A Greener Footprint for Industry, and Policies to Make It Happen

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(No Transcript)
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A Greener Footprint for Industry, and Policies to
Make It Happen Ernst Ulrich von
Weizsäcker Co-Chair
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• Let us first ask what triggered the financial
  crisis.
• Let us then ask how we best get out of it.
• Then comes the bad news about climate.
• It will allow us to understand what needs to be
  done and how much time we have.
• We then shall look at options to respond to the
  challenge.
• Then I am opening a window into an absolut- ely
  exciting technological universe.
• Finally, let us talk about policy options we have
  to make it happen.

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1. Let us first ask what triggered the financial
   crisis.

• The media portrayed it all as a matter of
  deregulation of the financial sector plus greedy
  and arrogant bankers
• OK, thats correct, at the surface.
• But the real reasons go deeper and have to do
  with cheap energy.

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• Tumbling oil prices and opposition in the USA to
  gasoline taxes created an optimistic feeling of
  cheap gas forever, leading to
• the creation of a new car fleet, the gas
  guzzling SUVs, and Hummers
• accelerated urban sprawl and a near doubling of
  typical commuter distances.

The Hummer H1, a fortress on wheels, and a gas
guzzler
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During a mere 5 years, urban sprawl madly grew in
many areas
Source Anand Prasad, US Forest Service, 2002
aprasad_at_fs.fed.us
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And then came 2007. Oil prices skyrocketed.
Long distance commuting became a
nightmare Houses lost value Mortgage loans
above home values got non-performing Collapse
of Fannie Mae, Freddie Mac, Countrywide and later
Bear Stearns, Lehman Bros., Merryll Lynch, AIG,
General Motors etc.
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2. Let us now ask how we best get out of the
financial crisis. Optimistic stock markets are
not enough. We should avoid the squandering of
energy that was at the roots of the crisis.
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There are, of course, strong forces, mostly from
sunset industries (and their politicians) saying
Lets deal with the economic crisis only and
return to the environmental agenda once we are
back to a very robust economy.
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More forward looking, Achim
Steiner, UNEPs Executive Director is
calling for a Global Green New
Deal (quoting Franklin D. Roosevelts New
Deal of 1932, which helped pull the USA out of
the big Depression)
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Thats obviously also the idea behind our
conference
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It is also at the core of the mandate of the
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Two Asian countries made their stimulus package
very green
Source DIE, German Institute for Development
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Some Silicon Valleys venture capitalists (here
John Doerr of Kleiner Perkins, Al Gores new
firm) are moving into green investments
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The next Kondratiev Cycle has to be
green (after Charlie Hargroves, Brisbane,
Australia)
Resource productivity, renew. energy, green
system design.
Biotech IT
TV, aviation, computers,
Electricity, chemicals,cars
Steel railroads
Mechanization
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3. Now comes the bad news about climate. Let me
show you some pictures that should make you think.
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Asia saw many desasters in 2008, many climate
related
Earthquakes, volcanoes Storms Floods Droughts,
wildfires
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Munich Res Natural desasters map, 2008
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Come sea level rises, desasters get much worse!
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Italy during the .... and during the
last last Ice Age (20 000 Hot Age (2
million years ago) years ago)
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Areas in red are at risk from rising sea levels
in Bangladesh
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East and South Asias agglomerations are highly
vulnerable to sea level rise
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Sea level rise can take catastrophic speed!
(after Michael Tooley. Global sea-levels
floodwaters mark sudden rise. Nature 342 (6245),
p 20 - 21 1989)
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Presently we are destabilizing Greenland!
(Freshwater coverage during Summers 1992 and 2002)
.
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4. This should suffice to understand what needs
to be done and how little time we have. Stern
Review BAU (blue) vs. stabilising at 450 ppm CO2
(red)
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The longer we wait, the more radical changes are
needed
Source Investing in Cimate Change 2009 (Deutsche
Bank, October 2008)
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Let us perhaps save what we consider worth
saving. Noahs Ark, 2009
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Why are so many people thinking we should first
become rich and deal with climate problems later?
It is the convenient paradigm of the Kuznets
curve of pollution
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Conventional wisdom More wealth, more carbon
intensity
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Escaping from this mindset means we need a
Kuznets Curve of decarbonization!
rich and carbon free
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5. Let us now look at options to respond to the
challenge.

• Three options exist
• Reduce carbon intensity of energy
• Reduce energy intensity of wealth
• Reduce wealth

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The Panels Biofuels group has looked into the
scope (and problems) of biofuels. Report being
published soon.
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Certain biofuels are ecologically worse than
fossil fuels
Global warming potential Smog potential
Eutrophication
From IPSRM Biofuels Report, 2009, after Zah et
al, 2007
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Up to 90 biodiversity losses from agrofuels
plantations
From IPSRM Biofuels Report, 2009, after Eickhout
et al, 2008
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The win-win options relate to efficiency. And
efficiency has a lot to do with greening industry!
Source MacKinsey Vattenfall 2007
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More promising perhaps Decoupling wealth from
greenhouse gases and resources. First Decoupling
report nearing peer review phase.
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Absolute Decoupling mostly for the rich
countries Relative Decoupling mostly for
developing countries
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6. Now let us open a window into an absolutely
exciting technological universe.
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Imagine a bucket of water weighing ten
kilograms.How many kilowatt-hours would you
need to lift that bucket from sea level up to
the top of Mount Everest?
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1 kwh
Knowing that one Watt-second (Ws) is equivalent
to one Newton-meter (1 Joule), the answer is
One quarter of a kilowatt-hour! ( 900.000 Ws)
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Amory Lovins Hypercar 1,2 l/100km
Todays fleet 6-12 l/100km
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House in the Alps
Amory Lovins Rocky Mountain Institute
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Passive houses a factor of ten more heat
efficient
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Refurbishing existing buildings
Upper row Photographs Lower Thermograms
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LED replacing incandescent bulbs a factor of 10
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From urban sprawl to high density cities
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From rotten trains to high speed trains
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From Portland cement to geopolymer cement
Carbon efficiency
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Also networks of industry can help decarbonise
our wealth. The (Danish) Kalundborg
industrial ecosystem
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Developing the World's Best Energy-Efficient Appliances Japan's "Top Runner Standard
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7. Finally, let us talk about policy
options we have to make it happen.
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The first step sounds philosophical Changing
technological paradigms

• Old
• Increasing labour productivity

• New
• Increasing resource productivity

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Labour productivity has increased twentyfold
since 1850. It is not utopian to think of
resource productivity increasing tenfold in 100
years and fivefold in 50 years!
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Labour poductivity rose in parallel with labour
costs
This suggests a strategy of actively elevating
energy prices in parallel with energy
productivity increases
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High price elasticity for electricity comparing
countries
Source Jean-Philippe Barde, 2008
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High price elasticity for petrol
per capita and year fuel comsumption in kg
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However, for 200 years resource prices were
falling. Recent price hikes just brought us back
into the lower confidence interval!
Prices of industrial commodities energy, in
constant dollars
2000-2004
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Ecotaxes can reverse the trend in fuel
consumption
Percent changes against 1994
Ecological Tax Reform
Reference UNFCC 2005
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High energy prices need not hurt the economy.
Japan blossomed during the 15 years of highest
energy prices.
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Predictability is perhaps the strongest signal to
investors. So I believe that a predictable
trajectory of rising energy prices will attract
immense investments into the efficiency
revolution.
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To make this trajectory socially acceptable and
good for industry, I am suggesting to raise
prices in proportion with measured average
increases of energy productivity. Meaning the
driven mile or industrial energy services would
not become more expensive as prices rise.
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I suggest that we now know how to kick it off!
Resource productivity, renew. energy, green
system design.
Biotech IT
TV, aviation, computers,
Electricity, chemicals,cars
Steel railroads
Mechanization