Society depends on more for less / La sociedad depende del más por menos

VIEWPOINT
Sir Mark Moody-Stuart

If the world is to end the threat from climate change, we need to produce more with less energy, says Mark Moody Stuart. In this week's Green Room, he outlines his vision that will help society fulfil this goal.


To address the climate challenge we need to reduce the carbon content of our energy by at least half.

But at the same time we must learn to generate a unit of GDP for about half the energy which we use at present.

Energy efficiency and carbon content of energy are equally important, but they require different approaches to achieve them.

I am a great believer in both the power of consumer choice and the market. As we come to understand the consequences, we do tend to make greener choices.

But most of us will only make those choices if they deliver the convenience and utility to which we are used or aspire; and if they do not cost more (or we can afford the luxury of choice).

Consumer opinion and choice is important, but it will not do the trick on its own. Its importance is in encouraging companies to supply the market in more climate friendly ways, and most importantly in encouraging governments (for whom consumers vote) to take the steps needed.

'Bitter experience'

So what of the market? It is an unsurpassed mechanism for allocating resources to deliver better things. Through competition, technologies are optimised or discarded, opening the field for creativity and choice. I believe in the power and value of markets.

But like most things, they have a failing. Without regulation to channel their power, markets will not deliver things which are of no immediate benefit to the individual making his or her choice, even though they may be beneficial to society.

Without regulation, markets would not have delivered unleaded gasoline, catalytic converters on the exhausts of cars or seatbelts and airbags, nor clean air to London after the killer smogs of the 1950s.

In New Delhi, regulation forced three-wheeled vehicles, taxis and buses to switch to clean gas fuel. The initial complaints were great, but everyone, including the taxi drivers, blessed the result.

These regulations were not cost free, but everyone benefited. Regulation was needed to channel the power of the market, but regulatory frameworks have to be simple and practical.

The gut opposition of business people to regulation comes from bitter experience of regulations which don't just frame the market but bind it hand and foot and tell us how things must be done.

This kills markets and takes the fun and variety out of life.

Carbon price

So what are the frameworks we need?

For carbon content, we need a mechanism which forces energy supplies in the right direction. This means putting a price on carbon for major producers (and large-scale users) of energy through a carbon cap and trade system, such as we already have in Europe.

Unfortunately, this system has been initially subject to government and business special pleading and gaming. Or it means a carbon tax.

Both are complex and should only be applied to major producers or users. Trading encourages carbon-avoiding investment where it has the most impact. It also allows the transfer, through market mechanisms, of financial resources to China and India.

I do not think we will get a more global agreement without such transfer. Taxation has the great merit that it provides a clear floor price of carbon.

So for me the preferred option is a combination - a tax, but with the ability to reduce it through trading, getting the best combination of a floor price and efficiency of investment.

Most people think that a price of something around 40 dollars a tonne of carbon dioxide (CO2) to producers would do the trick.

Market decides

Before you panic about the cost to you and industrial transport, that is only about 5p a litre on fuel - within the noise of oil price variations.

On the other hand, for efficiency we need regulatory frameworks - very tough efficiency standards on buildings, on lighting and on personal transport.

That means banning the manufacture or import of old fashioned light bulbs.

Technically, this actually just means putting a standard on the efficiency of lights so that markets decide whether the best answer is compact fluorescent lights or the newer LEDs - old incandescents would never meet such a hurdle.

It means very tough standards on buildings. This is already having an effect in London where to achieve highly valuable planning permission, developments are already achieving energy efficiency which we thought we would not achieve for a decade or more.

And for personal transportation? That means banning "gas guzzlers" and steadily increasing the total efficiency of any vehicle sold.

You can buy the roomiest, vroomiest car, as long as it meets the efficiency standard.

My wife and I have driven a hybrid since 2001 and it is a beautiful and comfortable piece of engineering, silent and will do 100mph (we tried it, but not in England!).

That may not be the best technology - the market will find out. But we must constrain the market in an efficiency framework.

To achieve the same through taxation would mean fuel taxes at levels which would play havoc with industry, countryside dwellers and the poor who need transport.

Sir Mark Moody-Stuart is non-executive chairman of Anglo American, and is a member of the UN Global Compact and chairman of the Global Compact Foundation

The Green Room is a series of opinion articles on environmental topics running weekly on the BBC News website

EU biofuel policy is a 'mistake'

The EU target of ensuring 10% of petrol and diesel comes from renewable sources by 2020 is not an effective way to curb carbon emissions, researchers say.

A team of UK-based scientists suggested that reforestation and habitat protection was a better option.

Writing in Science, they said forests could absorb up to nine times more CO2 than the production of biofuels could achieve on the same area of land.

The growth of biofuels was also leading to more deforestation, they added.

"The prime reason for the renewables obligation was to mitigate carbon dioxide (CO2) emissions," said Renton Righelato, one of the study's co-authors.

"In our view this is a mistaken policy because it is less effective than reforesting," he told BBC News.

Dr Righelato, chairman of the World Land Trust, added that the policy could actually lead to more deforestation as nations turned to countries outside of the EU to meet the growing demand for biofuels.

Carbon counting

The study compared the amount of carbon absorbed by a forested area with the total of "avoid emissions" by using biofuels instead of fossil fuels.

The researchers examined arable land that could either be used for growing crops to produce biofuels, or replanted with trees.

"We looked at the amount of biofuels produced per hectare," Dr Righelato explained. "From that figure, we were able to calculate the amount of fossil fuels that could be replaced by biofuels.

"That gave a figure for avoided emissions, but then we had to subtract from that the carbon emissions generated during the production of the biofuels.

He said this calculation provided them with the "net avoided carbon emissions".

"This is the key factor, that is the amount of CO2 that is saved from being released into the atmosphere by using the biofuel."

The researchers then compared the net avoided carbon emissions with the amount of CO2 that would have been absorbed if forests were re-established on the land.

"In all cases, the amount of CO2 sequestered (by forests) over a 30-year period is considerably greater than the amount of emissions avoided by using biofuels," Dr Righelato revealed.

The researchers also examined the impact of clearing forests in order to convert land to grow crops used to make biofuels.

Dr Righelato said forest clearances had a large and immediate impact on the carbon cycle.

"Forest carbon stocks are in the region of 100-300 tonnes per hectare. Three-quarters of that is lost over the first year during clearing and burning," he said.

"It would take - in all the cases we examined - between 50 to 100 years to recover this carbon through the production of biofuels."

Second chance

However, he said that so-called second generation biofuels, which used feedstocks such as straw, grasses and wood (lignocellulosic material) rather than grains or palm oil, offered a much better opportunity.

"It was the one route that seemed to offer some possibilities in terms of CO2 mitigation.

"If you can extract lignocellulosic materials sustainably from forests without destroying the soil and maintain a way that forests can rapidly regrow, it is quite possible you can have your cake and eat it, as it were."

A number of nations, including Germany, the UK and US, are developing second generation biofuels, but the capital costs needed to build commercial "biorefineries" have been seen as a major barrier.

But two US researchers, writing in the Biofuels, Bioproducts and Biorefining journal, say that rising grain prices could make the technology commercially competitive sooner rather than later.

Mark Wright and Robert Brown, from Iowa State University, US, said that a second generation biorefinery cost four to five times as much as a bio-ethanol plant that used grains, such as corn.

However, the overall cost of producing second generation biofuels would be similar to biofuels produced from food crops when corn prices exceed $3 (£1.50) per bushel, they explained.

The adoption of second generation biofuels would be welcomed by environmental groups and food agencies, who view first generation fuels as unsustainable.

Experts at the World Water Week conference in Stockholm have voiced concern that growing food crops to be used to make biofuels could jeopardise water supplies.

"When governments and companies are discussing biofuel solutions, I think water issues are not addressed enough," Johan Kuylenstierna, director of the annual conference, told AFP.