Legislation based on full product transparency should also be on absolutes. For example, legislating energy efficiency in TVs should be by absolute kgCO2 or kwh consumption instead of diving that by the size or other metric.

The Germans proposed a scheme to divide the gCO2 of the cars by the weight of the cars. That’s wrong.

According to the MIT, the average fuel efficiency for US vehicles increased by 60 percent between 1980 and 2006. But because cars got bigger (by 26% on average) resulted that the average efficiency only increased by a mere 15%

Some extracts:

• By depressing the carbon price, the fall in emissions in the ETS has paradoxically increased the risk of Europe getting locked into too high-carbon investment. Carbon-intensive investments today would lead to higher mitigation costs after 2020
• For the EU as a whole, moving to a 25%  domestic reduction in 2020 would save an average of €20 billion in fuel costs each year
• If the 30% target in the ETS would be implemented by a reduction in auctioned  allowances, it is estimated that overall auctioning revenues for Member States in the year  2020 would be up to €7 billion or around one-third higher than with the current 20% target, increasing auction revenues to around €28.5 billion

80% rise in steel demand projected from 2010 to 2030.

147% increase in real commodity prices since the turn of the century.

Up to $1.1 trillion spent annually on resource subsidies

$2.9 trillion of savings in 2030 from capturing the resource productivity potential

$3.7 trillion if carbon is priced at $30 per tonne, subsidies on water, energy, and agriculture are eliminated, and energy taxes are removed

70% of productivity opportunities have an internal rate of return of more than 10% at current prices

90% if adjusted for subsidies, carbon pricing, energy taxes, and a societal discount rate of 4%

The 15 opportunities identified by the report are:

1. Building energy efficiency
2. Increasing yields on large-scale farms
3. Reducing food waste
4. Reducing municipal water leakage
5. Urban densification (leading to major transport efficiency gains)
6. Higher energy efficiency in the iron and steel industry
7. Increasing yields on smallholder farms
8. Increasing transport fuel efficiency
9. Increasing the penetration of electric and hybrid vehicles
10. Reducing land degradation
11. Improving end-use steel efficiency
12. Increasing oil and coal recovery
13. Improving irrigation techniques
14. Shifting road freight to rail and barge
15. Improving power plant efficiency

I am not the biggest supporter of BREEAM,  I prefer fully harmonised European  EPDs instead of paying country by country a fee for getting the products certified by a different national standard.

But I think in this occassion, the government should maintain the requirement. BREEAM is well understood and used in the UK.

The valid concerns about bureacracy should not be the excuse to throw the baby out of the water. There are ways around them.

These are some of the figures raised by the report

• £5bn lost to UK economy

• 14m tonnes of CO₂ emissions created

• 2,500 job cuts in insulation industry

• In 2009, UK domestic buildings were responsible for 25% of UK CO2 emissions and just over 40% of UK final energy use.

• Over three quarters of this energy use is for space and hot water heating, mostly from gas-fired central heating boilers

• Domestic properties make up three quarters of the UK’s usage of low grade heat.

The conclusions and findings from the report are:

• Even with the most modern gas boilers and state-of-the art insulation, we cannot continue to heat so many homes by natural gas and achieve an 80% cut in emissions.
• Storage, whether of natural gas, biomass, large scale thermal storage, an intermediate vector such as hydrogen, electricity or heat, will be essential.
• Skills shortages will be a serious barrier to decarbonising heating unless addressed effectively.
• We can expect to see a diversity of systems – such as district heating, CHP, heat pumps. It is important that regulations, taxes and subsidies are sufficiently flexible and are directed at the end objectives, such as reducing carbon emissions, but are otherwise technologically neutral. At present, the complexity of the regulations and financial incentives risks leading to
• perverse outcomes.
• Strategies aimed at meeting the stringent 80% CO2 reduction targets preclude some technologies, which are efficient and cost effective, that could make significant contributions to a lower CO2 reduction target at lower cost.

Let me share with you some of the great points the Commissioner made.

- In one private meeting with several companies (all quite progressive sustainability leaders) where all the companies where asking for more regulation and proper standards on sustainability he said, in response to other companies who advocate less regulation: ‘Would you take out all the rules from football?’

What a great point. Of course we wouldnt because it would become a chaos where the strongest (and with less scrupulous, this is my own words) would benefit, not the most talented. The most succesful sport in the planet is heavily regulated but the rules are clear and are consistent.

- ‘Slovenia who was the strongest country in the former Yugoslavia and thought would benefit the most from the breakdown, lost 20% of GDP after the separation’. That tells you how interlinked the economies are and how important is the internal market and having same standards across the EU.

Other points from his various speeches on Monday were:

-Today material costs already make up more than 40 % of total costs in manufacturing industries compared to less than 20 % for labour – we need innovation and ingenuity to improve our resource productivity beyond labour productivity.

-During the 20th century the world population grew four times, its economic output 40 times. We increased our fossil fuel use 16 fold, our fishing catches by a factor of 35 and our water use 9 fold. It was called the “great acceleration”, but I am afraid that we might hit the wall soon.

-87% of European Companies expect the costs of their material inputs to increase over the next 5 to 10 years.

-Every year in Europe, we use 16 tonnes of materials per person per year to keep our economy going; and we produce 6 tonnes per person per year of waste; with half of that going into landfill. This is not sustainable. It’s more of a linear economy than a circular economy

-A one percentage point gain in resource productivity can save € 23 billion a year to European businesses, and could help them create 150,000 jobs

-It is a mystery to many people that we are prepared to sacrifice scarce public resources at a time of budget austerity in order to do damage to our environment. Just one small example is tax breaks for company cars – these cost € 50 billion a year, and increase our greenhouse gas emissions at the same time! You could also ask why we are taxing employment so heavily when we have 12 million unemployed and resources so lightly when we have environmental problems. So getting the prices right means also getting taxes and subsidies right. That means a shift away from taxing employment and on to resource use

Download the full speeches from Monday here:

http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/877&format=HTML&aged=0&language=EN&guiLanguage=en

http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/876&format=HTML&aged=0&language=EN&guiLanguage=en

During the last months I’ve been lobbying for full product transparency and the band of carpet landfill. Many politicians, especially conservative, have said it would be better to reach voluntary agreements versus imposing new legislation. I am really shocked our politicians have allergy to legislating, in the end it’s their job. Instead they preach about corporate responsibility and voluntary agreements. You can see them having orgasms in their mouth when they talk about the V word: voluntary.

Why politicians love voluntary

Why do they love it? Because they don’t have to do any work (industry would do it for them) and then they just show up to sign the agreement with the industry and get in the picture, free PR with no work, no erosion of political capital. They also love the headlines such as: Mayor Boris urges London firms to stamp out waste. You, the politician, appearing to sort out the industry in eyes of the voters and doing so just with words, with no hard work and analysis of what works and what doesn’t, no need to fight people in your party nor in opposition for passing a new bill. Voluntary agreements are a chimera for politicians. But the political class doesn’t understand they are abdicating totally of their responsibilities and therefore making themselves useless and powerless (even more)

The problem is that voluntary agreements with industry often represent the minimum common denominator agreement, where every single company is comfortable. It’s a comfort zone agreement and therefore doesn’t stretch. It penalises companies with the technologies, the risk attitude and the willingness to go for higher standards and rewards the laggards.

How would the world look like if we had no legislation and all is based on voluntary corporate standards?

• Car companies would decide whether to include a seatbelt
• We would rely on pubs’ strict voluntary standards for not selling drinks to under 18
• Restaurants would choose whether they allow to smoke or not on a voluntary basis
• We would choose how much taxes to pay, appealing to our own responsibility

We would become the extreme version of Greece or Russia where legislation is mere guidance and where enforcement is inexistent.

The case of the car industry

In 1998, the European Automobile Manufacturers’ Association had agreed to reduce average tailpipe emissions from newly sold cars to 140g/km by 2008. That would have been a 25 per cent reduction. But with no stick or carrot available to galvanise manufacturers into action, they predictably fell well short of that commitment, achieving just a 2.2 per cent reduction between 1998 and 2006. That the EU felt the need for regulation was largely because it had run out of patience with the lack of progress from voluntary industry agreements. There seems little doubt that manufacturers will now meet the EU wide target of 95gCO2/km by 2020. That’s the beauty of the market: tell it what you want to achieve and it will usually find a way to do it.

The voluntary mobile phone charger

When working for Vodafone as responsible for global handset recycling, I spent quite an effort in lobbying manufacturers to standardise chargers. It was an unnecessary cost to give a new charger for each new phone and it was a hassle for consumers to find a suitable charger when they forgot theirs at home. Let alone the environmental impact. I wasted three years working for that vision appealing for voluntary responsibility to the mobile phone manufacturers. But a standard charger would create winners and losers (like every single piece of legislation) and of course this would never happen. Until the EU said enough. Then miraculously things started to happened.

Corporate responsibility doesn’t work. Because the companies that take more risks and stricter standards often get penalised. The more sustainable companies need proper old school legislation to gain a competitive edge for their stricter standards and new technology. And yes, we want a ban on the landfill of carpet. We have the technology to recycle it. And we cant compete with throwing away for free.

Messenger. We are heavily influenced by who communicates information
Incentives. Our responses to incentives are shaped by predictable mental
Shortcuts. Such as strongly avoiding losses
Norms. We are strongly influenced by what others do
Defaults. We „go with the flow‟ of pre-set options
Salience. Our attention is drawn to what is novel and seems relevant to us
Priming. Our acts are often influenced by sub-conscious cues
Affect. Our emotional associations can powerfully shape our actions
Commitments. We seek to be consistent with our public promises, and reciprocate acts
Ego. We act in ways that make us feel better about ourselves

Here are some of my thoughts on consumption-based reporting or what it’s the same: managing the emissions embodied in imported products.

• Consumption-based emissions reporting should not be done for the sake of it (as an accounting exercise). It should aim at re-designing the flow of imported goods and systems to radically reduce the overall emissions created by a country’s consumption.

• The key leverage is that many products are designed in the west and manufactured in Asia. Decisions at product design level by a UK product manager could cut dramatically the emissions of making that product in Asia, reducing the imported emissions of the UK (and most importantly, the rest of the world). That design would immediately become a key service that the UK could export. Unfortunately I don’t see much policy thinking on this critical area.

• Re-designing products is the most effective way of reducing the emissions from the increasingly export-oriented Asian economies. (easier and quicker than subsidising these developing economies to go for renewables).

• For our products, carpet tiles, around 70% of the total carbon footprint is on the raw materials. Only 10% is production and the rest is transport, end of life and vacuum cleaning. We have been focusing on the last years to reduce our ‘imported embodied’ impacts of the raw materials that we use to make our products.

• InterfaceFLOR’s latest product, Biosfera Micro, made with 350g of 100% recycled yarn, was redesigned to half the carbon footprint of a normal carpet tile. Embodied carbon reductions are easier to achieve than own direct emissions. See more at http://www.interfaceflor.co.uk/web/sustainability/gobeyond

• So the key leverage of a product importer, service exporter country like the UK is not in reducing home emissions. It’s in using its people’s brains (their service industry) to reduce the impacts for goods produced in other countries. It’s about coming out with innovations that will substitute high energy intensive materials. Countries that will invest in these technological breakthroughs will get a competitive advantage. Whoever comes with a substitute for steel or cement will have a huge advantage, either company or country.

• Measuring embodied impacts of products will enable consumption based taxes rather than inputs based taxes such us national or European carbon trading or carbon floor prices. The issue of carbon leakage could also be addressed much easier by taxing finished goods based on their embodied carbon. (since it doesn’t matter where the goods are produced, goods produced internally or imported would face the same tax). That would be the final nail on the coffin for carbon leakage.

• That would mean taxing physical things based on embodied carbon and taxing energy hungry machines based on their carbon emitted at use level. Taxing things at consumption / product level can be easier than the complex carbon trading mechanisms. It could also enabling tax discounts for products with super-low carbon impacts, if at some point governments are brave enough to consider things such as reduced VAT.

• It’s rather pointless that governments (eg DEFRA’s clumsy attempts) and retailers embark in doing LCAs for all the products that pass through them. Governments should ask companies to produce LCAs for the products they put on their markets and Retailers such as supermarkets should ask for their suppliers. At the end of the day, the core knowledge is with the producer. And the key to redesign a product to radically have less embodied impact is with the producer.

• It’s actually neither that complex nor expensive to produce LCAs / EPDs for products. Starting from zero could be £10-15k. In our company we have the competence in-house and it costs us much less.

• Transparency of embodied impacts (using magic metrics such as gCO2/kg of material or gCO2/m2) could enable transformative regulation at all leves with a changing power equal to what gCO2/km did for the car industry. See magic metric article attached.

• Rather that supporting ailing high-energy intensive industries, government industrial policy should encourage radical alternatives to those energy intensive materials. IP in these areas could be a critical source of growth in the countries of invention.

• We should move away from the rather constraining scope 1,2,3 thinking. We should just shift mindsets from direct company and country footprints to product footprints.

In page 42-43 they mention our concept of Open Loops, where the waste from one company becomes the raw materials for another company. When we coined the term Open Loops, we would not expect to become such a popular concept but in the last month, many organisations have embraced this idea.

Now, there a few revolutionary companies that are starting in the design board with the ultimate challenge: making good stuff by using bad stuff as raw materials.

This is one example.

A bunch of green chemists founded Novomer, a company focused on developing sustainable materials using CO2 and CO as a feedstock. Their CO2 feedstock based technology produces Polypropylene Carbonate (PPC) to use in applications such as ceramics, coating or packaging. Their CO feedstock arrives through alternative synthetic routes to succinic acid (for biodegradable plastcis) or acrylic acid (for diapers, detergents).

And many people with perhaps a less degree of exposure to LCA usually retort: It’s very difficult to do it if your company has 1,000 of products. How little they know.

Look at what Danone is doing. they are measuring the footprint of 35,000 products!!!

And they are looking at working with companies such as SAP to automatise the process.

The result, more transparency, more trust and will enable radical transformation.

Here about this and more in the PCF forum in Berlin.

Their product target is reducing product carbon footprint by 15% by 2015 against 2008 baseline.

http://www.barillagroup.com/corporate/en/home/responsabilita/ambiente.html