 r & d The Maths of Saving Us from Ourselves The climate change debate is changing. Stage one was the no it isn't /yes it is debate, stage two was woe is us, the end of the world is nigh and now we begin to discuss and implement practical solutions. For those who believe we have woken up too late, here is some reassuring maths from someone who woke up before almost anyone else. In 1972 Professor Jorgen Randers co-authored a book "The Limits to Growth". Almost 40 years, a few new editions, 9 million copies in 26 languages later, he addressed a group of us in Cape Town on economic growth. A physicist & economist by training, Prof Randers gave us this maths - the global GDP has grown on average over the last hundred years or so by 3,5% per annum - it is a safe assumption that this will hold true going forwards; and so by 2050 the GDP will have grown fourfold. That means four times as many gadgets, four times as many plane trips, four times as many potato chips - you get the picture. At the same time, we need to half our current carbon emissions by 2050. Include the growth - we must reduce carbon emissions by a factor of eight. Before you stick your head in a gas oven to get it all over with, know that this equates to an annual reduction of 5%. To put that into perspective, the Department of Energy told mining companies last year that they must cut electricity usage by 10% within 12 months, if they wanted guarantees of no power cuts. All complied. the 5% solution For the first few years, the 5% solution will be achieved by tightening things up a little. Nineteen flights instead of twenty; lowering the hot water geyser thermostat by a couple of degrees, some energy efficient light bulbs, obeying the speed limits. Then with money saved from one less flight & no speeding fines, think about solar water geysers, or just cold water in the company washrooms. Perhaps video conferencing to cut the air bills further, or working from home one day a month. And a worm-farm to turn garbage into compost. Then a few years down the line, making your next car electric. Meanwhile government would be doing its bit by encouraging & rewarding a carbon light life -from upgrading public transport to generous tax incentives for local companies making low-cost solar water heaters. creating shared value Michael Porter, doyen of consultants for capitalism and business school case histories, had a Damascene moment on the road to our global financial meltdown. Capitalism needs an extreme makeover, he reasons, and "Creating Shared Value" can do this. For too many corporates, capitalism 1.0 was squeezing your value chain until it was desiccated - squeeze some more, then find the next supplier, preferably in a low-cost, labour-exploiting environment. Capitalism 1.1 added a degree of corporate largesse with a bunch of noble values that for some like Enron didn't go much further than a plaque on the wall and the "About Us" on their website. The business of making money was still removed from society and planet. Capitalism 2.0 recognises that a corporate can increase its profits by helping suppliers and employees. Amongst the examples Porter gives are Nestlé and Johnson & Johnson. To ensure continued supply of premium coffee for Nespresso, Nestlé helps growers with quality and productivity, ensuring they can produce more, better quality beans for everyone's benefit. Johnson & Johnson invests in a costly wellness programme for all their employees that includes such benefits as paying for courses that wean them off smoking. The net benefit in both cases far outweighs the costs - the bean-counters have seen that investing in people has greater returns than investing in machines. "Creating Shared Value" will encourage retailers to source products nearer home - developing communities that can afford their products as well as saving the carbon of unnecessary freight. The architects of globalisation discounted pollution as an externality - for someone else to pay. They ignored the someone else would be us, our children & children's children. The maths were flawed because they excluded all moral & future values. We were working on less than half of the equation. green building maths The tallest skyscraper in New York City is once again the Empire State Building. The second tallest is the new Bank of America building. It is a platinum rated green building and the Bank's board enthusiastically endorsed the extra cost. The bankers have not become wild-eyed bunny-huggers - they are convinced by the maths. Energy savings amount to $3-$4 million p.a. - good but not good enough to justify the return on investment that the bankers sought. A number of studies show that green buildings increase productivity by up to 10% - with healthier, happier inhabitants. Bank of America took a more conservative view and found that increasing productivity by 1%, or five minutes per day, would translate into an extra $10 million p.a. on their bottom line. Suddenly it was a no-brainer. nature's maths The United Nations Environmental Programme (UNEP) estimates that the annual worth of ecosystem services is $72 trillion - equivalent to the total GDP of all the nations on Earth. For every dollar we create in value, nature gives us another, for free. South African estimates are far more conservative - coming in at R73 billion - or 7% of our GDP. Biodiversity nourishes far more than the soul - it gives us fresh water and food, fuel and medicines. It has created the eco-tourism industry; offers carbon sinks as well as some protection from the effects of climate change. Yet around the world, 60% of natural ecosystems are degraded, many dangerously so. Before these maths were done, to preserve biodiversity was isolated to environmentalists. Housing, mining and monocrop agriculture were considered far more important than a few disappearing flowers or rabbits. Now we begin to understand that restoring ecosystems employs communities and develops sustainable prosperity. We have goldmines above the ground and under our seas. Goldmines that belong to the nation - that benefit all. When we measure things differently, we will do things differently. The maths of a fast buck brought us to the edge of financial and environmental ruin. The maths of sustainability will take us back from the brink. Accountants -please sharpen your pencils. | 
