Category: Project Management

The New Climate Economy (NCE), a flagship project of the Global Commission on the Economy and Climate has released a report documenting how urbanization drives of productivity and growth in the global economy. The report titled, ‘Better Growth, Better Climate,’ observes that as the global economy undergoes a deep structural transformation the next 15 years will be marked by: (i) rapid global economic expansion by more than half, (ii) rapid technological advancement that will have profound impact on both businesses and lives, (iii) migration of a billion more people into cities, and (iv) investment of nearly US$90 trillion in infrastructure in asset intensive sectors mainly in urban, land use and energy systems.

To overcome market, policy and institutional barriers to low-carbon growth, the report recommends harnessing three key “drivers of change,” notably: raising resource efficiency, investing in infrastructure and stimulating innovation in new business models, technologies, business models and social-technical innovations and practices to stimulate both growth and emissions reduction.

 

Speaking at the launch of the report, Philipp Rode, the Executive Director of LSE Cities and Senior Research Fellow at the London School of Economics and Political Science said that:

dispersed peripheralized development of many developing world cities in particular leads to a very regressive form of urban development replicating income and wealth inequalities by limiting access to common goods such as healthcare, better schools, and public transport.

The report identifies better urbanization, better development, and better coordination of critical economic systems as vital drivers of change in cities.

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The report recommends a 10-point global action plan, including:

  • integrating climate into core economic decision-making processes to accelerate low-carbon transformation;
  • phasing out subsidies for hydrocarbon fuels, and incentives for urban sprawl;
  • introduce strong, predictable carbon prices;
  • pursue a strong, lasting and equitable international climate treaty;
  • strengthen incentives for long-term investment in forestry and forest protection;
  • reduce capital costs for low-carbon infrastructure investments;
  • scale up innovation in key low-carbon and climate-resilient technologies;
  • emphasize on developing a connected and compact cities paradigm;
  • accelerate fuel switching away from polluting coal-fired power generation to low carbon fuels; and
  • restore lost or degraded forests and agricultural lands by 2030.

David Rogers, Executive Director of BRITE conference, which stands for brands, innovation and technology, hosted by the Center on Global Brand Leadership at Columbia Business School, discusses the challenges and promise of big data and how companies can master it to drive innovation and generate customer insight.

Here’s a great video of a speech delivered by Lord Nicholas Stern and sponsored by the International Monetary Fund (IMF) and World Resources Institute (WRI). Lord Stern, who is the chairman of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, explained how climate risks have changed six years after the publication of the Stern Review report, and what organizations and governments can do to transition to a low-carbon economy future. For more, check out the transcript of the speech and IMF Managing Director Christine Lagarde’s introductory remarks, and Stern Review .

Carbon Market Watch released a policy brief that examines the Doha decisions. The brief is available here: Carbon Market Watch policy brief. Carbon Market Watch was launched in November 2012 to provide an independent perspective on carbon market developments and is based in Brussels, Belgium.

The Doha compromise has two main elements related to surpluses from the first and second commitment period.

  1. It does not limit the carry-over of surplus AAUs from CP1 but puts limits on their use in CP2 and countries without a reduction target in CP2 cannot sell their surplus to countries with a reduction target.
  2. It restricts initial assigned amount, that is, the number of AAUs a country initially receives for CP2. This helps in avoiding a build-up of new surplus.

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How does a real estate investor in Milwaukee predict true housing market demand and fine-tune better forecasts of potential homeowners and or renters in New York City, 880 miles away? The answer lies in monitoring social interactions – location-specific tweets, pokes, and “likes” – where participants reveal individual and collective location preferences and willingness to pay. In the age of social technologies, the world has been flattening much faster since Twitter hit the corporate bloodstream with its 140-character limit, and Facebook began the long expedition to make the world “more open and connected.”

Most business leaders want to change how work is done — increase productivity, enhance employee engagement, build sustainable businesses and inspire innovation. Moreover, innovations such as shifting from one-to-one communication channels to social channels (one-to-many), creating accessible and searchable information, and enhancing creative forces among employees have been marketed as key drivers and benefits of social technologies.

But vital questions remain: How can organizations capture the value of social technologies, encourage collaboration across functional silos, and improve productivity? How can organizational practices be transformed to fully benefit from social networks on a large-scale basis? And how can social media facilitate or change the way businesses approach sustainability? Full article

Innovations such as the greening of supply chains and optimization of resource flow as a core business practice have been marketed as key drivers and benefits for environmental improvement. But vital questions remain: How do you market investment in the green economy as a key component for addressing energy security, green growth, climate change, and poverty reduction? How do you drive coherence and collaboration among corporations, among institutions and across disciplines in the transition to a green economy? How do you leverage global finance to fund investment in green economy? And how do you deal with externalities and supply chains?

A Green Pathway
Against the backdrop of these perplexing questions, a UN Environment Programme (UNEP) report, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, found that a transition towards a green economy future would need investment of two percent of the world’s gross domestic product (GDP)[1]. The investments should target ten key sectors, including agriculture, tourism, fisheries, forests, manufacturing, energy efficient buildings, transport, water supply and waste management, or an average of around $1.3 trillion annually, to create high-quality jobs, reduce carbon emissions and create new low-carbon industries, the report recommends.

Powering economic growth—with less fossil fuel—according to the report, offers a pragmatic assessment of how governments, communities and corporations can make a shift in the business of environment. Innovation in clean energy future, for instance, is quickly emerging as the next frontier in global economic growth. As Achim Steiner, UN Under-Secretary General and UNEP Executive Director, affirms, the green economy “aims to link the environmental imperatives for changing course to economic and social outcomes—in particular economic development, jobs and equity.”

Defined by UNEP as the result of “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities,” the green economy is transforming how people relate to one another; interact with the environment and also within the competitive global economy.

According to the UNEP report, in the green economy investors use market-based instruments such as payments for ecosystem services (PES), trading of access rights and pollution permits, and consumer-driven accreditation schemes to realize both return on investment (ROI) and return on environment (ROE). Fisheries adopt a creative approach to restore damaged marine ecosystems and gain a better understanding of the potential benefits of sustainably managed fishing. Investors and philanthropists speculate on how much they should invest in sustainable forest enterprise and production. Besides, governments enhance collaboration with private sector in developing clear energy policy targets aimed at improving energy efficiency and increasing investments in renewable energies and technologies. And manufacturers embrace efficient energy and materials processes and technologies that simultaneously reduce negative externalities associated with waste and pollution. Sustainability is now a prerequisite for funding for many environmental projects.

Real Opportunities and Misconceptions
The green economy offers a plethora of opportunities for project managers in these varied sectors and their corresponding role in utilizing project, program and portfolio management to realize global sustainability is critical. In successive pages, the UNEP report takes a considerably positive view, detailing opportunities in emissions trading, growth of acceptance of PES, consumer-driven accreditation and certification schemes, opportunities in water sector, and in wastes management, including certified emission reductions (CERs) which is a potential source of inter-governmental funding.

In addition, the green growth blueprint counters the misconception that sustainability is limited to environmental issues alone—far from it. It also includes economic and social issues and striking a balance between the three issues—environmental, economic and social—is not only good for organizations but also national and global economies.

Clearly, several recent developments at the international policy level have steadily promoted the transition to a global green economy as advanced by the report, more so in the lead up to Rio 2012 meeting in Brazil which will mark 20th anniversary of the adoption of Agenda 21—a blueprint for rethinking economic growth and improvement of the business of environment. The Kyoto Protocol, aimed at committing industrialized countries and countries in transition to emission reduction targets, first commitment period also comes to an end next year.

As far as awareness in global sustainability issues are concerned, there has been a steady rise in sustainability practices in both economic and political fronts. Indeed since the UN Conference on Environment and Development (UNCED) in 1992 in Rio de Janeiro, sustainability issues have been on the rise in developed countries and around the world.

Race to the Top
Take China, for instance. Despite overtaking Japan as the second biggest economy, and increased investment in clean-technology market share, it still faces its biggest unknown: Which clean-technology mix will win? Like most developing countries, China grapples with challenges such as low level of energy efficiency, high share of coal in primary energy use, large volume of energy use, and need for domestic energy transportation.

Yet despite these challenges, China leads in demand for growth in renewable energy development: driven mainly by population and economic growth. On the other hand, according to a recent report by the Solar Energy Industries Association, the U.S. solar market increased by 67 percent in 2010—from $3.6 billion in 2009 to $6.0 billion—driven mainly by new photovoltaic (PV) and concentrating solar power installations, and making solar the fastest growing energy sector[2]. As the UNEP report affirms, “improving the environmental efficiency of production at the global level can occur through technology and knowledge transfer from developed economies or through technology spillovers that occur as a result of international investment and globalised supply chains”[3].

The Bottom Line
As professionals in project management, you are probably wondering how these developments might impact on future leadership in global sustainability. The point is we are entering a new age of profound transparency where the calcified, operating-as-always approach, still archetypal in some of the sectors discussed in the UNEP report, are quickly being replaced by frenetic free flow of ideas.

I believe the other key drivers of future growth in sustainability would be the supply chains that must reveal information regarding production practices, intelligent software applications that improve decision making processes in sustainable business practices, and pressure for increased transparency of government actions and policies.

It is time to connect the dots: only those who can handle this transformation well will thrive and grab a bigger market share in clean-technology and deliver on both ROI and ROE, leverage global finance to fund investment in green economy, and effectively deal with externalities and supply chains. The UNEP report is a good place to begin a discussion on when, where, and why this is necessary, and what we must all accomplish for current and future generations.

Article first published in the PM Global Sustainability Community of Practice

Jim Rohn, America’s foremost business philosopher was guilty of forefronting self-discovery when he said, “You must constantly ask yourself these questions: Who am I around? What are they doing to me? What have they got me reading? What have they got me saying? Where do they have me going? What do they have me thinking? And most importantly, what do they have me becoming? Then ask yourself the big question: Is that okay? Your life does not get better by chance, it gets better by change.” This week’s article in The Economist explains an emerging trend among consultancy firms. Titled, “Free thinking: Why expensive consulting firms are giving away more research,” the article details why for-profit consultancy firms such as McKinsey, Boston Consulting Group (BCG) or PricewaterhouseCoopers, value releasing free short opinionated papers, webinars, podcasts as well as data-laden reports on topical issues such as clean energy, health information systems, emerging markets, etc. Indeed with the ever-increasing competition for talent, clients and expertise in “thought-leadership,” it is no surprise that the number one reason for “free thinking” is innovation. However, as the article also explains, “Thought-provoking reports also help recruit the talented. Many graduates join consultancies and put up with being merely affluent—instead of joining investment banks and becoming obscenely rich—for the intellectual stimulation that consulting seems to offer.”

A new X Challenge to clean up the oil in the Gulf Region has been announced. The Wendy Schmidt Oil Cleanup X Challenge is a $1.4 Million prize to promote highly efficient methods for cleaning up crude oil on the ocean surface. “The goal of the Wendy Schmidt Oil Cleanup X CHALLENGE is to inspire entrepreneurs, engineers, and scientists worldwide to develop innovative, rapidly deployable, and highly efficient methods of capturing crude oil from the ocean surface” X PRIZE Foundation said in a statement. “The devastating impact of the Deepwater Horizon Oil Spill will last for years and it is inevitable that future spills will occur – both from wells and from transport tankers,” stated X PRIZE Chairman Peter H. Diamandis.

The competition begins on from August 1, 2010 and will close in April 2011. An expert panel of judges from industry and academia will evaluate all of the proposals along the following criteria: a) Technical approach and commercialization plan b) No negative environmental impact c) Scalability of and ability to deploy technology; cost and human labor of implementation and d) Improvement of technology over today’s baseline booms and skimmers. The winner will be announced at the National Oil Spill Response Research & Renewable Energy Test Facility (OHSMETT) in New Jersey and will receive the $1 million Grand prize. Second place will win $300,000 and third place will win $100,000 in purses.

An excellent article by Angelica Valeria Ospina, from the Centre for Development Informatics, University of Manchester, titled “e-Resilience: Rethinking the Potential of ICTs towards Climate Change Adaptation.” In the article the author asks, “how can vulnerable contexts that are already facing the burdens of poverty and marginalisation, build resilience?” Certainly, “The rapid diffusion of Information and Communication Technologies (ICTs), such as mobile phones and the Internet, is adding new angles to this debate. Effective access and use of ICTs could pose new opportunities for developing countries that are at the forefront of climate change impacts to build resilience and achieve adaptation.”

Steven Johnson opened Emergence, his searing 2001 book on how complex systems manifest from simple rules and are driven by bottom-up behaviour, with a fascinating rhetoric:

“How does a lively neighbourhood evolve out of a disconnected association of shopkeepers, bartenders and real estate developers?” he asked. “How does a media event take on a life of its own? How will new software programs create an intelligent worldwide web?”

It’s an interesting question. Emergence examines how simple, interconnected elements – such as amoeba-like slime mould cells, neurons or the individual members of an insect colony – self-organise to form more intelligent and sophisticated systems by coalescing with thousands of their neighbours.

But how does this happen? And how is it relevant for cities?

Consider that when it comes to control over processes such as how long it should take for traffic lights to change, or the amount of energy consumed in each household, or how many times in a week garbage is collected, every city model falls somewhere along a continuum.

At one end are highly controlled, top-down hierarchical systems being engineered by a master planner. Someone – at the control room of a Pacific Gas and Electric Company, or a Southern California Edison, or a British Gas – monitors how much energy is coming in and how much is being consumed at any given moment.

And at the other end are self-organising components, where no individual exerts control over the processes. These components are, in essence, far more than the sum of their residents and get their orders from below.

In all leading cities today, we talk about sustainability as both a big-picture goal and in terms of what individual residents can do – those who are looking through various processes with an environmental lens, whether it be a shorter commute to work, an affordable fuel-efficient car with better miles per gallon, the replacement of incandescent light bulbs with energy saving bulbs, a weatherised home, liveable and healthier neighbourhoods, etc.

Each decision has competing tradeoffs. Yet those random personal and local decisions combine – and self-organise – to form the macro-behaviour of homes, boroughs, regions and cities, leading to global patterns.

And with this self-organisation, new pockets of success emerge: monthly home energy bills are reduced, waste and expenses associated with inefficient processes are slashed, air pollution is fixed, and equilibrium is restored. In essence, it is neighbourhoods in cities solving problems that would otherwise appear insurmountable – without any of those cities realising it.

IBM’s Smarter Cities initiative equips city managers with tools and technology that enable them to drive sustainable growth and prosperity by analysing efforts among agencies and sectors as they happen, thus helping them anticipate issues rather than react to them. New York, Rio de Janeiro and Memphis, to name a few, are using IBM tools to coordinate emergency response units and strengthen crime fighting, while Singapore is working with IBM on a range of issues such as congestion charging in order to reduce traffic and air pollution.

“The majority of us live in cities, and the percentage is growing,” says IBM. “As centres of business, culture and life, cities are logical places to integrate many of the Smarter Planet principles and innovations: smarter transportation, policing, emergency response, governance and smart grid that links power and water systems, to name a few. By using these tested approaches, cities can manage growth and development in a sustainable way that minimises disruptions and helps increase prosperity for everyone.”

However, with budget cuts and slower economic growth, many cities are facing a tough challenge. Their populations are growing at a time when their revenues are shrinking. More than half of the world’s population now lives in cities. Moreover, this figure is estimated to grow to 80 percent by the year 2050.

These new realities have led people to ask some searching questions. What will happen to monthly energy costs in the coming years? How clean is the water supply? What adaptation and mitigation strategies will climate change require us to model? How can we replace fossil fuels with sustainable energy sources in our mass-transit systems in the urban environment? And how can we increase the vitality and competitiveness of our urban environments with solutions that optimise the entire city?

Consider one million people will have moved into the world’s cities by the end of this week. For the foreseeable future, cities may have to do more with less, and they may have to find new ways to manage complexity, to increase efficiency, to reduce overheads and still build liveable and healthier neighbourhoods and improve quality of life.

By eliminating operational silos, enlisting forward-thinking leaders and adopting self-organising smarts, cities can remain prosperous and sustainable in the face of unprecedented competing interests, and take the first steps toward creating more liveable neighbourhoods.

This article first appeared  in PMI Global Sustainability Practice

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