Business Quests in the Information Age

Carbon emissions: facts to make a difference

Nowadays a day seldom goes by without some piece of news regarding the sorry state and dismal prospects of the Earth's environment. These are the days of inconvenient truths. Opinions are numerous, conceptual ideas abound,  more or less scientific and rigorous conclusions widely distributed and each person responds in their own way. Some will feel anxious, others don't know or pretend not to know (so they can drive an over-sized car with an engine that makes a noise that is music to their ears), others still feel a century is too long a time to worry and a few do what they can to help.
The point however is that we all seem to be like drivers or airplane pilots deprived of instruments, flying or driving blindly in the worrying knowledge that the wall we will hit is getting dangerously close. That's the key issue: we lack data about the impact of our daily micro-decisions on the environment even though there are all sorts of calculators of environmental impact out there. What we do not have is a means to measure what is going on as it's happening, which is really a pity in a world so connected. That's precisely one of the challenges OpenSpime, the self proclaimed "infrastructure company for an open internet of things", seems to be addressing with a pretty cool infrastructure that combines sensors, software, the Internet and mashups to deliver actual maps of carbon dioxide emissions. A good friend of mine is their CTO and I am impressed with what these guys are presenting in this video:

Why some people can't Cool It...

It does seem that the discussion of the Copenhagen Consensus and Bjorn Lomborg's positions canlead to some pretty heated reactions. I came across an interesting post discussing such reactions and arguing that it all boils down to the concept of "opportunity costs". It does  look as though the world is going hysteric over global warming when it would be quite crucial to keep cool and make perhaps vital decisions rationally, especially since our resources as so scarce.

Sadly, despite a very "user friendly" / pedagogical way of presenting his points Lomborg is not always well understood. I believe that is because quite a lot of his developments run counter generally accepted ideas and even "common sense" in a way. It's a bit like the resistance to change one faces when trying to help a disorganized and overloaded executive to start prioritizing actions because it takes some nerve and a healthy dose of indifference to accept the idea that there are quite a few things out there on which you will not focus if you are to achieve anything meaningful on those subjects you've decided to tackle first with your limited resources.

Maybe more than an issue with the understanding of the concept of "opportunity cost" discussed in the post, I feel there are phenomena that provide explanations on that count:

1. a reluctance of many people to use money and utility curves to make decisions about "noble causes" as though that would put dirt on those noble causes (perhaps owing to a tradition in many cultures to consider money as "bad" or "dirty")
2. the degree of anxiety created by the sort of media coverage we're getting about global warming and I must say Cool It came as a refreshing perspective as far as I am concerned
3. reluctance to accept the consequences that cannot be avoided and which stem from our past (current?) consumption behaviors... something which is creating a collective schizophrenia of sorts with part of ourselves concerned with success within the existing economic and social context and part of ourselves leaning in the direction of a radical change of behavior in favor of more ecology
4. lack of skill in prioritizing and planning at a collective level especially where the protection of the commons is concerned, more particularly since we were conditioned into believing the theory that competition and the free markets would solve all of our problems without government intervention
5. poor collective sense of proportion and assessment of quantitative facts, especially as regards the quality of projections of likely consequences from warming
6. desire to keep things as they were or are (something that is very characteristic of our modern civilization with its unprecedented recording capabilities), when the world is a place in constant evolution
7. excessive confidence in the effectiveness of public action with ambitious goals, fueled by the lack of assessment of past initiatives led by governments only with long term time horizons (economic development of less-developed countries, agricultural programs in Africa, funding of projects by the World Bank, free trade agreements invariably leading to a violation of the position of developing nations...) Overall we have confidence in a failed model of world governance and perhaps the first challenge to tackle is to reform that so as to be at least confident in the vehicle we are going to use to tackle whichever problems we can rationally consider to be the real top priorities

On the other hand there are also a few intelligent replies like this one that are a real contribution to the discussion from my perspective and which IMHO should not prevent us from using valuable contributions from the Copenhagen Consensus (I certainly consider their analytical and cooperative approach to be a very positive contribution that should bring us closer to a more factual discussion on this important matter).

The challenge of sustainability of business quests

Blog Action Day is the initiative that leads me to posting a few thoughts based on the simple fact that business has been the main driver of environmental impacts we've been hearing about over the past decade or so. By business I mean the more and more systematic use of limited resources and innovation (technical and non-technical) to achieve commercial benefit.

The topic is huge and I do not have sufficient knowledge and time to tackle it in an exhaustive manner, but I've started putting some thoughts together as to what causes business to contribute negatively to the global environment because I believe that understanding that is a key to structuring business practices that can be both sustainable and competitive on the market. In essence, what I'm saying is the following:

1. today's situation is not something that happened overnight: it is the result of two centuries of industrial revolution
2. the current status is a by-product of economic and business processes as they were structured for the industrial age
3. some of those practices are at fault while other should be kept (i.e. let's not throw the baby with the bath water)

An the question is: can we use market mechanisms and financial vehicles similar to those that created the problem to solve it? In other words, if we could use existing assets (i.e. including good practices created with industrialisation) and resources to build successful businesses whose activity will have as a by-product solutions to the deteriorating environment, then we probably have a winner. And since it all starts with proper measurement of what is actually going on on the font of sustainability, I will mention a trend that is picking-up steam, as testified by posts like this one:

1. socially responsible investing, a global movement to which Triodos, one of my customers has been contributing for the past 25 years or so, another example being the Domini Fund
2. the creation and publication of sustainability indexes like the one recently launched by KLD. Their common ancestor is the Domini Social Index, whose companies seem pretty decent on their returns by several accounts.

I have started working on a mindmap of key areas and causes explaining the contribution of business to the deterioration of the global environment. It's still very much a draft. My goal is to examine the relevance of setting-up an investment vehicle dedicated to taking over a specific target group of European companies (allow me to keep that bit for me) in view of boosting their performance (in an integral sense, i.e. including environmental and human development aspects). After all, most companies are incorporated without an end date, so I guess it is in the nature of business to be seeking sustainability. The question being of course how to achieve sustainable consistent positive performance... Perhaps I'll have more on this within the next couple of months.

A contrarian's view

If we are serious about dealing with durable (human) development and the type of world we will leave to future generations (not only in the economically developed world), it is worth listening to well documented views from contrarians like Bjorn Lomborg, whose book Cool It I strongly recommend. Worth considering on this Blog Action Day I think. His presentation at TED Talks can be viewed at the end of this post.

What I like about what he develops is that:

1. he makes the case for immediate action on stuff that matters today and has consequences tomorrow, possibly preparing people and nations to better deal with threats that we cannot possibly fathom
2. his approach involves considering the issues of the human condition in an integral manner, not looking at matters in isolation
3. he considers the limited nature of current resources and outlines a path for a rational use of those resources to achieve the goal of a wealthier and more balanced world
4. taking an integral approach forces us to confront the contradictions of our current ways with barely conceivable imbalances between endeavours of different types and merits
5. considering costs and benefits and focusing on currently achievable steps while keeping an end goal in mind is precisely what will break the loosing game of the prisonner's dilema as outlined in a recent article of The Economist

A matter of objective

The impact of human activity on the environment and consequences on the habitability of the planet is a central topic of concern today. So much so that today is a "Blog Action Day", that is a day during which blogs around the globe are to publish content, contributions, views and perhaps (I hope) a few questions about durable development and global warming. My contributions will mainly be with questions since there seem to be quite a few factual aspects to sort out for any action to be meaningful.

In the recent years the importance of "greenhouse effect gases" in the atmosphere has been central in media coverage of global warming and because modern communication requires simplification (excessive somtimes?), everybody seems to be focusing on carbon dioxyde. The claim goes that we should curb emissions to avoid catastrophy (for Mankind "only", should it be reminded).

But is this not somehow focusing on means instead of focusing on meaningful objectives? At the end of the day, what good will it do us to live in a world with (irrealistically) lower CO2 emissions, but still plagued with ignorance, malnutrition, lack of democracy, untolerable exclusion of developing world farmers from world trade as a result of subsidies in developed countries and so on?

My professional experience in business has taught me that formulating a worthwhile objective is central to mustering an organization's resources to execute in the right direction, so perhaps the big discussion about global warming is actually the very best opportunity in human history to agree on a long-term objective. What world do we want in a century? What can we do now to move towards that? Is it merely focusing on cutting carbon emissions?

D-1 for blog action day

A convenient Nobel Peace Prize: challenges ahead remain

Thrilled is probably the best way to describe how I feel at the news that the Nobel Peace Price is to be shared between the scientific community represented by the IPCC and Al Gore. At a time when Exxon is going out of its way to influence public opinions and governments against taking radical action about climate change and when Fox is doing everything it possibly can (serving which masters, I wonder?) to exploit imperfections in An Inconvenient Truth, the Nobel Prize is exactly what is needed to further tip the balance in favor of immediate action. I suspect it is also a great moment for a very special production company called Participate, which I covered on this blog over a year ago.
The challenge is huge especially when one factors into what needs to be done about climate change the following:

1. China's explosive growth that is by no means environmentally friendly (see excerpt from Gore's documentary below)
2. the fact that the growth of the other BRIC countries is not necessariy more sustainable than China's
3. US indifference to Kyoto and hostility to accepting limitations and binding measures to curb emissions and move towards a cleaner and more sustainable economic model, which presumably cannot continue to be based on unchecked mass consumption of goods engineered for a limited useful life (programmed obsolescence is the technical word for it)
4. the ethical conundrum that we all find ourselves trapped into in the sense that the developed world reached its current level of welfare by using natural resources without consideration for their limited nature and therefore is not in a moral position to force less-developed nations to subject their growth to an overarching goal of durable development
5. the dynamics that are currently in place worldwide and which were very well described in a recent article of The Economist (covered here) arguing that game theory could be used to actually bring the world out of the current deadlock

Solving the climate crisis with game theory

This article provides an interesting perspective on the current dynamics of paralysis in the way the international community deals with climate change. It also offers pretty interesting and practical actions that could help break the deadlock and start moving towards measurable improvements in the way we use the global environment.

clipped from www.economist.com Playing games with the planet A version of the “prisoner's dilemma” may suggest ways to break through the Kyoto impasse AT ANY given summit on climate change, it is never long before some politician declares how “urgent” or “vital” or “imperative” it is to stop the planet from overheating. And yet few governments are willing to tackle the problem by themselves. In practice, what these impassioned speakers usually mean is that it is urgent—no, vital!—no, imperative!—for all countries but their own to get to grips with climate change. Yet in a recent paper, Michael Liebreich, of New Energy Finance, a research firm, draws on game theory to reach the opposite conclusion. The dynamics of the prisoner's dilemma, he points out, change dramatically if participants know that they will be playing the game more than once. In that case, they have an incentive to co-operate, in order to avoid being punished for their misconduct by their opponent in subsequent rounds.

Blog action day: 15-OCT-2007

The following video is an open invitation to participate to a huge global conversation about the environment on 15-OCT-2007. If you have a blog, post relevant material in your area of focus. If you don't visit more or less prominent blogs and use the "Comments" features to participate. Wherever you are, save a quarter of an hour to take part and show you care about the world that this generation will leave to the next one... if there is to be a next one, because life will go on even without mankind.