The new occupant of Number 10

I assume that in London’s most famous address, 10 Downing Street, Gordon Brown has packed all his personal possessions into boxes and is ready to leave. He has a constitutional duty to remain until an alternative government emerges. It would be presumptuous of David Cameron to have his bags packed ready to move in, but he must feel confident that this will be his next home. His call for change is what the country needs.

Now, there is a chance for deep-rooted change - if our leaders grasp the opportunity. Difficult times demand bold action. Otherwise, there is a danger that the same tired policies will continue but with a different spin and slightly altered priorities.

Politicians, and most of the electorate, are fixated on our economic ills. The apparent priority is to get the economy back on track. Other problems, such as environmental stress caused by continued high levels of material consumption, are being sidelined. It does not have to be like this.

Rescuing the economy, and stepping rather lighter on the planet, can be on the same route if we choose our direction well. Green stimulus measures are what are needed. This is far more complex than the simple economic levers used so far to counter the crisis. There is a difficult challenge to design appropriate government policy that links with, and influences, behaviour change to move closer to a sustainable society (that includes, of course, a sound economy). It can be done; and this is what the new resident of 10 Downing Street should focus on.

A Greek Tragedy

An agreement for a financial rescue package for Greece has finally been brokered. Any further delay and Greece may have been forced to default on paying out on bonds due to mature in the near future. For a Euro-zone country to default on its national debt is unthinkable – or so we thought. This is an important stage in the development of the Euro. Is it a stable well run currency vying with the US dollar for reserve status; or is does it represent an unwieldy merger of disparate economies that is bound to unravel? These are important questions for Europe; and for the stability of global finance.

Discussions have been slow and tortuous. The internal politics of Greece has made it very difficult to agree to implement the tough austerity measures demanded by the IMF and the EU. For Germany – providing a large chunk of EU new loans – this is a bitter pill to swallow. The Germans take pride in running a prudent economic policy and ordinary Germans have had to put up with belt-tightening. To see this result in bailing out the profligate Greek economy is galling; Angela Merkel may reap a political backlash in the coming elections.

This whole sorry tale of Greece and the Euro is a Greek tragedy. It will end with Greece leaving the Euro. After this agreement the inevitable is delayed but not for as long as people might hope. As soon as it becomes clear that the Greek government does not have the domestic support to implement the full austerity package (nor the stomach to get a grip of tax evasion), and the EU looks likely to reject further requests for yet more loans, there will be a rush to dump Greek Euro debt and to withdraw funds from euro accounts in Greek banks. The final act could be messy and dramatic.

I write in my book, Green Outcomes in the Real World, coming out in the autumn:

‘There is little prospect that the euro will be dismantled any time soon, but it is likely that one or more members will explore the possibility of exit to regain greater financial control. Implementation would be a challenge for both the country and the European Central Bank, but once one country had acted as trailblazer, others might follow.’

Greece and the European Central Bank should have trail-blazed an orderly exit at a much earlier stage. Further delay is dangerous.

My generation

My generation, born in the 1950s and 60s are now in power and it is our wisdom that is guiding decision making. We have experienced three decades of economic growth, rising consumption and materially better lives. We have no direct experience to warn us that there may be problems ahead. Scientists tell us about the possibilities of climate change but the evidence is now tainted. Recent polls suggest that only 25% of the population believe that climate change is real and caused by humankind. There is relief amongst many people that they can latch onto the idea that climate change is a hoax. Whether climate change is real, or not, we will find out in the decades ahead. The inability of world society to respond to this threat is symptomatic of deeper problems. My generation are living in denial of the need to make changes to reduce the impact of society on the global ecosystem.

I have been out and about in Berkshire schools talking with sixth form pupils. This has given me huge optimism that real progress towards a sustainable society is possible as they come of age to vote and influence those in positions of power. The younger generation are open-minded and thirsting for knowledge. They are also concerned about the future and not afraid to ask searching and difficult questions.

The younger generation have a different set of observations to guide them. They see a shortage of jobs, a lack of opportunities and an older generation better at generating hot air than taking real action to protect the integrity of our planet’s ecosystem. We owe it to them to start making real progress - and start soon.

Foreign holidays as a Right

According to the Times:

‘An overseas holiday used to be thought of as a reward for a year’s hard work. Now Brussels has declared that tourism is a human right and pensioners, youths and those too poor to afford it should have their travel subsidised by the taxpayer’. The European Union commissioner for enterprise and industry, Antonio Tajani, is reported to have said, “Travelling for tourism today is a right.”

There has been a massive increase in low-cost flying based on cheap aviation fuel. If airlines had to pay a similar amount of tax, as motorists pay to drive their cars, then the mass aviation market would be forced to contract. Instead of curbing unsustainable aviation, the EU is seeking to expand tourism (presumably on cheap flights) to the poorest members of society. The aims are laudable: to encourage a sense of European identity by understanding other countries within the union; but what has happened to the idea of reducing the carbon impact of our holidays?

For now we are enjoying clear blue skies in southern England for the first time that I can remember. This has been courtesy of the ban on flights in response to the risk of volcanic ash thrown out by the volcanic eruption in Iceland. The skies are free of vapour trails and high cloud generated by aircraft. We have just has a very quiet and sunny evening meal in the garden.

We should reflect whether the time has come to charge the full environmental cost of flying. The EU would have to think again about its budget for tourism for the poor and disadvantaged. We might then observe exchanges taking place between adjacent countries to allow people to travel sustainably and engage with neighbouring societies. This would be a more useful way to give the poor a taste of alternative culture than further subsidies on flying.

Threats and Opportunities

The classic view of the external business environment, taught at business schools everywhere, is through the lens of ‘threats and opportunities’.

Responding to ‘threats’, is about looking to the future in order to survive the cut and thrust of a constantly evolving business landscape. Responding to ‘opportunities’, is about looking to the future to grow the business to exploit new markets, new technologies and new ways to do business.

I believe in looking at the world as a series of opportunities. Focussing on threats, leads to defensive strategies and risk-averse tactics. Focussing on opportunities, leads to risk taking and support for innovation. These latter behaviours are the ones that I favour.

These same deep-rooted mental approaches apply also to government and to all of us. People, who focus on the threat of climate change, are digging themselves into a defensive rut of narrow thinking that attempts to squeeze carbon out of the processes we now operate. People, who focus on the opportunities that arise, are getting on with the work of transforming society to sever society’s reliance on fossil fuels.

There is a huge difference between shuffling forward in a timid manner driven by fear and leaping forward taking the problems that arise in our stride. I would rather be running a little too fast than shuffling far too slow.

Paying in Energy

Iceland was lauded prior to 2008 on having clever entrepreneurs who could covert the nation from a remote island reliant on fishing to a major speculator in the realms of international finance. I remember the praise that was heaped on these financial wizards. The Icelanders bought a lot of UK companies and earned respect from overseas observers – although not from me. I was very wary of the alchemy that was being pursued. Conjuring up money and profits by playing the financial system does not fit my definition of sound business.

I like businesses based on innovation and genuinely novel ideas that seek to do something better or more efficiently. These companies deserve to prosper. It might be nothing more than the old and very successful business model built on community values that encourages hard graft from a loyal work force that are valued for who they are and not only the work they do.

The Iceland business model was more smoke and mirrors than hard graft. I was dealing with my parent’s affairs before the crash and was advised to put their savings into Icesave to get the best interest rate. It was advice I ignored. In hindsight, the UK government decided to back the deposits in Icesave so perhaps it was safe but it did not take much due diligence to see that this was a dodgy operation. It might have been better to let people learn the lesson that dodgy investments are to be avoided.

The UK government chose to bail out the savers and now seeks recompense from Iceland. An interesting idea has been floated by Gijs Graafland, the director of the Amsterdam-based Planck Foundation, that Iceland could pay back this debt in energy. Iceland straddles the fault line between North American and Eurasian tectonic plates and has good geothermal electric power potential. The power could be generated and passed to the UK through a new 750-mile underwater cable. That would be an innovative and useful idea.

Little Known Fact No 3 – Bottled Water

UK bottled water consumption reached 34 litres per person in 2008, up from 27 litres in 2001. Bottled water consumption is projected to reach 40 litres per person by 2015. In the US, bottled water is drunk at an average rate of 105 litres per person up from 67 litres per head in 2002. In Italy bottled water consumption has grown from 194 litres per head in 2002 to an estimated 200 litres in 2008.

The UK market has a lot of room to grow if the market follows the lead in other countries. People are responding to health advice that drinking water is good for you and are concerned that the water they drink is pure and healthy. This is big business with a large, and growing, resources bill for the bottles and their transportation.

There have been a number of studies comparing the quality of bottled water with tap water. For Helsinki, tap water comes out with an excellent report. In fact there is one company bottling and shipping Helsinki tap water to be sold in the Middle East. London tap water may not get such glowing reports but it is healthy and safe to drink.

Carefully managing water supplies is vital to human health. It might be better to ensure that all our drinking water is safe and put the bottled water business (and the associated resource consumption) out of business.

That would then lead onto tackling another associated anomaly – that we use clean water for flushing toilets. We would not flush the toilet with Evian; why flush it with tap water? Flushing loos should reuse grey water from our washing activities.

Rather than bottled water, we need protected water sheds and more complex plumbing.