Monday, 25 June 2012

Grounded by out-of-date policy

I am waiting for the next stage of the Department for Trade and Industry (DfT) consultation into aviation policy. The problem the DfT faces is huge swathes of conflicting advice from a wide range of people with different perspectives and often vested interests. This is a prime example where trying to compromise between the parties will lead to a hotchpotch of failed policy. The politicians and their advisors need to look at priorities and establish some principles. I suggest three principles:

1. Delivers a better aviation industry that serves the needs of society;
2. Allows the UK to have a big role in the development of the next generation of air vehicles;
3. Reduces the environmental impact of aviation with policy that is fit for mid 21st century.

My credentials for suggesting the basis of UK aviation policy is that I can wear, simultaneously, the three hats required: The economic and business perspective is one hat; the environmentalist is another and the third is the hard hat of the engineer. The shape of each hat is different.

 The economic and business cap has flaps on both sides that blinker the view of the wider issues and a low brim that stops you seeing more than the first few steps in front of you. The wearer of this hat blunders into policy with a very clear view of the short-term economic perspective. Wearers of this hat are often vocal and loud and look faintly ridiculous from the perspective of those around them that see the bigger picture.

The environmentalists wear a soft hat overgrown with foliage to such an extent that the green leaves obscure the view. Wearers of this hat see a patchwork view of the world in which flying should be rationed in some way or even banned without seeing fully the resistance that this approach generates.

The aeronautical engineers wear a helmet with a clear view in all directions but it is enclosed in a full visor so no one else can hear what they are saying. The engineers wearing this hard hat are forced to focus on 20th century aviation technology because the new 21st century technologies are not financially viable in the current policy framework.

Being a proponent of the capacity of business to implement change, and an environmentalist, and an engineer, I wear a special hat that allows a clear view in all directions. It is topped by a bit of green foliage, is strong enough to stand a few knocks and allows me the freedom to focus on real solutions. The principles I propose are hard to dispute. First, we should want a better aviation industry that serves the needs of society. Second, it makes sense that we plan a key role for UK industry. Third, in an industry with long lead times and high levels of investment it is crucial that we set now policy that is fit for the middle of this century when the air vehicles now being designed will still be flying.

Monday, 18 June 2012

Delaying the fall of the Euro Zone

World markets have risen this morning on news that The New Democracy party has beaten the radical left Syriza party in yesterday’s Greek election. This is an irrational response because further delay in sorting out the euro crisis will make the euro zone’s problems worse, not better.

The New Democracy party have promised to the country’s creditors that it will honour the terms of the bailout loans to keep Greece inside the euro zone; hence the positive reaction by the markets. If the Syriza party had won and carried out its promise to the Greek electorate to tear up the loan agreement, this would almost certainly have meant a rapid exit from the euro.

Stepping back from the immediate political turmoil, it is clear that Greece cannot remain inside the euro zone. This view is based on economic, political and social grounds; it is simply not sustainable. To leave the euro is the correct course of action, primarily for the Greek people but also for Europe and the world economy. A bankrupt Greece would default on its debts and start anew. The new Drachma would plummet in value against the euro and other currencies. Greeks would find imports were unaffordable. Other Europeans would find that Greece is an extremely good value holiday destination. They would and flock to book their next vacation and dash to buy holiday property which would be exceedingly cheap to foreigners. Greece inside the EU but outside the euro zone could do very well without losing its identity and retain its rather loose definition of fiscal discipline. The Greeks could return to a currency which tended to continually depreciate to counter the Greek way of running the economy. It is not the way the Germans run their economy but each country should build on its strengths and work around its limitations.

Sustainable economies are built around the resources that each country has and take into account the specific circumstances of a nation. This is the policy of ‘proximisation’[1] which will lead the world economy out of the current crisis. At the tail end of the era of economic globalisation, people are slow to accept this major paradigm shift, but change is coming, and it is change for the better.
Will the change in policy come soon enough to allow a controlled resolution of the euro crisis? Two years ago, or even one year ago, it would have been possible for Greece to leave the euro in a controlled manner and for the other members of the euro zone to hold the currency union together. Even now, it could be argued that if Greece left without further delay and Germany accepted joint euro bonds, Spain and Italy could be protected. But the longer the Greece departure is delayed the more likely that the euro zone will splinter apart.

The politicians squabble and try to hold the euro project together – and thus ensure its break up. A currency union of separate sovereign states was never going to be sustainable. The sooner a more stable economic system is established in Europe the better for everyone. Keeping the euro intact ensures that all euro zone countries stand or fall together. When the fall comes it will be far more painful than it needs to be.

[1] Also spelt ‘proximization;’ term introduced in Adapt and Thrive: the Sustainable Revolution, McManners 2008.

Monday, 11 June 2012

Unsustainable Water for London

Thames Water switched on their desalination plant at Beckton in London for the first time a couple of months ago in anticipation of a drought this summer. London’s first desalination plant cost £250m and can produce 140-150 million litres of water per day, which is enough for one million people. Desalination has been used in hot dry countries for many decades but in cloudy wet UK, it seems odd to be using this technology. The reason is that the population of London continues to expand beyond the capacity of the local water supplies.

Let us take a look at a range of possible solutions (all of which are being used or under consideration):

1. Desalination

2. Pump water from other parts of the country

3. Buy water from Norway

 These three possible solutions need energy input. The reverse osmosis process used at the Beckton plant typically requires about 4KwH per cubic metre of waters produced [1]. Pumping water across the country from the exceedingly wet west is also an energy-hungry activity. Shipping water from Norway in tankers or towed across in large plastic bags is, surprisingly, also an option being considered. In a world facing the challenge of increasing energy prices and the need to hold carbon dioxide emissions in check, energy intensive solutions should be avoided. None of these three options therefore look very attractive. Three more options are:

1. Fix leaks in London’s delivery network

2. Alter plumbing systems to use less water

3. Cap population growth in the Greater London Area.

First, fix the leaks in London’s old creaking supply system which leaks a staggering 26% of the water supplied [2]. Halving the leaks would increase supply to consumers by 13%. Second, alter plumbing systems to use less water. This could include the installation of water harvesting systems to collect rainwater. This could be envisaged to reduce water demand by 10-20%. Third, a logical option would be to hold the population of the greater London area (about 8 million) from further increase so capping the need for additional supplies. The idea that population should, of even could, be held down is not considered seriously by policy makers, so this option is off the table.

That leaves the two best options:

1. Fix leaks in London’s delivery network;

2. Alter plumbing systems to use less water including water harvesting.

Thames Water may be proud to show off their desalination plant at Beckton sewage works. They presumably worked out the figures and concluded that it would be a good investment. From the narrow perspective of the water supply company this may be logical. It is hard to find the cash to invest massively in long-term network improvements; and customer plumbing solutions are outside their control. We therefore get Beckworth desalination plant, a shiny new memorial to unsustainable policy.

1. Energy Requirements of Desalination processes, Encyclopedia of Desalination and Water Resources (DESWARE), UNESCO Encyclopedia of Life Support Systems (EOLSS).
2. BBC News, 5th April 2012. How much does your water company leak?

Tuesday, 5 June 2012

The next 60 years

Britain is enjoying a 4-day holiday to celebrate the Queen’s Diamond Jubilee with street parties, concerts and community events of all kinds. There is plenty to celebrate since the queen came to the throne in 1952. Wealth has increased; her population of loyal subjects has enlarged; and along with Western Europe Britain has enjoyed a period of relative peace and prosperity.

Whilst we sit back and enjoy the last day of celebration we should reflect on whether the party is finally over. All the wealth and prosperity of recent history has been built on a mountain of debt. Living the good life, whilst borrowing ever more, was always going to end badly. We should be living our lives in balance; spending only what we earn and using only that proportion of our resources as we can easily replace. The last sixty years have been good but have not been in balance. Over the next sixty years we will need to find a new balance to celebrate.

Financial debt at personal and at governmental level is a cause for concern but at least this is a debt that is relatively easy to resolve. When financial debts have ballooned out of control, bankruptcy is a way out. A line can be drawn on the profligacy of the past and a new start made. The countries of southern Europe are likely to take this route with Greece in the vanguard. I have been predicting in this blog since September 2011 that Greece will leave the euro. When it does, it will have the freedom to build a new economy and leave its debts behind. It will not have access to the international debt markets (for a period) and the Drachma will plunge like a stone but its main export (tourism) will boom as the tourists come flooding back.

 The debt we should be much more worried about is ecological debt. Financial debt in the modern financial system is just a series of numbers in bank computers. Writing off debt is not without consequences but this is relatively easily solved. Ecological debt will take decades or centuries or in some cases will never be paid off where species have become extinct.

“God save the queen.” She has our respect for long and loyal service to the Commonwealth; this weekend we have remembered the best of the last 60 years. Now as the celebrations end we need to look at the next 60 years to find a new balance that allows us to continue to thrive. Looking back, we have been measuring success by rising GDP, increasing material wealth and rising consumption. Looking forward we need to measure success by quality of life, stability of the economy and the cohesion of our communities. The best legacy of this Diamond Jubilee would be if it marked the transition from the old era to the new era of sustainability.