Highlighting the creative perspective – pivoting the blog

I have been struggling to maintain content so I am in the midst of considering a pivot.  As one of my earlier blog posts pointed out, one of the gaps that I was thinking was the lack of an artistic perspective on climate change and a lack of engaging the artistic, creative human mind to imagine a future which is not apocalyptic but is positive (and not techno-optimistic) and realistic.  Of course, since then I am coming across lots of artists of all types who are creating work and challenging this viewpoint and trying to address the cultural gap that is there.

To that end, I may be pivoting this blog to start highlighting all of the various efforts to use the creative and not necessarily just artistic brain to highlight the challenges and potential solutions to humanity in a world with the almost inevitability associated with climate change.

First off, there has been a series of pretend forecasts of the future done by the WMO.  They are called weather reports from the future.  Here is one for Canada in 2050  (en francais with English subtitles).

While we are at it, here is a comic from XKCD with their own take of a weather forecast from the future!

 

 

Green Bonds or green washing?

Green Bonds or Green washing?

7-sins-greenwash

The latest rage in environmental finance is the green bond.   Christiana Figueres the Executive Secretary of the UN Framework Convention on Climate Change even declared optimistically and perhaps hopefully at the 2014 Investor Summit on Climate Risk in January that 2014 would be the year of the GreenBond (http://www.ceres.org/investor-network/investor-summit ). Based on the issuances and financing of green bonds in 2014 and 2014, most people would agree that Green bonds have taken off and this is the first year where green bond financing has increased significantly from almost nothing to a small player in the finance sector.

The question remains, what makes a bond green?  The definition of a green bond is evolving but one recognized definition is encoded in the green bond principles.  A subset of green bonds are what are called Climate Bonds.  These are primarily promoted by the Climate Bonds Initiative.  Now a number of organizations are starting to define what is a and is not a green bond upfront.  Examples of green bonds that are generally accepted are bonds where the financing is going to renewable energy projects, energy efficiency, waste to energy, mass transit including subways or light rail transit as well as others.  Here is a list of potential projects that have started to be defined by as acceptable for financing by green bonds (link to green bond or climate bond definition).

However, since this is early days of the green bond market, it is still a little like the wild west out there. What does that mean? It means that there are no rules as of yet and some organizations and people are taking the opportunity to define on their own what a green bond is or is not.  For example if an oil refinery is looking for financing could you consider this a green bond?  What about a waste water treatment project?  what about if the funding is used for general “green” projects which are yet to be defined?

Bonds are of course one method for getting financing for your project.  What this means is that most of the organizations and people involved in bond financing are only interested in the interest rate, the yield, the tenor and the risks associated with the underlying investment and how well it matches with the rate being charged and how well it fits the needs or gaps of the buyers portfolio.  In addition, they are also interested in the liquidity of the investment, is there another market ( a secondary market) where once the bond has been issued by the sponsoring financial organization the bond can be sold to another buyer.  The questions is is how many of these green bond financiers both from the buy side and the sell side are interested in the green – supposed – benefits of the projects being funded by the green bond.

The question is what is a green bond and what makes it green?  Is a green bond which is used to pay for a new subway a green bond?  No-one would argue that a subway will move people from cars meaning less fuel burned and less greenhouse gas emissions particularly if the electricity powering the subway is clean (and does not include any coal).  That is the situation in Ontario where the the Ontario government issued a green bond to pay for the construction of a subway line in Toronto. Do they need a green  bond for this?  They government would have probably financed this with a bond regardless.  Does this mean that the subway will be “greener” than otherwise because it is now financed with a green bond? What are the differences between a normal bond and green bond?  Is there a lower interest rate for the borrower  or any sort of preferred terms?  I suspect not and if not then the financing is the same and what is the label “green” for. In this case, the answer could be marketing and branding?

If we look at green bonds through the lens of greenwashing…what do we find?  Sustainable brands has a good set of guidelines for if your ecofriendly products are green washing.  As sustainable brands says at least 95% of products are guilty of breaking at least one of the sins of greenwashing.  Let’s see look at green bonds …

First the sevens sins as shown below are taken straight from here.

  1. Hidden Trade-Off: Labeling a product as environmentally friendly based on a small set of attributes (e.g., made of recycled content) when other attributes not addressed (e.g., energy use of manufacturing, gas emissions, etc.) might make a bigger impact on the eco-friendliness of a product as a whole.

Green bonds – I would argue that some green bonds are being labelled based on one or a small set of attributes as opposed to looking at the entire product or the entire project that is being funded.  However, at the same time there are some projects funded by green bonds which are looking at many attributes.

VERDICT – Partially guilty

Stay tuned next week for the other sins of greenwashing and how green bonds rate!

Geothermal power – What is not to like?

takhini-hot-pools-in-winter

So what is not to like about geothermal power and where are all of the geothermal facilities in Canada? Why is it not contributing more to energy generation in this country?

What is it and what are the benefits?

First of all, it is clean, no emissions. Geothermal involves drilling into the ground and circulating water through the pipes that are in the ground. The water then captures the heat from the ground and the heat is used to spin turbines which generate electricity. In addition, any other the excess heat maybe captured and harvested in other ways. Geothermal does not generate any greenhouse gas emissions and no air quality emissions that affect people’s health.

Second, no fuel. Operating costs are low and not based on any fuel based commodity so the costs have less volatility than fossil fuel based power plants.  You could argue that the hot water from the crust is the fuel source.  Of course the heat that is harvested from the earth would need to be consistent in order to deliver consistent energy and heat load.

Thirdly, it is generally based on relatively well established technology.  Whether it be a combined heat and power plant or a turbine and heat recovery, these technologies are well established.  Certainly the big companies are continuing to innovate and refine them, but the risk of non-performance of the heat and energy recovery would be expected to be low.  Possibly the piping to move the energy and the hot water could be more susceptible to non performance, since there could be corrosion issues.

Fourthly, geothermal can contribute to base load generation: Unlike wind and solar, geothermal is not intermittent It is constant and can be managed in that way.  This is a major advantage over most other renewable sources of energy except for hydro.  This means that geothermal can displace nuclear and base load coal.  Replacing coal fired generation as base load generation will be a challenges in places where coal is one of the primary fuel sources (Alberta, Saskatchewan, Nova Scotia and the U.S.) . Geothermal could be a key energy source in transitioning away from coal and towards cleaner fuels.  The newly announced Clean Power Plan , if it gets passed and through all of the court hurdles could incent this in the U.S.

What are the potential constraints and barriers?

Location, location, location:  Geothermal is very regional based so far. It is built around sites where there is active venting at the surface and there are not a lot of spots in the country that meet this condition.

Competing interests:  This overlaps a bit with the location one, since wherever there are hot springs, humans have built generally built a tourism sector and hot springs are attractive. There are concerns that geothermal will harvest all of the heat and water and the local hot springs will no longer be as good as they once were.  Not an unrealistic thought.  This also speaks to the social licence for geothermal.

One of the only ways to counter this is to have more projects that show that the geothermal plants can operate without impacting the quality of the hot springs. However few communities want to let projects get built unless they can see from previous projects that there is no impact (classic chicken and egg).

Understanding: Another possibility could be that with the growth of other new energy sources like wind and renewable, people including investors could be wondering “why do we even need this geothermal, let’s grow solar and wind and we can think about geothermal and the role it will play later when we need it.”  This thought is not entirely logical since investment is going into research into tidal energy or offshore wind which have larger technical barriers than geothermal. This though process also means that financing may not be as easily available.

Lack of knowledge of the potential opportunity:  Geothermal resource mapping is expensive and not as easy to do as for other energy sources.  Clearly places where there is heat venting and hot springs are prime candidates to start.  To understand the true potential of geothermal in any area a significant amount of drilling needs to take place to determine temperature profiles and others aspects. In the past the sector has piggybacked or attempted to piggyback off of oil and gas drilling and this continues.  It strikes me that a secondary business for the oil service sector could be to provide drilling services to the geothermal sector and to provide information and data from drilling to the sector to use in their mapping.

Confusion with fracking sector: I think with all of the drilling involved in mapping the resource and some of the impacts from fracking, maybe there is some confusion of geothermal with oil fracking.  With geothermal, there is no “fracking” where the rocks are fractured with high pressure to release oil or gas.  The drilling for geothermal is very similar to the drilling for oil and gas exploration.

Higher capital costs:  One aspect of geothermal plants is that they have higher capital costs than some other forms of generation.  They need to install the power generation plant as well as the all of the piping to transfer the heat from the ground to the water in the pipes.  However, as already mentioned operating costs will be lower and prices for power can be locked in with power purchase agreements, so you would think that should be enough to offset the risks of higher capital costs.  Carbon pricing can also only help the economics of geothermal.

I still think that geothermal has a bright future and requires some vision, a government to set some policies right, hard work.  The best locations would be locations with a good heat source close to the surface, with some experience with oil and gas drilling, an electricity source that is reliant on coal, some form of carbon pricing and experience with large capital projects.  Alberta and Saskatchewan seem like prime location, maybe BC as well.

For more information:

Borealis geopower mentions many of these as well in the following presentation on slide 22

The Canadian geothermal association has these points and more at their website.

CBC has a recent article on their website and another one here.

A failure to imagine? Artistic expression and climate change

Mary_Iverson_Glacier_12x12_collage_2014_sm.jpg

The mind works in mysterious ways.  As soon as I starting thinking about a topic and then I do a blog post about it, all of a sudden I see many examples of what i was pointing out in my blog post.  Of course in my blog post I was pointing out a lack of examples of artistic expression and climate change and now I am seeing them everywhere. Here is my first blog about a failure to imagine as part of the barrier to getting to a low carbon future.

As you can see at the bottom of the post and in some comments that I have added, I have found some people doing exactly what I was talking about re art and climate change.

Here is another one , a post from grist – an online magazine that discusses all things environmental with a focus on climate change.  In this case, it is an interview with Mary Iverson and her move from her traditional landscapes to starting to incorporate a dimension of climate change – re rising seas and a the expansion of the economy and trade via shipping containers.

Here is one image of one of her paintings from her website.

Mary_Iverson_Glacier_12x12_collage_2014_sm.jpg

And speaking of grist, about a month after I first posted this, they published another article about stories about climate change being collected by medium.  Check them out here.  Based on all of this evidence, it looks like artistic expression is starting to address and think about climate change.

I will read some of these stories and maybe do some book / story reviews.  I am interested to see if there are any stories of a positive future or if they are all negative, fear based stories.

Happy reading

Risk categories and assessing the risks of climate change on investments

Climate Change Risk Assessment Matrix

The generation foundation  (http://genfound.org/library/ ) has published a paper on stranded assets and the risks of climate change to companies and investments.  It identifies three primary risk categories for investments, regulation, market forces and socio-political pressures.  They are summarized as follows in the allocating capital for long term returns paper.

Risk 1 – Regulation: Pending and future changes in laws and regulations that would affect carbon-intensive business models can take at least four forms: (a) Direct regulation that is globally coordinated or led by local, provincial, national, regional supra-national, or global authorities; (b) Indirect regulation affecting carbon-intensive assets through restrictions on pollution or water use, and measures aimed at addressing health impacts;(c) Mandates on renewable energy adoption as well as efficiency standards; (d) Impending regulations that create uncertainty for long-lived carbon-intensive assets.

  1. Direct Regulation: Regardless of whether carbon pricing manifests as a coordinated global response to the Carbon Budget or is enforced through national, regional, state or local carbon pricing or ‘cap and trade schemes’, the result would be a material shift in the valuation of carbon-intensive assets over a short period of time and hence the stranding of carbon assets.
  2. Indirect regulation: Increased pollution control, water-use restrictions, or policies targeting health related concerns, indirect regulation could negatively impact carbon-intensive business models.
  3. Renewable Energy and Efficiency Mandates: Mandates on renewable energy adoption as well as the implementation of efficiency standards can lead to the accelerated development and adoption of alternatives to carbon-intensive assets.
  4. Impending Regulation: A significant overhang of other impending regulatory actions creates uncertainty for long-lived carbon-intensive assets, and is likely to add to the pressures that will increasingly drive capital away from those assets.

Risk 2: Market Forces: Renewable technologies are becoming economically competitive with traditional energy sources in a number of countries, without the need for subsidies, because costs continue to decline. Cost competitiveness, combined with the ability to secure stable, long-term prices for power, and produce electricity through a distributed model, are driving increased allocation of capital away from fossil fuels and towards renewables.

Risk 3 : Socio-political pressures : In the absence of regulation, sociopolitical pressures could create an environment where carbon intensive businesses could lose their license to operate.

A guess the analysis is at least one place to start. However, generally I do not find these particularly useful,  First of all the focus is on the risk of regulation and effectively five of the subcategories are related to the risk of regulation.

While there are many definitions of risk ( http://en.wikipedia.org/wiki/Risk ) oneof them is the probablility of an event happening times the impact of that event.  Assessing a particular investment simply based on the risk as outlined in the paper of the generation foundation does not tell us much.

Including a probability and impact assessment will address my other need for ensuring that some other risks including  the social values and license to operate receive more recognition.  This would be of course for companies and investments that are more exposed to these risks including companies which require infrastructure and/or rights of way to transmit / ship fossil fuel based energy.

In addition, in this risk analysis, there is no recognition of the costs of climate change to the business operations. How will the supply chain be affected, will there be increased shipping costs and other input costs, is the company exposed to any of the climate weather events that are starting to occur, will there be any costs associated with adapting to climate change etc.

The document also states a number of actions that investors should take,  One of these is that “at a minimum  investors should determine the extent to which carbon risk is embedded in their current and future investments. This can be achieved by considering the key drivers of a company’s asset base and revenue; reviewing the focus of its short- and long-term capital expenditure strategy; asking management how carbon risk might impact the company’s business model; and asking what steps have been taken – for example do they incorporate an unreported ‘shadow price’ on carbon when developing the business’ strategy?” (Generation Foundation. 2014. Stranded Carbon Assets – need to confirm the title). Using the risks identified in this paper, the risk analysis could look something like:

Stock Bond Project
Risk 1 – Regulation
Direct Regulation
Indirect Regulation
Mandates on Renewable energy adoption and efficiency
Impeding regulation that creates uncertainty
Risk 2: Market Forces
Renewable energy  price competitive
Risk 3 : Socio-political pressures
License to operate at risk

Including the probability and the impact:

In any one given scenario of the future when looking at the probability of that scenario as applied to one or more investments, the probability that regulation will take place should be the same. However the impact of that action will be different on the each option / investment / company.  Based on this analysis, the risk is effectively a proxy for the impact on a sector.

Only when assessing different political, economic and other scenarios would the probability vary.  For example, the probability of regulation would vary depending on which party was elected in that country or  the probability of a regulation would vary based on the which direction public opinion sits. In these cases, when looking at one investment in the two scenarios, while the probability would be different, the impacts of the regulation would be the same – again assuming only looking at the same investment across the two scenarios.

However, for sensitivity and resilience analysis comparing a set of investments across scenarios and applying a particular probability to a scenario may shed light on a better mix of set of investments based on analysis of a significant set of companies. Then investments could be made which are shown to be more resilient or have less risk than others in a world with potential for carbon regulation.  This would be similar to portfolio analysis done around other factors that can change and impact investments (e.g. interest rates, economic growth, sales targets etc.).

In addition much of the assessment will depend on the specific nature of the regulation.  For example will the carbon pricing regulation directly increase the price for producers or will it be applied at the consumption side.  Will it also be applied to fuel that is being exported or is that considered to be tariff-free? These details are not discussed and explored here.

In addition, in some cases these actions could have a negative or a positive impact.  This depends of course on the sector and the details of the regulation.

For example, if we used this risk assessment to assess a number of companies on a hypothetical level and very high level, here is what some of the results could be:

EV vehicle manufacturer/sales and distribution Fossil fuel Pipeline company
Risk 1 – Regulation
Direct Regulation Small negative impact:

Direct regulation would not directly affect the operations of the EV company but in locations where fossil fuels are burned to generate electricity, this could mean that the EV will cost more to fill up.

Medium negative Impact:

Since the pipeline company would be transporting fossil fuels, the demand for the fossil fuel could decrease based on the regulation.  This would not likely be a short term impact.

Indirect Regulation Zero impact Small negative impact:

Unlikely to have a greater impact that direct regulation

Mandates on Renewable energy adoption and efficiency Moderate positive impact: Depending on if the mandates including incentives for EV support.  Otherwise, small positive impact. Small negative impact:  Increased efficiency and renewable energy could affect demand and be a medium term impact.
Impeding regulation that creates uncertainty Small positive impact:

The threat of impending regulation could strengthen the business model of the EV company.

Small negative impact –

This would differ based on the fuel actually transported by the pipeline company

Risk 2: Market Forces
Renewable energy  price competitive Small positive impact:  Renewable energy could decrease the price of electricity making the case of EV vehicles stronger Small negative impact:  Where renewable energy directly competes with the fossil fuel energy in question. there could be a small decrease in demand.  However, different than electricity, there are no easy and scaled and readily available renewable alternatives to many fossil fuels in large amounts.  Biofuels and biomass are available but are also only available in small quantities.
Risk 3 : Socio-political pressures
License to operate at risk Zero impact: Small negative impact: While existing pipelines would continue to operate with little issue unless there was a spill, it would be difficult to get new pipelines and infrastructure

Ideas are free – Proposal for energy management training at Algonquin

I used to sit on all my ideas worried, concerned that someone else would steal them. Of course, with my day job and real life very few of these ideas went anywhere and occassionally someone else would come up with the same idea and maybe turn it into something.  In these cases, I was always ecstatic that an idea that I had once thought of actually was turned into something of value by someone else.  Sure I would have preferred to have turned it into something useful and interesting, but at least the idea did not sit in my head or on one of my many lists waiting for the day that would never come when I could devote the needed time and energy to actually move it along.

Now my new approach is to share my ideas with colleagues and peers and in my meetings as part of my networking. Set them free! If someone sees value in it and runs with it, Great! If they see value and run it and want to include me, even better!

So here is one idea and granted this one is not new although it may be new in the Ottawa community.

Training program in Energy management:

Rationale:

A set of events are coming togethor which are driving momentum to improve how we use energy in our homes and our work.  These include the continued increase, volatility and uncertainty in  energy prices, recognition and changing social expectations about addressing climate change and reducing  greenhouse gas emissions and as our energy use increases with more electronics and conveniences, there is interest in ensuring that we use our energy more efficiently.   Utilities also know that reducing energy use and investing in energy efficiently can reduce energy use and help to meet the growing demand much cheaper than building new energy infrastructure.  It is much cheaper to invest in energy efficiency in the electricity sector rather than trying to build nuclear power plants, natural gas generation in Ontario and large hydro.  Recognition is also growing that it is cheaper to reduce energy use and invest in efficiency in the fossil fuel sector rather than building new refineries, new pipelines to export crude oil or new LNG export terminals.

As well at the same time, new technologies are being created and being brought to market which will allow for the more efficient use of energy and enhance and preserve our quality of life. These opportunities have been recognised by entrepreneurs in the clean tech sector as well as traditional energy players as they are being forced to adapt to changes in the energy sector.

Skills are needed to understand the underlying technologies, understand where these technologies can be applied, understand how to describe the benefits and how to use the tools that are not developed to forecast, project, measure and verify that the energy savings will be delivered based on the promises made.  Technical skills are also needed to support the evaluation of the success of any energy efficiency investments using the suite of tools, technical understanding and experience that the individuals who graduate from this program will have.

Objective: Practical training and education that can lead to an undergraduate certificate in energy management, potential certification in IPMVP, continuing education units for PMI project management certificate, LEED  plus others.

This training could be part of a one year certification degree, a specialization within an existing degree or an add-on to an existing certificate. Thie could also link with any existing certificate programs asociaterd with green construction and/or advanced construction engineering degrees.

Qualified Individuals:

A need to drive investments in the energy efficiency sector is the need for qualified individuals who can do a number of interrelated jobs including:

  • go into a facility and building and understand the energy use,
  • understand the impacts of a retrofits of different technologies,
  • understand how to model different technologies and their impacts,
  • be able to ensure that after the building has been built or retrofitted it is operating optimally and be able to do a commissioning to support this,
  • be able to establish and operate a monitoring and verification program to be able to ensure that the building is functioning as intended.

In addition, to be able to understand and develop a business case and be able to articulate this business case is a needed skill for driving energy efficiency investments.  The skills that these individuals need are practical skills best delivered through a college diploma and certificate. Algonquin could develop a complete program which could train individuals with these skills to the marketplace. These skills are needed both for retrofits of existing building as well as building new energy efficient buildings and net zero buildings.  The sectors where these skills are mostly needed include commercial, institutional, industrial and residential.

Industry that has need of these skills include property managers, property developers, architects, architectural technologists, energy companies (utilities etc.), ESCO’s, engineering consultants.

The types of positions that these individuals would fill include energy managers, energy auditors, energy modellers, building commissioners, building inspectors.

It would also be useful skill development for existing trades including engineers, building inspectors, architects, planners, project managers etc.

Potential Courses:

  • Rationale: Why, business case for energy management and energy efficiency and retrofits
  • Introduction to energy management:
  • ISO 50001 Energy Management System
  • How to do energy audits
  • Benchmarking (see article at bottom)
  • Energy modelling (include RetScreen and others)
  • How to determine energy savings, greenhouse gas emission reductions, establish baselines etc.
  • Monitoring and verification
  • Commissioning and decommissioning
  • Financial Analysis
  • Potential sources of capital
  • How to sell energy efficiency
  • Practical application to a building on campus.

It just so happens that on the day that I was writing this up and preparing, I came across this press release from Algonquin College about a new Energy Management Graduate Certificate

I hope to be taking this around to people at Algonquin college in the next few weeks and working with a couple people who I know to push this ahead.  Comments and suggestions are welcome!

My early experiences with selling energy efficient lighting – did we guarantee energy savings?

There is a blossoming of innovation in energy efficiency financing that has taken place over the last 10 years as many of the ideas around energy efficiency and how to pay for them have been learned and seeped into the marketplace.

Of course all of these projects are positive NPV.  Using the cash flow from energy savings to pay off the upfront capital costs and borrowing costs of the energy efficiency investment, allows these investments to be paid off with no upfront capital costs to the project owner. In an environment with rising energy or electricity utility prices and an environment where the total cost of generation is higher than the costs associated with conservation, incentives are supporting increased investments in energy efficiency.

I worked for a company in the early 1990’s , at that point called Orion Scientific – which may have morphed into Orion Energy Systems.  We approached businesses that were operating for close to 24 hours a day and tried to sell them energy efficient lighting systems which at that time consisted of more efficient electronic ballasts, more efficient fluorescent tubes (T4’s instead of T8’s) and replacing potlights with CFL as well as selling a reflector to reflect the light down from the top of the T4.  The capital costs were financed through a third party lease to own arrangement where the lease costs were less than the energy savings, so the business still saw some of the savings while paying off the costs of the efficiency investment.  The payback was somewhere in the 3-5 year period.  There were a whole set of barriers for why businesses said “No”.  From my perspective, these were mostly about

  • Inertia or laziness
  • Resistance to change
  • Split incentives (the person operating the business not paying the utility costs)
  • Doubt about the savings actually being achieved (and in turn wary about being sold something that did not exist)

When I was selling these energy efficient lighting systems while we would project the actual energy savings based on the historical use patterns, we did not “guarantee” the energy savings.  If the use changed, for example the business only ran 12 hours a day rather than 18, then the lease costs would not change even though the energy savings were less.

Granted the total energy costs were also less, since the business was only operating two-thirds of the time.  Now however, with the use of energy modelling and legal agreements and ways to account for changes in use of the building as well as accounting for particular cool or hot weather patterns, companies will actually guarantee energy savings though energy performance agreements.  If the building does not perform as anticipated, the contractor will pay the client what they should have received for energy savings.

With energy performance agreements, the contractor aslo takes on the responsibility of ensuring that the building or facility is operating optimally.  They do this by commissioning the building and monitoring the energy use of the building.  Of course it also means that when bidding on an energy efficient contract, the incentive is to bid somewhat lower, design for a better standard and when operating you should be able to hit in the middle most of the time.  This will be contrary to an energy efficient retrofit with no energy performance savings agreement where the contractor will promise high and the building may be able to perform as intended or not.  There is no financial penalty of the building does not perform as intended.

The energy efficiency sector has moved significantly since then and particularly over the last few years.  I will explore those in future posts.

Is Energy Efficiency like a Treadmill?

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Will energy efficiency be like a treadmill that never stops?  Is that a good thing or a bad thing?  The idea of “negawatts” and investing in energy efficiency has been around for a long time.

When I was in grad school Amory Lovins of the Rocky MFeatured imageountain Institute came and did a talk on negawatts and pushed the case for investing in energy efficiency instead of large new generators.  He said it was cheaper to reduce energy than investing in large generation.  In Manitoba, where I was at the time, a land of large hydro electricity and lots of potential and clean sources of power, it was not clear how the message was received.  Manitoba Hydro went on to launch one of the first energy conservation programs in the country (Powersmart) while at the same time examining which next big dam to build.  This was even though the big dams that were built in the 1960’s and the 19070’s –  the time of the mega project in Canada had significant unintended consequences.  Not unexpected as they significantly altered the flow of the Churchill River so that it flowed down a different river (The Churchill River Diversion) and flooded the land of several First Nations.  Of course as nowadays, the business model of Manitoba Hydro and Quebec Hydro is to export as much clean power as possible.  In the 1980’s, it was more about exporting power and now it is about exporting “clean” power.

After the Amory Lovins speech being inspired I went back and did a paper for a course using a scientific American article showing the negawatts (could have been this one – paywall) that could be generated in Manitoba rather than building the next big dam – Conawapa. That was the first supply curve for energy efficiency that I had seen.

The underlying message that Amory Lovins made to us remains the core reason why utilities in all countries pursue energy conservation and efficiency programs.  If anything the argument has been strengthened based on the experience over the last 20 years.  It remains significantly cheaper and less risky to invest in energy efficiency than to build new generation.  OF course when these programs started they were targeted at large industrial users or homes and residences.  Now more and more energy efficiency is starting to target commercial and institutional buildings and all aspects of power use in these buildings.  There were far more barriers as well to financing and accessing capital and that is why the utilities tend to run programs to incent energy efficiency.

I have heard that it takes 30 years for an invention to be proven in the lab to get to the broader marketplace.  Just now in 2015, there is finally starting to be booming or at least the start of a booming market place in energy efficiency.  The private sector is investing capital and there are now a number of companies working to lower the barriers to investing in energy efficiency.  These include companies like Noesis, HASI, Mercatus and the numerous other solutions providers that have arisen.  All of these institutional infrastructure have started to provide the tools and language and trust that the marketplace to needs to realize the returns, mobilise the capital and educate the marketplace on the benefits and returns of investing in energy efficiency.

The energy efficiency market is here to stay and in some ways it is just going to get bigger.  As technology progresses, the existing building stock gets bigger and bigger, opportunities will always remain for reducing energy and saving money and having these upgrades financed through the savings, particularly in a world where electricity prices appear to keep increasing and where there is uncertainty around the price of fossil fuels.  In addition, as societal values continue to change and value the environment more and more, there will be an increased value put on reducing greenhouse gas emissions and this naturally implies less energy use and increased efficiency.

I have more to say about the treadmill analogy in a future post.

A failure to imagine…Dreams of a low carbon future?

dreams of alow carbon future

Are we in the midst of a failure of the imagination?

So many of the approaches to trying to inspire action to reduce greenhouse gas emissions and address climate change have been taking a “technocratic” approach.  We analyse the situation, talk about costs and benefits, technological solutions, wedge analysis and the list goes ever on.  Over the last 20 years during all of this analysis very little if any change has taken place that could be linked to this analysis.  The argument could be made that the regional and state carbon pricing that we are seeing (cap and trade or carbon pricing) and much of the technology development and generation around renewable energy mostly solar and wind are steps that can be directly linked to the “technocratic” analytical approach.

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However, I talk to people in my family and friends who are living their lives not focussed on climate change and one of the largest feelings is powerlessness – a feeling of lack of there is nothing that I can I do about it.  Part of this is what I briefly discussed in an earlier blog post on how the design of our society and cities is designed around a paradigm which does not include any consideration of climate change – This institutional and development momentum has many names and the for along time the technocratic approach has also recognized this where it is called “rounding the baseline” .

I think we need something bigger than an analytical approach which appeals to only a small number of people.  We need an approach which lays out a future which people can embrace and engage, which is positive and people can see themselves and their children in, which is equitable and has many other aspects.  Feel free to let me know what these other aspects should be in the comments section. I am not espousing for a not realistic utopian vision of the future, but more of a realistic positive vision not haunted by disaster scenarios and fear or anchored to a space opera fantasy of escaping to the stars.

At my day job, I have been involved in some discussions about deep carbon reductions for Canadian cities to reduce carbon emissions by 80% by 2050.  One fo the points made by one fo the attendees was that we need a vision of the future which is not defined by the need to be low carbon.  It needs to be a vision of the future which addresses people’s needs and dreams, is postive and people can see themselves in it.

In my view this also needs to be a realistic vision articulating the needs and wants of people as well as understanding that people are not going to go backwards in their living conditions.  To me this means that they will still want to have some form of personal transportation, the IT sector and the communiciations embodied by the smart phone will continue to be a part of our lives and people will continue to want to explore innovation, have fun, be artistic and creative and develop new tools and toys.

The implicit assumption under this vision is that resources and energy will not become excessively expensive as any increase in pricing which could potentially impact quality of life will induce innovation, smart use etc. – really the heart of the modern industrial competitive capitalistic(?) economy.  This also assumes that there is no dramatic change in governance in these modern economies either to a socialistic centrally planned economy or to a religious nonscientific governance and economy. Human ingenuity will continue to deliver increased quality of life within the constraints that are dictated by resources and values.

My question is where is this vision being explored?  The place where it should be explored is in art, painting. performance, literature, comics, manga etc.

Where is the low carbon economy and our future being explored and teased apart?.  Where is the human imagination being used to explore these futures.

One literature area which I know well is science fiction.  To large extent extent however science fiction tends to not be sophisticated and mostly either disaster climate science fiction or a technocratic vision where science and technology deliver humanity to space.  However, one vision I think is too pessimistic and I think it is time to move beyond fear to motivate change and the other one is too optimistic and escapist.

In the art world, there is some thinking and visioning going on, specifically

http://www.sciencefestival.co.uk/event-details/what-does-a-low-carbon-future-look-like

http://sfforward.blogspot.ca/2013/05/dreams-of-low-carbon-future-new-graphic.html#comment-form

Interview with the editor of the graphic comic shown above

Is this lack of imagination holding us back as a group or society from being able to imagine steps and actions that can be taken to address climate change and move us to a future that is positive and low carbon?

I am sure there are lots of other places and domains where this is starting to be imagined and I would love to hear of them.

Thanks for listening!

Timeline to get to a low carbon economy

Steps to a low Carbon Economy

Welcome to my first blog post in awhile…As I have mentioned I hope to do this semiregularly.  My goals are to learn how to write better, take a few risks and put myself out there and get involved in a more public manner about how to get to a low carbon economy..

How will our society change happen and what are the steps needed to be taken to get to a low carbon economy.  What has to happen so that our behaviour changes in a substantive manner so that our actions no longer add to the weight of all of our previous actions and make climate change a worse and greater threat than it already is.

Often I want to think that there is one silver bullet that will allow our society to in one swoop start fixing the problem.

Maybe the silver bullet is education, if we could just convince everyone that it was a problem through logic and then get and persuade everyone to agree that this is problem. If everyone knew that climate change was happening and the impacts from it, surely they would change their behaviour.  They would believe the scientists and say yes and change their behaviour, think about choices and change.  Of course, this is not what happens and for many reasons.  One of course being that not everyone agrees that scientists are this noble creature with pure instincts and a completely rational perspective on the world.  Then there are competing interests which conspire to undermine the experts views and seize on every uncertainty and yes error to sow dissent and uncertainty.  While I have not read the “Merchants of Doubt”, based only on the title, it strikes me that is much of what the book is about.

If we all were educated and convinced about the problem or even if some mystical policy makers were to design a bunch of “nudges”, then maybe we could change our behaviour and be able to reduce our impact on the planet and create less greenhouse gases. There is a big but here of course, the way, our societies and our cities are designed and built from a basic level including neighborhood planning, being built around the car as a mode of personal transportation, expansion based municipal tax regimes, not accounting for full costs in the purchasing decisions that we make, to the availability of information makes it very difficult to even make choices to reduce our impact on the planet.  Do we sell our house and move into the downtowns? Do we move to the country? What are the tradeoffs from a climate perspective?  What are the trade-offs right now? Maybe I need a house to take care of my parents and the only locations where that is available requires our family to have two cars and drive to work every day, and besides the transit system in our city is lousy?

Then there is the information gap, how does anyone know what is the preferred alternative from a long term perspective cloth washable diapers or disposable diapers?  Washing dishes by hand or in the dishwasher?  Renting or buying? Shampoo 1 vs shampoo 2 etc.   First of all, the information is not available unless one can do extensive research on the various alternatives on line and then one needs to know all of the assumptions that the researchers are doing in determining the best approach and what if my situation is different than the example studied by the researcher.  And then even if the information for all of these decisions was available at the tip of a click on my smart phone, do I really have to do this research and thinking for every small and large decision that I am making in my life, not to mention that my decisions to buy a product or services will also include a set of other aspects which are arguable more important – will it do what I want it to do? Will it last as long as I need it? What is the price? Is that what I am prepared to spend on it? Information, decisions  —ahh! Can I not just have a little fun – Should I buy beer, wine, gin, vodka ahhhh!  Will my decision even make a difference so I buy product A instead of produce B, will my small difference impact the future.  Doubtful?

As part of this thinking, I have developed the following schematic which shows some of the steps that society will and must take to address the climate change problem.  I have put them in a rough order but clearly there could be countries where the change occurs in a different order.  The key steps are:

  • Manmade climate change is an accepted reality
  • There are obvious and significant impacts associated with climate change. This leads to increased public concern, protests, development of pubic policy and government commitments
  • Civil Society and NGO’s start to take action
  • Society has accepted that full costs need to be accounted in some way
  • Governments start to put a price on carbon
  • Investment Funds and other private sources of capital start to invest in a low carbon economy
  • Infrastructure is designed and built to address the full costs associated with it
  • Behavioural change
  • Generation changeSteps to a low Carbon Economy

This infographic is not comprehensive and jurisdictions will take a different path and these steps in a different order to eventually get to a low carbon economy and I have most certainly left off a few steps.  Comments and additions are welcome.