Post-Paris Pragmatism

The Paris Pact

In December 2015, an international agreement was reached whereby almost 200 nations, along with other political and commercial entities, agreed to significantly reduce annual greenhouse gases (principally carbon dioxide). Many also agreed to participate in a US$ 100 billion U.N. administered fund, intended to help less developed nations reduce emissions and abate damages due to climate change*. The sizes of each entity’s commitments vary widely.

President Obama’s commitment was for the U.S. to reduce greenhouse gas emissions to 25% – 28% below 2006 levels (the highest ever) by 2025, and to make substantial contributions to the U.N. administered fund. Neither the agreement nor President Obama’s commitments were submitted for ratification by the U.S. Senate; hence lack the obligatory nature of a formal international treaty.

Earlier this month (June 2017), President Trump announced that the U.S. will withdraw from the Paris agreement, apparently after substantial discussions with many people. The President’s decision was greeted with both applause and cat-calls, as one might expect. International reaction was almost entirely negative, since withdraw of U.S. support greatly weakens the viability of the Paris agreement.

The properness of the President’s decision has been widely discussed in the media. No need to add to that here. Rather, this post attempts to assess the pragmatic realities going forward, especially as those realities affect smaller manufacturers.

Going Forward

Regarding Emissions Reduction:

>> I think that achieving President Obama’s commitment for the U.S. to reduce emissions by 25% by 2025 is going to happen, Paris or no Paris. The advent of “fracking”, advances in renewable energy technologies and improvements in energy utilization efficiency all have too much momentum. The economics of power generation are rapidly favoring replacing the old with the new.

As you can see from this graph labeled “Energy-related carbon dioxide emissions”, U.S. emissions peaked near 6 billion annual metric tons about 2006. A 25% reduction by would mean emissions near 4.5 billion tons by 2025. The graph projects emissions around 4.9 – 5.3 billion tons for 2025, considering eight different cases. However, these extrapolations specifically exclude technical advances not already in place (or required to be in place by regulation or legislation) at the end of 2016.

CO@ Emissions Projections

Global CO2 EmissionsNevertheless, even if the U.S. and everybody else achieve their emissions reductions commitments in full, the concentration of greenhouse gases in the global atmosphere will continue to increase, not decline. This occurs because increasing populations and increasing per-capita incomes in the developing world will generate additional emissions well in excess of emissions declines in the economically developed nations.

The graph labeled “Figure 9-1”, where “OECD” refers to economically developed countries, illustrates this.

Projected Global Emissions>> President Trump has reversed the EPA’s Clean Power Plan, meaning that some coal fired electric generation plants will stay on stream longer than they would have otherwise. However, “fracking” (cheap natural gas) and rapid advances in renewable energy are making coal fired plants increasingly less economically attractive here in the U.S. However, “fracking” and cheap natural gas are not generally available worldwide, so, in many places globally, coal will remain a low cost choice for years to come. The graph labeled “ES-8. World energy related carbon dioxide emissions by fuel” illustrates this. Coal is dying, and has been dying since around 1950. But coal isn’t dead just yet.

>> You may recall that, prior to the election last November, then-candidate Trump chastised Ford Motor Company about Ford’s plans to move small car production (and jobs) from the U.S. to Mexico. Ford reversed their decision. Then, early this year, Ford’s then-CEO Mark Fields asked President-elect Trump to reconsider the EPA’s Corporate Average Fuel Economy (“CAFE”) program that mandates a series of increases in miles per gallon fuel economy for automobiles. Ford’s problem is that small cars are expensive to produce in the U.S. – and Ford needs to produce and sell a lot of them in order to sell a lot of large (and profitable) SUVs (the “corporate average” part of “CAFE”). To date, there has been no change in the CAFE requirements, nor do I, speaking personally, expect any.

>> It was the Obama administration’s policy to actively support research and development for emissions reduction technology. The Trump administration is expected to be less aggressive in doing so. Government supported R&D is, in my view, best applied to fundamental research and I expect that to be where most government R&D dollars will spent in the next several years. So, most practical, year over year advances in technology will continue to come from the private sector. 

The U.S. contribution to the U.N. climate change relief fund.

>> Take another look at the graph labeled “Figure 9-1”. Total global emissions are equal to the sum of the two lines. For 2012, for example, the sum of the two lines is about 13 + 19 = 32 billion metric tons. In order to reduce the concentration of greenhouse gases in the atmosphere, the sum of the two lines has to decrease year after year, not increase. Even if the U.S could somehow eliminate its entire 5 billion tons of emissions, that would not, by itself, be sufficient to stop the sum of those two lines from increasing.

>> Quite obviously, any viable solution lies requires substantial mitigation of expected future increases in emissions everywhere in the world. That is the purpose of the fund. However, there seems to be very little public discussion of how the fund will actually work: for example: what types of projects will be funded, on what basis the money will be dispersed, and how transparency of the disposition of the money will be assured.

The U.S. withdraw from the Paris agreements have likely confounded expectations as to who pays and how much. It is not clear how the less economically developed nations are actually going to reduce emissions, rather than continue to increase them. Perhaps the international private sector will take the lead in doing so.

So What?

The point here for pragmatists is that, Paris pact or no Paris pact, efforts to reduce greenhouse gas emissions are going to continue, regardless of individual views on the reality of Climate Change. The Trump administration is expected to be considerably less aggressive than its predecessor in forcing emissions reductions. Still, there is substantial pressure from governments abroad, from the U.S. private sector and from other interested groups to continue to push for reductions.

As usual in business, dangers and opportunities – of which there will be many, in operations and in marketing — are two sides of the same coin. Operate your business.

Chuck & Joan in ParisThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.


* “Climate Change”, as that term is used in the Paris agreements and almost everywhere else, refers to a set of negative events (changes in the global climate) caused by increases in the mean temperature of the Earth’s surface (“Global Warming”). The Paris pacts are predicated on efforts to restrain temperature increase to two degrees Celsius (2o C) compared to temperatures before the beginning of the Industrial Revolution, about 250 years ago. Increases in atmospheric greenhouse gas concentration are regarded as causing Global Warming.

Graphs are from the 2016 International Energy Outlook (IEO 2016) and the 2017 Annual Energy Outlook. Both are published by the U.S. Department of Energy and are available free on line at www.eia.gov

 

Getting to Drawdown

Drawdown

Book CoverDrawdown, [1] a new book edited by Paul Hawken, presents about 80 proven action areas for reduction of global greenhouse gas emissions. The book and its action areas take a notably comprehensive view by including greenhouse gases other than carbon dioxide, and by not limiting carbon dioxide emissions to those related to energy production. Each of the action areas is well researched, with quantitative projections for future greenhouse gas emissions reductions. About 20 “coming attractions” – emerging technologies – are also presented, but, appropriately, are not considered in a quantitative sense.

Since Climate Change is a set of anticipated negative effects from Global Warming, which is attributed to increased concentrations of greenhouse gases in the Earth’s atmosphere, it follows that reducing future emissions of greenhouse gases can delay those negative effects. Further, there are natural processes that remove greenhouse gases from the atmosphere (notably, but not exclusively, photosynthesis). If annual global emissions of greenhouse gases can be reduced sufficiently, then atmospheric concentrations of those gases can reach a point where natural removal processes, perhaps augmented with new technologies, can begin to be reduced — drawn down — year over year.

The book does not present a plan for systematically implementing the several action areas on a global scale, never mind the book’s subtitle. Realistically, creating such a plan, with an objective of achieving drawdown, is certainly not a simple matter. Effectively executing that plan is likely much tougher.

Challenges

There are a number of serious and fundamental challenges that creating and effectively executing a globally sufficient plan that should be expected. Here are two of them:

>> U.S. and the World: Over the coming decades, the U.S., along with other economically developed nations, faces a vastly different set of demographics than do less developed nations. Developed nations can expect slow population growth rates, aging populations and rather static economies. Less developed nations face more rapid population growth, along with rapidly rising expectations for economic growth. [2] This chart projects greenhouse gas emissions over the next several decades: [3]

IEO 2016 - Carbon Dioxide

As you can see, greenhouse gas emissions are projected to roughly correlate with population growth and economic growth, such that the U.S. cannot directly control reduction in global emissions sufficiently to achieve drawdown. Even if the U.S. were able to eliminate all of its emissions, global emissions would continue to rise. Direct control over sufficient emissions reductions to achieve drawdown lies among the many developing nations, each with its own interests and priorities. There, the U.S. can only indirectly influence emissions to some degree or another.

This does not mean that American emissions don’t matter or should not be reduced. It does mean that the U.S. alone cannot achieve global drawdown.

>> Urgent vs Important: Dr. Covey [4] taught many of us that the urgent almost always gets priority over the important. At the most zoomed out level, Climate Change competes for active attention with other potential global threats, such as global war, financial system collapse, terrorism or epidemic. Zooming in, Climate Change competes with the panoply of routine business issues – supply chains, customers, production, technology, industry issues, ad nausium — for the active awareness of business people.

Drawdown provides a ready collection of proven techniques and a rational objective: achieving drawdown. An executable plan for achieving that objective within a few decades is still needed.

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.


[1] Paul Hawken, editor, Drawdown The Most Comprehensive Plan Ever Proposed to Reverse Global Warming, Penguin Books (2017)

[2] For more on this, see: Carbon, America and the World, this blog, http://jerasustainabledevelopment.com/2017/04/01/carbon-america-and-the-world/

[3] This chart is from the 2016 International Energy Outlook, published by the U.S. Energy Information Agency. Available on-line at www.eia.gov . The  chart is restricted to carbon dioxide emissions, rather than the more comprehensive view of greenhouse gases that Downturn takes. However, it does make the point that the U.S., of itself, cannot control reaching a condition of global drawdown.

[4] Covey, Stephen, Seven Habits of Highly Effective People, Revised Edition, Free Press (2004)

Carbon, America and the World

Climate Change

For a business to be Sustainable – that is, able to thrive in perpetuity [1] – requires that the world remain a viable place in which to thrive, in perpetuity. The world faces a number of substantial threats to its continuing viability to support a prosperous humanity. Climate Change is arguably the most discussed of these just now. Unfortunately, Climate Change is highly politicized and not generally well understood.

To clarify:

Climate Change refers to significant changes in the world’s climate that diminish the natural world’s ability to adequately support humanity and its civilizations.

Climate Change, in the sense intended here, refers to an increase in the global mean temperature.

Climate Change, then, is a set of negative effects caused by Global Warming.

Global Warming, again in the sense intended here, results from a “greenhouse effect” – a change in the composition of the earth’s atmosphere that results in retaining a greater portion of the energy from sunlight.

Carbon Dioxide (CO2) is a rapidly increasing “greenhouse gas” component of the earth’s atmosphere.

Energy generation from combustion of fossil fuels contributes most of the approximately 34 billion metric tons of CO2 that are currently being added to the earth’s atmosphere annually.

Most of the world’s nations, through the United Nations Framework Convention on Climate Change (UNFCCC), have reached agreement on the necessity to reduce global CO2 emissions quickly and significantly.


The American Situation

At a meeting of the UNFCCC in December 2015, President Obama expressed an intention for the U.S. to reduce its greenhouse gas (essentially CO2) by 26% to 28% below 2005 levels, and to do so by 2025 (that is, 8 years from now).

This graph, from U.S. Department of Energy’s Annual Energy Outlook 2017, projects America’s energy related CO2 emissions to 2040 in a number of cases (sets of assumptions). As you can see, none of those cases provide substantial reductions in CO2 emissions, compared to present levels.

CO@ Emissions Projections

The Global Situation

Global CO2 EmissionsThe graph labeled Figure 9-1 [2] plots global CO2 emissions, broken out as emissions from OECD [3] countries (which include the USA) and non-OECD countries. Add the two together to get total global emissions (for 2016, approximately 13 billion metric tons from OECD countries + 21 million metric tons from non-OECD countries approximates 34 billion metric tons). Annual emissions from the OECD countries are projected to be approximately constant over the period through 2040. Annual emissions from the non-OECD countries are projected to increase substantially.[4]

Two points here: (1) Annual global CO2 emissions are projected to increase, not decrease. (2) Even if the USA could drive its CO2 emissions to zero, that reduction, of itself, would not prevent total annual CO2 emissions from continuing to increase, not decrease.

So, in order to contain Global Warming and it’s predicted negative effects (meaning Climate Change), annual global CO2 emissions need be reduced substantially, pronto. However, the Department of Energy’s figures, based on existing policies along with world demographic and economic projections, indicate that emissions will continue to rise, at least through 2040.

What to Do?

The USA can institute policies that directly affect its own emissions. It can only influence, not control, the emissions of other countries. Here are three possible approaches that the USA might choose to take. None of them can promise to radically reduce annual global CO2 emissions within the next decade or so.

Whatever it Takes: This approach posits that the USA forgets about costs and domestic economic growth, shuts down existing U.S. emissions sites on a crash schedule, and uses moral suasion, political pressure and an open checkbook to persuade other countries to follow suit.

Lead by Example: The approach starts by embracing, then building on President Obama’s expression of intention to reduce emissions. From there, the USA would lead by further reducing its emissions, while using diplomacy, economic incentives and coalition building to encourage others.

Pragmatics: The USA could continue to encourage the development and implementation of economically viable technologies, continue to research new emissions control and decarbonization approaches, and work with other nations to encourage them to do likewise on a mutually beneficial basis.

Considering present and your expectation of future political and economic realities in the USA and elsewhere, what do you think the USA should do? What approach should your business or organization take?

My House with Solar Panels

Google Map View of Chez Chuck, with Solar Panels

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.


[1] Adam Werbach, Strategy for Sustainability, Harvard Business Press (2009), page 9

[2] The graph labeled Figure 9-1 is from the U.S. Department of Energy’s International Energy Outlook 2016 (IEO 2016). The Annual Energy Outlook and the International Energy Outlook are available fro free download at www.eia.gov

[3] OECD, the Organization for Economic Co-operation and Development, is a group of 34 relatively developed countries. The USA is a member.

[4] The non-OECD countries are growing significantly faster than the OECD countries, both demographically and economically. People in less economically developed countries understandably want to catch up with those in OECD countries on a GDP per capita GDP basis.

 

Energy Notes from the EIA

The Energy Information Administration (EIA)

The EIA, part of the U.S. Government, compiles and projects statistical data on energy production and consumption. Among the EIA’s many regular publications, the Annual Energy Outlook (AEO) and the International Energy Outlook (IEO) are probably the most comprehensive. The 2016 editions of both publications have recently become available (for free). This post draws on both.

Both publications project data out to 2040. The basic set of projections is labeled the “reference case”. The reference case is a “business as usual” case that projects current trends in view of government demographic projections (like population projections), financial projections (like GDP and inflation rates) and laws / regulations already in place. The reference case does not anticipate technical break-throughs, other than those necessary to meet established laws or regulations. For example, the reference case projects that new automobiles will meet the fuel consumption levels required by the existing C.A.F.E. regulations in the years to 2025, never mind how, technically, that is accomplished.

Fueling Our Past – and Future

Energy Consumption in the US

The graph labeled “Energy Consumption in the United States (1776-2040)” is from the home page of the EIA’s website (www.eia.gov).  Comments:

>> Energy consumption is measured in quadrillion BTUs (“Quads”). One quad is a heck of a lot of energy. As the graph indicates, all of the hydroelectric dams in the U.S., taken together, produce only about 3 Quads annually. Over recent years, the total energy consumption in the U.S. has been around 100 Quads per year.

>> As you can see, the AEO 2016 reference case projects that, over the next 25 years, about 12 Quads of energy from coal will be replaced with an almost equal amount of energy from natural gas. This would cut the use of coal as fuel in this country by about half between now and 2040.

>> Energy production from petroleum is projected to remain almost constant through 2040.

>> Renewable energy (“other renewables”), especially solar energy, is projected to increase rapidly, to almost 10 Quads by 2040. Still, 10 Quads are projected to be less than 10% of the U.S. total energy consumption in 2040.

Energy Consumption Trends

The green line on the graph labeled “Total Energy” projects that total energy consumption in the U.S. will increase slowly between now and 2040. Total energy production (blue line), however, is projected to increase somewhat faster. That means that the U.S. will swing from being a net importer of energy to becoming a net exporter of energy about ten years from now. This, if it happens, will be great news.

US Energy Balance

In my view, the America’s chronic international trade deficit in petroleum has been a huge burden on the U.S. economy. The improvement in U.S. petroleum production rates over the last few years has dramatically lowered world petroleum prices. Those lower prices have resulted in many fewer U.S. dollars going abroad to pay for fuel, and in a nice chunk of change for everybody with every tank full. Moreover, I regard these improvements as the major causal factor in the recovery (such as it is) in the U.S. economy over the last two years.

But wait, there’s more. America’s international relations and foreign policies over the last several decades have been excessively influenced by the need to assure safe access to imported energy, especially petroleum.

So, better global and domestic economics, plus considerably more latitude in foreign relations (including military affairs) – would be great news indeed for America!

Carbon Dioxide Emissions

Carbon Dioxide Emissions Projections

Concerns about global warming / climate change / carbon dioxide (CO2) emissions have been at the forefront of Sustainability issues in recent years. This graph uses figures from the IEO to project reference case annual carbon dioxide emissions through 2040. As you can see, carbon dioxide emissions are projected to rise over the coming years.

 This is in sharp contradiction to almost everything we hear from the media and elsewhere. To be clear: given the “business as usual” conditions upon which the reference case is constructed, carbon dioxide emissions are not going to decline in the coming years. Net reductions in CO2 emissions will require significant changes in policies and / or technologies, in the U.S. and in the rest of the world.


Chuck at the Pacific

 

 

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington

(Chuck@JeraSustainableDevelopment.com)

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

 

A Cautious New Year

As a new year dawns, I think it useful to recognize several recent events that can be expected to significantly affect American manufacturing managers in 2016:

The Global Commodities Bust

China’s economic growth rate is now slowing, after two decades of torrid growth. This slow down manifests as sharply reduced global demand for industrial commodities, as prices indicate. As examples, copper prices dropped about 24% in 2015, iron ore about 40%, rubber about 22% and steel a whopping 57%.

National economies that have been focused on exporting these and similar commodities are, of course, hurting. Such sharp drops in export revenues reverberate through their economies, quenching demand for imports, especially manufactured goods. The reduction in demand affects the entire value chain. So, for many manufacturers around the world, lower sales volumes at lower price per unit sold.

The Perils of Petroleum

China’s growth rate slow down represents demand side imbalance. On the supply side, global availability of petroleum (crude oil + natural gas) has soared, spurred by “fracking”, and by intense on-shore and off-shore exploration and discovery financed by years of $100+ per barrel crude oil. Additionally, the recent nuclear weapons agreement with Iran has removed economic sanctions, allowing that oil-rich nation to substantially increase its petroleum exports.

As we all know personally, gasoline and related fuel prices dropped by over half in the last 18 months or so. Great for consumers in oil importing countries like the U.S. Disastrous for countries that rely on exporting petroleum – Venezuela and Russia, as examples.

The Paris Climate Change Agreement

In December 2015, 190+ nations reached an agreement on limiting carbon dioxide (CO2) emissions, hence Climate Change. As one might expect, an agreement acceptable to 190+ sovereign nations involves a lot of compromises.

In essence, most of the parties have made voluntary commitments on reductions in CO2 to the atmosphere. The totals of those commitments are not nearly sufficient to achieve the atmospheric CO2 concentration levels necessary to prevent global mayhem, according to the United Nations’ projections.

The nations (along with corporations, cities and others that have made voluntary commitments) are expected to honor those commitments. There is a program of reviews to be conducted every five years, where progress is to be discussed and, hopefully, commitments will be increased. There is no means of enforcement.

Take-Aways for Manufacturers

>> The global commodities bust is just part of the bad news in the global financial system. There are a lot of red flags waving. Don’t take that to mean that a global recession (or worse) is at hand (although that is certainly possible). Do take it to mean that the situation is dangerous and very well could deteriorate quickly. The recommendation here is that all managers find a way to follow the pulse of the global financial system. You cannot afford to get blind-sided.

>> The commodities bust and the petroleum glut both demonstrate that all manufacturers are global manufacturers, because your value chain, like it or not, is affected by events everywhere.

>> The U.S. economy has been experiencing a modest rate of recovery from the Great Recession. Modest as it is, it is about the best there is globally. That means those nations suffering from the commodities bust are going to try to increase their exports, and the U.S. is the obvious choice. Look for lots of competition, some of it close to desperate.

>> The Paris Agreement is aspirational, at best. It does set out generally recognized goals for CO2 emissions reductions, with little to suggest that those goals will be achieved. Experience with the earlier Kyoto Protocol – which the Paris Agreement replaces – suggests that making commitments is easier the fulfilling them. The fact is that the agreement is global and that politics are local. Sovereign nations act in accord to their own political and economic immediacies, good intentions notwithstanding.

>> Low petroleum prices are good for present, since personal and business costs are reduced. They are a problem going forward, since cheap fuel means less attention to energy efficiency and related issues. The petroleum glut will eventually disappear, or government fiat will override the markets in pricing petroleum, somehow or another. Enjoy it while you can, but don’t become addicted.

Chuck - Red RocksBest wishes for a prosperous New Year!

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about prospering in the globalized 21st century … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.

“The Age of Sustainable Development” – Part 1

Sustainable Development

This post is the first of a series that examines the concept of Sustainable Development in its most zoomed out (broadest) sense. This series of essays is intended to provide context, from which smaller manufacturers can individually zoom in to take actions appropriate to their business and its circumstances. The series title, “The Age of Sustainable Development”, is borrowed from the title of a book and on-line course by professor Jeffery Sachs. Dr. Sach’s book and course will provide much of the material for the posts that follow this one.

It is not accidental that this series of posts corresponds in time (December 2015) with U.N. sponsored meetings on Climate Change being held in Paris. Those meetings represent the latest zoomed out efforts at defining “Sustainable Development” in an operative sense.

Before we get to Dr. Sach’s book and the outcomes from the meetings in Paris, this post reprises and slightly updates an earlier post to this blog. Sustainable Development: An Oxymoron? offers a good starting point.


Sustainable Development: An Oxymoron?  (from 31 August 2011)

The publication of Rachel Carson’s Silent Spring in the 1960’s struck a nerve in Kennedy – era America. A national sense of outrage at abuse of the natural environment resonated with the protest climate of the time – the time of the Vietnam War protests and Civil Rights marches, among others. Greenpeace, perhaps the highest profile environmental activist group, has its roots in those times.

Patrick Moore was a founding member and later President of Greenpeace. In his book Confessions of a Greenpeace Dropout (terrible title), Dr. Moore recalls attending a global conference of environmental activists in Nairobi in 1982. Of course, all of the delegates at the conference championed immediate and dramatic action in defense of the environment. However, he noticed a difference in outlook between delegates from developed countries and those from developing countries. Those from developed countries wanted action, regardless of economic consequences. Delegates from developing countries, on the other hand, wanted a clean and safe world, along with economic development. There are around 7.2 billion people on this planet today. About half of those live on the equivalent of $2.00 a day or less. Yes, they want economic development.

Dr. Moore maintains that Sustainable Development – the idea that a safe, clean environment and economic development are not mutually exclusive – was born from that conference of environmentalists. Not long thereafter, it was recognized that humanity is part of nature; therefore improvement of the environment entails improvement in the condition of humanity. Dr. Moore emphasizes that connection when he credibly demonstrates that poverty is the worst single cause of environmental degradation.

For a manufacturer, Sustainable Development is a strategic approach, where economic development is pursued simultaneously with reduction in impact on natural systems and without exploitation of humanity. As development proceeds, “reduction in impact” and “without exploitation” both grow into positive improvements. In this sense, Sustainable Development is a course of action, while Sustainability is a state to be achieved.

So, Sustainable Development is definitely not an oxymoron. Serendipitously, it has become increasingly clear that the three elements of Sustainable Development – economic growth, environmental impact and humanity – can be mutually reinforcing when pursued systematically. A clear win-win-win.

The “Jera” in our name, Jera Sustainable Development, is that of a rune, part of a northern European system of writing from about the third century. Jera refers to the harvest, hence to beneficial outcomes earned through systematic actions sustained over time. Thus, our name evokes our mission: to be useful to manufacturers who choose to embrace Sustainable Development through systematic actions, sustained over time.


Chuck - Blue SweaterThoughtful comments and experience reports are always appreciated.

 

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

 

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.

Petroleum and Pragmatism – Part 2

Last week’s post, Part 1 of Petroleum and Pragmatism, offered a zoomed out view of petroleum consumption as it affects the U.S. and the world, today and for the next several years. This post, Part 2, zooms in on petroleum, greenhouse gases and, as a consequence, the continuing debate on climate change.

Petroleum and the Transportation Sector

Petroleum provided about 28% of the primary fuel consumed in the U.S. in 2013. The great majority (about 90%) of that was used in the transportation sector. Petroleum derived fuels, especially gasoline, diesel fuel and jet aircraft fuel, offer a combination of physical properties that are especially desirable for mobile applications.

AEO 2015 Fig 10The chart labeled “Figure 10” is from the Annual Energy Outlook – 2015, [1] published by the U.S. Government Department of Energy in April 2015. Figure 10 breaks out energy consumption by mode of transportation. As you can see, light-duty vehicles (cars and light trucks), heavy-duty vehicles (primarily heavy trucks) and aircraft, taken together, accounted for 88% of energy use in the transportation sector in 2013.

Please notice that projected percentages for 2040 indicate both a substantial reduction in energy consumption for light-duty vehicles and an increase in heavy-duty vehicle fuel consumption. Also notice that the total energy consumed by the transportation sector is almost unchanged between 2013 and 2040 (energy use equivalent to 13.8 million barrels of petroleum per day in 2013, declining only slightly to 13.5 million barrels per day in 2040).

Petroleum, Greenhouse Gases and Climate Change

Petroleum derived fuels are close to 100% hydrocarbons, so greenhouse gas emissions from petroleum derived fuels — mostly carbon dioxide (CO2) – are just about directly proportional to petroleum consumption. Greenhouse gases are regarded as the primary driver of the climate change and its negative effects, as projected for coming years. In order to abate the dangers associated with climate change, President Obama has proposed to reduce America’s total greenhouse gas emissions by 25% – 28% by 2028.

AEO 2015 Fig 37The chart labeled “Figure 37” indicates total greenhouse gas emissions by sector for 2005 and 2013, along with projections for 2025 and 2040. Clearly, the emissions from the Transportation sector will need to decline much more than Figure 37 indicates.

Here are some comments on the obvious discrepancy between the President’s proposal and the figures presented in the Annual Energy Outlook – 2015:

>> The projections presented in Figure 10 and Figure 37 reflect the Annual Energy Outlook’s Reference Case. The Reference Case extrapolates historical data in light of demographic projections, macroeconomic projections and regulations in place prior to publication. Anticipated technical breakthroughs and regulations not yet finalized are not considered in the Reference Case. As examples: (1) The Corporate Average Fuel Economy (CAFE) regulations for light-duty vehicles are included and timely compliance is assumed (roughly 5% decrease in fuel consumption per model year through model year 2025). (2) New heavy-duty vehicle fuel economy standards proposed for years following 2018 are not final, hence are not considered.

>> Most, if not all major light-duty vehicle manufacturers have included diesel engines in their CAFE standards compliance plans. Volkswagen’s recent emissions problem with diesel engines and France’s decision to de-emphasize diesel engines in light-duty vehicles cast doubts on the future market acceptance of diesel powered light-duty vehicles. [2]

>> Electric vehicles, hybrids and bio-fuel powered vehicles are the only practical and available alternatives to petroleum fueled light-duty vehicles that come to mind. Electric vehicles, like those offered by Nissan, BMW and Tesla, if manufactured and sold in sufficient numbers, would dramatically reduce greenhouse gas emissions. I personally don’t like hybrids – given an adequate recharging infrastructure, I don’t see any advantage compared to all electric vehicles. I’m also less than enthusiastic about bio-fuels for light-duty vehicles. Toyota has introduced a fuel-cell powered light-duty vehicle – I admire Toyota, but I have not seen much action toward the necessary refueling infrastructure.

>> For heavy-duty vehicles, natural gas is my first choice. Natural gas is significantly cleaner than diesel fuel, emits less greenhouse gas than diesel fuel, and is readily available from domestic sources. The necessary refueling infrastructure is increasing daily.

>> As everyone has noticed, the price of gasoline has dropped by almost half over the last year or so. The operating economics of vehicles using $2.10 per gallon gasoline are hard to match – or even approach — with any other practical and available technology.

The advent of “fracking”, the migration of some non-transportation uses to natural gas and the discovery of new and extensive petroleum sources financed through years of high petroleum prices are all conspiring to keep petroleum prices low for the reasonably foreseeable future.

At the same time, cheap gasoline can be expected to motivate buyers to choose larger, more fuel hungry vehicles. Cheap gasoline can be expected to encourage people to drive more. Additionally, cheap gasoline can be expected to promote demand for more vehicles.

All of this means more greenhouse gas emissions, not less.

For Smaller Manufacturers

Look for several years of cheap petroleum products. If you have made greenhouse gas emissions reduction commitments, take another look at how those reductions will be accomplished.


Chuck - Vancouver3Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] The Annual Energy Outlook – 2015 is available for free download at www.eia.gov

[2] For more on VW, France and diesel engines see The Diesel Dilemma, this blog, http://jerasustainabledevelopment.com/2015/10/10/the-diesel-dilemma/

 

Pragmatics and the Paris Pacts

Efforts toward a global agreement to limit greenhouse gas emissions, hence to forestall climate change, will come to a climax in Paris a few weeks from now. Groping Toward Paris, an essay to this blog from February 2015, outlined what is at issue. This post replays Groping Toward Paris and adds several comments of a pragmatic nature, representing my own personal views. – C.H.


Groping Toward Paris (from 7 February 2015) 

A Climate Climax

UN FlagOn 30 November 2015, delegates from about 200 nations will convene in Paris, including many Heads of State and Heads of Government. Parties to the United Nations Framework Convention on Climate Change will meet for 12 days in an attempt to finalize two closely related international agreements:

(1) Conclude a comprehensive agreement on reducing carbon dioxide (CO2) and other greenhouse gas (GHG) emissions sufficiently to hold global temperature increase below 2oC, compared to pre-industrial levels.

2) Establish a $100 billion Green Climate Fund to assist less developed nations to develop economically while coping with effects of climate change. [1]

About the CO2 Emissions Reduction Agreement

Parties to this agreement, especially the economically developed nations that emit the majority of the world’s CO2, are expected to propose national emissions reduction goals sometime this Spring. Those proposals, of course, will remain open to negotiation until a final agreement is concluded. There is an expectation that achieving national goals will be (somehow or another) legally binding. A working level meeting of delegates this week (8 – 13 February 2015) in Geneva is expected to produce a draft agreement, providing a framework for negotiations.

To date, the U.S. has proposed to reduce CO2 emissions levels by 26% – 28% by 2025, compared to 2005 levels. China has proposed to reach a peak in emissions levels by 2030, with reductions thereafter. The European Union has proposed national guidelines of 40% reduction by 2030, compared to 1990 levels. [2]

About the Green Climate Fund

The fund is intended to help less economically developed nations develop sustainably, while coping with effects of climate change. The expectation is that the fund will have $100 billion at its disposal, of which about $10 billion has been promised. The fund is to be administered and distributed under the direction of a Board established by the UNFCCC. [3]

What About It?

The entire matter of climate change is contentious and, unfortunately, highly politicized. In the U.S., any number of credible surveys [4] indicate that belief that human activities seriously threaten the global climate correlates highly with political views. People who profess views associated with the political left tend to regard climate change as a dire and immediate threat to humanity. Those who profess views associated with the political right tend to discount the matter as error or hysteria, if not outright fraud. Further, those polls indicate something less than half of Americans polled believe that human activities seriously threaten the global climate. On top of that, a clear minority of those polled regard climate change as an urgent public issue.

On a global scale, less economically developed nations tend to regard climate change as caused by past actions in the more economically developed nations. Since the developed nations caused the problem, in their view, they should solve it. Further, nations that rely on export of fossil fuels – especially petroleum – for a significant part of their national GDP are understandably less than enthusiastic about an international pact that is clearly detrimental to their economies. In addition to the Middle Eastern nations, Russia, Nigeria, Venezuela and Angola come quickly to mind.

What’s Next?

Diametrically opposed views on climate change are likely to precipitate lots of global political maneuvering and media bombast. In this country, the President and the Congress are, in my view, unlikely to find any meaningful common ground. Globally, nations are likely to watch each other, each waiting for others to make the serious concessions.

In the end, I do think that some sort of agreement will be reached. I doubt that such an agreement will even promise – let alone deliver – the emissions reductions projected as necessary to hold global warming to 2oC, which is the stated objective of the entire UNFCCC process.

What should a smaller manufacturer do? Continue to act in a pragmatic manner. Continue to reduce materials requirements. Continue to improve energy utilization efficiencies. Continue to produce the innovative products, processes and business models that make a business competitive in this globalized economy. In the end, American (and global) manufacturing doesn’t really need a government – driven international agreement. Manufacturing firms need to recognize and address, jointly and severally, the Sustainability of their own businesses.


Comments Added 31 October 2015

>> Events since Groping Toward Paris was published early last February have proceeded pretty much as outlined. The media has relentlessly expounded on the urgency of taking actions to prevent climate change. Much – but not all – of the ceaseless climate change reporting is drivel at best, P. T. Barnum-esque at worst. And I expect that the media’s shrillness and intensity will increase even further during November.

>> The prospect of climate change is not nonsense – or fraud, as some contend. The basic physics behind concern about greenhouse gases is sound. However, the computer model projections of specific effects within specified time spans are tenuous. Earth’s climate is an extraordinarily complex system. It is an immense task to model all of components of such a system – the known knowns, the known unknowns and the unknown unknowns – as well as getting all of the relationships, dependencies, sequences and initial values right.

As Niels Bohr put it, “Prediction is very difficult, especially if it’s about the future”.[5]

>> Given that significant global climate change may occur within this century, it is useful to consider what priority pre-emptive actions should have. As those of us who are over 15 years old have experienced, a whole lot of bad stuff can happen in a century. As examples, how should the pre-emptive actions concerning climate change be prioritized compared to: (1) Global economic depression, like or worse than the one that occurred in the 1930’s or the one that almost occurred in 2008? (2) Global war, like the two that happened within the last century, this time with 21st century weapons? (3) Global epidemic, like several in the 20th century and like the recent Ebola scare could have become? (Several more possible calamities, each comparable to climate change in its potential consequences and its probability of occurrence, come quickly to mind. These three are enough to make the point.)

>> The pacts to be finalized in Paris are to replace the Kyoto Accords. Most nations eventually signed the Kyoto Accords. The U.S. did not. Most nations did not even come close to reducing their CO2 emissions. The U.S. did significantly reduce its CO2 emissions. Nations are sovereign entities – they do as their interests and internal pragmatics dictate from time to time, sincere intentions to the contrary notwithstanding.

In my view, the level of human generated CO2 in the global atmosphere at the end of this century will be determined by the interests and internal concerns of about 200 nations, conditioned by everything else that happens over the next 85 years.

Each of us is entitled to their own views.

Chuck & Joan in ParisThoughtful comments are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.

UN flag image: © Friziofriziofrizio | Dreamstime.comUn United Nations Flag Photo


[1] Learn more on these issues at the UNFCCC website: http://unfccc.int/2860.php

[2] For more detail, see: http://www.rtcc.org/2015/01/30/pressure-on-to-finish-draft-paris-climate-deal-in-february/

[3] For more on the Green Fund, see: www.gcfund.org

[4] Example polls from the Pew Trust and from the Gallup organization: http://www.people-press.org/2014/06/26/section-7-global-warming-environment-and-energy/http://www.gallup.com/poll/167843/climate-change-not-top-worry.aspx, and  http://www.people-press.org/2015/01/15/publics-policy-priorities-reflect-changing-conditions-at-home-and-abroad/

[5]  http://www.brainyquote.com/quotes/quotes/n/nielsbohr130288.html

 

Profiting Through Decarbonization

The Problem in Paris

Groping Toward Paris, [1] an essay from last winter, discussed prospects for finalizing a global agreement for carbon dioxide (CO2) and other greenhouse gas (GHG) emissions, to be finalized in Paris late this year. Primary emphasis is placed on drastically reducing the use of hydrocarbons as fuels. To date, about 50 nations – most of the developed world — have proposed GHG emissions reductions over a range of coming decades.

With four months to go until the Paris meeting, it is clear that emissions reductions currently proposed will not be even close to sufficient to achieve the key goal for this agreement: to achieve GHG emissions reduction sufficient to hold peak global temperature increase to 2 oC maximum. It is reasonable to expect that leaders, especially leaders of developed nations, will be pressured to increase their nation’s emissions reduction commitments. Of course, each leader is constrained by political and practical realities in doing so. (A Carbon Conundrum, [2] a recent essay to this blog, discusses one such reality).

Further, experience from the Kyoto Protocol, an earlier global agreement on GHG emissions reductions, suggests that actual emissions reductions may be considerably smaller than those promised. In summary, it appears that reductions from any GHG emissions agreement likely to be achieved at the Paris meeting this year will be insufficient to limit peak global temperature increase to 2 oC.

The Carbon Cycle

There is a more comprehensive way to think about this. Mean global temperature is affected by the mean concentration of CO2 in the atmosphere. CO2 enters the atmosphere primarily as a result of oxidation – the respiration of animals and people, as well as the combustion of carbon – based fuels, especially coal and petroleum. Since CO2 is somewhat heavier than air, CO2 in the atmosphere tends to sink toward the ground, where, as you learned in the 4th grade, plants convert CO2 into carbohydrates (sugars) by photosynthesis, emitting oxygen while doing so. The carbohydrates react by physical and biological reactions to form various biomasses, some of which, over time, become part of the earth’s crust (coal, for example).

The Intergovernmental Panel on Climate Change says that a stabilizing atmospheric CO2 concentration at between 350 and 440 parts per million will suffice to limit global warming. That stabilization can be achieved by limiting CO2 emissions into the atmosphere, by expediting the removal of CO2 from the atmosphere, or by some combination of both. The prospects for GHG emissions abatement being as they are, the expedited CO2 removal part of the carbon cycle deserves more attention than it has received to date.

There are lots of ways to expedite removal of CO2 from the atmosphere, including natural (like increasing forests), biological (such as bio-fuels and photosynthetic processes), and thermo- or electro-chemical approaches. Any or all of these can help to some extent or another. However, all are constrained to some degree by costs, available space, scalability, disposition of recovered CO2 or other concerns. There is currently no readily available “silver bullet” method to remove CO2 from the atmosphere in gigaton quantities without losing money in doing so. [3]

For Smaller Manufacturers

The carbon cycle presents concerns as well as opportunities for smaller manufacturers.

One of those concerns is a rising chorus for applying a price to GHG emissions, in order to force their reduction. This might be a “cap and trade” scheme or a straight – forward tax. Either way, a price on carbon means additional cost for smaller manufacturers.

Opportunities may be present in developing new products, processes and possibly entire industries that remove CO2 from the atmosphere and put it to profitable use. There may be possibilities “inside the box” as well as “outside the box”. All of us have thought about profiting through reducing CO2 emissions. Few have given much thought to profiting through recovering CO2 from the air. There is a lot of room for imagination and innovation.

Chuck and Joan - Paris low resThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This essay and 200+ more are available at www.JeraSustainableDevelopment.com are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. Fresh essays are published weekly.


[1] Groping Toward Paris http://jerasustainabledevelopment.com/2015/02/07/groping-toward-paris/

[2] A Carbon Conundrum http://jerasustainabledevelopment.com/2015/06/20/a-carbon-conundrum/

[3] For an extensive look at current technologies for carbon capture, see K. S. Lackner et al, The Urgency of the Development of CO2 Capture from Ambient Air, available at: http://www.columbia.edu/~ap2622/pdf/PNAS%20paper%20on%20CO2%20air%20capture.pdf

A Carbon Conundrum

Climate and Controversy

Just about everyone knows that a global agreement on “greenhouse gas” (GHG) emissions reductions is to be finalized at a meeting in Paris next November. “Greenhouse gases”, principally carbon dioxide (CO2), are associated with Global Warming, hence Climate Change. In anticipation of the Paris meeting, President Obama has proposed that the U.S. reduce ‘greenhouse gas” emissions by 26% – 28% compared to 2005 levels by 2025. The President will likely be pressed to increase that proposal before or at the meeting in Paris.[1]

The Energy Information Administration, a unit of the U.S. Government, recently published the Annual Energy Outlook 2015 (AEO 2015), which compiles information pertaining to energy and projects that information into the future. AEO 2015’s projections are based on a “Reference Case”. The Reference Case essentially extrapolates present trends into the future. Future changes required by existing legislation are included. The possible effects of future legislation and technological innovations are not included.[2]

Miller’s Analysis

The problem is that AEO 2015’s forecast on greenhouse gas emissions does support the President’s proposal. John Miller, a consultant in the energy field, has compared the AEO 2015’s Reference Case projections with the President’s proposal in a post entitled Can Obama’s Proposal to Reduce GHG Total Emissions by 26% be Achieved? [3]

Miller’s straight-forward reading of the AEO 2015’s Reference Case projections is that GHG’s will reduce by about 8% in 2025, compared to 2005. When Miller adds in the not yet finalized EPA requirement that electric power generation reduce CO2 emissions by 30% in 2030 compared to 2005, the projected reduction increases from 8% to 13%. 13%, however, is still only half of the reduction the President has already proposed.

Miller’s conclusion to the question his title poses – can Obama’s proposal to reduce GHG total missions by 26% be achieved? — is “highly improbable”.

Then What?

 “Prediction is very difficult, especially if it’s about the future” — Niels Bohr

Rational projections that indicate that you are short by half are certainly daunting. But daunting isn’t the same as impossible. And predictions aren’t always right.

As Miller points out, the obvious next question is “how to get to 26% reduction by 2025?” Here are some thoughts, some more daunting, some less so:

>> Electric power producers will likely close older coal fired power plants in response to the EPA mandate-in-process to reduce CO2 emissions by 30%. Closing those plants will certainly reduce emissions. However, it will also reduce power generation capacity. At least some of that generating capacity will need to be replaced. Any CO2 emissions from the replacements – substituting new natural gas fired capacity for old coal fired capacity, for example — will to need be netted against reductions.

>> When Technology Goes Viral,[4] a recent essay posted to this blog, discussed technologies that experience exponential growth. Exponential growth over a decade (say, 2015 – 2025) can make a huge difference. Consider cell phones, for example.

Distributed photovoltaic solar energy generation may well prove to be experiencing exponential growth. When technologies do go exponential, contingent technologies often are swept along. In the case of photovoltaic solar energy, the battery technology (capabilities and cost reductions) appear to be developing apace.

There are other technologies that may also emerge over the coming decade, advanced nuclear and next generation biofuels, for example. There is a lot of really interesting technology in development right now.

>> The Empires Strike Back, another recent essay, discusses resistance to innovations as they confront establish technologies, organizations and ideas.[5] For example, the City of Las Angeles has refused to purchase power from a new utility scale photovoltaic project in the Mojave Desert. Reason: environmentalists object because the migration route of a small herd of mountain sheep may be compromised. Right or wrong, urgent or not, resistance is to be expected – and difficult to overcome.

>> The public discussion on GHG emissions almost never includes decarbonization. Decarbonization refers to technologies that remove GHGs from the atmosphere and return it to the soil – trees, for example. Large scale photosynthesis of fuels and industrial feedstocks from atmospheric CO2 just might happen.

>> Smaller manufacturers should keep in mind that change means new opportunities. Watch for them.

Chuck, Joan and CatThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about prospering in the globalized 21st century … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] See Groping Toward Paris: http://jerasustainabledevelopment.com/2015/02/07/groping-toward-paris/

[2] The Annual Energy Outlook 2015 is available for download at www.eia.gov

[3] See John Miller’s essay at: http://theenergycollective.com/jemillerep/2232821/can-president-obama-s-proposal-reduce-total-us-ghg-emissions-26-2005-2025-be-achi

[4] See When Technology Goes Viral: http://jerasustainabledevelopment.com/2015/05/23/when-technology-goes-viral/

[5] See The Empires Strike Back: http://jerasustainabledevelopment.com/2015/06/06/the-empires-strike-back/