In the lead-up to the 2015 Paris climate change conference, policymakers stressed the need for creation of integrated carbon markets and called for linking new climate financing mechanisms with the United Nations-organized Green Climate Fund (GCF) based in South Korea. Both the U.S. and China have committed to accelerating the transition to low-carbon development internationally. Through a $3 billion per year pledge to GCF by the U.S. and a new annual $3.1 billion climate finance guarantee by China to support other developing countries to combat climate change, the two countries have committed to enhance multilateral climate cooperation. Read more>>
Tag: Financial Markets
A new paper strategy by the World Bank Group sets a new direction for energy sector investments focusing on expanding energy access and sustainable energy. Along with expanding access to energy, the Energy Sector Directions Paper focuses on accelerating energy efficiency and renewable energy development as per the Sustainable Energy for All initiative’s 2030 goal for doubling global energy efficiency measures and the global renewable energy mix share.
“As part of a drive for universal access, financial solutions or guarantees will be made available for the most feasible energy options for the poor and for people living in fragile and conflict-affected states. If short-term options include those with moderate or high greenhouse gas emissions, complementary support will also be provided in the medium term to harness lower-emission options.
In rural, remote or isolated areas, off-grid solutions based on renewable energy combined with energy- efficient technologies could be the most rapid means of providing cost-effective energy services. Engagement in cleaner cooking and heating solutions will grow.”
The new energy strategy paper will limit financing of new coal-fired power plants to “rare circumstances,” and only to countries with “no feasible alternatives” to coal. This follows President Obama’s “climate action” speech at Georgetown University last month calling for an end to public financing of dirty coal plants abroad.
“The WBG will provide financial support for greenfield coal power generation projects only in rare circumstances. Considerations such as meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power would define such rare cases.”
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 .
The centre of clean energy gravity is fast shifting to Asia, with China taking the lead. In a new report developed by Australian think tank The Climate Institute and GE, China has improved its global low-carbon competitiveness index significantly.
The report ranks France, Japan, China, South Korea and the UK in the top five positions. China has leapt ahead of its previous ranking from 7th to 3rd while U.S. is now 11th down from 8th position. Australia is ranked 17th. The report attributes the latest decline in U.S. ranking to “lower public equity investment in clean energy, shrinking high-tech exports and a surge in reliance on emission intensive air freight.”
China’s growth in cleantech investment is boosted by high-tech exports and a rise in global public equity investment in clean energy. Read more
We all remember the notable story that opens Daniel H. Pink’s Drive: The Surprising Truth about What Motivates Us. Harrow, a psychology professor, and two colleagues gather eight rhesus monkeys for a two-week experiment on learning. They’re surprised to see the primates—without any urging or coercion—begin to play with their specially devised puzzle with focus, determination, and enjoyment. The shock deepens when the experimenters observe the monkeys crack a code on how to remove a pin, slide a hook, and open the cover of the mechanical puzzle, each time, even without a food reward, affection, or applause. Conversely, when the primates are rewarded with raisins for solving the puzzle they make more errors and less frequently solve the puzzle. The reason, Pink concluded, was that the monkeys solved the puzzle repeatedly because it was gratifying to do so. That is, the intrinsic benefits of solving the puzzle outweighed the extrinsic rewards.
In view of Harrow’s dilemma, I find the description of what motivates us presented in Pink’s book to be an apt description of global sustainability today. And the example that perfectly fits this description is the self-organizing aspect of sustainable initiatives. I find that many people still see sustainability as a carrot or stick dilemma; they are pretty convinced their choices are the best and it’s other people who aren’t doing the right thing. Their reasoning takes this line: “Nature has a unique way of maintaining equilibrium and regenerating itself. Our company is not a big polluter like other big companies and if it means that we have to give up our current production processes, we probably won’t do it.”
We sometimes think of sustainability practices as bootstrapping themselves into existence. We fail to connect the dots between our lifestyle choices and the resulting macrobehavior. One Wall Street Journal article documents why, despite government efforts to encourage consumers to adopt zero-emissions vehicles, electric cars are not yet creating much spark. As one researcher observed, “Until battery technology improves and people can drive further, I don’t see significant growth in electric vehicles.” Other consumers have expressed interest in electric cars, but acknowledge that it is going to take time before an effective solution to the range anxiety problem is resolved. How about if government paid new electric car owners? Try to nudge car owners to buy zero-emission cars by paying them for each unit bought—and they’ll become more diligent in the short term and lose interest in the long term.
But those who drive electric cars, or use energy saving bulbs, or incorporate ISO 14000 standards into projects, or weatherize their homes, for instance, aren’t setting out to solve global sustainability challenges; they are solving personal or business—and indeed local—problems, such as how to drive to their workplaces, or what to use in lighting their homes, or how to set a framework for continual improvement of environmental performance of their business, or how to maintain a certain in-house temperature. And yet those personal and local decisions combine—and self-organize—to form the macrobehavior of their homes, companies, businesses, states and nations. As a result of this self-organization, new pockets of successes emerge: home energy bills are reduced, corporate image among regulators, customers and the public is improved, clean air is restored, cases of chronic pulmonary diseases are reduced, and the equilibrium is restored.
“It takes a village” is a cliché. And yet I see its dynamics are at play everywhere in addressing sustainability. The correlation reinforces the notion that global sustainability requires a trade-off driven by intrinsic rewards: we all have a role to play in improving the environment and we will have to sacrifice something (e.g., our backyard for wind farms, preference for mass transit, or inexpensive transportation). And while some people are willing to make this trade-off, many others are not. As a result, the notion of global sustainability may need some nudges, including peer pressure.
The interaction is two-way: the project manager who incorporates ISO 14000 standards into the project influences other project staff in his or her team, and vice versa; the new homeowner who buys, retrofits and weatherizes his or her home next to an existing homeowner influences the behavior of that homeowner, which in turn influences the behavior of the new comer; the quality assurance specialist who applies exactitudes rather than generalities in project cost, project quality, and project time trade-offs, and educates, trains, and holds project staff responsible for sustainability, influences the behavior of those staff, who in turn influence the behavior of the project manager. In other words, the relationships are mutual: you influence your peers and your peers influence you, and a ‘flow,’ which enhances intrinsic benefits, is maintained and enhanced.
More prosaically, Pink addresses the complexity of these interactions, both in personal decisions and corporate environments, and advises those who prefer a reward-and-punishment route that: “Building our businesses in sync with these truths won’t be easy. Unlearning old ideas is difficult, undoing old habits even harder. And I’d be less sanguine about the prospects of closing the motivation gap anytime soon, if it weren’t for this: The science confirms what we already know in our hearts.” That is his swanky way of saying that decisions on global sustainability will come down to our deep-seated desire to direct own lives, expand our abilities, and to continue to live a life of purpose.
I will admit that, in that sense, Pink’s work gives us hope. And to make progress with global sustainability we will have to come to terms with the fact that real headway will only be realized when we adopt sustainability practices because it is gratifying to do so. Success will be possible when the collective action to create more profitable, healthy, and sustainable businesses, communities, and nations, is bottom-up, and enjoyable. That is, when the intrinsic benefits outweigh the extrinsic rewards.
Harrow’s primates have cracked the code and solved the puzzle without any raisins, and the ball has now been tossed to the bigger-brained, less hairy human beings. I will bet on intrinsic motivation and kaizen—continuous improvement—to get us there.
This article first appeared in the Project Management Global Sustainability Community of Practice (CoP).