May 13, 2009

Overcoming barriers: finding innovative ways to monitor GHG emissions

The Commissioner of the Environment and Sustainable Development published today a report on the government's compliance to the Kyoto Protocol Implementation Act that was passed in 2007 in the House of Commons, by all parties save the governing party. Obviously, this can only happen in the minority government situation.

From our perspective of barriers to change and innovation, it is worthwhile to look at just one aspect of the auditor’s critique, namely the lack of proper monitoring system. I don't want to belabor the point as to whether environment Canada did or did not fulfill its duty with regards to monitoring GHG emissions, or the requirements of the Act. But I do want to focus on the critical importance of having such a monitoring system in any change management process, which is what a transition to a sustainable society is all about.

As our research has shown today, especially using the example of the residential sector, deploying green technologies that dramatically reduce GHG emissions, water use and wastewater generation, and garbage, requires a very large number of small decisions. More importantly, the barriers to these innovations and changes cover all jurisdictions and within each jurisdiction, go across several departments and silos. There is no single golden bullet. But there are some overall metrics with relations to GHG emissions, water, energy usage and so on. And we discussed these in an earlier post (see Setting sustainability and environmental targets (1): Recent announcements on GHG emissions ; Setting sustainability and environmental targets (2): the dimensions of sustainability, and Setting sustainability and environmental targets (3): Ottawa’s “Choosing our future”)

Keeping track of how each of these small decisions, in all the sectors of the economy, contributes to achieving these objectives is critical in any change management strategy. However, a full monitoring system is not a trivial matter. It requires a fairly significant bureaucratic infrastructure and reporting structure. A good analogy is what statistics Canada uses to poll on a monthly basis the necessary manufacturing shipments and inventory data from Canadian corporations to provide the key monthly indices off economic growth and performance. However, in this instance we would be looking at all sectors of the economy, including transportation, residential, commercial, as well as industrial. We would need to not only baseline data, but the rate of implementation of new technologies to achieve these environmental objectives. This is not a trivial task. But it is essential to invest in building up such a system if we ever hope to achieve Kyoto targets.

More importantly, it is a classic example of the real barriers to achieving a sustainable society, where power, information, and resources are broadly dispersed among a wide range of stakeholders, and where effective coordination is needed. (See, for example, Gilles Paquet’s studies on governance)

With some creativity, this exercise could be turned into a hugely motivating process, that could help engage the whole country. Let’s look at one sector, not mentioned in the Commissioner’s report, which we have studied in the course of our study: the residential sector.

Depending on whose definition you take, households in Canada contribute anywhere from 10 to 40 -50% of GHGs. The low end estimate looks only at the actual physical house and residential unit, the high end extends the GHG emissions to each family’s lifestyle, including what they do, how they travel and where they go to work. In fact, it can include all of the community, excluding industry.

So the challenge is to how to help each individual household monitor as accurately as possible their own progress towards achieving each reduction objectives with regards to GHG, electricity, energy and water usage reduction. And each company or enterprise could do the same, as well as each commercial building or complex. Putting all the blame on the Environment Canada, which is pretty strapped in terms of budgetary resources, is not likely to find a quick solution. Instead, why don't we throw open the challenge and find innovative ways to engage the various key sectors to determine better ways for tracking their improvement along the pathway to sustainability and GHG reductions.

Staying with the residential and community sector, we would first need some standards and common definitions, to make sure that the accounting is consistent. And the federal government and Natural Resources Canada have a well-established track record in doing so with the Energuide program. We will need new and much more user-friendly meters in each household that can track, for example, the improvement in energy consumption or water usage, or gas heating and electricity consumption. This would allow each of us to track and become aware in real time how a new appliance, a new device or a change in practice helps achieve the reduction objective. The idea is to make this cause-and-effect as clearly visible and understandable as possible. There is ample opportunity for incentives, standards and new metering products to address this task. It could be a unique opportunity for new businesses and jobs.

And by putting the responsibility on individuals, while helping them with easy to use tools to measure progress, we not only empower them, but provide a context to unleash a unprecedented flow of innovative ways to reduce GHG emissions.

May 8, 2009

“Ecoflation”: a barrier or an opportunity?

In today's Financial Post, Diane Francis brings up the term "ecoflation" first reported in a December 2008 article by Deborah Zabarenko, Environment Correspondent for Reuters.

In essence, the argument states that a barrage of environmental legislation, regulations and taxes to address environmental degradation and global warming will significantly raise the price of consumer goods and hurt the profitability of the companies that manufacture them. This view is strongly held by many business leaders. And it is a crucial perceptual barrier to any major progress on moving to a sustainable society.

To this argument, I respond by reiterating UK’s Lord Stern’s position that the long-term cost to the planet as a whole will be dramatically higher if we don't put these measures in place to address global warming.

As our project "Making it happen" demonstrates, we do need to change the way we run our economy, use resources, and build our infrastructures, if we want to become a sustainable society. And what we have been doing is looking at what are the barriers to achieve this.

But the more pertinent question here is whether those changes in infrastructure, in our manufacturing processes, and in the creation of new "green" industries and businesses, would lead to a more resilient economy.

Never mind the fact that the Arctic ice cap is melting 30% faster than any previous projection. The urgency for re-examining some of our traditional concepts of economic growth comes from another corner. The largest corporations in the United States, including GM (not to mention the Phoenix Coyotes) are on the brink of bankruptcy, something that was unheard of a year or two ago. Whatever happened to that old adage "What is good for GM is good for America"?

And here is the challenge to all of those researching what a green economy in Canada might look like: can we demonstrate persuasively that “ecoflation”, what Diane Francis and Deborah Summer consider to be a curse, might in fact be the pathway to the economic salvation and long term sustainability?

Can we be creative and find ways to devise new business models, new concepts of community, and longer-term security as a result of this transition?