trillion a year on oil some reports suggest that extra investment of just $40bn a year until 2050 could stabilise CO2 in the atmosphere at manageable levels. However, he warned that raising this investment would prove extremely challenging because "the current financing mechanisms are completely inadequate in both design and scale".

"A few windmills and solar panels just aren't going to cut it," he said. "We need a global, long term regulatory framework that recognises equity between developed and developing world economies. It can't just be Kyoto plus another five years."

Watson also claimed that a long term successor to Kyoto that delivered a global carbon trading scheme, could make it easier for the World Bank to expand its investments in clean energy projects in the developing world. He said that the World Bank had mapped out a model that would allow loans for green energy projects to be paid back at a low rate, because the investment fund could sell the carbon credits generated from the project.

He argued that this investment model was potentially sustainable, but was being hampered by the uncertainty surrounding the future of the UN's Clean Development Mechanism carbon emissions trading scheme post 2012, which has led to a decline in the price of carbon credits.

Posted by James Murray on February 20, 2007 | Permalink | Comments (0)

The Institute of Electrical and Electronics Engineers (IEEE) 802.3 working group has recently hosted the first meeting of its new Energy-Efficient Ethernet (EEE) Study Group as it seeks to develop standards that will help reduce the environmental footprint of network equipment.

If the technology is implemented, estimates for cost savings run to $450 million in the US alone.

The proposed process relies on switching to lower speeds during low link utilisation. Speed bumps for network interface cards (NICs) are 10Mbit/s, 100Mbit/s and 1Gbit/s - 10Gbit/s over copper NICs are available but the switches are doing interop tests with the cabling.

Ironically, firms who are developing 10Gbit/s switches are currently also trying to get the power per port used in these devices down to manageable levels, as I discussed recently in IT Week's labs blog.

In principle the Energy Efficient Ethernet is a great idea. If you're at work, and you have a 1Gbit/s NIC and the local area network supports 1Gbit/s then if you're just tootling along surfing the web, nothing too demanding, your link might then decide to drop the data transfer rate to say 10Mbit/s, saving energy and money in the process.

If you then decide to download a 1GB .PDF file, from an internal portal, you're link might crank up to 100Mbit/s. It's highly unlikely that your WAN link goes much above 10Mbit/s, especially if you're at home using a broadband. So the only reason that you're link rate would ramp up to 1Gbit/s would be if you wanted a large data file say a 50GB database chunk over your internal LAN.

The IEEE is right, millions of dollars could be saved and the carbon footprint of network equipment will be reduced.

But, is this the same IEEE that is currently working on a new energy profligate power-over-Ethernet standard, the 802.3at spec otherwise known as power-over-Ethernet Plus (PoEPlus)?

In case you were wondering, yes it is. At their last shindig on Jan 17th, the group passed a motion which could allow at least 30 watts and potentially up to 60 watts of juice over network cabling. In theory, PoEPlus could allow users to run or even recharge laptops over network cabling, which would prove extremely tempting to many organisations.

OK, it's different technology, but if it takes off it could make a massive dent in any energy savings achieved through rolling out the proposed EEE standard. The EEE standard is a step in the right direction, but the IEEE has a long way to go before it can regard itself as a green organisation.

Dave Bailey

Posted by James Murray on February 19, 2007 | Permalink | Comments (2)

Budget airline easyJet chose Valentine's Day earlier this week to declare its love for the environment, unveiling three "promises" that will see it enhance the fuel efficiency of its aircraft, improve the energy efficiency of its ground operations and support legislation that encourages green aviation.

The promises came as the company published its corporate and social responsibility report, which argued that far from being an environmental pariah the company already boasted a relatively green business model.

It claimed that its commitment to new aircraft had allowed it to cut CO2 emissions per passenger kilometre by 18 percent since 2000, while the strategy of cramming more seats into each Airbus A319 than traditional airlines meant that the typical European airline operating the same plane would burn 27 percent more fuel per passenger.

Speaking on the publication of the report, easyJet chief executive Andy Harrison called for "a more balanced debate" on airline sustainability that starts to explore practical means of reducing the industry's environmental footprint.

"Given that aviation CO2 only accounts for 1.6% of global greenhouse gas emissions, grounding every aircraft in the world would have a miniscule impact on climate change yet a vast impact on our economies," he said. "So, airlines have a responsibility to do what they can and governments have a responsibility to ensure that their policies incentivise the right behaviour."

Harrison argued that the government's recent decision to double air passenger duty was a prime example of how ill-conceived legislation was failing to drive the environmental improvements the industry required.

"Governments should recognise that some airlines are already more efficient than others - something that the UK's Air Passenger Duty (APD) dramatically fails to do," he said. "APD provides no incentive for airlines to operate the cleanest aircraft; it completely omits airfreight and private jets; the proceeds are not allocated to any scheme to improve the environment; and it is disproportionate - on a UK domestic return flight, the £20 APD is now 25% of the average fare and about 10 times the cost of off-setting the carbon emitted on an easyJet flight."

Advocates of passenger duty would argue that making the tax disproportionately high for domestic flights is a wise move designed to encourage domestic passengers to take the train instead. However, it is far harder to object to Harrison's assertion that "it would be better to incentivise consumers to choose airlines... operating the cleanest aircraft available".

Perhaps unsurprisingly Harrison stops short of suggesting a tax on airline fuel to help achieve this - even if a levy on fuel, rather than a flat tax on passengers, would reward the most fuel efficient operators, punish those airlines that use older fleets and bring airfreight and private jets into the green tax system.

Instead, easyJet has identified the European Union's Emissions Trading Scheme as the best means of achieving this and has called for the scheme to be extended to include aviation "as soon as possible". Meanwhile, Harrison also urged European governments to mandate minimum environmental standards for aircraft.

It is interesting to note how even airlines - for so long villified by the environmental movement - can perceive a competitive advantage from greener business models.

EasyJet will have recognised that any laws banning the most fuel guzzling aircraft would have little impact on its fleet while costing its rivals billions and possibly even driving a few of them out of business. Similarly, any extension of the emissions trading scheme would be likely to cost its more inefficient opponents far more than it would easyJet's relatively modern operation. In fact, if the company's aircraft are as efficient as it claims it may even get money out of the scheme by selling carbon credits to its gas guzzling competitors.

Furthermore, easyJet will have realised that it is bound to gain some customer goodwill by taking a position diametrically opposed to that of archrival Ryanair. While Ryanair boss Michael O'Leary has vowed to boycott the emission trading scheme if it is extended to include his company, easyJet can present itself as an environmentally responsible operator genuinely striving to find a legal framework that helps reduce emissions.

Staunch environmentalists, however, are unlikely to be won over by easyJet's green commitments, and will note that without any published targets for emissions reductions its three promises look more like rhetoric than a concerted action plan.

But while easyJet still has its faults Harrison should be applauded for his willingness to engage with the issue of environmental sustainability and actually take the unusual step of advocating legislation.

A reduction in air travel may ultimately be necessary to tackle climate change, but in the short to medium term there is no way governments will back any move that leads to planes being grounded. Given this scenario we instead need to ensure the airline industry is as green as it possibly can be and Harrison's recommendations for a regulatory framework that rewards the cleanest airlines and bans the most inefficient is as good a place to start as any.

Posted by James Murray on February 16, 2007 | Permalink | Comments (1)

A global carbon emissions trading scheme moved a step closer yesterday after leading world politicians and business leaders agreed that all major economies should face targets for cutting emissions and that a limit should be set for the maximum acceptable level of carbon dioxide in the atmosphere.

The non-binding agreement was reached at a two day meeting of the G8 group of the eight richest nations plus Brazil, China, India, Mexico and South Africa in Washington this week. Attendees at the event - which was organised by British-led environmental group Global Legislators Organisation for a Balanced Environment (Globe) - included German chancellor Angela Merkel, president of the World Bank Paul Wolfowitz, US senator Joe Lieberman and presidential hopeful John McCain.

The group also agreed that man made global warming was "beyond doubt" and that a global carbon trading scheme should be instigated as the best means of capping and reducing emissions.

Experts said that while the agreement was non-binding it highlighted the growing political consensus that was developing around the need for climate change legislation and laid solid foundations for the imminent UN talks on agreeing a successor to the Kyoto protocol.

Senator John McCain, who hopes to be the next president of the US, also nailed his colours firmly to the environmental mast, declaring that climate change posed a threat to national security and arguing that voluntary targets for reducing emissions were inadequate.

McCain has co-sponsored climate change legislation with senator Joe Lieberman, who told the forum he was confident legally binding CO2 reduction targets would soon be in place in the US.

"I want to make a prediction, which is that the Congress of the United States will enact a nationwide law mandating substantial reductions in greenhouse gases before the end of this Congress or early in the next," he said.

With major players on both sides of the US political divide now committed to climate change legislation and lawmakers in developing countries such as China and India hinting they will come on board with greenhouse gas targets if the US does likewise a major breakthrough looks more likely than ever.

It is becoming increasingly apparent that a global emissions trading scheme, which would reward the cleanest companies and penalise the most polluting, is likely within the next five years and that firms that wish to turn the scheme into a revenue generator rather than a drain on the bottom line need to act now to reduce their carbon emissions wherever possible.

Posted by James Murray on February 16, 2007 | Permalink | Comments (0)

The full scale of the energy crisis facing the world's datacentres was revealed for the first time this week after new research found that powering and cooling servers is costing businesses $7.2bn a year.

The study from the Lawrence Berkeley National Laboratory (LBNL) combined estimates on the size of the server market from IT analysts IDC with figures on datacentre energy efficiency to quantify the global power demands of datacentres. It concluded that the shift towards low end servers had caused global power consumption to double between 2000 and 2005 to 123 million kw/hours.

It also estimated that US datacentres alone now account for 1.2 percent of total US power consumption or more than the whole state of Mississippi. That equated to an electricity bill for US datacentres of $2.7bn in 2005.

The report, which was authored by Jonathan Koomey, a scientist at LBNL and consulting professor at Stanford University, also warned that based on IDC server shipment forecasts the situation could get far worse with power demands expected to increase by 40 percent on 2005 levels by 2010, assuming per-server power consumption stays at 2005 rates.

Speaking at the LinuxWorld OpenSolutions Summit in New York this week, Randy Allen, corporate vice president for the server and workstation division at chip manufacturer AMD, which funded the research, said that it should serve as a "wake-up call" to businesses. "This study demonstrates that unchecked demand for data center energy use can constrain growth and present real business challenges," he said.

Allen pointed to the next generation of more energy efficient servers as a means of tackling the problem. He also argued that while political and business leaders had taken some steps to reduce the energy consumption of their datacentres far more needed to be done.

He recommended that an annual report on national datacentre energy consumption and a standard means for firms to measure their own datacentre's energy efficiency would help monitor progress in tackling the problem and identify areas for improvement.

Posted by James Murray on February 16, 2007 | Permalink | Comments (0)

At a preview for its new products in London today, computer-aided design software leader Autodesk discussed its Green Index, which is intended to provide a snapshot of the state of architectural sustainability practices.

The Green Index is not new, having been conducted since 2005, but it merits attention as an illustration of the interconnectedness of technology and environmental challenges in the real world outside of computer components.

Transport probably gets more abuse by environmental lobbyists but buildings are huge energy consumers and often patently inefficient, so the pressure is on architects to come up with improved designs.

Autodesk's Green Index measures design and construction metrics to provide a score between 0 and 100 on the use of sustainable techniques with factors such as wastage minimisation, use of prefabricated components and sourcing of materials all weighted. Architects are quizzed on design practices based on the US Green Building Council's Leadership in Energy and Environmental Design (LEED) standards.

"Students in [architecture] colleges today are as interested in the manufacturing of components as the assembly of those components," said an Autodesk spokesman.

The good news is that tihngs are getting better and the overall Green Index score of 30 in 2006 is forecast to rise to 60 in 2011. One surprising finding claimed by Autodesk is that the top driver for sustainable designs is no longer fuel cost but client demand. In other words, those picking up the bill are demanding sustainability.

The radical changes in demands for buildings will require architects to better understand materials, energy and atmosphere management alternatives. A new take on HVAC (heating, ventilation and air-conditioning) will be critical - as is already occurring in datacentres, we could add. And, of course, new design software will have to support these new demands.

Martin Veitch

Posted by James Murray on February 15, 2007 | Permalink | Comments (0)

With growing numbers of firms convinced by the need to develop green business models it was only a matter of time before the business school community started offering courses to instruct executives precisely how environmental sustainability should be managed.

Stanford Business School has become the latest such institute to get in on the act with the launch of a new five day residential seminar entitled Business Strategies for Environmental Sustainability that promises to explore how "to turn sustainable business practices into competitive advantage".

The event - which is to run from the 16th to 22nd of September at the Stanford Sierra Conference Centre in California - will cover a range of topics including how to develop a sustainable supply chain, how to avoid "greenwashing" initiatives, and how to work effectively with the media and green lobby groups.

The school said the seminar would aim to bring together senior executives from business, government and the non-profit sector. Applications for attendance can be made until June 25th.

Posted by James Murray on February 15, 2007 | Permalink | Comments (0)

Businesses that fail to develop strategies to limit their greenhouse gas emissions could find it harder to attract investment capital after the FTSE Group last week launched new criteria for its CSR index that will exclude firms that fail to do enough to tackle climate change.

The new criteria were added to the increasingly influential FTSE4Good Index, which just celebrated its fifth anniversary and provides real-time indices designed to reflect the performance of socially responsible equities and offer investors an independent way of identifying companies with good CSR records.

The criteria - which oblige firms to disclose their GHG emissions, and develop and successfully execute policies for reducing emissions – will be rolled out over the next two years with the first deadline for compliance coming in January 2008.

The new standards will initially effect just over 250 of the companies on the index which have been identified as having the highest impact on climate change, such as energy, oil and gas, mining and aerospace firms. The FTSE Group said that of these companies less than 50 would currently meet the criteria and as such it will work with them to ensure they are aware of the changes required.

The organisation also said that these criteria were just a "first step" and indicated that it planned to introduce far more stringent criteria - such as insisting companies publish a GHG reduction target and develop strategies to limit suppliers' emissions - and extend them to cover other medium impact industries such as consumer electronics and house builders.

Mark Makepeace, chief executive of FTSE Group said the move highlighted the company's commitment to keeping the criteria governing the FTSE4Good Index Series in line with CSR best practice. "Climate change is an important issue for companies and investors alike, and investors understand these criteria will make an important contribution to helping companies manage their risks," he said.

Mark Kenber, policy director at The Climate Group, which helped with the development of the criteria argued that not only would they help drive climate change concerns further up the business agenda but they could also help deliver business benefits to those firms that comply with the standards. "We believe incorporating sustainable behaviour into business practice will deliver long term benefits to stakeholders," he said. "Clearly a lot of companies will have to work hard to meet these new criteria but we are convinced that their efforts will bring positive impacts, both economic and environmental."

Inclusion on the index is increasingly highly regarded by investors, according to a spokesperson for the FTSE Group. "One company recently said that it was contacted by 38 different fund managers when they entered the index," she said.

In related news, the US-based Ceres group of environmentally sustainable investors this week attempted to drive global warming further up the investment agenda with the publication of a new Climate Watch list designed to name and shame those firms that fail to respond to shareholder inquiries about their climate change policies.

The first ten companies on the list are: banking giant Wells Fargo; energy firms TXU, Dominion Resources, and Allegheny Energy; coal companies Massey Energy and Consol Energy; oil and gas giants ExxonMobil and Conoco Phillips; insurance firm ACE; and retail firm Bed Bath & Beyond.

New York City Comptroller William Thompson Jr., whose office filed resolutions with electric power and coal companies for them to release their climate change policies, said that climate change now posed a significant business risk and that investors needed to know what firms were doing to tackle the problem in order to make informed investment decisions.

"Companies in every industry, especially energy sectors, must act now to assess and mitigate climate change risks," he said. "To enable investors to make informed investment decisions, companies must provide full and transparent disclosure of the actions they are taking to address the risks and opportunities of climate change."

The latest developments further underline the growing importance of environmental issues to institutional investors and come just days after an ethical investment fund from the Co-op was judged to be the best performing unit trust in the UK last year.

Posted by James Murray on February 15, 2007 | Permalink | Comments (1)

Human activity may not be making as large a contribution to global warming as thought, according to a new theory that is bound to infuriate many scientists who believe there is now little doubt that mankind is the primary cause of climate change. However, business leaders would be wise not to let the on-going debate about the causes of global warming derail their initiatives to limit greenhouse gas emissions.

According to a recent study from Danish weather scientist Henrik Svensmark, cosmic rays have a far greater effect on climate than previously thought and as such the impact of human activity may have been exaggerated.

The research - which was published in the journal Proceedings of the Royal Society and forms the basis of a new book called The Chilling Stars, written by Svensmark and former editor of the New Scientist Nigel Calder – is based on a series of experiments which found cosmic rays that originate from stars and hit the earth create charged ions. The experiments showed that these ions encourage the formation of clusters of ozone, sulphur dioxide and water molecules, which in turn act as aerosols that attract water vapour and lead to the formation of clouds, which reflect more of the sun's rays back into space.

Writing in the Sunday Times this week to publicise the new book, Calder said that the intensification of the sun during the twentieth century increased the magnetic field which bats away many of these cosmic rays. The slight increase in the sun's temperature therefore meant "fewer cosmic rays, fewer clouds, and a warmer world".

Calder argued that this theory was a compelling alternative to the orthodox view that human activity is the dominant cause of global warming and also helped explain why some regions of the world, such as east Antarctic, are currently experiencing cooler temperatures than in the past – something he argued theories centred on manmade climate change fail to adequately account for.

The theory, however, is unlikely to convince many of the leading climate scientists who leant their name to the recent Intergovernmental Panel on Climate Change (IPCC) report, which claimed it was now 90 percent certain humans were causing climate change. It had been hoped by many environmentalists that the report would put a nail in the coffin of the debate surrounding the causes of global warming, but their hopes that rival theories would fade away appear to be decidedly premature.

A spokesman for the Met Office told GBN that Svensmark's theory was not new and that while the organisation's scientists kept an open mind on the various causes of global warming the research "needs to be taken with a pinch of salt".

"According to Met Office climate change scientists the impact of cosmic rays on cloud formation is very small and only occurs on a localised basis," he added.

However, the continuation of the debate on the causes of climate change may prompt some business and political leaders to ask if there really is the need to invest in moving away from fossil fuel based technologies when there is still some doubt that CO2 emissions are the main factor driving climate change.

It is a question Calder is keen to raise, imploring readers to "inquire whether Gordon Brown will give you a refund if it's confirmed that global warming has stopped".

He also points out that the IPCC's 90 percent certainty about the scale of man's contribution to global warming is no guarantee they are right. "Older readers may recall a press conference at Harwell in 1958 when Sir John Cockcroft, Britain's top nuclear physicist, said he was 90 percent certain that his lads had achieved controlled nuclear fusion," writes Calder. "It turned he was wrong."

But the suggestion that we should not act to curb emissions until we are certain they are the main cause of global warming – while tempting to those unwilling to make the necessary investments – completely misunderstands the nature of risk and should be ignored by any sensible business or political leader.

Even accepting there is a small chance that the scientific orthodoxy is incorrect the stakes are so high that economies have little choice but to develop business models that follow the scientists' recommendations and rely far less on fossil fuels.

Can you imagine someone giving you a gun with 10 chambers that contains nine bullets, and then saying you can either invest a small percentage of your income with them or you have to play Russian Roulette? You'd be pretty reckless not to give them the money. Would it even matter if they were lying and there were only five bullets in the chamber?

The same principle applies with global warming, albeit on a grander scale and with a longer timeline. It is almost certain that greenhouse gases emitted by mankind's activities are causing global warming that will lead to catastrophic results and huge loss of life. Even if the scientists are wrong, is it worth continuing with a course of action that could make the entire planet uninhabitable on the grounds that the scientists might just be incorrect and we could save a small percentage of global GDP by ignoring them and refusing to invest in new clean technologies?

It is simply too risky to ignore this scientific consensus.

However, even if you do belong to the shrinking minority of people who believe manmade climate change is a hoax there is still a clear commercial case for green investments.

Let's assume, just for a moment, that the link between carbon emissions and global warming is erroneous. It would not stop the vast majority of legislators, employees, and, most importantly, consumers being certain such a link exists.

Climate change deniers repeatedly claim that there is a conspiracy afoot, but from a business perspective the response has to be, so what? If there is a conspiracy – and on a personal level I believe firmly that there is not – it has been so successful that it would be a very foolish business decision to try and oppose it. You do not win customer approval by contradicting their beliefs, as any business that has operated in a non-secular country will testify.

Public opinion on manmade climate change is now well established and, much as climate change deniers may object, it is not going to change any time soon. As a result, any business leader that wants to keep employees, politicians and customers on side needs to act to limit carbon emissions regardless of how much noise is made by those who wish to downplay the impact of human activities on global warming.

There is a miniscule chance the scientists are wrong – and in a way we should all hope that they are – but without truly compelling evidence to contradict them the stakes are simply too high from an environmental and commercial perspective for anyone to use the opinions of a shrinking band of dissenters as a valid reason for the status quo to continue.

Posted by James Murray on February 14, 2007 | Permalink | Comments (7)

Firms keen to find greener options for their business travel requirements could benefit from a new online carbon calculator tool unveiled today by Carlson Wagonlit Travel (CWT).

The calculator will be available on the CWT Portal web site at the end of February, according to the David Tibbles, global product director for online booking at the corporate travel specialist. It is designed to let business users calculate and compare the carbon footprint of various travel options, as well as the cost, before booking trips.

Tibbles said that although other organisations already offer similar carbon calculators for air travel, CWT's version adds rail data into the equation. "If you enter an air travel route, the tool can give you a rail alternative," he explained. "It can search through six million rail routes across the UK, and we're thinking of expanding this to European destinations such as France and Germany as well."

CWT is the business travel partner of hundreds of UK companies and is the preferred supplier for many government departments. The first stage of the calculator was developed in collaboration with the Department for Environment, Food and Rural Affairs (Defra), which plans to roll the tool out internally.

Defra's Jonathan Green said the carbon calculator was a "positive example" of the travel industry tackling environmental issues. He added that balancing the cost of travel against the impact of CO2 emissions is a huge challenge that businesses need to face. "This is particularly true as shareholders become more aware of the importance of corporate social responsibility and the environment," Green argued.

Tibbles added that the travel industry was facing increasing pressure from customers to report on CO2 emissions. "But business travellers also want to get this information upfront before committing to a route," he said.

However, as one hand of the travel industry gives, the other takes away.

According to the General Aviation Manufacturers Association, worldwide demand for executive jets soared last year. Almost 900 private planes were delivered during 2006, up from 750 in 2005. One company has reportedly signed up for a corporate version of the Airbus A380 superjumbo.

So while some firms might consider switching their short-haul flight options for a more eco-friendly rail alternative, it is obviously proving far prove harder to convince the growing private jet crew to do likewise. Maybe being made to include the CO2 emissions from their executive planes in public CSR reports would persuade them to move towards more sustainable means of transport where possible.

Madeline Bennett

Posted by James Murray on February 13, 2007 | Permalink | Comments (1)

The accelerating arms race between IT hardware manufacturers to develop more energy efficient systems stepped up a gear at the International Solid State Circuits Conference (ISSCC) in San Francisco this week where both IBM and AMD revealed plans for new low power chips.

IBM was first out the blocks, detailing how its upcoming Power6 chip would deliver double the performance of its Power5+ chip while using the same amount of power.

According to reports the chip will have a new "nap" mode that cuts power consumption by up to 35 percent when a server's operating system is idle and will also provide new power management capabilities that will cut processor frequency and voltage when required.

The company said it would also allow users to "cap" maximum power usage, making it far easier for them to manage the power demands of a given server. Currently, estimating how much power a server will require is a tricky task with many manufacturers only providing details on maximum power requirements. But as chips may rarely approach this maximum firms are often left having to arrange to deliver far more power into a datacentre than they actually need. Capping the amount of power any chip can use would, in theory, make it far easier to optimise the energy efficiency of the datacentre.

Meanwhile, chip manufacturer AMD confirmed that the four cores in its imminent quad-core Opteron processor, codenamed Barcelona, will be able to operate at different speeds simultaneously, potentially slashing energy demands.

The company said the new chip would use an updated version of its PowerNow technology to reduce overall power requirements by ensuring that cores can crank down their speed based on their workloads.

According to reports, this ability for the cores to operate independently means AMD is confident it can cut power consumption by an average of around 10 watts compared to current AMD dual-core processors where the two cores have to move together.

Separately, AMD also demonstrated a new memory controller that allows the read/write memory to power down when not in use, reducing power consumption by 80 percent on previous models.

The company said that Barcelona would have a thermal envelope of 68, 95 or 120 watts depending on the model.

The on-going interest in energy efficiency from leading chip manufacturers at the ISSCC event further highlights the extent to which a desire to improve both energy efficiency and performance has now fully replaced the sole focus on enhancing performance that previously dominated computer chip design.

Posted by James Murray on February 13, 2007 | Permalink | Comments (0)

For a man who has spent his whole career dividing opinions it is little surprise that Sir Richard Branson's recent foray into the green business movement has failed to win universal approval. Like one of his action-packed round-the-world balloon rides the question remains as to whether Branson's green pronouncements are the brave work of a natural pioneer or the ultimately futile PR-stunt of a craven self-publicist. At times it is hard to tell.

His latest wheeze is to offer $25m to the first scientist to develop a workable means of removing at least one billion tonnes carbon dioxide from the atmosphere each year.

Sharing a stage with former US vice president Al Gore and former British ambassador to the United Nations Sir Crispin Tickell, Branson said the Earth Challenge Prize was the largest of its kind and would stimulate a scientific race akin to the 17th Century competition to find a way to accurately measure longitude.

"The Earth cannot wait 60 years," he said. "I want a future for my children and my children's children. The clock is ticking."

The move comes hot-on-the-heels Branson's commitment last year that he would reinvest the £3bn of profit raised over the next five years from his airline and rail firms into a new venture called Virgin Fuels which will research renewable fuels.

So what's not to like?

Well not much if you believe Gore, Tickell, inventor of the Gaia theory James Lovelock, climate scientist and head of the Nasa Institute for Space Studies James Hansen, and Australian mammalogist and palaeontologist Tim Flannery, all of whom have agreed to sit on the judging panel for the new prize. Branson could not have assembled a more respected group of environmentalists if he'd recruited Mother Nature herself.

He even had a pretty compelling defence ready for those who would argue that owning an airline and leading the fight on climate change should be two mutually exclusive activities. He argued that were Virgin to disappear tomorrow people would simply fly with other airlines, and that every penny of profit from the airline was being invested into Virgin Fuels and its mission to find a way to make the fuel used in planes and other forms of transport cleaner.

And yet there is something that doesn’t feel quite right about Branson's new prize.

There is no doubt that it is welcome and it may well encourage innovation, but many environmentalists would argue that awarding a prize for developing a way of removing CO2 from the atmosphere only fuels the "science will save us" mentality that convinces many people and organisations that they do not need to modify their current behaviour.

A cynic would argue that this is a mentality that Branson, as the owner of an airline, would dearly love to encourage as it allows everyone to continue to fly guilt-free.

It is a point that has not been missed by Tony Juniper, director of Friends of the Earth, who said in a statement that carbon capture remained a high risk strategy for tackling climate change and a focus on renewable energy would be more welcome.

"Technology has an important role to play in tackling climate change and Sir Richard's initiative may encourage innovators to develop a wonder technology which takes carbon dioxide out of the atmosphere," he said. "But many of the ways of tackling climate change, such as energy efficiency and renewables, already exist, and it is essential that these are implemented as soon as possible. We cannot afford to wait for futuristic solutions which may never materialise."

It may sound pessimistic to claim carbon capture technologies may never appear, but it is a not unreasonable fear given the ongoing concerns over the amount of energy required to capture carbon from the air and the stability of storing carbon underground, both of which continue to hamper the development of large-scale sequestration projects.

Meanwhile, if Branson's defence of his airline is difficult to argue with, it is less easy for him to explain how his Virgin Galactic space tourism project - which promises to emit countless tonnes of greenhouse gasses for the sole benefit of giving a handful of bored millionaires a few minutes of weightlessness – fits into his new green image.

Personally, I think that much of this criticism is off beam and that on balance Branson is to be applauded. Not only is he demonstrating how businesses can take a positive role in tackling climate change while maintaining growth and profitability, he has also appreciated that clean technology is a valuable investment opportunity, he is putting his money where his mouth is, and he is exploiting his considerable PR skills to highlight the seriousness of the climate change threat.

However, his recent moves do highlight for all firms how quickly a green business strategy can be undermined if you do not take a truly holisitic approach.

Branson could counter much of the criticism of Virgin's climate change strategy and destroy the allegations of hypocrisy by simply cancelling the space tourism programme. It would cost him millions and represent a major climbdown, but is it really too much to ask of a man who accepts that the future of humanity is at risk from the very greenhouse gases his giant space folly will emit?

He could argue that others would just fill the gap he leaves, which may well be true, but if the main purpose of Virgin Galactic appears to be symbolic then think of the even more powerful symbolism for the environmental movement of Branson accepting the whole thing is dangerously misguided.

Furthermore, it is hard for Branson to argue with the accusation that awarding a prize solely for developing a means of removing CO2 from the atmosphere creates the impression that we should focus on capturing greenhouse gases rather than transforming our economies to ensure we don't put them into the atmosphere in the first place. Personally, I hope Branson has to award the prize, and award it soon when a feasible way to remove CO2 from the atmosphere. But as one of the world's most successful businessman Branson must be fully aware of the concept of risk and the foolishness of putting all your eggs in one basket.

He could counter this criticism overnight and create a far more valuable scientific race if he offered to give similar prizes to the first scientists to deliver cheap and effective tidal and solar power, a feasible replacement for the internal combustion engine, and a means of turning waste energy into usable electricity.

If his green intentions are as heartfelt as they sound he should delight in paying out for any of these inventions, while from a financial perspective ownership of just one of these inventions would surely deliver the Virgin empire the on-going  commercial success it craves.

Posted by James Murray on February 12, 2007 | Permalink | Comments (9)

Contrary to popular opinion the drive to tackle global warming will result in a significant boost to the global economy.

That is the conclusion of a new report from investment bank Barclays Capital, which claims the need to increase energy supply by 50 percent over the next 25 years while simultaneously weaning our economies off of hydrocarbons will lead to an "energy revolution" that will "prove highly stimulatory for the global economy".

Speaking to GBN, report author and global head of asset allocation at Barclays Capital Tim Bond said that the current political and economic focus on how much climate change is going to cost in terms of GDP was "fundamentally flawed".

"We've seen throughout history that wherever an economy adopts a new general purpose technology there has been no circumstance where it has had a negative effect on growth," he explained. "The shift from hydrocarbons to alternatives should be seen in these terms."

The report argues that with the transition towards green technologies and business practices estimated to require at least 15 percent of global investment in the medium term there is bound to be a stimulatory effect on the global economy as more people are employed and more money invested.

Bond also argued that a shift to renewable energy sources would help create a more stable investment environment. "Hydrocarbon based energy may be cheap in nominal terms but it has been characterised by volatility," he said. "One thing alternative energy should give us is stable and predictable pricing, which means uncertainty will be diminished and the cost of investment in energy will come down."

Unfortunately however Bond admitted that this rosy outlook is dependent upon the development in the near future of a clear political and regulatory framework to underpin the transition towards clean energy.

"The capital is queuing up and the markets are raring to go," he said. "But the only barrier is the uncertainty around the politicians sitting down and sorting out a framework. In the past businesses have shifted and the politicians haven't shifted enough, but the feeling of us and other investment houses is that the defeat of the Republicans at the mid-term elections means the log jam has been removed and that an international agreement is now likely."

Failure to deliver such a regulatory framework would have a negative impact from an investment as well as an environmental perspective, according to Bond. "Without an agreement we will have persistent uncertainty around which energy sources to back, which will deter investment," he argued.

Bond argued that the current uncertainty around international energy policy has already had a dampening effect on the global economy of around 1.5 percent a year since energy prices started to rise in 2002. He said that while demand was currently outstripping supply investment in real terms in energy was not climbing to meet that demand due to fears amongst investors that they might back energy projects that could be hit by a new legislative framework.

Posted by James Murray on February 9, 2007 | Permalink | Comments (0)

It may have gone largely unnoticed that last week was the European Union's Sustainable Energy Week, but according to several experts events behind the scenes at the European Commission revealed it is approaching a major legislative breakthrough on energy efficiency that could reshape the entire European technology landscape.

Speaking following a workshop in Brussels on Applying ICT-based Solutions to Energy Efficiency Challenges (pictured), senior executives at HP admitted they thought that the Commission was approaching a milestone in its attempts to improve energy efficiency and that strict new legislation could be in place within "two years".

"The new package of energy proposals [released last month] will be reviewed in March and if it is approved [by the European Parliament] it will have a major impact across all industries," predicted Bernard Meric, senior vice president external relations for HP in Europe, Middle East and Africa. "It is a major milestone. It will increase awareness of efficiency issues further and provide renewed impetus for the push for standards."

HP also predicted that the new proposals would result in wider adoption of energy efficiency specifications in public procurements. "In the Nordic region energy efficiency has been included in public tenders for ten years and we expect to see the EU roll that out across the union," said Hans Wendschlag, Nordic environmental programme manager for the company. "It is one of the areas we really want to see more progress. It is not enough to just buy on up front price any more and we expect more precise guidelines for governments from the EU."

Alongside the broader proposals included in the recent energy package, experts also signaled that progress was being made towards banning inefficient electrical products under the Energy Using Products (EUP) directive.

The directive - which came into force in August 2005 and is due to be transposed by member states by August 11th this year - covers fourteen different areas, including PCs, printers and consumer electronics, and has the power to ban products that fail to meet minimum standards and ensure the energy efficiency of products is included on labeling.

The various EUP studies to determine the standards by which to gauge energy efficiency are due to be completed by 2008 and Wendschlag said that HP expects to see "legally binding measures within two years that will raise the floor for the worst performers".

Meike Escherich, senior analyst at Gartner, agreed that a rare consensus in the European Commission meant that not only could the legislation be pushed through relatively quickly but that the minimum standards could prove surprisingly stringent. "The minimum standards are still being discussed but the early signals are that they will be pretty strict and won't be easy to achieve," she said.

Perhaps surprisingly leading IT manufacturers have reportedly not been engaged in intensive lobbying against these new measures, despite the fact they could see swathes of their products banned. "It is actually good news for firms that can afford to do the R&D," explained Escherich. "It's not that easy to change your whole production and design process so [the EUP] could have a big impact on imports as some of the Asia-Pac manufacturers may just forget about Europe… We'll see a smaller list of available suppliers, which is why the big players like HP, Dell and Fujitsu are broadly supporting the EU on this."

Like many manufacturers of electrical equipment HP says it is keen to see a largely voluntary element to any improvements in energy efficiency, but Meric hinted that it would indeed support much of the new legislation, claiming that setting standards for procurement and cutting off energy inefficient products would prove "two clever ways of moving the market" that "will punish the worst performers and reward the best".

Banning products and effectively forcing smaller suppliers out of the market would of course lead to less competition, but Escherich argued that most customers would see that as a price worth paying if it means they see significant improvements in the energy efficiency of their products.

The legislation also means that European purchasers not already considering energy efficiency as a factor in their procurement decisions now have another major reason to do so, as inefficient products could well be discontinued within two years making support and spare parts arrangements more difficult.

Posted by James Murray on February 8, 2007 | Permalink | Comments (0)

The European Commission has sent a shot across the bows of industries that refuse to stick to voluntary targets on curbing carbon emissions, with proposed legislation that will force carmakers to slash CO2 emissions from new cars by 18 percent by 2012.

The new legislation, which was unveiled yesterday, will set legally binding targets to ensure the average new car emits no more than 130g of carbon per kilometre, a sizable reduction on the 162g per kilometre emitted by the average new car in 2005.

The legislation represents something of a compromise after original targets of 120g per kilometre proposed by Environment Commissioner Stavros Dimas were rejected last month following ferocious lobbying from car manufacturers and opposition from Industry Commissioner Guenter Verheugen who argued it would result in jobs being sent overseas.

However, the recent UN report on the seriousness of climate change appears to have stiffened the Commission's and it is now committed to pushing through legally-binding targets in the wake of manufacturers failure to meet a voluntary target of reducing emissions to 140g per kilometre by next year.

Verheugen said the new strategy "hit the right balance between the need for global competitiveness and progress in safety and environmental performance".

The Commission said that the 130g/km average would not apply to each individual manufacturer, but to the industry as a whole.

It also claimed that the new strategy would be based on "an integrated approach", involving not only engine technology, but also technological improvements such as setting mimimum requirements for air-conditioning systems, the compulsory fitting of tyre pressure monitoring systems, setting maximum tyre rolling resistance limits and increased use of bio-fuels, which it hopes will drive emissions nearer to the original 120g/km target. 

However, precise details are still to be released and it is unclear how the Commission will police firms that fail to meet the new targets.

Environmentalists bemoaned the compromised target as evidence of the car lobby's success and insisted it did not go far enough. Friends of the Earth said that the European Commission should have stuck to its original target. "The 120g/km target is feasible," said Tony Bosworth, transport campaigner at the lobby group. "Some new technology might be needed, but car manufacturers need to make best use of existing technology and stop the move towards bigger, heavier, more powerful cars."

However, despite some anger at the watering down of the legislation the new targets are likely to serve as a major warning to other sectors, including the air and electrical equipment industries, that failure to work towards voluntary goals on emissions will result in more stringent legislation and that arguments about damage to international competitiveness no longer hold the power they once did.

Posted by James Murray on February 7, 2007 |