Can city mayors lead the way on sustainable development?

On a recent trip to San Francisco and Austin, Texas, I found myself accompanied by two potential agents of change – Benjamin Barber’s book If Mayors Ruled the World and a newly appointed Swedish city mayor, Niklas Nordström. The former has the power to inspire and empower local politicians who wish to take on big challenges. The latter – who has recently taken charge in the city of Luleå – is exactly the type of mayor who has the power to lead change.

The ability of cities to shape national strategies should not be underestimated – they can help address up to two-thirds of a country’s policy issues. For instance, one of the more influential city networks, the C-40 Group, is on track to reduce its members’ carbon dioxide emissions by 248 million tonnes by 2020 – equivalent to the total greenhouse gas emissions of Portugal and Argentina combined.

This is just one example of how global problems can be addressed with local solutions, or ‘glocalism’. Apply this logic to other international challenges– such as conflict, integration, economic inequality and disease epidemics – and you see how, with the right partnerships, cities can provide an alternative to the traditional channels of global governance.

Seeing Nordström assume the role of foreign minister as he enters the mayoral office in Austin is a sign of how the new global landscape is evolving. It’s moving fast. But then so is Austin. The Texan capital is now an emerging hub of IT and innovation, home to some of America’s most vibrant creative sectors. Here, the governor has even appointed a senior official whose sole function is to ensure that the city remains a leading hub for the country’s music industry.

While Luleå, in the north of Sweden, may be smaller than Austin, it is also a growth area, though it has historically relied more traditional industries like steel and mining in nearby Kiruna. Here too, there is now a vibrant music scene, with concerts held in igloos and musical instruments made of ice proving to be viable selling points for the city. Once deeply rooted in iron and steel, Luleå is also now home a world-leading, climate-neutral cluster of data centers, used by tech giants such as Facebook.

Greenpeace publicly welcomed Facebook’s investment because of the the Swedish operation’s use of renewable energy. This success mark is another way in which Luleå has emerged into a new economic era. River hydropower is now a significant resource and even traditionally ‘dirty’ industries are cleaning up, with steel facilities contributing their surplus energy to the district heating system, keeping neighborhoods warm at the lowest prices in the country.

When I ask Nordström about his views on the city’s role and global focus, he immediately explains that doing nothing is irresponsible and leads to stagnation and non-sustainable community development. “We have now signed a first ‘letter of intent’ with Austin and my employees feel a greater commitment to being part of building a global partnership like this,” he explains.

Later that week, the mayor and Luleå’s head of business and economy, Matz Engman, visited Tesla’s manufacturing plant in Freemont, just outside San Francisco. While bicycles, coffee areas and computers may be expected features of Facebook’s headquarters (which the pair visited earlier in the day), finding them in a car factory is something of a surprise. But this industry is also changing rapidly, with Tesla at the forefront.

Having bought the factory from Toyota for USD43mil, the company then received a USD50mil investment from the Japanese car giant. Not a bad deal for the electric vehicle manufacturer, which currently sells about 1,000 cars a week, up from 600 at the beginning of 2014. Tesla’s customers are found mainly in the USA and Norway and while its share of world car sales may be modest for now, there will soon be huge interest in its concept, argues Nordström: “We see our work in Luleå as having to learn from developments in the new areas where IT really start to change our lives.”

Over in Silicon Valley, an evening gathering at Nordic Innovation House brings together a number of the figures participating in ‘Will Mayors Rule the World?’, the opening event of Almedalen Week (a series of important political forums, seminars and debates held every June in Sweden).

One of them is James Ehrlich, who is on the verge of taking his idea of Regentvillages – residential areas that generate their own energy supply – from plan to reality. By developing new technologies that integrate families’ and their neighborhood’s interests, from healthcare and garbage to water water supply and other essential support services, Ehrlich’s sustainable housing concept is as much about social lives as it is building materials. Substantial support from Stanford University has been crucial and numerous international organizations are now involved in developing the project.

Ehrlich is currently in discussion with a number of cities in Denmark, Malaysia, Sweden, China, India and Indonesia. Interest in his idea could lead to more meetings with senior municipal politicians, as he may offer cities of all sizes a way to meet the challenges arising from migration and rapid urbanization. Ehrlich is already in dialogue with mayor Nordström and hopes to use Almedalen Week as a chance to engage with other city-level politicians in attendance.

The opportunity to meet mayors at Almedalen is also of interest to James Hanusa, a leading figure in San Francisco’s new technological and social development. Although best know as innovation manager for the annual Burning Man festival, Hanusa has also participated in projects involving residents, politicians and officials in the interactive, ‘smart’ urban developments in San Francisco.

These are just some of the innovators using new technology more systematically to build smart cities. Many of the analysts I speak with in Silicon Valley argue that using large data sets to better understand human behavior can help treat economic, social and environmental issues simultaneously when planning an urban environment. This holistic, cross-sector approach offers new planning tools for building cities that are better integrated and sustainable.

It seems fitting that sustainable urban innovation is occurring in a city with such a fluid population. And what would San Francisco be without its immigrants? Over 40 percent of city’s inhabitants (and just over 30 percent of Austin’s) come from abroad. The resulting diversity has arguably driven the area’s ongoing transformation, something for us to think about when we talk of immigration in Europe.

Luleå’s mayor, Niklas Nordström, says he sees several important links between the development of Norrbotten (the region his city is located in) and the talks happening at Silicon Valley’s Nordic Innovation House. He takes the stage in a discussion with Anne Lidgard of Vinnova, the Swedish government’s innovation agency manager in Silicon Valley.

“Right now in Kiruna, in the north, they are moving the whole city and building a new ‘sustainable city’. The mining industry has undermined the city’s location [with the relocation prompted by the expanding mine] – a unique situation. With the skills here in Silicon Valley and Stanford University, both Kiruna and Luleå gain new insights into the construction and development of sustainable cities,” he tells the attendees.

There are several components of these, Nordström argues, including technological development and integration of planning, construction and operation. Sustainable cities are also about the growth of local political activities by eroding sector boundaries and streamlining everyday work in the municipality. But what is particularly inspiring is that, with the help of new technologies, they can develop democracy and allow both officials and citizens of new ways to have a direct impact.

But with so many competing interests, surely there is also political tension here?

“For parties, I see this as a great opportunity to revitalize the party work and Almedalen is just the place to bring this type of discussion,” says Nordström. “And remember. We mayors are pragmatic and community builders with local ties. This perspective makes us the key actors to work with the challenges that communities around the world are facing. Although national governments negotiating in Paris later this year [at the UN Climate Change Conference] will not agree on a common international climate agreement, we will.”

“Mayors will continue our global network and deliver solutions to climate change. This is important and we can thus show the way in which international cooperation should be conducted. But we must act strongly and consistently and that’s what we will, among other things, see in Almedalen in June.”

Kaj Embrén

ps registration to the Almedalen event - more information

 

Energy independence for Ukraine?

Issues of energy efficiency and sustainable energy production may have featured less prominently in the recent unrest, but they may present the greatest long-term opportunity for Kiev to seize control of its own fortunes. European investment can also play a crucial role in encouraging energy (and thus political) independence, for the country.

In Ukraine´s third largets city Odessa, for instance, the Swedish company Alfa Laval has revolutionized the way that district heating is delivered. Odessa’s total energy consumption has been reduced by 50 percent, with electricity use down 40 percent and water usage decreasing by an astounding 95 percent. Not only have the direct system costs also fallen by 30 percent, carbon dioxide emissions are now 3,800 tons lower per year. Such energy efficiency projects have the potential to ensure better resource security, according to Professor of Energy at Halmstad University, Sven Werner.

“[This type of] investment in district heating meets all the requirements that the politicians have set up for the future energy supply,” he says. “Including that it contributes to more power production.”

The political risks of a continued reliance on oil and gas stretch beyond the sphere of immediate international diplomacy.

There are growing fears of a fossil-fuel bubble that, when burst, could financially cripple countries like Ukraine and thrust them further into the hands of larger states.

Globally, pension funds and other financial institutions are now beginning to move money away from fossil fuel industries towards renewable energy.

As Ukraine seeks to redefine its relationship with both Russia and the EU, the public debate in the country has been, understandably, one of national identity. But with so many political disputes, there is a pivotal geo-political factor that underpins these broader questions – energy supply.

With Moscow seeking to win allegiance through gas prices and Russia’s opponents looking toward American fracking deals, one thing is clear – neither offer Ukraine independence.

Governments too are beginning to realize the risks of remaining overly dependent on fossil fuels that may soon become unprofitable. They often reap the returns on the fossil-bearing plants, taking about 90 percent of income in the form of ownership and taxation. So diversifying with more sustainable and renewable investments can help alleviate their exposure to increasingly volatile energy markets. The overall savings could also be huge.

Greater investment in more efficient district heating and other state-level energy-efficiency schemes saves an approximate €100bn a year in Europe, according to a 2013 study by researchers at universities in Halmstad, in Sweden, and Denmark’s University of Aalborg.

Even more could be done if the European Bank for Reconstruction and Development (EBRD) acted more forcefully. Currently, the targets it sets on energy savings when making project specifications are not tough enough, meaning that any local company can, and will, offer a simple and cheap solution. In countries like Ukraine, this stunts the development of new technology in district heating provision.

When banks loan money for energy efficiency they should also incentivize the development of the future technologies to match. Nordic countries provide a world-leading model of using these efficiency savings to secure greater energy independence.

With 25 million people and a combined GDP of about USD$1trillion, they are both improving their own standing and inspiring similar moves in Europe and around the world.

Innovations in district heating remain some of the most pertinent examples from Nordic countries that countries like Ukraine can learn from. Accounting

for half of Swedish heating, it has gone from being almost exclusively powered by fossil fuels in the 1980s, to now being about 80 percent renewable and recycled heat. It uses waste, as well as waste energy from industries – partly by taking advantage of this excess heat and power, but mainly by transitioning to biofuels. Biofuels, largely those is left over as waste from deforestation, accounts for 44 percent of the energy supplied, according to

Ulrika Jardfelt CEO of Swedish District Heating. “There is much that is unclear about what will happen in Ukraine, but what we do know is that many of the EU member countries need to reduce their dependence on imported energy,” she explains. “In Sweden, we have managed – through local government spending on infrastructure — made it possible to switch to renewable fuels.

And now we’re taking it a step further by using the net to deliver heat from those who have surplus heat to those who need it… In Europe, we can see that the greatest benefits are linked to district heating,” says Jardfelt, who urges the European Commission to talk more about the subject heat. Such calls are slowly being heard by European decision-makers, with more talk about energy efficiency and renewable energy.

According to the EU’s own longterm trend analysis, a policy that continues ‘business as usual’ cannot achieve the goal of a de-carbonized EU by 2050 or keeping rising temperatures of less than 2 degrees Celsius.

Fears of a fossil fuel bubble only increase as investment continues to flow into both the gas and oil industries. But we are also beginning to see positive climate change decisions that are increasingly connected to the markets —pension funds and other financial institutions are starting to opt out of investments in fossil fuel industries and invest more in sustainable energy.

Nonetheless, vast challenges remain. Annually on the world markets, investment in renewables amounts approximately USD$1,000 billion. But estimates suggest that this sum needs to be closer to USD$8,000 billion a level if we are to achieve the aforementioned 2 degree Celsius target.

The risks facing those government that enjoy substantial income from fossil fuels are increasing as it becomes less and less profitable to invest in dirty energy. Governments taking upwards of 90 percent of their income through state ownership and taxation will be able to better control their huge exposure with diverse sustainable and renewable investments.

The model found in Sweden (which is in many ways a largescale version of what we have seen in Odessa) has redeveloped infrastructure in a manner that should serve as an example for other European cities.

The 1991 carbon dioxide tax, consistent political support for renewable energy and a strong forestry sector have all led to the growth of the now thriving bioenergy sector. This energy source is now a more important resource for the country than fossil fuels, argues CEO of The Swedish Bioenergy Association, Gustav Melin. “By far the greatest contributor to Sweden’s renewable revolution has been bioenergy,” he says. “Biomass, such as municipal solid waste, demolition wood, black liquor, firewood, bark, sawdust, industry by-products, wood chips, pellets, briquettes, ethanol, methanol, bio-diesel, bio-oil and bio-gas, accounts for most of Sweden’s renewable energy.”

In the eastern city of Norrköping the municipal government has, alongside E.ON, Lantmännen Agroetanol and Swedish Biogas, invested nearly USD$1.5 billion in a plant that produces steam (which is used in the production of fuel ethanol), electricity and heat from biomass.

While in the west of the country, in Värmland, a USD$540 million plant is being planned which will produce bio-methanol using raw materials from nearby forests. There are countless more instances of Swedish organizations implementing sustainability projects and, in the process, reducing the country’s dependency on outside supplies.

The northern city of Luleå has managed to provide the country’s lowest heating costs for its residents, largely thanks to the use of waste energy from the local ironworks/steel mill. The project is, according to Anna Blomborg, Marketing Manager of Alfa Laval “a good example of successful cooperation between local industries and the district heating company.”

Another inspiring example can be found in wind-power company Vattenfall’s city partnerships, such as its work in Sweden’s fourth largest city, Uppsala. Vattenfall is participating in the Uppsala Climate Protocol, in which companies and organizations work together to secure the city’s ambitious long-term climate and energy goals, such as reducing the city’s CO2 emissions by 45 per cent by 2020. Now, almost 95 per cent of homes and businesses in Uppsala’s urban areas are heated with district heating from Vattenfall. Vattenfall is committed to supporting the city of Uppsala in its climate ambitions.

A new combined heat and power plant – which uses biomass – will be built by 2020, says Director of European Affairs at Vattenfall, Sabine Froning. Uppsala is likely to exceed its target of a 45 per cent reduction in CO2 emissions. “We are working systematically on energy savings, reducing CO2 emissions and supporting the use of renewable energy,” Froning explains.

The district heating sector has grown for a third consecutive year, with pioneering projects springing up around the country.

In Stockholm, the capital of Sweden, Fortum Värme has invested USD 680 million in a new bio-fuelled combined heat and power plant, which is now under construction. The environmental benefits will be huge, and carbon emissions will decrease localy by 126,000 tons and globaly by 650,000 tons annually, says the company’s CEO, Anders Egelrud. “We are now focusing on meeting the 2030 target of providing the greater Stockholm area with 100% renewable and recycled energy,” he explains. “In a few years, nine out of every ten households in Stockholm will provided with carbon and resource neutral heating. We take pride in the fact that Fortum Värme has no small part in making Stockholm one of the cleanest capitals in the world, and in 2010, Stockholm was appointed world’s first ‘Green Capital’ by the EU.”

In this area there are promising parallels with Eastern European countries. As in Sweden, many of Eastern Europe’s district heating plants are owned largely by state or local authorities, giving governments the power to drive forward change. Indeed, 75 percent of Ukraine’s are state-owned at a national or municipal level.

This also means, however, that democracy and decision-making effectiveness both come into play.

Corruption in Eastern Europe is well documented and poses a potential threat that will be taken into consideration when investing in new energy-efficient infrastructure. But at the same time, procurement of these new technologies can, with the help of European capital, itself help combat corruption. The shared focus should now be about encouraging innovation with technology solutions that can enhance the efficiency of Ukrainian plants.

There are encouraging signs

The European Investment Bank (EIB) has now introduced its first initiative to support climate-related investments across the continent. It has introduced a GBP- 500mil bond investment opportunity for projects that demonstrate that heating energy efficiency and renewable energy are key priorities, explains Director and Head of Capital Markets

Department at EIB, Eila Kreivi. “This initiative was driven by an increased interest in the emergence of social responsibility portfolios among the large mainstream investors,” she explains. “Maybe this is a start of a new step to increase investment in the field of cities’ energy infrastructure and new district heating models that also bring more values than technology.” Such interest in Energy projects from European institutions may hold the key to shifting the power balance in Ukraine, as well as other countries in which dependence on fossil fuels, and other states, dominates. Whereas Russia threatens Kiev with the stick of energy prices, Europe is instead dangling the far more appealing carrot of self-sustainability.

Kaj Embrén

This article –  was written for the Swedish Magazine Green Solutions from Sweden edition 6 which was published in December 2014 – Read more articles in the magazine – order the magazine through  http://bit.ly/1zxx6Y4

2. The Ukraine article - http://bit.ly/1x49ieq

3. The full magazine with Swedish hottest startups - http://bit.ly/1zWVaWJ

 

 

Mayors network listed – will Mayors take the lead on a climate deal?

National governments have proven that they do not have what is required to meet the global challenges of climate change and the unsustainable use of our planet’s resources. The shortcomings of the COP meeting since Copenhagen acts as testament to this. With the burden of recession and austerity, short-sighted national governments have thus far shown themselves unable to handle sustainable development issues.

Within the arena of sustainable development, the boundaries of responsibility are undergoing a monumental shift. This allows new actors to take pole position in the creation of new opportunities. Old infrastructures are being replaced by new ones that are better designed to cope with the challenges facing cities and regions.

We should stop directing our attentions and frustrations towards impotent governments. Instead we must focus on more localized models that simmer from below but come to influence and inspire national actors to greater action.

Better levels of engagement and the development of local and international networks have prompted a wider range of actors to become involved in sustainability, from both within and outside the market.

Over the past five years we have seen several strong international networks emerge from municipalities and regions. To get a wider understanding of this phenomenon I undertook some research that shows just how many locally-focussed organizations use their involvement in these networks to bring about sustainable solutions that can have a real impact.

Sweden’ s biggest Political Week event in 2015 – A Challenge for National Governments in front of UN Climate Meeting Paris

Next summer – between the 28 to the 30th of June – the Mayor of the Swedish Island Gotland will invite Mayors from all over the world to the event to debate and prepare to challenge national governments in front of the Paris UN Climate meeting in December 2015. The event is organised by Region Gotland, Stockholm Environment Institute, WWF, The Think Tank – Global Utmaning, The Nordics association, Kairos Future, Club of Rome and Respect Climate.

Send me an e-mail if you are interested to find out more –  kaj at embren.com.

Mayors 33 networks that can act are:

1. United Cities and Local Governments - http://www.cities-localgovernments.org/

2. United Cities and Local Governments of Africa (UCLGA) - http://www.afriquelocale.org/en/about-us/uclg-africa

3. Federación Latinoamericana de Ciudades, Municipios y Asociaciones (FLACMA) / Latin American Federation of Cities, Municipalities and Associations of Local Governments - http://www.portalambientallatinoamericano.com/

4. UCGL Euro-Asian Regional Section - http://www.euroasia-uclg.ru/index.php?lang=en

5. UCGL- Asia-Pacific - http://www.uclg-aspac.org/

6. Council of European Municipalities and Regions (CEMR) - http://www.ccre.org/en/

7. UCLG-Middle East and West Asia (MEWA)  - http://www.uclg-mewa.org/

8. METROPOLIS Network (World Association of Major Metropolises) - http://www.metropolis.org/

9. Union of the Baltic Cities  - http://www.ubcwheel.eu/

10. Local Governments for Sustainability – ICLEI  - http://www.iclei.org and ICLEI USA / National League of Cities / U.S. Green Building Council’s Resilient Communities for America Campaign:http://www.resilientamerica.org

11. C40 (Large Cities Climate Leadership Group) - http://live.c40cities.org/

12. Clinton Foundation’s Climate Initiative - http://www.clintonfoundation.org/main/our-work/by-initiative/clinton-climate-initiative/programs/c40-cci-cities.html

13. World Mayor Council on Climate Change - http://citiesclimateregistry.org/

14. Sustainable Cities Network  - http://www.sustainablecities.net/

15. United Nations Human Settlements Programme (UN-Habitat) - http://www.unhabitat.org/content.asp?typeid=19&catid=540&cid=5025

16. United Nations International Strategy for Disaster Reduction (UNISDR) - http://www.unisdr.org/campaign/resilientcities/

17. World Bank - http://blogs.worldbank.org/sustainablecities/about-us

18. Cities Alliance - http://www.citiesalliance.org/

19. World e-Governments Organisation of Cities and Local Governments (WeGO) - http://www.we-gov.org/history

20. Mercociudades - http://www.mercociudades.org/

21. Unión Iberoamericana de Municipalistas (Iberoamerican Union of Municipality Authorities – UIM) - http://www.uimunicipalistas.org/#/sobrelauim.txt

22. Federación de Municipios del Istmo Centroamericano (FEMICA) – Federation of Central American Municipalities - http://www.femica.org/

23. Cities Development Initiative for Asia (CDIA) - http://www.cdia.asia/

24. CAI-Asia – The Clean Air Initiative for Asian Cities  and CITYNET (The Regional Network of Local Authorities for the Management of Human Settlements) - http://www.cleanairnet.org/caiasia

25. Committee of the Regions (CoR) and Covenant of Mayors http://cor.europa.eu/en/activities/Pages/priorities.aspx

http://www.covenantofmayors.eu

http://www.eumayors.eu/index_en.html

http://ec.europa.eu/environment/europeangreencapital/index_en.htm

http://cor.europa.eu/en/

26. MEDCITIES - http://www.medcities.org/

27. Association of Cities and Regions for Recycling and Sustainable Resource management (ACR+) - http://www.acrplus.org/

28.Brazil – Frente Nacional de Prefeitos (National Front of Mayors – FNP) - http://www.fnp.org.br/home.jsf

29.India – City Managers Association of India (CMA) http://www.umcasia.org/content.php?id=67

30. China – China Association of Mayors (CAM) - http://www.citieschina.org/en/

31. South Korea – Governors Association of Korea - http://www.gaok.or.kr/eng/e01_intro/intro010.jsp

32. Canada – Federation of Canadian Municipalities - http://www.fcm.ca/

33. Sweden – Klimat Kommunerna – http://www.klimatkommunerna.se/

Ask the question – mobilise network, organisations and give your voice below or at LinkedIn  Rio+

 

 

Political leadership in a new era

IPCC. Drought. Storms. CO2 levels of 400 ppm. In 2014, climate change and sustainability moved from being distinct environmental concerns to becoming systematic welfare issues.

Agricultural production was effected by both droughts and floods in many areas around the world. We have also seen war and conflictemerge in the wake of climate change and the pressure on resources that it brings. With increased population growth in urban areas, the costs and risks resulting from our damage to the environment have grown exponentially.

Countering these changes will require new ways of thinking about energy resources (and efficiency), water, transport and the relationship between cities and national governments. We are entering a new era and the implications for the political system could be profound.

The questions facing governments across the political spectrum –especially those about to take office, such as the EU and Sweden –are huge. How much demand will there be for the political decision-making process in environmental policy requirements? How should policymakers act at a global, EU, national and local level?

As well as the inevitable negotiations between parties, politicians need to re-address the very way that power is organized. Limiting responsibility along sectoral and geographical lines must stop. Many politicians are talking about sustainable development, but if action is to be meaningful it must be characterized by a holistic approach to resource efficiency. More stakeholders need to become involved in a social model that integrates economic, ecological and social perspectives. Policies should dare to lead while remaining open to suggestions from the outside world.

United Nations Global Compact, the World Business Council for Sustainable Development (WBCSD) and Global Reporting InitiativeCarbon Disclosure Project Multistakeholder Forum and Fair Trade are all examples of how these principles can be applied to create new models of governance. The so-called “Post-2015 Development Agenda” sees climate change as an area in which governments can redefine their decision-making structures. Several have already introduced innovative climate policy frameworks, including UK, Mexico and certain states in Germany.

But despite these positive examples, it is clear that most national governments have failed to agree on how to counter the growing threat of climate change.The cost of taking action requires bold leadership when there are fewer resources available for a more aggressive focus on job creation and welfare.

A government in power in 2014 must initiate a widespread process of changeif it is to develop a comprehensive climate strategy. This includes reviewing the role of national governments and cities alike; how they interact with one anotherand new stakeholders. Institutions with members from across a spectrum of interests will meed to formif we are to secure ongoing commitments within cities, businesses and organizations. This applies at both a national and local level—remember, it is cities and not countries that hold the key to the sustainability of tomorrow’s societies.

The agenda of a new era should based on volunteerism, “smart”legislation and realigning the way that institutions work together on active global, national and local climate policies. Such an approach could have a huge impact on new initiatives designed within fields such as fiscal policy (investment / pension funds), investment in university and college education,the renewal of business and labor market policies for the green sector, and renewed aid and trade.

Whether these changes will come about in time remains unclear, but one element of this story appears inevitable —urban growth. It often increases at more than double the rate of the nation-state writes Arif Naqvi in the Financial Times:

This change means that almost half of the economic growth expected over the next ten years will take place in 400 cities in the world’s emerging markets globally. It will create an urban consumer class of 4 billion people by 2025, up from 1 billion from as late as 1990.”

Our traditional way of looking at the world as a collection of national economies can not continue. Policy decisions at the national level must be based on a different worldview – one that sees our world as a network of cities with climate change and sustainable community development at their heart. It is time to start Governing for Sustainability

@KajEmbren

 

Circular economies: a new industrial model, not “business as usual”

The move from linear business models to circular ones is an exciting development. More and more companies are rejecting the “business as usual” model by maximizing the value extracted from resources and reusing them to generate new products as well as by improving efficiency which enable cost savings in raw materials, labour, energy, water, waste and emissions.

Articles on the circular economy are being more widely discussed in business groups. As a result, new policies are being integrated into company strategies and promoted as benchmarking tools.

I was recently invited to an industrial plant operated by the carpet tile manufactures, Interface, in Scherpenzeel, The Netherlands, where I joined in discussion with industry leaders, government employees and stakeholders from financial markets and other organizations. At the top of the agenda was the question of whether Europe’s industries can transform into “circular” businesses. Could the US-owned Interface be used as a prototype for a new industrial model in manufacturing sector in Europe?

In my interview with Rob Boogaard, Acting CEO & President EMEA, he explained how important it has been to provide economic, social and environmental goals within the company. As a listed company standing up for long-term sustainable development Boogaard says that Interface “has many eyes” on it. “[But] using the Natural Step system conditions, we have gradually increased our ambitions.”

As of January 2014, Interface has been operating on 100 percent renewable energy (both electricity and gas) and using 100 % re-circulated water in its manufacturing processes in Scherpenzeel. It has also managed to send zero waste to landfill. These are impressive achievements for the facility and a significant step towards “Mission Zero”, the company’s pledge to eliminate any negative impact on the environment by 2020 and, in doing so, become a restorative enterprise.

This mission is the result of the vision and strong leadership of Interface’s late founder Ray Anderson. The principle was established in 1996 and, by 2013, the company’s European manufacturing plants located in Sherpenzeel, the Netherlands and in Craigavon, Ireland  had reduced their greenhouse gas emissions by 90 percent and their water consumption by 87 percent. In this context, the political objective of a 40 percent reduction in greenhouse gas emissions across Europe by 2030 does not seem particularly ambitious. It sounds more like a new, achievable definition of “business as usual”.

To aim beyond the status quo, company managers must raise their expectations and take on more ambitious goals. In Scherpenzeel I also spoke with CEO of Lavery Pennell, Greg Lavery, who has undertaken the challenge of developing a new industrial model for Europe. In a new report he presented at the meeting, Lavery demonstrated how European industry can increase its profits by 9 percent and create 170,000 new jobs through energy efficiency and increased use of renewable energy. All of this can be achieved while simultaneously reducing greenhouse gas emissions by 1,200 metric tons (or 14.6 per cent of Europe’s total).

With experience from my own values-based consultancy Respect, which uses the principles of both the Natural Step system conditions and circular economies, I have seen how important it is to use companies like Interface as an example of best practice. The organization’s process of change provides a business model that can apply in all market-driven companies, whether listed or not. Circular models can become standard practice and, in doing so, use efficiency in the name of both profits and environmental sustainability.

@KajEmbren

 

Climate strategy is a welfare issue

Europe is facing a shift political agendas. This transition will place greater focus on welfare, in both the short- and long-term, and in both policy and action. The organizations and individuals involved in social dialogue feel that the political leadership is far too indecisive and slow-moving to create new models in this time of change.
We as citizens, voters or consumers will not sit quietly and wait for political action. Welfare societies are under threat and the gap between rich and poor has widened dramatically in the wake of the financial crisis. “Business as usual” is no longer enough.
The new year should mark an era of political maturity, where smarter decisions are made (and rules set) in both politics and finance. The interplay between climate change, energy efficiency and renewable energy is one example of an area where it should be possible to act more forcefully. All of our welfare depends on it.
By necessity, our dependence on fossil fuels will be phased out, step-by-step. New sustainable social goals can emerge, even with the pressures created by declining supplies of coal, oil and gas. The cost of the dirty energy sources is rising, while that of renewable energy will inevitably drop. A UBS analysis in 2013 argued that by 2017, 30 percent of gas, coal and oil production will be shut down – not necessarily to combat climate change or air pollution, or even to reduce imports, but because renewable energy will start forcing fossil fuels out of energy market. Take the price of nuclear energy for instance, where the UK government has guaranteed a 35-year price of £92.50 per megawatt hour (Mwh). This is more than the double the amount of today’s market price for energy. Another “business as usual” deal between politics and the energy market.
The economic incentives for renewable energy are becoming more apparent. European industry can increase profits by 9 percent and create 170,000 jobs through a greater focus on energy efficiency, materials efficiency and renewable energy according to a new report entitled The New Industrial Model. At the same time, this process will reduce greenhouse gas emissions by 1,200 MtCo2e tonnes (or 14.6 percent of Europe’s total).
Some companies are already realizing the benefits.
The US-based carpet manufacturer Interface has set itself a target of reducing its energy use through improved operational efficiency, aiming to use 100 percent renewable energy by 2020. It purchases clean electricity from the grid and invests it in carbon-neutral, on-site power generation. Currently, 91 percent of the electricity the company uses is from renewable sources, as opposed to 30 percent globally. Interface also uses the option of carbon offsetting so customers can ensure their purchases are more sustainable.
Recycling is another sector that is growing. This is not only crucial to protect the eco-systems ravaged by our hunt for raw materials because, as with energy efficiency, recycling has huge economic and job-creation potential. A recent EU study estimated that 400,000 new jobs could be created through the recycling industry, saving €72 billion at the same time.
The EU needs to combine climate issues, energy efficiency and renewable energy into a coherent policy for sustainable growth, rather than separating them and moving away from holistic policy. The UK government, which is acting against this type of integrated target-setting would do well to read the Westminster Sustainable Business Forum’s report on building efficiency which proposes realistic efficiency targets and incentives, while arguing that UK businesses can achieve “a cost saving opportunity of up to £1.6 billion through investment in energy efficiency”.
The EU knows this only too well. According to its own long-term trend analysis, a policy based on “business as usual” will meet neither its target of a decarbonated EU by 2050 nor the climate change target of less than 2 degrees Celsius.
Nordic countries can show the way. With 25 million people and a combined GDP of about $1 trillion, they can have a direct impact and inspire followers in Europe and around the world. A report from the business-oriented Think Tank, Global Utmaning (Global Challenges), shows that carbon-neutrality is a possibility. It proposes a way to viably reduce energy-related CO2 emissions by 85 percent and cover the remaining 15 percent offset with international carbon credits.
As early as 2012, Sweden achieved the EU target for 2020 of using renewables for 10 percent of its transport sector and 49 percent of the total energy mix. Energy use from fossil fuels decreased and now bioenergy is more of a major resource than oil. Sweden’s total electricity consumption has decreased by about 1 TWh per year since 2001, with industrial energy use on the decline since 1970.
But of course there are challenges. Nuclear power energy loses has increased to 110 TWh in 2010 (as well as the additional cost, of course).
The transport sector, and especially Sweden’s vehicle fleet, also remains a problem. But change is happening in these areas too, thanks in part to some promising collaboration with forward-thinking Asian partners.
More can be done. The goal for 2020 should be further reductions in energy use, greater efficiency and setting new renewables targets for 2030. We are ready to realize the goal of a fossil-free transport sector when political decisions are in place, says Vice President of the Swedish Bioenergy Association, Lena Bruce.
There are also a number of areas in which Sweden and the Nordic countries can provide models of collaboration with other countries, within and outside Europe. Take the example of district heating and cooling, where the Nordic experiences can be used as a resource to stimulate improvements in similar, but less efficient, systems in central and eastern Europe. Sustainable urban development is a beneficial Nordic brand but it can also be a powerful force among other world cities.
The Nordic forestry and bioenergy industries already have leading global positions which can also mean a lot for the future development of society, especially when it comes to transport. The growth of these sectors can contribute with new fuels and the processing of raw cellulose for new industrial development.
Swedish multinationals such as Fortum, Eriksson, H&M, Skf, Abb and Ikea have successfully demonstrated attempts to be part of a global transition towards growing sustainability and renewable energy. Take Fortum’s and Abb:s sustainable urban developmentSkf’s ball bearings for wind powerIkea’s investment in solar energy and green technologyH&M’s supply chain reform and Ericsson’s work with Stockholm Royal Seaport and the UN Sustainable Development Goals. And there is now more space for small, green companies to produce solutions for huge growth markets in the US, China and Africa.
Now is time for politics to act decisively. Leadership must be braver and politicians must take a step towards Sustainable Development.
If they do, there might be more chance of attracting interest from voters ahead of both the European elections and upcoming Swedish election later this year.
@KajEmbren

Welfare at stake?

Dear friends,
The new year marks new challenges and opportunities. In 2014 we will see two tests of two major political systems – the Swedish general election and the EU’s parliamentary election. Are politicians ready to face the challenges of the welfare state, climate change and other global issues?
Let me propose one of the means by which politicians, businesses and their stakeholders can be brought to the table – pension funds. Our pension funds need a new roadmap. If they are restructured responsibly, Sweden can create a new model that encourages more serious discussion about what we do with future investments.
How much CO2 is emitted by companies that Swedish citizens are inadvertent shareholders in by virtue of such public investments? Pension funds are some of the biggest actors in the country’s financial sector, so why aren’t they supporting the development of clean energy, especially in fields like bioenergy where Sweden is a global leader?
Now is the time for Swedish politicians to lead from the front.
Read my full article on how pension funds can overhaul the direction of energy markets – http://bit.ly/19rPQhp
For my Swedish network I also recommend the debate featured in the Daily Newspaper Dagens Industri - http://bit.ly/1gcEkbs – written by CEO of EON Sweden Jonas Abrahamsson, Professor at Karolinska Institutet’s Center for Social Sustainability Stefan Einhorn, TCO President Eva Nordmark, President of Global Utmaning Kristina Persson, Publicist Mats Svegfors, Archbishop of the Swedish Church Anders Wejryd, and President of the Club of Rome Anders Wijkman.
More links that could be interesting for you
English: The GuardianReuters The Atlantic cities
Swedish: Swedish RadioSydsvenskan
Best wishes for 2014!
Kaj
Follow me on Twitter – @KajEmbren -  https://twitter.com/KajEmbren – to receive updates on issues related to sustainable development and the challenges facing the welfare state.

Prevent, recycle and reuse

As urban consumers our use of resources leaves a huge footprint on the planet. In Europe alone, 8 billion plastic bags find their way through to waste disposal systems, creating unnecessary environmental problems.

The OECD expects that its member countries will generate 45 percent more waste than it did in 1995. A new EU directive in 2013places greater demands on European nations to cope with the increasing amount of garbage and the systems needed to take process it.

Studies show that a more effective system and smarter regulations can save financial resources and create new jobs. The research suggests savings in the region of € 72 billion and the creation of 400,000 new jobs in recycling industries.

But of course there is plenty of ways that both consumers and producers can take greater responsibility today. As consumers we can make more conscious choices at the store or when shopping online. Similarly, producers can make it easier for us, by offering appealing, well-designed products that are recyclable and resource-efficient.

There are also a number of pioneering technological advances in this field. A few weeks ago, I spoke with Jonas Törnblom of Envac, a company that develops systems for waste disposal and separation in residential areas.

He told me about the company’s new optical sorting technology now being launched in several Swedish cities including Stockholm and Eskilstuna, as well as the Norwegian capital, Oslo. Using camera technology, this fully automated system is able to separate waste on the basis of the color bag that it is contained in.

This new tool can contribute to more efficient garbage disposal in many sustainable urban development projects. Let’s hope that the EU directive instigates more examples of innovation in waste collection and management.

Kaj Embrén

 

Sweden may have moved first to break fossil fuel dependency, but it’s no thanks to the pension funds

The planet’s atmosphere is constantly being flooded with more greenhouse gases. The more that we unleash, the more we warm the planet. Put simply: now is the time to let our fossil fuel reserves rest in peace.

If we are to create a sustainable future, the International Energy Agency (IEA) says that at least two-thirds of the coal, oil and gas reserves that the market believes to be economically recoverable must remain in the ground. We must instead use our resources to invest in cleaner sources of energy.

But while may feel somewhat removed from the direction of the energy markets, there are pension funds making decisions on our behalf using society’s collective assets. How much CO2 is emitted by companies that Swedish citizens are inadvertent shareholders in by virtue of these investments? Pension funds are some of the biggest actors in the country’s financial sector, so why aren’t they supporting the development of clean energy, especially in areas where Sweden is a global leader, like bioenergy?

Here’s an idea of both the scale of the problem and pension funds’ potential to change the market.

Let us first assume that our planet’s resource “budget” until 2050 is based on the agreed target of limiting the global temperature rise to 2 degrees. There are 200 companies listed on global stock market that hold 745 gigatonnes of CO2 in fossil fuel reserves, which is 180 gigatonnes more than the world’s remaining carbon budget combined, according to an analysis by the Carbon Tracker Initiative. Of these companies, there are 133 that enjoy investment from Swedish pension funds (to the tune of 32 billion SEK) and collectively hold 643 gigatonnes of CO2  - this figure itself more than 14  percent higher than the world’s remaining carbon budget, according to findings presented by environmental group WWF Sweden at a conference in November.

At the event, I interviewed the President of Carbon Tracker, Jeremy Legget, who warned that we risk a global fossil fuel bubble.  “Companies and stock exchanges are currently being allowed to account coal, oil and gas reserves as assets at zero risk of standing by climate policymaking,” he told me. “As a result, such is the enormity of carbon-fuel-based value on stock exchanges that the risk of systematic financial failure builds with every new reserves of fossil fuel discovered.”

This bubble could be burst by pension funds. WWF argues that if all of such funds were to withdraw their stakes in six coal companies – Secerstal, Anglo American, BHP Billiton, Peabody, Alliance, and Xstrata – the emissions savings would equate to two times those produced by all of Sweden.

So, will pension funds in Sweden continue with an investment policy that fails to take into account the dependency on fossil fuels? Action from politicians in the pension system has the power to further strengthen the leading position that bioenergy and other non- fossil fuels have in Sweden at present.

That pension plan money finances climate change is a global theme. The US-based mass-movement 350.org calls for “divest from fossil fuels” and provokes a badly needed discussion by tweeds like this, read and spread by millions: “If you invest in fossil fuel corporations, you have a share in Typhoon Hayan: Count your profits in lives lost”.

Politics is becoming increasingly aware of the role of large investors financing climate change, so the European Union’s Climate-KIC recently promoted an initiative, where five asset owners were selected to receive a climate impact assessment for free. Maximilian Horster of South Pole Carbon, the organization running the assessment, was overwhelmed: “The interest among asset owners was enormous. We received a large amount of applications from all over Europe and it was very tough to select just five of them”.

Among the winners was also the Church of Sweden that has divested from fossil fuels already five years ago – without giving up on generating financial returns: «We hope to get our case even stronger so that we can present it better to others in the investment industry» says Gunella Hahn who runs the Responsible Investment unit and wants the Church to serve as a role model for other investors.

It is not surprising that organisations with strong ethical grounds such as churches and foundations are taking climate change and investments seriously: The pension plan of the Church of Finland has also screened its investments for climate impact in order to line up mission with investments: «This climate impact assessment of our investments will give us a new tool to continue our work» says Ira van der Pals, the Chief Investment Officer of the pension fund.

While such a climate impact assessment might be an obvious task for a church, it should also be the duty of a pension plan: For any organization with a societal mandate, it should be logic that the investments should not contradict the mission. The money managed for future retirees should be invested in a way that preserves a world that is worth retiring into. Knowing about climate impact of investments is only the first step and yet, very few large investors have taken that. The second step is then about taking action, climate-optimizing investments and divesting.

Ahead of the Swedish election in 2014, voters should look carefully at where each party stands on matters like these. Will any of them take heed of WWF’s pleas and completely phase out pension funds’ holdings in the production of oil, gas and coal?

Kaj Embren

 

 

 

33 Mayors network listed – will they act for a climate deal?

National governments have proven that they do not have what is required to meet the global challenges of climate change and the unsustainable use of our planet’s resources. The shortcomings of the COP meeting since Copenhagen acts as testament to this. With the burden of recession and austerity, short-sighted national governments have thus far shown themselves unable to handle sustainable development issues.

Within the arena of sustainable development, the boundaries of responsibility are undergoing a monumental shift. This allows new actors to take pole position in the creation of new opportunities. Old infrastructures are being replaced by new ones that are better designed to cope with the challenges facing cities and regions.

We should stop directing our attentions and frustrations towards impotent governments. Instead we must focus on more localized models that simmer from below but come to influence and inspire national actors to greater action.

Better levels of engagement and the development of local and international networks have prompted a wider range of actors to become involved in sustainability, from both within and outside the market.

Over the past five years we have seen several strong international networks emerge from municipalities and regions. To get a wider understanding of this phenomenon I undertook some research that shows just how many locally-focussed organizations use their involvement in these networks to bring about sustainable solutions that can have a real impact.

Mayors ! Get involved and give your local voice in front of and at the COP19 meeting in Warsaw! When will we see Mayors and regions act at the COP meetings?

The 33 networks that can act are:

1. United Cities and Local Governments - http://www.cities-localgovernments.org/

2. United Cities and Local Governments of Africa (UCLGA) - http://www.uclga.org/pages/homepage/?#1

3. Federación Latinoamericana de Ciudades, Municipios y Asociaciones (FLACMA) / Latin American Federation of Cities, Municipalities and Associations of Local Governments - http://www.portalambientallatinoamericano.com/

4. UCGL Euro-Asian Regional Section – http://www.euroasia-uclg.ru/index.php?lang=en

5. UCGL- Asia-Pacific - http://www.uclg-aspac.org/

6. Council of European Municipalities and Regions (CEMR) - http://www.ccre.org/en/

7. UCLG-Middle East and West Asia (MEWA)  - http://www.uclg-mewa.org/

8. METROPOLIS Network (World Association of Major Metropolises) - http://www.metropolis.org/

9. Union of the Baltic Cities  - http://www.ubcwheel.eu/

10. International Council for Local Environmental Initiatives – ICLEI (Local Governments for Sustainability) - http://www.iclei.org/index.php?id=801

11. C40 (Large Cities Climate Leadership Group) - http://live.c40cities.org/

12. Clinton Foundation’s Climate Initiative – http://www.clintonfoundation.org/main/our-work/by-initiative/clinton-climate-initiative/programs/c40-cci-cities.html

13. World Mayor Council on Climate Change - http://citiesclimateregistry.org/

14. Sustainable Cities Network  - http://www.sustainablecities.net/

15. United Nations Human Settlements Programme (UN-Habitat) - http://www.unhabitat.org/content.asp?typeid=19&catid=540&cid=5025

16. United Nations International Strategy for Disaster Reduction (UNISDR) - http://www.unisdr.org/campaign/resilientcities/

17. World Bank - http://blogs.worldbank.org/sustainablecities/about-us

18. Cities Alliance - http://www.citiesalliance.org/

19. World e-Governments Organisation of Cities and Local Governments (WeGO) - http://www.we-gov.org/history

20. Mercociudades - http://www.mercociudades.org/

21. Unión Iberoamericana de Municipalistas (Iberoamerican Union of Municipality Authorities – UIM) - http://www.uimunicipalistas.org/#/sobrelauim.txt

22. Federación de Municipios del Istmo Centroamericano (FEMICA) – Federation of Central American Municipalities - http://www.femica.org/

23. Cities Development Initiative for Asia (CDIA) - http://www.cdia.asia/

24. CAI-Asia – The Clean Air Initiative for Asian Cities  and CITYNET (The Regional Network of Local Authorities for the Management of Human Settlements) - http://www.cleanairnet.org/caiasia

25. Committee of the Regions (CoR) and Covenant of Mayors http://cor.europa.eu/en/activities/Pages/priorities.aspx

http://www.covenantofmayors.eu

http://www.eumayors.eu/index_en.html

http://ec.europa.eu/environment/europeangreencapital/index_en.htm

http://cor.europa.eu/en/

 

26. MEDCITIES - http://www.medcities.org/

27. Association of Cities and Regions for Recycling and Sustainable Resource management (ACR+) - http://www.acrplus.org/

28.Brazil – Frente Nacional de Prefeitos (National Front of Mayors – FNP) - http://www.fnp.org.br/home.jsf

29.India – City Managers Association of India (CMA) - http://www.umcasia.org/site/index.php?option=com_content&task=view&id=45&Itemid=68

30. China – China Association of Mayors (CAM) - http://www.citieschina.org/en/

31. South Korea – Governors Association of Korea - http://www.gaok.or.kr/eng/e01_intro/intro010.jsp

32. Canada – Federation of Canadian Municipalities - http://www.fcm.ca/

33. Sweden – Klimat Kommunerna – http://www.klimatkommunerna.se/

Ask the question – mobilise network, organisations and give your voice below or at LinkedIn  Rio+

Kaj Embrén

 

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