Americans are likely to have their first taste of an all-electric vehicle as a rental car. Our correspondent climbs behind the wheel for a test drive.The future is here. It’s cheaper than I expected, and it’s so small that you could fit two in a single parking space. I find it plugged into a wall charger in the subterranean garage of a midtown Manhattan office tower. It’s called the Smart ForTwo Electric Drive, or ED, and it’s one of the first mainstream, all battery-powered cars to hit U.S. roads.
New Yorkers, of course, have seen Smart cars before. The gas-powered version grabbed headlines two years ago for its ultra-parkability, but it handled poorly and wasn’t much on gas mileage. Electrification fixes both of those problems. The ED’s cost per mile — the electric equivalent of mileage — is among the best available. And the added weight from the batteries improves the car’s handling, while electric motors zip it up to speed more confidently. Continue reading A Smart Ride — Testing driving Smart’s electric runabout | OnEarth
All posts by Adam Aston
7 Technologies Where China Has the U.S. Beat | GreenBiz
I’ve been watching China’s ascent in cleantech for a couple of years. In that time China’s potential to leapfrog the U.S. has gone from talk to substantive examples of leadership. Even so, I’ve been surprised by the increasing frequency with which China is pushing ahead in new fronts of cleantech development.Earlier this week, the latest surprise came from energy secretary Steven Chu, who’s been talking up China’s green progress in an effort to boost Washington’s resolve on clean tech policy.
In a talk at the National Press Club, with characteristic forceful clarity (PDF of slides), Chu illuminated the growing list of sectors where China’s emerging leadership threatens U.S. players, and added leadership in supercomputing as the most recent Sino-superlative. China’s success in these technologies represents a “Sputnik Moment” for the United States, Chu said.
“When it comes to innovation, Americans don’t take a back seat to anyone — and we certainly won’t start now,” said Secretary Chu at the event. “From wind power to nuclear reactors to high-speed rail, China and other countries are moving aggressively to capture the lead. Given that challenge, and given the enormous economic opportunities in clean energy, it’s time for America to do what we do best: innovate.”
China’s ascent to the top of the list for supercomputing speed reveals a new front in this race. Last month China’s Tianhe-1A, developed by Chinese defense researchers, became the world’s fastest supercomputer, with a performance level of 2.57 petaflop/s (quadrillions of calculations per second, for all the geeks in our audience, based on a standard test), substantially eclipsing the U.S. DOE’s Cray XT5 “Jaguar” system at Oak Ridge national labs in Tennessee, which runs at 1.75 petaflop/s. Third place is also held by a Chinese computer.
Supercomputers may seem long way from grid-competitive solar panels, long-range electric car batteries, or other cleantech gizmos, but advanced computational simulation is the keystone of most leading-edge scientific research, including nuclear energy, nanotech and materials science, proteomics and other advanced biotech applications. Basically, any very advanced science these days needs big computing horsepower. Leadership on the fastest-computer league tables has been traded off many times, between U.S., Japanese and European computing centers. China is a relative newcomer to the race, but is clearly the new elite.
Chu highlighted several crucial technologies — mostly in the areas of power generation and transportation — where China is already outpacing U.S. efforts, adding the U.S. must innovate or risk falling far behind. The following is from the DOE:
• High Voltage Transmission. China has deployed the world’s first Ultra High Voltage AC and DC lines — including one capable of delivering 6.4 gigawatts to Shanghai from a hydroelectric plant nearly 1300 miles away in southwestern China. These lines are more efficient and carry much more power over longer distances than those in the United States.
• High-Speed Rail. In the span of six years, China has gone from importing this technology to exporting it, with the world’s fastest train and the world’s largest high-speed rail network, which will become larger than the rest of the world combined by the end of the decade. Some short distance plane routes have already been cancelled, and train travel from Beijing to Shanghai (roughly equivalent to New York to Chicago) has been cut from 11 hours to 4 hours.
• Advanced Coal Technologies. China is rapidly deploying supercritical and ultra-supercritical coal combustion plants, which have fewer emissions and are more efficient than conventional coal plants because they burn coal at much higher temperatures and pressures. Last month, Secretary Chu toured an ultra-supercritical plant in Shanghai which claims to be 45 to 48 percent efficient. The most efficient U.S. plants are about 40 percent efficient. China is also moving quickly to design and deploy technologies for Integrated Gasification Combined Cycle (IGCC) plants as well as Carbon Capture and Storage (CCS).
• Nuclear Power. China has more than 30 nuclear power plants under construction, more than any other country in the world, and is actively researching fourth generation nuclear power technologies.
• Alternative Energy Vehicles. China has developed a draft plan to invest $17 billion in central government funds in fuel economy, hybrids, plug-in hybrids, electric and fuel cell vehicles, with the goal of producing 5 million new energy vehicles and 15 million fuel-efficient conventional vehicles by 2020.
• Renewable Energy. China is installing wind power at a faster rate than any nation in the world, and manufactures 40 percent of the world’s solar photovoltaic (PV) systems. It is home to three of the world’s top ten wind turbine manufacturers and five of the top ten silicon-based PV manufacturers in the world.
• Supercomputing. Last month, the Tianhe-1A, developed by China’s National University of Defense Technology, became the world’s fastest supercomputer. While the United States — and the Department of Energy in particular — still has unrivalled expertise in the useful application of high performance computers to advance scientific research and develop technology, America must continue to improve the speed and capacity of our advanced supercomputers.
Next page: Two research areas where the U.S. still leads
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Elusive efficiency: Why saving energy is so hard and what can we do about it? | Ensia
When it comes to reducing fossil fuel use, increasing energy efficiency has obvious appeal: help the environment, boost energy security and save money, too—without the grit-your-teeth-and-get-by-without attitude of 1970s-style energy conservation. Not only that, but boosting the amount of work we squeeze out of each kWh or Btu is the cheapest, most plentiful and fastest tool we have for moving toward a more sustainable energy future. Many efficiency fixes, experts point out, save so much it would be foolish to ignore them.
Americans have made some moves to enhance efficiency: Per capita energy use has fallen by 14 percent in the past three decades in the U.S., and since 1970 the energy necessary to create each dollar of GDP has been halved. Still, based on comparisons with other countries, that figure could well be halved again. And a recent report by the National Academies suggests Americans could reduce energy use 17 to 22 percent by 2020 and 25 to 31 percent by 2030 if we adopt existing and emerging energy efficiency technologies.
Why isn’t this “low-hanging fruit,” as efficiency is invariably called, being plucked? In the face of logic, incentives, regulatory mandates, new efficiency-enhancing technologies and even moral imperative, consumers remain surprisingly ambivalent about, or even muddled by, the options. Part of the problem is how human behavior often stymies better intentions. Another factor is the more banal reality that bureaucracy and a lack of capital can slow any revolution in its tracks, no matter how cost-effective it might be.
“The potential to reduce the energy we waste is compelling,” Kenneth J. Ostrowski, a senior partner at global management consulting firm McKinsey & Co., said in announcing a 2009 study of the U.S. economy. “However, to unlock the full potential, we need a coordinated national and regional strategy to overcome barriers and scale up the deployment of existing energy efficiency technologies.”
Consider the Value
First, take a step back and consider the value efficiency offers.
In an influential study published in 2008, psychologists Gerald T. Gardner and Paul C. Stern assessed the impact of around 30 steps households could take toward increasing their energy efficiency, all using currently available technologies. The sum of the efforts, they found, could cut U.S. home energy use by up to 30 percent. Since residences account for nearly one-third of total energy use, these savings could trim 11 percent from overall U.S. energy consumption.
In its 2009 report, McKinsey identified waste and other savings opportunities amounting to 23 percent of the U.S. energy pie, excluding the transportation sector. The cost of energy-saving upgrades, McKinsey found, could be entirely paid for within a few years by the resulting reduction in spending on energy. For a total investment of $520 billion, the U.S. could trim some $1.2 trillion from its energy costs by 2020. “Energy efficiency should be elevated to a national priority,” said Ostrowski.
The savings would be greater still if the calculation considers future innovation, says David Goldstein, energy program co-director for the Natural Resources Defense Council. In his 2010 book Invisible Energy, Goldstein estimated savings of 80 percent are possible by 2050 if we include technologies now in the pipeline, as well as those likely to be introduced given what we know about the pace of innovation.
Commenting on a National Academy of Sciences study estimating that energy savings of 30 percent are possible with today’s technology, Goldstein points out that by factoring in improvements in these technologies, the efficiency resource balloons in size to trillions of dollars of growth potential.
Culprit: Confusion
So if these gains are waiting to be made, what’s holding up the great efficiency revolution?
One culprit seems to be confusion. Consumers face a challenge connecting big, abstract gains with more familiar day-to-day decisions, such as installing CFL lightbulbs. And Americans are — for now, at least — so muddled about energy and efficiency that we’re largely unable to identify best choices about how to cut consumption.
In 2009, a research team led by Shahzeen Attari at Columbia University’s Center for Research on Environmental Decisions surveyed 505 subjects to assess their perceptions of energy consumption and savings for a variety of household, transportation and recycling activities. The team found that subjects sometimes overstated the impact of visible actions that offered relatively little energy savings, while profoundly underestimating the impact of less-visible steps that saved 10 or even 100 times more energy. While the test did not formally include cost estimates, the data suggest that respondents tended to underestimate choices with bigger impacts that were more costly.
Interestingly, respondents who identified themselves as eco-minded tended to be less accurate than the general public. Emphasizing that the study wasn’t testing the causes of these misconceptions, Attari points out, “The well intentioned may focus on behaviors that they do, and pay less attention to the ones they don’t do.”
But the study offers one piece of the puzzle to help encourage efficiency: Enlighten consumers about their consumption. Some utilities, for example, are tinkering with household gizmos designed to deliver data to residents so they can see their energy use. That kind of personalized instant feedback on gains made may be just what people need to make pursuing energy efficiency seem worth their while — particularly if reducing energy use is tied to something that makes a difference to them.
High costs, such as the price tag for insulation or a new, energy-efficient furnace, can be a barrier to major green upgrades.
“Go after what matters most to a consumer,” says Attari. “If they care about security, talk about energy independence. If they care about economics, talk about cost savings. If they care about their grandkids, talk about protecting future generations. If they care about biodiversity and species extinction, talk about polar bears.”
Set the Pace
Consumers are quick to state a willingness to pay for green features. But in practice, another impediment to adopting energy efficiency measures is our aversion to paying large amounts up front, even if the investment promises long-term savings. High costs, such as the price tag for insulation or a new, energy-efficient furnace, can be a barrier to major green upgrades.
Some cities have pioneered an innovative solution to this problem. Adapting a model historically used to pay for sewer systems, sidewalks and other public works, planners in Berkeley, Calif., devised an approach — called Property Assessed Clean Energy, or PACE — that financed the up-front costs of big-ticket efficiency investments by issuing a bond. Property owners could, in turn, borrow those public funds to pay for green upgrades. To pay back the loan, homes that tapped into PACE funds see their taxes rise incrementally over 20 years.
“PACE helps consumers get past the hurdle of paying up-front costs,” said Claire Danielle Tomkins, director of research at the Carbon War Room, at the Business Climate 2010 conference in New York.
To date, more than 20 states have passed laws enabling PACE programs. Perversely, however, Washington stymied the progress of PACE deployments. In the wake of the global financial crisis, federal authorities blocked mortgages attached to PACE bonds, arguing that the added payments increase a borrower’s monthly costs and thereby add risk to still sickly mortgage markets.
Rebound
Interestingly, thanks again to human nature, even implementing measures that improve efficiency will not necessarily result in reduced energy use.
One challenge is something called the “rebound effect”, or Jevons paradox. By definition, greater efficiency lowers the cost to use a resource or technology. But as goods and services grow cheaper, people tend to consume more of them .
When these two dynamics collide, efficiency gains can be diluted by increases in use. One study found that households with high-efficiency washing machines boosted the volume of washing they did on average by 5.6 percent. This increase didn’t negate the 40 to 50 percent reductions in water and energy consumption the units delivered, but it did erode total efficiency gains, according to a 2008 RAND paper by economist Lucas Davis.
For another twist on how human nature can stymie efficiency’s efforts to cut energy use, consider America’s love affair with big, fast cars. The technology to dramatically boost vehicle efficiency has been progressing for decades, but technology upgrades that could have saved energy have instead gone to soup up performance. While mileage barely budged between 1990 and now, average horsepower surged 77 percent, to around 230 today. As a result, today’s mild-mannered Toyota Sienna minivan offers about as much horsepower as Ford’s fastest ’72 Mustang.
More Carrots, More Sticks
Alas, there is no single fix for efficiency elusiveness. Logjams like the PACE policy must be dismantled one by one. And because human behavior is so complex, approaches to altering it must take many forms.
For now, incentives are the most politically saleable strategy to induce efficiency savings. As part of the 2009 stimulus bill, the U.S. Department of Energy doled out hundreds of millions to boost efficiency programs.
More vigorous mandates are making a comeback, too. Most visible, perhaps, has been the rollout of higher mileage standards for cars. And in 2010, DOE announced dozens of tough penalties against companies selling appliances, plumbing and lighting without certifying that they meet energy and/or water efficiency standards. Such well-crafted rules promise to speed change while obviating many of the psychological traps that can distract consumers. When we can’t opt for a less-efficient technology, our purchasing decisions get easier.
There may even be a public appetite for a yet heavier regulatory hand. A national survey conducted by the Mellman Group for the Union of Concerned Scientists suggests consumers may prefer tougher mileage rules. The study found that about 74 percent of voters favor tougher federal goals requiring that average fuel efficiency rise to 60 mpg by 2025. Two-thirds supported the goal even if it meant a $3,000 premium on the sticker price, assuming that could be recouped in savings at the pump within four years.
Perhaps the biggest motivator of all could end up to be the market. The sharp oil price spike of 2008 caused an unprecedented stampede away from gas-guzzling vehicles and triggered broader efforts to cut energy use. Similar increases in the cost of electricity or natural gas could do much to motivate consumers to cut back by improving their energy efficiency.
Advocates for a tax on carbon emissions generated by energy use argue such a fee would trigger the adoption of energy efficiency measures in an orderly fashion by preventing such on-again, off-again shifts toward efficient technologies. Better to create an incentive to put efficient systems into place ahead of time, they argue, than to wait for unpredictably high energy prices to return and force these shifts chaotically.
Indeed, better we all learn efficiency-improving behaviors while we can afford to. 
A version of this feature originally appeared in the Fall 2010 issue of Momentum magazine, Ensia’s predecessor.
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Check out the original story at Ensia.com:
Investing in Clean Energy: A Sputnik moment for America? | The Fiscal Times
In balmy Cancun, at a U.N. conference on climate change, China and the U.S. remain the elephants-in-the-room of all discussions. Both are more focused on the commercial potential of climate-related technology than on any environmental goals that could impair economic growth. Such a focus should sell better in Washington, but it’s an area where the U.S. is lagging, and China’s lead is growing.
U.S. Energy Secretary Steven Chu, speaking at the National Press Club earlier last week called China’s mounting successes in clean energy a “Sputnik moment” for the U.S.
In 1957, a refrigerator-sized sphere transmitting a steady radio signal was lofted into orbit by the Soviet Union, sparking a generation of U.S. technical and scientific discovery. But it took decades for satellite technology to become a commercial market.
Now, in clean technologies, China is racing into well-established, fast-growing markets U.S. players are eyeing hungrily. Chu named the most vulnerable areas, where the U.S. must innovate quickly, or risk falling behind…
GE’s Innovation Avalanche | GreenBiz
In New York yesterday, GE announced two big steps in its Ecomagination Challenge program. The company unveiled 12 investments, totaling $55 million, as the first round of its goal to put $200 million to work in power grid technology startups over the next 18 months.
Second, GE announced five $100,000 “Innovation Awards” for still- developing technologies identified from its novel effort to crowd source innovative energy technology opportunities from the Web. This batch included two of my favorites: WinFlex, which is developing a collapsible wind turbine rotors, for easier assembly, and IceCode, which is electrifying wind turbine blades to prevent power-sapping ice build-up.
In the big money category, GE and its venture capital partners are putting up $55 million into 12 startups, established companies and one academic program. Winners get more than investment funds. They’ll also have the benefit of warp-speed product development with the help of GE’s engineering and sales troops. Plus they’ll get guidance and financial help from leading VCs, including Emerald Technology, Foundation Capital, Kleiner Perkins Caulfield & Byers, and Rockport Capital.
For GE, the key is cultivating innovation from beyond its four walls. “What do I do? I’ve got 45,000 engineers and innovators, and 45,000 sales people. I can drive innovation at a scale these guys can’t do,” said Jeff Immelt, GE’s CEO and Chairman, at the announcement.
For today’s winners, all those engineers and sales experts offer a huge leg up. “For a startup, capital is necessary, but it’s never sufficient to build innovation,” said Thomas Noonan, the CEO of JouleX, one of the winners, which is making advanced grid-monitoring technology. “The work we’re doing with GE though their energy research labs, with access to their network, testing our products, has been extraordinary for a small, early-stage company.”
As you’ll see in the list below, this first round of winners was long on smart grid plays. This is no accident. Smart grid complements GE’s own ambitions in advancing its in-house power distribution and grid management technology.
Smart grid also offers some of the best growth potentials in clean tech, too, as Steve Vassallo of Foundation Capital pointed out during the announcement. While many cleantech plays are focused on the supply side of the opportunity — whether it’s converting photons to electrons, or switch grass to fuel — they’re very capital expensive to take commercial.
Conversely, Vassallo added, opportunities to reduce demand are more capital-efficient, faster to deploy, and not as dependent on subsidies because the solutions can deliver such quick savings to customers.
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Climate Change: Hotter, Wetter, Windier and Costlier — Insurers Tally the Potential Toll | The Fiscal Times
It’s not your imagination. The weather in lots of places is getting hotter, windier, and weirder. In September, New York City was hit by its third tornado in the past five years, unprecedented in more than a century of weather records.
For a few minutes on Sept. 16, a macro-burst carved a swath of tree-felling, roof-lifting destruction through Brooklyn and Queens. Remarkably, the storm killed only one bystander. Estimates put the cost of damage from the storm at over $27 million, not including the loss of thousands of city trees.
An unprecedented heat wave and severe drought conditions this summer fueled wild fires in Russia, causing hundreds of deaths and some $15 billion in property loss. Later in the summer, Pakistan experienced cataclysmic flooding, displacing millions and doing some $9.5 billion in damage to housing, infrastructure and farm fields.
Some say these events are part of a normal weather cycle, others say it’s a sign of permanent climate change. Either way, it’s a multi-billion dollar problem. Globally, insured losses from weather events have jumped to an average $27 billion annually from $5 billion over the past 40 years, adjusted for inflation. While rising property values account for part of the increase, a growing share is driven by the intensification and rising frequency of weather disasters, according to an assessment of insured property damage by SwissRe, a Zurich-based reinsurance provider…
The End Isn’t Near: A Better Way to Spur Action on Climate Change | GreenBiz
From Al Gore’s An Inconvenient Truth, to emotionally wrenching visions such as this video shown at last year’s Copenhagen climate meeting, many climate change communicators opt for shock and emotional awe in their efforts to stir action. Given the scope of the fears, it’s an understandable tactic.
In fact, litanies of massive environmental disruption — often paired with images of imperiled children (here, here and here) — have become a sort of visual cliché used by even the most sophisticated messengers in this arena. Gore’s movie — despite being essentially a PowerPoint presentation on steroids — even won an Oscar. At their best, they can be educational, stirring visions meant to motivate the public.
At their worst, they do the exact opposite. Given the parlous state of climate efforts, it’s pretty obvious that these apocalyptic warnings aren’t winning over droves. I’ve seen it first hand: For every person moved to act by Gore’s work, I’ve observe others who respond with a fatalistic shrug asking, in effect, what could I possibly do about it? Still others have vaulted clear over ambivalence to outright antagonism, angered by the threat these visions suggest, and their implicit accusation of fault.
Now behavioral researchers at the University of California, Berkeley, have shed some scientific light on these unintended consequences of climate communication. The new study, which will be published in the January issue of Psychological Science, suggests that dire descriptions of global warming, in isolation, can backfire, causing viewers to shut off, before considering the problem.
In their paper, “Apocalypse Soon? Dire Messages Reduce Belief in Global Warming by Contradicting Just World Beliefs,” [PDF] researchers Matthew Feinberg and Robb Willer highlight the basic fact that fear and fatalism are poor motivators. The conclusion offers a reminder that, for all the billions being put into mitigating climate change, developing better understanding of human behavior could lead to more change at lower cost.
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Is the US Losing the Leading Role in Smart Grid? | GreenBiz
When the World Economic Forum and Accenture launched their latest look at global progress of smart grid technology, the authors selected Tianjian, China, for the debut.
It wasn’t until nearly two months later that the analysis, “Accelerating Successful Smart Grid Pilots (pdf),” was formally unveiled in the U.S. — at a meeting of industry leaders today in Atlanta hosted by General Electric Energy.
The China debut caught my eye. Is it a signal that U.S. leadership in smart grid is giving way? There’s been much worry that the U.S. is losing its edge in clean technologies born here. It’s already happened with solar photo voltaic technology, which is dominated by China. Other sectors — such as e-car, battery and wind technology — are re-centering there, too.
In the smart grid space, the U.S. is a natural leader, given our huge energy appetites and how similar the smart grid is to the Internet.
“As the largest per capita consumers of energy in the world, the United States has both the opportunity and the responsibility to be at the forefront of this revolution,” said Bob Gilligan, GE Energy’s vice president of digital energy, in a statement as part of the WEF event.
Yet as its China debut suggests, the report makes clear that whatever head start the U.S. may have had, it’s being challenged by ambitious programs elsewhere. The report maps out the surprising scope of international efforts. For instance, while Washington committed $4.5 billion into smart grid as part of the stimulus, Beijing committed some $7.3 billion.
The question isn’t so simple as U.S. versus China, of course. China’s key focus isn’t to develop exports, at least not yet. Rather, it’s racing to build out its national grid to keep pace with rapid urbanization and economic growth. And it’s not alone. Newly wealthy India and Brazil, together with Kenya, according to the WEF’s report, are plowing funding into smart grid work to build infrastructure fast, as well.
That said, and unlike China, some other economies are more explicitly focused on developing smart grid technologies for export, the WEF found. These include South Korea, Japan and Singapore. Their plans dovetail nicely with domestic efforts to cultivate green technology industries and lower national energy use.
In Europe, billions are flowing into the sector as part of strong national commitment to build out renewables, roll out e-cars and lower the carbon intensity of the power grid.
To be sure, the sky isn’t falling. According to the WEF’s survey, the U.S. is tied with Europe as leaders in these technologies. Plus in fast-emerging markets like China and India, much of the money being poured into grid technologies is simply to deliver basic services, rather than cutting edge digital systems.
U.S. efforts are gaining speed too. While U.S. public funding in smart grid projects trails that of some other regions, private investment — led by utility spending — is slated to hit $7 billion this year, the WEF estimates. As much as South Korean and Singaporean players may hope to export smart grid gizmos to the U.S., big tech juggernauts here such as GE and IBM are already hustling to sell U.S. expertise into those and other markets too.
This context is worth remembering as the U.S. smart grid rollout goes through some early growing pains. We’ve already seen some barriers to early projects and anxiety is on the rise over the vulnerability of the smart grid to cyber-risks. These problems aren’t unique to the U.S., of course, and by fixing them, the U.S. smart grid could yet set standards and define the technologies, others will emulate.
A video of the discussion on the report by the WEF and Accenture can be seen here. The Q&A following the presentation is worth catching, given the caliber of attendees — including Duke Energy CEO Jim Rogers — and the thoughtful the discussion of the challenges facing the U.S. rollout.
The full WEF “Accelerating Successful Smart Grid Pilots” is available at www3.weforum.org/docs/WEF_EN_SmartGrids_Pilots_Report_2010.pdf
The executive summary is available atwww3.weforum.org/docs/WEF_EN_SmartGrids_Pilots_ExecutiveSummary_2010.pdf
Image CC licensed by Flickr users Vince Alongi and Marc_Smith.
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BSR 2010: What Will it Take to Feed the Future? | GreenBiz
Food production sits at the intersection of some of the most fraught concerns in the landscape of sustainability. Combining life-or-death issues of nutrition, with pressing concerns about the environment together with questions over the role of big industrial players in agricultural, food production sparks passions in boardrooms and dining rooms alike.
At BSR 2010, the tensions pulling at these issues surfaced in a standing-room-only session titled “Feeding the Future: What will it Take.”
World Wildlife Fund’s Jason Clay, who ran his family’s farm early in his life, laid out the challenge facing the world’s food production systems. Today, just 30 percent of arable land remains unfarmed. Yet over the last 10 years, that share of farmed land has grown by bout 0.6 percent per year. If this pace continues steadily, by 2050, all but 6 percent of untouched arable land will be put to use, meaning rain forests and other pristine environments will be imperiled.
“Suddenly there will be no biodiversity left. We will eat the planet. We have to figure out how to do more with less,” said Clay. To get there from here, without eating the planet, Clay estimates we’ll have to do about twice as much with every input — whether plants, or phosphorus, or water, or land.
Clay pointed out that water is another huge constraint. Today humans use half the fresh water supply on the planet, and of that, about 70 percent goes for farming. Put another way, he explained that it takes about 1 liter of water to produce each calorie of food we eat. So a person’s daily water consumption isn’t really the few liters they drink directly, but the 2,500 or 3,000 liters they eat each day.
Driving the food consumption is rising wealth. By 2050, Clay predicts, the world will have some 9 billion people, with 2.9 times more income on average than today. And in many of the largest, less developed countries, income could grow by 5 times per capita.
By practically any measure, wealth translates into healthier populations. But as newly wealthy populations boost their meat intake, the impact on food systems will be stressful, and enormous. A richer world will eat more protein, which demands much more energy, water and farming resources to grow. “We’re seeing it with pork in China and eggs in India,” said Clay.
To feed this richer, more populous world, Clay emphasized that no single strategy can do the trick, so we should be pursuing many at once. Reducing waste is among the best near term steps, he points out, given that one of every three food calories is wasted worldwide.
By simply eliminating wasted food, said Clay, “we could produce half as much additional new food we expect to need under the business as usual plan.” Sounds easy? But it runs against deeply ingrained practices in restaurants — where portion sizes are often too big — and shoppers’ love affair with fresh food. Transporting fresh food not only wastes about half the food, but uses more energy.
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BSR 2010: The Push to Merge Financial and Sustainability Reporting | GreenBiz
For all the attention flowing into greener corporate practices, there’s scant agreement about how best to document these efforts. Standalone sustainability reports have become de rigueur for most multinationals, pressure is growing to integrate environmental and sustainability practices into a single annual report.
The push for such so-called “integrated reporting” was the topic of a meeting at the BSR 2010 conference, When CSR and Financial Reporting Meet: Integrated Reporting, where “AK”Adam Kanzer, managing director and general counsel of Domini Social Investments, emphasized that the issue is likely to end up on the “to do” lists for many boards of directors and investment relations offices as the SEC moves towards setting rules about treating the “materiality” of sustainability issues to earnings and reporting.
In advance of SEC rulemaking, Kanzer points out many companies are headed in the same direction for strategic reasons. Over 90% of CEOs, when polled, report that sustainability is critical to future success. “If it’s material to business, then it’s inadequate not to include it in the annual report,” Kanzer said. “The ultimate question is: why do separate reports?”
As yet, just a handful of companies — mostly European, such as Astra Zeneca — are producing integrated reports, and there is scant consensus on how to prepare such reports. And while guidelines remain hazy, Kanzer said, lawyers in investment relations offices are always likely to opt out until rules are set.
“The SEC definition of materiality is based on what a reasonable investor would need to make an investment or voting decision,” said Kanzer. “Take that broad interpretation, then put it in hands of corporate counsel, and you end up with boilerplate disclosure, something not very useful to investors.”
Investors should therefore be pressing for integrated reporting ahead of the rules, Kanzer argues. Mainstream financial analysts are more likely to integrate these issues into their recommendations when sustainability factors are presented along side conventional financial metrics in an same annual report. Left to an external report, Kanzer concedes, sustainability issues are more likely to be ignored.
Kanzer, who has served on an SEC advisory committee on sustainability reporting standards, explained that determining what is “material” to earnings is still more art than science, which complicates the decision about how to report such issues.
For instance, Kanzer recounted, Costco recently changed its seafood purchasing practices in response to pressure from Greenpeace and other NGOs. “If Bluefin tuna goes extinct, neither Costco nor its competitors will sell it anymore,” so they’ll be equally affected, plus sales reduction will be undetectable to the company’s bottom line, Kanzer explained. “So it’s hard to make a case that the decision is material to Costco’s financial reporting. But it is clearly material to our evaluation or the company as an investor.”
Photo CC-licensed by featheredtar.
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