Our consumption of rubber is leading to Asian deforestation

GallonDaily has written about how demand for palm oil is leading to tropical deforestation but now researchers from the University of East Anglia and the University of Sheffield are pointing out that increasing demand for natural rubber, primarily for tires, is contributing to major loss of Asian forests. Among their key findings:

  • more than 2 million hectares of industrial-scale and smallholder monoculture rubber plantations have been established during the last decade, primarily in mainland Southeast Asia and Southwest China.
  • between 4.3 and 8.5 million hectares of additional rubber plantations will likely be required to meet projected demand for natural rubber by 2024, threatening significant areas of Asian forest, including many protected areas.
  • some of the problem arises from potential displacement of rubber from existing plantations by more profitable oil palm.
  • conversion of forests or swidden (temporary) agriculture to monoculture rubber negatively impacts bird, bat and invertebrate biodiversity.
  • work is urgently needed to ensure rigorous biodiversity and social standards via the development of a sustainability initiative.

An abstract and the full 9 page article can be found in the journal Conservation Letters: A journal of the Society for Conservation Biology at http://onlinelibrary.wiley.com/doi/10.1111/conl.12170/abstract

Only a little for the environment in the 2015 Canadian Government Budget

The 2015 Canadian Budget contains very little for those who believe that there is a need for additional spending on the environment. The following are environmental commitments, initiatives, and spending described in the 2015 Federal Government budget:

  • We [the government] will only proceed with natural resource projects that are safe for Canadians and safe for our environment.
  • $34 million over five years, starting in 2015-16, for consultations related to projects assessed under the Canadian Environmental Assessment Act.
  • Economic Action Plan 2015 includes investments to enhance marine transportation safety in the Arctic as well as to strengthen environmental protection, spill prevention and response measures in Canadian waters.
  • $80 million over five years, starting in 2015-16, to the National Energy Board for safety and environmental protection and greater engagement with Canadians.
  • $72.3 million in 2015–16, on a cash basis, to Atomic Energy of Canada Limited to maintain safe and reliable operations at the Chalk River Laboratories.
  • $30.8 million over five years, starting in 2015-16, for measures to enhance the safety of marine transportation.
  • Legislation to re-establish a moratorium on oil and gas activities in Georges Bank, Nova Scotia.
  • Support the transformation of the forest sector by providing $86 million over two years, starting in 2016-17, to extend the Forest Innovation Program and the Expanding Market Opportunities Program.
  • $75 million over three years, starting in 2015-16, [for continuing] the implementation of the Species at Risk Act.
  • Providing $2.0 million in 2015-16 to the Pacific Salmon Foundation to support the Salish Sea Marine Survival Project.
  • Extending the Recreational Fisheries Conservation Program by providing $10 million per year for three years, starting in 2016-17.
  • Dedicating $34 million over five years, starting in 2015-16, to continue to support meteorological and navigational warning services in the Arctic.
  • Renewing the Chemicals Management Plan, with $491.8 million over five years, starting in 2016-17.
  • Renewing support for the Federal Contaminated Sites Action Plan with $99.6 million over four years ($1.35 billion on a cash basis), starting in 2016-17.
  • $15 million per year to the Natural Sciences and Engineering Research Council, of which $10 million per year is directed to collaborations between companies and researchers from universities and colleges under the new consolidated suite of similar business innovation programs. This new funding will target research areas such as natural resources and energy, advanced manufacturing, and environment and agriculture.
  • The Government intends to ensure that the costs associated with undertaking environmental studies and community consultations that are required in order to obtain an exploration permit will be eligible for Canadian Exploration Expense treatment.

GallonDaily was unable to find any mention of spending to address climate change or water quantity and quality issues in this Budget.

A full set of 2015 budget documents can be found at

http://www.budget.gc.ca/2015/docs/download-telecharger/index-eng.html

The State of Sustainability 2015

Ethical Corporation, a UK-based global consultancy, publisher, and event organizer with a mission to help businesses around the globe do the right thing by their customers and the world, has just published a report on the “state of sustainability”. Among the findings of particular interest to GallonDaily:

  • Sustainability is of increasing importance to business strategy.
  • Corporate leaders around the world are increasingly persuaded by the case for sustainability.
  • Sustainability is already driving business revenues.
  • Sustainability is infiltrating all areas of business.
  • 68.9% of the global CEOs surveyed claim to be convinced of the value of sustainability.
  • 29% of “sustainability teams” report to the CEO, 21% to the head of sustainability, and 19% to the Board.
  • 46% pay an external organisation for advice/assistance with their sustainability strategy.
  • Only 21% of corporate respondents said their company is leveraging the potential of sustainability as fully as possible.
  • Only a third of respondents were able to say that they are measuring the return on investment of sustainability.

For much more information from the report, including a list of current sustainability priorities, obtain a free copy (registration required) from http://www.ethicalcorp.com/business-strategy/state-sustainability-%E2%80%93-key-takeaways

Energy has the potential to be a leader in the new economy

There is a problem with the way many capital intensive and near monopoly goods, such as energy and water, are priced in our economy. The problem arises when society decides, or needs, to reduce consumption of these goods. Clearly this is happening now in the face of climate change and major regional drought. The problem, put simply, is that the ratio of fixed costs to variable costs is weighed heavily in favour of fixed costs so as demand goes down the supplier is faced with fixed costs being an even greater percentage of total costs, resulting, in a classical situation, in an increasing price for the commodity.

For example, the cost of the infrastructure required for supply of electricity is much greater than the costs of the water, fuel, renewable resources, or uranium required to generate the electricity. In some cases demand for electricity goes down by so much that generation and production equipment is idled before it has reached the end of its productive and/or economic life. This is the classic problem of “stranded assets”. The result is that ratepayers are forced to pay an increased price for less electricity, simply to continue paying off the debt that the electricity company took on to build the infrastructure in the first place.

This is pretty much a lose-lose situation for electricity companies and consumers. If society is to enthusiastically embrace conservation we are going to have to find ways to avoid having prices per unit of energy increase as demand decreases.

Energy service companies have developed a model that may well be appropriate for energy supply and local distribution companies. The model recognizes that they do not really care how many electrons (kilowatt-hours) they receive but simply want to receive the benefits, in the form of lighting, heating, motion, etc., that the electrons provide. Instead of paying for electricity, users are charged for the services provided. The services include the electricity, supply, maintenance, consumables and their replacement, and so on. Thus a consumer might contract for 900 lumens of light in a room. The ESCO would install the light, provide wiring and fittings as necessary, maintain the fixture, and replace the light bulb periodically. The same model would be even more relevant and effective when applied to large energy consuming appliances and equipment.

The environmental advantage is that if the ESCO could provide 900 lumens of light with lower electricity consumption there would be an economic incentive for them to do so, even if some additional capital cost, for example the cost of new lightbulbs, is necessary. Maybe the ESCO would even pass some of the savings on to the consumer. If the ESCO is also the utility providing the electricity then planning for demand would be easier and the need for capital investment could be more easily controlled and decisions to keep building more and more supply could be at least partially set aside in favour of more energy efficient solutions.

Imagine if the same approach existed for personal automobiles. You lease your car at a fixed price per year and per kilometre and the fixed price includes all fuel, maintenance, repairs, insurance, and consumables such as tires. You know exactly what you have to pay and, with few exceptions, that price is not going to go up. The leasing company, which may well be the manufacturer, has an incentive to keep your car well maintained so that its costs for fuel and future maintenance are minimized. The approach is not perfect but it does indicate a direction that needs to be taken if conservation and efficiency are to supercede increasing supply as the major drivers of the energy industry.

This is a GallonDaily original editorial. Comments are welcome and may be published at the discretion of the Editor.

Electric cars and auto fuel efficiency may create a government revenue challenge

An article in the current issue of Slate magazine highlights the economic changes that may be required as a result of the growing adoption of electric, hybrid, and more fuel efficient vehicles. Unfortunately some governments may even reverse some of their previous support for EVs rather than finding ways to properly address the problem. According to the article, the legislature of the state of Georgia has voted to scrap the existing $5,000 tax credit for electric vehicles and instead charge a $200 registration fee on such vehicles. Washington state already charges a $100 annual tax on electric cars and Virginia has a $64 tax on hybrids. The problem, at least in part, is not that these states want to penalize EV owners but that increasing adoption of EVs is harming state highway-related revenues.

The Slate article states that hybrids, plug-in hybrids, and electric cars account for about 3% of car sales in the US. In addition, vehicle fuel efficiency has increased by 26% since 2007, resulting in a 4% drop in gasoline sales over the same period. From an environmental perspective that is great news, but from an economic perspective it is bad news not only for petroleum companies but also for governments, most of which derive significant revenues from gasoline taxes. The temptation to increase taxes on EVs to counteract falling gas tax revenue is just too great for many politicians.

Oregon is reportedly planning to pilot a road use tax system that is based on miles driven – a fully automated road toll system. The amount a driver pays would be based on the number of miles driven, regardless of the fuel used. The toll system would partially or wholly replace fuel taxes. A mileage-based road tax, perhaps also linked to vehicle weight, another important factor in wear and tear of roads, would seem to GallonDaily to be a much more fair system for raising funds for road construction and maintenance than a fuel tax. Available technology, already being used by some auto insurance companies to monitor driving habits and adjust insurance rates accordingly, could automate the tolling process at relatively low cost.

Such a scheme may be more fair and have greater environmental advantages than fuel taxes but it will still be a very tough sell to voters. It is a dialogue with which environmentally concerned organizations and voters should consider engaging.

The Slate magazine article referenced above, with a more in-depth approach than presented here, is available at http://www.slate.com/articles/business/the_juice/2015/04/georgia_passes_200_electric_car_fee_why_are_states_punishing_people_for.html

GallonDaily’s editor is a happy driver of a mostly electric vehicle for which he has received some Ontario government incentives.

Neonics: first bees, now monarchs

Researchers at South Dakota State University and the US Department of Agriculture Research Laboratory at Brookings, South Dakota, have published research results which indicate that a neonicotinoid pesticide could be acting as a stressor to monarch butterfly populations. The effects on monarch larvae were observed  at a pesticide concentration of one part per billion on milkweed, the sole food plant for monarch larvae, equivalent to the potential concentration of the neonic pesticide on milkweed plants growing in a field adjacent to a corn field in which neonic pesticides are being applied.

According to the researchers, neonics are now the most widely used agricultural pesticides in the world.

No doubt the manufacturers and users of neonic pesticides will go ballistic in their efforts to decry this research. GallonDaily suggests that they are now very much on the losing side of the battle and that, without a major change to the formulation of neonic pesticides, the products will sooner or later face restrictions and bans. After all, those who harm honey bees and monarch butterflies are unlikely to win friends among the environmentalist, school kid, and concerned consumer segments of the population.

Gallondaily has written about neonics before, and may do so again. The purpose of this article is to suggest that food retailers not seek to jump on the anti-neonic bandwagon, something that we expect will start sooner or later. The research reported briefly above makes it apparent that trying to sell food as free from neonics, or as from farms that are neonic free, may be an unwise strategy. Even organic food is likely to be contaminated with these extremely low levels of neonics if it is grown in proximity to farms that use neonics. People generally do not eat milkweed, though some parts of the plant, flower buds and young seed pods, are edible. There is no evidence to date that neonics at very low levels on food plants cause harm to human health, so claims that a food product is neonic free could cause problems with label claim regulators who may argue that any such claim is inherently misleading.

GallonDaily suspects that there are claims that can be made for human food products that are grown without use of neonics and that are therefore not contributing to the decline of honey bees and monarch butterflies but the wording of such claims will have to be developed carefully and with considerable assistance from experts in product  environmental claims. Regulators are often all too ready to pounce on claims that harm the big players in the agricultural sector.

The article Non-target effects of clothianidin on monarch butterflies can be found at http://link.springer.com/article/10.1007/s00114-015-1270-y The abstract is free; there is a fee, or journal subscription required, for the full article.

Large electricity companies are facing massive downsizing by ~2030

An analysis by researchers with the Rocky Mountain Institute, co-founded by well-known energy guru Amory Lovins, and Homer energy, a private sector spin-off from the U.S. Department of Energy’s National Renewable Energy Laboratory, finds that electricity from solar photovoltaic systems will replace the majority of grid-provided electricity, likely by as soon as 2030. The impact on large suppliers of electricity and on distribution companies is likely to be enormous.

Among the findings in this 13 page report:

  • solar-plus-battery systems are rapidly becoming cost effective.
  • the grid’s contribution to electricity supply will shrink from 100% today for commercial customers to ~25% by around 2030 to less than 5% by 2050.
  • large kWh defection could undermine revenue for grid investment under the current rate structure and business models.
  • eliminating net metering only delays kWh loss; fixed charges don’t “fix” the problem

The researchers recommend that the electricity industry and its owners/regulators need to act quickly on three fronts:

  • evolved pricing and rate structures;
  • new business models; and
  • new regulatory models.

A brief summary and links to the executive summary and full report (free, but name and email address are required) are available at http://www.rmi.org/electricity_load_defection

CBC presents false information about electric cars

The Canadian Broadcasting Corporation and other media outlets have been claiming over the last few days that a newly published study shows that “even if every driver in Canada made the switch, from gas to electric, the total emissions might not actually go down”. This information is totally false and is not what the study shows.

The study shows, quite correctly, that if drivers in Alberta, Saskatchewan, and Nova Scotia switched from gasoline to electric vehicles, emissions would rise. This is because much of the electricity in those provinces comes from coal. However, in all other provinces, switching from gasoline to electric vehicles would reduce greenhouse gas emissions. Given that the three provinces account for less than 17% of Canada’s population, the increased emissions that would arise from electric vehicles would be outweighed by the improvement in emissions arising from the switch to electric vehicles in the other provinces. If every Canadian switched to an electric vehicle, an unlikely scenario over the next decade, the impact on emissions would of course depend on the sources the provinces choose for the increased electricity demand but it seems unlikely much of that the additional power requirements would be met with coal.

The CBC has corrected the story in some of its reporting but incorrect information still remains on its website and was repeated on the flagship radio program The Current this morning.

The following is a brief summary of the commentary by Christopher Kennedy, a professor in the Department of Civil Engineering at the University of Toronto:

  • To reduce greenhouse-gas emissions in the short term, and catalyse longer-term cuts, countries should reduce the carbon intensity of electricity generation to below a universal target of about 600 tonnes of CO2 equivalent per GigaWatthour by 2020. 
  • The world average carbon intensity for electricity production in 2011 was 536 tonnes of CO2 equivalent per GigaWatthour
  • In Canada, four provinces have grids under 20 tonnes of CO2 equivalent per GigaWatthour, while Alberta and Saskatchewan have high carbon intensities >750 tonnes of CO2 equivalent per GigaWatthour.
  • If sub-regions with such carbon-intensive power grids can be encouraged to meet the 600-ton threshold, then this would bring national average intensities down even further.
  • It may be possible to provide all of the worlds electricity needs from renewable sources.

GallonDaily has no difficulty with Professor Kennedy’s commentary but takes objection to the inaccurate way in which the CBC and other media outlets have interpreted it. One CBC article, not the most egregious offender in misinterpretation of the scientific commentary, and a link to Prof. Kennedy’s three page commentary can be found at http://www.cbc.ca/radio/thecurrent/the-current-for-march-24-2015-1.3006711/switching-to-an-electric-car-isn-t-always-good-for-the-environment-1.3006734

Canada West Foundation calls for provincial, not federal, climate initiatives

In an interview with CBC radio’s The 180, Trevor McLeod, Director of the Centre for Natural Resources Policy at the Canada West Foundation, argues that the provinces, not the federal government, should be responsible for climate policies within their own jurisdictions. It is rumoured that the Ontario government also prefers an Ontario-led climate initiative rather than a federal initiative.

McLeod’s arguments appear to include:

provinces jealously guard natural resource ownership,

environment is a shared jurisdiction under the Constitution, and

differences among provincial economies make a one-size-fits-all approach impractical.

He appears to believe that if climate change is left to the provinces they will come together to develop an overarching national climate change program that can be presented to the world as a Canadian initiative.

GallonDaily believes that this Canada West Foundation proposal should be rejected by business, particularly those businesses that have greenhouse gas emitting operations in more than one province or that ship products between provinces. Sooner or later, climate initiatives will inevitably affect more than just the largest emitters. The only way to reach the targets to which Canada has committed is to apply carbon-reducing initiatives to every sector of society. This can be done through carbon taxes, numerous forms of cap and trade program, incentives, and regulations. If action is left to the provinces we suggest that history shows that each and every province will head in a different direction. Substantial coordination among the provinces is unlikely. So companies doing business in more than one province will face:

  • carbon taxes in some provinces but not in others, as already exists
  • cap and trade programs that encompass some provinces but not others and that have different reporting requirements in different provinces
  • industrial and end-user incentive programs that vary from province to province
  • greenhouse gas emissions regulations that are different in each province
  • tailpipe emission regulations which change whenever a vehicle crosses a provincial boundary
  • some provincial requirements based on resource extraction while others are based on utilization of the resource

Companies dealing with packaging stewardship are already grumbling loudly about the inefficiency, from a business perspective, of the several different stewardship models in use across the country. Imagine how much more arduous dealing with ten or more different greenhouse gas emissions control regimes would be.

The radio interview and a brief summary can be heard/seen at http://www.cbc.ca/radio/the180/niqab-ban-endangered-species-three-party-candidate-1.3000139/should-carbon-pricing-fall-to-provinces-regions-or-the-feds-1.3000523 

US Federal Government climate mitigation plan requires supply chain and contractor compliance

Under the heading Planning for Federal Sustainability in the Next Decade, President Obama this week issued an Executive Order requiring the US Federal Government to begin implementing a climate change mitigation program for its own activities. Among the requirements are that executive departments and agencies shall:

  • increase efficiency and improve their environmental performance. Improved environmental performance will help us protect our planet for future generations and save taxpayer dollars through avoided energy costs and increased efficiency, while also making Federal facilities more resilient. To improve environmental performance and Federal sustainability, priority should first be placed on reducing energy use and cost, then on finding renewable or alternative energy solutions. Pursuing clean sources of energy will improve energy and water security, while ensuring that Federal facilities will continue to meet mission requirements and lead by example. Employing this strategy for the next decade calls for expanded and updated Federal environmental performance goals with a clear overarching objective of reducing greenhouse gas emissions across Federal operations and the Federal supply chain. Under the order the head of each department and agency is required to:
  • within 90 days of the date of this order, propose to the Chair of the Council on Environmental Quality and the Director of the Office of Management and Budget percentage reduction targets for agency-wide reductions of scope 1 and 2 and scope 3 greenhouse gas emissions in absolute terms by the end of fiscal year 2025 relative to a fiscal year 2008 baseline.
  • where life-cycle cost-effective, beginning in fiscal year 2016, unless otherwise specified promote building energy conservation, efficiency, and management.
  • promote sustainable acquisition and procurement by ensuring that specified environmental performance and sustainability factors are included to the maximum extent practicable for all applicable procurements in the planning, award, and execution phases of the acquisition. This includes recycled content products, energy and water efficient products and services, BioPreferred and biobased products, and environmentally preferable products and services.
  • for the seven largest Federal procuring agencies, submit for consideration plans to implement at least five new procurements annually in which the agency may include, as appropriate, contract requirements for vendors or evaluation criteria that consider contractor emissions and greenhouse gas emissions management practices.

The 11 page highly detailed order includes many more requirements and specific numerical targets in each area. It is essential reading for Canadian companies doing, or seeking to do, business with the US government. While the actual greenhouse gas reductions that will be achieved by the order are quite small, in the case of most departments and agencies, the leadership that it provides, as well as the compliance that will result from the multitude of US companies doing business with the government, is likely to be substantial.

The full order can be read and copied from https://www.whitehouse.gov/the-press-office/2015/03/19/executive-order-planning-federal-sustainability-next-decade