Questionning market logic for quelling carbon emissions

Interesting data on the cost estimates relating to various means of cutting carbon emissions. However, at the very moment when markets are proven not to be as effective as previously proclaimed, do we still want to rely solely on market mechanisms to quell carbon emissions? I mean, the current financial and credit crisis, which is relentlessly extending as a full-blown recession of the "real" economy, amply shows that markets are not that good at pricing assets and risk. So, why is it that we still seem to think that market mechanisms should be more or less exclusively involved in quelling carbon emissions?

clipped from www.technologyreview.com

The Cost of Cutting Carbon

Will putting a price on carbon increase the use of renewables?

If the goal is to increase the use of renewable energy, says Sergey Paltsev, principal research scientist at the MIT joint program, governments may have to mandate its use. Unfortunately, that would increase energy costs much more than market-based approaches to carbon regulation would.

¹Based on average 2007 prices ²For electrical utilities ³All blends
Source: Energy Information Administration/Gilbert Metcalf (prices); MIT Joint Program on the Science and Policy of Global Change (power sources)

Could Sorell's greater online engagement help push for WPP digital leadership?

Excerpts from a BusinessWeek article with some fairly interesting info about the goals and obstacles faced by WPP as it tries to transform itself into a next generation marketing agency. Interestingly Martin Sorell, its CEO is pushing employees and Board Directors alike to adopt new practices from video, to Facebook, to Twitter and other social tools. And that's the right way to go for this sort of transition from yesterday to tomorrow, an endeavor only very few companies managed to achieve in business history.

Now, since I believe that coherence, alignment and consistency are essential ingredients of success as the US presidential super-campaign amply demonstrated, I wanted to check whether Sorell, the staunch promoter of WPP's diitization, has done anything for himself to be more present, more digital, more of a "social networker" I looked for his profile on LinkedIn and the result was, I quote, "0 results

for


Martin Sorell". Same thing on Naymz and Plaxo, while on Facebook there's only one entry without pictures and with one friend called Mélanie Pineau. So let me get this: we're about to have the first awesomely digital US President in Barack Obama (present on all sorts of online platforms from Facebook to LinkedIn to Twitter to a YouTube channel and with fans forming Plaxo groups like this one), and the head of tomorrow's would-be leading agency is nowhere to be seen? When is Sorell going to assemble a small team of WPP wiz kids to build his own onine presence? That would go a long way to making his push with employees and close co-workers much more compelling IMHO.

clipped from www.businessweek.com

strategy to make the $15 billion agency a leader in the emerging world of digital communications

At an Oct. 20 board meeting in Palo Alto, Calif., Sorrell had all the directors—including himself—learn how to upload video and create their own Facebook pages

chairman of interactive marketing company OgilvyOne, figures he pays 15% to 30% more to hire young people with one-third less experience than those versed in traditional advertising channels

Sorrell also is pushing for greater cooperation among WPP companies to incorporate TV, video, print, mobile technology, and social networking into every campaign

WPP recently won a hefty portion of a Johnson & Johnson

widely reported to be worth more than $100 million

WPP staged a science fair-style presentation inside JWT's New York office, where representatives from 20 WPP units sat in different booths, showing off displays such as a WPP-designed social network promoting a prescription drug and an interactive Web site to inform doctors

Quote of the day

Since we're entering a time when decision makers are less exuberant we can also expect some of the excessive rhetoric of the past couple of years to recede. Hence the quote of this day (source worth reading) about viral marketing, one of the hottest marketing fads of the recent past:

"Being viral isn't the hard part. The hard part is making that viral element actually produce something of value, not just entertainment for the client or your boss." - Seth Godin

Season's greetings

Just blame it on the crisis Joe!

As the news remain pretty negative, business and consumer confidence stays in the basement and incompetent senior managers get away with the consequences of past poor decisions by blaming it all on the crisis.

The string of recent bad news from several sectors of the world economy is fast becoming the latest great excuse in companies that are in dire straits for reasons wholly unrelated to the macroeconomic context. Sectors that are still considered to be at least unaffected if not outright favored by the recession, e.g. online and interactive marketing, have their casualties too and it does seem odd that the credit crisis should be invoked to explain lay-offs. In many cases the current difficulties can be better explained by yesterday's lack of foresight, excessive increase of fixed costs, careless allocation of financial and human resources and most likely by insufficient profit margins in the core of the business. So in many cases even though managers blame it on the crisis they'd better take a long hard look at the objective reality 'cause you may blame it on the crisis but in ain't so Joe!

Managing in the downturn

Obviously the current financial crisis is capturing a lot of attention and causing serious trouble even for the best managed of companies. In my practice I see a number of entrepreneurs and managers having very hard time coping with the fact that liquidity is not even an appropriate term to describe the lack of cash in te economy, while the level of trust is at its lowest and not only between banks. So, what's the smart way of managing in the downturn? Here are a couple of points that came up in an interesting email I got from McKinsey:

1. Freeing up cash from operations


2. Maintaining the customer experience


3. Upgrading talent


4. Managing IT spending

Of course these recommendation may seem to be very high-level, but I think they're interesting because the last thing you want to do in a downturn, unless you absolutely have to, is to part company from the people who run your business and in many cases ARE your business. In fact, not only should you do your best to retain talent, but it does seem like a good time to upgrade it. The trouble of course is that in many cases personnel is precisely the first area to be seen as a way to adjust, right after R&D and marketing. There's another reason why McKinsey's recommendations are an interesting inspiration for any manager worth their pinch of salt: the value of maintaining the customer experience, something that usually goes down the drain as soon as a business losses key customer facing personnel and / or core expertise.
Then there's another point here which I believe is important: cash should be managed carefully regardless the situation of the economy and what you don't want to do is spend it unwisely in perfectly useless assets. Some companies tend to do that, painting their walls, buying expensive furniture (nope I didn't say anything about the famous Aeron chair...), painting walls, travelling around the globe well beyond the needs of their business or acquiring tools and means that are not high priority... Usually, with unwise use of cash comes an increase in the fixed costs of a business, which makes break-even more challenging to reach. Another phenomenon that comes with lack of thinking through the allocation of cash resources is an increase of the cash tied into assets that are not directly productive... and you don't want that under any circumstances, let alone those in which we are today.
So be careful in dealing with the crisis so as to avoid throwing the baby with the bath water...

The making of a credit crisis

Here's an interesting set of slides to provide an overview of how the credit crisis was caused, even though there is a little something that is missing: the role of rating agencies that failed their mission more than ever before...

Creditcrisis 30slides Final

View SlideShare presentation or Upload your own. (tags: capitalism mortgage)