Well, I hope they got a no win, no fee deal.

I don't like being cynical (it's more of a congenital thing) but I would not put any money on the new coalition of green groups successfully suing the Treasury for failing to consider the environmental implications of the Royal Bank of Scotland's carbon intensive investment practices when it pumped billions of taxpayers money into the bank.

The Treasury may well technically be in breach of government rules through its failure to give even a cursory nod to environmental considerations when it bailed out RBS, while its failure to subsequently rein in the bank's carbon intensive lending should certainly be added to the ever expanding list of craven ineptitude that characterises the whole sorry saga.

But it is easy to forget that things were just a tad fraught on that weekend back in the autumn when one of the UK's largest banks stared into the abyss, and it is extremely hard to imagine the Treasury being successfully sued for saving the bank from collapse. Apologies once again for the cynicism, but the Establishment tends to win these types of arguments.

But that is not to say the case is without its merits, and regardless of the eventual result it provides a high profile reminder of the increased legal risks all carbon intensive businesses (and the governments that support them) now face.

Any business guilty of environmental degradation already runs the risk of embarrassing and costly legal action, but as climate change really begins to bite that risk is only going to get more and more acute.

It is not hard to imagine that existing environmental and human rights legislation could be harnessed to make a case against the worst carbon emitters, with the world's climate refugees lining up as highly emotive litigants.

Carbon intensive firms might be able to amass the best corporate lawyers money can by, but decisions such as the US Environmental Protection Agency's recent ruling that carbon emissions constitute a health risk only strengthen the hand of potential litigators, while the simple reality is that, win or lose, any such cases would represent a PR disaster for those firms involved.

You do not need a PhD in media studies to work out who will be the public relations victor in a battle between a homeless Eskimo and a global oil behemoth.

This increased risk may not be enough to stop firms engaging in carbon intensive projects, nor may it be enough to stop investors funding environmentally irresponsible practices.

But it is certainly an issue all business should be aware of and it also provides yet further evidence that low carbon technologies enjoy a much lower long term risk profile than polluting alternatives.

After all, you are not going to be sued by a South Sea Islander who lost their home, their worldly possessions, and their country for investing in solar panels.

Posted by James Murray on July 3, 2009 | Permalink | Comments (0)

First the bad news, and please bear with me as this may take some time.

The impact of climate change, existential in its nature and all consuming in its scope, will be far more severe and felt far earlier than previously thought.

The latest scientific research presented at this week's meeting of climate scientists in Copenhagen confirms what many had privately feared: we are on track for the worst case scenario set out by the Intergovernmental Panel on Climate Change two years ago, and the instabilities in the climate system coupled with the fact that many natural carbon sinks are beginning to fail mean that it could be worse still.

All the latest climate science suggests global average temperatures are rising in line with expectations, but carbon emissions are rising faster than anticipated and natural systems are responding more dramatically than expected to even modest temperature rises.

For example, sea levels have risen an average of 3mm a year since 1993, an increase of 50 per cent on the average rate of sea level increase during the 20th century. The rise is faster than expected because previous models failed to anticipate the rate at which glaciers would move into the sea. Based on the current trends sea levels will not rise by between 18cm and 59cm by 2100 as predicted by the IPCC, but by more than one metre putting a tenth of the global population at risk of coastal flooding.

Similarly, new evidence reveals that the world's major carbon sinks, the tropical rainforest, Siberian permafrost and the oceans, are all much more sensitive to even small average temperature increases than previously thought. According to one model a temperature increase of just two degrees would result in 20 to 40 per cent of the Amazon dying off, releasing yet more CO2 into the atmosphere. The worst case scenario predictions that rising temperatures will result in more warming gases being released triggering runaway climate change are already being realised.

All this means that we are currently on track for warming of around five to six degrees by the end of the century.

What does that mean?

Well, one of the themes of the conference was that climate scientists have not adequately communicated the severity of the situation to political and business leaders. If they did choose to put aside their rigorous scientific terminology for a moment, they would likely settle on a one word assessment of our prospects, Anglo Saxon in origin and not to be used in polite company.

At five to six degrees below pre-industrial temperatures we were in the midst of the last ice age; at five to six degrees above we would be facing the end of civilisation as we know it.

That might sound like hyperbole, but at five to six degrees warmer vast swathes of the tropical and sub tropical regions would become uninhabitable, sea levels would rise by at least a metre putting coastal cities and entire countries at risk of inundation, the rainforests would be effectively wiped out, acidification of the oceans would create giant dead zones, and mass migration would spark near unprecedented levels of global conflict. One scientist predicted the global population could crash to just one billion people - between 2050 and 2100 the world could be literally decimated.

And the really scary thing is that most previous climate studies have been far too optimistic in their predictions. This time, if they are even half right we are on a path towards utter devastation.

For many people, 2100 may be too distant a prospect for these threats to register, even given the fact that modern life expectancies mean that a child born today in one of then lucky northern countries has a fair chance of being around to see it. But another scary component of these warnings is that we won't wake up in 2100 and everything will suddenly change. Based on the current emissions and warming trends the climate change impacts already being felt in many regions could become unmanageable within the next 20 to 30 years.

How should we feel about these predictions? Anxious, angry, and energised to take action, ought to cover it - though you'd be forgiven for opting for just plain terrified.

The bigger question though is where do we go from here?

Scientists at this week's meeting divide into two camps: those who believe it might just still be possible to limit warming to around two degrees above pre-industrial levels - a scenario that would still put the climate system under extreme stress. And those who believe the best we can hope for is to limit warming to three or four degrees and pray this does not do so much damage to the carbon sinks that it triggers runaway global warming. "Hope" and "pray" might not be particularly scientific terms, but after three days in Copenhagen this seems to be the crux of it.

To give us the slightest chance of avoiding catastropic levels of climate change we need a far greater sense of urgency than has been displayed to date. Political and business leaders need to act, and they need to act now.

To this end, the scientific, political and business community need to instigate an immediate change in the terminology they are using to describe global warming. Environmental campaigner George Monbiot's suggestion this week that we should substitute the passive "climate change" for the more accurate "climate breakdown" might seem like a semantic side issue, but if adopted widely enough it could have a huge impact.

If the full scale of the threat can be accurately communicated then there is a chance that a meaningful international deal can be reached later this year in Copenhagen, built around deep and binding emission reduction targets and the rapid mobilisation and adoption of clean technologies.

We also need to increase the focus on the short term benefits that accrue from a low carbon economy.

Talk of saving our grandchildren has not worked so far and sadly humanity is too short sighted for that to change any time soon. Unfortunately, by the time we realise, sometime in the 2030s, that it is our lives and livlihood at risk it will be too late to do anything.

As explicitly as economists, scientists and politicians warn of the catastrophe that will be reaped in the second half of the century, they need to highlight the cost savings, health benefits, risk reduction, job creation and investment returns that will accrue today for low carbon economies. It needs to become self evident that low carbon growth is not just the only long term option, but better in the short term too.

Most of all, it is critical that the temptation to succumb to despair is resisted. The challenge may be even more daunting than previously thought, but, as numerous speakers at the conference pointed out, it can be overcome.

One of the most compelling observations offered up by Professor Dan Kammen of the University of California, Berkeley, was that the US could save energy equivalent to its entire annual fuel imports simply by replicating the level of efficiency attained by New York and California across the rest of the countries. Time and again the point was made that the technologies needed to decarbonise economies are here now, tried and tested and ready to go.

Moreover, the price tag for deploying them really is remarkably small. One study suggested that subsidies of just €10 to €20bn a year would allow the solar and wind energy industry to account for around 40 per cent of the global electricity mix by 2050. Similarly, £50bn could make the ambitious plan to generate Europe's energy from solar farms in the Sahara a reality, while there is growing evidence that such investments would actually deliver a net increase in GDP.

The upfront costs might sound large, but they are miniscule compared to the amount governments have spent propping up failing banks. Many of the stimulus packages being rolled out around the world already have a green hue, but if we made them greener still we really could deliver deep cuts in emissions while restoring economic growth.

Finally, while the change in the climate might be terrifyingly fast, rapid cultural and economic changes are possible too.

Speaking at the conference, Lord Nicholas Stern noted that his generation had in just a few decades moved from a position where drink driving was widely seen as a basic right to an acceptance that it was the height of irresponsibility and should be severely punished.

A session at the conference on green cities, featured two photographs of a road in Dubai taken from the same point. One of the photographs was taken 13 years ago and featured a vast expanse of desert; the other was taken this year and showed a teeming metropolis dominated by skyscrapers and highways. It might be an example of the kind of unsustainable growth that has contributed to the current climate crisis, but it also serves as a reminder of how quickly societies can change if the ambition and will is there.

And that is the only good news we have left.

Posted by James Murray on March 13, 2009 | Permalink | Comments (9)

In case you haven't noticed the weather has been somewhat inclement this past week or so.

With more blizzards forecast overnight fears are mounting that we could see a repeat of last Monday when the southern half of the UK effectively ground to a halt, costing the economy anywhere between £1bn and £3.5bn depending on which guestimate you choose to believe.

Cue much wailing and gnashing of teeth about the UK's battered transport infrastructure, the absence of government leadership, the shirking culture of staff hoping for a day off, and, thanks to the ever-lovable Richard Littlejohn, the suggestion that climate change can't really exist on the scientific grounds it's a bit nippy out.

Leaving for another time the impossibility of engaging with wilfully moronic rabble rousers such as Littlejohn who are incapable of telling the difference between climate trends and weather events and are happy to dismiss the increased incidence of deadly heat waves and summer floods as one offs, while citing the fact the "sea is freezing over in Wales" as evidence the "eco-loonies" are all wrong, there is a counter-intuitive case for arguing that the recent snow should be sparking a serious debate over how the UK plans to cope with a warmed world.

The most obvious fact highlighted by last week's snow is the UK's continued inability to respond effectively to weather-related disasters.

Government ministers were quick to trot out the entirely rational argument that there is no point investing in snow ploughs that would gather dust before being rolled out for one week every two decades.

But the fact remains that both culturally - witness the huge numbers of people in London who did not make it into work last Monday when even with the public transport system struggling all that stood between them many of them and the office was a bracing walk in the snow - and structurally the economy is too vulnerable to freak weather events.

There is now a compelling case for investment in more resilient infrastructure capable of coping with the increased incidence of freak weather events that climate scientists now predict. Even if we can't justify spending on snow ploughs, we surely can justify investment on improved response planning and resilient resources that can keep rail and road networks clear come flood, fire or snow. The government did last year pledge to invest around £800m in improved flood defences, but it is hard to disagree with the Association of British Insurers view that the sums involved still look pretty paltry compared to the scale of the problem.

But perhaps the bigger lesson to be gained from the last week is that our businesses are simply too reliant on the transport network. It is inevitable that the economy will take a hit when snow or floods close roads and rail lines, but should it really be to the tune of several billion pounds when we increasingly live in a knowledge economy where the majority of the population now have internet access.

Effective home working technologies have been at a reasonable state of maturity for at least five years now, but still too many businesses are set up in a manner whereby they can't operate unless staff are reporting, present and correct, to work each morning.

While their rivals were complaining about lost revenue as a result of last week's snow, truly flexible businesses where staff can access the systems they need over the internet were suffering minimal disruption.

What is more, a flexible home working business model is not only resilient to freak weather events, it is also low carbon.

With the government committed to cutting emissions from a transport sector that accounts for about a quarter of the UK's carbon footprint and analysts predicting long term fuel costs will only rise the enabling of home working helps address both legislative and cost risks as well as the risk of climate-related disruption.

And it is not just office-based businesses that can benefit from home working. As a recent report from the NHS on its low carbon future showed, huge numbers of support staff could cut their carbon emissions and improve their work-life balance if only they had access to the right online systems at home.

In many respects, investment in laptops, home offices, fast broadband connection and secure intranet connections are likely to prove more effective in the long term than spending on grit wagons and snow ploughs.

Posted by James Murray on February 9, 2009 | Permalink | Comments (3)

If I worked for a tabloid I would, at this very moment, be putting the finishing touches to a front page scoop - after all what else is there to write about, besides more moaning about the snow.

Earlier today, Jonathon Porritt, former director of Friends of the Earth, co-founder of Forum for the Future, chair of the Sustainable Development Commission, and arguably the government's most important green advisor, said that what we needed to shock us out of our complacency over climate change was at least "four Katrinas in one year".

In fairness, he did qualify his comments to say that they should not all hit America, but did argue that it would be handy if at least two hit the developed world as Europe and the US had an unfortunate habit of ignoring disasters in poorer nations.

He then admitted to occasionally dreaming of Miami getting wiped out - you can kind of see why the guy so often finds himself mired in controversy.

Taken out of context, Porritt's comments are just the kind of thing that gets environmentalists their reputation as callous doom-mongerers who take a perverse delight in natural disasters that vindicate their world view.

Like I say, a tabloid hack would have gone to town on Porritt's speech, delivered at a conference on carbon management hosted by business software company SAS (not content with talk of deadly hurricanes, he also touched on the need for huge cuts in aviation and meat consumption and declined to distance from his controversial view that there is an environmental case for seeking to limit population growth).

But taken in context, Porritt's comments follow an indisputable, if slightly morbid, logic.

The point he was making (and elaborated on in an interview with BusinessGreen.com which we will post tomorrow) is that all the climate change models now point to an era of "radical discontinuity" characterised by increasingly frequent "climate-induced shocks".

Be they devastating events like Katrina or slower-moving shocks such as droughts or carbon feedback loops there will be increased pressure on societies, governments and businesses to somehow prepare for the unpredictable.

As Porritt puts it: "There are businesses working on models that are not worth the paper they are written on. Whether you are talking from the perspective of demographics or technology change or the environment or changing consumer expectations the reality for business now is one of radical discontinuity. So smart management teams are already thinking how do we proof our business against that discontinuity? How do we build resilience in the company so we are better equipped to deal with all that?"

This resilience will have to take two forms. Firstly, there is the urgent need to make businesses and their supply chains more physically resilient to climate change threats, but secondly there is the need to create resilience against the legislative and market changes that will accompany any increase in the frequency of climate shocks.

Porritt noted that while carbon cap-and-trade schemes may have their flaws one advantage they do boast is flexibility. As a result governments are in a position to lower emission caps as soon as public opinion becomes fully aware of the need for greater action on climate change - most likely in the wake of a flurry of climate-related disasters.

Consequently, businesses need to prepare for not just increased climate instability, but also potentially sharp changes in the legislative environment that would drive up energy prices and require dramatic reform of business models. As with any such systemic changes, it is those firms that prepare earliest that will prove the most resilient and best equipped to prosper in the new low carbon economy.

It might not grab as many headlines as hypothesising over the potential up-side of Katrina-scale disasters, but this is the message business leaders should take from Porritt's all too real warnings.

Posted by James Murray on February 4, 2009 | Permalink | Comments (1)

For much of the past two years one of the most compelling drivers behind green business investments has been the soaring cost of energy. So what happens when those energy costs begin to fall?

As the UK today has its recessionary status officially confirmed, businesses are facing a new energy landscape where bills are falling for the first time in years.

The price of oil has slumped, and even green energy providers such as Good Energy are now lowering their tariffs alongside conventional players such as British Gas. Moreover, the fall in industrial output has pushed the price of carbon to record lows, putting still more downward pressure on energy prices.

For business leaders falling energy bills mean the temptation to push energy efficiency issues back to the bottom of the corporate in-tray will become ever more beguiling. Many will understandably ask why they should fork out for more efficient technologies or buildings when their bills are already falling and capital is unbelievably hard to come by.

And yet there are compelling reasons for businesses to continue to curb energy use that go far beyond the obvious truism that during a recession you should look to control all operational costs as tightly as possible, even if they are already falling.

The fact is that those firms that don't address their energy use now could recover from the credit crunch and find themselves thrown right into an energy crunch characterised by soaring power bills.

There are already signs that a perfect storm is brewing that could well break just as we'd hope to see the economy surging forward again.

The most obvious basis for this prediction is the simple reality of supply and demand. The price of oil may have fallen over a $100 from its peak of around $140 last year, but that collapse in price is the result almost entirely of falling demand, not an increase in capacity.

When demand recovers to pre-recession levels or above - and while it might seem hard to believe at the moment the history of recessions tells us this will happen - then the oil price will soar again. In fact, with many of the oil giants scaling back investments in new capacity as the recession bites the situation will likely be even worse than it was in mid-2008 as supply inevitably struggles to keep pace with rising demand.

Rising oil prices would not only lead to increased transport fuel costs they would also have a knock on impact on wholesale electricity prices that will already be being forced upwards again as a result of the raft of green regulations that are scheduled to converge upon the energy sector between 2010 and 2013.

As a leaked Whitehall memo revealed this week, the UK government is concerned new EU legislation designed to limit air pollution from power stations could add as much as 20 per cent to energy bills. And that is before you even begin to consider that EU targets requiring the UK to cut emissions and generate 15 per cent of energy from renewables by 2020 mean that by the early 2010's work on a huge expansion in renewable and nuclear capacity will be well underway, leading to a predictable impact on energy bills.

Meanwhile, the current low price of carbon in the EU's emissions trading scheme is subject to much the same rules of supply and demand that will impact the oil market once the recovery materialises.

Prices have dropped in recent months because heavy industries are producing less, releasing less carbon into the atmosphere and therefore require fewer emission allowances. The number of carbon credits issued between now and 2013 however remains constant, so as the recovery materialises and production and emissions increase again the price of carbon will also rise placing further cost pressures on energy producers. Again, these pressures will become more pronounced from 2013 when the EU moves to impose still tighter emission caps on heavy polluters.

The net result is that companies that fail to address their energy use could find themselves climbing out of the credit crunch only to find themselves locked into an energy crunch characterised by 100 per cent plus increases in energy costs and fuel bills.

That is why businesses such as Tesco and Sainsbury's this week announced new stores and initiatives that display a continued commitment to addressing energy issues despite tough trading conditions, and why those companies that really want to position themselves to fully exploit the inevitable economic recovery would do well to follow their lead.

Posted by James Murray on January 23, 2009 | Permalink | Comments (4)

You know that sinking feeling that you get when you realise you should of thought of something. Well, that was me on Saturday morning staring at the front page of The Guardian and John Vidal's excellent investigation into some of the adverse environmental implications of bioplastics.

It was the first three paragraphs that did it:

"The worldwide effort by supermarkets and industry to replace conventional oil-based plastic with eco-friendly "bioplastics" made from plants is causing environmental problems and consumer confusion, according to a Guardian study.

The substitutes can increase emissions of greenhouse gases on landfill sites, some need high temperatures to decompose and others cannot be recycled in Britain.

Many of the bioplastics are also contributing to the global food crisis by taking over large areas of land previously used to grow crops for human consumption."

It's all so blindingly obvious when someone spells it out for you isn't it?

The sinking feeling, which I imagine was shared by the marketing and sustainability departments of retailers up and down the UK, was prompted by the sense that I already knew on some level that there were environmental risks attached to these "bioplastics". What Vidal had done so effectively is make those risks plain.

Anyone with even a fleeting interest in environmental science knows that organic matter will release methane as it breaks down and is probably aware that methane is one of the most harmful greenhouse gases. Just as anyone who has any experience of the UK recycling sector, knows that recycling technologies tend to lag far behind the emergence of new types of waste.

Equally, it stands to reason that if biofuels are guilty of taking up land previously used for food crops and inadvertently contributes to deforestation, then any other product that similarly diverts food away from peoples' mouths and increases pressure on agricultural land will have similar effects.

What The Guardian's investigation has done is draw together these facts, and while the bioplastics sector can justifiably claim that it poses a relatively small problem compared to the burgeoning biofuels industry and that work is underway to enhance recycling capacity, the paper is entirely right to have raised these concerns.

The investigation also serves to highlight to corporate risk assessment and due diligence teams everywhere the extent to which many of the unintended consequences that arise from well intentioned green initiatives are in fact surprisingly obvious if you just take a detached look at the bigger picture.

It is always tempting when an exciting new green technology emerges to deploy it as quickly as possible. But as the problems experienced by biofuels and now bioplastics prove, such an approach could leave you repenting at leisure. It is a fact those scientists dallying with climate modifying technologies, algae based biofuels and various other clean technologies would be advised to remember.

In the long run, bioplastics may well prove a sustainable green alternative to conventional plastics, but in the meantime firms would be well advised to make sure they have considered the full environmental impact of using these types of polymers - or else they might just have to get used to that sinking feeling each time someone else points out that their green plastics might not be so green after all.

Posted by James Murray on April 29, 2008 | Permalink | Comments (0)

In one of those funny coincidences that occasionally beset you I have just managed to read two consecutive novels both dealing the ever so cheery topic of the apocalypse.

The first was Douglas Coupland's Girlfriend in a Coma, his 1998 fantasy about a 17 year-old girl who slips into a coma in 1979 and wakes up years later to warn her friends of impending doom.

The apocalypse that follows sees the world succumb to a surreal pandemic where everyone simply falls asleep, never to wake up, until the only people left alive are the girl's boyfriend, small band of school friends, her teenage daughter who she gave birth to while in the coma, oh and the ghost of their dead classmate - bear with me here it really is a very fine read.

All the tropes familiar to anyone who has read a Coupland novel are present and correct: an appalled fascination with modernity and technology, an obsession with a group of young friends, a love of memorable one liners and a fiercely questioning agnosticism.

The apocalypse is ultimately a metaphorical one, highlighting the spiritual vacuum that afflicts the modern world - a world which the waking coma victim believes has gone dark.

However, while the end of the world may be fantastical in nature the scenes of the small group of friends coping in a city stripped of human presence offers a compelling reminder of the fragility of civilisation.

It is this concept that is taken to its chilling extreme in the second novel, Cormac McCarthy's The Road.

It tells the post apocalyptic story of a father and son travelling across a "cauterised terrain", "a cold illucid world" stripped of all life except for occasional lone travellers and terrifying bands of cannibalistic bandits.

The novel has already been hailed as a masterpiece by environmentalists, including George Monbiot who called it "the most important environmental book ever written" – he has a point.

What McCarthy's haunting, apparently post nuclear, landsape shows us is what will likely happen in the event of the biosphere collapsing. As Monbiot observes, "his thought experiment exposes the one terrible fact to which our technological hubris blinds us: our dependence on biological production remains absolute".

So why draw your attention to all this on a business blog?

Well, besides that fact that The Road is a genuine full blown masterpiece, the kind of which you want to tell everyone about, it also highlights the full scale of the climate change risks we all face and the fragility of the societies we have built.

The world The Road imagines is necessarily extreme, but the scientific consensus is convinced that milder versions of it are heading our way unless urgent action is taken.

It always seems heartless to point out that business suffers in regions devastated by starvation, drought or flooding given that people suffer far more. But it is also a useful way for stimulating action.

The Great Depression had its roots in the dust bowl and the collapse of the midwest's ecosystem and it is a precedent all firms should take to heart. None of the many companies currently investing in India want to see their money wasted in the event of the monsoon being disrupted and the country succumbing to drought. None of the firms ploughing cash into China will want to see a vicious fight for resources between China and Russia to its north, particularly when both have the ability to turn nuclear warheads on each other – in short, if the biosphere suffers, business suffers.

Countless UN and government reports, including a new study this week from defence think tank the Royal United Services Institute, have now warned that climate change and its associated natural disasters and migrations represent the greatest security threat the world faces, but still this message is not getting through to business leaders and policy makers.

Perhaps Mccarthy's The Road can succeed where the scientists have failed and make it plain what the collapse of the biosphere really means. And if it does then the book also contains a second message for our leaders in its representation of the father and son protagonist and their compelling hope, ingenuity, and burning desire to survive.

Posted by James Murray on April 24, 2008 | Permalink | Comments (0)