Sustainable transport, sustainable buildings

If we derive our electricity from clean, green sources, that is, by means that do not damage the environment, then we could have reduced our carbon footprint by 50%.

This footprint reduces further if we electrify transport.

At Cleanpower09, we touched upon innovative partnerships around electrified transport. An example was a supermarket working with a solar company and the consumers’ fleet of electric vehicles to power them up while in the car park directly, rather than sending the power to the grid. I believe there is value in visualising and discussing as many such examples as early as possible. I personally believe that the age, decades, of ‘concept cars’ that are electric, is nearly over, and that we are about to see them appear on roads in increasing numbers.

What is frustrating is that what is easier for the brands and manufacturers is actually weighing down upon the consumers. For a consumer, it would not represent a problem to use an electric car, plugging it in to charge at home or work, or at service stations, or to swap manufacturer-owned batteries at service stations. But for the automotive companies, they perhaps cannot see a way to morph away from internal combustion engines and fuel, over cheap, and sale of service electric cars requiring little infrastructural change, but significant business model and operational and manufacturing change. Those car companies probably fear moving to simpler cars, since they’ve only been able to make money by making cars more and more complex and heavier.

Our discussion on HEAT: home energy and technologies, on 4 December 2009, might touch again upon the electronics that power our increasingly smart ‘built-environments’: our commercial properties, stores, HQs, and our houses. Yes, this includes security systems, but this is a small part of that. What we are focused on are smart metering and electronics that help us to power our properties much more efficiently. And even if our electricity is completely clean, by reducing our power usage, we contribute in some small way to energy security. And in all probability, we still contribute to reduced carbon footprints, however diminished at source.
So we’ll talk again about passivhaus. How do we circumvent the need to heat our properties. And when we do, we’ll use lower carbon, non-fossil-fuel solutions, such as air-source heat pumps rather than gas boilers. We’ll also look into viable solar thermal and solar PV technologies, and areas such as neighbourhood biomass and gasification where it genuinely reduces footprint.

The HEAT conference proposes to highlight practical solutions that will enable us to meet these extremely near term, but exceptionally stringent construction industry changes that are set to be with us by 2016!

By linking this conference in with the Cleanpower Series, which provides solutions to clean macro renewable smart power provision across the UK and European supergrids, and also with conferences on electrification of transport and on the eradication of waste and footprint in industry, we bring a formidable set of discussions which will emanate from Cambridge in 2009 and beyond.

At the HVMS Conference, on 24 June 2010, we shall again discuss how industry more generally can get in on this new revolution. Services can make more money than products. Through sale of service, you align interests of manufacturers with those of our environment. There is still some waste, but it is vastly reduced. It costs the brands and manufacturers money. If your ansatz is ‘more products equals more profit’ you can guess where we are headed. If you start not with products, but value-added services, wherein products may play a role, one resembling cost rather than profit, then you are leafing towards the right pages in the book for for the future of industry. The problem with switching to this, is that the change needed affects much or all of the supply chain. Gradual change seems hard to achieve. We need a way to get entire supply chains over to sale of service and aligned interests to keep business healthy but also reduce footprint greatly.

If you make money by looking after things and making them to last and choosing the most efficient solutions, then you naturally protect the environment and reduce your emissions. We can reduce overall taxes, slimlining government with better organisation and new IT systems, and then transfer taxes from “good” things like people and businesses’ income to “bad” things like waste and environmental damage. One thinks of Amory Lovins’ ideas in these statements, of course. The challenge for him is how to achieve these changes and make them mainstream. Our view is that our paper showing that a modified GDP globally can be higher and rising as normal, if one chooses this new regime of sale of service across all areas where it is possible, and in tandem make the logical taxational and regulatory changes. If only one could bring this all about in practice! When I say a “modified GDP”, I mean one that resembles the ‘Human Development Index’ a little better. As we’ve noted, Lord Maynard Keynes, a Kingsman here in Cambridge, did not intend GDP to be used as an indicator of national economic health. What I mean is that any form of GDP that is not making our lives better as a society and individually, is not to be added or included in GDP. Many areas are difficult. An example is the security alarm you fit to your house after being burgled. Without the burglary, you wouldn’t have installed one. With this nasty event, you do so. This is added to GDP, which all else equal, rises. Then the media reports that GDP has gone up and society then basks in this ‘wonderful’ economic growth. We must cut out this vicious cycle. If on the other hand we are working with another measure, we may end up moving in a better direction. I agree we need measures: if you cannot measure, you cannot manage. And perhaps you can’t govern either. At the Copenhagen World Business Summit from 24-26 May 2009, we (800 business people) called (world governments) to agree on measurement, verification and reporting of heat-trapping emissions by business. This, for the same reason. What measure should we use? I put it to the Provost of King’s College a couple of months ago, that the people of Bhutan had had a great idea: to work with Gross National Happiness. He noted that money and wealth, etc, were an innate Western feature, (and implicitly perhaps, that happiness was innately alien to it)! But there must be some other way. I’m not aware of any competing measures that any particular, powerful organisations are monitoring, that might take root in the future. But this approach might be a good idea. Pick your considered, healthy-and-good GDP, and start measuring it. Maybe one day, with enough lobbying and marketing, it will take hold. Surely, in broad terms, you do not want to add products or services that increase when crime rises, or when health gets worse. You should surely not increase GDP as you increase pollution, heat-trapping gas emissions or waste.
It is not that we cannot monitor such a new GDP. There have been plenty of funds that have invested in “sin sectors” to complete with the ethical funds. And I do not mean to suggest what I am talking about here is the same as these things. The point is that small private funds are able to decide what these things mean. You might want to monitor a set of ‘GDPs’ with varying ‘baskets’. Some ‘stricter’ than others. Let people decide after some debate what is the right one.

But this really is important to put in place. We need to get away from all these misalignments.

We hope you’ll take part in these exciting discussions.

Justin Hayward
Director, CIR Strategy

Upcoming 2009 Conferences: http://www.cambridgeinvestmentresearch.com/events
Resource Productivity & High Value Manufacturing Services (HVM) Wednesday 2 Dec 2009
Sustainable Transport (SHIFT) Thursday 3 Dec 2009 (and dinner after conference at King’s College)
Sustainable Built-environment (HEAT) Friday 4 Dec 2009

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