BUSINESS IN THE PRESS LESSON 2 – Aspects of the ... · 1 BUSINESS IN THE PRESS LESSON 2 – Aspects of the environment and business Aim and description In the following section

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BUSINESS IN THE PRESS LESSON 2 – Aspects of the environment and business

Aim and description In the following section you will read articles discussing various aspects of the environment. Most of these articles were chosen by your peers last year, as this was their topic of choice. The aim is to give you a better understanding of environmental issues related to business, and to help you become more familiar with some of the economic as well as social implications they have. Some articles are written with a very clear "aim", political or other – bear that in mind when reading the articles. Comprehension /discussion questions on “A change in climate” 1. PepsiCo’s Indra Nooyi promotes products that “contribute positively and responsibly to human

civilisation”. In what ways does the article suggest this is possible?

2. Give an outline of some of the things that companies in the article are doing to reduce their carbon emissions. What can’t they do yet?

3. How can companies encourage their staff and customers to act responsibly? 4. What is the difference between companies ‘doing well and doing good’? Does the author believe

that both of these are possible? Comprehension /discussion questions on “Big business says addressing climate change 'rates very low on agenda'”

1. What are some of the reasons given in the article for companies’ lack of action concerning climate change?

2. Do you think the authors believe that governments or businesses should take the lead in addressing

climate change? Who do you believe should be more responsible?

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Discussion question on both Comprehension /discussion questions on “A change in climate” & “Big business says addressing climate change 'rates very low on agenda'” In the first article the author calls the rhetoric about the environment “lofty talk”, but goes on to recount numerous examples of companies putting their words into action. The second article, however, discloses how low a priority climate change is to many companies. 1. Discuss the factors that you believe could affect how committed a company is to addressing climate

change.

2. In cases where companies are simply engaging in “lofty talk”, what do you believe are their reasons for doing so?

Comprehension /discussion questions on “How green is their growth” 1. According to this article, what is the traditional assumption of the relationship between

environmental issues and economic growth in developing countries? 2. Do the findings of Mr Esty’s research confirm or disprove this assumption? In what ways? What

cannot be easily read from the results? 3. How might economic growth bring about further harm to the environment? 4. The author suggests that “good governance” is the solution to this potential problem. What do you think is meant by this? Do you believe this is the key? Is it feasible in developing countries? Comprehension /discussion questions on “On the Rebound” 1. According to the article, what attempts to protect the environment are being made by politicians,

economists, engineers and “greens”? Which of these attempts does the article focus on? 2. Explain “the rebound effect” in your own words

3. Why is “the rebound effect” greater with low-income groups? In what ways do rich people contribute to “the rebound effect”?

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Comprehension /discussion questions on “The Greening of the U.S. Consumer” 1. According to the article, who is the current concern for the environment now reaching? What other

factors might be contributing to their more cautious spending plans? 2. What negative repercussions might this trend have on the economy? 3. How and why are consumers making use of carbon offsetting programs? Do you think this is

justified? 4. (The article mentions the US government’s economic stimulus plans. What does this involve and

do you think it will work?)* * Answering this question will involve some private research Discussion question on “On the Rebound” and “The Greening of the U.S. Consumer” While the first of these article concentrates on the “the rebound effect” of energy efficiency, the second would appear to contradict the existence of “the rebound effect” on the U.S. consumer. In your opinion, can “the rebound effect” be in any way countered by a growing awareness of environmental issues and the consequent changing attitudes of the public towards? Justify your answer.

Comprehension /discussion questions on “Economic crisis gives us a chance of repairing climate damage”

1. What do you think about the author’s view that the current crises are a result of “human greed largely unrestrained by ethics”?

2. One could say that the author argues that it is good, from a climate point of view, that we are in a financial recession at the moment – to what extent do you agree?

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Discussion question on “What Effect Will Ethanol And Corn Have On Inflation?” 1. What points from the previous article are backed up by this article? 2. Which article do you believe is more optimistic about the production of biofules? Justify your

answer. Comprehension /discussion questions on “CHINA SPENDS BILLIONS ON ENVIRONMENTAL IMPROVEMENTS, BUT IS THE WINDOW OF OPPORTUNITY CLOSING?” 1. What are the environmental challenges facing China as its businesses and industries grow? 2. Name some of the environmental projects currently under way in China today. 3. According to the article, what are some of the most important differences between doing business in

China and in the west? How would you overcome these differences if you were seeking to do business in China?

4. What “window” does the author speak of in the title of this article? How does the future look for

doing business in China? Comprehension /discussion questions on “China’s climate change opportunity”

1. How should one look at the claim that the West “tends to measure with a double standard”; to what extent do you agree?

2. What implications will it have, if the West allows for the developing countries to get the same living standard as they have, and what implications does it have if the West tries to curb the aspiration of the developing countries to increase their standard of living?

3. What does the author seem to think of China’s contribution to global climate change and of the West’s, respectively? Do you detect any particular bias?

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Comprehension /discussion questions on “Environment: From car-borne to carbon challenges” 1. Why is this particular wave of environmental awareness here to stay?

2. Name some of the things that companies and governments are doing to protect the environment.

3. What kind of services do the environmental consultancy agencies offer?

4. How does Andy Mulholland believe environmental consultancy can be compared to management consultancy? Can you think of any other parallels?

5. In light of what you read in the previous article about doing business in China, do you think these

environmental consultancy agencies could break into the Chinese market? Justify your answer. Comprehension /discussion questions on “Why the Copenhagen climate talks matter” and “Copenhagen climate deal: Spectacular failure - or a few important steps?”

1. To what extent do you think the author’s/experts of the respective had a positive view on the Copenhagen Climate Talks?

2. Which was the most positive and most negative in your opinion? Why is that, do you think? Argue your case.

3. What seems to you to be the most important outcome of the Copenhagen Talks? Why do you choose that?

4. Should dealing with climate change be a voluntary task for individual countries and supervised by the UN, or do you think there is another and better way of coming to grips with this issue?

5. To what extent do you think that climate change is a real issue and to what extent is it a media hype or a political scam? Who has the most to gain from making climate change into such a big deal? Discuss.

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Vocabulary Propel cause to move

Rhetoric language designed for a purpose (often persuasive)

Lofty excessively noble

Baseline starting point (in this case) a basic measurement

Conglomerates a large corporation formed from the merger of many

At the cutting edge the latest / most advanced stage in development

Stewardship supervision / management

Ardent enthusiastic / passionate

Champion (in this case) someone who fights for a cause

Co-op a group of business

Shop around look for the best at the lowest price before buying

Hub centre of activity (in this case) centre of distribution

Getting granular looking into the fine details

Trajectory path/ direction

Assiduously closely / carefully

Churn out produce routinely in large quantities

Forgo do without

Arteries of globalization the passage (metaphorical)

Vigorous involving great effort

Hardly stretching not causing any great adjustment or personal discomfort

Fritter away waste

Lobby seek to influence (usually a politician or public official)

Burnish enhance (figurative)

Hold them to account ensure that they do what they have promised

Poll short for ‘opinion poll’ = an assessment of public opinion usually obtained by questionnaire Pioneer be the first to develop / set an example for others

Canvas cover (in this instance, involve)

Convene call people together for a meeting

Core financials Basic financial principles / equations

Scope the extent of something

Carbon pricing mechanisms strategies for charging people for the carbon they emit

Pointedly directly

Death toll number of people to die as a result of something

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Environmental Sustainability Index list showing which countries are better at protect environment

In a nutshell in the fewest possible words

Sponsored paid for (usually by a large group or company)

Orthodoxy generally accepted doctrine or theory

Variable factor liable to change

Ranking a position in a scale of achievement

Woes troubles

Malnutrition an unbalanced diet usually through lack of food

Vicious circle a problem whereby the cause and effect endlessly aggravate each other worsening the problem

Burden duty or misfortune

Shift gear change pace or direction

Benign less harmful to the environment

fares better performs / turns out better

noxious poisonous

epidemics widespread disease

surge sudden, powerful upwards movement

heat waves period of prolongued, often dangerous heat

leapfrog jump over to avoid

Panacea a solution or remedy for difficulties

Tinker with play around with

Incandescent emitting light as a result of being heated

Frugal sparing with regards spending

Mitigate make less severe or painful

Paucity insufficient in quantity

Albeit although

Gauge estimate or determine the magnitude of something

Crusade organized campaign geared at change

Tide current wave / trend

Pick up steam become widely recognized / popular

Eschew deliberately avoid

Forecast predict

Exacerbate make worse

Free up make available

Engender cause, bring about

Freewheeling without care (metaphorical)

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Laddering up climbing the social ladder (colloquial)

Retailers shops / department stores etc…

Letting up stopping / reduction

Philanthropic seeking to promote the welfare of others / selfless

Potholes a hole in the surface of the road

Palpitations rapid, strong, irregular heart beat

Barrage bombardment

Heralding giving a sign that something is about to happen

Per capita per person / per head

Subsidies money given to an struggling industry by the government to help them keep prices low and compete on the market Mandates an official order / law

At odds with contradictory / ill-filling

Surpluses more than is needed or can be sold

OECD countries organization for economic co-operation and development / a group of countries committed to democracy and the market economy Stumbling block causing difficulty or hesitation

Commodity prices price of raw material / agricultural product

Crop yields the amount of corn / barley / rye etc… produced in a harvest

Drought abnormally low rainfall and thus water shortage

FAO Food and agriculture organization

Chronic long-lasting and difficult

Rationing fixed, small amounts of food allotted to individuals in times of

shortage

Impetus force

Acreage Land used for agricultural purposes but not necessarily

measured in acres

Directive an official instruction

Council of ministers Now known as The Council of the European Union. This institution consists of government ministers from all the EU countries, who take detailed decisions and pass EU laws. Arable suitable for growing crops

Pondering considering

Pursuing seeking to attain

Violate break or fail to comply with a rule

Mandatory compulsory / required by law

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Hazardous potentially dangerous

Tariffs tax or duty on imports and exports

Levy impose a tax on

Surcharges additional payments

Emerging becoming apparent

Rehabilitation restoring something to its former condition

Grant money given from one government and not to be repaid

Discount (in this case) disregard

Makes a run guarantees success

Virtually almost

Aggregate value a value created by the total supply or (in this case) demand for

goods in an economy at a specific time

Concession (in this case) a thing granted in response to demands

Water velocity the flow of water

Trade show a fair with a number of stalls where professionals in the same

industry exhibit their products or services

Facilitate to make an action easier

Hampered impeded from making progress

Discriminatory showing bias towards one category/ thing / person over another

Harassment aggressive pressure or intimidation

Onerous involving great amounts of effort

Broker (verb) arrange or negotiate

Multilateral agreed on by three or more parties

Veteran a person with a lot of experience

FTSE 100 100 blue chip stocks that trade on the London stock exchange

Suppliers companies who sell goods to other (often larger) companies

Disclose make public

Marks and Spencer A British chain of department stores

Carbon neutral producing no carbon emissions

Cap (verb) put a limit on

Substantially a lot

Carbon footprint the impact of human activity on the environment, measured by amount of harmful gasses emitted in the life cycle of a product

Supply chain the complete network of organizations delivering to each other

Procure obtain

Paradigm typical example

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Integral central

Thrive do very well (esp. in business)

Fall foul of come into conflict with

Remote far from the cities / towns

Sizable quite large

Revenues company income

Staff retention ability to keep employees for long periods

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CORPORATE SOCIAL RESPONSIBILITY

A change in climate Jan 17th 2008�From The Economist print edition

The greening of corporate responsibility AL GORE has done a wonderful thing for corporate bosses. By helping to propel climate change to the top of the global agenda, he has opened up a world of new opportunities for them. Opportunities for rhetoric, for a start. The green theme allows chief executives to adopt a planetary perspective. “It's what survival will be about in the 21st century,” proclaims Coca-Cola's Neville Isdell, talking of his company's plans for water conservation. Over at PepsiCo, Indra Nooyi stresses the importance of companies embracing “purpose” as well as performance, with products that “contribute positively and responsibly to human civilisation”.

Beyond the lofty talk, reducing a company's output of greenhouse gases and encouraging “responsible” use of resources can also mean cutting waste and saving money. Whether it is discouraging the use of plastic bags in a supermarket or switching off a law firm's computers at night, there are plenty of quick wins for most companies. This is doubly satisfying—doing well and doing good—and therefore extremely popular.

For some companies the gains to be had from cutting waste and improving energy use are very large. United Technologies Corporation (UTC), whose products range from aerospace to air-conditioning systems, has reduced its carbon footprint by 19% over the past ten years even as it has doubled its output, according to George David, the CEO. “We've had an explosion of doing more with less,” he says. In 2008 UTC is aiming for growth of 10% while cutting carbon emissions by a further 5%. Looking ahead, some companies think the demand for efficient and clean energy use is an opportunity not just for savings but for growth. Mr David thinks that in 30 years' time conservation and related areas could make up 30% of the company's business, from nothing today. DuPont, a chemicals giant, is starting to set targets for increasing revenue from “non-depletable” products and services. At the Clinton Global Initiative last September Standard Chartered, a bank with big operations in emerging markets, pledged to spend $8 billion-10 billion over five years on financing renewable energy projects in Asia, Africa and the Middle East. Peter Sands, the chief executive, says that since enormous amounts of money will have to be deployed in this area in the coming years, “we want to be active leaders.”

Sootless in Seattle But leadership on “sustainability” is not easy. Some of the companies that set themselves the goal of becoming carbon neutral by 2010 or 2012 will struggle to find a way to do it. For those that are serious about changing their impact on the planet, it will be something of a voyage of discovery. The starting point is to find out the size of their current carbon footprint. “We find with energy and greenhouse gases, if you start to measure, people reduce the usage,” says Linda Fisher, the chief sustainability officer at DuPont. Measuring is not a simple task,

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but once a company has a proper baseline it can see what can be changed. Commitment from the top is crucial.

What are the truly committed companies doing? Three examples—an outdoor-goods business, a logistics company and one of the world's biggest conglomerates—give an idea of what is happening at the cutting edge.

If your business is equipping people for outdoor adventure, then careful stewardship of the environment seems a natural. Sure enough, outdoor-goods companies such as Patagonia (“every day we take steps to lighten our footprint and do less harm”) and Timberland (“our love for the outdoors is matched by our passion for confronting global warming”) are among the most ardent champions of sustainability. The same goes for Seattle-based REI, America's biggest consumer co-operative with over 3m members and 80-plus stores.

As a co-op, REI enjoys the luxury of not having to worry about Wall Street's expectations each quarter. It can think long-term. Four years ago it decided it had to aim to be climate-neutral and brought in consultants to establish a baseline and help produce a plan. The target date is 2020, with a one-third reduction by 2009 against the 2006 baseline.

REI was shocked to find that more than a quarter of its carbon emissions came from flights associated with the adventure travel it organises, so it started to buy carbon offsets for these trips. One-fifth of its emissions comes from electricity consumption, so it shopped around for renewable sources, such as hydro power in Washington state. It opened a second distribution hub in Pennsylvania to cut energy waste in transport. It also looked at ways to reduce greenhouse-gas emissions from employee commuting, which account for about a fifth of the total, so it is providing incentives for its people to cycle to work. “Our team is really getting granular,” says Sally Jewell, REI's chief executive.

The company is also working on the carbon footprint of its buildings, its use of paper, its packaging and the eco-friendliness of its products. Together with other manufacturers, it is looking at eco-sensitive materials, which need to be natural but also to do the job in hand well. Green labelling will follow.

The lesson from REI is that going seriously green involves a lot more than setting a target date for zero emissions. It requires measuring and managing. That turns out to be hard, intricate work which stretches right across a company's operations, and perhaps beyond. At present, REI counts the carbon once it owns a product: for example, it takes responsibility for its own brands' transport from the factory. It does not include its suppliers' operations in its carbon calculations because it has yet to work out how to do it. “But I think that's coming,” predicts Ms Jewell.

The non-flying Dutchman You know a boss is serious when he gives up his private jet, swaps his Porsche for a hybrid Prius and drives rather than flies all the way from Amsterdam to Davos. Peter Bakker believes that being on top of the climate-change issue is a prime business need for TNT, the Dutch logistics company he heads. He thinks customers may well shorten their supply chains to stop shipping so many parts around the world by air. Regulators may impose new rules, such as a carbon tax

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or carbon labelling, which could affect TNT's business model. Investors are asking questions about sustainability. “Only those companies that can make the shift to manage this as an integral part of the business will be able to respond fast enough,” he says.

Last year Mr Bakker launched “Planet Me”, a campaign to change the company's carbon trajectory. TNT's carbon footprint has been measured, targets for reducing it will soon be set and efforts will be made to help employees lead greener lives both at work and at home. For starters, the travel budget is being cut by 20% (a saving of €3.2m a year, which more than covers the €2.8m spent on installing state-of-the-art desktop video-conferencing systems). In 2010 TNT will move its headquarters to what is designed to be a carbon-positive building that will be producing green energy to spare.

TNT intends to monitor its carbon emissions assiduously, giving customers a tracker to show CO2 emissions of the services they are buying. Reporting on emissions will follow the same rules as financial reporting, so there could be warnings of poor performance just as a company might issue profit warnings. Bonus schemes will be linked to this.

But there is no escaping the fact that, as a global transport company with a big fleet of aeroplanes and trucks, TNT churns out greenhouse gases. In 2006 it produced 826 kilotonnes of CO2. To cut down on emissions from the trucks, it is introducing hybrids and electric vehicles. The 44 aeroplanes are trickier. They account for half of all TNT's emissions, and there is little the company can do but try to run these as efficiently as possible. It says it is prepared to invest in promising aircraft technologies.

Its fleet includes two Boeing 747s which fly back and forth between Liège in Belgium and Shanghai, accounting for half the company's fuel consumption. “Two years ago we didn't think of climate change when buying 747s,” says Mr Bakker. “Today it would be a main item if we were considering buying two more.” But would TNT really forgo increasing its business with China?

The logistics industry provides the arteries of globalisation, and TNT's experience suggests that pressure for more responsible strategies on carbon emissions will spread through those arteries. Some of TNT's customers in Scandinavia, for example, have started to inquire about the carbon impact of transporting their parts. TNT is asking its own suppliers and subcontractors to be committed to the environment too, and selects them with that in mind.

The list of big companies that have put the environment or other aspects of CSR at the heart of their strategy is not very long, but one name usually tops it: GE. In 2005 it launched “ecomagination”, a vigorous push to invest in green technology and expand sales of products and services with measurably better environmental performance. Products range from light bulbs to gas turbines to railway and jet engines and have to offer a sustainability improvement of at least 10% to be included.

General Eclectic Like most such initiatives, ecomagination is partly a packaging and public-relations job, bringing together a number of things the company was doing

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anyway. Some say it is not even particularly ambitious, given the gains in energy efficiency that technology is producing across the board. Part of the plan involves a cut in greenhouse-gas emissions in 2012 of 1% compared with the 2004 baseline—not bad for a company that also expects to grow strongly over that period, but hardly stretching. Sure enough, GE is beating its targets, with emissions already down by 4%. There are no targets yet for saving water (though GE says these are on their way).

Still, GE is big, and ecomagination has scale. R&D investment in cleaner technologies is to rise from $700m in 2005 to $1.5 billion in 2010. By then the company expects revenues from ecomagination products to be at least $20 billion.

This is turning out to be a good bet. “We've sold out in eco-certified products to 2009,” says Bob Corcoran, the vice-president for corporate citizenship. You can't buy a GE wind turbine before 2010. Employees like the green focus and have come up with initiatives of their own that are worth some $70m a year in energy savings. All this has helped to polish GE's reputation. The company still gets bad marks for its response to the toxic mess it poured into New York's Hudson river long ago, but it now has fans among environmentalists too.

GE has not forgotten that it is in the business of making money, not doing social work. “No good business can call itself a good corporate citizen if it fritters away shareholder money,” says Mr Corcoran. GE has 6m investors, and “it's their money too.” The company is simply moving in the direction in which it thinks social pressures will push it anyway.

In doing so, it is also behaving in ways that would have been hard to imagine a few years ago. It has joined together with other big companies and NGOs to form the US Climate Action Partnership to lobby for national legislation in America to cap carbon emissions. Europe already has a cap-and-trade system, and GE would like a more uniform set of rules across the world.

There is no doubt that the greening of corporate responsibility rings a bell with many companies. They can cut costs, delight employees and burnish their brand. By preparing their business for the expected demands of customers and regulators they may also be giving themselves a competitive advantage. But if it is to involve much more than public relations, it will be long, hard work. As companies' claims of green virtue multiply, so will the efforts by organisations such as Climate Counts to monitor them and hold them to account. Few customers will buy green at the expense of price or quality, and it is early days for much of the research and investment in clean technologies. Besides, the demand for sustainability varies greatly from place to place. Europe and Japan have mostly been ahead of America. And in China the dash for growth comes first.

Big business says addressing climate change 'rates very low on agenda'

Poll of 500 major firms reveals that only one in 10 regard global warming as a priority

By Tricia Holly Davis, Geoffrey Lean and Susie Mesure�Sunday, 27 January 2008

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Global warming ranks far down the concerns of the world's biggest companies, despite world leaders' hopes that they will pioneer solutions to the impending climate crisis, a startling survey will reveal this week.

Nearly nine in 10 of them do not rate it as a priority, says the study, which canvassed more than 500 big businesses in Britain, the US, Germany, Japan, India and China. Nearly twice as many see climate change as imposing costs on their business as those who believe it presents an opportunity to make money. And the report's publishers believe that big business will concentrate even less on climate change as the world economy deteriorates.

The survey demolishes George Bush's insistence that global warming is best addressed through voluntary measures undertaken by business – and does so at the most embarrassing juncture for the embattled President. For this week he is convening a meeting of the world's largest economies to try to persuade them to agree with him.

The meeting – in Hawaii on Wednesday and Thursday – follows the US's refusal to accept binding targets for reducing carbon dioxide emissions, the main cause of global warming, in international negotiations in Bali last month, and is seen as an attempt to develop a less rigorous approach to the crisis.

But the new report shows that even business does not support this, with four out of the five companies surveyed wanting governments to take a central role in tackling climate change.

The survey, carried out by the consulting firm Accenture, found that only 5 per cent of the companies questioned – and not one in China – regarded global warming as their top priority. And only 11 per cent put it in second or third place.

Overall it ranked eighth in business leaders' concerns, below increasing sales, reducing costs, developing new products and services, competing for talented staff, securing growth in emerging markets, innovation and technology. Although most are taking limited action to reduce their own emissions, almost one in five had done nothing.

Mark Spelman, global head of strategy at Accenture, told The Independent on Sunday at the World Economic Forum in Davos last week: "Climate change is not going to get nearly the same degree of attention here as it would have achieved if the economic outlook were brighter. Whenever there are underlying economic concerns, people will focus on them."

The report makes it clear that – in contradiction of the Bush administration's position – business is waiting for governments to take the lead. Nearly half of all the companies worldwide said that climate change was already a major issue for them and three in five expected it to be so within five years. But more than half confessed to be struggling to understand its implications.

Matthew Farrow, head of environment for the Confederation of British Industry, agreed that companies are having a hard time digesting climate change, but added: "The core financials need to be right, but business also needs to understand how climate change will affect the marketplace and realise those

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business opportunities."

Some 67 per cent of the businesses surveyed agreed they have a role to play in tackling global warming, but only four out of 10 felt in a position to fulfil it. In China only 14 per cent of those questioned felt in a strong position.

The report concludes: "Businesses clearly are seeking long-term signals about where and how to invest. They are reluctant to make big investments in climate change-related initiatives until the scope of future regulation becomes clearer".

This point has been made to US and European governments by businesses in their own countries. The European Corporate Leaders on Climate Change group, made up of the heads of major companies – which persuaded both Tony Blair and EU President José Manuel Barroso to make climate change a priority – has called for "a strong and clear policy framework" to enable cuts in emissions.

And the US Climate Action Partnership – which includes the heads of blue-chip companies such as General Electric, DuPont, and Alcoa – has urged Mr Bush to "establish a mandatory emissions pathway" leading to a reduction of up to 30 per cent in US emissions within 15 years.

Yesterday, Mark Kenber, policy director at the Climate Group, said: "These disappointing findings highlight the fact that carbon pricing mechanisms are not yet strong enough for businesses to incorporate climate change risks and opportunities into traditional business strategy".

Environment and development How green is their growth Jan 24th 2008�From The Economist print edition

A new argument that economic progress can help to ease environmental woes, just so long as the governance is good too

CAN poor countries afford to be green? That is a question which politicians in the developing world have often asked rather pointedly. To them, it seems that the obsession of some rich types with preserving forests and saving cuddly animals like pandas or lemurs, while paying less attention to the human beings living nearby, is both cynical and hypocritical.

There is, of course, plenty of evidence that greenery and growth are not polar opposites. After decades of expansion in China and other fast-emerging economies, some of the negative side-effects and their impact on human welfare, above all the death toll caused by foul air and water, are horribly clear. Yet the relationship between growth and the state of the environment is far from simple.

Some new light has been cast by a team of researchers led by Daniel Esty of Yale University, who delivered their conclusions this week to the World Economic Forum in Davos, Switzerland. What they presented was the latest annual

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Environmental Sustainability Index, which grades the “environmental health” of 150 countries—using many indicators, from population stress and eco-system health to social and institutional capacity. This year's report focuses on the link between the state of the environment and human health.

In a nutshell, what the new report (also sponsored by the European Commission and Columbia University) suggests is that poor countries have been quite right to challenge the sort of green orthodoxy which rejects the very idea of economic growth. Indeed, the single biggest variable in determining a country's ranking is income per head. But that doesn't imply that economic growth automatically leads to an improvement in the environment.

The team's finding is that growth does offer solutions to the sorts of environmental woes (local air pollution, for example) that directly kill humans. This matters, because about a quarter of all deaths in the world have some link to environmental factors. Most of the victims are poor people who are already vulnerable because of bad living conditions, lack of access to medicine, and malnutrition. Among the killers (especially of children) in which the environment plays a role are diarrhoea, respiratory infections and malaria. These diseases reinforce a vicious circle of poverty and hopelessness by depressing production. According to the World Bank, the economic burden on society caused by bad environmental health amounts to between 2% and 5% of GDP.

Mr Esty's analysis suggests that as poor countries get richer, they usually invest heavily in environmental improvements, such as cleaning up water supplies and improving sanitation, that boost human health. (Their economies may also shift gear, from making steel or chemicals to turning out computer chips.)

But the link between growth and environmentally benign outcomes is much less clear, the study suggests, when it comes to the sort of pollution that fouls up nature (such as acid rain, which poisons lakes and forests) as opposed to directly killing human beings. The key to addressing that sort of pollution, Mr Esty argues, is not just money but good governance.

A closer look at the rankings makes this relationship clearer. Of course it is no surprise that Switzerland fares better than Niger. But why is the poor Dominican Republic much healthier and greener than nearby Haiti? Or Costa

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Rica so far ahead of Nicaragua, whose nature and resources are broadly similar? And why is wealthy Belgium the sick man of western Europe, with an environmental record worse than that of many developing countries?

A mixture of factors related to good government—accurate data, transparent administration, lack of corruption, checks and balances—all show a clear statistical relationship with environmental performance. Among countries of comparable income, Mr Esty concludes, tough regulations and above all, enforcement are the key factors in keeping things green.

All this may be a helpful way of looking at pollution in the classic sense, but there is another factor that may upset all previous calculations about the relationship between growth and the state of the earth: climate change. Greenhouse emissions do not poison people, or lakes or woods, in the direct or obvious way that noxious chemicals do. But at least in the medium term, they clearly alter the earth in ways that harm the welfare of the poor.

Paul Epstein of the Harvard Medical School says the impact both on nature and directly on humanity of global warming will swamp all other environmental factors. As alterations in the climate lead to

mass migrations, epidemics will spread; as temperate zones warm up, tropical diseases like malaria will surge; storms will overwhelm sewer systems; heat waves will push ozone levels up.

He may be right, but here too economic growth, coupled with good governance, may yet prove to be a source of solutions rather than problems. At the moment, perhaps 2 billion people have no formal access to modern energy—they make do with cow dung, agricultural residue and other solid fuels which are far from healthy. Unless foresight and intelligence are applied to the satisfaction of these people's needs, they may embrace the filthiest and most carbon-emitting forms of fossil-fuel energy as soon as they get the chance.

A mixture of economic growth and transparent governance may offer the only chance of avoiding that disaster. Indeed, everyone will gain if poor countries find a way to leapfrog over the phases of development which in so many other places did terrible harm to the environment.

On the rebound

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Dec 17th 2007�From Economist.com

Energy pleas ignore an important bit of economics ENERGY efficiency is probably the most popular environmental panacea. While politicians discuss complicated global climate-change deals, economists tinker with intricate emissions-trading schemes and engineers design a new generation of nuclear-power plants, many greens advocate simpler steps: buying more efficient cars, replacing wasteful incandescent bulbs with efficient fluorescent ones and installing proper insulation. The International Energy Agency reckons that more efficient manufacturing, cosier houses and frugal transport could reduce energy demand worldwide by a third by 2050.

With that in mind, governments are prodding businesses to make their products more efficient. A voluntary agreement between the European Union and big carmakers has helped boost fuel economy 12% above its 1995 level, although the target of 25% by 2009 will not be met. The airline industry has promised great strides in jet-engine efficiency to mitigate the environmental damage caused by flying. Best of all, unlike proposals for green taxes or higher electricity prices to pay for expensive windmills and nuclear plants, the prospect of lower power and petrol bills makes efficiency measures attractive to consumers.

Given that transport accounts for between one-quarter and one-third of the emissions of most developed countries, a 12% improvement in fuel efficiency sounds impressive. But economists know better.

Because fuel costs are a significant part of the total price of running a car, lowering them means cheaper motoring. And cheaper motoring, all other things being equal, means more motoring. The same applies to flying, home insulation or industrial processes: any reduction in energy use means a reduction in cost which, in turn, leads to an increase in demand, eating into the savings from more frugal engineering. In energy economics this is known as the “rebound effect.” It was first described in 1865 by William Stanley Jevons, an economist investigating steam engines.

Since then, says Steve Sorrel, an economist who produced a report about the rebound effect for Britain’s Energy Research Centre, there has been little research into just how big the rebound effect is. Estimates of the “direct” effect range from almost zero to over 100% (ie, greater efficiency encourages so much more consumption that net energy use actually goes up).

The precise size of the effect depends on both the good in question and the wealth of those consuming it. “The potential for a big rebound is higher when you’re looking at low-income groups,” says Mr Sorrel. “Lots of poor people can’t afford to make their homes as warm as they’d like. So they’ll take any efficiency improvement in the form of more heating, whereas the rich—who are already comfortable—will probably spend the savings on something else.”

Nor is that the end of it. Rich people may not consume more heating, but whatever else they spend their money on (a foreign holiday, say, or a new television) will come with an energy cost of its own. Such “indirect” effects are

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even harder to quantify, although some estimates range as high as 50%.

The paucity of data has meant that rebound has been ignored in most of the academic work done around climate change. It was not discussed in the Stern Review, a weighty piece of economic modelling produced by Sir Nicholas Stern, a former chief economist at the World Bank, which aimed to put a cost on climate change and a price on avoiding it.

The Intergovernmental Panel on Climate Change, a UN-sponsored group of experts, notes the effect’s existence but says nothing more. Most economists believe that the direct effect, at least, is fairly small, although they are much less sure about indirect effects. Others—such as Len Brooks, an energy expert formerly employed by the UK Atomic Energy Authority—reckon that rebound is a big enough problem to make energy efficiency programmes almost useless.

Answers may now be coming, albeit slowly. Britain’s environment department commissioned two pieces of work that attempted to gauge the likely size of both the direct and indirect rebound effects across the economy. Published in 2006, one study estimated the total effect at 26%, the other at 37%, although the use of different assumptions makes the figures hard to compare directly.

Mr Sorrel and his research team, after conducting an exhaustive review of the literature, will say only that they believe the size of the effect to be at least 10%, and frequently much higher. Whichever estimate is nearest the mark, the effect seems significant. Environmentalists may wish to re-do their sums.

The Greening of the U.S. Consumer Consumers today are reducing their carbon footprint and their spending. The trend could offset the government's stimulus plans Lisa Goodson, a 38-year-old mother of three children 5 and under, reuses printer paper by flipping every sheet over when she's done using one side. She wears a sweatshirt to keep warm during the day when she dials down the heat in her house in Greenville, S.C. These small gestures are part of Goodson's personal crusade to reduce her carbon footprint. "I think twice before buying anything for the kids, and I've even talked to my parents about holding back on gifts," says Goodson, who thinks her house is already loaded up with too much stuff and has lately been cleaning out toy boxes and donating toys to charity.

Goodson is part of a small, but growing, tide of consumers who have started shifting their spending patterns because of their concern about global warming. They want to contribute in any way they can to help reduce greenhouse gases. This kind of consumer behavior is starting to pick up steam nationwide. Consumers are choosing to drink tap water over bottled water, carrying reusable bags into supermarkets and eschewing plastic grocery bags, and buying locally produced, in-season foods, rather than purchasing fruits and vegetables that have traveled thousands of miles on carbon-emitting trucks.

"You know there's a shift, when drinking tap water is cooler than drinking Pellegrino or Evian," says Faith Popcorn, founder and chief executive of trend forecasting firm.

End of the Sub-Zero Fridge?

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All this runs counter to the spending patterns of the last few years. And some economists and retail experts say the trend could exacerbate an already slowing consumer spending outlook. The days of easy credit [the U.S. Federal Reserve cut a key short-term interest ratefrom 6% to 1% in a two-year period after 2001] that freed up cash and engendered high-speed consumption are over for now [BusinessWeek.com, 1/10/08].

And so apparently is the kind of freewheeling spending that saw Americans replace kitchen stoves, refrigerators, and washers and dryers because they wanted to acquire the Viking stove which cost between $3,000 and $10,000, or a brushed-steel Sub-Zero refrigerator for $2,000, though similar appliances were available from mainstream brands like Kenmore or Maytag for a fourth of the price. Kitchen and Bath Business magazine reported the number of home renovations tripled in the last five years to over $100 billion.

Newspapers and magazines reported people were installing walk-in closets that were larger than their bedrooms. And to fill those fancy closets, middle America chose to shop at higher-end stores such as Nordstrom (JWN) and Saks (SKS) and started buying luxury items such as Coach (COH) handbags. "It was a time of laddering up, and people were buying the more expensive car or the extravagant vacation, but now they are doing the reverse of that," says Brian Bethune, retail economist at financial analytics firm Global Insight.

Pressures on Consumers Mounting

From the recent swoon of retailers as varied as J.C. Penney (JCP) and Saks, Kohl's (KSS) and Coach, all of whom reported negative or slowing sales, there is no doubt people are pulling back on all fronts. The U.S. Commerce Dept. reported on Jan. 31 that consumer spending, which accounts for two-thirds of the economy, rose by just 0.2% in December, down from a 1% gain in November. It was especially worrisome because December is generally one of the best consumer spending months, with people buying gifts during the peak holiday season.

There are many pressures on consumers -- not only is there no additional free money, since the home equity loan market has dried up, but mortgage payments are on the rise, even as home prices continue to fall across the nation. On top of that, there's no letting up of high gas and heating oil prices. "Consumers have adopted more cautious spending plans," says Richard Curtin, director of the Reuters/University of Michigan consumer sentiment survey, which said on Feb. 1 that consumer confidence had dropped by one-fifth in the last 12 months.

It could be difficult to rely on consumer spending to maintain the kind of growth the U.S. has enjoyed in recent years, especially if you add to all the pressures a fundamental change in consumer behavior. Bridal and children's magazines have been writing about an increasingly popular trend of no-gift wedding and birthday parties, where the hosts identify philanthropic causes or nonprofit groups to which guests can send a check instead.

A Vacation in Your Own Backyard

It's not uncommon to see discussions on travel Web sites about whether it hurts the environment to get on an airplane and one site, responsibletravel.com, even poses the question, "to fly or not to fly?" There's evidence from conversations on these sites that some folks are even opting to take vacations with their children close to home and are discovering county and state parks.

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Saving for Hard Times

No wonder airlines are working harder to retain eco-minded customers -- Continental (CAL), Delta (DAL), and Virgin have all launched carbon-offset programs. And people are starting to buy carbon-offsets or energy credits from companies that promise to identify ways to make up for carbon emissions or energy use by planting trees or investing in wind or solar energy. One such provider, TerraPass sold about 100,000 such carbon offsets by the end of 2007, a threefold increase since the beginning of the year.

The growing environmental awareness, and tougher economic times, could even influence the effectiveness of economic stimulus plans now being weighed by the Bush Administration and Congress. The kind of free spending the government hopes consumers will revert to might be difficult in this new mood. South Carolina's Goodson says her family of five will probably get a check of $2,100. Will she spend it? "No way," she says. "Spending got us to where we are today, and the last thing that the country needs is for people to hit the mall. I'll put my check in the bank and save it for hard times."

By Pallavi Gogoi

Economic crisis gives us a chance of repairing climate damage Large-scale investment to fix global finances is an opportunity to move quickly to a low-carbon economy

• Terry Barker and David King • guardian.co.uk, Tuesday 17 March 2009 12.56 GMT

The financial crisis that started in May 2007 is a global catastrophe. As central banks, one after another, reduce interest rates towards zero, they risk the world economy falling into a global liquidity trap in which monetary and fiscal policies become ineffective and regulation becomes the main instrument for recovery. The effect of such a trap is to risk global depression and mass unemployment for years to come.

In the background lurks another crisis — the risk of dangerous climate change. Although these changes are slow-moving, increasing concentrations of greenhouse gases will risk more climate catastrophes that will damage human wellbeing and conceivably lead to mass unemployment in the very long run.

These two crises are not independent. Both arise from human greed largely unrestrained by ethics, or concern for others in distant lands, or future generations. And the state of the world's finances can either hinder our efforts to tackle climate change or, if the world responds correctly, provide an unrivalled opportunity to help.

The most prominent policies at the moment are market-based instruments such as emissions trading schemes, which put a price on carbon dioxide emissions. But the financial crisis is rendering such policies ineffective. Carbon allowance prices in the EU emissions trading scheme have hit new lows recently as plunging economies reduce the demand for electricity.

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If the short-term reduction in demand for emission permits continues into a collapse of allowance prices to near zero, then not only does the market lose its ability to cap emissions but we would also lose the valuable experience built up by companies in the carbon market. One way to restore profitable allowance prices in the scheme is to tighten the emission reduction targets for 2020. Even an announcement that such tightening is being considered may be enough to support the prices.

So how can investment best achieve climate change stabilisation at different carbon prices? The Intergovernmental Panel on Climate Change (IPCC)'s fourth assessment report, published in 2007, examined this and concluded that most actions proven to reduce greenhouse gas emissions involve regulation, tradable permits or carbon taxes. Not so many involve direct government investment, such as making buildings more efficient, reducing deforestation, investing in public transport, and subsidising and supporting research in renewable energy.

But things have changed since the last IPCC report. The global financial markets are not as they were at the end of 2006, when the assessment was finalised. We face the prospect of a large and global unemployment problem, and carbon markets that do not deliver the expected incentive to induce technological change. In this new context, measures such as taxing carbon, tradable CO2 allowances and strong regulation of industry begin to seem less immediately attractive than simple direct investment by governments.

As the financial crisis continues, there is widespread recognition of a need for substantial investment by governments — fiscal stimuli — to restore confidence, spending and employment to more normal levels. This is where resolving the financial crisis can help climate policy. The investment should be in decarbonising national economies and international transportation at an accelerated pace.

Such action presents an immediate solution to both crises if combined with the bankrupting of the insolvent banks, with appropriate protection of depositors and small shareholders. Other global measures are also needed as a coordinated response to the crises for the investments to work. However, the scale of the financial crisis means that much more investment will eventually be required. Money spent on decarbonising is likely to seem small in retrospect.

We are in a global depression, not quite on the scale of the Great Depression Of 1929-1932, but approaching it in the UK, many other European countries and in Japan. Our January 2009 outlook suggests that on present policies Britain's GDP will fall by 3.8% in 2009, and then by a further 6.2% in 2010.

Such a sharp contraction in economic activity is bound to have an impact on greenhouse gas emissions. In a fossil fuel-based global economy, growth is closely correlated with these emissions, so recession means lower emissions, for a time at least.

This of course does not mean that the financial crisis helps to address the climate change problem because the effect is hopefully short term. But the crisis may provide the stimulus we need to move to a low-carbon economy. In dismal economic times, investments in things such as infrastructure and new technologies become available at lower cost and greater benefit than at other times.

So let us take stock. We have a critical and deepening global financial crisis that demands large-scale job-creating investment. And we have an impending global climatic crisis that could be partially solved by large-scale job-creating government investments. If it cannot be quickly resolved, the financial crisis itself could seriously undermine the market-led climate change policies we have, so there is an increasing need to go for more direct investment approaches to tackle climate change.

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The answer is obvious. The resolution of the global financial crisis must be seen as an opportunity to kick-start a rapid shift to a low-carbon economy, which is absolutely necessary in the coming decades if we are to avoid dangerous global climate change.

Sir David King was the government's chief scientific adviser and is now director of the Smith School for Enterprise and the Environment. Terry Barker is director of the Cambridge Centre for Climate Change Mitigation Research

• guardian.co.uk © Guardian News and Media Limited 2009

What Effect Will Ethanol And Corn Have On Inflation?

by Tim McMahon

Unless you have been living under a rock you have probably noticed that the government has mandated that the gasoline you are pumping into your car these days has Ethanol in it now. You have probably also heard that it is good for farmers and the environment but lets look at all those factors and one more...

Is there a link between Ethanol and Inflation?

These days Ethanol is the hot topic in many different circles including conservation, farming, energy, and even in investment circles.

Ethanol is the latest additive to be used in gasoline. Throughout the years several different additives have been added to gasoline. Back in the 1940s tetraethyl lead was added to help boost the octane of gasoline creating the first “Ethyl” gasoline. But by the mid-1970's it was found that a thin coating of Lead dust was covering the earth from the exhaust fumes. And since lead was toxic to animals and especially to humans, lead was banned from gasoline in 1978. But refineries needed a new additive to boost octane. So, they began adding methyl tertiary-butyl ether (MTBE) instead. Which was the first “unleaded” gasoline.

Unfortunately, MTBE was found to cause cancer and as it leaked from underground gasoline storage tanks it found its way into local water supplies and so instead of dying of lead poisoning people began getting cancer. So once again the government mandated a change. The result of all this is that ethanol is now replacing MTBE in gasoline.

Talking about ethanol is good politics. Imagine a single topic where you can fight cancer, battle pollution, boost the economy, fight foreign oil dependence and help farmers all at once and you have Ethanol! And to top it all off Ethanol is renewable. So what’s the problem?

First of all, there is some debate as to whether leaking ethanol is any better than leaking lead or leaking MTBE. So ethanol might not be much of a solution to either cancer or pollution.

Secondly, there is a heated debate about the economics of producing ethanol i.e. whether it would be economically viable without government subsidies.

Thirdly, the energy content of ethanol is approximately two-thirds that of gasoline by volume. So it takes more ethanol to run your car than gasoline. Put another way, the more ethanol you burn the worse your mileage (mpg) will be. Ethanol is usually used in a blend known as E10,

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which is 10 percent ethanol and 90 percent gasoline. At levels higher than this your car needs to be readjusted to account for the lower energy content.

And since ethanol is made by turning starch or sugar from plants into alcohol it needs to be distilled and distillation requires heat. Heat requires energy, so there is a debate as to whether ethanol actually produces more energy than it requires to make it. So although it might reduce foreign oil needs it will increase the total number of gallons of gas burned and require more energy to produce.

And finally, we come to the farmer. Because ethanol is in high demand it is lifting farm fortunes. It has been said, “Ethanol is one of the best things to happen to the agriculture industry since the combine.” Ethanol is dramatically increasing the demand for corn because the grain required to fill the gas tank of a minivan with ethanol is sufficient to feed one person for a whole year.

It is currently taking about 6% of the US corn crop to make 90% of all US ethanol. But ethanol is only currently 10% of the fuel. So the question arises can we use 12% of all the corn and double production to 20% of our fuel? Or can we use 24% of all corn to produce 40% of our fuel?

Since the government mandated the change in gasoline additives from MTBE to Ethanol, Corn prices have almost doubled, going from just over $2.00 a bushel to almost $3.50. So imagine where the price of corn would go if we used 40% of the available supply in making ethanol.

In reality, corn-derived ethanol won't make a noticeable dent in our overall oil usage even though we grow more corn than anyone in the world. An Energy Department official said 18 billion gallons was the maximum amount of corn ethanol that we could be produced annually. Which is only a small fraction of our 140 billion-a-year oil habit. And currently we are only producing something like 25 million gallons of ethanol.

So if producing 25 million gallons of ethanol drives the price of corn up to $3.50 a bushel how much would corn cost if farmers sold enough of it to make 18 billion gallons?

What effect will higher corn prices have on other products that use corn as a feedstock? Corn goes into much more than just corn on the cob and tortillas. In reality, almost every farm raised animal in the United States is force-fed corn. Everything from Beef to chicken, to pork and even salmon! It takes over ten pounds of corn to raise one pound of beef. And meat isn’t all corn is used in everything from adhesives to crayons, peanut butter and yogurt. As a matter of fact corn is already the nation’s no. 1 crop. Of the 10,000 items in a typical grocery store 2,500 of them use corn in some fashion or other.

So how much will prices of everything else inflate if the price of corn doubles? Or triples? Or even Quadruples as more and more corn is used for fuel. The only mitigating factor is that as prices for corn rise, the government’s subsidy to corn farmers will decrease. Last year the government spent nearly 8.9 Billion dollars in corn subsidies but next year if current prices continue that could fall to $2 Billion.

So although the government may save almost $7 Billion consumers will most likely end up paying that and more in increased costs for all those 2,500 corn related products.

That brings us back to the question of the energy it takes to produce ethanol. One of the biggest energy components of producing Corn is nitrogen fertilizer and one of the biggest components of Nitrogen fertilizer is natural gas. Plus it requires a great deal of electricity to actually make the ethanol. Back in the 1970's it actually took more energy to grow and refine

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the ethanol than you got from it. Today due to increases in efficiency that is no longer the case.

So ethanol is a complex proposition that uses a significant amount of energy to produce and could have a major impact on the price of a wide variety of other products competing for the corn.

However although the price of corn has been rising in the short term since 2000 on a historical basis (over the longer term) corn is actually still very cheap in inflation adjusted terms.

Monday, February 18, 2008 - 9:09 AM MST CHINA SPENDS BILLIONS ON ENVIRONMENTAL IMPROVEMENTS, BUT IS THE WINDOW OF OPPORTUNITY CLOSING? Article from Environmental Business Journal Volume XVIII No.7/8 2005 In late April of this year, China Daily reported that, as China's population expands to about 1.6 billion citizens over the next 25 years, and as the nation's rivers and lakes run dry and become increasingly polluted, China's water supplies will be stretched to the limit by 2030. Rapid industrialization and economic growth over the last two decades has combined with this population expansion to place extreme stress on fresh-water supplies to the point where Chinese officials are pondering drastic schemes to bring water from the relatively rain-rich south to Beijing and other urban and industrial centers in the north. Even with such massive transfers, there will still be the need to prevent discharges of volumes of untreated municipal and industrial wastewater.

China's water problems are by now very well known, as are its air-quality problems. Abundant in coal resources, China relies on coal to fire approximately 70% of its electricity-generating capacity and is rapidly catching up to the United States in its greenhouse gas emissions. China is also the world's second largest importer of oil, and car ownership doubles at a rate of every two years, BBC News reported late last year. The World Bank claims that China is home to 16 of the world's 20 most polluted cities.

Keenly aware of these problems, the Chinese government has been aggressively pursuing a variety of initiatives to clean up its environment, spending billions of dollars in the process. Key air, water and solid waste laws have been in place for several years, and in January of this year, China's State Environmental Protection Administration (SEPA) elevated efforts to enforce those laws—for example, by halting about 30 construction projects because they violated mandatory environmental impact assessment laws, according to the U.S. Department of Commerce's Office of Energy and Environmental Industries (OEEI). China's Clean Production Law, which took effect in January 2003, encourages industrial facilities to conserve energy, use cleaner energy sources, use raw materials more efficiently, and develop recycling programs. A new Law on Renewable Energy, currently under development, would require power companies to purchase electricity from renewable sources.

In a well-publicized declaration, the government has vowed to make the 2008 Olympics in Beijing the "greenest" ever, and the city expects to spend a total of about $12 billion on environmental cleanup in preparation for the games. As for China's environmental market overall, SEPA estimates that $14.9 billion was spent on environmental projects during 2002, and that the environmental technology market will grow at a 30% rate annually out to 2010.

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OEEI estimates that the total annual market for environmental goods and services in China stands roughly at $32 billion today, including $19.3 billion in the water/wastewater sector, $9.5 billion in the air-quality sector, and $3.2 billion for solid and hazardous waste management. OEEI, which has an active match-making program to support U.S. firms that are trying to serve the Chinese market, says that U.S. environmental technology exports to China increased by 125% from 2002 to 2004, from $754 million to $1.7 billion. By equipment category, monitoring and analysis systems led the way at $782.8 million in sales during 2004, according to OEEI.

By media, OEEI finds, China and its foreign lenders still spend much more money on water-related projects than on air- and solid waste-related initiatives. Water tariffs are rising to support funding demands, and cities are levying wastewater surcharges. Municipal solid waste management is an emerging priority for SEPA as the volume of waste grows 9% annually.

Key market developments of recent note include the revision of China's Clean Air Law, which is now designed to restrict annual sulfur dioxide (SO2) emissions to 10-million tons until 2010 in the nation's "acid rain" and "SO2 control" zones. OEEI forecasts an enormous market opening up for flue-gas desulfurization (FGD) equipment as a result of this initiative. China also plans to invest $36 billion to construct 2,000 municipal sewage treatment facilities, as well as the associated pipeline network, to meet mandates in China's 10th Five-Year Plan.

Several of China's cities and regions have distinct environmental initiatives requiring substantial investment. Using a loan from the Asian Development Bank, Hebei Province will undertake a major wastewater management project that is designed to reduce water pollution and protect the region's water sources. In 2003, the city of Shanghai embarked upon a hospital waste disposal project under which it planned to tender about $3 billion in contracts over five years for the collection, transport and disposal of hospital wastes. The Beijing Nangong Medical Waste Treatment Center began operation in 2004, and upon the expected completion of the second phase of this project later this year, the center's capacity will increase from 15 tons to 30 tons per day.

Internal and external lending agencies are providing a substantial amount of funding for projects in China. The China Development Bank has signed a cooperation agreement with the government of Liaoning Province, under which the bank will provide a $6.05-billion soft loan and a $121-million technical assistance loan to underwrite the rehabilitation and revival of an industrial complex in Liaoning. ADB will provide a $35-billion loan to support clean energy projects in Gansu Province, while the International Finance Corp. agreed in June 2004 to provide $30 million in financing for China Green Energy Ltd., a concern established to develop and operate power projects nationwide. Also in June 2004, the World Bank approved a $128-million loan and a $10-million grant from the Global Environment Fund (GEF) to finance the Guangdong Pearl River Delta Urban Environment Project.

Although World Bank- and ADB-led projects drive a part of China's environmental market, the U.S. Trade and Development Agency (TDA) has also gotten into the act, providing more than $10 million in funds for various environmental projects. These include the establishment of a chemical/hazardous material emergency response system in Tianjin, the setup of an environmental monitoring project in Jiangsu Province, and the construction of a major wastewater treatment plant on the Yangtze River in Chongqing.

JOIN THE THRONG

To say the least, then, the Chinese environmental market is an eye-catching one for U.S. environmental firms, perhaps more so than the market in any other country outside the United States. Of course, U.S. firms are not alone in targeting China: the French firms Veolia and Suez dominate the water market

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there, and competition from European Union, Japanese, Canadian and Australian firms is generally strong. In addition, the home governments of these firms' home countries often provide stronger support than U.S. firms receive from their government.

Many of these governments provide low-interest soft loans with extended repayment terms, sometimes up to 40 years, and a significant amount of this work goes towards the development of the policy infrastructure that's required to make environmental improvement possible. OEEI reports that the Italian government is subsidizing a two- to three-year, 30-million-Euro (about $38 million) grant for environmental projects in China, while the EU is subsidizing a five-year Environmental Management Cooperation project to the tune of some 18-million Euros. The government of Canada is providing $6 million and $8 million, respectively, for two five-year projects that are designed to help China develop integrated policies that link sustainability imperatives with economic and social development goals.

Financial backing by your home government isn't necessarily what makes a run at the Chinese environmental market go, according to Bill Stead, a senior vice president with responsibility for international business development at Earth Tech (Long Beach, Calif.; www.earthtech.com). "I discount the government support that other companies from other countries get. At the end of the day, you have to be smart enough to operate on your own," he says, adding "the most beneficial support we can get is political."

Within the past eight years, Earth Tech has built a business in China that employs approximately 1,000 people, virtually all Chinese nationals, at three water facilities—projects that amount to about $200 million in aggregate value to the company. The projects consist of a sewage treatment plant in Guangzhou, controlled by Earth Tech on a design-build-finance-operate (DBFO) basis, as well as a water concession serving about 200,000 people in a municipality east of Beijing and a water treatment plant upgrade in the city of Tianjin.

As a subsidiary of Tyco International, Earth Tech was able to provide financing for these projects, which Stead describes as absolutely critical to establishing a business in China. "If we couldn't provide financing, we wouldn't be there," he remarks. Stead comments that the U.S. concept of selling man-hours "is not applicable to any extent in China. People there want complete solutions, for a fixed price."

Also essential was establishing a local presence with Chinese nationals representing the company. "It's a real tough market," says Stead, whose company opened up a rep office in 1997. "You and I will never think like the Chinese. It's a huge barrier to doing business. You have to have on your staff Chinese people who have lived in America for a while and have gone back, and can operate cross-culturally."

Going a similar route was SonTek Inc. (San Diego, Calif.; www.sontek.com), a maker of water velocity measurement equipment. SonTek identified China's enormous market potential during the late 1990s and, in 1999, hired a Chinese-American engineer to build "applications interest" in China, according to International Sales Manager Chris Ward.

"We go to these trade shows in our market, which are small and focused," Ward recalls. "We get Chinese people coming by every now and then, and one was a Chinese-American who worked for a consulting firm in the states. He said, there's a need in China, and we can sell your products there." SonTek hired an American ex-patriot in China in 2001 to build a distributor base, and since then, SonTek's parent YSI Environmental has facilitated the opening of several sales offices.

GROWING NATIVE CAPACITY

Earth Tech's Stead reports that his company hopes to close two or three new water concession deals within the next 12 months, but he suggests that the window of opportunity in China is rapidly closing to

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outsiders, as Chinese companies increasingly develop the capacity to serve this market. "We are seeing the emergence of large Chinese companies entering this space," he warns. Chinese construction companies are already active in the Middle East, and some of the large Hong Kong and Shanghai companies "are breaking away from their former government companies and are setting up in the water and environmental business very rapidly," Stead observes. "In the long run, we will see some Asian companies, mostly Chinese, as major players in this business."

On the equipment side, Earth Tech finds buying locally as increasingly important as well. "Most products we can buy in China," says Stead. "There are some foreign specialized pumps and so forth that we bring in, but generally, to compete in China, you have to know how to buy in China. The appetite in China for international expertise is declining. The window of opportunity that existed over the past 20 years is gone. There have been so many trips by Chinese people internationally that they are getting a lot more confidence in their ability to do things on their own."

In contrast with the West, where people are very busy and want to reach the deal quickly, in China, there are hosts of people seemingly "with tons of time to talk to you." emissions.

OEEI affirms that, although U.S. environmental technologies are perceived as innovative and state of the art, they are also viewed as expensive. This perception, combined with the relative lack of financial aid from the U.S. government, has historically hampered market entry for U.S. technologies and products, according to OEEI. And as Bill Stead remarks, "value doesn't count. China, unlike many countries, is totally driven by cost."

Even if foreign equipment and technology were to remain welcome in China, there are many challenges to overcome for firms that want to be successful there. Quite apart from tariffs ranging from 5% to 35% on imported goods, OEEI has identified numerous non-tariff barriers as well. For example, government purchasing practices are occasionally discriminatory, as is the assessment of fines and fees by local governments, which often hold joint ventures and multinational corporations to higher environmental standards than they do for Chinese firms.

OEEI also has heard reports indicating a certain amount of harassment of importers—that is, through onerous labeling and certification requirements and delays prompted by the influence of competitors on corruptible officials. And as for intellectual property, the Chinese government has simply not stepped up to the plate to enforce existing regulations, by many accounts. Of course, there is also the requirement to broker U.S. imports through local representatives or sell indirectly through multilateral projects or foreign-funded investment schemes. OEEI recommends that U.S. firms interested in selling into China establish a "well-managed, legitimate joint venture" or a "wholly owned foreign enterprise," but executives with experience in China report that even these options are difficult and don't uniformly lead to positive experiences.

Then there are simply matters of culture and bargaining style, which differ radically in China from those with which U.S. executives and sales personnel are most familiar. Notes SonTek's Ward, there are many middlemen involved in a potential deal, and there is an emphasis on "theory over practice," which is to say that "a lot of folks like to look at the science and understand how a technology works, but then it seems to be hard to install and implement." Striking the deal means "getting down to the meat and potatoes," Ward stresses. In contrast with the West, where people are very busy and want to reach the deal quickly, in China, there are hosts of people seemingly "with tons of time to talk to you... You're trying to get down to what you can actually do for them as opposed to talking to all these theorists."

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The decision-making process is old-fashioned and less structured than that in the West, Ward continues. He describes the process as more "feudal," with directors in charge of the process flexing their prestige and placing little emphasis on the fairness that a structured procurement process would provide. Then, of course, there's the challenge presented by the final negotiation itself. Chinese negotiators "expect you to bargain," Ward notes. "The culture is built around this, and in fact, the tone of the language changes when it gets to the bargaining stage. You have to take the hard line, especially when you get to price. You have to demonstrate strength. If you cave in right away, you look weak."

So, with a growing native capacity to provide environmental goods and services, assorted tariff and non-tariff barriers, and a substantially different culture, China might seem a place to avoid. But then there's that environmental market—$32 billion today, growing at 30% annually for at least the remainder of the decade. One thing to remember is, with China striving to join the community of international commerce, both the opportunities and the challenges can change rapidly. As Earth Tech's Bill Stead puts it, "anything you say about China today will be out of date two years from now."

China’s climate change opportunity  

• Source: Global Times [10:40 June 16 2009]

By Gerald Schmidt

China has become strong enough to surpass Germany as the third-largest national economy. Even suffering from the global recession, China’s economy is still growing. One has to have the greatest respect for the achievements of the last 30 years. Yet, the challenges ahead are going to be tougher still – measures against climate change seem to threaten the recovery and further progress, but climate change is threatening all prior gains. So, the talks on the road to a successor treaty to the Kyoto protocol are hard.

Chinese politicians, very rightly, point out that the West tends to measure with a double standard.

Industrialized countries’ affluence was built on cheap oil. Their development caused by far the largest share of the emissions that are now recognized as problematic. This is conveniently overlooked in arguing that all countries now need to reduce future emissions.

Industrialized countries tend to celebrate their emissions reductions and criticize China’s rising emissions. A share of these reductions was not really achieved, however, but only “outsourced” to China when moving manufacturing here. Now, conveniently, these emissions are China’s problem.

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China’s rise to the third-largest economy – and the largest emitter of CO2 – is taken to imply that the country has an obligation to reduce its emissions. It is less popular to look at GDP and emissions per capita, which puts the issue into a very different perspective. China, if compared by population size, still has low productivity, low material affluence, and low emissions. Industrialized countries, meanwhile, want to see and portray themselves as exemplary for their highly developed way of life. The resources used and emissions generated are so large, however, that such a lifestyle must be changed, and must not be the example for others to follow. In this regard, all countries are developing countries; change may even be harder for industrialized countries because it appears to mean giving up some of their affluence.

At present, all attention is on the new treaty. It is understandable that China, where economic development has brought millions out of poverty, is very concerned about its economic effects. Even the US and Europe, although in a very different position, are not changing as dramatically as would befit their status. China, although looking for its own ways, is so far following a Western model of development only too well, although the problems that this creates – even without counting the effects climate change could very well cause – are clear. Thus, all the mutual criticism, no matter how justified, is of little use when the whole world needs to change toward sustainability. Thus, the focus on emissions reductions is short-sighted. In fact, what we need to work toward are economies and ways of life that function better, satisfy human needs and protect our environment.

The challenge of a change toward sustainability, in the end, may pose a peculiar opportunity for China: looking over the unfairness of some of the arguments, China could show that it has not only been gaining power, but aims for greatness as it develops toward sustainability.

China has a chance to improve its environmental situation as it gets better at serving its citizens, and to develop its economy toward alternative energy and products designed to satisfy human needs while having as little negative effect on the environment as possible.

As it does this, it can put other countries to shame (which would certainly get them working on environmental improvements, too).

The expenses necessary to develop alternative energies that are focused more on quality and sustainability rather than headlong growth are great, but given China’s commitment to stimulus spending, it is not impossible.

It would be a good investment in the future.

Gerald Schmidt is an Austrian ecologist and cultural anthropologist working as German lecturer at Xiangtan University, Hunan

http://opinion.globaltimes.cn/top-photo/2009-06/437281.html

Environment: From car-borne to carbon challenges By Fiona Harvey, Environment Correspondent, FT.com site�Published: Nov 19, 2007

Environmental issues have hit the mainstream in the past few years as growing concerns over problems such as climate change, pollution in developing countries, and the loss of biodiversity have prompted consumers, governments and businesses to start finding solutions.

Tom Woollard, a veteran consultant and business development director at Environmental Resources Management, has seen it all before. He points to previous waves of

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interest in green issues, in the 1970s, 1980s and 1990s. But this one, he thinks, is here to stay.

He explains: "This is much bigger. More people are aware of the importance of these problems. We are coming to the point with issues such as climate change that now it is no longer an option whether to do something about it. It is now a must."

Most companies in the FTSE 100 - and an increasing number around the world - now report on their carbon emissions, though they are not obliged to. Wal-Mart wants its suppliers to start disclosing their carbon emissions. Companies such as Coca-Cola and Cadbury Schweppes are taking steps towards labelling their products based on how much carbon went into their production. A few companies, including HSBC, News Corporation, Dell Computer, British Sky Broadcasting and Marks and Spencer, are even going "carbon neutral".

Governments around the world are toughening environmental regulations. The US is considering a federal regulation that would cap companies' carbon output and allow them to trade in permits to emit carbon, along the lines of the system in the European Union. Waste is also increasingly regulated, as is the use of potentially harmful materials.

With so much corporate and regulatory activity concentrated on making companies greener, the market for environmental consultancy has expanded substantially. Quite how much is difficult to say, because of differing definitions of environmental work. In the UK its growth is estimated by Environmental Data Services at nearly 20 per cent a year. The sector in the UK has been estimated at £1.5bn ($3.1bn) a year.

Environmental consultancies range from one-person firms advising companies on energy efficiency or waste management, to units of large engineering groups. The Big Four and smaller management consultancies also now boast in-house environmental specialisms. For instance, KPMG has a "carbon advisory group" helping companies tackle their impacts on climate change. It also helped Ecotricity, a renewable energy company, raise finance to build wind farms. Booz Allen Hamilton has developed a way to measure the "carbon footprint" of a company's supply chain, and has refurbished its Savoy Court offices to high standards of efficiency.

Deloitte says its activities have included advising investors in areas such as renewable energy; helping organisations to procure waste management services; auditing corporate social responsibility reports; providing services to financial institutions that may have exposure to liabilities resulting from climate change; and advising the UK government on policy options on greenhouse gas reduction.

Charles Gooderham of Deloitte says: "We help clients respond to these challenges through blending environment expertise with business advisory skills. Clients benefit from sound commercial advice underpinned by a detailed knowledge of the underlying environmental drivers."

He says companies should see environmental issues as a core part of their business strategy, not an optional extra: "The best way of sustaining a paradigm shift in corporate behaviour is by making it integral to business strategy and shareholder value."

Carmel McQuaid, a senior consultant on sustainability at PA Consulting, says businesses want to prepare for tougher regulation: "Clients are increasingly seeking guidance and support on how to transform their business to thrive in a carbon constrained world. Management consultancies play a vital role in that, be it quantification and reduction of carbon footprints, developing more next-generation sustainable products and packaging, or enabling public sector projects to set leadership examples."

Consultants are also keen to develop their skills in a specialism that is rapidly expanding, and which interests and motivates people at a personal as well as an intellectual level. For younger people in particular, it is increasingly important to feel that their company is not damaging the environment. Mr Gooderham reports: "Both the opportunity to work on environment related projects, and the environmental performance of Deloitte, are seen as

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important factors by the younger generation of employees." But the environmental performance of management consultancies is itself a tricky area.

Consultancies are working to cut their "carbon footprint" - witness AT Kearney's decision to be "carbon neutral" within two years.

Achieving a lower environmental impact can be hard. Ms McQuaid notes: "Some could argue that management consultancy is not a sustainable business model due to the large footprint associated with business travel. In a carbon-constrained world, do we really want to have professions that rely on flying their people around the world?"

PA Consulting says staff regularly ask questions about the company's environmental impact, and, increasingly, clients are also asking for evidence of the company's commitment to cutting its impact when procuring services.

Ultimately, companies may find consulting on environmental issues is not so different from advising on general corporate productivity issues. Andy Mulholland, chief technology officer at Capgemini, which helps companies find ways to cut the "carbon footprint" of their computer operations, says: "The environment issue is nothing more than a question of common sense - much of the task is simply good business practice." ERM: going green helps its clients stay out of the red

Companies are much more aware of the potential damage to their reputation of falling foul of environmental concerns than they were in 1971 when Environmental Resources Management was founded.

In part, that is because of the rise of global communications, says business development director Tom Woollard. "It is so easy to get information now from remote places, non-governmental organisations are much more active and people can use the internet to disseminate information. Companies cannot afford to ignore environmental and social issues, wherever they are operating, or they will be exposed and that could be very damaging."

For ERM and companies like it, concerns such as these have meant substantial growth. ERM is one of a small number of sizeable environmental consultancies in the UK, alongside the likes of RPS Group, SLR Consulting and Hyder Consulting. In addition, the mainstream management consultancies now have environmental specialisms, as do big engineering companies.

ERM was bought by Bridgepoint, the private equity company, in 2005 for $535m. The venture capital group 3i sold the 52 per cent of the company it acquired for £200m in a management buy-out in April 2001.

ERM increased its revenues by 14 per cent in the year to March 31 2007, with gross revenues at about $533m. Its earnings before interest, tax and amortisation (ebita) were $47m over the same period. ERM's ebita was $38m on turnover of $425m before its takeover. In 2003, ERM's gross revenues were $318m and its ebita $30m. In 2003, ERM decided to focus entirely on serving the biggest in its core markets. Consulting to manufacturers and retailers brought in 22 per cent of ERM's sales last year, with oil and gas supply 19 per cent, the chemical and pharmaceutical sector 12 per cent and transport, utilities and construction about 11 per cent.

The broad range of sectors the company works for reflects the growing desire for all sorts of businesses to incorporate environmentally sound practices into their work. "Sustainability issues are now integrating with business development issues, and that is where a lot of opportunities are for environmental consultancies," says Wayne Holden of ERM.

The company has also widened its geographical reach, now operating in more than 40 countries. In March 2007, the company had 3,171 staff - an increase of about 14 per cent over the previous year - and 342 partners, also a rise of 14 per cent. There is much more

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fierce competition for staff among environmental consultancies, reports Mr Woollard. But he says that many graduates are also now keenly seeking a career in environmental consulting.

He says a focus on staff retention is one of the key determinants of success for companies such as ERM: "You have to keep giving people interesting projects that challenge and motivate them. That's what people join us for, to do interesting work."

These projects might include involvement in the preparations for the London Olympics of 2012; helping companies to asess their impact on the climate; or assessing the Republic of Congo's environmental and social regulations, a condition of a World Bank loan to the country.

Unlike many mainstream consultancies, ERM prefers organic growth and a sprinkling of small acquisitions to large-scale mergers or takeovers. Mr Woollard says: "It's all about the culture. Our value is all in our staff. But you can destroy a culture easily or it can disappear overnight. Then if your staff think, 'the culture of this place has changed, I don't like it' - bingo, in six months they're gone."

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EXTENSIVE READING – just to give you an understanding of what the Copenhagen Meeting on Climate Change was all about

Why the Copenhagen climate talks matter

They won't likely deliver a new global treaty on global warming, but the decisions made here may still change our lives.  By Steve Hargreaves, CNNMoney.com staff writer Last Updated: December 7, 2009: 10:55 AM ET

Geoengineering, or deliberately tinkering with the earth's climate, could help if global warming proves disastrous for mankind, but the ideas are untested and the risks unknown.

NEW YORK (CNNMoney.com) -- It's a massive jamboree, with tempers on both sides of the issue running hot and no final deal in sight. But even so, we'd better pay attention to what transpires here, the consequences of action or inaction may be massive. Starting Monday, 15,000 people are expected in Copenhagen, Denmark. Over the next two weeks they're supposed to be hashing out a successor to the Kyoto Treaty, the global deal regulating greenhouse gases that expires in 2012.

Among them will be over 100 world leaders, including President Obama and half his cabinet. Hundreds of environmentalists are also expected, some protesting outside the massive convention center. With the world's top scientists saying global warming is caused by humans and that quick action is needed to avoid devastating consequences, the environmentalists will be pushing for cuts in greenhouse gases that go far beyond what most nations are proposing. On the other side will be a handful of U.S. senators opposed to any deal at all. The ring leader of this group is James Inhofe, the Oklahoma senator who has famously called man-made global warming "the greatest hoax ever played on the American people." They'll question the science behind global warming, holding up recently hacked e-mails from prominent climate scientists. The e-mails apparently show the scientists, frustrated with a small but vocal group of global warming skeptics, trying to keep dissenting opinions out of prominent journals and attempting to hide inconsistencies in the overall data.

Most independent analysts say the hacked e-mails do not change the nature of the debate - the e-mails, however inappropriate, don't undermine the consensus of hundreds of scientists that have been studying this issue for decades. Still, might there be conflict between the believers and skeptics at the convention? "It's a good question," said Kyle Ash, a legislative representative for Greenpeace who's already in the city. "I'm excited to see what happens." While a new Kyoto treaty isn't expected, thanks in large part to the U.S. Senate's inability to move climate legislation already approved in the House, experts expect the framework for an eventual deal will take shape. What that deal looks like will ultimately affect how much Americans pay in their gas and electric bills, and how quickly the world cuts greenhouse gas emissions. "It will set the stage for what's to come," said Divya Reddy, an energy policy analyst at the Eurasia Group, a political risk consultancy. "And that will translate into changes in lifestyle and energy costs."

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What's on the table

Conference organizers at the United Nations are pushing for three main objectives:

-Numbers from each nation as to how much they can reduce greenhouse gases.

-How those reductions might be achieved.

-And how much money the developed world is willing to give developing nations as they attempt to cut pollution.

President Obama recently pledged that the United States can reduce emissions by 17% from 2005 levels by 2020. Others nations measure cuts from 1990 levels. Using this standard, the U.S. cut is roughly 4%. The European Union has already pledged to cut emissions by 20% from 1990 levels by 2020, and has said it might even go for a 30% cut if others nations promise big reductions. China says it can't cut overall emissions, but is instead promising a 40-45% cut in carbon intensity -- the amount of emissions created in relation to the growth of its economy -- from 2005 levels. India, Brazil and a host of other nations have pledged similar reductions. Obama's proposal is roughly in line with legislation passed in the House, and slightly less aggressive than a bill in the Senate. The Congressional Budget office estimates the House version will cost the average American household $175 a year by 2020.

Too little?

Scientists have two deadlines for when reductions must be made. Obama's reductions are far below the 25% to 40% cuts scientists say are needed by 2020 to head off the worst effects of climate change. But U.S. lawmakers say their plan will ultimately achieve the reduction scientists say must be made by 2050.

Conference organizers originally hoped to make these commitments binding law in Copenhagen, but experts say Obama won't move on any deal until he's sure the Senate will pass a climate bill similar to the one that passed the House this summer. "It is unlikely that the United States will sign up to a commitment on which it does not think it can deliver," Deloitte analysts Nick Main and Joseph Stanislaw wrote in a recent research note. "The passage of that [Senate] bill and any eventual passing of legislation will be a fundamental prerequisite to any agreement." The Senate was expected to take up a climate change bill early in 2010, but with health care reform still unfinished and financial regulation reform slated next, passing a climate bill anytime in 2010 now looks optimistic.

As for money to help developing nations tackle emissions and deal with climate related problems like rising sea levels, Greenpeace is calling for $140 billion a year to be transferred from rich nations to poorer ones. It's a number broadly in line with what other analysts expect will eventually be passed, although the breakdown of who pays for what is uncertain. Europe has agreed to contribute $22 to $40 billion a year. In the U.S., the House climate change bill allocates at least $8 billion a year, a figure that's already baked into the estimated $175 yearly household cost. Ultimately, most analysts expect Copenhagen will result in a statement of broad principles and agreed upon goals, but little in the way of action. "The room for surprises is pretty limited," said Paul McConnell, a carbon analyst at Wood Mackenzie, an energy consultancy. The next major global meeting on climate change is set for next December in Mexico, and will likely be the next opportunity for supporters of mandatory cuts to get a binding agreement.

http://money.cnn.com/2009/12/03/news/international/copenhagen/index.htm

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What the experts say 

Copenhagen climate deal: Spectacular failure - or a few important steps?

We ask leading climate change experts for their assessment of the Copenhagen deal

Tuesday 22 December 2009 20.00 GMT

Activists demonstrate outside the Bella Center in Copenhagen at the end of the COP15 UN Climate Change Conference, 19 Dec 2009. Photograph: Olivier Morin/AFP/Getty Images

Fuqiang Yang, director of global climate solutions, WWF International 

The negotiations in Copenhagen ended without a fair, ambitious or legally binding treaty to reduce greenhouse gas emissions. Despite this, what emerged was an agreement that will, at the very least, cut greenhouse gases, set up an emissions verification system, and reduce deforestation. Given the complexity of the issue, this represents a step forward.

I hasten to add that much of the hard work still lies ahead. The Copenhagen accord, the text that came out of the talks, leaves a long list of issues undecided. Among them are the emissions targets industrialised nations will accept, and how much climate finance they will offer.

The accord essentially allows countries to set their own greenhouse gas emissions reduction goals for 2020.

But I am optimistic, because the talks did achieve $100bn in aid from industrialised countries to poorer nations. China, as well, submitted to an emissions verification system under which all nations will report.

The accord also includes measures to help cut greenhouse gases and reduce deforestation, particularly in heavily forested developing nations such as Brazil and Indonesia.

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These are big steps forward, and I think it is important to remember that there were achievements made in Copenhagen. There is still a great deal that needs to be done by China and all other signatories. Specific, binding targets are extremely important and need to be worked out. But we did see a move towards an agreement that could keep atmospheric Co2 levels from rising above dangerous levels.

John Prescott, climate change rapporteur for the Council of Europe 

I've read a lot about so-called Brokenhagen and the failure to get a legally binding agreement. Frankly we were never going to get one, just as we didn't get one at Kyoto, when I was negotiating for the EU.

What you need is a statement of principle. At Copenhagen this was a final admission that we cannot let temperature rise 2C above pre-industrial levels. And to get approval from 192 countries on this principle is remarkable, considering Kyoto dealt with only 47 nations.

The details and targets to meet that principle will be settled at COP16 in Mexico in 12 months' time. Until then, countries must show, as Ban Ki-Moon said, greater ambition to turn their backs on the path of least resistance.

Many of the countries have set out their own carbon action plans by 2020. So let's see them put those plans into action and put those figures in the annexes to the Copenhagen accord. The rest of the world will follow.

Copenhagen's achievements are an acceptance of the science (contested at Kyoto), an admission there will be global emission cuts, and an acceptance that there will have to be verification.

Martin Rees, president of the Royal Society, master of Trinity College, professor of cosmology and astrophysics, university of Cambridge  

Plainly the outcome of Copenhagen was less than many hoped – but perhaps not substantially less than could be realistically expected. The involvement of India and China was clearly going to be crucial. But the grandstanding by particular nations (and the insistence by some on an unreasonable target of 1.5 degrees) was plainly unhelpful to the negotiations.

We in the UK should surely acclaim the constructive and committed role played by our government, and by Gordon Brown and Ed Miliband in particular, both in the lead-up to Copenhagen and during the frustrating and exhasting negotiations last week.

Next year, one hopes the US internal debate will evolve further, so Obama feels able to play a less muted role. Let's hope also that negotiations within groups of nations are carried forward. There is more hope of something being agreed among a group of up to 20 key nations (provided the group covers developing and developed countries), which others then sign up to.

And to be positive, the Copenhagen meeting, circus though it was, carried the process forward. For instance, it stimulated pledges of funding from developed nations (albeit, not as firmly as might have been hoped) and made progress on forestry. And it maintained global long-term concerns about climate change on the international agenda.

Bryony Worthington, climate campaigner with sandbag.org, who helped draft the UK climate change bill 

Copenhagen was a spectacular failure on many levels. The UN process was stretched to breaking-point, with no consensus on any pressing issues.

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The accord that was signed was clearly designed to meet the needs of the US, who always wanted a voluntary "pledge and review later" type agreement with minimum enforcement.

The sums of money agreed to help developing nations adapt to climate change are so low as to be insulting.

The future of the major mechanism driving private capital into solutions, the carbon market, has been left with a question mark over its future, and the long-anticipated agreement on stopping deforestation lacked clarity.

What happens next? The most honest answer would be to accept that under the current arrangements consensus will not be reached.

We have to focus on domestic action in big fossil-fuelled economies: the US, China, and Europe. All three have made pledges about their intentions to act – each has the opportunity to introduce policies which will create huge markets in climate solutions. If they lead, these solutions will become available for use in all parts of the world, with the costs of development having been born by those most able to pay.

That is our best hope.

Gavin Schmidt, climate scientist at Nasa and co­founder of RealClimate.org  

Look at the history of environment negotiations – take the ozone ones as the best example. People start off negotiating very hard and the first agreement does nothing but moderate the problem.

While the Montreal protocol was ultimately a huge triumph, it made an infinitesimally small difference at first. It took them four amendments to get from reduction to a ban [on CFCs], a process of 20 years after science identified the problem.

Carbon and climate change are much more complicated, and we're just getting to that 20-year mark now. Anyone expecting a definitive solution to the problem on timescales any shorter than that is extremely optimistic.

It's not an event, it's a process. I guarantee that the decisions we will be making in 2050 will not be the ones made in Copenhagen.

Copenhagen did show some improvement in the process. People are now talking about changes in greenhouse gas emissions that are commensurate with the size of the problem. Before, they weren't.

People are now seeing the problem for the challenge that it really is. But, in seeing that challenge, it makes the process – because that challenge is very large.

Kumi Naidoo, executive director, Greenpeace International 

The outcome of the summit was not fair, ambitious or legally binding. This eluded world leaders because they put national economic self-interests, as well as those of climate polluting industries, before protecting the climate.

Even if all countries reach their pledges, our planet will be propelled towards a 4C temperature rise, double what leaders say they must achieve. This will have devastating climate impacts, including crop failures and the disappearance of the Amazon rainforest and the Great Barrier Reef.

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With each month of delay in getting a real climate deal, the chances of the world staying below a 2C rise slips further away, and the cost to this and the next generation in tackling climate change increases.

To avoid this, industrialised countries as a group – which bear historic responsibility for the problem – must make the largest emission cuts. They also need to provide at least $140bn a year to help developing countries.

The non-result from Copenhagen calls into question the ability of leaders to deliver what is needed. Citizens around the world will need to elect more ambitious leaders and embrace new, low impact technologies.

Vicky Pope, head of climate change advice at the Met Office 

At previous meetings in the runup to Copenhagen, in Barcelona and elsewhere, there was talk about greenhouse gas targets for 2020 and 2050; it is disappointing that those have been lost, but it is good that everyone accepted the scientific reality that climate change is a problem and that we need to limit warming to 2C.

The accord is fairly weak, and we will only know how effective it will be when countries fill in the table that details their targets to reduce emissions (they have until the end of January to do so).

Only when we have those targets and we can add them up to see the scale of cuts will we be able to properly judge what has been achieved. It is a positive thing that finance is included, as that could help to make things happen.

Going forward, the first thing that needs to happen is that the table of targets needs to be filled in. Then the whole agreement needs to be made legally binding.

Nicholas Stern, chair, Grantham research institute on climate change and the environment, London School of Economics and Political Science 

The Copenhagen meeting was a disappointment, primarily because it failed to set the basic targets for reducing global annual emissions of greenhouse gases from now up to 2050, and did not secure commitments from countries to meet these targets collectively.

Nevertheless, the road to Copenhagen and the summit itself generated commitments on emissions reductions from many countries, including, for the first time, from the world's two largest emitters, China and the US. The Copenhagen accord also did recognise that a rise in global average temperature should be limited to below 2C.

In addition, the prime minister of Ethiopia, Meles Zenawi, speaking for the African Union, put forward a very important proposal on financial support, much of which is reflected in the Copenhagen accord, including the creation of the Copenhagen green climate fund to administer funding for developing countries.

The current UN framework convention on climate change process has been found wanting over the past few weeks.

One potential way forward is for Mexico, as hosts of COP16 (the next full summit) in 2010, to convene a group of 20 representative nations, as Friends of the Chair, to work on a potential treaty and tackle the outstanding issues and building consensus around strong action. The group should start its work immediately.

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Dr Myles Allen, head of climate dynamics group in the atmospheric, oceanic and planetary physics department, University of Oxford  

On one level, it could be argued it is quite a good outcome.

There is a goal to limit global temperature rise to 2C and an acknowledgement that current commitments are not enough to meet that goal. It is good that China recognises the 2C goal and that emissions reductions are the way to go.

I am glad they did not make serious progress towards a legally binding treaty, because the current thinking that nationally negotiated emissions targets and a system of carbon trading will solve this problem is flawed. I'm very sceptical about that whole approach.

A legally binding regime based on that principle would lock us into that process, and it could take 20 or 30 years before it became sufficiently obvious it was not working. Once set up, there is enormous investment in a system like that and it becomes difficult to change. So something close to success in Copenhagen based on what the politicians were aiming for could have been counterproductive.

It's depressing that governments appear to have walked away from Copenhagen only to say they are going to spend the next year fighting for the legally binding treaty they wanted it to produce, rather than use the time to consider some radical alternatives.

One way we have suggested is to target producers rather than emitters. A mandatory requirement on fossil fuel companies to capture and store carbon emissions, to clean up after themselves, could solve a big part of the problem without complex international negotiations.

Bernarditas de Castro Muller, former lead negotiator for the G77 plus China group of developing countries 

What was achieved in Copenhagen? The Copenhagen accord contains what was possibly the most that the leaders of the world's biggest countries could give in terms of actions to address climate change.

However, there are problems with the document as it stands. The main one is the process pursued to reach this agreement, which completely undermined the cardinal rule of multilateralism in international negotiations, and that is transparency and inclusiveness.

The final session and the mishandling of the process by the Danish presidency delivered the knockout blow to any meaningful agreement. That this travesty should take place before the eyes of the main guardian of multilateralism, the UN secretary-general, only added to the irony of the tragic situation.

But the worth of the "deal" (I actually prefer the word "accord"; "deal" sounds like some sleazy business plot) lies in laying out clearly what each of the major countries could live with in terms of addressing climate change. In my opinion, it is still inadequate insofar as developed countries' commitments to reduce emissions are concerned. However, we are always told to take into account the "political realities" of rich countries. I revolt against this, but have to live with it, and put aside our own political realities in the developing world, which have to do with basic necessities and even survival itself.

Where do we go from here? We could take the accord as some kind of political guidance from the leaders of major countries. We are now clear on where the major groups stand. It is now up to negotiators to come up with universally agreed next steps.

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Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change 

I think there are three major achievements that could be listed at Copenhagen: • The acceptance of a 2C limit for temperature increase, and reference to the scientific basis for doing so. This indicates that science has finally had an influence on negotiators defining what would represent dangerous anthropogenic interference with the climate system. • An agreement was reached between the so-called Basic countries [Brazil, South Africa, China and India] and the US on a tricky issue, which had become a bone of contention particularly between the US and China. • A sum of $30bn has been included in the agreement for funding developing countries' actions during the period 2010 to 12.

Is the agreement worth anything? The accord would be worth something only if we build on it with a sense of urgency and take it forward towards a binding agreement by the end of next year.

The next step is that the negotiators, and particularly the leaders of major countries, must now get into action to see that we come up with an inclusive agreement involving all the countries of the world. This would require early convening of some meetings under the Conference of the Parties, and a timetable for specific outcomes to be achieved before Mexico.

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