Blog 2010

A Cut Too Far 26th July 2010

On Thursday DEFRA announced that funding would be withdrawn from the Sustainable Development Commission (SDC) from next financial year. From the view point of an official given the task to identify savings to meet the government’s ambitious plans to cut expenditure, this is a simple decision. The SDC is a quango that is not directly responsible for front-line services; therefore it should go. If we lived in a sustainable society – as I hope will be the case within the next decade or two – the SDC would indeed become irrelevant. Now, as we struggle to understand the policy choices required of the transition to a sustainable society, the SDC is vital.

Governments have to find ways to bring sustainability experts inside the decision making process. In the United States, President Obama appointed climate expert Steven Chu to be Secretary of Energy. The UK government established the Sustainability Commission (SDC). This organisation is outside government, to be free to carry out the analysis unencumbered by existing policy or political constraints, and with the ear of government to be able to influence future policy. In the current financial climate it is not surprising that, along with many other quangos, funding for the SDC has been withdrawn. I hope that this decision will be reviewed because the logic for the SDC remains strong. I argue that the SDC can leverage greater savings elsewhere in government than its £3 million budget.

Withdrawing funding from the SDC is a cut too far. This will leave government departments reliant on external consultants. There is a growing army of consultants who have been rebadged as sustainability consultants to satisfy demand. These are green in every sense. I hope they learn quickly; there are important policy choices to make and the need for deep thinking has never been greater.

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Blame it on the British 19th July 2010

The weather here in Hong Kong is 30 degrees and humid. It feels warm and sticky, but not so much as to be unpleasant. Walking out on the streets, in many of the places where there would be a set of steps to climb, there is an escalator. A series of covered escalators and moving walkways beside Shelley Street ascends a whole hill. My immediate reaction was to question the need for such automation of personal mobility. I soon found out that using the stairs, you break into a sweat. I can see the advantages of relaxing, strolling slowly and let the escalators take the strain. Escalators can perhaps have a role in city design in the tropics, to persuade people out of cars and taxis and onto their feet.

Tropical temperatures suits humans rather well; this is where our species has its roots. Unlike at northern latitudes, where we need clothes to stay warm, at these latitudes it is only modesty and fashion that means we wear clothes at all. That is why I found it strange that the air-conditioning in my hotel room was set to 16 degrees - requiring a thick duvet on the bed. This is just as strange as finding the heating in my hotel room in Helsinki back in the winter was set to 25 degrees. If 25 degrees is the ideal indoor temperature in Helsinki, why not use the same temperature here in Hong Kong –saving energy of course. The converse is also true; if 16 degrees is the ideal indoor temperature in a luxury hotel in Hong Kong, why then not use such cool temperatures in hotel rooms in Helsinki in the winter?

The reason, I was told, for cold buildings throughout the affluent areas of Hong Kong (so cold as to be unpleasant) is because this is what the British expected in their days of colonial rule. If that is true, it is high time to throw off the daft demands of colonial masters and run Hong Kong as a sustainable city should be run. I adjusted my hotel room to 25 degrees throughout my stay and slept very well; I did not of course then need the duvet.

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A Car for the 21st Century 12th July 2010

Last year’s World Forum on Enterprise and the Environment addressed the question, ‘Is there a model for low carbon growth?’ This set the scene and started a dialogue. This year the forum took on the more specific sub theme of ‘Low Carbon Mobility: Air, Sea and Land’. A big chunk of carbon is used for mobility. Making progress in this area is vital to de-carbonizing society.

The World Forum, organised annually in Oxford by the Smith School of Enterprise and the Environment, could grow to have the same significance within the green business community as the World Forum in Davos has amongst world leaders and economists.

The discussions, over three days, showed the strength of delegate’s concern that we must lead change. We discussed a range of issues and a variety of responses. Many delegates shared my approach that we must be bold and move fast. This was illustrated well by the launch at the forum of the T25, a new car from Surrey based Gordon Murray Design. Gordon Murray, of F1 fame, has brought the technology of race cars to the production of a small fuel efficient car. Unlike F1 cars, it is also designed to be affordable - although the price has not yet been announced and it is not yet available for sale.

The body of the T25 is made using the composite techniques of the F1 world but without the carbon fibre to keep cost down. The driving position is in the centre and the controls are in the steering wheel - just like an F1 driver. Two passengers sit back from the driver either side with their legs extending forward beside the driver. In the conservative world of car design, this a radical move. The design is green and cool; the perfect combination to make an early impact in the market. The T25 will be followed by the T27, an all electric version. This shows what forward-looking bold thinking can create.

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Solar Decathlon 5th July 2010

The Solar Decathlon here in Europe 18 to 27 June was organized by the Spanish Ministry of Housing, in collaboration with the Universidad Politecnica de Madrid. Seventeen energy efficient houses competed. The winning house, Villa Solar, produced three times more energy than it used with the energy surplus going to the grid.

Our house here in southern England is also a mini power station, although much more modest than Villa Solar. Now, in midsummer, I am proud that we are generating more power than we use. However we live in an old-design house and making the full transition to an energy neutral house will be hard. If we commissioned a new house now, I have total confidence that the engineers and architects can respond to a brief that requires it to be energy neutral. If customers state this as their requirement, it will be so. Of course the house will cost more. Better houses (that are cheaper to run) do cost more and it is about time we got used to that idea.

Depressingly, I met an academic, who teaches building design, who thought that the government’s long-term targets were not achievable. My assurance that it is possible if you throw away the old design text books fell on deaf ears. I received a reply along the lines of “This is how we teach, how I have taught for years and I am the expert.”

Despite such intransigence, I believe that the house building industry is up to the challenge. Not the large house builders who want to complete quickly and sell on. They do not yet detect a demand strong enough. They will keep their blinkers on to defend their immediate profit margins. It is the small builders building premium houses for the wealthy end of the market that will lead the way.

Over 190,000 people visited Villa Solar during the competition. I would have liked the university lecturer I met to have been one of them. I suspect he was sat at home thinking of other tactics to prevent him from having to rewrite his lecture notes.
© Peter McManners 2010

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Shrewd Operators 28th June 2010

This week I have been invited to join with 150 world experts at the second World Forum on Enterprise & The Environment at Oxford University. Last year’s event opened a debate about tackling the challenges of climate change. This year the theme is Low Carbon Mobility: Air, Sea & Land.

The opening discussions set the scene. Mikhail Gorbachev spoke about the pressing need for action. He explained what some of us know to be true but few accept, that ‘the era of absolute economic growth driven by cheap fossil fuel is drawing to an end.’ He urged us to reach out for the truth, not bend to pressure from special interest groups. He explained how he had sat down with President Regan to diffuse the Cold War. This principled and bold approach is what the world needs now to address the climate crisis.

Steven Chu, the US Secretary of Energy, outlined his view of how to tackle the low-carbon challenge. President Obama has made a shrewd choice to put this expert climate scientist in a role that is pivotal to changing the direction of US policy. I detected that the need to stay engaged with US opinion means Chu has had to rein in his aspirations. For example, he was not drawn on the issue of increasing fuel prices. He, too, is shrewd in the way he is plotting an achievable path into the future.

This is no time for looking at the world through rose-tinted spectacles or launching grandiose schemes that are bound to fail. The world needs shrewd operators to navigate through the challenges we face in order to make progress in the real world. World leaders need to be bold like Gorbachev and appoint experts like Chu to take us towards a more sustainable future.

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Wherefore art thou E-Mini 21st June 2010

O E-Mini, E-Mini, wherefore art thou E-Mini?

The departure of the prototype E-Mini from our driveway and out of our lives has left me feeling bereaved and sad. This is the first time that I have had affection for a car. Cars are transportation: full stop. It was only a car, I tell myself; but I have to admit to harbouring other emotions.

The E-mini has drawn attention. I have taken every opportunity to use this introduction to start a conversation about the make-up of a future sustainable society. I have found my words, more often than not, falling on deaf ears. Why then have I loved the E-Mini? Because it has engaged people who have not the slightest interest in matters environmental.

In my focus group of ‘E-Mini pioneers’ (the term used by the BMW marketing team), I was a loan voice expressing the need to decarbonise the electricity supply before electric cars will be truly green. No one shared my concern. I suspect that this is a true reflection on most people’s level of interest in the bigger picture of building a sustainable society and sustainable economy.

The E-mini is liked because it is cheap to run - at a time when fuel prices are climbing once again as the economy picks up. The E-Mini is liked because it offers the possibility of maintaining lifestyle after the oil has gone. These are real-world reactions, and the real world is where we live.

On Saturday, at the Oxford mini factory, each of us who handed back the keys of ‘our’ E-Mini expressed sadness to lose the car. I will return to an old flame. My 11-year old diesel Audi has much the same carbon footprint as the E-Mini (based on the current mix of generation capacity on the electric grid) but it has greater range and more carrying capacity.

I am sad because my excuse to engage the uninterested in discussion of the nature of a sustainable society has been taken away.

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Kick BP’s Ass 15th June 2010

BP continues to work to stem the flow of oil into the Gulf of Mexico from the well head deep under the sea where the drilling rig Deep Water Horizon had been operating before it exploded and sank.

Like many multinational corporations, BP dropped its national identity some years ago. It became simply ‘BP’ rather than the old ‘British Petroleum’. This change of name reflected the truly global nature of the company in geographic reach, ownership and governance. BP does not answer to any one government. However BP does have to work with the governments where it operates.

Where the country is small and weak, it may not wield much power against the corporate colossus. Where that country is the United States, BP has to tread carefully.

The US government does not like the polite and over optimistic tone of Tony Haward, the CEO. It matters little that the best engineers, drawn from across the industry, are doing remarkable feats under testing conditions. The public face of BP – which US commentators continually refer to as British Petroleum – needs to be someone who is seen to ‘kick ass’.

The facts that the US addiction to oil is driving exploration ever deeper off shore, and that the drilling rig was owned by a US company, are ignored. Until this terrible disaster is brought fully under control, many Americans will continue to refer to BP as British Petroleum. BP would do well to put a tough American to face the media and make it clear that this is a shared disaster. There will be more mishaps as technology is pushed to its limits to satisfy our craving for oil as the ‘easy oil’ runs out.

The regulations will be beefed up: deep offshore drilling will require double blowout preventers and other safeguards. The safest solution is not one we do not like very much. It is to wean the world off oil...

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Knowledge is Building 8th June 2010

Following my depressing venture two weeks ago out to engage with the general public and finding that sustainability was low down most people’s agenda, I went on holiday. It was half-term and we had planned our getaway for some time but it suited me well to wind down a little and to reflect. I took with me the task to write an exam for the business school with regard to the global business environment. It was relatively easy to write the exam. Reflecting on the financial crisis and its ramifications was more straight-forward than dealing with how to achive a sustainable society. People understand that there is a financial crisis, and when the Prime Minister speaks about the need for action, people listen.

On my return from holiday, my first meeting was with one of the leading management consultancies. We discussed my ideas about a Sustainable Revolution and how to achieve it. Five years ago, if I were to attempt such a meeting, eyes would have glazed over. It would have been necessary to retreat or lose the attention of the audience. Things have changed. The people I met may not have agreed but they listened and asked sensible questions. These are influential people who are now engaged in the debate. They know that sustainability is a growing issue but do not yet know how to deal with it.

Knowledge is building. Perhaps we have had the case of ‘the blind leading the blind’ whilst we started to consider the issue of sustainability. Now, some of us now see clearly where we should go and we are leading people who are starting to learn the best route forward. There will still be wrong choices and we will find dead ends but the process has begun. The Sustainable Revolution is coming.

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Joe Public Doesn't Care 24 May 2010

I spent an enjoyable but fruitless day championing sustainability at an outdoor event in Berkshire. The event itself had nothing to do with either the environment or sustainability – that should have warned me. Our stand brought together a number of local sustainability groups aiming to spread the idea of sustainable communities. We hoped that amongst the crowds of people passing through the event we would grab the attention of a useful proportion. How wrong we were.

I had arrived in my electric car which then formed part of the display. The car attracted some attention but the interest was confined to the sort of questions Jeremy Clarkson would ask, such as how fast it can go, how well it corners and how far it will go on a full charge. My interest in testing the prototype BMW e-mini is the potential such cars have to be a part of a low-carbon transport infrastructure. I tried this thought on the people who stopped and their eyes glazed over.

This was a genuine random sample of people and the results are interesting; and also disturbing. Joe Public is not going to change through free choice. Change will come because costs for carbon intensive transport increase and reduce for low-carbon alternatives - with regulation removing some choices entirely. This is how change will be delivered.

Further along the line of stands I spent some time talking with a salesman seeking to sell replacement windows. He had been in the window trade for over 30 years. He was convinced that there was no longer a place for wooden windows except for the rich who can afford to paint them every few years (his words). He sold exclusively plastic windows. Whatever happened to the idea that if money is tight you paint your own windows over a few warm summer weekends?

Further along there was a line of amusements stalls aimed at children offering prizes - all cheaply made. This was a depressing display of consumer detritus likely to end up in the bin within the day.

From this experience the conclusion I draw is that most people do not care about the concepts of sustainability. It is up to those of us who do care to lead change and push society onto a sustainable path. It can be done but we should not expect active support from the majority.

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The Old and the New 17 May 2010

I attended the Annual General Meeting and of our local scout group on Friday with the family. The organisers had arranged a quiz evening with food to ensure a good turnout. As the social event was buzzing around me I reflected on the advances of the modern age juxtaposed with the historic context.

The wood framed building had been rebuilt in recent years but much of the timber had been reclaimed and reused from an earlier building on the site. A number of the beams went back even further to buildings many centuries back now only briefly mentioned in the historic record. Tree-ring analysis dated one batch of timber to 1540. The quality carving indicated that this may have comprised the Manor House (long since demolished and now forgotten).

Timber with multiple uses over many centuries is an example of good sustainable construction. My thoughts then extended to the modern Formica-topped tables at which we were sat. These ‘monstrous hybrid’ materials are almost impossible to recycle successful and often end up in land fill after a life of 10-20 years.

After the meal all the paper plates and plastic cutlery were gathered into black bin liners and loaded into the large wheelie bin behind the village hall. This is an example of the convenience of modern catering making life easy for us all. What would a 16th century observer make of it all? They would recognise the wood beams and marvel at the gadgets like the Public Address system and data projector; but I don’t think they would be impressed with our wasteful ways.

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The new occupant of Number 10 10 May 2010

I assume that in London’s most famous address, 10 Downing Street, Gordon Brown has packed all his personal possessions into boxes and is ready to leave. He has a constitutional duty to remain until an alternative government emerges. It would be presumptuous of David Cameron to have his bags packed ready to move in, but he must feel confident that this will be his next home. His call for change is what the country needs.

Now, there is a chance for deep-rooted change - if our leaders grasp the opportunity. Difficult times demand bold action. Otherwise, there is a danger that the same tired policies will continue but with a different spin and slightly altered priorities.

Politicians, and most of the electorate, are fixated on our economic ills. The apparent priority is to get the economy back on track. Other problems, such as environmental stress caused by continued high levels of material consumption, are being sidelined. It does not have to be like this.

Rescuing the economy, and stepping rather lighter on the planet, can be on the same route if we choose our direction well. Green stimulus measures are what are needed. This is far more complex than the simple economic levers used so far to counter the crisis. There is a difficult challenge to design appropriate government policy that links with, and influences, behaviour change to move closer to a sustainable society (that includes, of course, a sound economy). It can be done; and this is what the new resident of 10 Downing Street should focus on.

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A Greek Tragedy 3 May 2010

An agreement for a financial rescue package for Greece has finally been brokered. Any further delay and Greece may have been forced to default on paying out on bonds due to mature in the near future. For a Euro-zone country to default on its national debt is unthinkable – or so we thought. This is an important stage in the development of the Euro. Is it a stable well run currency vying with the US dollar for reserve status; or is does it represent an unwieldy merger of disparate economies that is bound to unravel? These are important questions for Europe; and for the stability of global finance.

Discussions have been slow and tortuous. The internal politics of Greece has made it very difficult to agree to implement the tough austerity measures demanded by the IMF and the EU. For Germany – providing a large chunk of EU new loans – this is a bitter pill to swallow. The Germans take pride in running a prudent economic policy and ordinary Germans have had to put up with belt-tightening. To see this result in bailing out the profligate Greek economy is galling; Angela Merkel may reap a political backlash in the coming elections.

This whole sorry tale of Greece and the Euro is a Greek tragedy. It will end with Greece leaving the Euro. After this agreement the inevitable is delayed but not for as long as people might hope. As soon as it becomes clear that the Greek government does not have the domestic support to implement the full austerity package (nor the stomach to get a grip of tax evasion), and the EU looks likely to reject further requests for yet more loans, there will be a rush to dump Greek Euro debt and to withdraw funds from euro accounts in Greek banks. The final act could be messy and dramatic.

I write in my book, Green Outcomes in the Real World, coming out in the autumn:

‘There is little prospect that the Euro will be dismantled any time soon, but it is likely that one or more members will explore the possibility of exit to regain greater financial control. Implementation would be a challenge for both the country and the European Central Bank, but once one country had acted as trailblazer, others might follow.’

Greece and the European Central Bank should have trail-blazed an orderly exit at a much earlier stage. Further delay is dangerous.

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My generation 26 April 2010

My generation, born in the 1950s and 60s are now in power and it is our wisdom that is guiding decision making. We have experienced three decades of economic growth, rising consumption and materially better lives. We have no direct experience to warn us that there may be problems ahead. Scientists tell us about the possibilities of climate change but the evidence is now tainted. Recent polls suggest that only 25% of the population believe that climate change is real and caused by humankind. There is relief amongst many people that they can latch onto the idea that climate change is a hoax. Whether climate change is real, or not, we will find out in the decades ahead. The inability of world society to respond to this threat is symptomatic of deeper problems. My generation are living in denial of the need to make changes to reduce the impact of society on the global ecosystem.

I have been out and about in Berkshire schools talking with sixth form pupils. This has given me huge optimism that real progress towards a sustainable society is possible as they come of age to vote and influence those in positions of power. The younger generation are open-minded and thirsting for knowledge. They are also concerned about the future and not afraid to ask searching and difficult questions.

The younger generation have a different set of observations to guide them. They see a shortage of jobs, a lack of opportunities and an older generation better at generating hot air than taking real action to protect the integrity of our planet’s ecosystem. We owe it to them to start making real progress - and start soon.

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Foreign holidays as a Right 19 April 2010

According to the Times:

‘An overseas holiday used to be thought of as a reward for a year’s hard work. Now Brussels has declared that tourism is a human right and pensioners, youths and those too poor to afford it should have their travel subsidised by the taxpayer’. The European Union commissioner for enterprise and industry, Antonio Tajani, is reported to have said, “Travelling for tourism today is a right.”

There has been a massive increase in low-cost flying based on cheap aviation fuel. If airlines had to pay a similar amount of tax, as motorists pay to drive their cars, then the mass aviation market would be forced to contract. Instead of curbing unsustainable aviation, the EU is seeking to expand tourism (presumably on cheap flights) to the poorest members of society. The aims are laudable: to encourage a sense of European identity by understanding other countries within the union; but what has happened to the idea of reducing the carbon impact of our holidays?

For now we are enjoying clear blue skies in southern England for the first time that I can remember. This has been courtesy of the ban on flights in response to the risk of volcanic ash thrown out by the volcanic eruption in Iceland. The skies are free of vapour trails and high cloud generated by aircraft. We have just has a very quiet and sunny evening meal in the garden.

We should reflect whether the time has come to charge the full environmental cost of flying. The EU would have to think again about its budget for tourism for the poor and disadvantaged. We might then observe exchanges taking place between adjacent countries to allow people to travel sustainably and engage with neighbouring societies. This would be a more useful way to give the poor a taste of alternative culture than further subsidies on flying.

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Threats and Opportunities 12 April 2010

The classic view of the external business environment, taught at business schools everywhere, is through the lens of ‘threats and opportunities’.

Responding to ‘threats’, is about looking to the future in order to survive the cut and thrust of a constantly evolving business landscape. Responding to ‘opportunities’, is about looking to the future to grow the business to exploit new markets, new technologies and new ways to do business.

I believe in looking at the world as a series of opportunities. Focussing on threats, leads to defensive strategies and risk-averse tactics. Focussing on opportunities, leads to risk taking and support for innovation. These latter behaviours are the ones that I favour.

These same deep-rooted mental approaches apply also to government and to all of us. People, who focus on the threat of climate change, are digging themselves into a defensive rut of narrow thinking that attempts to squeeze carbon out of the processes we now operate. People, who focus on the opportunities that arise, are getting on with the work of transforming society to sever society’s reliance on fossil fuels.

There is a huge difference between shuffling forward in a timid manner driven by fear and leaping forward taking the problems that arise in our stride. I would rather be running a little too fast than shuffling far too slow.

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Paying in Energy 5 April 2010

Iceland was lauded prior to 2008 on having clever entrepreneurs who could covert the nation from a remote island reliant on fishing to a major speculator in the realms of international finance. I remember the praise that was heaped on these financial wizards. The Icelanders bought a lot of UK companies and earned respect from overseas observers – although not from me. I was very wary of the alchemy that was being pursued. Conjuring up money and profits by playing the financial system does not fit my definition of sound business.

I like businesses based on innovation and genuinely novel ideas that seek to do something better or more efficiently. These companies deserve to prosper. It might be nothing more than the old and very successful business model built on community values that encourages hard graft from a loyal work force that are valued for who they are and not only the work they do.

The Iceland business model was more smoke and mirrors than hard graft. I was dealing with my parent’s affairs before the crash and was advised to put their savings into Icesave to get the best interest rate. It was advice I ignored. In hindsight, the UK government decided to back the deposits in Icesave so perhaps it was safe but it did not take much due diligence to see that this was a dodgy operation. It might have been better to let people learn the lesson that dodgy investments are to be avoided.

The UK government chose to bail out the savers and now seeks recompense from Iceland. An interesting idea has been floated by Gijs Graafland, the director of the Amsterdam-based Planck Foundation, that Iceland could pay back this debt in energy. Iceland straddles the fault line between North American and Eurasian tectonic plates and has good geothermal electric power potential. The power could be generated and passed to the UK through a new 750-mile underwater cable. That would be an innovative and useful idea.

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Little Known Fact No 3 – Bottled Water 29 March 2010

UK bottled water consumption reached 34 litres per person in 2008, up from 27 litres in 2001. Bottled water consumption is projected to reach 40 litres per person by 2015. In the US, bottled water is drunk at an average rate of 105 litres per person up from 67 litres per head in 2002. In Italy bottled water consumption has grown from 194 litres per head in 2002 to an estimated 200 litres in 2008.

The UK market has a lot of room to grow if the market follows the lead in other countries. People are responding to health advice that drinking water is good for you and are concerned that the water they drink is pure and healthy. This is big business with a large, and growing, resources bill for the bottles and their transportation.

There have been a number of studies comparing the quality of bottled water with tap water. For Helsinki, tap water comes out with an excellent report. In fact there is one company bottling and shipping Helsinki tap water to be sold in the Middle East. London tap water may not get such glowing reports but it is healthy and safe to drink.

Carefully managing water supplies is vital to human health. It might be better to ensure that all our drinking water is safe and put the bottled water business (and the associated resource consumption) out of business.

That would then lead onto tackling another associated anomaly – that we use clean water for flushing toilets. We would not flush the toilet with Evian; why flush it with tap water? Flushing loos should reuse grey water from our washing activities.

Rather than bottled water we need protected water sheds and more complex plumbing.

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The Wrong Ice Conditions 22 March 2010

Sunday was a special day. I stood atop Suomenlinna, the Fortress Island that stands guard over the harbour of Helsinki. From there I looked out over the Baltic sea in one direction and across to the buildings of Helsinki on the other. Another high point on the island is surmounted by a church that doubles up as a light house. The regular pulses of light brought rhythm to the early dawn. Hopping across the snow in front of the church was a hare. The peaceful scene came at the end of a week when I had skied across the breadth of Finland from the Russian Border to the Swedish border.

The event was the ‘Border to Border’ ski marathon event. People from 18 countries came together to tackle the 440km route. The end point was Tornio a small town on the Swedish border. If all had gone according to plan; I would have ended by skiing across the Tornio River and right up to the lobby of the Town hotel.

It was not to be. Although this winter is the coldest for many years (dropping to minus 36 degrees C) the ice on the lakes and rivers was not as strong as it should have been. Heavy snows had come early in the winter whilst the ice was still thin. This had then provided insulation from the severe cold above preventing the formation of thick strong ice.

The ice on the Tornio River was strong enough to take skiers as evidenced by the large number of ice-hole fishermen sitting over their round holes in the ice with their short fishing rods. The problem was a river further to the east where there was water on the ice and snow on top of that. This river prevented us from going further. We were forced to end the journey a few km short of the full distance.

I still harbour the wish to finish the ‘Border to Border’ event at the doors of the hotel in Tornio, to take off my skis and walk downstairs and into the sauna to then relax. To fulfil my dream I will need to return another year when ice conditions are better.

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Little Known Fact No 2 – Oil and Sheep 8 March 2010

Did you know; that in The Falkland Islands there are 160 sheep for every islander?
Did you also know; that for every sheep there is thought to be 120,000 barrels of oil reserves?

The foreign Office official position is that the sovereignty of the Falkland Islands depends on the wishes of the islanders. The war in 1982 was not about oil; but as the world faces shortages of black gold it may be a convenient time to drill for more in the waters off these remote islands. When the prime assets are sheep, the incentive to fight over the islands is low. If there proves to be commercially viable oil fields then the game changes.

In the unsustainable world in which we live the politicians will weigh off the cost of protection of this remote outpost with the potential revenue streams – sticking, of course, to the official line that it is the wishes of the residents that are paramount.

There is another possible outcome. The world could take the huge steps required to learn to live without fossil fuel. It seems preposterous, but it is feasible. Saudi Arabia understands the dangers and this is why the kingdom is so obstructive in negotiations over climate change and the need to reduce carbon emissions. Falkland Islanders should also not count their barrels of oil before they are pumped. If the world takes the required action to stop climate change, then the commercial and political case to make the Falkland Islands a new oil producing nation may never add up.

I suspect that there will be a window of opportunity for an oil boom in the Falklands. However wool from sheep is a better long-term bet for the Falkland Islands in a sustainable world society.
© Peter McManners 2010

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Hummer RIP 1 March 2010

"General Motors said on Wednesday that it would shut down Hummer, the brand of big sport utility vehicles that became synonymous with the term gas guzzler, after a deal to sell it to a Chinese manufacturer fell apart." —The New York Times, Feb. 25, 2010

In 2007 I wrote about massive change in society that I described as the Sustainable Revolution. My book Adapt and Thrive was published the following year. I predicted that the future of the Hummer brand would be a barometer of when the revolution was ready to take off.

“Driving an SUV will be a good barometer of where we have reached. Having one is a proud aspiration of many drivers now, but when fashion changes they will not enjoy the ridicule that will be heaped upon them. This will not be a clear-cut transition, as, even if we push the costs prohibitively high, there could be a small hard core who take pleasure in demonstrating their ability to pay. It will only be when they are shunned socially for their choice of vehicle, and the latest Hummer is no longer the thing to be seen driving, that the SUV will finally leave our city streets.”

Adapt and Thrive: The Sustainable Revolution, by Peter McManners published 2008.

If I am right, then the death of the Hummer brand heralds the start of the Sustainable Revolution.

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Little Known Fact No 1 – Canned Soup 22 February 2010

Did you know; that in January 2010 57 million cans of Heinz soup were sold in the UK, a rise of 11 million cans over the same period in 2009?

If soup was used a measure of economic performance, then an increase of 20% year-on-year sales would indicate that the recession is over, but there might be more to these head-line figures than appears at first sight. My mind wanders to pictures of the soup kitchens operating in the Great Depression of the 1930s, doling out hot soup to the unemployed. Perhaps the consumption of more soup is an indication of belt tightening and moving down market in choices of easy meals. I suspect that sales of tinned caviar will not have seen a corresponding increase.

Soup has the reputation of food for the poor (or cheapest starters on the menu) because it is so cheap and easy to produce, consisting mostly of water. It seems odd that such a stream of waste metal and the associated carbon emissions in moving the cans from factory to consumer is tolerated.

People like the convenience of opening a can of soup. Fresh soup takes more effort. Ingredients need to be chopped and then cooked. Powdered soup is another option but it is always second best - to the can. Fresh ingredients have to be bought; cans sit on the shelf awaiting their moment of consumption for months or years. A fresh and easy option would be a small pack of herbs to drop into a pan with chopped seasonal vegetables, but we are not prepared to wait the time.

If we pause and think about it, the can is obsolescent technology from a past era when keeping food fresh was a challenge. The time has come to regard canned food as old technology. There may be certain specific foods that require being canned; or specific arduous conditions such as military operations where the can remains the best option. But even the military would not waste logistic capacity on canned soup.

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Economics or Fashion? 15 February 2010

Economists delight in working out the figures to support a rationale business case. If the proposal makes money (or saves money) enough to offset the expenditure then it is a sound investment. Anyone who lives in the real world – which is most of us – knows that there is more to life than rational economic decisions.

I committed to fitting solar Photovoltaic (PV) panels to my roof before the government announced the PV feed-in tariffs. I made the decision on the basis that this is what each building must have if we are to start to reduce carbon emissions. My decision was based on wanting to show leadership and ‘walk the talk’ to back up my calls for change. For me, it was not a rational economic decision, although I did have a suspicion that energy prices will climb high over the years ahead and that the expenditure might be a good hedge against such circumstances. The pay-back period, based on current energy prices, went way beyond the expected life of the system (30 years). It made no economic sense – but I wanted to fit PV despite this.

The UK government has now announced the feed-in tariff. Householders will be paid 41.3 pence per KW for retrofitted (36.1 pence for new build) starting from 1 April. The pay-back period for my system is now less than 20 years (based on current energy prices). There is now a robust business case to support a decision I took on a non-economic basis. Will that mean a flood of people following my example? No, people are not rationale in the way that economists assume for their calculations.

There is still deep-rooted opposition to PV panels on roofs despite the fact that they are a sound investment. What is needed is fashion change. When it is fashionable to have PV panels on the roof then people will invest in them to keep up with the Jones. Mine are hidden away out of sight on the side of the house and the generation meter hidden in the garage. Not much showing off to be had, but when I drive my electric car I can claim, with some justification that I am driving with zero emissions. That gives a certain warm glow inside that I am doing the right thing, but also, on this occasion, I am now behaving according to rationale economic analysis.
© Peter McManners 2010

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Fixing the Global Economy 8 February 2010

From a superficial glance, the global economy is looking much better. World leaders have given the economy a big boost with massive stimulus packages. Shares prices have recovered and if the size of bank bonuses is an indicator then the banking system is back in good health.

A quick fix was needed to prevent economic meltdown. Now that apparent stability has returned we need to take a long hard look at the economy - and society. People are starting to question capitalism and so they should. There are fundamental problems that can only be fixed by a major overhaul.

When the economy was booming people were reluctant to look beneath the figures. Now that the gearbox of the global economy has started to make some ugly noises we need to look deep inside at the mechanics. The return to stability may be little more than the actions of a bent second-hand car salesmen who has tipped sawdust in the gearbox to dull the noise. Such a short-term fix leads to a massive bill in the future.

We need to examine the purpose of finance and bring it back to support the real economy and society. This may mean taking apart the gearbox, cleaning it, fixing it where necessary and reassembling the pieces.

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Being Responsible for the Future 1 February 2010

The stated aim of the World Economic Forum that closed in Davos yesterday was to:

“Improve the State of the World: Rethink, Redesign, Rebuild”

The discussions demonstrated some rethinking, but there little evidence of agreement over a coherent redesign, and therefore no shared vision of how to rebuild the world economy.

Not surprisingly, there was a lot of talk about banking and bankers, but the three issues that struck me from the final session were more fundamental than problems in the financial system. These are issues that reach right into the heart of the principles with which we manage the economy.

First, were reports of the call from President Nicolas Sarkozy for the need to add a moral dimension if we are to be able to save capitalism. I interpret this to mean that capitalism is not in itself a problem, but capitalism without a moral compass is. A number of speakers echoed this theme.

Second, there was a discussion over the relationship between stakeholder value and shareholder value. The business leaders at Davos seemed to accept (partly as a consequence of the financial crisis) that a narrow focus on shareholder value is not sustainable. If business neglects the needs of a range of stakeholders, and thereby loses the support of society, then the business will suffer.

Finally, a brief vignette caught my attention. The point of view represented was that the bail-out of the financial system had made the situation worse. The world economy was pictured as a car that has been prevented from driving off a cliff. However that car was now racing downhill even faster than before. This summons up a vision of the world economy charging into an even bigger car wreck as stimulus measures are withdrawn.

The results coming out of Davos are inconclusive. I offer my interpretation of the deductions that follow from the discussion. We need a moral compass; stakeholders are important and we must steer the economy onto a safer track. That means being responsible for the future, putting people before profits and in doing so retreat from a narrow focus on growth as the prime measure of progress. This is my conclusion, but it is not the conclusion that we will read in the final reports coming out of Davos.

© Peter McManners 2010

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What to Discuss in Davos? 25 January 2010

The World Economic Forum Annual Meeting starts later this week in Davos Switzerland. This gathering of leaders from all walks of life has helped to shape the global agenda at the start of each year since 1970. This year, there are claims that climate change is a hoax and expectations that the financial crisis of 2008 is now over. So what is there left to discuss at Davos?

There are two categories of people who may be less in evidence than previous years – bankers and climate scientists. Bankers have fared worst; their reputation as masters of the universe has been shown to be less than accurate. Unwisely, they have further tarnished their image by awarding themselves a big slice of the bumper profits made on the back of cheap money provided by governments. This is insensitive at the very least. If they want to keep the tentacles of government regulation out of banking then they should have shown more respect for public opinion and taken more responsibility for their actions. Some bankers have been forced out (with their pension pots intact) but few have fallen on their swords or expressed contrition.

Climate scientists - and the chairman of the IPCC in particular - are also in the dog house. Exaggerated claims and sloppy research have made their way into the IPCC reports. These are vital documents that world leaders need to be able to justify taking action. The evidence that climate change is a threat to society is robust, but the presentation of the evidence to persuade a sceptical public has to be transparent and accurate. There are echoes of Tony Blair’s attempt to justify the war in Iraq by over stating the evidence (as we will hear more of on Friday when he appears before the Iraq inquiry). Such deception leaves a bitter taste and is best avoided even if the intentions are honest.

These are dangerous times as leaders gather in Davos. The crisis is far from over – the flaws in the financial system have not been fixed, just papered over. Climate change is real and we are not taking action to reduce the threat. There is plenty to discuss in Davos. We need to move beyond bashing bankers and scientists (no matter how well justified) and get on with the process of building a sustainable future for society.
© Peter McManners 2010

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The UK Reopens for Business 18 January 2010

Britain has been gripped by the coldest winter for decades. Many parts of the country have been paralysed; children’s education has been interrupted and many businesses have had to curtail operations. The thaw has brought welcome relief.

I lived in Finland 2004 to 2008 where such weather is normal and may last for months. The Finns are equipped for such weather; the society and the economy hardly miss a beat, except in the most severe storms. Here in the UK, some people argue for better contingency plans, more snow ploughs and larger stockpiles of salt.

It is ironic that this spell of cold weather comes hard on the heels of the Copenhagen Climate Change Conference. Climate change deniers have welcomed it with glee, claiming that this weather is proof that global warming is an elaborate hoax peddled by scientists wanting to keep their research funding. But weather is not the same as climate. Climate is all about long-term trends; weather is fickle and changeable. According to the UK Meteorological office, ‘the current cold weather in the UK is part of the normal regional variations’. Concurrent with cold weather in the UK, many places in the far north have seen temperatures above normal – in many places by more than 5 °C, and in parts of northern Canada, by more than 10 °C. According to the US National Snow and Ice Data Center, the cause of this warm weather in the Arctic is an ‘extreme negative phase of the Arctic Oscillation (AO)’ – a natural pattern of climate variability.

Cold weather in the UK does not disprove global warming nor lessen its dangers. There is a simple fact that cannot be ignored; if all other variables remain the same, an atmosphere with a higher concentration of carbon dioxide will absorb more of the sun’s radiation. The weather may respond in a number of ways but the overall trend towards a warmer planet can only be stopped, and reversed, by breaking the world’s reliance on the burning of fossil fuels.

As for the UK’s contingency plans for a long spell of freezing weather, what should we do? We could procure all the equipment to be able to run our country like the Finns run Finland. This is not warranted. It would be more cost-effective to close down our little island for one week each decade than to keep it running through the rare big freeze.

We should remember that the sledging has been great and the weather excellent for building snowmen and for snow sculpture. The McManners tribe constructed a Tardis in our back garden which makes it look as if Dr Who has come to call. The kids may not have learnt much at school but they have had a lot of fun. Let’s stop work and enjoy the winter fun on the few occasions we have the chance, knowing that, for the UK, it is the most cost-effective solution.
© Peter McManners 2010

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Learning a New Rhythm 11 January 2010

I was reminded of the power of repetition in returning to the river this afternoon to race against the Durham University first rowing VIII. It is over 30 years since my last race in a rowing boat but the instinct came flooding back. The old boy’s boat went well (for a short period) but as expected the younger men won.

Rowing in perfect unison is a good analogy of successful society and a successful corporation. We each play our part according to a unifying rhythm. Once we have learnt how to operate we repeat the same actions over and over again reinforcing success and getting ever more efficient.

Novice oarsmen or women take many months to get the balance, a feel for the water and the rhythm that will take them through the race. Old hands like us could slip into old habits with ease. In the past, many hours, days, weeks and months on the river have honed our instincts into a perfect machine. These habits are not forgotten but it would now be tough to learn a new rhythm.

The thirty years since my undergraduate days has seen a huge expansion in the world economy and a huge increase in the pressure we are placing on the environment. The rhythm with which we run society is focused on economic outcomes. This rhythm has become ingrained and second nature.

It will be hard to change the rhythm to a different beat but change it we must. This new rhythm is sustainability. If you are not used to it, you have to concentrate hard or get caught in a number of traps. Take heart; sustainable policy and sustainable operations have a much more natural rhythm. Once learned it will run much more smoothly and intuitively, but putting aside the rhythm of the past will take time.

© Peter McManners 2010

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Opening the Decade of Change 4 January 2010

This is the beginning of the second decade of the 21st century when I hope and expect there will be a major shift in the way we run human affairs. Society needs new ideas and a new direction.

The Noughties (as the BBC called the last decade) has set the scene for change through demonstrating that continuation of the policies of the 20th century will not solve the world’s problems. As the new millennium dawned, it was hoped that there would be substantive progress towards the Millennium Development Goals. It was hoped that world leaders would embrace sustainability and reduce pressure on the environment. It was hoped that the Copenhagen climate change conference 2009 would be the crowning achievement of the decade and solve climate change for us and future generations. It was not to be. Human society has found that, despite good intentions, the straightjacket of 20th century policies is preventing progress.

If there is one word that can describe the policy framework that brought economic success to the closing decades of the 20th century, it would be ‘globalization’. Our commitment to the concept of open markets, free flows of capital and deregulation has been dented by the financial crisis, but confidence is returning. The fact that the global economy has been rescued from immediate collapse gives breathing space to start work on medium-term solutions. We must use the opportunity well, not to reinforce the policies of the 20th century but to craft a framework fit for the 21st century.

I hope to see the concept of sustainability mature into a robust policy framework that is understood by all and implemented widely. The second decade will set the direction of the 21st century but only when we accept the need to leave the concepts of the 20th century behind.

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