tag:blogger.com,1999:blog-84757489582992358822024-03-14T14:08:12.065-04:00A Climate of Change: The Way AheadGLOBAL SUSTAINABILITY AND THE ULTIMATE RACE AGAINST TIMESMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.comBlogger39125tag:blogger.com,1999:blog-8475748958299235882.post-63084661107864616502010-02-21T14:01:00.015-05:002010-04-19T15:22:16.343-04:00The New Business Agenda (2): The Need for New, True Pricing Paradigms<div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">Fundamental to the new agenda for business is the willingness to invest in long term gains for the collective over short-term returns. One of the key elements of classic economics is the fact that we have accounted for natural capital at its extraction cost, not at its renewal or replenishment cost. Depletion costs are an externality in this analysis and thus the cost of natural resources is set to be at or near zero, essentially free. </span></span></div><div style="font: 14.0px Times; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
</span></span><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> </span></div><div style="font: 14.0px Times; margin: 0.0px 0.0px 0.0px 0.0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">True pricing includes these externalities whether they be applied to forest, land use, mineral or oil reserves, appropriately requires that a new perspective on discount rates also be incorporated into the new business agenda. One can argue that typical (under 10%) discount rates do not fairly value the future and lead to decisions that favor short term profit maximization. Therefore, true discounts rates are in fact much higher.</span></span></div><div style="font: 14.0px Times; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
</span></span><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> </span></div><div style="font: 14.0px Times; margin: 0.0px 0.0px 0.0px 0.0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">Getting the pricing right may in fact be possible for assets where there are clear property rights, the the asset is owned or controlled by individual or corporate entities. The issues gets much muddier when dealing with the commons where pricing mechanisms or markets don't exist and complex issues of social equity/justice become large considerations. These factors are what makes the issues of climate change, conservation and environmental stewardship so complex.</span></span></div><div style="font: 14.0px Times; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
</span></span><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> </span></div><div style="font: 14.0px Times; margin: 0.0px 0.0px 0.0px 0.0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">The need for new pricing paradigms is not universally accepted, this change will not come easily. Over the next 5 years, I expect continued economic and social turmoil along with moves toward both significantly increased balkanization along with increased rhetoric toward multilateralism without much progress toward resolution. During this period of turmoil in another 5 years or so when the consequences of inaction are more evident will our collective behavior change. Hopefully, it will happen before the tipping point is reached. </span></span></div><div style="font: 14.0px Times; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-72906490331508121842010-02-18T12:14:00.031-05:002010-04-19T17:03:59.738-04:00The New Business Agenda (1): The Need for a Strong, Sustainable, Balanced Economic Growth<div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;"><b>The New Macroeconomic Reality</b></div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">A shift is beginning to decouple economic growth from ecosystem destruction, natural resource depletion and material consumption toward a concept of sustainable economic development where environmental externalities (true costs) are incorporated and prosperity and societal wellbeing are the goals and define success. In future months, look for structural/behavioral economics to become increasing prominent in the discussion. </div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">The G8's "RESPONSIBLE LEADERSHIP FOR A SUSTAINABLE FUTURE" declares:</div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;"><span style="color: black;">"</span><i>The interlinked challenges of climate change, energy security and the sustainable and efficient use of natural resources are amongst the most important issues to be tackled in the strategic perspective of ensuring global sustainability. A shift towards green growth will provide an important contribution to the economic and financial crisis recovery. We must seize the opportunity to build on synergies between actions to combat climate change and economic recovery initiatives, and encourage growth and sustainable development worldwide."</i></div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">Recently, France, Germany and Australia as pushing the G20 to adopt a new framework for sustainable growth, the G20 Sustainable Growth Accord. At the same time, the field of economics is moving beyond its 500 year old roots in classical/neoclassical macroeconomics to embrace new models and methods. </div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">The focus at the recent G20 meeting in Pittsburgh, Pennsylvania was on the current financial crisis including much discussion on the issue of sustainable growth. The following is an output of the Pittsburgh meeting on this topic: </div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;"><b>G-20 Framework for Strong, Sustainable, and Balanced Growth*</b></div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;"><span style="font: normal normal normal 14px/normal 'Lucida Grande';"><br />
1. Our countries have a shared responsibility to adopt policies to achieve strong, sustainable and balanced growth, to promote a resilient international financial system, and to reap the benefits of an open global economy. To this end, we recognize that our strategies will vary across countries. In our Framework for Strong, Sustainable and Balanced Growth, we will:</span></div><ul style="list-style-type: disc;"><li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">implement responsible fiscal policies, attentive to short-term flexibility considerations and longer-run sustainability requirements.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">strengthen financial supervision to prevent the re-emergence in the financial system of excess credit growth and excess leverage and undertake macro prudential and regulatory policies to help prevent credit and asset price cycles from becoming forces of destabilization.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">promote more balanced current accounts and support open trade and investment to advance global prosperity and growth sustainability, while actively rejecting protectionist measures.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">undertake monetary policies consistent with price stability in the context of market oriented exchange rates that reflect underlying economic fundamentals.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">undertake structural reforms to increase our potential growth rates and, where needed, improve social safety nets.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">promote balanced and sustainable economic development in order to narrow development imbalances and reduce poverty.</li>
</ul><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">2. We recognize that the process to ensure more balanced global growth must be undertaken in an orderly manner. All G-20 members agree to address the respective weaknesses of their economies.</div><ul style="list-style-type: disc;"><li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">G-20 members with sustained, significant external deficits pledge to undertake policies to support private savings and undertake fiscal consolidation while maintaining open markets and strengthening export sectors.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">G-20 members with sustained, significant external surpluses pledge to strengthen domestic sources of growth. According to national circumstances this could include increasing investment, reducing financial markets distortions, boosting productivity in service sectors, improving social safety nets, and lifting constraints on demand growth.</li>
</ul><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">3. Each G-20 member bears primary responsibility for the sound management of its economy. The G-20 members also have a responsibility to the community of nations to assure the overall health of the global economy. Regular consultations, strengthened cooperation on macroeconomic policies, the exchange of experiences on structural policies, and ongoing assessment can strengthen our cooperation and promote the adoption of sound policies. As part of our process of mutual assessment:</div><ul style="list-style-type: disc;"><li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">G-20 members will agree on shared policy objectives. These objectives should be updated as conditions evolve.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">G-20 members will set out their medium-term policy frameworks and will work together to assess the collective implications of our national policy frameworks for the level and pattern of global growth, and to identify potential risks to financial stability.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">G-20 leaders will consider, based on the results of the mutual assessment, and agree any actions to meet our common objectives.</li>
</ul><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">4. We call on our Finance Ministers to develop our process of mutual assessment to evaluate the collective implications of national policies for the world economy. To accomplish this, our Finance Ministers should, with the assistance of the IMF:</div><ul style="list-style-type: disc;"><li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">Develop a forward looking assessment of G-20 economic developments to help analyze whether patterns of demand and supply, credit, debt and reserves growth are supportive of strong, sustainable and balanced growth.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">Assess the implications and consistency of fiscal and monetary policies, credit growth and asset markets, foreign exchange developments, commodity and energy prices, and current account imbalances.</li>
<li style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">Report regularly to both the G-20 and the IMFC on global economic developments, key risks, and concerns with respect to patterns of growth and suggested G-20 policy adjustments, individually and collectively.</li>
</ul><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 16.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 16.0px; margin: 0.0px 0.0px 0.0px 0.0px;">These are important steps in addressing the financial crisis and moving toward strong, sustainable, balanced growth. Despite the current fiscal challenges it is possible to make significant strides towards these goals if nations are effective in execution of policies. The OECD has done extensive work and shown there is clear benefit in job creation and growth when policies incorporate sustainability components. OECD studies have found reforming education systems could raise living standards significantly. In one finding, an additional year of education can raise GDP/capita by 4 and 7 per cent through increasing the labour supply. This directly impacts standard of living, is a coordinated program of job creation is also put in place to create a virtuous cycle of growth.</div><div style="font: 14.0px 'Trebuchet MS'; line-height: 16.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 16.0px; margin: 0.0px 0.0px 0.0px 0.0px;">Where will the growth and jobs comes from? ALong with the G20 frame work above. The G8 Declaration “Responsible Leadership for a Sustainable Future” includes significant and detailed language along the following theme:</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 16.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px;"><i>"New sources of growth will have to be supported by investments in infrastructure, innovation and education to facilitate productivity growth, while ensuring sustainable use of resources in a greener economy, within a context of open markets."</i></div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px;">While the OECD “Declaration on Green Growth” recognizes and specifically targets the opportunities for tackling global financial, environmental and social crises together in transparent and accountable ways. Specifically:</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px;">"The OECD can, through policy analysis and identification of best practices, assist countries in their efforts to respond to the growing policy demands to foster green growth and work with countries to develop further measures to build sustainable economies.</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px;">DECLARE that we:</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px;">STRENGHTHEN our efforts to pursue green growth strategies as part of our response to the current crisis and beyond, acknowledging that “green” and “growth” can go hand-in-hand.</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px;">ENCOURAGE green investment and sustainable management of natural resources. In this respect, we are resolved to make further efforts to use efficient and effective climate policy mixes, including through market-based instruments, regulations and other policies, to change behaviour and foster appropriate private sector responses. We will consider expanding incentives for green investment, in particular in areas where pricing carbon is unlikely to be enough to foster such private sector responses. Such areas may include smart, safe and sustainable low-carbon infrastructure and R&D technologies that can contribute to building a sustainable low-carbon society. Approaches to recognise the value of biodiversity should be encouraged through appropriate instruments and consistent with relevant international obligations. We are resolved to share information on green investment flows and policies, and best practices.</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px;">ENCOURAGE domestic policy reform, with the aim of avoiding or removing environmentally harmful policies that might thwart green growth, such as subsidies: to fossil fuel consumption or production that increase greenhouse gas emissions; that promote the unsustainable use of other scarce natural resources; or which contribute to negative environmental outcomes. We also work towards establishing appropriate regulations and policies to ensure clear and long-term price signals encouraging efficient environmental outcomes. We call on other major economies to follow the OECD countries’ lead.</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="color: #333233; font: 14.0px 'Trebuchet MS'; line-height: 15.0px; margin: 0.0px 0.0px 0.0px 0.0px;">ENSURE close co-ordination of green growth measures with labour market and human capital formation policies. We note that these can support the development of green jobs and the skills needed for them, and ask that work on implementing the Reassessed OECD Jobs Strategy pays due attention to this objective."</div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px; min-height: 16.0px;"><br />
</div><div style="font: 14.0px 'Trebuchet MS'; margin: 0.0px 0.0px 0.0px 0.0px;">* Source: Leaders' Statement: The Pittsburgh Summit, September 24 – 25, 2009</div>Anonymousnoreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-79778463681585397522010-02-15T09:30:00.013-05:002010-04-19T15:40:55.039-04:00I am 3,996,308,755 people old<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">According to UN estimates, global population is expected to increase from 6.9 billion to more than 9 billion by 2050. Roughly the same increase in population as since I was born in 1956. I find it hard to relate to these figures as they feel rather abstract but when juxtaposed against life events, as in the chart below, they seem much more concrete. Using UN population estimates, I was born when the world population was about </span></span><span class="Apple-style-span" style="-webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;"><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">2,834,078,230 people. With the current world population estimate at 6,830,386,985, that makes me now about 3,996,308,755 people old.</span></span></span><br />
<div><span class="Apple-style-span"></span><span class="Apple-style-span" style="font-family: 'trebuchet ms', serif;"><span class="Apple-style-span" style="-webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px; font-size: medium;"><br />
</span></span><br />
<div><div><div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHjbe4_8qgyEmXYujyRmrR6xSF5hFJQhqD_bxn9v7UytW5S65jEJuAAt_kHI_hFgaAlcn_dR3shi7_lti8hqhgkb-h5SijYeKzKCBLa1exLj05YQvwsU8iImhQILTcDRCuiXeaLRuMOM4K/s1600-h/pop+chart.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="165" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHjbe4_8qgyEmXYujyRmrR6xSF5hFJQhqD_bxn9v7UytW5S65jEJuAAt_kHI_hFgaAlcn_dR3shi7_lti8hqhgkb-h5SijYeKzKCBLa1exLj05YQvwsU8iImhQILTcDRCuiXeaLRuMOM4K/s320/pop+chart.jpg" width="320" /></a></div><br />
</div><div><a href="http://2.bp.blogspot.com/_AgiLpC7xY48/S3la9-d__XI/AAAAAAAAABo/BcodJvU7IBQ/s1600-h/pop+chart.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"></a></div></div></div></div></div>Anonymousnoreply@blogger.com2tag:blogger.com,1999:blog-8475748958299235882.post-52400167766540653202010-02-15T08:41:00.005-05:002010-04-19T15:40:04.245-04:00What I Do and Why<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><span class="Apple-style-span" style="font-size: small;">As a teacher across two departments; one which focuses on issues of Policy, Law & Ethics and the other on issues of Strategy, Innovation & Entrepreneurship, you can say I live at the intersection of two worlds. That is my nature. Within that intersection, that confluence of thoughts, ideas, principles and disciplines, I concentrate on what I feel are the most important policy, strategy and development problems of the world today. At a time when society, individuals and education are becoming ever more specialized, I pursue the development of “the mind” at a time when great business minds are desperately needed.<br />
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We live in an age of great political, social and economic challenge on one hand and seemingly insurmountable opportunities on the other. To paraphrase Bill Clinton, the challenge before us in the 21st century is:</span></span> <span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
</span></span> </span></span><i><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">“… whether the 21st century will be marred by scarcity, deprivation, environmental degradation, terrorism and conflict of all kinds or whether it becomes the most peaceful and prosperous time the world has ever known.”</span></span></i><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
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My ambition is to create the latter.<br />
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As Thucydides suggested in the fifth century BC, “The events which happened in the past will at some time or other and in much the same way be repeated in the future.”. The past can suggest much about the future – the nature of change, progress and its impact on society and our environment, and the interplay among human societies in times of peace and conflict. While much will change, human nature </span></span><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> </span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">being what it is will continue to be a driving force in the affairs of the world. </span></span><span class="Apple-style-span" style="-webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px; line-height: 18px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> </span></span></span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">We must work with this nature, these instincts, not against this them in shaping the future.</span></span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
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The challenges faced demand the best from us as individuals, organizations and as a society. Solutions will require integrative, systemic thinking, the ability to take on and reconcile seemingly intractable problems combined with the confidence to lead change and act amidst great uncertainty. Quoting Einstein, </span></span><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> </span><i><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">"We can't solve problems by using the same kind of thinking we used when we created them."</span></span></i><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> Thus our current challenges demand the development of great minds, engaged minds, minds with the awareness of, understanding of and commitment to solve the challenges before us. This is why I do what I do.<br />
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Dare we be optimistic about the future? To answer the question with a question, "Is there any other choice?". To address the question directly, my answer is a resounding yes.</span></span>Anonymousnoreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-55089984368995819502010-02-13T17:38:00.007-05:002010-04-19T15:44:54.243-04:00Shifting Gears: Moving Beyond Copenhagen<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">In 2050, just 40 years from now, it is estimated the some 30%, about 3 billion, more people will be living on this planet. For classic growth-oriented development, the good news is that this growth will deliver billions of new consumers who want a better lifestyle. For sustainable development, the bad news is that shrinking natural resources, environmental degradation, and climate change will limit the ability of all 9 billion of us to attain or maintain the consumptive lifestyle that is commensurate with the middle class in today’s affluent markets. To resolve this conflict one must redefine the political, economic and social agenda where the global population is not just living on the planet, but living well and within the limits of the planet. “Living well” describes a standard of living where people are secure and have equitable access to and the ability to afford education, healthcare, mobility, the basics of food, water, energy and shelter, and consumer goods. “Living within the limits of the planet”, means living in such a way that this standard of living can be sustained with the available natural resources and without further harm to biodiversity, climate and other ecosystems.<br />
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Areas of focus toward a vision of a sustainable economy in 2050:</span> </span><br />
<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><ul><li><span class="Apple-style-span" style="font-size: small;">Population growth, migration/urbanization and demographics shifts.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">Evolutionary economics the toward structural/behavioral true-value economics that include true cost of the classic externalities of natural resource depletion and environmental impact.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">Property ownership rights of both hard assets (primary property vis-à-vis De Soto) and intellectual property.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">The definition of State, the boundaries of sovereignty, the effectiveness of governance and the role of existing and emerging multilateral institutions.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">The social and economic drivers of conflict and terrorism.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">The systemic and integrated (co-dependent) nature of economic and the food, water, energy and environmental ecosystems.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">The social systems of healthcare, education, social services and urban development.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">Globalization opportunities, threats and regulation related to trade systems, financial markets, healthcare (pandemic), environmental impact, wealth creation and social/cultural diversity.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">Social and technological creativity, breakthrough invention and disruptive innovation related to products services and business models and their diffusion.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">Entrepreneurship and risk capital as an engine of sustainable development in both developed and developing economies.</span></li>
<li><span class="Apple-style-span" style="font-size: small;">Empowerment of individuals, particularly women and youth in the developing world, the development of leaders to create radically more eco-efficient solutions for improved business competitiveness, enhanced social equity and sustainable economic development.</span></li>
</ul></span><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">Each area unto itself is technically challenging, socially complex, and presents potential intractable problems. Even understanding these problems requires the integration of diverse perspectives, insight into the interconnectedness and interdependencies and the factors that amplified or attenuate efforts to implement change.<br />
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This is the path we are about to embark upon. Hope you enjoy the journey.</span> </span>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-1555507514655932082010-02-13T14:24:00.016-05:002010-04-19T15:42:18.178-04:00Copenhagen Accord Update: Good News and Bad News<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">The good news first:<br />
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More than 50 nations including major greenhouse gas emitters China and the United States have submitted voluntary commitments for greenhouse gas emissions under the Copenhagen Accord's January 31, 2010 deadline.</span> </span><br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiktpvCXQ92pU60zsJfXegpsCSHKqLUEwv4yWttBOJ7KjcZA6CSD84l0ya3r4aUWy6EVMc5RZb2qQzihnk1qDfniZuHIYYgEcHd8EeYCDVm6A5SuiNCNRajIacHtBYnVy9zBmKOxFiHPd29/s1600-h/Copenhagen+Summary+-+WRI+Chart.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><span class="Apple-style-span" style="color: black;"><img border="0" height="271" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiktpvCXQ92pU60zsJfXegpsCSHKqLUEwv4yWttBOJ7KjcZA6CSD84l0ya3r4aUWy6EVMc5RZb2qQzihnk1qDfniZuHIYYgEcHd8EeYCDVm6A5SuiNCNRajIacHtBYnVy9zBmKOxFiHPd29/s400/Copenhagen+Summary+-+WRI+Chart.jpg" width="400" /></span></span></a></div><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
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<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">The bad news:<br />
</span> </span></div><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">While the Copenhagen Accord reaffirms the goal of limiting the rise in global temperatures to below 2 degrees Celsius above pre-industrial levels, analysis of the voluntary commitments submitted will miss this goal by a wide margin. Pledges submitted to the UNFCC would allow a temperature increase to 3.9 degrees Celsius (7.0 degrees Fahrenheit) by 2100.<br />
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Much work remains to be done before COP16 in Mexico later this year.</span> </span>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-25862438464805289512010-01-20T10:09:00.011-05:002010-04-19T15:43:03.427-04:00The United States, Post-Copenhagen: Where do we go from here?<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">The UN COP15 climate change conference in Copenhagen ended with disappointing results but the challenges to find solutions to mitigation and adaptation continue. The UN process has no formal agenda in the near term and will not likely begin the preparation meetings for COP16 before mid-year.<br />
<br />
The focus in the United States leading up to COP16 will be on legislation. With Waxman-Markey off the table, the focus is on the compromise Boxer-Kerry Senate bill. </span> </span><br />
<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'trebuchet ms';"></span></span><br />
<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><ol><li><span class="Apple-style-span" style="font-family: Georgia, serif;"><b><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">General Cap & Trade or Cap & Trade II</span></span></b><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> - Without binding agreements with specific targets and methods, cap and trade legislation is facing an uphill battle in the United States. (One could argue that a treaty wasn’t achieved in Copenhagen because the U.S. and others didn’t have legislation in place at home prior to the conference.) The Boxer-Kerry bill is seeks to bridge gaps and is looking at coupling cap and trade with new incentives for expanding nuclear power and oil and gas drilling in the United States. Essential elements for Republicans and a lightening rod for Democrats. Look for the messages to focus on national security, energy independence and job creation.<br />
</span> </span></span></li>
<li><span class="Apple-style-span" style="font-family: Georgia, serif;"><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-family: Georgia, serif;"><b><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">General Carbon Tax</span></span></b><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> - Anything called tax is unlikely to gain any traction in the U.S. Legislature.<br />
</span> </span></span></span></span></li>
<li><span class="Apple-style-span" style="font-family: Georgia, serif;"><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-family: Georgia, serif;"><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-family: Georgia, serif;"><b><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">Limited/Focused Programs</span></span></b><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> - Should general carbon legislation not pass in the U.S. Congress, other alternatives actions include:</span></span></span></span></span></span></span></li>
</ol><span class="Apple-style-span" style="font-size: small;"><b></b></span> <span class="Apple-style-span" style="font-size: small;"><b></b></span><br />
<b><ul><li><span class="Apple-style-span" style="font-weight: normal;"><b><span class="Apple-style-span" style="font-size: small;">Incentives for Clean Energy - </span></b><span class="Apple-style-span" style="font-size: small;">American Clean Energy Leadership Act of 2009 was approved months ago by the Senate Energy committee encouraging utilities and others to use more alternative, clean energy sources. These programs could be expanded although this approach but alone would not be enough to achieve the 2 degree target.</span></span></li>
</ul><ul><li><span class="Apple-style-span" style="font-weight: normal;"><b><span class="Apple-style-span" style="font-size: small;">Industry Specific Programs - </span></b><span class="Apple-style-span" style="font-size: small;">Bringing high carbon industries such as utilities, cement iron and steel up to state of the art technologies and best practices. Such programs would limit emissions in specific high emission industries, while providing funding for R&D in those specific industries. Critics say it's unfair to single out one industry.</span></span></li>
</ul><ul><li><span class="Apple-style-span" style="font-weight: normal;"><b><span class="Apple-style-span" style="font-size: small;">EPA Regulation - </span></b><span class="Apple-style-span" style="font-size: small;">The Environmental Protection Agency has begun taking steps to regulate carbon, in case Congress fails to pass legislation. This approach is less comprehensive than legislation and already is being hit with legal challenges.</span></span></li>
</ul></b></span><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><b><span class="Apple-style-span" style="font-weight: normal;"><b><span class="Apple-style-span" style="font-size: small;"> 4. Do Nothing</span></b><span class="Apple-style-span" style="font-size: small;"> - Do nothing at the national level. Leaving action to the sub-national regions and states. </span><span class="Apple-tab-span" style="white-space: pre;"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;"> Hope for the best.</span></span></b></span>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-81290188162026300492010-01-08T19:54:00.006-05:002010-04-19T15:43:31.890-04:00Climate Change Comes of Age: Reflections of the 15th Conference of the Parties, Copenhagen 2009<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">Forty-five thousand people descended on the fifteen thousand person, Bella Center in Copenhagen in early December to participate in the COP15, the UN’s Climate Change Summit. A logistical nightmare on the outside; needless to say, not all the pre-registered and credentialed attendees got into the venue. After standing in line in snow and subfreezing temperatures for 13 hours over two days, I was one of the lucky ones who got in. A failed result on the inside; the acknowledgment of the creation of the non-binding, BASIC Copenhagen Accord. A step forward…yes, progress…yes, but not what the, perhaps unachievable, pre-conference rhetoric called for. The conference was unprecedented in many ways. Every one of the 192 UN member states was represented at the meeting, which was attended 119 heads of state, the largest such gathering outside of the UN’s New York City headquarters. In many respects, this was the “coming of age” event for climate change on the global stage. What follow are highlights of my personal thoughts and reflections from participating in this amazing event and what lies ahead:<br />
</span> </span><br />
<span class="Apple-style-span" style="font-family: 'trebuchet ms';"><ol><li><span class="Apple-style-span" style="font-size: small;">What happened in Copenhagen was a failure of the process, not a lack of commitment by the Parties.<br />
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Attempting to create a binding treaty of this complexity with unanimous vote of 192 highly diverse members is challenging in the face of a clear and present threat, impossible on a complex issue such a climate change. First, look for the structure to evolve toward that of the WTO & WHO, smaller consensus-based subgroup, with clear voting rules and the focus to be sharper on the development of the framework of goals, monitoring, verification and enforcement policies. Second, look for increased emphasis on building financial, intellectual resources and knowledge sharing capabilities to effectively and equitably deal with climate change as a “commons” problem. There’s a big role for business schools in this arena.<br />
</span> </li>
<li><span class="Apple-style-span" style="font-size: small;">COP15 was more about development than about climate change.<br />
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Several countries, particularly poor low-lying or drought-stricken countries are feeling the effects of climate change now and are intensely focused on the CO2 emissions issue. For most others, the fundamental discussions in Copenhagen always revolved around questions of economics. How could development nations balance their responsibilities while protecting job and economics competitiveness? How can poor countries protect financial subsidies promised by developed countries in Kyoto and Bali? How do fast growing emerging economies minimize restrictions and continue to grow? If Copenhagen taught me anything, it taught me that economics and climate charge are even more inextricably interwoven than I have understood in the past. All of which is context for business.<br />
</span> </li>
<li><span class="Apple-style-span" style="font-size: small;">Sub-national regions step into the spotlight.<br />
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Arnold Schwarzenegger generated more buzz than Al Gore. Schwarzenegger along with Jose Serra Mayor of Sao Paulo spoke of the future and how sub-nationals regions such as California, Sao Paolo and others are paving the way toward green economies that are delivering both economic growth and reduced environmental impacts in advance of national initiatives. Yes, an emotional story of hope and promise, Arnold never the less spoke of actions being taken, results being delivered now and path for moving forward. Given, the outcome of COP15 and the time it will take to move to the next step, look for the groups to become immediately more active taking action on their own.<br />
</span> </li>
<li><span class="Apple-style-span" style="font-size: small;">Climate Change involves politics, get used to it.<br />
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Much of the world looks to the U.S. for leadership and to take a leadership role, not because it is the biggest, the most powerful or bears the greatest responsibility, but because it is one to the few nations that can and historically its record of success if pretty good. As the World looks to the United States for leadership, transparency is critical, such that its intentions and actions are clear and coherent. What others must keep in mind when looking to the U.S. for leadership is that our leaders in the Executive Branch much work with the Legislature and within the Constitution when making promises and commitments to its nation partners. This is the political process. It requires procedure and must follow protocol to be effective, and must ultimately answer to the electorate. This is true in many of the other 192 countries that have effective, representative government.<br />
</span> </li>
<li><span class="Apple-style-span" style="font-size: small;">China came to play<br />
<br />
Much has been made of China’s role in the negotiations in Copenhagen and only those close to the discussions really know what went on behinds closed doors. That said, let there be no doubt, China came to play. Flexing its political and economic muscles on the world stage, China firmly established that the climate change negotiations are in integral part of an overall strategy to gain the leadership position for the coming Low Carbon Economy. Game on.<br />
</span> </li>
<li><span class="Apple-style-span" style="font-size: small;">The Elephant in the Room<br />
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Battling climate change is a global challenge where technology will play a central role, in many ways analogous to that of vaccines and pharmaceuticals in fight for global health. Most fundamental research and technology development will occur in the developed world with a need to be transferred and deployed, whether in its original or locally modified form, in many third world countries. As with the intellectual property issues of pharmaceuticals in global trade environments, I expected to learn about Intellectual Property Rights (IPR) issues being central to the discussion in Copenhagen.<br />
<br />
While IPR was not a prominent theme of the week and language was not explicitly included in the Copenhagen Accord IPR is the elephant in the room. Moving forward beyond Copenhagen IPR solutions could follow a number of paths ranging from; developed countries having no patent protection on green technology, to setting up a patent pools for green technology, to ensuring that developing countries can make full use of the flexibilities found in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) - including compulsory licensing - and cooperation on future research and development of green technology. Stay tuned.<br />
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7. For Want of a Price<br />
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Governments want it. Economists want it. Regulators wanted it. Investors want it. Industry wants it. NGOs want it. What is it? Honest, fully–cost pricing, where environmental costs (carbon emissions) are incorporated in product pricing. Copenhagen didn’t provide it. Without a regulatory framework in place and resulting price set for carbon emissions, market forces cannot be leveraged to address these challenges on a universal basis. While pricing was not to be and should not be set in a forum such as the UNFCC, the failure to achieve a binding agreement puts the carbon markets into limbo for at least another year, until COP16 in Mexico.</span> </li>
</ol></span><br />
<div><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">Climate change came of age in Copenhagen, but much work remains to be done. Research-oriented business schools in large universities, such as Boston University, are in a unique position to participation in the coming transformation to a sustainable economy. Not only will this experience find its way directly into my teaching this spring and it also shines a light on emerging field, rich with research opportunities and new curriculum development in areas such as, of policy, economics, finance, operations, innovation and technology commercialization, while shaping a vision of the future an the role academic institutions will play in the development of the sustainable economy.</span></span></div>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-70221738784568290962010-01-02T12:28:00.007-05:002010-04-19T15:43:49.920-04:00Is the concept of the nation-state getting in the way?<div style="font-family: Times,";"><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">On the 12th day after Copenhagen a final conclusion came to me….<br />
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Will climate agreements will follow the evolution of trade agreements?</span> </span><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> I believe as trade agreements have evolved beyond the multilateral agreements envisioned when the WTO was formed in 1995 toward a wide variety of regional/local trade agreements,</span></span><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> so too will, will climate agreements.</span></span><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> </span></span><o:p><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"><br />
</span> </span></o:p><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">Multilateral negotiations need to focus on getting the policies/infrastructure right, establishing emissions targets, timing and carbon pricing policies, (managing the commons) but leave bottoms-ups implementation to entities at the local level.</span></span><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> A combination of clears goals with flexible execution will address the technological investment challenge, prove to be economically feasible and politically the most practical.</span></span><o:p><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"><br />
</span> </span></o:p><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">Success in has been achieved at the regional level, in the U.S. California and Sao Paulo, Brazil were strict climate legislation has been put in place in advance of national level legislation without dampening economic development. Many other regional initiatives are being formed, in Asia, Latin America and most recently in New England/Mid-Atlantic regional in the United States.</span></span><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> The EU is also moving in this direction as it tries to cope with differences between the oil dependent west and the natural gas dependent east.</span></span><o:p><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"><br />
</span> </span></o:p><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;">Is the concept of the nation-state dead and ready to be cast aside?</span></span><span class="Apple-style-span" style="font-family: 'trebuchet ms';"><span class="Apple-style-span" style="font-size: small;"> No, not in our lifetimes, but as with trade & natural resources, there is there is comparative advantage in regional areas on energy & energy resources that dictate a regional approach to implementation within the larger multilateral frame work. </span></span></div>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-17168964315895530332010-01-02T11:13:00.013-05:002010-04-19T15:44:09.581-04:00For Want of a Price... A Climate was Lost<div class="MsoNormal" style="font-family: Times,";"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">Much of the focus and cause of the non-result in the Copenhagen climate negotiations has on the “how” of climate change and opposed to the “what” in terms of targets. (We Have It Backwards - Dec 21, 2009). Focusing exclusively on reductions from historical emissions has greatly hampered the negotiations thus far, but is in fact only half the problem. While targets may satisfy the need on the policy side of the issue, they do not satisfy the need on the market side. A price signal in needed to make the market work, but way the negotiations are going now, the markets must wait for the political process to set pricing on carbon. Focusing on energy as a driver of climate change, the lack of pricing hampers mitigation efforts in three profound and related ways in terms of production, distribution and consumption.</span></span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><o:p></o:p><br />
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First, on the consumption side, the lack of a price on carbon is leaving the low hanging fruit of energy efficiency investments still hanging on the tree. The now famous Mckinsey study demonstrates approximately 40% of the emission reductions could be achieved by conservation/efficienty investments that have a positive NPV. (Left half of Exhibit 1 below.) While these investments currently have a positive NPV without carbob porcing, setting a price for carbon will give consumers a complete picture of the true cost of their energy, demonstrate even shorter payback periods and should drive more rapid adoption of conservation/efficiently measures. At the same time, it will justify investment in the information infrastructure necessary support this implementation of these systems.</span></span><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> </span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><o:p></o:p></span></span></div><div class="MsoNormal"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
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<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">Source: McKInsey Study "</span></span><a href="http://www.mckinsey.com/clientservice/electricpowernaturalgas/US_energy_efficiency/"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">Unlocking Energy Efficiency in the U.S. Economy</span></span></a><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">"</span> </span> </div><div class="MsoNormal"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
</span></span> <span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">Second, the economic uncertainty surrounding investments in new technologies, be they wind, solar, electric vehicles, carbon sequestration or others, is a significant barrier to investment in the potentially beneficial technologies. Here again, carbon pricing establishes true cost and allows industry players to develop confidence in their risk-adjusted return models for investments in these areas. A price on carbon makes investments on the right side of the chart (Exhibit 1) more attractive.</span></span></div><div class="MsoNormal"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
</span></span><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"> </span></div><div class="MsoNormal"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;">Finally, lack of discussion on carbon pricing has greatly hampered negotiations on climate commitments form the standpoint of developing countries where the uncertainty about the future and the cost is greatest. Carbon pricing offers a transparent and verifiable assurance of the comparability of effort across countries and incorporating price-based commitments into the treaty along with an emissions goal also establishes a basis for compliance during, as well as after, the treaty has expired. Ultimately, carbon pricing would clearly establish a leapfrogging strategy to clean emerging technologies in developing countries would be a clear advantage while diminishing the need for aid or new financing mechanisms beyond traditional sources from the World Bank/IMF. </span></span></div><div class="MsoNormal" style="font-family: Times,";"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: 'Trebuchet MS', sans-serif;"><br />
Moving forward, a price-based framework has several advantages over the historical emissions based approach. It would get investment moving now rather than later, could break the log jam in the current negotiations and be enacted by COP16 in Mexico City next year. </span></span><o:p></o:p></div>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-39413649104389227262010-01-01T11:36:00.008-05:002010-02-15T12:52:23.256-05:00If Copenhagen proved anything, it's that climate and trade/economic policies are inextricably intertwined<span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">Paul Krugman opens this NYT Op-Ed piece with the following statement:<br /><br /></span></span><a href="http://www.nytimes.com/2010/01/01/opinion/01krugman.html?th&emc=th"><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">Op-Ed Columnist - Chinese New Year - NYTimes.com</span></span></a><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /><br /><br /></span></span><i><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">"It’s the season when pundits traditionally make predictions about the year ahead. Mine concerns international economics: I predict that 2010 will be the year of China. And not in a good way."</span></span></i><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /><br />In my post below, "China: Copenhagen Spoiler or Keen Strategist?", China is investing aggressively toward a Low Carbon Economy. </span></span><i><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /></span></span></i><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /><br /></span></span><b><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">Question: Should the West be willing to cede economic/trade leadership to China if it's "profits" were to continue to be directed toward environmental protection and climate change mitigation?</span></span></b><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /><br />Comments welcomed...<br /><br />Posted using </span></span><a href="http://sharethis.com/"><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">ShareThis</span></span></a>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-15882883002107142172009-12-31T10:22:00.011-05:002010-02-15T12:53:01.194-05:00China: Copenhagen Spoiler or Keen Strategist?<div style="font-family:inherit;"><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">On the 8th day after Copenhagen, the obvious whacked me upside the head...<br /><br />In recent weeks, I've observed several events that support the theory that China wants to be economically and geopolitically dominant in the coming Low Carbon Economy.<br /><br />First, China does not want Copenhagen to establish a flat playing field in the low carbon economy and got everything it wanted at the summit; no binding agreement, no targets, no timetable and contention and disarray within the global community. </span></span></span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /></span></span><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br />Second, while spot prices for coal in China have risen steadily during 2009 due to increasing demand, the government has curtailed coal production and now sits on a historically low 12-day supply. It has mandated over 1500 coal mines under 300,000 tons/year output will be closed by the end of 2010. This constrained supply will drive coal and coke prices up further raising the cost of fossil fuel-based energy across their entire manufacturing sector.</span></span></span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /></span></span><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br />Third, on December 28</span></span><sup><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">th</span></span></sup><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">, the Chinese government revised its renewable energy laws to mandate that utilities buy 100% of the renewable energy produced and established severe financial penalties for non-compliance. This action will dramatically raise the cost of coal-based energy and incentivize investment in renewables by guaranteeing a market for renewable energy at any/all future production levels. </span></span></span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /></span></span><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">Further investigation reveals other actions taken by China in 2009:</span></span></span><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"> </span></span></span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"><br /></span></span><ul><li><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">54 Gigawatts of China’s smallest, most inefficient coal-fired electrical plants were taken offline in 2009. Replaced with new plants, such as the 1 GW Huaneng Power International coal plant in Yuhuan that can generate a kWh with just 283 grams of coal, a 25% improvement on the their industry average efficiency.</span></span></span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"> </span></span><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"> </span></span></span></li><li><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">The central Asian gas pipeline began operations in December. The pipeline will bring 40 billion-cubic-meters/year of natural gas from Turkmenistan, (through Uzbekistan and Kazakhstan) to northwest region of Xinjiang Uyghur Autonomous Region and from there to Shanghai, Guangzhou and Hong Kong.</span></span></span></li><li><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">In a move to augment its controversial hydro projects, China’s National Energy Administration (NEA) announced it would bring its total wind power capacity to 100 GW by 2020 from the current 12 GW and has planned six 10GW-level wind power bases Inner Mongolia, Gansu, Xinjiang, Hebei and Jiangsu. The first o be built in the Jiuquan will be completed by 2010.</span></span></span><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"> </span></span></span></li><li><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">Construction started in September on three third-generation, </span></span></span><span style="color:black;"><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">pressurized water reactor, </span></span></span><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">nuclear power projects in Sanmen (Zhejiang), Haiyang (Shandong) and Taishan (Guangdong). The fleet will employ AP1000 technology from Westinghouse. The combined capacity will be almost 4GW with the first plant being on-line in 2012. At the same time, the government also revised its plans for nuclear power production capacity in 2020 from 40GW to 70GW.</span></span></span><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;"> </span></span></span></li><li><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">Effective January 1, 2010, China will move to a market price-based scheme for oil pricing. In addition, taxes on gasoline will be raised 500% while taxes on diesel fuels will be raised 800%. These incrwases will accelerate the move to electrification of the automobile fleet.</span></span></span></li></ul></div><div style="font-family:inherit;"><span><span class="Apple-style-span" style="font-family:'trebuchet ms';"><span class="Apple-style-span" style="font-size: medium;">Was China a climate spoiler in Copenhagen or a keen strategist? Are these actions the coordinated effort of a nation that is serious about climate change? Or, does it believe the low carbon economy is coming and an opportuntity to establish itself as the economic and geopolitical leader in the coming era? </span></span></span><br /></div>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com1tag:blogger.com,1999:blog-8475748958299235882.post-50578135410854694472009-12-27T12:30:00.003-05:002009-12-27T12:35:13.535-05:00Learning to love multinationals<style>
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</style> <o:p></o:p>On the 7th day after Copenhagen a conclusion came to me...<br />
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It’s all about leverage. Who has it? How do you apply it?<br />
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In the fight against climate change, multinational corporations (MNCs) are on the front lines, bringing both scale and scope to the battle. Wal-Mart is the often-cited example. With over 2.1 million employees in the U.S. alone and a global supply chain of over 60,000 suppliers in 70 countries, the company’s reach is massive and the impact of its strategic decisions rapidly crosses national borders. The company has discovered sustainability makes strategic and economic sense and it reinventing itself to take advantage of the opportunity. Most of the major consulting firms (AT Kearney and Cap Gemini efforts highlighted below) have brisk business in the supply chain area helping clients implement these high leverage strategies. Perhaps more importantly there is also a secondary effect, for as Wal-Mart goes, so goes the world. All of this has been accomplished without the involvement of multilateral institutions, legislative procedure or regulatory mandate.<br />
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While historically the daemon in past, MNCs with the right kind of leadership these companies can serve society while also serving their shareholders. Educating and influencing the strategy of the world largest MNCs may be both more expedient and more effective than the rhetoric of political process.<br />
<a href="http://www.scribd.com/doc/19709925/Gci-Capgemini-Future-Supply-Chain-2016-Report" style="display: block; font-family: Helvetica,Arial,Sans-serif; font-size-adjust: none; font-size: 14px; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; margin: 12px auto 6px; text-decoration: underline;" title="View Gci Capgemini Future Supply Chain 2016 Report on Scribd">Gci Capgemini Future Supply Chain 2016 Report</a> <object align="middle" classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" height="500" id="doc_761468305663821" name="doc_761468305663821" width="100%"> <param name="movie" value="http://d1.scribdassets.com/ScribdViewer.swf?document_id=19709925&access_key=key-j3m2ebs6xv5ka8qocxj&page=1&version=1&viewMode=list"><param name="quality" value="high"><param name="play" value="true"><param name="loop" value="true"><param name="scale" value="showall"><param name="wmode" value="opaque"><param name="devicefont" value="false"><param name="bgcolor" value="#ffffff"><param name="menu" value="true"><param name="allowFullScreen" value="true"><param name="allowScriptAccess" value="always"><param name="salign" value=""><param name="mode" value="list"><embed src="http://d1.scribdassets.com/ScribdViewer.swf?document_id=19709925&access_key=key-j3m2ebs6xv5ka8qocxj&page=1&version=1&viewMode=list" quality="high" pluginspage="http://www.macromedia.com/go/getflashplayer" play="true" loop="true" scale="showall" wmode="opaque" devicefont="false" bgcolor="#ffffff" name="doc_761468305663821_object" menu="true" allowfullscreen="true" allowscriptaccess="always" salign="" type="application/x-shockwave-flash" align="middle" mode="list" height="500" width="100%"></embed> </object> <br />
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<a href="http://www.scribd.com/doc/18603832/Sustainable-Supply-Chain-Aug-09" style="display: block; font-family: Helvetica,Arial,Sans-serif; font-size-adjust: none; font-size: 14px; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; margin: 12px auto 6px; text-decoration: underline;" title="View Sustainable Supply Chain Aug 09 on Scribd">Sustainable Supply Chain Aug 09</a> <object align="middle" classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" height="500" id="doc_674848554815165" name="doc_674848554815165" width="100%"> <param name="movie" value="http://d1.scribdassets.com/ScribdViewer.swf?document_id=18603832&access_key=key-7b5llp3ehxxtl7cg7yl&page=1&version=1&viewMode=list"><param name="quality" value="high"><param name="play" value="true"><param name="loop" value="true"><param name="scale" value="showall"><param name="wmode" value="opaque"><param name="devicefont" value="false"><param name="bgcolor" value="#ffffff"><param name="menu" value="true"><param name="allowFullScreen" value="true"><param name="allowScriptAccess" value="always"><param name="salign" value=""><param name="mode" value="list"><embed src="http://d1.scribdassets.com/ScribdViewer.swf?document_id=18603832&access_key=key-7b5llp3ehxxtl7cg7yl&page=1&version=1&viewMode=list" quality="high" pluginspage="http://www.macromedia.com/go/getflashplayer" play="true" loop="true" scale="showall" wmode="opaque" devicefont="false" bgcolor="#ffffff" name="doc_674848554815165_object" menu="true" allowfullscreen="true" allowscriptaccess="always" salign="" type="application/x-shockwave-flash" align="middle" mode="list" height="500" width="100%"></embed> </object>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-59033426324226776922009-12-27T11:18:00.004-05:002009-12-27T11:35:36.968-05:00Is the U.S. too big to fail?On the 6th day after Copenhagen a conclusion came to me...<br />
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The “failure” to reach a comprehensive and binding agreement on climate charge in Copenhagen was due in some part to two related issues, the scale of nation states and their representative forms of government. <br />
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Large nation states are among the largest emitters and play a leading role at the environmental bargaining table. At the same time, they are made up of many entities with conflicting needs across geographic, industries, cultural, demographic and sociological strata. Imagine the difference one finds across a country such as the United States, Australia, China, India, Russia or Brazil and it is easy to see the many conflicts that can arise when discussing what country’s optimum position on various aspects of climate change, environmental protection, trade or economic development. Small nation state’s, particularly island state, issues are more bounded and more easily focused, i.e. Mohamed Nasheed, President of the Maldives is dealing with externally driven sea level rise and salt water infiltration of their ground water without the need to consider issues related to a domestic coal industry or loss of jobs in a major domestic industrial group, such as automotive sector. <br />
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At the same time, leaders of large nations with representative forms of government are torn between the conflicting needs of their many constituents, leaving them without a clear mandate. In essence, this leaves them powerless to demonstrate the leadership demanded by many or to take strong positions on issues that may, in the short term, negatively impact significant elements of their constituency. As an example, Australia and Prime Minister Kevin Rudd had been leading voices for bold legislative change, Emissions Trading Schemes (ETS) and aggressive GHG emission targets in the run up to COP15 and was planning to attend COP15 with signed legislation in hand. That is until Tony Abbott, a stanch climate skeptic ascend to the leadership of the leadership opposition (Liberal) party immediately prior to the summit. In preparing to attend COP15, Rudd is quoted in the "Now that Tony Abbot and the extreme right have taken over the opposition it's difficult to see legislation passing the Australian parliament." In contrast, China with its centralized form of government had significant advantages at the bargaining table in Copenhagen as a result.<br />
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Are we treating the large, industrialized nation states as we have the large global financial institutions of the recent financial crisis, i.e. too big to fail? Will climate change reforms require a new approach governance and implementation, in essence a break from Kyoto? I think yes. As we are seeing in the case of California in climate/environmental legislation and the broader global trade regime, regionalization and cross-border coalitions with tighter alignment around political, strategic resource and economic factors will evolve to fill the governance gap. It has been said political boundaries that historically have been arbitrarily set for a variety of reasons, would be better aligned according to the ecosystems boundaries and subdivisions of the natural watersheds. This is a unique point of view that triggers interesting thinking around the issues of climate change and governance.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAPeDExUhzFy8IUDoSBYKhp8qvw6iWpk6V1dv4OcHNtXjf-zedr_ZClNN27SOxaGKaaCc6jEbCF4MdiQMS1KEVSjmlKyCbtUg5gpyOjdPp62L8kyuJI2WV6pKl4s636IGr2Wi6XG1X2hdz/s1600-h/Global+Watersheds.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAPeDExUhzFy8IUDoSBYKhp8qvw6iWpk6V1dv4OcHNtXjf-zedr_ZClNN27SOxaGKaaCc6jEbCF4MdiQMS1KEVSjmlKyCbtUg5gpyOjdPp62L8kyuJI2WV6pKl4s636IGr2Wi6XG1X2hdz/s320/Global+Watersheds.gif" /></a><br />
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</div><table border="0" cellpadding="0" cellspacing="0" height="70" style="width: 417px;"><tbody>
<tr align="left" valign="top"><td height="19" width="420"><div class="subhead"><span style="font-size: xx-small;"><b>Map Description</b></span><br />
</div></td> </tr>
<tr align="left" valign="top"> <td height="15" width="420"><span style="font-size: xx-small;">This map shows the location of 106 major watersheds of the world. It includes the world’s</span><br />
<span style="font-size: xx-small;"> largest transboundary watersheds and other small basins that are representative of a particular geographic area. Omitted regions, shown in white, are primarily smaller coastal drainage basins or regions with no permanent rivers.</span><br />
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</tbody></table><img height="10" src="http://earthtrends.wri.org/images/sub_line_vert.gif" width="15" /><br />
<span style="font-size: xx-small;"><b>Source: Earth Trends Institute</b></span>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-82869350415174036272009-12-27T09:24:00.003-05:002009-12-27T11:23:08.807-05:00Sustainable Thinking - Smarter, Cleaner, CheaperOn the fifth day after Copenhagen (Christmas Day), a new mantra came to me...<br />
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Design thinking is all the rage these days in executive suites and product planning sessions these days. The 1.4 million Google hits for the phrase and in over 1,000 scholarly publications in 2009 are a testament to the attention being given this creative process that attempts to apply empathy and “out of the box” thinking to meet user needs better and drive business success. This emphasis makes sense in markets where commoditization combined with years of focus on six sigma, supply chain management, lean manufacturing, outsourcing and low cost production have both raised quality and squeezed the margins out of many product categories. This design thinking philosophy feels like an improvement while being regressive at the same time. I recall the Volkswagen ad from the 1960’s, where the jingle <a href="http://www.youtube.com/watch?v=P2jJeEnHbtA">“longer... lower... wider... the ’49 Hudson is the car for yoooOOOoooOOOuuuu”</a> has stuck in my head all these years. In this ad, VW contrasts “marketing thinking” of Hudson, Studebaker and Packard with its own more sustainable (in the micro-economic theory of the firm sense) “value thinking”. In the 1980s with the microelectronics, quality and globalization revolutions, the pendulum swung to “better, faster, cheaper”, a value-based philosophy that has led to too many bland, look-alike products. I see design thinking trying to bring these two opposing forces, “marketing thinking” and “value thinking” together to drive business success (revenues), as well as benefit of users. The challenge is related to the classic Porter-ian question of profits, <i>“Does the uniqueness of the product or service create enough value such that the firm can charge a premium and that the higher price covers the incurred in offering the unique features?”</i>. In many cases, perhaps not.<br />
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At the same time, the emerging sustainability trend will impact this balance moving forward. Macro-level environmental and sustainability demands are shifting the value proposition from product/service features of “better, faster, cheaper” to those of “smarter, cleaner, cheaper”; smarter use of scarce natural resources, cleaner (less wasteful) products/processes and lower costs that will accelerate adoption and allow penetration of Bottom of Pyramid (BOP) markets. William McDonough among other has been a proponent the life-cycle based design for many years which has seen growing adoption a number of corporations and industries. Now with the advent of the Low Carbon Economy, sustainability thinking, i.e. smarter, cleaner, cheaper has reached a tipping point and will be the mantra the permeates every element of every product, service and industry form here forward.SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-48879506923484779542009-12-24T17:28:00.002-05:002009-12-24T17:45:07.757-05:00Would we act differently if GHG emissions were as threatening to civilization as nuclear weapons?On the forth day after Copenhagen a conclusion came to me…<br />
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There is discussion of the successes of Copenhagen, the important first step, getting all the major emitters to the table, the rain forest agreements, the financing mechanisms, the importance in reporting and validation (transparency). But, there is has been much more talk of what failed in Copenhagen. The UN let us down. Our leaders let us down. So much has slipped through our fingers, been left undone. Others suggest, as written in this week’s Time Magazine, “The very struggle to reach agreement at Copenhagen (…) that 113 heads of state attended (…) is a sign that global climate talks have moved beyond symbolic rhetoric.” Looking ahead, it will only get tougher at COP16 in Mexico City in 2010, as the stakes get higher. <br />
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It was neither the science nor the leadership that failed at Copenhagen. It was the process that failed. The process used by the UNFCC calls to mind the two familiar stories about herding both and allowing the 800-pound gorilla (China) sleep anywhere it wants to. It is the direct result of the open and democratic process being used, where one country gets one vote and the vote must be unanimous. One hundred ninety two countries involved in the negotiation process, each with veto power. This approach treats climate as a common good and thus we are at risk of suffering Garrett Hardin’s tragedy of the commons. <br />
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Rather than treat climate as a common good, what if we treated climate change as a threat to international security (which it is on many level) where the proliferation of Green House Gas (GHG) emissions need to be collectively controlled as is done with that other major threats to international security, nuclear weapons. This shift in the paradigm gives one great freedom to think differently about the process of GHG emissions proliferation while remaining within the auspices and consistent with the purposes of the United Nations.<br />
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The purposes of the United Nations laid down in Article 1 of the present Charter, shall be: <br />
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1. to further international peace and security;<br />
2. to promote the political, economic, social, and educational advancement of the inhabitants of the trust territories, and their progressive development towards self-government or independence as may be appropriate to the particular circumstances of each territory and its peoples and the freely expressed wishes of the peoples concerned, and as may be provided by the terms of each trusteeship agreement;<br />
3. to encourage respect for human rights and for fundamental freedoms for all without distinction as to race, sex, language, or religion, and to encourage recognition of the interdependence of the peoples of the world; and<br />
4. to ensure equal treatment in social, economic, and commercial matters for all Members of the United Nations and their nationals, and also equal treatment for the latter in the administration of justice, without prejudice to the attainment of the foregoing objectives and subject to the provisions of Article 80. <br />
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One model to follow in moving forward beyond Copenhagen is that of the UN Security Council, whose primary responsibility is the maintenance of international peace and security. The Council is composed of five permanent members — China, France, Russian Federation, the United Kingdom and the United States — and ten non-permanent rotating members. The Presidency of the Security Council is held in turn by the members of the Security with each President holds office for one calendar month. Ten non-permanent members, elected by the General Assembly for two-year terms and not eligible for immediate re-election. <br />
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Each Council member has one vote. Decisions on procedural matters are made by an affirmative vote of at least nine of the 15 members. Decisions on substantive matters require nine votes, including the concurring votes of all five permanent members. This is the rule of "great Power unanimity", often referred to as the "veto" power. <br />
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Under the Charter, all Members of the United Nations agree to accept and carry out the decisions of the Security Council. While other organizations of the United Nations make recommendations to Governments, the Council alone has the power to take decisions that Member States are obligated under the Charter to carry out.<br />
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A climate Council could mirror this structure and purpose. This would build on the actions of the Copenhagen “Basic Five”, the US, China, India, Brazil and South Africa, who structured the Copenhagen Accord, This smaller group of this design would be more nimble, action-oriented and while being consistent with the overall UN charter.<br />
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This “Climate Council” could have functions and powers similar to that of the Security Council:<br />
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• to maintain international “climate equity” in accordance with the principles and purposes of the United Nations; <br />
• to investigate any dispute or situation which might threaten the climate security of member nations and lead to international friction; <br />
• to recommend methods of adjusting such disputes or the terms of settlement; <br />
• to formulate plans for the establishment of a system of emissions targets and measurement, monitoring and validation of regulate emissions; <br />
• to determine the existence of a threat to the global climate action should be taken; <br />
• to call on Members to apply economic sanctions and other measures not involving the use of force to prevent or stop emissions violations; <br />
• to take collective military action against an aggressor; <br />
• to recommend the admission of new Members; <br />
• to exercise the trusteeship functions of the United Nations in "strategic areas"; <br />
• to recommend to the General Assembly the appointment of the Secretary-General and, together with the Assembly, to elect the Judges of the International Court of Climate Justice. <br />
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Indeed, a conclusion after a dew days of reflection and undoubtedly an oversimplification of what needs to be done. This approach does address many of the areas seen as flaws in the current process and provides a path moving forward: leadership by a smaller groups, representative and faster decision making and majority rule, clearly defined goals, targets, measurement and independent validation, as well as the ability to impose economic sanctions and other actions on violators. Without a movement toward a more effective process, we are destined to have a repeat experience in Mexico City in 2010 and another year lost.SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-57057186341219423692009-12-23T22:47:00.003-05:002009-12-24T15:16:28.331-05:00The Curious Incident of the Dog in the Night-TimeOn the third day after Copenhagen I became aware of a deafening silence…<br />
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Battling climate change is a global challenge where technology will play a central role, in many ways analogous to that of vaccines and pharmaceuticals in fight for global health. Most fundamental research and technology development will occur in the developed world with a need to be transferred and deployed, whether in its original or locally modified form, in many third world countries. As with the intellectual property issues of pharmaceuticals in global trade environments, I expected to learn about IP issues being central to the discussion in Copenhagen. What I heard related to IP issues over the five days I spent at COP15 was…..nothing. <br />
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As with the curious incident of the dog in the night-time in the Sherlock Holmes classic “Silver Blaze”, this silence piqued my interest and warranted further investigation. Are issues of IP a non-issue in the fight against global warming? Have they already been resolved? Or perhaps is it the purview of another forum, such as the World Trade Organization (WTO). <br />
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My subsequent investigation uncovered IP issues are in fact central to the work of the UNFCC with much emphasis placed on the topic in the preparatory meetings leading up to COP15. This work was captured in a paper interestingly called “Non-Paper 47,” which was developed in the Barcelona meeting of November 2009 under the Ad Hoc Working Group On Long-Term Cooperative Action (AGWG-LTC), with some follow-on work performed during week one of COP15.<br />
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Non-Paper 47 contains a number of IP-solution suggestions ranging from developed countries having no patent protection on green technology, to setting up a patent pools for green technology, to ensuring that developing countries can make full use of the flexibilities found in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) - including compulsory licensing - and cooperation on future research and development of green technology. <br />
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As with pharmaceuticals, the Parties are far apart of the issue of IP protection of green technologies. Developed nations are adamant that a strong IP protection framework is essential to innovation, while the G77 group of developing countries and others take the position IP is a barrier adoption and must be removed. Much of the debate focuses on trade rules, and what has been learned from TRIPS. For example, patents on some green technology could be removed for developing countries and compulsory licensing could also be considered. Today compulsory licensing of pharmaceuticals is allowed under TRIPS, but each technology has a lot of patents and the developing countries have to go to each country and company and apply for a license, which does not make sense when technologies must be deployed are rapidly as possible. <br />
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New technologies will be at the core of new solutions that address climate change. It is important that the right IP framework is put in place the to foster innovation without creating barriers to timely and successful deployments.SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-3174040862996722632009-12-23T20:17:00.001-05:002009-12-23T20:36:46.115-05:00Economics 1, Climate-Change 0On the second day after Copenhagen, a conclusion came to me…<br />
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COP15 may have been titled the United Nations Climate Conference, but the agenda was economics under the guise of global warming; developed countries protecting jobs and avoiding taxation, emerging economies protecting sovereign rights to unconstrained growth and poor countries seeking to protect prior commitments of financial support for development with no strings attached. Yes, there were impassioned pleas for action against climate change and global warming. Citizens of low lying island nations such as Tuvalu, Kiribati and the Maldives are especially vulnerable to sea-level rise and spoke eloquently of the immediacy of this threat and near-term loss of their homelands and extinction of their cultures. While others voiced acknowledgment of challenges to be faced, the future consequences to be endured ny all and the need to act collectively, but without a true sense of a clear and present danger, this was a case of language of climate debate being used to frame the economic discussion. <br />
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The Copenhagen Accord, akin to a non-binding letter-of-intent, recognizes the need to keep global temperature rise below 2 degrees centigrade by 2050, provides a means for protecting current rain forests and establishes a $100B fund to support poor countries in the future but does not establish emissions targets for individual countries, does not specify what developing countries will do, nor defines how the financing is to be raised and distributed to poor countries; an important first step, but much less than many hoped for. <br />
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Could the outcome have been much different? Could the world leaders really achieve what was hoped for going into COP15? In a word, no. As powerful as they are, the majority of world leaders, had neither the autonomy nor the mandate to act in a way that would give climate change priority over the economy? <br />
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Meanwhile the scientists remind us the clock is still ticking toward that environmental tipping point that will ultimately define that clear and present danger that will eventually drive us to consensus and coordinated action.<br />
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If you are one to keep score, at the end of the first inning, it is Economics 1 and Climate-Change 0.SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-84771995452292401722009-12-21T14:47:00.003-05:002009-12-21T23:52:18.715-05:00We have it backwards – Managing Symptoms versus Investing in CuresI’ve returned from Copenhagen, had some time to reflect on what transpired, how it has affected my thinking and begun to draw some conclusions about what’s next. All this will be fodder for a series of 12 essays that will take us from today to the end of the year and serve as the basis of discussion of what now lies beyond Copenhagen. <br />
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<b>On the First Day After Copenhagen </b><br />
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On the first day after Copenhagen, a conclusion came to me…<br />
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We are going about this climate change thing all wrong for three reasons. First, as was predicted by many before the UN’s summit in Copenhagen, no one party will want to concede more than other parties, therefore any negotiated agreement will be minimal and certainly not the at the level the scientists suggest are necessary to avoid global warming and dramatic climate change. Second, the UN process will just take too long. We have been working on Kyoto since 1997, and it will take several more years to get a definite and binding agreement and the resulting timetables for implementation will be too long to achieve the goals set. More simply, it’s a case of too little too late. My third point is the UNFCC process and the Kyoto Protocol are attempting to manage, control and regulate the symptoms of the climate change rather than root cause of the problem itself. This approach is fraught with fundamental problems; from the collective process of setting equitable emission limits, to rules for measuring and monitoring of emissions, to validation and compliance. <br />
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The Copenhagen Accord is a step forward in the process but was ultimately developed outside the UN process by a small handful of nations and, as predicted, is much weaker than the treaty that has been in development for the past two years. Many are calling into question the UN’s process and its role in climate change moving forward. The U.N.'s own Yvo de Boer said in an interview with Reuters after the conference, <i>"You could argue that it would be far more effective to just address climate change in the G20, whose members account for most carbon emissions… (But) it's not correct from an equity or from an environmental point of view because that would exclude many countries already on the front lines of impacts of climate change."</i> Another suggestion, the Major Economies Forum might be the correct venue. <br />
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At the same time, there’s good news. We know technologies can advance and be deployed very rapidly with the right investments and consumer behavior can change just as rapidly with the right incentives. Case in point, in the last two years in the US coal use has dropped 11 percent while an estimated 190 new wind farms with over 16,000 megawatts of generating capacity have come online, all without legislative or institutional mandate. An argument in favor of directly investing in cures rather than managing the symptoms.<br />
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To this point, I draw the reader's attention to a recently published report from the Stockholm Environmental Institute:<br />
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<i>"Analyses at the global level and in regions, both in poor and rich nations, clearly show that energy transformations towards a low-carbon future are technologically possible, even over the short term, and that they are socially desirable, and to a large extent economically profitable. Recent energy scenarios show that the EU can achieve 40 per cent emission reductions by 2020 with current technologies, and that India and China can bend their emission trajectories while increasing energy access and securing their economic and development goals over the coming decades."</i>1<br />
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The clock is ticking. The environmental tipping point, the point of no return, lies somewhere ahead with the most recent scientific data suggesting it will occur sooner than we previously thought. For example, recent studies predict the polar ice cap could be gone in summertime as early as 2015 compared to previous model predictions of 2025. It might just be that if we get the economics right, a market driven strategy of investment and deployment of new technologies along with market interventions/incentives could trigger independent or small scale collective action that will turn the tide on carbon emissions and reverse global warming before the multilateral negotiation process completes the initial step of developing a definite and binding agreement that can be ratified for the 192 member nations.<br />
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<a href="http://www.sei-international.org/?p=publications&task=view&pid=1349">1 A Copenhagen Prognosis: Towards a Safe Climate Future</a>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-32311263937039802312009-12-20T08:48:00.010-05:002009-12-20T09:42:12.784-05:00It was 3 AM and I'm not referring to the Matchbox 20 songAfter a 12 hour delay, the last 4 of which Party delegates waited patiently on station in the plenary room, UN Secretary General Ban Ki-moon called the session to order at 3AM on Saturday morning. Then taking less than a minute, the Secretary General made a short statement to the effect that UNFCC (United Nations Framework Convention on Climate Change) would recognize the "Copenhagen Accord" and brought down his gavel to close the session to seal "A Deal" if not "The Deal" that many had hoped for.<br />
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<a title="View Copenhagen Accord on Scribd" href="http://www.scribd.com/doc/24340679/Copenhagen-Accord" style="margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block; text-decoration: underline;">Copenhagen Accord</a> <object codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" id="doc_593039862216323" name="doc_593039862216323" classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" align="middle" height="500" width="100%" > <param name="movie" value="http://d1.scribdassets.com/ScribdViewer.swf?document_id=24340679&access_key=key-24g5f76fa9ludfekq8sd&page=1&version=1&viewMode=list"><param name="quality" value="high"><param name="play" value="true"><param name="loop" value="true"><param name="scale" value="showall"><param name="wmode" value="opaque"><param name="devicefont" value="false"><param name="bgcolor" value="#ffffff"><param name="menu" value="true"><param name="allowFullScreen" value="true"><param name="allowScriptAccess" value="always"><param name="salign" value=""><param name="mode" value="list"><embed src="http://d1.scribdassets.com/ScribdViewer.swf?document_id=24340679&access_key=key-24g5f76fa9ludfekq8sd&page=1&version=1&viewMode=list" quality="high" pluginspage="http://www.macromedia.com/go/getflashplayer" play="true" loop="true" scale="showall" wmode="opaque" devicefont="false" bgcolor="#ffffff" name="doc_593039862216323_object" menu="true" allowfullscreen="true" allowscriptaccess="always" salign="" type="application/x-shockwave-flash" align="middle" mode="list" height="500" width="100%"></embed> </object>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-13210825538620066682009-12-18T19:28:00.001-05:002009-12-20T08:49:34.485-05:00The wait is over at least for me, for nowEleven o'clock has come and gone. So has twelve. And one. While the plenary room is full of people waiting for the speaker to arrive, I will wait no longer. Any significant news will be on Twitter in the morningSMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-79940984048446355492009-12-18T17:00:00.005-05:002009-12-18T17:20:44.891-05:00Dazed and Confused in LimbolandMore cold. More snow. More closed door bilateral meetings. More speeches about the need to act. More speeches about capitalism at the root of all our problems. More he said. More she said. More proclamations that a deal is eminent. More acknowledgments a deal is not possible. More leaked copies of “The Draft”, distributed along with other documents, also called “The Draft”. Is it an agreement? An Accord? Or perhaps just a Policy? No one can agree on what to call it. More people with more experience than me asking each other, “Do you have any idea what’s going on?”. More waiting, and waiting….and waiting. Ombama is still trying to pull a rabbit out of a hat. At least I think so, the process is not very transparent. The next plenary is to begin at 11:00pm, 2 mins from now. The agenda has just been posted. Good magic takes time. I guess we should give it a few more minutes.SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-35218839993044735522009-12-18T09:10:00.005-05:002009-12-18T09:28:08.271-05:00A frustrated and angry Obama opens with "Our ability to take collective action is in doubt" then lays out a framework. How will China respond?<object height="344" width="425"><param name="movie" value="http://www.youtube.com/v/acdzaAoyNXo&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/acdzaAoyNXo&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-45693162246314191432009-12-18T07:38:00.001-05:002009-12-18T09:25:03.879-05:00We wait...The morning is spent with Obama and the heads of 23 nations behind closed doors. Sarkoszy reports the US is ready to close the deal leaving China as the sole roadblock.<br />
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Rather than mill about aimlessly like an expectant father, I decide to use the time to finish grading my fall courses. I never imagined a time when I thought grading papers would ever sound like a way to relax and recharge the batteries. :-)SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0tag:blogger.com,1999:blog-8475748958299235882.post-65254131835263630112009-12-18T07:23:00.003-05:002009-12-18T07:43:25.054-05:00Day 11 is a roller coaster - The Drama alone is exhaustingMorning dawns with the Parties hopelessly deadlocked as the major players standing their ground, eyeing each other’s moves, as if playing a high stakes game of “chicken”. The G77 showing strength in solidarity hold fast to the Kyoto protocol as the best legally binding framework for coordinated global action. The balks. Both procedural as well a substantive issues creating delays. Everyone back peddles. Gordon Brown the British PM signals of impending failure at COP15. China says a deal is out of reach. The Danish Presidency issues statement that a comprehensive framework may be unachievable and may have to wait until Mexico City in 2010. Perhaps we will only get a policy statement after two weeks of talking.<br />
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At noon, deliberations are broken into two tracks, one each in line with Kyoto and UN Climate Change Convention, each to draft a proposal and come together later in the day, a procedural move to break the log jam. The US is not in favor of Kyoto stonewalls and pushes China hard on transparency and validation, China pushes back staunchly protecting its sovereignty. India shares the Chinese position. Reports of near riots on the floor ensue, perhaps better described in UN terms as “heated discussion”. Late in the afternoon the decision is made, Kyoto is the path. The US falls in line, the G77 get one of the things they came for.<br />
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Targets are discussed and the 2 deg C goal in upheld, although current commitments won’t get us to 3 deg accroding to the scientific models. The summit remains in crisis.<br />
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Hillary Clinton now leading the US delegation, gives strong speech that injects energy into the talks, making a commitment to support a $100B global “fast track”. This is seen a breakthrough on the issue of mitigation financing for LDCs. Momentum builds. China and India then make overtures they will open up to independent validation. A sliver of hope spreads across the city of Copenhagen, perhaps the world. The night wears on.<br />
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There is a growing sentiment here at COP15, perhaps more aptly describe as frustration. Where is the US leadership? As it appears, it is only they (the US) who can bring the Parties together and exact the compromise needed.<br />
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With Obama's arrival, the day ends on thread of hope.SMG Facultyhttp://www.blogger.com/profile/17032878908275188215noreply@blogger.com0