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Natural gas has been in the news a lot lately, being hailed as the solution to our energy problems on the one hand, and a potential environmental nightmare on the other. Let's try to sort out the reality behind this old friend with a new face. Before we start, it might be useful to make a distinction between the natural gas that has historically been collected as a byproduct of oil drilling and the more recently promoted source known as shale gas. This has become newsworthy as the result of an enormous deposit of shale gas discovered in the Marcellus field extending across large sections of Pennsylvania, Maryland, and New York.  Shale gas requires a much more aggressive method of collection since it is buried deep in the earth under many layers of shale. The most popular method of collecting shale gas is hydraulic fracturing, or fracking, a relatively new technology, developed by Halliburton, which has become quite controversial. The move into fracking parallels a gradual takeover of the natural gas industry by the big oil companies.

PROS

• Widely used, contributes 21% of the world’s energy production today


• Delivery infrastructure already exists


• End use appliances already widespread


• Used extensively for power generation as well as heat


• Cleanest of all the fossil fuels


• Burns quite efficiently


• Emits 45% less CO2 than coal


• Emits 30% less CO2 than oil


• Abundant supply in the US. DOE estimates 1.8 trillion barrels


• Low levels of criteria pollutants, (e.g. SOx, NOx) or soot when burned


• Can be used as an automotive fuel


• Burns cleaner than gasoline or diesel


• No waste (e.g. ash ) or residue to deal with


• Lighter than air, safer than propane which is heavier than air


• Can be used to makes plastics, chemicals, fertilizers and hydrogen


• Natural gas industry employs 1.2 million people

CONS

• Non-renewable fuel, supply cannot be replaced for millennia


• Emits carbon dioxide when burned


• Contains 80-95% methane, a potent greenhouse gas (GHG)


• Explosive, potentially dangerous


• Concentrated sources require long distance transmission and transportation


• Energy penalties at every stage of production and distribution


• Requires extensive pipelines to transport over land


• Stored and distributed under high pressure


• Requires turbine-generators to produce electricity


• Liquefied form (LNG) used to transport over water, in tanker ships  is potentially very dangerous


• Energy use competes with use for chemicals and fertilizers


• Additionally, there are significant environmental risks associated with “fracking”
  
  
  • Water pollution due to runoff of fracking chemicals
  
  
  • Companies are not required to disclose the composition of fracking chemicals (another example of lobbying in action).
  
  
  • Water can also bring up adsorbed underground toxins including arsenic
  
  
  • GHG footprint of shale gas greater than coal over 100 year time frame
  
  
  • Fracking has been linked to earthquakes
  
  
  • Casing leaks lead to gas in the water—blazing faucets
  
  
  • Fracking requires a large amount of water

The relatively even number of pros and cons shows that this is not an easy choice. Given how widespread and available and “less bad” natural gas is from other fossil fuels, plus the number of jobs created, it is hard to ignore the argument that natural gas should serve as a bridge fuel as more sustainable alternatives are built out. We should keep in mind though, that it is a short term measure and invest accordingly. As far as fracking is concerned, considering that there is already lots of gas available right now, there is no reason (other than greed) to be in a hurry to develop shale gas. Instead, we should take whatever time is necessary to develop a safer, more responsible way to access that gas, while investing heavily in more sustainable sources that will ultimately obviate the need for it.

 

***

What about other energy sources?

• Pros and Cons of Tar sands oil


• Pros and Cons of Solar Heating and Cooling


• Pros and Cons of Concentrating Solar Power


• Pros and Cons of Solar photovoltaics


• Pros and Cons of Natural Gas


• Pros and Cons of Fuel Cell Energy


• Pros and Cons of Biomass Energy


• Pros and Cons of Combined Heat and Power


• Pros and Cons of Clean Coal


• Pros and Cons of Algae Based Biofuel


• Pros and Cons of Liquid Flouride Thorium Power


• Pros and Cons of Tidal Power


• Pros and Cons of Nuclear Energy

[Image credit: Suncor energy: Flickr Creative Commons]

 

 

RP Siegel, PE, is the President of Rain Mountain LLC. He is also the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water. Now available on Kindle.

Follow RP Siegel on Twitter.

Submitted by Elaine Cohen

Reality-Based Leadership: Ditch the Drama, Restore Sanity to the Workplace & Turn Excuses Into Results

Author: Cy Wakeman

ISBN: 978-0-470-61350-4

Publisher: Jossey Bass

By Elaine Cohen

Recent polls show that 71 percent of workers think about quitting their jobs every day. That number would be shocking -- if people actually were quitting. Worse, they go to work, punching time clocks and collecting paychecks, while completely checked out emotionally.

In Reality-Based Leadership, Cy Wakeman reveals how to be the kind of leader who changes the way people think about and perceive their circumstances-one who deals with the facts, clarifying roles, giving clear and direct feedback, and insisting that everyone do the same, without drama or defensiveness.

Filled with dynamic examples, innovative tools, and diagnostic tests, this book shows you how to become a Reality-Based Leader, revealing how to:

• Uncover destructive thought patterns with yourself and others.
• Diffuse drama and lead the person in front of you.
• Stop managing and start leading, empowering others to focus on facts and think for themselves.

Leadership Accountability

Leadership accountability is one of the most underplayed themes in sustainability today.

This shows up when heads of companies receive massive bonuses that are not directly tied to corporate performance.

It shows up in the way employee performance is evaluated – using inputs (what people do) rather than outcomes (what results they deliver).

It shows up in the fact that 31 percent of employees are actively engaged in their jobs (and 17 percent are actively disengaged).

It shows up in the fact that "71 percent of workers think about quitting their jobs every day."

It shows up in the fact that far too many underperforming people remain far too long in organizations in which they are not positively contributing (and in some cases, they are actually causing damage).

Sustainable Reality-Based Leadership

Wakeman’s book was, perhaps, not written for the sustainability bookshelves. It was written for the Business Leadership, Management and Human Resources sections of business literature. However, its relevance for sustainability is compelling.

Business sustainability requires leaders who deliver sustainable results through people. A business cannot be sustainable when only a third of the workforce is engaged or two thirds are thinking about how to get out.

Here are some of the issues Wakeman lists as holding organizations back through lack of effective leadership feedback:

• Tenured employees whose skills are not current – leaders must raise the bar for performance and decide who makes the grade and who doesn’t.
• Employees at the top of their pay scale who no longer deliver top value – this happens when "leaders over-reward and under-coach employees over the course of their careers".
• Righteous top performers – "great employees whose performance is compromised by their righteousness and judgment of others."

Stop Managing, Start Leading

Effectively addressing these issues requires executives to stop managing and start leading. First of all, Wakeman writes, they have to "stop arguing with reality." This means relating to the facts of different situations at work, rather than the stories we tell ourselves or making judgments.

An example might be when a coworker receives a promotion – you tell yourself that it's not fair, you should have received the promotion, you work harder than the coworker, you deserve it etc. This line of thought is judgmental and reflects "entitlement" thinking.

Instead, if "you embraced reality, you would note that a promotion occurred and do the appropriate thing in such a situation: congratulate your coworker, offer to help and resolve to learn how to deliver what the company values. You'd be high on professionalism, low on drama and investing in better relationships and mutual support in the future…You are arguing with reality whenever you judge your situation in terms of right or wrong instead of fearlessly confronting what is."

Reduce the Drama

By the same token, instead of trying to keep employees happy, leaders should focus on helping them understand reality, while empowering them to build their capabilities to deal with all situations that arise.

If you want to evaluate the behavior of the people you lead, you can take Wakeman's Freak-Out Factor test, which will show you how your organization or team measures up in terms of level of drama in the workplace.  

"Empowerment without Accountability is Chaos"

Restoring sanity to the workplace is about the adoption of leadership behaviors that drive accountability. The problem with employee engagement surveys, writes Cy Wakeman, is that they don't measure accountability. They are simply "invitations for people to critique their reality".

All you end up with is a list of "what would need to change in order for your staff to grace you with their performance". However, one can never create a perfect working environment which meets everybody's aspirations. Engagement surveys are setting leadership up for failure.

Instead, Cy Wakeman recommends two questions for employees:

1. What is the one thing you need to be more productive in your work?
2. What are the three things you are willing to do to get it?

Such an approach eliminates the "victim factor" and builds accountability, while enabling leaders to understand what they need to do to truly empower their teams.

Work with the Willing

In leadership, playing favorites is "fair game," Wakeman observes.

"Too many leaders I work with have surrendered to the idea of mediocrity in order to never, ever offend anyone. Some leaders are so concerned with treating everyone the same that they are hesitant to give honest feedback".

Leaders should spend most of their time coaching the employees who are delivering the best results. In reality, leaders spend "on average 80 extra hours per year thinking about and working with a single person who's in a state of chronic resistance". These people won't change and worse, the best employees will be dragged down by a negative office culture. The idea is to "compensate value, not effort" and give your focus to the employees who deliver. "

You will have problem employees for as long as you continue to hire them and put up with them"

Everybody's Opinion Counts. Not.

Wakeman says your workplace is not a democracy. Ninety percent of the people in any organization at any given time are not key decision makers. Leaders need to set clear expectations and goals and focus the energy of their teams on working towards the desired results, rather than wasting hours complaining about why certain decisions are made.

Offering constructive feedback is positive. Fighting against decisions that are not yours or your team's to make is futile.

Reality–Based Leadership contains practical, mindset-changing and entertaining advice, anecdotes, tools, and recommendations that anyone who leads people in organizations should read.

Just as sustainability relies upon a realistic assessment of business impacts on people, society and the environment and the formulation of appropriate strategies to improve these impacts, so leaders must confront the realities of how they behave in organizations, how accountable they are and how they leverage reality-based tools to ensure their sustainable contribution. 

Landfills across the U.S. are teeming with waste. In fact, the average American throws away over 1,130 pounds of waste a year. That’s an environmental disaster because rotting garbage produces landfill gas (LFG) which is made up of 50 percent methane, a greenhouse gas with the warming potential 23 times greater than carbon. Municipal solid waste (MSW) is the third-largest source of human-related methane emissions in the U.S. In 2009, MSW accounted for about 17 percent of methane emissions according to the EPA. MSW landfills released an estimated 27.5 million metric tons of carbon equivalent to the atmosphere in 2009.

The environmental disaster can be avoided by using LFG as a source of energy to create heat or electricity. Landfills can “significantly reduce” their methane emissions through LFG projects. Over 365 landfills in the U.S. already recover methane and use it to produce electricity or heat. An LFG energy project can capture 60 to 90 percent of the methane emitted from a landfill. Generating electricity from LFG makes up about two-thirds of the operational projects in the U.S. Using LFG to offset the use of another fuel such as natural gas or coal occurs in about one-third of the operational projects.

The emerging area of LFG is producing alternative fuels. There has been successful delivery of LFG to a natural gas pipeline as a fuel, according to the EPA, and LFG has been converted to vehicle fuel as compressed natural gas and liquefied natural gas. There are also projects in the planning stages to convert LFG to methanol.

LFG projects save money

Using LFG to provide power or heat generates revenue from the sale of the gas, and creates jobs for communities. Businesses save money by using LFG, and some companies can even save millions of dollars over the life of their LFG projects, the EPA states on its website.

Businesses are not the only ones that can save money by using LFG for power or heat. The LFG project developed in 1997 in Maryland Heights, Missouri for Pattonville High School saves the school $40,000 a year. The Fred Weber Sanitary Landfill runs a 3,600-foot pipeline run from the landfill to the school’s two basement boilers. The school is less than a mile from the landfill. To develop the project, the school received a $150,000 loan from the Missouri Department of Natural Resources, and a $25,000 grant from the St. Louis County Solid Waste Commission. Fred Weber invested $220,000 for the pipeline construction.

From New Mexico to Ohio

The City of Albuquerque, in New Mexico, will develop a LFG project to heat water in the Metropolitan Detention Center. The City Council unanimously approved the $1 million project earlier this month. The landfill already has 46 wells that extract the gas, but it’s burned off and not used in order to avoid releasing a greenhouse gas into the atmosphere. The EPA is contributing $500,000 to the project, the city about $300,000 and the county about $230,000.

The Houston-based Elements Markets LLC recently made its LFG-to-pipeline project in Amsterdam, Ohio public. The project is at the APEX Sanitary Landfill which is located on 1,285 acres, and receives about 1.8 million tons of waste a year. It is one of the fastest growing landfills in the U.S., according to a press release by Elements Markets. The project will produce over 32 million of British Thermal Units (MMBtu) of biomethane, enough to power 19,000 homes. It is expected to be in operation in 2013.

Image credit: Pexels

3p is proud to partner with the Presidio Graduate School’s Macroeconomics course on a blogging series about the economics of sustainability. This post is part of that series. 

By Justin Semion

The concept of the “invisible hand of the market” underlies classical and neoclassical economic theories advocating for a free market economy, one with no government regulation.  In summary, free market theory proposes that supply and demand in the unregulated marketplace naturally reach a state of equilibrium where the maximum possible social good is achieved. 

Many economists over the past half century have developed complex mathematical models to demonstrate how this basic concept works, and these proofs have led to substantial deregulation, principally of financial markets, over the past quarter century. Many criticisms have also been made of free market theory.  The most well known criticism is that a free market economy does not account for externalities, side effects such as pollution that are borne by society at large and not by the individual supplier or consumer. 

However, there are more significant flaws to this theory that are rooted in the assumptions underlying its basis, the economic concept of “perfect competition”.  Perfect competition is the ideal state in classical and neoclassical economics, and functions properly only when held to certain assumptions.  These assumptions are necessary for a pure free market economy to function efficiently.  

A brief examination of each of these assumptions can show some fallacies in arguments for a pure free market economy.

1.  That the flow of information regarding the prices and quality of goods and services is perfect; that is, free and accessible to everybody in the market.

In an unregulated free market it is in the best interest of a firm or group of firms to maintain an imbalance of information.  Viewed in this way, the assumption of perfect information is self-defeating when applied to free market theory.  A recent and influential example of this is the sale of mortgage derivatives that played a large part in the current financial crisis. 

Complex derivatives comprised of individual mortgages carrying varying levels of risk were bundled and sold under a single risk classification.  Information regarding the individual mortgages within these packages was not readily divulged, and not free and accessible to everybody in the market.  It was in the best interest of the firms brokering these derivatives to maintain a lack of information regarding the structure of these instruments because it made them easier to sell at volume.  Buyers were eager to cash in on the bubble and so did not ask the right questions.  This lack of perfect information contributed heavily to the devastating effects of the mortgage bubble.  

2.  Consumers and producers always make rational decisions when purchasing or producing goods and services (i.e., buy at the optimal price and produce at optimal levels).

Some failures of this concept are described in Richard Olsen’s writing The Fallacy of the Invisible Hand.  In that article, differences in time horizons of different investors are used to examine the problem of heterogeneous agents.  In other words, investors do not make decisions based solely on price, but also depending on the length of time they expect for a return. 

The assumption of rationality also ignores interpersonal aspects of consumers and producers, such as emotional purchases or production decisions, and decisions made based on social preferences and priorities.  For this assumption to hold true, the flow of information would also need to be perfect, which as described above, is not often in the best interest of a profit-maximizing firm.

3.  Entry to and exit from the marketplace is easy (low “barriers to entry”). In short, barriers to entry are advantages held by established firms over firms entering the market, such as up-front capital costs, reputation, and revenue to support operating costs.  In modern times, this assumption holds true only in a very limited number of industries, such as some consulting services, computer programming, and internet retailing. 

The technological knowledge required to participate in lower barrier to entry industries often requires significant personal investment of time and money, which in itself is a barrier to many.  In addition, low barrier industries are often reliant on higher-barrier industries, such as manufacturing, real estate development, and energy production.  For the majority of industries, a startup competing with established firms requires a huge influx of resources, investments of both time and money, to compete with firms that have established reputations and economies of scale.  The resources required to compete in today’s landscape are available to very few.

4.  There are a large number of firms within a given industry, each selling a homogenous product. A real-world condition that represents this assumption has yet to be found.  Homogenous products are just not good for business (General Motors is one example).  Industries where products are largely homogenous trend in real-world examples towards fewer firms, such as with Coke and Pepsi. 

It is often industries with largely heterogeneous products that trend towards the greatest number of firms.  A world of homogenous choices also raises questions about personal freedom and individual choice, values that are promoted by many free market pundits as benefitting from a free market economy.

5.  The actions of an individual firm have little to no effect on market price. To see the fallacies of this assumption, one only need look to the effects of WalMart on local small businesses.  In today’s economy, large firms have amassed sufficient market power to be able to affect market prices by influencing suppliers, driving down price and margin to levels that competitors cannot maintain.

Capitalism has been a very successful system producing a host of innovations and generally increasing the standard of living around the world.  However, it is not a perfect system.  People make the markets, and people are not perfect.  People do not exist in the abstract and are not controlled by assumptions we choose to place on them for market-based analytical purposes. 

At their core, the invisible hand and free market economy are romantic notions, born from a romantic time.  The conditions necessary for the free market economy to function simply do not exist in today’s world, if they ever did.  A pure free market does not provide for the greatest social good, only the greatest good to those with the means to exploit weaknesses in a free market system. 

This can be seen in the large increases in income disparity that correspond with the deregulation of financial and other markets over the past three decades. To function properly and efficiently, markets need guidance.  The term “invisible hand” first appeared in The Wealth of Nations, where author Adam Smith popularized the notion that the study of market forces was a worthy pursuit, and one that could serve the greater social good, largely establishing economics as an academic discipline. 

The study of economics has been working to guide markets ever since.  In a sense, the notion of a pure free market economy seeks the absence of this guidance, and thus is contrary to the notions that build its foundation.

Image credit: Unsplash

These days, donating a portion of one's own savings or company dollars to charity is to look at philanthropy in its most primitive form. Now, the big players of Silicon Valley are applying their venture capital, social ingenuity and tech savvy to the task of rebooting philanthropy.

There is an impression among some, however, that this next generation of social media innovators and tech luminaries isn’t doing enough, at least not in the traditional sense. That’s what founder of Limited Brands, who donates 10 percent of his own personal time and income to charity, Leslie H. Wexner, tells the New York Times, “Society can’t wait. It’s sad there are so many entrepreneurs, business successes and venture capitalists who give no thought to society.”

Or is it that they are, in fact, giving thought to society, but typical of the entrepreneur/innovator crowd, they just have to do it their own way? Maybe that’s why online philanthropic investment businesses and microfinancing nonprofits have exploded in the last decade. DonorsChoose.org, Kiva, Samasource, Kickstarter, Omidyar Network, Scoll Foundation, Causes and the like are making the connection between social entrepreneurship, networking, market driven methodology and microfinance in order to bolster all sorts of worthy issues.

Causes’ stated vision particularly sums up this new movement, “We’re a for-profit tech company changing the face of online activism and philanthropy by bringing the best of Silicon Valley engineering and product design to the cause community. We think that a lively start-up culture, life-changing issues, and an inspiring mission go hand-in-hand.” Much in the same way that social networking sites like Facebook or Twitter have changed the way society interacts, these tools are altering the way that individuals and companies can give back – making it easier and more accessible than ever to the average Jane or small business to contribute their cash and/or talents in new and different ways.

While these innovators may have the tech side figured out, they still need some help from the “giving” experts. There are groups supporting this wave of philanthropy amidst the successful, young entrepreneurial crowd, like 21/64 where seasoned philanthropists advise green ones, or the Council on Foundation’s Next Generation Task Force who direct the “Next Gen” of philanthropists on how to maximize their impact (and whose members are all under 40).

One of the guiding lights who is dramatically reworking the landscape of corporate philanthropy 2.0 amongst Silicon Valley’s elite is Laura Arrillaga-Andreessen, wife of Netscape co-founder Marc Andreessen and daughter of commercial real estate developer John Arrillaga Sr., who was famed for turning Silicon Valley into a tech center. In 1998, she was ahead of the curve, founding the Silicon Valley Social Venture Fund (SV2), a group that takes tactics from both venture capitalism and philanthropy to provide grants to beginning non-profit organizations which address education, the environment and international development. SV2 now has almost 400 investors and just this past year donated more than $500k.

Arrillaga-Andreessen produced and teaches Stanford’s first ever course on “Strategic Philanthropy” and “Philanthropy and Social Innovation.” With her blog on corporate philanthropy 2.0 www.giving2.com, her recently published New York Times bestseller, Giving 2.0: Transform Your Giving and Our World, and an exhausting list of philanthropic board positions and accolades, one may wonder when this woman sleeps. Her dedication and connections brought her face to face with SV powerhouses from Facebook’s Mark Zuckerberg to Hewlett-Packard’s Meg Whitman offering them philanthropic counsel, and she is poised to direct her friend Laurene Powell Jobs, who might take charge of her family's giving efforts.

She opines to the New York Times, “The word ‘philanthropy’ brings up an image of somebody who’s had an illustrious career, has retired and is giving to highly established institutions that may or may not have ivy growing up their walls. I personally have felt the need to give philanthropy a reboot.” Arrillaga-Andreessen’s giving know-how and the creativity of SV’s next generation of innovators appear to be recharting business into more philanthropic waters.

Giving 2.0: Transform Your Giving and Our World from Giving 2.0 on Vimeo.

By Piper Kujac

Since the crowdfunding bill, officially called the HR-2930 Entrepreneur Access to Capital Act, was accepted by the House on November 2^nd, and is expected to pass in the Senate any day now, we’re all wondering what this really means for small business fundraising.  Is this the access to fundraising start-ups need from the SEC?  With sites like Kickstarter, Kiva, IndieGoGo, and Rockethub, does the new act really matter?

As it stands, individuals who wish to fund their bright ideas may do so by collecting "donations" in the form of crowdsourcing, but they cannot sell stock or other securities to their benefactors through social media. In the 1930s, the Securities and Exchange Commission prohibited organizations from "general solicitation" for funding without a substantive relationship with accredited investors. Therefore, social media sites, such as Twitter and Facebook, cannot currently be used to reach people for funding unless the solicitation takes place in the form of a direct message. Third-party social media sites must be registered with the SEC as an official "broker-dealer" before users can legally accept transaction-based compensation or offer securities sales or stock in the company.

The Entrepreneur Act proposes that these commonplace crowdsourcing sites may now be used to solicit funding up to a $2M cap, with a max $10K allowed per investor (or 10 percent of the investor’s income).  This vastly increases the potential of small startup businesses, as well as established businesses, to secure funding from individual and even anonymous investors through social media sites, when they otherwise may not be able to with a traditional bank.

There are certain downsides to crowdfunding for startups, however.  Under state law, minority stockholders have certain rights, such as voting rights, and may inspect a company’s books and records, as well as bring claims against a company they invest in.  Having a large number of people invest insignificant amounts into a company, and earn stockholder rights in that company, is a potential administrative nightmare as well as time-consuming and costly.  Additionally, crowdfunding may deter traditional VCs from investing in a company if they see hundreds of non-SEC registered investor/stockholders.  These same VCs may not want to sit on the board of directors of a company that has hundreds of other investors and stockholders, due to liability and risks of lawsuits. Likewise, D&O liability insurance rates could skyrocket for these companies.

That said, it takes money to start and run a business, and in today’s economy securing a loan is difficult, if not impossible, for most would-be startups.  At this point, the proposed law has Obama’s support, and some version of it is expected to be passed by the Senate in the coming weeks.  This will significantly improve small businesses’ ability to raise funds and grow their business, but not without significant risks.

Image credit: Pexels

3p is proud to partner with the Presidio Graduate School’s Managerial Marketing course on a blogging series about “sustainable marketing.” This post is part of that series. To follow along, please click here. By Joseph Wilzbacher In Ken Belson’s New York Times article on NASCAR, the author highlights the green initiatives being taken within the industry. NASCAR, going green? It seems like an oxymoron as he suggests. The industry exists due to a grand desire to watch fast vehicles going in circles consuming a gallon of fuel every four to five miles. Like many indulgences, the NASCAR pastime isn’t going anywhere. Yes, it heavily pollutes and drives (no pun intended) demand for consumption. Despite its negative impacts on the environment we shouldn’t dismiss the positive efforts being put forth to mitigate the impact. Large recycling efforts including lubricants, fuel rags, scrap metal, tires, and metal shavings have been implemented along with solar power fields, sheep grazing on the infield, and tree planting offsets. [caption id="attachment_94781" align="alignright" width="259" caption="Shredded for children's playgrounds and asphalt mixtures"][/caption] Critics call it greenwashing, but as the recipients of that message may not be as responsive to green marketing, the actions being taken appear to be driven more closely by benefits other than marketing their sport. In fact there are worries from the diehard fans that switching to ethanol could affect the performance of the vehicles, while environmentalists express concern over the substitution of corn fields supplying food to supplying fuel. The side effects of our ethanol consumption are profound. Marketing it as green has many challenges and critics. Most people accept ethanol as a greener alternative to fuel because it is cleaner, but it also exacerbates problems to other resources.  The U.S. exports of corn will be reduced, driving the development of alternative land within the higher income importers. The lower income importers would have to substitute corn for wheat or other grain. The price of beef will increase as herds are reduced to make room for corn fields. The water required for expanding fields will have a global impact.  Ethanol is currently 5 billion of the 12.5 billion bushel U.S. corn crop, growing from 1.4 billion just 6 years ago. “Green” initiatives and marketing those initiatives get a variety of responses depending on the industry, the target audience, and systematic impact. Environmental activists can continue to protest and fight industries that have a large impact on our environment but they must applaud the incremental strides towards becoming more responsible, such as the case with NASCAR.  They also must continue to raise the interdependent effects of some of these trends to bring full awareness to the impact and best prepare for those consequences whether intended or not. Each green initiative can be viewed from many personal frameworks offering benefits that satisfy each individual’s values. The concentration of NASCAR fans from the Midwest and South may see these initiatives as patriotic duties to wean our country of reliance of foreign oil. Other’s strictly value the environmental impact with reduction in waste generations from the events. Operation managers enjoy the monetary savings or growth they receive from energy efficiencies and positive PR respectively. All perspectives can claim satisfaction in environmental stewardship, whether they enjoy the monetary savings, the impact on climate change, or sovereign independence. Is it marketing or just the common sense driving the evolution of how things are done? Just as sustainability has penetrated movie making, shopping, professional sports, and the airline industry, why not penetrate all contributors to our environmental consumption? Perhaps it’s because it makes business sense too.

Submitted by Dr. Wayne Visser

By Wayne Visser

Part of the Quest for CSR 2.0 series.

Are concepts and models of corporate social responsibility (CSR) developed in the West appropriate for developing countries?

I decided to first tackle this question by setting out what I believe to be Seven Popular Myths about CSR in developing countries. Most of these myths exist as a result of the feeding frenzy that inevitably occurs every time the media has hunted down and sunk its teeth into one or other juicy story of corporate exploitation. They, however, become sustainable because they are spread by whole legions of largely well-intentioned people who have vested interests in promoting their particular brand of the truth about CSR.

The Seven Myths:

1. Economic growth is not compatible with CSR.
2. Multinationals are the biggest CSR sinners.
3. Multinationals are the biggest CSR saviours.
4. Developing countries are anti-multinational.
5. Developed countries lead on CSR.
6. Codes can ensure CSR in developing countries.
7. CSR is the same the world over.

Let’s look at these myths each briefly in turn.

Myth 1: Economic growth is not compatible with CSR: What the Index for Sustainable Economic Welfare and Genuine Progress Index show is that GDP growth and quality of life move in parallel until social and environmental costs begin to outweigh economic benefits. According to this ‘threshold hypothesis’ – coined by Chilean barefoot economist, Manfred Max-Neef – most developing countries have yet to reach this divergence threshold. For them, economic growth and the expansion of business activities is still one of the most effective ways to achieve improved social development, while environmental impacts are increasingly being tackled through leapfrog clean technologies.

Myth 2: Multinationals are the biggest CSR sinners: On the ground in most countries, multinationals are generally powerful forces for good, through their investment in local economies, creation of jobs, upgrading of infrastructure, provision of basic services and involvement in community development and environmental conservation. There are always exceptions, of course, and these should be named and shamed. But they shouldn’t overshadow the overall positive role of big companies in developing countries. The cumulative social and environmental impacts of smaller companies, which operate below the radar of the media and out of reach of the arm of the law, are typically far larger than that of the high profile multinationals.

Myth 3: Multinationals are the biggest CSR saviours: Not only do large companies have limited influence over government policy, but most multinationals, despite large capital investments, provide only a minuscule proportion of the total employment in developing countries. The real potential saviours are small, medium and micro enterprises (SMMEs), including social enterprises, which are labour intensive and better placed to affect local economic development. If the social and environmental impacts of these SMMEs can be improved, the knock on benefits will be proportionally much greater than anything that multinationals could achieve on their own. This is why the work CSR for SMEs by Anahuac University in Mexico and Forum Empresa in Latin America is so encouraging and important.

Myth 4: Developing countries are anti-multinational: Developing countries are often caught in a no-man’s land of under-development in a competitive, monetized, global economy, and the sooner they can modernise and integrate, the better for them. Most often, developing country communities welcome multinationals and their CSR initiatives. This is not the same as saying the developing world should repeat the past mistakes of the developed countries, such as highly polluting industrialisation, nor that multinationals should not be required to be responsible and held accountable. But we should not deny developing countries the dignity of choice, whether it be Unilever products or Coca Cola, both of which have made significant progress on CSR in recent years.

Myth 5: Developed countries lead on CSR: There are countless examples of how developing countries are proving themselves highly adept at delivering the so-called triple bottom line of sustainability, namely balanced and integrated social, economic and environmental benefits. It is actually not surprising, since in developing countries, these three spheres are seldom separable – economic development almost inevitably results in social upliftment and environmental improvement, and vice versa. Whether it is South Africa’s King Code, which encourages integrated sustainability reporting, or A Little World, which uses mobile phone and biometric scanners to bring micro-banking services to the poor in India, a lot of the innovation in CSR is taking place in developing countries.

Myth 6: Codes can ensure CSR in developing countries: The past few years have seen a mushrooming of corporate responsibility codes, standards and guidelines, which developing countries are keen to adopt, if only to satisfy their Western partners. This standardisation trend is both inevitable and necessary in a globalising world—which is desperately searching for an alternative to command-and-control style business regulation in order to satisfy the governance and accountability void which still exists. But this codification tends to measure CSR activities, rather than CSR impacts on the ground. Developing countries need to move rapidly through this Strategic CSR approach in an Age of Management to a more transformative CSR approach in an Age of Responsibility.

Myth 7: CSR is the same the world over: One of the biggest fallacies is that, in a globalised world, CSR can somehow conform to a unitary model. Of course, we need universal principles, like the Global Compact, and perhaps even process frameworks, like ISO 14001. But standardised performance metrics, like those of the Global Reporting Initiative and the numerous sustainability funds and indexes, start to tread on shaky ground. The tendency is for developed country priorities – such as energy and climate change – to receive emphasis and for northern NGO agendas to dominate.

The antitdote to these CSR myths for developing countries is glocality – one of the five principles of CSR 2.0. The term ‘glocal’ – a portmanteau of global and local – is said to come from the Japanese word dochakuka, which simply means global localisation. Or more simply, ‘think global, act local’. The question is, do we see glocality in action, or do we just see corporations in developing countries mimicking the practices of the West?

About Wayne Visser

Dr. Visser is Founder and Director of the think-tank CSR International and the author of twelve books. In addition, Dr. Visser is Senior Associate at the University of Cambridge Programme for Sustainability Leadership and Visiting Professor of Sustainability at Magna Carta College, Oxford. Before getting his PhD in CSR, Dr. Visser was Director of Sustainability Services for KPMG and Strategy Analyst for Cap Gemini in South Africa. In 2011, he was listed as one of the Top 100 Thought Leaders in Europe & the Middle East. Dr. Visser lives in London, UK, and enjoys art, writing poetry, spending time outdoors and travelling. A full biography and much of his writing and art is on www.waynevisser.com.

Readers: Are Western CSR models appropriate for developing countries? Tell us on Talkback!

By Mirsad Hasic

Many companies which cannot invest in their own solar panels or wind turbines purchase green energy credits. These credits represent the renewable energy resources associated with power production. When they are certified, they are eligible for renewable energy certificates (RECs). The credit can be sold, bartered or traded and the green energy credits represent the source of the energy produced.

RECs are similar to carbon emissions trading except, instead of trading tons of avoided carbon, kilowatt hours are traded. For RECs, the green energy credits represent electricity produced using environmentally friendly processes while the certificate is sold to a third party company.

For example, a wind farm would be credited with one green energy credit for every 1000 kWh of electricity produced. A designated agency certifies the production and issues a number for each certificate.

The electricity produced by the wind farm is then routed into the commercial electrical grid (this is a requirement for an REC). At that point, the REC can be sold by the owner of the wind farm.

Markets for Green Energy Credits

Markets for renewable energy certificates are divided into compliance ad voluntary markets. Compliance markets exist in 29 states in the US, the District of Columbia and Puerto Rico. Electric companies in those states must generate a percentage of power from renewable resources by a certain time.

In California, the law mandates 33% of electricity produced must utilize renewable resources by the year 2020. By 2013, New York will have a 24% requirement for renewable energy.

By purchasing green energy credits, the states can meet the requirements set by the laws of that state. It’s a balancing act where solar and wind energy created in one part of the country can be used to offset use of fossil fuels in another state.

Voluntary markets are states that do not have set requirements for producing a certain amount of power through renewable resources. In these states, customers choose to buy renewable energy due to concerns for the environment. RECs sold in voluntary markets are usually sold for less than in the compliance markets where acquiring REC’s is the only way to meet timelines of state laws.

There is much discussion and dispute over the marketing of green energy credits as critics have pointed to flaws in the system. Solar and wind power can be intermittent as they depend on natural factors out of our control (sun and wind).

The critics claim the unreliable electrical production of solar and wind cannot be used to cancel other energy sources. Proponents of green energy credits hold that greenhouse gas, sulfur, nitrogen and other pollutants are reduced overall.

The business of selling renewable energy certificates has grown rapidly but there is not a national registry of the RECs being issued. There is a voluntary program to ensure the certificates account for and not double counted. This program is form of an audit where a third party verifies the creation and sale of an REC.

Today most RECs are assigned numbers that are uniquely identifying and can be tracked. Systems are becoming available on a regional basis that can keep a running audit of green energy credits and this tracking ability will grow as the business of green energy continues to flourish.

Where Do Green Energy Credits Come From?

There are several power producing technologies that can qualify for creating green energy credits. These are

• Solar


• Wind


• Geothermal


• Small hydro-power facilities


• Biomass, bio-fuels


• Hydrogen powered fuel cells

Why Would Business Buy Green Energy Credits?

Environmental concerns have gained public awareness and focus in recent years. Damage to the environment caused by burning fossils fuels to provide for our ever increasing need for electricity is problem that must be solved.

The renewable energy resources must be captured where they are readily available. You can build a fossil fuel burning power plant anywhere there’s enough land but you can’t relocate a geothermal field.

Some areas of the country have winds that blow reliably day after day while others have winds that are blocked by mountains or other topography. In states like Arizona, the strong sunshine is a daily fact of life while in northern Ohio clouds hide the sun for days on end throughout the year.

Selling green energy credits encourages the use of renewable resources for electricity production by providing a financial incentive to companies investing in these energy sources. At the same time, use of renewable energy decreases the environmental damage of fossil fuel plants in that area.

Renewable energy certificates provide money for further growth of natural renewable power sources and allow companies and individuals across the country an opportunity to participate in the “green” movement.

One of the leading web hosting providers in the country features green energy credits on sales pages. Located in Texas, this company buys REC’s produced by Texas wind farms.

That company now hosts over 4,000,000 websites with 130% wind power. By purchasing renewable energy certificates, the company has in effect eliminated its reliance on fossil fuels and can advertise as an environmentally responsible hosting provider.

An entire new group of businesses has resulted from REC’s. These companies focus on providing funds for clean energy and carbon reduction projects by selling green energy credits to businesses in large cities that will allow wind farms and solar power producers to expand their production.

Summary

When a wind farm, geothermal field or other form of renewable resource is used to produce electrical power that power can be sold to a commercial power grid. If that is done, a renewable energy certificate is issued and that certificate can then sold to offset power use of a company located in a city far away from the power plant. Once the certificate has been sold, it is used to offset the buyer’s electrical use and meet state requirements. At that point, the certificate is retired as it can only be used one time for one power offset.

Image credit: Pexels

There's just something about coffee. From that first sacred sip in the morning while reading the paper to the mid-day pick-me-up, coffee is like fuel for many people. The price of that fuel may increase in the future as coffee supplies dwindle thanks to climate change. Last week Starbucks sustainability director, Jim Hanna told the Guardian that climate change is already affecting coffee farmers.

"What we are really seeing as a company as we look 10, 20, 30 years down the road – if conditions continue as they are – is a potentially significant risk to our supply chain, which is the Arabica coffee bean," Hanna said. "Even in very well established coffee plantations and farms, we are hearing more and more stories of impacts."

Starbucks is taking a proactive approach to climate change risks. Hanna will be in Washington, D.C. on Friday to speak to members of Congress about climate change and coffee at an event sponsored by the Union of Concerned Scientists (UCS).

"If we sit by and wait until the impacts of climate change are so severe that is impacting our supply chain then that puts us at a greater risk," Hanna said. "From a business perspective we really need to address this now, and to look five, 10, and 20 years down the road."

Coffee supplies are being reduced by higher temperatures, long droughts and intense rainfall, plus more resilient pests and plant diseases, according to the UCS, "all of which are associated with climate change." Coffee varieties adapted to certain climate zones so a temperature increase of just a half of a degree can have a big affect and cause lower crop yields. A good example is the almost 30 percent decrease in Indian coffee production From 2002 to 2011.

"Coffee likes a pretty narrow range of temperatures, and one of the hallmarks, really, of climate change will be increased extremes in temperatures," said Todd Sanford, a climate scientist from the UCS.

Chocolate and tea production also affected by climate change

Coffee is not the only food product affected by climate change. A recent International Centre for Tropical Agriculture (known by the Spanish acronym, CIAT) study predicted a one-degree Celsius temperature increase by 2030 and 2.3 degrees Celsius by 2050 in the Ivory Coast and Ghana, which would make it too hot to grow chocolate. Both countries supply more than half of the world's cocoa.

The CIAT report's lead author, Peter Laderach said that preparation is very important. "There is no doubt that these findings are severe," said Laderach. "But preparation is the name of the game. There is a lot that farmers, governments, scientists – and key players in the cocoa supply chains – can do to help protect and improve cocoa production. But these measures need to be implemented very quickly."

Tea is also being affected by climate change, according to a CIAT report released in May. Climate change will cause increases in average temperatures and rainfall which will cause many Kenyan farmers at lower elevations to abandon growing tea.

Photo: Flickr user, Dyobmit