Wednesday, 3 September 2008
Refashioned: from airline cast-off to eco-accessory
Published Date: 03 September 2008
By ALASTAIR DALTON
TRANSPORT CORRESPONDENT
THEY started life as aircraft seat covers, bicycle tyre inner tubes and car seat belts – but have been reborn as bags and shoes.
Humble components from the transport industry are being recycled into fashion accessories to reduce their contribution to landfill.Worn-out army kitbags have also been pressed into new service, along with tents abandoned by festival-goers leaving Glastonbury.David Cameron, the Conservative leader, was among the most high-profile exponents of such eco-fashion when he sported a pair of trainers made from firefighters' clothing and car seats last year.Other trainers, made from tweed suits, have been worn by film and music stars such as Cate Blanchett and Fat Boy Slim.In the latest move, Virgin Atlantic is donating 1,000 used seat covers from its aircraft to be made into a range of the "ultimate eco It bags".Worn Again, an ethical clothing firm based in east London, will use the durable, fire-retardant seat fabric, seat belts from cars and bicycle inner tubes to make a range of handbags and washbags.Each bag has an "ingredients" label which lists the source of its components. They are available online and at some John Lewis branches.The Virgin Atlantic move is part of the airline's aim of halving waste from its aircraft by 2012.The airline replaces its seat covers and curtains every two years, and previously donated them to charities such as animal groups for bedding and heritage railways for cleaning rags.Environmental and ethical campaigners gave the move a cautious welcome, but urged consumers to check firms' green claims.A spokesman for Friends of the Earth Scotland said: "Ethical fashion is mushrooming, with a sustainable textiles course being launched at Goldsmiths College in London. "However, it is worth researching firms before buying their products to check for 'greenwash' in their claims."Martin Hearson, of Labour Behind the Label, the UK arm of the international Clean Clothes Campaign, which aims to improve conditions in the garment industry, said: "Consumers need to be aware that what's good for the environment may not be good for workers. There could be problems wherever firms move their factories."Worn Again has been criticised for working conditions in its factory in China, where Mr Cameron's trainers were made. However, the firm said it was transferring production to Portugal, where the seat-cover bags will be made. It hopes to open a factory in Britain in three years.To minimise transport, the seat belts and inner tubes are culled from Portuguese scrapyards. The seat covers will be transported by land.Cyndi Rhoades, director of Worn Again, said the company had approached Virgin Atlantic because of its reputation for being "at the forefront of change". She said the firm had also been in contact with other Virgin Group companies and another airline, which she declined to name.She said: "We're pleased to be partnering with such a pioneering global brand as Virgin Atlantic at a time when environmental issues are at the top of corporate agendas."For us, it is a great opportunity to offer a design-led and innovative solution to waste, with the end product being the ultimate 'eco It bag'." Lysette Gauna, the airline's creative director, said: "Virgin Atlantic is committed to taking practical steps to make sure its business is as sustainable as possible. "From investing in new technologies to lobbying the aircraft manufacturers through to championing new ideas, we believe actions speak louder than words."This is a fun and creative way to recycle our waste
Dairy farmers raise green standard
Published Date: 03 September 2008
By Andrew Arbuckle
BRITAIN'S dairy industry has recently been on the receiving end of criticism over its impact on the environment.
The dairy cow is widely blamed for contributing to the rise in greenhouse gases as she contentedly emits gas from both ends after chewing the cud. Lagoons of slurry produced by large dairy herds have also aroused hostility.Yesterday the industry fought back on these and other issues affecting the public view of milk production.Jim Begg, director-general of Dairy UK, launched a drive to raise awareness of the sector's environmental progress.Speaking at Sorbie Farm, near Ardrossan, Ayrshire, he stated that there had already been massive improvements."We are aware that we have to be in line with what our customers want and we do not want the government to impose regulations on us," he claimed.He instanced research work being carried out that would, in the medium term, see a 20 per cent cut in emissions of methane gas by the ruminating cow. This, he said, could be achieved through improved knowledge of the animal's diet. The event's host, Alan Hogarth, who keeps 250 dairy cows at Sorbie Farm, is pioneering the use of an anaerobic digester to produce energy from the slurry they create.The gas produced on his farm amounts to 85,000 cubic metres a year and this is the equivalent of 170,000 kilowatt-hours. The gas is burned to produce electricity and heating for his farm, his home and a new milk processing and bottling operation.Slurry remaining after the gas extraction does not smell and cows can graze less than two weeks after it has been applied. But perhaps the best bonus for Hogarth is that, despite the cost of fertiliser rocketing in the past year, his own expenditure on bought-in fertiliser has fallen by 15 per cent in the period.So far, the green energy produced on the farm is used entirely on site but Hogarth believes the government is falling behind practice in Europe, where energy produced from renewable projects yields higher payments than conventionally produced energy.His own plant was funded by the former Scottish Executive as part of a plan to reduce pollution on the beaches in nearby Ardrossan. These beaches have now been awarded blue flag status and Hogarth will shortly take over ownership of the digester.Plans at his farm are to further improve his green policies with the expansion of a milk round that he started in May.Running counter to national trends, where a larger and larger percentage of milk is traded by the major supermarkets, Hogarth, believes there is a real niche for milk delivered on the doorstep.Response has been good from the 400 households already supplied and he said customers were really keen on locally sourced milk, delivered in the traditional glass bottle and coming to the door via a small electric float. "We have a niche market and people who are getting my milk are now buying more per head than they used to. We wondered about using plastic bottles and we do use some for the retail market but the householder wants the recyclable glass bottle," he states.Collecting cash on the round is not the burden it once was. A quarter of customers pay through internet banking, taking away a great deal of the hassle from the job. Hogarth's ambition is to push his direct sales up to delivering to more than 1,000 houses by the end of the year.
Saving trees first in the fight to reduce emissions need not cost the earth
By Simon Wolfson
Last Updated: 6:12am BST 03/09/2008
Policy-makers are under constant pressure to reduce greenhouse gas emissions. Yet they overlook the cheapest methods of reducing emissions and persist with environmental measures that have little or no benefit.
For example, every year developed countries spend £7.5bn on bio-fuel subsidies that actually increase net emissions and put upward pressure on food prices.
If this money were spent on preventing deforestation and peatland destruction, it could cut carbon emissions worldwide by a fifth. It is common knowledge that forests and peatlands act as carbon stores, and that when they are destroyed they release vast quantities of greenhouse gases.
Few understand the scale of these emissions, but they account for 20pc of all global emissions - more than the world's entire transport industry.
Despite this, government policy places no value on protecting global forests and peatlands - they are not included in the European Union's Emissions Trading Scheme and are seriously neglected by the UN Kyoto protocol.
The economics of avoided deforestation is staggering. According to the latest report from the think-tank Policy Exchange, The Root of the Matter: Carbon Sequestration in Forests and Peatlands*, the cost of preventing peatland destruction can be as little as 10 cents (6p) per tonne of carbon saved.
As can be seen from the table, this compares with the $146 per tonne of CO2 saved through the use of nuclear energy and up to $292 per tonne for UK biofuel subsidies under the Renewable Transport Fuel Obligation.
This table shows just how expensive current policies designed to tackle climate change are. The Government has a responsibility to reduce emissions in the most cost-effective ways possible, but this clearly is not happening.
According to the Government, environmental taxes cost the average household £1,417 a year. It makes sense then, especially at a time when there is so much pressure on public finances, for Whitehall to spend our "green" budget as wisely as it can.
It is not surprising that public trust in environmental taxes is at a low, when our taxes are spent so ineffectively. It sometimes seems that policy-makers are more interested in a pick and mix of crowd-pleasing measures than in an earnest attempt to cut emissions.
But the need for environmental measures to be economically responsible goes beyond the question of domestic taxation.
The developing world may simply not accept the burden of over-priced environmentalism, particularly at a time when their economy is slowing and the price of food is rising.
They will conclude (probably rightly) that the costs of adapting to future climate change are far lower than the present costs of fighting it - after all, as yet there is no guarantee that reducing emissions will actually mitigate global warming.
In a world where there are more environmental projects than can possibly be funded, it is vital that we allocate capital to those that achieve the highest return.
Avoiding deforestation and peatland destruction is cheap and can be implemented without huge investment in new technology. It has numerous other local environmental benefits, and would provide developing nations with a valuable source of income.
Some believe that it makes no difference which measures are used first, because the more expensive means of reducing carbon emissions will have to be deployed at some time. They have failed to appreciate the time value of money.
Incurring the lowest costs first can dramatically reduce the net present cost of tackling global warming, and in doing so it will significantly increase our chances of success.
Of course, forestry and peatlands alone cannot be a solution to climate change, but it should be our first port of call and not the last.
Simon Wolfson is chief executive of Next
Last Updated: 6:12am BST 03/09/2008
Policy-makers are under constant pressure to reduce greenhouse gas emissions. Yet they overlook the cheapest methods of reducing emissions and persist with environmental measures that have little or no benefit.
For example, every year developed countries spend £7.5bn on bio-fuel subsidies that actually increase net emissions and put upward pressure on food prices.
If this money were spent on preventing deforestation and peatland destruction, it could cut carbon emissions worldwide by a fifth. It is common knowledge that forests and peatlands act as carbon stores, and that when they are destroyed they release vast quantities of greenhouse gases.
Few understand the scale of these emissions, but they account for 20pc of all global emissions - more than the world's entire transport industry.
Despite this, government policy places no value on protecting global forests and peatlands - they are not included in the European Union's Emissions Trading Scheme and are seriously neglected by the UN Kyoto protocol.
The economics of avoided deforestation is staggering. According to the latest report from the think-tank Policy Exchange, The Root of the Matter: Carbon Sequestration in Forests and Peatlands*, the cost of preventing peatland destruction can be as little as 10 cents (6p) per tonne of carbon saved.
As can be seen from the table, this compares with the $146 per tonne of CO2 saved through the use of nuclear energy and up to $292 per tonne for UK biofuel subsidies under the Renewable Transport Fuel Obligation.
This table shows just how expensive current policies designed to tackle climate change are. The Government has a responsibility to reduce emissions in the most cost-effective ways possible, but this clearly is not happening.
According to the Government, environmental taxes cost the average household £1,417 a year. It makes sense then, especially at a time when there is so much pressure on public finances, for Whitehall to spend our "green" budget as wisely as it can.
It is not surprising that public trust in environmental taxes is at a low, when our taxes are spent so ineffectively. It sometimes seems that policy-makers are more interested in a pick and mix of crowd-pleasing measures than in an earnest attempt to cut emissions.
But the need for environmental measures to be economically responsible goes beyond the question of domestic taxation.
The developing world may simply not accept the burden of over-priced environmentalism, particularly at a time when their economy is slowing and the price of food is rising.
They will conclude (probably rightly) that the costs of adapting to future climate change are far lower than the present costs of fighting it - after all, as yet there is no guarantee that reducing emissions will actually mitigate global warming.
In a world where there are more environmental projects than can possibly be funded, it is vital that we allocate capital to those that achieve the highest return.
Avoiding deforestation and peatland destruction is cheap and can be implemented without huge investment in new technology. It has numerous other local environmental benefits, and would provide developing nations with a valuable source of income.
Some believe that it makes no difference which measures are used first, because the more expensive means of reducing carbon emissions will have to be deployed at some time. They have failed to appreciate the time value of money.
Incurring the lowest costs first can dramatically reduce the net present cost of tackling global warming, and in doing so it will significantly increase our chances of success.
Of course, forestry and peatlands alone cannot be a solution to climate change, but it should be our first port of call and not the last.
Simon Wolfson is chief executive of Next
Kingsnorth protest: Activists to use climate change as defence for £30,000 tower damage
· Stunt was attempt to stop loss of lives, accused to say · Greenpeace will call academics as witnesses
John Vidal, environment editor
The Guardian,
Tuesday September 2 2008
Greenpeace climate change activists who scaled one of Britain's tallest power station chimneys, causing £30,000 damage, were accused in court yesterday of crossing the line of acceptable protest.
Five activists, with food and water to stay four days, climbed the 200-metre chimney at Kingsnorth coal-fired power station near Hoo, Kent, last October. They had planned to daub "Gordon, bin it" on the outside of the chimney, but only got as far as painting the name "Gordon" before they came down after 30 hours, a jury at Maidstone crown court heard yesterday.
Huw Williams, 41, from Nottingham; Ben Stewart, 34, from Lyminge, Kent; Kevin Drake, 44, from Westbury, Wiltshire; Will Rose, 29, from London; and Emily Hall, 34, from New Zealand are all charged with criminal damage to the chimney. Tim Hewke, 48, from Ulcombe, Kent, who the prosecution says helped organise the protest from the ground, is also charged with criminal damage. None of them deny causing the damage and they also accept the estimated costs of repairing the damage.
The legality of causing the damage in the first place would be the central issue of the case, said John Price, prosecuting. "These defendants maintain that they had a lawful excuse for damaging the chimney for the protection of other property. Other property, you will hear, in Kent and all around the world. Property said to be at the risk of more serious damage threatened by climate change which is caused by the substantial increase in greenhouse gases of which it is said coal-burning power stations make a large contribution."
But he said the acts committed by the protesters were "not capable of being lawful". He told the jury of nine men and three women that the case was not a prosecution of free speech or legitimate political protest but a prosecution for crossing the line of acceptable protest.
"There are things you can lawfully do in making a protest, but there's a line which has to be drawn," he said.
The activists, who begin their defence today, are expected to argue that they acted to prevent lives being lost and damage being done to properties around the world by global warming. It will be the first time that such a climate change defence has been used in a British court.
The environment group is expected to call leading international climate change academics, researchers and environmentalists as witnesses.
Greenpeace was in a similar situation in 1999 when Lord Melchett, its director at the time, along with others destroyed a field of GM crops in Norfolk. They said in court they were acting to prevent wider environmental damage. The not guilty verdict sent a message to environmental activists that they would not necessarily be punished under the law if they caused damage to property.
The case, which is expected to run a further five days, has extra significance because of public opposition to Kingsnorth power station, and many people have pledged to disobey the law if a coal-fired station is built. More than 2,500 people demonstrated against it last month.
Gordon Brown is expected to give approval to Kingsnorth in the next few months, making it the first new coal-fired station for 30 years. The case continues.
John Vidal, environment editor
The Guardian,
Tuesday September 2 2008
Greenpeace climate change activists who scaled one of Britain's tallest power station chimneys, causing £30,000 damage, were accused in court yesterday of crossing the line of acceptable protest.
Five activists, with food and water to stay four days, climbed the 200-metre chimney at Kingsnorth coal-fired power station near Hoo, Kent, last October. They had planned to daub "Gordon, bin it" on the outside of the chimney, but only got as far as painting the name "Gordon" before they came down after 30 hours, a jury at Maidstone crown court heard yesterday.
Huw Williams, 41, from Nottingham; Ben Stewart, 34, from Lyminge, Kent; Kevin Drake, 44, from Westbury, Wiltshire; Will Rose, 29, from London; and Emily Hall, 34, from New Zealand are all charged with criminal damage to the chimney. Tim Hewke, 48, from Ulcombe, Kent, who the prosecution says helped organise the protest from the ground, is also charged with criminal damage. None of them deny causing the damage and they also accept the estimated costs of repairing the damage.
The legality of causing the damage in the first place would be the central issue of the case, said John Price, prosecuting. "These defendants maintain that they had a lawful excuse for damaging the chimney for the protection of other property. Other property, you will hear, in Kent and all around the world. Property said to be at the risk of more serious damage threatened by climate change which is caused by the substantial increase in greenhouse gases of which it is said coal-burning power stations make a large contribution."
But he said the acts committed by the protesters were "not capable of being lawful". He told the jury of nine men and three women that the case was not a prosecution of free speech or legitimate political protest but a prosecution for crossing the line of acceptable protest.
"There are things you can lawfully do in making a protest, but there's a line which has to be drawn," he said.
The activists, who begin their defence today, are expected to argue that they acted to prevent lives being lost and damage being done to properties around the world by global warming. It will be the first time that such a climate change defence has been used in a British court.
The environment group is expected to call leading international climate change academics, researchers and environmentalists as witnesses.
Greenpeace was in a similar situation in 1999 when Lord Melchett, its director at the time, along with others destroyed a field of GM crops in Norfolk. They said in court they were acting to prevent wider environmental damage. The not guilty verdict sent a message to environmental activists that they would not necessarily be punished under the law if they caused damage to property.
The case, which is expected to run a further five days, has extra significance because of public opposition to Kingsnorth power station, and many people have pledged to disobey the law if a coal-fired station is built. More than 2,500 people demonstrated against it last month.
Gordon Brown is expected to give approval to Kingsnorth in the next few months, making it the first new coal-fired station for 30 years. The case continues.
Tesco chief: 'We must go green'
Acting now to cut emissions makes perfect business sense, argues Sir Terry Leahy
Sir Terry Leahy
The Guardian,
Wednesday September 3 2008
All too often, politicians and businessmen have said to me: "You're a businessman, so surely you're opposed to the green agenda?" They think: "You cannot make a profit and go green." They think: "A consumer society cannot be a green society." And they believe that developing economies cannot afford to go green.
From my perspective, this is all muddled thinking. I fundamentally disagree, and say that if we want long-term growth, we must go green.
Why? Because only by acting now on cutting emissions will we save money in the future. For every £1 we spend now on tackling climate change, we are saving our children anywhere between £5 and £20 at today's value. Failure to act means risking economic and social disruption on the scale of the great wars and economic depression of the last century.
The means to tackle climate change does not just lie in the hands of politicians or regulators, the UN or the G8. If climate change is to be tackled successfully, we need a new framework in which governments, business and consumers each play their part.
This is not simply about dividing up responsibility between these groups, as though government is responsible for this, or business for that. I am not advocating a diminished role for government. The role of government in tackling climate change is vital. But it must be fulfilled in ways that meet the needs of our time.
Politicians are good at emphasising climate change as the greatest threat of the 21st century, but too often they fail to adapt to this new challenge 20th-century the tools of tax and regulation designed for high-carbon economies. If we are to move to a low-carbon economy, policies - such as tax and planning - must reward low-carbon activities and investment. And too often governments fail to harness the 21st-century power of consumers, incentives and markets, and bring these to bear on tackling climate change too.
You may be thinking: "Consumers - aren't they part of the problem, not the solution?" I see things differently. Consumers account directly and indirectly for 60% of carbon emissions. Get the consumer on side and the task of tackling climate change becomes possible.
Lifetime customer loyalty
I trust and listen to consumers. I believe in the power of consumers. Tesco's core purpose is to create value for customers to earn their lifetime loyalty. Customers tell us that they want to go green and do their bit to protect the environment. The challenge for us retailers is to help them do that.
Tesco is a global company: each week, over 30 million people shop in our stores around the world. To serve them, we employ 400,000 people. Then there are the countless people who work in firms and businesses, supplying our stores. Imagine if all those people acted to cut carbon emissions in all they did. This would be true collective action. The supply chain, and gradually the economy as a whole, would begin to turn green.
Business also has a crucial leadership role to play in empowering consumers, by overcoming barriers of price, incentivising customers to buy greener products, providing better information and innovating through new products and services.
If consumers are able to purchase lower-carbon products and services, they will reward the businesses that produce these products. This will encourage competition between businesses to produce more environmental alternatives to current products and services. It will stimulate the research and development to bring forward even better products. And we will begin to create a mass movement in green consumption.
So our strategy at Tesco falls into three parts. First, greening Tesco itself. Second, helping turn the supply chain green. And third, helping our customers by making green choices easier and more affordable.
To turn Tesco green and reduce our carbon footprint, we need to know which actions emit greenhouse gases and which don't. So we have measured our carbon footprint, which was 4.47m tonnes of CO2 equivalent for the entire Tesco Group in 2007. To cut this, we have set the entire group some clear targets, with 2006 as our baseline.
For example, we aim to halve emissions from our group's stores and distribution centres by 2020. To halve the carbon emissions from all new stores we build between now and 2020. To halve, by 2012, the amount of CO2 used in our distribution network to deliver a case of goods.
To achieve these goals, we've changed every aspect of how Tesco operates. We are saving energy in our stores - [by] hanging curtains on freezer doors, for example, and using better insulation, low-energy lighting and new refrigeration systems. In South Korea and Thailand, we are using ice thermal storage, and creating biogas from recycled waste. In China, we are installing energy management systems on the refrigeration in all of our existing stores this year, which will reduce the power consumption of these systems by 15%. Next year, we will expand this to include the air-conditioning.
We are reducing the number of empty trips our vans make by ensuring our vans - and our suppliers' vans - are fully loaded, and, in the UK, using our own train and canals to transport goods.
We are saving water. Next year, our Chinese business will begin rainwater harvesting and using grey water [non-industrial waste water] for things such as car washing and toilets. We're using energy-saving technology when we build new projects. In California, our distribution centre has one of the largest solar panel roofs in the US. We've set up a £100m sustainable technology fund to support low-carbon technologies such as wind, solar and ground source heat.
In Thailand, we aim to plant 9m trees by 2012: this alone will help reduce CO2 in the atmosphere by 9m tonnes over 40 years. And in the UK, we have invested £25m in the new Sustainable Consumption Institute, to research how we make the transition to a low-carbon economy, and the role that sustainable consumption can play in this. This will aim to contribute to the development of an internationally recognised carbon footprint methodology, and help us understand how customers read labels and respond to them. All the SCI's research will be released on an open source basis - published as soon as it becomes available, and accessible to all as soon as it is published. It will be led by Mohan Munasinghe, a leading scientist and economist, and vice-chair of the Intergovernmental Panel on Climate Change.
By the end of this year, our UK energy use per square foot will be half what it was in 2000. Last year, our group carbon intensity per square foot of sales space fell by 4.7%.
We are achieving this while Tesco grows. That's the critical point: the choice is not "green or grow". That is a false choice. You can do both - and you must do both. Reducing emissions does not merely fight climate change, it also cuts costs.
But a green Tesco is only one-third of our ambition. Just as important is greening the supply chain everywhere. In some ways, this is easier to achieve in the developing world. Old practices do not have to be changed. Instead, we can simply apply what we have learned elsewhere.
Just as some countries could leapfrog the laying of telephone lines and go straight to the mobile, digital age, there is no reason why, when we set up in developing countries, we cannot create new, green supply lines from scratch.
Meanwhile, we're developing a label that will tell customers the size of a product's carbon footprint. Armed with that information, they can begin to choose products with smaller footprints. This information revolution is beginning to gather pace worldwide.
Bumpy patch
People's values do not change simply because the economy is going through a bumpy patch. What does change is their ability to live up to those values. If the budget for the weekly shop becomes tighter, we need to be sure that going green is not seen as an expensive optional extra.
Take energy-saving lightbulbs. They don't just cut carbon but also cut fuel bills. So in the UK we have permanently halved their price. We've sold over 10m in the UK in just over a year, up from 2m the year before.
Or carrier bags. In the UK, in just two years, we have saved almost 2bn bags. In Poland, by providing a greater range of reusable bags, we have saved 400m.
If retailers help customers, customers will go green. The green agenda is not something that consumers only care about in the US and Europe. It is absurd to think that people in Bangkok, Seoul or Tokyo don't want a healthy and clean environment just as much as people in Budapest, Warsaw or Los Angeles.
Billions of purchases send a signal to cut carbon right down the supply chain and right through the economy. Each time a product is swiped through a checkout, that sale can reduce CO2 emissions. Each consumer who buys a green product is joining the mass movement in green consumption.
That movement is what we are seeking to create. A mass movement in green consumption - a movement that shows it is possible to consume, to be green, and to grow.
· Sir Terry Leahy is chief executive of Tesco. This is an edited extract of a speech he gave to the Coca-Cola Retail Research Council Global Forum, in Beijing, on August 22.
Sir Terry Leahy
The Guardian,
Wednesday September 3 2008
All too often, politicians and businessmen have said to me: "You're a businessman, so surely you're opposed to the green agenda?" They think: "You cannot make a profit and go green." They think: "A consumer society cannot be a green society." And they believe that developing economies cannot afford to go green.
From my perspective, this is all muddled thinking. I fundamentally disagree, and say that if we want long-term growth, we must go green.
Why? Because only by acting now on cutting emissions will we save money in the future. For every £1 we spend now on tackling climate change, we are saving our children anywhere between £5 and £20 at today's value. Failure to act means risking economic and social disruption on the scale of the great wars and economic depression of the last century.
The means to tackle climate change does not just lie in the hands of politicians or regulators, the UN or the G8. If climate change is to be tackled successfully, we need a new framework in which governments, business and consumers each play their part.
This is not simply about dividing up responsibility between these groups, as though government is responsible for this, or business for that. I am not advocating a diminished role for government. The role of government in tackling climate change is vital. But it must be fulfilled in ways that meet the needs of our time.
Politicians are good at emphasising climate change as the greatest threat of the 21st century, but too often they fail to adapt to this new challenge 20th-century the tools of tax and regulation designed for high-carbon economies. If we are to move to a low-carbon economy, policies - such as tax and planning - must reward low-carbon activities and investment. And too often governments fail to harness the 21st-century power of consumers, incentives and markets, and bring these to bear on tackling climate change too.
You may be thinking: "Consumers - aren't they part of the problem, not the solution?" I see things differently. Consumers account directly and indirectly for 60% of carbon emissions. Get the consumer on side and the task of tackling climate change becomes possible.
Lifetime customer loyalty
I trust and listen to consumers. I believe in the power of consumers. Tesco's core purpose is to create value for customers to earn their lifetime loyalty. Customers tell us that they want to go green and do their bit to protect the environment. The challenge for us retailers is to help them do that.
Tesco is a global company: each week, over 30 million people shop in our stores around the world. To serve them, we employ 400,000 people. Then there are the countless people who work in firms and businesses, supplying our stores. Imagine if all those people acted to cut carbon emissions in all they did. This would be true collective action. The supply chain, and gradually the economy as a whole, would begin to turn green.
Business also has a crucial leadership role to play in empowering consumers, by overcoming barriers of price, incentivising customers to buy greener products, providing better information and innovating through new products and services.
If consumers are able to purchase lower-carbon products and services, they will reward the businesses that produce these products. This will encourage competition between businesses to produce more environmental alternatives to current products and services. It will stimulate the research and development to bring forward even better products. And we will begin to create a mass movement in green consumption.
So our strategy at Tesco falls into three parts. First, greening Tesco itself. Second, helping turn the supply chain green. And third, helping our customers by making green choices easier and more affordable.
To turn Tesco green and reduce our carbon footprint, we need to know which actions emit greenhouse gases and which don't. So we have measured our carbon footprint, which was 4.47m tonnes of CO2 equivalent for the entire Tesco Group in 2007. To cut this, we have set the entire group some clear targets, with 2006 as our baseline.
For example, we aim to halve emissions from our group's stores and distribution centres by 2020. To halve the carbon emissions from all new stores we build between now and 2020. To halve, by 2012, the amount of CO2 used in our distribution network to deliver a case of goods.
To achieve these goals, we've changed every aspect of how Tesco operates. We are saving energy in our stores - [by] hanging curtains on freezer doors, for example, and using better insulation, low-energy lighting and new refrigeration systems. In South Korea and Thailand, we are using ice thermal storage, and creating biogas from recycled waste. In China, we are installing energy management systems on the refrigeration in all of our existing stores this year, which will reduce the power consumption of these systems by 15%. Next year, we will expand this to include the air-conditioning.
We are reducing the number of empty trips our vans make by ensuring our vans - and our suppliers' vans - are fully loaded, and, in the UK, using our own train and canals to transport goods.
We are saving water. Next year, our Chinese business will begin rainwater harvesting and using grey water [non-industrial waste water] for things such as car washing and toilets. We're using energy-saving technology when we build new projects. In California, our distribution centre has one of the largest solar panel roofs in the US. We've set up a £100m sustainable technology fund to support low-carbon technologies such as wind, solar and ground source heat.
In Thailand, we aim to plant 9m trees by 2012: this alone will help reduce CO2 in the atmosphere by 9m tonnes over 40 years. And in the UK, we have invested £25m in the new Sustainable Consumption Institute, to research how we make the transition to a low-carbon economy, and the role that sustainable consumption can play in this. This will aim to contribute to the development of an internationally recognised carbon footprint methodology, and help us understand how customers read labels and respond to them. All the SCI's research will be released on an open source basis - published as soon as it becomes available, and accessible to all as soon as it is published. It will be led by Mohan Munasinghe, a leading scientist and economist, and vice-chair of the Intergovernmental Panel on Climate Change.
By the end of this year, our UK energy use per square foot will be half what it was in 2000. Last year, our group carbon intensity per square foot of sales space fell by 4.7%.
We are achieving this while Tesco grows. That's the critical point: the choice is not "green or grow". That is a false choice. You can do both - and you must do both. Reducing emissions does not merely fight climate change, it also cuts costs.
But a green Tesco is only one-third of our ambition. Just as important is greening the supply chain everywhere. In some ways, this is easier to achieve in the developing world. Old practices do not have to be changed. Instead, we can simply apply what we have learned elsewhere.
Just as some countries could leapfrog the laying of telephone lines and go straight to the mobile, digital age, there is no reason why, when we set up in developing countries, we cannot create new, green supply lines from scratch.
Meanwhile, we're developing a label that will tell customers the size of a product's carbon footprint. Armed with that information, they can begin to choose products with smaller footprints. This information revolution is beginning to gather pace worldwide.
Bumpy patch
People's values do not change simply because the economy is going through a bumpy patch. What does change is their ability to live up to those values. If the budget for the weekly shop becomes tighter, we need to be sure that going green is not seen as an expensive optional extra.
Take energy-saving lightbulbs. They don't just cut carbon but also cut fuel bills. So in the UK we have permanently halved their price. We've sold over 10m in the UK in just over a year, up from 2m the year before.
Or carrier bags. In the UK, in just two years, we have saved almost 2bn bags. In Poland, by providing a greater range of reusable bags, we have saved 400m.
If retailers help customers, customers will go green. The green agenda is not something that consumers only care about in the US and Europe. It is absurd to think that people in Bangkok, Seoul or Tokyo don't want a healthy and clean environment just as much as people in Budapest, Warsaw or Los Angeles.
Billions of purchases send a signal to cut carbon right down the supply chain and right through the economy. Each time a product is swiped through a checkout, that sale can reduce CO2 emissions. Each consumer who buys a green product is joining the mass movement in green consumption.
That movement is what we are seeking to create. A mass movement in green consumption - a movement that shows it is possible to consume, to be green, and to grow.
· Sir Terry Leahy is chief executive of Tesco. This is an edited extract of a speech he gave to the Coca-Cola Retail Research Council Global Forum, in Beijing, on August 22.
Focus on green offices wanes
By Daniel Thomas, Property Correspondent
Published: September 3 2008 03:00
Environmental concerns such as energy efficiency have been pushed to the bottom of the agenda for UK companies as cost becomes increasingly crucial in the more difficult economic climate.
Rental cost is the key factor in the decision to take office space in central London, with energy efficiency and green issues cited as the least important consideration, according to research by Knight Frank, the property consultancy.
During the recent property boom, much was made of the drive by developers for more energy-efficient schemes, which had been hoped to command higher rents because of their green credentials.
However, green issues are more of a concern in a benign economic climate, becoming a luxury as circumstances change, the research suggests.
"While the green agenda and sustainability issues are fundamental to the future of office buildings . . . as economic markets suffer such requirements become less of a priority to central London office occupiers," said Bradley Baker, head of central London for Knight Frank.
The survey gave the retention of key staff as the next most important factor.
Copyright The Financial Times Limited 2008
Published: September 3 2008 03:00
Environmental concerns such as energy efficiency have been pushed to the bottom of the agenda for UK companies as cost becomes increasingly crucial in the more difficult economic climate.
Rental cost is the key factor in the decision to take office space in central London, with energy efficiency and green issues cited as the least important consideration, according to research by Knight Frank, the property consultancy.
During the recent property boom, much was made of the drive by developers for more energy-efficient schemes, which had been hoped to command higher rents because of their green credentials.
However, green issues are more of a concern in a benign economic climate, becoming a luxury as circumstances change, the research suggests.
"While the green agenda and sustainability issues are fundamental to the future of office buildings . . . as economic markets suffer such requirements become less of a priority to central London office occupiers," said Bradley Baker, head of central London for Knight Frank.
The survey gave the retention of key staff as the next most important factor.
Copyright The Financial Times Limited 2008
In Germany, New-Car Registrations Decline
A WSJ NEWS ROUNDUPSeptember 3, 2008;
German new-car registrations in August dropped 10% from a year earlier, to around 214,400 vehicles, amid lackluster consumer confidence, said the German motor-vehicle department KBA.
Adjusted for the two fewer working days last month compared with a year earlier, new-car registrations were off at daily rate of 1.8%, continuing a streak of weak results in recent months. New-car registrations in the first eight months of the year reached 2.11 million, the KBA said. That is a 1.7% rise from 2007, when an increase in the value-added tax at the beginning of the year dented demand.
While significantly better than the performance in other Western European countries, such as Italy and Spain, the slight increase in year-to-date registrations was helped by a flattering comparison with last year, the German car market's worst year since reunification in late 1990.
"The decline in real net wages per capita is having a considerable effect on private car purchases," said Volker Lange, the president of the Association of International Motor Vehicle Manufacturers, or VDIK. The lobbying group called on the German government to help support the industry by aiding consumers to buy newer, more fuel-efficient cars.
Average carbon-dioxide emissions of the newly registered vehicles edged down to 163 grams per kilometer from an average of 166 g/km in the first six months, said the KBA. For the first time, the department registered new passenger cars fulfilling the European Union's strictest emission standards. However, at just 610 vehicles, they remained a small fraction of those that only met the lower emission norms.
On Monday, Italy reported a 26% drop in new-car sales for August, while Spain suffered a 41% plunge. Despite a government incentive plan, France watched its new-car market slide 7.1%.
German new-car registrations in August dropped 10% from a year earlier, to around 214,400 vehicles, amid lackluster consumer confidence, said the German motor-vehicle department KBA.
Adjusted for the two fewer working days last month compared with a year earlier, new-car registrations were off at daily rate of 1.8%, continuing a streak of weak results in recent months. New-car registrations in the first eight months of the year reached 2.11 million, the KBA said. That is a 1.7% rise from 2007, when an increase in the value-added tax at the beginning of the year dented demand.
While significantly better than the performance in other Western European countries, such as Italy and Spain, the slight increase in year-to-date registrations was helped by a flattering comparison with last year, the German car market's worst year since reunification in late 1990.
"The decline in real net wages per capita is having a considerable effect on private car purchases," said Volker Lange, the president of the Association of International Motor Vehicle Manufacturers, or VDIK. The lobbying group called on the German government to help support the industry by aiding consumers to buy newer, more fuel-efficient cars.
Average carbon-dioxide emissions of the newly registered vehicles edged down to 163 grams per kilometer from an average of 166 g/km in the first six months, said the KBA. For the first time, the department registered new passenger cars fulfilling the European Union's strictest emission standards. However, at just 610 vehicles, they remained a small fraction of those that only met the lower emission norms.
On Monday, Italy reported a 26% drop in new-car sales for August, while Spain suffered a 41% plunge. Despite a government incentive plan, France watched its new-car market slide 7.1%.
Hyundai Aims for Efficiency Lead
Car Maker May Meet U.S. Fuel Standard Five Years Early
By EVAN RAMSTADSeptember 3, 2008;
NAMYANG, South Korea -- Hyundai Motor Co. can meet the proposed U.S. fuel efficiency standard of 35 miles per gallon in the fleets of its Hyundai and Kia brands by 2015, five years ahead of a U.S. deadline, without relying heavily on hybrid vehicles, the company's research chief said Tuesday.
The declaration is a bold statement of technical confidence by the South Korean manufacturer, which has trailed behind Japanese and U.S. manufacturers in the development of fuel-sipping hybrid vehicles. It also distinguishes the company from competitors that have argued to U.S. regulators in recent weeks that an interim step in boosting fuel standards -- to 31.6 mpg by 2015 -- is too aggressive.
Hyundai will focus on building smaller cars using lighter materials as well as new engine and powertrain technologies such as gasoline direct injection, dual continuously variable valve timing and eight-speed automatic transmissions to hit the new U.S. fuel-efficiency standards, said Lee Hyun-soon, president of Hyundai's research and development division. The company is also unlikely to enter the gas-guzzling U.S. pickup-truck market, he said.
"With just conventional gasoline engines, we think we can hit 35," Mr. Lee said in an interview at company's research and test center. "We have the technology to improve fuel economy. The problem was it increased the cost of the vehicle. Now, with higher oil prices, we can justify the technology."
With gas prices soaring, Mr. Lee said consumers would be willing to pay slightly more for cars with these new, expensive technologies if the added cost is more than made up for in fuel savings. An extra $100 to $200 in cost per vehicle, he said, may be enough to boost efficiency about 10%.
"Ten percent is not small over the life of a vehicle," Mr. Lee said.
To hit the 35 mpg fleetwide target by 2015, the company is still relying, in part, on selling highly fuel-efficient hybrid vehicles. The company already has said it will sell a compact hybrid in South Korea under both the Hyundai and Kia brands next year and a midsize hybrid in the U.S. under both brands in 2010.
Hyundai said it would likely steer clear of the U.S. pickup-truck market, which it has considered entering in the past. Pickup trucks and large sport-utility vehicles consume much more fuel than passenger cars. U.S. auto makers since the early 1990s have relied heavily on sales and profits from pickups and SUVs, but that has left them in a difficult position to adapt to rising fuel-efficiency standards.
Mr. Lee said Hyundai executives will make specific decisions about pickups in coming years.
"In any case, we will not be involved in full-size, heavy-duty pickup trucks. If we need to be in the pickup market, it will be compact or smaller than midsize but with an advanced powertrain," he said. "We are watching carefully how the pickup-truck market evolves under this environment of higher gas prices."
In December, U.S. President George W. Bush signed a law that requires auto makers to boost their fleetwide gas mileage, including cars and light trucks, to an average of 35 mpg by 2020. The standard this year is 27.5 mpg for cars and 22.5 mpg for light trucks.
Since the law's passage, auto makers have tried to influence new regulations being developed by the National Highway Traffic Safety Agency, which is responsible for enforcing the new standard.
Asked whether Hyundai may be able to gain a marketing edge by meeting the 2020 target early, Mr. Lee said: "Everybody has the same homework. Maybe we are a little bit faster. Our engineers are working hard on this."
By EVAN RAMSTADSeptember 3, 2008;
NAMYANG, South Korea -- Hyundai Motor Co. can meet the proposed U.S. fuel efficiency standard of 35 miles per gallon in the fleets of its Hyundai and Kia brands by 2015, five years ahead of a U.S. deadline, without relying heavily on hybrid vehicles, the company's research chief said Tuesday.
The declaration is a bold statement of technical confidence by the South Korean manufacturer, which has trailed behind Japanese and U.S. manufacturers in the development of fuel-sipping hybrid vehicles. It also distinguishes the company from competitors that have argued to U.S. regulators in recent weeks that an interim step in boosting fuel standards -- to 31.6 mpg by 2015 -- is too aggressive.
Hyundai will focus on building smaller cars using lighter materials as well as new engine and powertrain technologies such as gasoline direct injection, dual continuously variable valve timing and eight-speed automatic transmissions to hit the new U.S. fuel-efficiency standards, said Lee Hyun-soon, president of Hyundai's research and development division. The company is also unlikely to enter the gas-guzzling U.S. pickup-truck market, he said.
"With just conventional gasoline engines, we think we can hit 35," Mr. Lee said in an interview at company's research and test center. "We have the technology to improve fuel economy. The problem was it increased the cost of the vehicle. Now, with higher oil prices, we can justify the technology."
With gas prices soaring, Mr. Lee said consumers would be willing to pay slightly more for cars with these new, expensive technologies if the added cost is more than made up for in fuel savings. An extra $100 to $200 in cost per vehicle, he said, may be enough to boost efficiency about 10%.
"Ten percent is not small over the life of a vehicle," Mr. Lee said.
To hit the 35 mpg fleetwide target by 2015, the company is still relying, in part, on selling highly fuel-efficient hybrid vehicles. The company already has said it will sell a compact hybrid in South Korea under both the Hyundai and Kia brands next year and a midsize hybrid in the U.S. under both brands in 2010.
Hyundai said it would likely steer clear of the U.S. pickup-truck market, which it has considered entering in the past. Pickup trucks and large sport-utility vehicles consume much more fuel than passenger cars. U.S. auto makers since the early 1990s have relied heavily on sales and profits from pickups and SUVs, but that has left them in a difficult position to adapt to rising fuel-efficiency standards.
Mr. Lee said Hyundai executives will make specific decisions about pickups in coming years.
"In any case, we will not be involved in full-size, heavy-duty pickup trucks. If we need to be in the pickup market, it will be compact or smaller than midsize but with an advanced powertrain," he said. "We are watching carefully how the pickup-truck market evolves under this environment of higher gas prices."
In December, U.S. President George W. Bush signed a law that requires auto makers to boost their fleetwide gas mileage, including cars and light trucks, to an average of 35 mpg by 2020. The standard this year is 27.5 mpg for cars and 22.5 mpg for light trucks.
Since the law's passage, auto makers have tried to influence new regulations being developed by the National Highway Traffic Safety Agency, which is responsible for enforcing the new standard.
Asked whether Hyundai may be able to gain a marketing edge by meeting the 2020 target early, Mr. Lee said: "Everybody has the same homework. Maybe we are a little bit faster. Our engineers are working hard on this."
Firms to get green advice
BUSINESSES in Midlothian are to be given free advice on harnessing renewable technologies such as solar and wind power at an event at Pentlands Science Park on September 16.
Aimee Weatherburn, of organisers the Business Environment Partnership, said: "Renewable technologies offer cost benefits to businesses as well as making a significant contribution to the fight against climate change. Experts will be on hand to advise the most appropriate technologies
Coal plans go up in smoke
Environmentalists in the US have halted a huge new wave of coal-fired power stations. What lessons can Europe learn from them?
Juliette Jowit
The Guardian,
Wednesday September 3 2008
One day, historians might speculate that it was the ambition of the companies that sought to profit by building coal-fired power stations that triggered the beginning of the end for humans' most polluting habit.
Four years ago, campaigners in the US raised concerns over plans to build 150 coal-fired power stations nationwide. Today, nearly half those plans have been defeated in the courts or abandoned, while half of the remaining proposals are being actively opposed. Just 14 of the 150 plants are being developed, and environmental lawyers are all still pursuing them.
"The enormity of what they were proposing to do provided a platform to have that whole debate about pollution, including global-warming pollution, " says Bruce Nilles , director of the national coal campaign for the Sierra Club, America's biggest grassroots environment group.
Firmer action
In a few years, the backlash against coal power in America has become the country's biggest-ever environmental campaign, transforming the nation's awareness of climate change and inspiring political leaders to take firmer action after years of doubt and delay. Plants have been defeated in at least 30 of the 50 states, uniting those with already strong environmental records, such as California, with more conservative areas, such as the southern and central states.
The success of the US campaign is also now inspiring a global wave of protests, many in Europe, against similar schemes that plan to build coal-fired generators before carbon capture technology exists. If the European protesters succeed, Nilles believes US legislators will be likely to support presidential candidates' promises to join international efforts to cut emissions. By implication, though, if the protesters fail in Europe, the impact on a US or international deal would be disastrous.
The US anti-coal campaign is being linked to protests against similar plans in Australia, Germany, Italy and the UK, where there are demonstrations at almost every public appearance by E.ON, the company that plans to build Britain's first new first new coal power station for two decades in Kingsnorth, Kent, where protesters set up a protest camp against the new development in August.
US campaigners say they are concerned that if the UK and other European countries go ahead with new coal plants, the momentum to tackle climate change will be lost. " The rest of the world has been leading on this, particularly Europe," says Nilles. "Building new coal makes it increasingly difficult, if not impossible, to meet [emissions] targets, so it's critical the European community countries do not fail."
Coal power returned to the US political agenda when vice-president Dick Cheney's 2001 energy policy lifted key pollution restrictions. It took two years for environmental groups to see what emerged: state by state, project by project, a total of 150 new plants were put forward, almost all of them not to replace old coal but to augment it. Individually, some plants would have emitted more CO2 than some African countries. Together, the plants would have emitted an estimated1bn tonnes of CO2 annually - more than the total emissions cuts by countries that have signed the Kyoto protocol.
That realisation mobilised an incredible national campaign, led by a few national groups including the Sierra Club, the Union of Concerned Scientists and others, but driven by state and local membership of these and many more organisations and employing a wide array of tactics. The first job was to raise public awareness that the cumulative threat was far greater than each local project, says Nilles. "The projects were moving through the public process and nobody was paying any attention."
Using town hall debates, local media and political connections, they stirred up interest and recruited new supporters to the cause, including powerful hunting and fishing interests and religious leaders in the Appalachian mountain states, where opencast coal mining is often affecting the poorest communities. Then the campaign began. State politicians were persuaded to legislate either against emissions, as in the case of California, or in favour of alternatives such as renewables and energy efficiency, in Minnesota. Campaigners targeted banks, telling them that investing in coal might be too risky because of the threat of international emissions caps and high carbon prices, prompting the banks to set tougher conditions on lending.
Then the environmentalists highlighted a little-noticed Federal grant fund that gave billions of dollars for new coal power; following their publicity six planned plants were dropped. Legal challenges successfully blocked more plants on the basis of local pollution in Illinois and Montana. It was also proven that burning coal was not the cheapest method of generating electricity, breaking state rules in Minnesota and Florida.
In 2007 the US Supreme Court ruled that greenhouse gases were a pollutant under the clean air act and so could be regulated. In July this year for the first time a coal plant in Georgia was blocked by a local court using this ruling. Meanwhile, concrete and steel prices have escalated so high that other projects have been dropped on cost grounds.
Extreme weather
It is not only energy policy that has changed: public opinion on climate change has been transformed during this time, thanks in part to extreme weather events across the US, says Nilles.
"The sceptics will say that you can't say one flood is down to global warming. That's right, but we can see an up-tick in extreme and unprecedented weather patterns: wildfires sweeping across California, the drought that stretches [across] the southern tier of states, extreme flooding up in the mid-west, and an up-tick in tornados across the Great Plains."
Public opinion, in turn, has helped persuade at least six states, directly or through emissions limits, to put an effective moratorium on new coal power - California, Washington, Oregon and, perhaps more surprisingly, the conservative southern and midwest states of Florida, Idaho and Kansas. Governors of states that have taken action are also now putting pressure on their peers to stop them building generators that would wipe out their own hard-won emissions reductions. Nilles believes new coal power is now doomed in the US. "My sense is less than 10% [of the 150 plants proposed] will ultimately get built," he says. After this campaign, protesters will turn their attention to existing coal power and the mining industry, he says. "Ultimately, we need to phase out coal entirely .We don't need it and it's very expensive. The US has some of the best [renewable energy] resources in the world."
Growing resistance
In Germany, where 25 plants have been mooted, campaigners are winning local referendums and blocking the proposals. India has also had some resistance to new coal, for example in Chamalapura near the city of Mysore. China is facing a fierce public response to pollution caused by coal and other industrial sites: an environmental official in 2006 estimated there had been 51,000 pollution-related protests the previous year. In Australia, protesters kicked off six planned climate camps around the world this year by chaining themselves to a coal train and blocking access to two plants.Source: European Climate Foundation
Juliette Jowit
The Guardian,
Wednesday September 3 2008
One day, historians might speculate that it was the ambition of the companies that sought to profit by building coal-fired power stations that triggered the beginning of the end for humans' most polluting habit.
Four years ago, campaigners in the US raised concerns over plans to build 150 coal-fired power stations nationwide. Today, nearly half those plans have been defeated in the courts or abandoned, while half of the remaining proposals are being actively opposed. Just 14 of the 150 plants are being developed, and environmental lawyers are all still pursuing them.
"The enormity of what they were proposing to do provided a platform to have that whole debate about pollution, including global-warming pollution, " says Bruce Nilles , director of the national coal campaign for the Sierra Club, America's biggest grassroots environment group.
Firmer action
In a few years, the backlash against coal power in America has become the country's biggest-ever environmental campaign, transforming the nation's awareness of climate change and inspiring political leaders to take firmer action after years of doubt and delay. Plants have been defeated in at least 30 of the 50 states, uniting those with already strong environmental records, such as California, with more conservative areas, such as the southern and central states.
The success of the US campaign is also now inspiring a global wave of protests, many in Europe, against similar schemes that plan to build coal-fired generators before carbon capture technology exists. If the European protesters succeed, Nilles believes US legislators will be likely to support presidential candidates' promises to join international efforts to cut emissions. By implication, though, if the protesters fail in Europe, the impact on a US or international deal would be disastrous.
The US anti-coal campaign is being linked to protests against similar plans in Australia, Germany, Italy and the UK, where there are demonstrations at almost every public appearance by E.ON, the company that plans to build Britain's first new first new coal power station for two decades in Kingsnorth, Kent, where protesters set up a protest camp against the new development in August.
US campaigners say they are concerned that if the UK and other European countries go ahead with new coal plants, the momentum to tackle climate change will be lost. " The rest of the world has been leading on this, particularly Europe," says Nilles. "Building new coal makes it increasingly difficult, if not impossible, to meet [emissions] targets, so it's critical the European community countries do not fail."
Coal power returned to the US political agenda when vice-president Dick Cheney's 2001 energy policy lifted key pollution restrictions. It took two years for environmental groups to see what emerged: state by state, project by project, a total of 150 new plants were put forward, almost all of them not to replace old coal but to augment it. Individually, some plants would have emitted more CO2 than some African countries. Together, the plants would have emitted an estimated1bn tonnes of CO2 annually - more than the total emissions cuts by countries that have signed the Kyoto protocol.
That realisation mobilised an incredible national campaign, led by a few national groups including the Sierra Club, the Union of Concerned Scientists and others, but driven by state and local membership of these and many more organisations and employing a wide array of tactics. The first job was to raise public awareness that the cumulative threat was far greater than each local project, says Nilles. "The projects were moving through the public process and nobody was paying any attention."
Using town hall debates, local media and political connections, they stirred up interest and recruited new supporters to the cause, including powerful hunting and fishing interests and religious leaders in the Appalachian mountain states, where opencast coal mining is often affecting the poorest communities. Then the campaign began. State politicians were persuaded to legislate either against emissions, as in the case of California, or in favour of alternatives such as renewables and energy efficiency, in Minnesota. Campaigners targeted banks, telling them that investing in coal might be too risky because of the threat of international emissions caps and high carbon prices, prompting the banks to set tougher conditions on lending.
Then the environmentalists highlighted a little-noticed Federal grant fund that gave billions of dollars for new coal power; following their publicity six planned plants were dropped. Legal challenges successfully blocked more plants on the basis of local pollution in Illinois and Montana. It was also proven that burning coal was not the cheapest method of generating electricity, breaking state rules in Minnesota and Florida.
In 2007 the US Supreme Court ruled that greenhouse gases were a pollutant under the clean air act and so could be regulated. In July this year for the first time a coal plant in Georgia was blocked by a local court using this ruling. Meanwhile, concrete and steel prices have escalated so high that other projects have been dropped on cost grounds.
Extreme weather
It is not only energy policy that has changed: public opinion on climate change has been transformed during this time, thanks in part to extreme weather events across the US, says Nilles.
"The sceptics will say that you can't say one flood is down to global warming. That's right, but we can see an up-tick in extreme and unprecedented weather patterns: wildfires sweeping across California, the drought that stretches [across] the southern tier of states, extreme flooding up in the mid-west, and an up-tick in tornados across the Great Plains."
Public opinion, in turn, has helped persuade at least six states, directly or through emissions limits, to put an effective moratorium on new coal power - California, Washington, Oregon and, perhaps more surprisingly, the conservative southern and midwest states of Florida, Idaho and Kansas. Governors of states that have taken action are also now putting pressure on their peers to stop them building generators that would wipe out their own hard-won emissions reductions. Nilles believes new coal power is now doomed in the US. "My sense is less than 10% [of the 150 plants proposed] will ultimately get built," he says. After this campaign, protesters will turn their attention to existing coal power and the mining industry, he says. "Ultimately, we need to phase out coal entirely .We don't need it and it's very expensive. The US has some of the best [renewable energy] resources in the world."
Growing resistance
In Germany, where 25 plants have been mooted, campaigners are winning local referendums and blocking the proposals. India has also had some resistance to new coal, for example in Chamalapura near the city of Mysore. China is facing a fierce public response to pollution caused by coal and other industrial sites: an environmental official in 2006 estimated there had been 51,000 pollution-related protests the previous year. In Australia, protesters kicked off six planned climate camps around the world this year by chaining themselves to a coal train and blocking access to two plants.Source: European Climate Foundation
Solar plant yields water and crops from the desert
· Green energy glasshouses may transform arid areas· Fresh water will end need to dig wells, say architects
Alok Jha, green technology correspondent
The Guardian,
Wednesday September 3 2008
The Sahara forest project will use seawater and solar power to grow food in greenhouses across the desert. Photograph: Exploration Architecture
Vast greenhouses that use sea water for crop cultivation could be combined with solar power plants to provide food, fresh water and clean energy in deserts, under an ambitious proposal from a team of architects and engineers.
The Sahara Forest Project, which is already running demonstration plants in Tenerife, Oman and the United Arab Emirates, envisages huge greenhouses with concentrated solar power (CSP), a technology that uses mirrors to focus the sun's rays, creating steam to drive turbines to generate electricity.
The installations would turn deserts into lush patches of vegetation, according to its designers, and do away with the need to dig wells for fresh water, an activity that has depleted aquifers across the world.
Charlie Paton, a member of the team, and the inventor of the Seawater Greenhouse, said the scheme was a proven way to transform arid environments. "Plants need light for growth but they don't like heat beyond a certain point," he said.
Above certain temperatures the amount of water lost through leaves' stomata rises so much plants stop their photosynthesis and do not grow. The solar farm planned by the project runs seawater evaporators, pumping damp, cool air through the greenhouses. This reduces the warmth inside by about 15C, compared with the temperature outside.
At the other end of the greenhouse from the evaporators, water vapour is condensed. Some of this fresh water is used to water the crops, some for cleaning the solar mirrors.
"So we've got conditions in the greenhouse of high humidity and lower temperature," said Paton. "The crops sitting in this slightly steamy, humid condition can grow fantastically well."
The designers said that virtually any vegetables could be grown in the greenhouses. The demonstration plants already produce lettuces, peppers, cucumbers and tomatoes. The nutrients to grow the plants could come from local seaweed or be extracted from the seawater.
Michael Pawlyn, of Exploration Architecture, based in London, worked on the Eden Project for seven years and is now part of the Sahara Forest team. He said that the Seawater Greenhouse and CSP provided substantial synergies for each other. "Both technologies work extremely well in hot, dry, desert locations. CSP produces a lot of waste heat and we'd be able to use that to evaporate more seawater from the greenhouse. And CSP needs a supply of clean, de-mineralised water in order for the [electricity generating] turbines to function and to keep the mirrors at peak output. It just so happens the Seawater Greenhouse produces large quantities of this."
Paton said the greenhouse produced more than five times the fresh water needed to water the plants inside, so some of the water could be released to the outside, creating a microclimate for hardier plants such as jatropha, a crop that can be turned into biofuel.
The cost of the Sahara Forest Project could be relatively low as both CSP and Seawater Greenhouses are proven technologies. The designers estimate that building 20 hectares (nearly 50 acres) of greenhouses combined with a 10MW CSP scheme would cost about €80m (£65m).
Paton said groups in countries across the Middle East, including in UAE, Oman, Bahrain, Qatar and Kuwait, have expressed interest in possibly funding demonstration projects.
He said use of Seawater Greenhouses could reverse the environmental damage done by the glasshouses already built in places such as the desert region of Almeria, southern Spain, where, constructed over the past 20 years to grow salad crops, they now covered more than 40,000 hectares.
Paton said: "They take water out of the ground something like five times faster than it comes in, so the water table drops and becomes more saline. The whole of Spain is being sucked dry. If one were to convert them all to the Seawater Greenhouse concept it would turn an unsustainable solution into a more sustainable one."
Pawlyn said: "In places like Oman they've effectively sterilised large areas of land by using groundwater that's become increasingly saline. The beauty of the Sahara Forest scheme is that you can reverse that process and turn barren land into biologically productive land."
Neil Crumpton, an energy specialist at Friends of the Earth, said the potential of these desert technologies was huge. "Concentrated solar power mirror arrays covering just 1% of the Earth's deserts could supply a fifth of all current global energy consumption. And 1 million tonnes of sea water could be evaporated every day from just 20,000ha of greenhouses."
Governments should invest in the technologies and "not be distracted by lobbyists promoting dangerous nuclear power or nuclear-powered desalination schemes", Crumpton added.
The International Energy Agency estimates that the world needs to invest more than $45 trillion (£22.5 trillion) in new energy systems over the next 30 years.
Alok Jha, green technology correspondent
The Guardian,
Wednesday September 3 2008
The Sahara forest project will use seawater and solar power to grow food in greenhouses across the desert. Photograph: Exploration Architecture
Vast greenhouses that use sea water for crop cultivation could be combined with solar power plants to provide food, fresh water and clean energy in deserts, under an ambitious proposal from a team of architects and engineers.
The Sahara Forest Project, which is already running demonstration plants in Tenerife, Oman and the United Arab Emirates, envisages huge greenhouses with concentrated solar power (CSP), a technology that uses mirrors to focus the sun's rays, creating steam to drive turbines to generate electricity.
The installations would turn deserts into lush patches of vegetation, according to its designers, and do away with the need to dig wells for fresh water, an activity that has depleted aquifers across the world.
Charlie Paton, a member of the team, and the inventor of the Seawater Greenhouse, said the scheme was a proven way to transform arid environments. "Plants need light for growth but they don't like heat beyond a certain point," he said.
Above certain temperatures the amount of water lost through leaves' stomata rises so much plants stop their photosynthesis and do not grow. The solar farm planned by the project runs seawater evaporators, pumping damp, cool air through the greenhouses. This reduces the warmth inside by about 15C, compared with the temperature outside.
At the other end of the greenhouse from the evaporators, water vapour is condensed. Some of this fresh water is used to water the crops, some for cleaning the solar mirrors.
"So we've got conditions in the greenhouse of high humidity and lower temperature," said Paton. "The crops sitting in this slightly steamy, humid condition can grow fantastically well."
The designers said that virtually any vegetables could be grown in the greenhouses. The demonstration plants already produce lettuces, peppers, cucumbers and tomatoes. The nutrients to grow the plants could come from local seaweed or be extracted from the seawater.
Michael Pawlyn, of Exploration Architecture, based in London, worked on the Eden Project for seven years and is now part of the Sahara Forest team. He said that the Seawater Greenhouse and CSP provided substantial synergies for each other. "Both technologies work extremely well in hot, dry, desert locations. CSP produces a lot of waste heat and we'd be able to use that to evaporate more seawater from the greenhouse. And CSP needs a supply of clean, de-mineralised water in order for the [electricity generating] turbines to function and to keep the mirrors at peak output. It just so happens the Seawater Greenhouse produces large quantities of this."
Paton said the greenhouse produced more than five times the fresh water needed to water the plants inside, so some of the water could be released to the outside, creating a microclimate for hardier plants such as jatropha, a crop that can be turned into biofuel.
The cost of the Sahara Forest Project could be relatively low as both CSP and Seawater Greenhouses are proven technologies. The designers estimate that building 20 hectares (nearly 50 acres) of greenhouses combined with a 10MW CSP scheme would cost about €80m (£65m).
Paton said groups in countries across the Middle East, including in UAE, Oman, Bahrain, Qatar and Kuwait, have expressed interest in possibly funding demonstration projects.
He said use of Seawater Greenhouses could reverse the environmental damage done by the glasshouses already built in places such as the desert region of Almeria, southern Spain, where, constructed over the past 20 years to grow salad crops, they now covered more than 40,000 hectares.
Paton said: "They take water out of the ground something like five times faster than it comes in, so the water table drops and becomes more saline. The whole of Spain is being sucked dry. If one were to convert them all to the Seawater Greenhouse concept it would turn an unsustainable solution into a more sustainable one."
Pawlyn said: "In places like Oman they've effectively sterilised large areas of land by using groundwater that's become increasingly saline. The beauty of the Sahara Forest scheme is that you can reverse that process and turn barren land into biologically productive land."
Neil Crumpton, an energy specialist at Friends of the Earth, said the potential of these desert technologies was huge. "Concentrated solar power mirror arrays covering just 1% of the Earth's deserts could supply a fifth of all current global energy consumption. And 1 million tonnes of sea water could be evaporated every day from just 20,000ha of greenhouses."
Governments should invest in the technologies and "not be distracted by lobbyists promoting dangerous nuclear power or nuclear-powered desalination schemes", Crumpton added.
The International Energy Agency estimates that the world needs to invest more than $45 trillion (£22.5 trillion) in new energy systems over the next 30 years.
Brazil contemplates independent nuclear agency
The Associated Press
Published: September 2, 2008
SAO PAULO, Brazil: Brazil is studying the creation of an independent nuclear watchdog agency as it expands uranium enrichment, builds more reactors and develops a nuclear-propelled submarine.
Renato Hoffmann, a spokesman for the presidential chief of staff, said on Tuesday the new agency is under consideration by the Nuclear Program Development Committee. He would not provide further details.
Creating the new agency would help bring Brazil's expanding nuclear program in line with international standards for safety and security inspections, said Francisco Rondinelli, president of the Brazilian Nuclear Energy Association — an independent think tank of nuclear scientists and technicians.
Safety and security are currently handled by the National Nuclear Energy Commission, the government's regulatory body in charge of the country's entire nuclear energy sector.
"Independent watchdog agencies are the norm," Rondinelli said. "Only an independent agency can ensure efficient safety and security mechanisms."
President Luiz Inacio Lula da Silva last year announced US$540 million in new funding to expand the country's nuclear energy program.
Brazil recently decided to complete construction of its long-delayed third nuclear plant, Angra 3, and to build four new nuclear plants starting in 2013.
Brazil currently has two operating nuclear plants, Angra 1 and Angra 2, with an installed capacity of about 2,000 megawatts. The plants are near the coastal city of Angra dos Reis, 110 miles west of Rio de Janeiro.
Published: September 2, 2008
SAO PAULO, Brazil: Brazil is studying the creation of an independent nuclear watchdog agency as it expands uranium enrichment, builds more reactors and develops a nuclear-propelled submarine.
Renato Hoffmann, a spokesman for the presidential chief of staff, said on Tuesday the new agency is under consideration by the Nuclear Program Development Committee. He would not provide further details.
Creating the new agency would help bring Brazil's expanding nuclear program in line with international standards for safety and security inspections, said Francisco Rondinelli, president of the Brazilian Nuclear Energy Association — an independent think tank of nuclear scientists and technicians.
Safety and security are currently handled by the National Nuclear Energy Commission, the government's regulatory body in charge of the country's entire nuclear energy sector.
"Independent watchdog agencies are the norm," Rondinelli said. "Only an independent agency can ensure efficient safety and security mechanisms."
President Luiz Inacio Lula da Silva last year announced US$540 million in new funding to expand the country's nuclear energy program.
Brazil recently decided to complete construction of its long-delayed third nuclear plant, Angra 3, and to build four new nuclear plants starting in 2013.
Brazil currently has two operating nuclear plants, Angra 1 and Angra 2, with an installed capacity of about 2,000 megawatts. The plants are near the coastal city of Angra dos Reis, 110 miles west of Rio de Janeiro.
Scottish hydro power untapped
By Andrew Bolger
Published: September 3 2008 03:00
Scotland has enough untapped hydro electricity potential to power a quarter of its homes.
A study carried out for the Forum for Renewable Energy Development in Scotland, which brings together ministers, companies and environmental bodies, shows there are still 657MW of financially viable hydro electricity schemes to exploit. That would power around 600,000 homes and is about half the amount of installed hydro capacity already in Scotland.
Jim Mather, energy minister at Holyrood, said: "It is clear there is huge untapped potential - and a sustainable and profitable future - in smaller and micro hydro schemes. Each scheme would have to be assessed on its own merits, but if we can turn the tap on to new hydro power we can tackle climate change and continue to stimulate economic growth."
Andrew Bolger
Copyright The Financial Times Limited 2008
Published: September 3 2008 03:00
Scotland has enough untapped hydro electricity potential to power a quarter of its homes.
A study carried out for the Forum for Renewable Energy Development in Scotland, which brings together ministers, companies and environmental bodies, shows there are still 657MW of financially viable hydro electricity schemes to exploit. That would power around 600,000 homes and is about half the amount of installed hydro capacity already in Scotland.
Jim Mather, energy minister at Holyrood, said: "It is clear there is huge untapped potential - and a sustainable and profitable future - in smaller and micro hydro schemes. Each scheme would have to be assessed on its own merits, but if we can turn the tap on to new hydro power we can tackle climate change and continue to stimulate economic growth."
Andrew Bolger
Copyright The Financial Times Limited 2008
Bourne again: a giant agribusiness finds itself back in the dock
ADM is once again besieged - by Hollywood stars and green campaigners
Ian Griffiths
The Guardian,
Wednesday September 3 2008
When Matt Damon, star of the Bourne trilogy, sat down for lunch a few months ago at the Hog Trough Too, a restaurant in the village of Moweaqua in central Illinois, it may have sent a shiver down the spine of executives at Archer Daniels Midland (ADM), the giant US agribusiness.
Damon was filming a scene for his latest movie - The Informant - which recounts how the whistle was blown on ADM's price-fixing tactics in the 1990s. The Hog Trough Too had been recast as a 90s diner - the Cat & Griddle - and old ADM hands could recall the traumatic events 15 years earlier that put the company at the heart of what was then the US's biggest price-fixing scandal.
ADM has worked hard over the past decade to recover from a scandal that saw some of its senior executives jailed and earned it a then record $100m (£55m) antitrust fine. Far from being dragged down by the scandal, ADM has prospered. It remains one of the most influential food companies in the world with recently announced annual sales of $70bn and a wide product range that lurks anonymously among the groceries that grace supermarket shelves around the world.
"We've moved on, and today ADM is a leader in the results we achieve and the way that we achieve those results," an ADM spokesman said. "ADM has a robust ethics program, with practices and policies that align our actions with our values."
But in the 90s not everyone at ADM embraced those values. According to Mark Whitacre, the unofficial mantra at that time was: "The competitor is our friend and the customer is our enemy." Whitacre was at that time a rising ADM star, head of the company's bioproducts division and, unbeknown to his colleagues, an FBI informant. For nearly three years he secretly taped the meetings at which ADM and other companies fixed the price of lysine, a food additive. The evidence he gathered was to be crucial in the antitrust case against the company.
Bipolar star
Whitacre will be portrayed by Damon in the movie, which is scheduled for release next year. Although hailed as a national hero, Whitacre ultimately spent nearly nine years in a federal prison after it emerged that not only was he working for the FBI but at the same time stealing $9m from his employers. Whitacre suffered from bipolar disorder during his work for the FBI.
The residents of Moweaqua, where Whitacre lived in the village's most luxurious home, have enjoyed rubbing shoulders with the stars. But not everyone is excited at the prospect of an awkward truth being revisited. In Decatur, a 20-mile drive north of Moweaqua and home to ADM, some residents argue that the film will reflect badly on the community by glorifying Whitacre.
The company does not share that view. Although it did not allow filming at its plant on safety grounds, ADM cooperated with the film production team. It is more concerned with looking to the future than dwelling on the past.
"In 1995, ADM was a company made up of close to 15,000 people," a spokesman said. "All but a very few were responsible hardworking people who went to work every day to do an honest day's work. The success of our company then and now is due to the efforts of our people."
He is more concerned to rebut the arguments of modern-day activists than explain the actions of past executives, because although ADM has worked hard to improve its corporate ethics, the company is never far from controversy. It has been accused of endangering the Amazon rainforest and encouraging the trafficking of child labour in Africa. The allegations are denied by ADM, which points to a business code of conduct providing the framework that allows the company to operate in a manner consistent with the highest social and environmental standards.
"We care deeply about human rights and the responsible, sustainable development of agriculture and bioenergy throughout the world," the ADM spokesman said. But though ADM is happy to counter the activists' concerns, the company is less voluble on another contentious issue relating to the benefit it receives directly and indirectly from US farm subsidies and tax credits.
As a food processor ADM has a pivotal position between farmers and food producers. It takes corn, wheat, cocoa, soya beans, rapeseed, sunflower seeds, palm, cotton, peanuts, coconut and subjects them to a variety of pressings and processing to provide oils, flour, beans, ethanol, meals, sweeteners and a host of other ingredients that end up in soft drinks, cereals, chocolate, jam, margarines, snacks, dressings and biofuels.
ADM is the world's largest corn processor and has the largest market share in two corn-based products: high-fructose corn syrup, a sweetener, and ethanol, which has enflamed the controversy over biofuels. The switch by the big agribusiness companies to process increasing amounts of corn for fuel rather than food has become the subject of heated debate. The green credentials of biofuels are being questioned and there are genuine fears that corn prices are inflated by the quest to match government targets for corn-based fuels.
ActionAid, the activist charity, suggested that the drive for increased use of biofuels by developed countries had been a major factor in pushing 760 million people closer to hunger. "The rise of biofuel production and the increasing impact of climate change coupled with an unparalleled decrease in agricultural aid are creating a triple whammy for poor countries," said Tom Sharman, policy officer at ActionAid.
The Environmental Working Group (EWG), which campaigns to protect public health and the environment, is also critical.
Drunk on ethanol
"They are driving drunk on ethanol," said Sandra Schubert, EWG director of government affairs. "When the push for increased ethanol production was mandated by the US government it was based on good intentions. But what we are seeing now is that this push for ethanol is not having the desired effects. We are seeing some disturbing side effects from ethanol production and we believe it is time to step back, suspend the mandate which calls for 9bn gallons of ethanol to be produced this year, and examine whether ethanol is a truly renewable fuel."
This is not a view shared by ADM. It is regarded as one of ethanol's main cheerleaders. The company is expanding its ethanol capacity to 1.65bn gallons a year.
"ADM believes a retreat from these biofuels would be shortsighted," a spokesman said. "It would undercut the investment, the momentum and the commitment needed to make second-generation biofuels a reality. And it would result in even higher gas prices.
"A retreat from biofuels would also undercut development of advanced seed and farming technologies, which can greatly increase crop yields in the US and globally. Long term, the best solution to rising food demand and prices is the development of more crops that provide more food and more fuel."
Schubert also points out that ADM is a major indirect beneficiary of the US subsidies for corn and ethanol.
"Corn is our country's most heavily subsidised crop and has received $56bn from the government over the last 12 years," she said. "Ethanol gives the blender a tax credit of 45 cents a gallon - just reduced from 51 cents. I would have thought ADM is in a good place."
ADM would not answer questions on subsidies.
But any benefit the company may receive directly or indirectly from subsidies is doing little to help its share price. In April, the company's stock hit a 52-week high of $48.95. Since then, the share price has headed steadily south as investors fretted about the price of corn, which hit an all-time high in the summer amid reports of stock shortages. But while corn prices began to retreat, the ethanol backlash gathered pace. Last month, ADM's share price hit a 52-week low of $24.40 after disappointing results that left analysts worrying about the longer-term outlook and the US government's commitment to ethanol.
Those results confirmed that for ADM rising commodity prices have been a double-edged sword. In the year to June 2008, ADM's sales rose by 59% to $69.8bn. Of that $25.8bn uplift, about 90% was attributable to higher commodity prices. But higher selling prices also mean higher costs and some analysts who tuned into the results conference felt ADM was hinting at tougher times ahead.
Patricia Woertz, ADM's chairwoman and chief executive, saw it differently.
"We faced changing market dynamics with very fluid and very diverse conditions," she said. "Now we see a very different set of opportunities and we remain very optimistic."
Ian Griffiths
The Guardian,
Wednesday September 3 2008
When Matt Damon, star of the Bourne trilogy, sat down for lunch a few months ago at the Hog Trough Too, a restaurant in the village of Moweaqua in central Illinois, it may have sent a shiver down the spine of executives at Archer Daniels Midland (ADM), the giant US agribusiness.
Damon was filming a scene for his latest movie - The Informant - which recounts how the whistle was blown on ADM's price-fixing tactics in the 1990s. The Hog Trough Too had been recast as a 90s diner - the Cat & Griddle - and old ADM hands could recall the traumatic events 15 years earlier that put the company at the heart of what was then the US's biggest price-fixing scandal.
ADM has worked hard over the past decade to recover from a scandal that saw some of its senior executives jailed and earned it a then record $100m (£55m) antitrust fine. Far from being dragged down by the scandal, ADM has prospered. It remains one of the most influential food companies in the world with recently announced annual sales of $70bn and a wide product range that lurks anonymously among the groceries that grace supermarket shelves around the world.
"We've moved on, and today ADM is a leader in the results we achieve and the way that we achieve those results," an ADM spokesman said. "ADM has a robust ethics program, with practices and policies that align our actions with our values."
But in the 90s not everyone at ADM embraced those values. According to Mark Whitacre, the unofficial mantra at that time was: "The competitor is our friend and the customer is our enemy." Whitacre was at that time a rising ADM star, head of the company's bioproducts division and, unbeknown to his colleagues, an FBI informant. For nearly three years he secretly taped the meetings at which ADM and other companies fixed the price of lysine, a food additive. The evidence he gathered was to be crucial in the antitrust case against the company.
Bipolar star
Whitacre will be portrayed by Damon in the movie, which is scheduled for release next year. Although hailed as a national hero, Whitacre ultimately spent nearly nine years in a federal prison after it emerged that not only was he working for the FBI but at the same time stealing $9m from his employers. Whitacre suffered from bipolar disorder during his work for the FBI.
The residents of Moweaqua, where Whitacre lived in the village's most luxurious home, have enjoyed rubbing shoulders with the stars. But not everyone is excited at the prospect of an awkward truth being revisited. In Decatur, a 20-mile drive north of Moweaqua and home to ADM, some residents argue that the film will reflect badly on the community by glorifying Whitacre.
The company does not share that view. Although it did not allow filming at its plant on safety grounds, ADM cooperated with the film production team. It is more concerned with looking to the future than dwelling on the past.
"In 1995, ADM was a company made up of close to 15,000 people," a spokesman said. "All but a very few were responsible hardworking people who went to work every day to do an honest day's work. The success of our company then and now is due to the efforts of our people."
He is more concerned to rebut the arguments of modern-day activists than explain the actions of past executives, because although ADM has worked hard to improve its corporate ethics, the company is never far from controversy. It has been accused of endangering the Amazon rainforest and encouraging the trafficking of child labour in Africa. The allegations are denied by ADM, which points to a business code of conduct providing the framework that allows the company to operate in a manner consistent with the highest social and environmental standards.
"We care deeply about human rights and the responsible, sustainable development of agriculture and bioenergy throughout the world," the ADM spokesman said. But though ADM is happy to counter the activists' concerns, the company is less voluble on another contentious issue relating to the benefit it receives directly and indirectly from US farm subsidies and tax credits.
As a food processor ADM has a pivotal position between farmers and food producers. It takes corn, wheat, cocoa, soya beans, rapeseed, sunflower seeds, palm, cotton, peanuts, coconut and subjects them to a variety of pressings and processing to provide oils, flour, beans, ethanol, meals, sweeteners and a host of other ingredients that end up in soft drinks, cereals, chocolate, jam, margarines, snacks, dressings and biofuels.
ADM is the world's largest corn processor and has the largest market share in two corn-based products: high-fructose corn syrup, a sweetener, and ethanol, which has enflamed the controversy over biofuels. The switch by the big agribusiness companies to process increasing amounts of corn for fuel rather than food has become the subject of heated debate. The green credentials of biofuels are being questioned and there are genuine fears that corn prices are inflated by the quest to match government targets for corn-based fuels.
ActionAid, the activist charity, suggested that the drive for increased use of biofuels by developed countries had been a major factor in pushing 760 million people closer to hunger. "The rise of biofuel production and the increasing impact of climate change coupled with an unparalleled decrease in agricultural aid are creating a triple whammy for poor countries," said Tom Sharman, policy officer at ActionAid.
The Environmental Working Group (EWG), which campaigns to protect public health and the environment, is also critical.
Drunk on ethanol
"They are driving drunk on ethanol," said Sandra Schubert, EWG director of government affairs. "When the push for increased ethanol production was mandated by the US government it was based on good intentions. But what we are seeing now is that this push for ethanol is not having the desired effects. We are seeing some disturbing side effects from ethanol production and we believe it is time to step back, suspend the mandate which calls for 9bn gallons of ethanol to be produced this year, and examine whether ethanol is a truly renewable fuel."
This is not a view shared by ADM. It is regarded as one of ethanol's main cheerleaders. The company is expanding its ethanol capacity to 1.65bn gallons a year.
"ADM believes a retreat from these biofuels would be shortsighted," a spokesman said. "It would undercut the investment, the momentum and the commitment needed to make second-generation biofuels a reality. And it would result in even higher gas prices.
"A retreat from biofuels would also undercut development of advanced seed and farming technologies, which can greatly increase crop yields in the US and globally. Long term, the best solution to rising food demand and prices is the development of more crops that provide more food and more fuel."
Schubert also points out that ADM is a major indirect beneficiary of the US subsidies for corn and ethanol.
"Corn is our country's most heavily subsidised crop and has received $56bn from the government over the last 12 years," she said. "Ethanol gives the blender a tax credit of 45 cents a gallon - just reduced from 51 cents. I would have thought ADM is in a good place."
ADM would not answer questions on subsidies.
But any benefit the company may receive directly or indirectly from subsidies is doing little to help its share price. In April, the company's stock hit a 52-week high of $48.95. Since then, the share price has headed steadily south as investors fretted about the price of corn, which hit an all-time high in the summer amid reports of stock shortages. But while corn prices began to retreat, the ethanol backlash gathered pace. Last month, ADM's share price hit a 52-week low of $24.40 after disappointing results that left analysts worrying about the longer-term outlook and the US government's commitment to ethanol.
Those results confirmed that for ADM rising commodity prices have been a double-edged sword. In the year to June 2008, ADM's sales rose by 59% to $69.8bn. Of that $25.8bn uplift, about 90% was attributable to higher commodity prices. But higher selling prices also mean higher costs and some analysts who tuned into the results conference felt ADM was hinting at tougher times ahead.
Patricia Woertz, ADM's chairwoman and chief executive, saw it differently.
"We faced changing market dynamics with very fluid and very diverse conditions," she said. "Now we see a very different set of opportunities and we remain very optimistic."
Gabelli Starts to Explore Green Scene
Alternative Energy And Supply Chain Will Be Fund Focus
By MARA LEMOS STEINSeptember 3, 2008;
Institutional research brokerage Gabelli & Co. has put together a team to focus on the clean-technology and alternative-energy sector, with an eye to launching an investment fund under its affiliate, Gamco Investors Inc.
"We're of the view that there's a convergence happening between technology and energy," says John Segrich, who joined the firm as a research analyst last month to coordinate what he called the "Gabelli green effort."
The Gabelli firm, founded by famed money manager Mario Gabelli, "has been talking about this internally for a while, but so far the research has been done in a fragmented way," Mr. Segrich says. "We're now taking a coherent approach to develop a product around it. It's a big enough theme that warrants the focus of multiple minds and disciplines."
Mutual funds and hedge funds dedicated to investing in renewable energy and clean technology are being launched with increasing frequency, says David Kathman, a researcher at Morningstar Inc., an investment research firm that tracks the performance of funds.
One area that has been growing strongly is exchange-traded funds, which are gathering assets quickly, he says.
An example of that is First Trust ISE Global Wind Energy Index Fund, which in late July had nearly $60 million in assets only five weeks after its launch. The fund sponsors had a target of reaching $100 million in one year.
The heightened interest in the sector gives rise to concerns that there may be the risk of an investment bubble, Mr. Kathman says. Although not all funds or technologies will survive, and the price of crude oil may come down, the issue of climate change will keep the sector a hot area for investment, he says.
"Even with the oil price pullback ... it won't just go away, because everybody recognizes that something needs to be done to ease our dependence on oil," he says. "It's going to be something that is going to be promoted by the federal government regardless of the short-term fluctuation in oil prices."
As for Mr. Segrich, he is returning to Gabelli, where he started his career as an analyst in 1993, after stints at Goldman Sachs and, most recently, J.P. Morgan in London. At J.P. Morgan, he ran the sell-side technology research team.
Gamco is a publicly traded company that manages about $28 billion in assets in private advisory accounts, mutual funds, closed-end funds, offshore funds and partnerships. It already runs funds focused on utilities and has several investments in the water and technology sectors.
Mr. Segrich says "Gabelli green" will look at existing companies, usually in the industrial sector, that are seeing an impact on their business as they become part of the supply chain for the emerging alternative-energy industry. One such company is Woodward Governor Co., which is making inverters for wind turbines, he says.
The group will also analyze companies that are directly related to the green theme, including solar and wind power, energy storage and smart grid.
By MARA LEMOS STEINSeptember 3, 2008;
Institutional research brokerage Gabelli & Co. has put together a team to focus on the clean-technology and alternative-energy sector, with an eye to launching an investment fund under its affiliate, Gamco Investors Inc.
"We're of the view that there's a convergence happening between technology and energy," says John Segrich, who joined the firm as a research analyst last month to coordinate what he called the "Gabelli green effort."
The Gabelli firm, founded by famed money manager Mario Gabelli, "has been talking about this internally for a while, but so far the research has been done in a fragmented way," Mr. Segrich says. "We're now taking a coherent approach to develop a product around it. It's a big enough theme that warrants the focus of multiple minds and disciplines."
Mutual funds and hedge funds dedicated to investing in renewable energy and clean technology are being launched with increasing frequency, says David Kathman, a researcher at Morningstar Inc., an investment research firm that tracks the performance of funds.
One area that has been growing strongly is exchange-traded funds, which are gathering assets quickly, he says.
An example of that is First Trust ISE Global Wind Energy Index Fund, which in late July had nearly $60 million in assets only five weeks after its launch. The fund sponsors had a target of reaching $100 million in one year.
The heightened interest in the sector gives rise to concerns that there may be the risk of an investment bubble, Mr. Kathman says. Although not all funds or technologies will survive, and the price of crude oil may come down, the issue of climate change will keep the sector a hot area for investment, he says.
"Even with the oil price pullback ... it won't just go away, because everybody recognizes that something needs to be done to ease our dependence on oil," he says. "It's going to be something that is going to be promoted by the federal government regardless of the short-term fluctuation in oil prices."
As for Mr. Segrich, he is returning to Gabelli, where he started his career as an analyst in 1993, after stints at Goldman Sachs and, most recently, J.P. Morgan in London. At J.P. Morgan, he ran the sell-side technology research team.
Gamco is a publicly traded company that manages about $28 billion in assets in private advisory accounts, mutual funds, closed-end funds, offshore funds and partnerships. It already runs funds focused on utilities and has several investments in the water and technology sectors.
Mr. Segrich says "Gabelli green" will look at existing companies, usually in the industrial sector, that are seeing an impact on their business as they become part of the supply chain for the emerging alternative-energy industry. One such company is Woodward Governor Co., which is making inverters for wind turbines, he says.
The group will also analyze companies that are directly related to the green theme, including solar and wind power, energy storage and smart grid.
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