Stimulus, Justice, and Business in Greening the Developing World

I attended a business leaders luncheon last week organized by the United Nations Association around the idea of Greening the Developing World: Tech's Leading Role (Siemens and TIME co-sponsored). Among the themes one stood out: "Experiment on us!" This came from Minister Modest Mero of Tanzania. He indicated that Africa is an investment opportunity where clean energy pilot projects can take root because they don't have to fight the inertia of creative destruction common in rich countries.

But what is the policy and political landscape for greening development? Robert Orr, the Assistant Secretary-General for Strategic Planning and Policy Coordination, explained the relevance and success of the Clean Development Mechanism in this area. About half of new energy demand and development will be in poorer countries, he said, where 2 billion people live without modern energy access or technology. About one-third of CDM projects to date have involved technology dissemination to these countries.

Orr also made the point that it might be more useful to speak generally of "technology dissemination" instead of "technology transfer." He described the latter as too much of a 1960s–70s term. Recasting the process in this light would help account for co-development, PPPs, and other projects. (While I understand his pragmatic bent here, it does seem to gloss over the justice questions at stake in climate change.)

The CDM for all its faults [PDF] is not an insignificant pool of resources, and lessons have been learned from early implementation efforts. In 2006 some $25 billion was dedicated to projects in the CDM pipeline, $5.7 billion of which went to renewable energy and energy efficiency. But it should have come as no surprise for the UN to learn that money has flowed to the biggest, most profitable projects. As Orr acknowledged, about 80 percent of the projects have occurred in just five countries: Brazil, India, China, Mexico, and the Republic of Korea. Forty-nine other countries account for only 1.5 percent of CDM projects, showing a great need for equity and capacity-building. Orr explained that the UN role should be to help harness the power of the market in a formula that ensures full participation for access to energy.

On the topic of climate ethics, Ambassador Hardeep Singh Puri of India was asked to explain why the West should help countries like India that are its industrial competitors. He answered that you can't solve global climate change without them! He also offered a somewhat rhetorical question of his own: Should the West give to the poorest countries but not to India? Puri estimated that there are more people living in India at the poverty level of the Least Developed Countries than there are total people living in those LDCs.

He said that countries like India offer potential not only as laboratories for new clean energy projects, but also as new markets for green technologies. He stressed that these investments should occur within the existing intellectual property regime (a point also expressed in Sen. John Kerry's Clean Energy Jobs and American Power Act [PDF]). "Accessing technologies" would mean paying for patents, but at affordable rates to promote dissemination of clean technologies. Relying on philanthropy and altruism will go nowhere, he said.

Puri cited renewables and even nuclear as the green technology needs of India, since India still relies heavily on fossil fuels. Biofuels are a non-starter for India in the short and medium term because of land and water shortages, concerns about food security, and commodity price volatility. Puri instead would like to see an increase in public-funded R&D projects that can lead to technology dissemination that also maximizes the common good.

Glenn Prickett of Conservation International broke implementation goals down into three priorities: Efficiency, Forest conservation, and Renewable energy. He cited a McKinsey study [PDF] showing that progress in those areas could account for 75 percent of the global emissions reductions needed by 2020, at a net savings of $14 billion! Of course, this would entail a 50 percent reduction in tropical deforestation, and one roadblock is that public investment in forestry, agriculture, and land-use policies has been dropping.

Energy efficiency solutions, according to Prickett, can be driven by effective standards backed by institutions for enforcement. He pointed out that one of the best ways an "awakening" private sector can contribute is through supply-chain analysis and waste reduction. On a related note, the Kerry climate bill also calls for a voluntary "national product carbon disclosure program," to be based on a review of existing and planned standards such as Carbon Trust's Publicly Available Specification 2050, standards to be developed by the World Resources Institute and the World Business Council for Sustainable Development, and those of the International Standards Organization.

A question was posed to the panel about why the interaction of climate change and land-use issues has been neglected relative to renewables and other investments. Orr responded that food security must be tackled in tandem with climate change, and that technology transfer for adaptation projects that deal with land use could yield huge advances at low cost. Ambassador Puri turned to the case of India, where he said 60 percent of the country lives in rural areas but only 20 percent of the country's GDP comes from agricultural investments. Why the underinvestment? Subsidies in the rich countries! Puri indicated that it's impossible to disentangle climate solutions from the inequities and stagnation of other negotiations such as the WTO Doha Round.

Indeed it is these systemic complexities and inequities that most plague the path to agreement in Copenhagen. But there is nonetheless climate solidarity that transcends national barriers, as evidenced by the massive global call to action organized by 350.org on October 24. As I wrote recently, solving climate change has great potential to serve as an organizing principle for Green Diplomacy, in a way that solves geostrategic, security, and development concerns. But it also has the potential to be a Global Green Stimulus, at a time when developing countries have been further battered by the financial failures of rich nations. Administering much of this stimulus in the form of mitigation grants or an adaptation fund is key to answering the major questions of global environmental justice.

[Photo credit: 350.org action on the beach of Dar es Salaam, Tanzania (CC).]

America Shouldn't Blow an Opportunity for Green Diplomacy

Among all the talk about soft power and smart power something big and obvious has been missing: wind power. By not being a global leader on climate change over the past decade America has blown a major opportunity to engage in Green Diplomacy—the strategic use of clean energy projects to boost development and security in poor countries. Going forward, the Obama Administration should articulate and carry out a plan to align several of our national priorities: innovation, emissions reduction, development, diplomacy, and security.

When it comes to linking climate change and security it is common practice to trot out the specter of mass hordes of climate refugees inundating rich countries as their own coastal homelands disappear into the ocean. Likely this fear suffers from a case of xenophobic exaggeration. But an already-porous migration policy does motivate the United States to focus on the development of climate-resilient countries in its own hemisphere first. Fortunately a demonstration project exists in the region: Costa Rica, where reforestation and renewable energy combine in a national commitment to becoming carbon neutral.

One can envision the United States helping clean energy best practices radiate out from there, facilitated by domestic and international regulation. Thus it is heartening to see funding and institutional priorities coalescing around these goals in Sen. John Kerry's recently submitted Clean Energy Jobs and American Power Act [PDF]. The bill calls for establishment of a Strategic Interagency Board on International Climate Investment, to be composed of the secretaries of State, Energy, Treasury, Commerce, and Agriculture, the administrators of USAID and the Environmental Protection Agency, and any other relevant officials the president sees fit.

The SIBICI's task would be "to provide United States assistance to developing countries to develop, implement and improve nationally appropriate greenhouse gas mitigation policies," including preparation for participation in "markets for international offset credits for reduced emissions from deforestation." The bill also calls for the State Department to establish an International Clean Energy Deployment Program that would distribute funding either as bilateral assistance, to multilateral funds or institutions formed pursuant to the UNFCCC, or some combination of both. Similar funding would also be distributed under the International Climate Change Adaptation and Global Security Program to "provide assistance to the most vulnerable developing countries... in a way that protects and promotes interests of the United States."

The bill goes on to specify the details for emissions allowances and international offset credits, but much is also left open-ended to ensure that the executive branch has enough latitude to create and carry out these new programs. This bodes well for putting Green Diplomacy in the American power toolbox.

[Photo credit: Volcan Arenal, by Arturo Sotillo (CC).]

Japan Loves You, Brother - Newsweek piece

My take in Newsweek on Japanese Prime Minister Hatoyama's speech in front of the Diet this week and his notion of yuai (fraternity). Here is an excerpt:

...Hatoyama's vision would go far beyond that of his predecessors, who have been trying for decades to coin a catchphrase that would somehow provide a signpost for understanding Japan's place in the world. Some of these ideas understood Japan primarily in relation to the world's great powers. DPJ chairman Ichiro Ozawa talked of Japan as a "normal country"—by which he meant that Japan would have a foreign policy of its own, independent of the United States. Other ideas were more nationalistic in tone, such as former prime minister Shinzo Abe's idea of Japan as a "beautiful country" or Taro Aso's of Japan as the "thought leader" of Asia. Still others attempted to position the country as the premier power in Asia, with Japan dubbed the head of "the flying geese." But all of these formulations seemed to position Japan against others, rather than putting it in a truly global context. Yuai, by contrast, identifies Japan as an independent actor that is also part of a much larger and integrated global system. Indeed, the universal rhetoric seems appropriate for a time of universal problems.

IceStone CEO: "Buy American and Ask Questions" - An Interview with Miranda Magagnini

Today, I visited Miranda Magagnini, Co-CEO of one of New York's leading ethical companies, IceStone at its headquarters in the Brooklyn Navy Yard. The Brooklyn site, which used to be owned by the U.S. Navy to produce the USS Missouri and other famous war ships, is now home to IceStone, which is waging its own battle for a better world by creating green alternatives to stone surfaces and counter tops. The company, which Miranda runs with Co-CEO Peter Strugatz, produces durable surfaces made of recycled glass and concrete. Their product is not only made from recycled materials but is also recyclable itself. The company has achieved an extraordinary level of certification, including LEED, Cradle to Cradle GOLD, and B Corporation.

Miranda was especially proud of their company's B Corporation Certification since big companies simply don't have the ability to be transparent enough to get B Corporation Certified. There are only 190 B Corporations, including Seventh Generation, Good Capital, and Greyston Bakery (listen to our interview with CEO Julius Walls, Jr. here). IceStone's logo is featured prominently on the B Corporation website. Miranda also showed me a stunning table made from their refined collection (pictured in photo from their website). She also had some cautionary advice for would-be ethical consumers.

"There is a lot of confusion about what 'eco' means. 'Green' has become something that is in the eye of the beholder. While deep green people ride their bicycles to work, others might feel fine just recycling their paper," she said. "People have to make compromises because that is what society demands. We all make decisions everyday. There are trade offs."

Beware of Green Washing

While Miranda was encouraged to see big companies trying to get their minds around sustainability issues and that they are seeing a real business case for the "leaning of products" (or green and lean), she reminded me that it is small businesses that do the innovating. She also warned that some companies are intentionally confusing consumers on green claims. They are "dumbing down" claims on being green. "How many tree frogs do we see on corporate communications? Does it mean anything?"

To avoid falling into these green washing traps, Miranda called on consumers to ask more questions and buy American. Why? Buying products made in the United States helps products that are subject to stricter standards; it employs Americans; it creates jobs; it reduces the U.S. dependence on foreign oil; and it is therefore good for society.

Despite the more stringent labor and environmental standards in the United States, this country has a long way to go in terms of recycling. We are way behind Europe. "And glass has become the orphan of recycling in the United States," she said. In Europe, 95 percent of glass is recycled and it is sorted so it can be used to create higher value products. IceStone uses post-industrial waste instead of consumer waste because the recycling systems are lacking in the United States. Big U.S. beer companies lobby against increasing the cash return value (container deposit legislation), which would make it worthwhile to sort and recycle glass. The big beer companies simply don't want to establish the recycling systems to facilitate the more advanced consumer waste recycling, she told me.

But overall, Miranda is upbeat. "I am pathologically optimistic," she told me. "I have to be as an entrepreneur."

She sees green products as a permanent presence in the market. "Green is not a trend. It is in people's vernacular. People want deeper value. Because money is tighter, people ask more questions." She sees consumers seeking "layers of value," meaning products must be high quality and the company that produces them must demonstrate that they share your values.

Meanwhile, consumers have a duty to ask questions and find out what is inside those products and what went into making them so they can make informed decisions, which can have a collective impact. It has become cheaper to import quartz from Madagascar or stone from China or Africa, where people routinely die in mines and environmental standards are low, than to source the stone from Vermont. "Every time you see mined or engineered stone," Miranda urged me, "think IceStone could be used there instead."

Security Implications of Climate Change

A couple of years ago at a conference in New York, I tried out a theory I had been developing: What if climate change presents a security threat in terms of a confluence of oil dependence, funding to terrorists, displacement of people, and changing water supplies, arable land, and strategic choke points. Certainly, I thought, the combination of poverty, terrorist groups, and the presence of people with new, powerful grievances are an explosive mix. My co-panelists looked at me in bewilderment.

Now it seems the idea is coming into its own, if it's not too late. At a UN meeting I attended yesterday, I asked a UN official whether member states and her colleagues were focusing on the effects of climate change. Her only answer was that everyone was doing their best to make the Copenhagen meeting a success. There didn't seem to be any thought given on preparing for the inevitable impact of climate change. We all have a responsibility to slow climate change but we also have a responsibility to prepare for its impact.

But there are many who understand the gravity of the problem. This afternoon, the Truman National Security Project and Operation Free hosted a conference call with Senator John Kerry on the security implications of climate change. I recommend everyone take a look at Operation Free's excellent website, which contains a ton of information on the possible threats from climate change. The message of the call was that in the past the United States had led by rank on these issues; now, it must lead by example. One officer said that we cannot wait for 100 percent certainty on what climate change means before we act on the threat. The time for action is now.

Senator Kerry's message was that American soldiers in Afghanistan have already reported on the visible threats related to climate change, including desertification and drought in areas that are vulnerable to extremist groups. General Zinni has said that climate change will involve the military and the loss of human life. Some of the points Senator Kerry mentioned were:

- The growing desert in Sudan against the backdrop of the need for firewood, worsening the desert
- The acute need for water in the Middle East where only 2 percent of the world's water is located
- The melting of the glaciers in the Himalayas that provide water to billions of people; the glaciers may be gone in 20 years.
- The rising oceans and their devestation to island nations
- The destruction of fishing grounds
- The predicted displacement of some 100 million people form climate change
- The anticipated increased migration of Mexicans to the United States
- The increased spread of diseases
- The disappearance of forests in Colorado
- The continued money from oil funding petro-states, autocrats, and extremists
- The dependence on (and shifting) strategic choke points like the Malacca Strait

If these threats were not enough, the arguments to take leadership include: the positive economic impact of investing in clean energy; the health benefits of reducing pollution; and the ethical responsibility to future generations.

Photo of Sudanese desert by tomallen.

Toward a Global Economic Ethic: Fraternity Needed

I just got back from a presentation at the United Nations of a new manifesto on advancing a "Global Economic Ethic" by the UN Global Compact, the Swiss Government, Novartis Foundation, and the Global Ethic Foundation. Swiss Ambassador Peter Maurer, UN Global Compact Executive Director Georg Kell, philosopher Hans Kung, economist Jeffrey Sachs, economist Josef Wieland, and Novartis Foundation CEO Klaus Leisinger presented the new manifesto, which draws from all the religious and non-religious moral traditions of the world (including Humanism) and includes as its first signatories Michel Camdessus, Hans Kung, Mary Robinson, Jeffrey Sachs, and Desmond Tutu.

The manifesto starts with a preamble that situates this effort for a more ethical globalization in the urgency of the financial crisis:

For the globalization of economic activity to lead to universal and sustainable prosperity, all those who either take part in or are affected by economic activities are dependent on a values-based commercial exchange and cooperation. This is one of the fundamental lessons of today’s worldwide crisis of the financial and product markets.

At the core of the manifesto are two pillars: humanity and the Golden Rule (or reciprocity).

On humanity, the manifesto states:

The fundamental principle of a desirable global economic ethic is humanity: Being human must be the ethical yardstick for all economic action: It becomes concrete in the following guidelines for doing business in a way that creates value and is oriented to values for the common good.

On the Golden Rule, under its fourth article, the manifesto states:

What you do not wish done to yourself, do not do to others. This Golden Rule of reciprocity, which for thousands of years has been acknowledged in all religious and humanist traditions, promotes mutual responsibility, solidarity, fairness, tolerance, and respect for all persons involved.

Such attitudes or virtues are the basic pillars of a global economic ethos. Fairness in competition and cooperation for mutual benefit are fundamental principles of a sustainably developing global economy that is in conformity with the Golden Rule.

Some of the discussion at the conference focused on the French motto: Liberty, Equality, and Fraternity. Some argued that while governments and societies have done their best to improve the first two goals--liberty (or freedom) and equality--the third goal of fraternity (or brotherhood) had been dropped by the wayside. And this lack of a sense fraternity--the sense of caring for others--accounts for a lack of ethical thinking in the world.

Coincidentally, the new Japanese Prime Minister Hatoyama's personal philosophy (yuai) also emphasizes fraternity.

This morning I attended Japanese economic official Hidehiko Nishiyama's talk at the Japan Society in NYC, moderated by Merit Janow. Giving the audience a sense of where Japan is headed under the DPJ as APEC 2010 approaches, Mr. Nishiyama introduced some concepts:

- Japan's economic policy will emphasize "inclusive growth" (which is to say a fairer economic policy benefiting more people in my words).

- Japan will promote green, sustainable growth, including energy efficiency and green infrastructure.

- Japan will champion "human security," improving food security, human health, etc.

- Yuai (fraternity or brotherhood) will be a guiding principle of Japanese society and Japan's relations with the world.

After the conference, I mentioned Prime Minister Hatoyama's expression to the organizers. Their response: "Probably not a coincidence."

Buddha statue in Kamakura, Japan. Photo by Kristian Stevens (CC).