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Friday, January 7, 2011

Key sustainability trends for 2011 …with reflections on 2010, the year that was

A statement of the obvious: 2011 is going to be a big year for climate change, the environment and sustainability. In many ways it can be a pivotal year, at the start of a decade where the world has to act decisively. Of course, the burning question is still the same: Will it?

Last January I published my tips on 10 key sustainability trends for the 2010 year under the banner of my consulting business the 3rd degree. This year, as The Wattwatcher, this sustainability trends review both reflects on what happened in 2010 and offers updated installments for 2011. My views on these trends are weighted towards an Australian perspective while offering a more global view where relevant.

My introduction last year began: ‘Global recession and the CPRS* and Copenhagen failures were serious setbacks for sustainability, leaving many players discouraged and frustrated. Yet the pressure on governments and businesses to act on climate will keep rising.’ On reflection, I was both right and wrong. The pressure to act is rising in terms of the scientific justification, observable negative impacts, and also the business case for early action. But political will has been sapped by economic recovery priorities and a conservative ideological backlash, the latter most apparent in the US and also Australia.

For 2011, I am more optimistic that we will see stronger evidence of the world moving towards an era of more sustainable consumption and less damaging exploitation of natural resources. This will include a heightened, though still inadequate focus on preserving biodiversity and greater recognition of the eco-system services that underpin the global economy and human civilisation.
  • At a macro level, the UN climate summits of 2011 and 2012, plus the potent symbolism of Rio+20 in 2012, will provide crucial forums to engage leaders across government, business and the community sectors
  • At a micro level, the transformative agendas of individual cities, corporations and even individuals will build understanding of both the need for change and the ways in which it can be delivered while enhancing the economy and improving quality of life.   

(*For non-Australian followers the CPRS was the Carbon Pollution Reduction Scheme, the Australian Government’s 2009 plan for a cap-and-trade scheme, which fell over badly in extraordinary political circumstances in 2009-10.)

The trends - in no particular order - are:

Carbon Strategy
Carbon strategy is going shorter and longer. With the CPRS and Copenhagen summit opportunities in apparent disarray, pressure will build for both short-term interim solutions and bigger and bolder long-term strategies.
International cap-and-trade is still the elegant longer-term tool we need to engineer an orderly transition to a low-carbon global economy. But it now seems clear we will need to demonstrate how messy and/or ineffective the main shorter-term alternatives are before we adopt cap-and-trade properly. Vested interests in fossil fuels had temporary wins, and continuing uncertainty over the post-Kyoto period is undermining political will to act and also investment decision-making.
The US EPA push to regulate carbon emissions and renewed Australian interest in an interim carbon tax are good indicators of how short-term pressure points will be targeted to force due consideration of realistic, long-term solutions (i.e. cap-and-trade). Encouraging strategies to deliver low carbon cities and companies are emerging.
There will be further growth in scale and diversity of civil society organisations committed to building a broad base of consumer and citizen awareness and action on climate change.
New Activism

(now including social media)
Polluters will pay. It’s the carbon version of the ‘Sea Shepherd effect’ i.e. where failure to stop Japan killing whales in the Antarctic each summer has spawned more radical protesting than that of Greenpeace.
This trend tip was on the right track, but I didn’t see how powerful social media would become in magnifying activist power and community outrage e.g. the huge pressure BP faced over the Gulf oil spill disaster & Greenpeace v Nestle over palm oil in KitKats. Twitter, Facebook and You Tube are important new tools of choice for activism in the 2010s.
By combining traditional protests and stunts with more use of social media campaigning, activist groups can bypass the mainstream media and outflank traditional corporate spin-doctoring. Activists will gain more skills in 2011 in using social networks for their communications and also for ‘crowd-sourcing’ of funds. However, it is a crowded battlefield and business also is learning how to operate better in a networked world.
Policy Fatigue & Investor Alarm
The energy has been sucked out of the would-be carbon trading and services sector again, leaving business plans smashed, early movers hurting and investors cautious or retreating all over again.
Now any hope of an early US federal cap-and-trade scheme has faded, and with Europe so financially embattled, the rout of the carbon trading wannabe sector is a serious setback for early movers. But there are still some ‘real jobs’ in actually saving energy and waste, and clean tech and clean energy investment survived the global recession in good shape v. old alternatives.
With the pain of ‘false starts’ on the much anticipated shift to a global carbon market worth many billions or even trillions of dollars a year so fresh, the focus will be away from trading and will concentrate on saving energy, generating clean energy, the smart grid and waste and water technologies. This is a healthy trend to deliver real solutions rather than speculation. It will be very hard to finance any more traditional coal-fired power stations in the developed world at least.
CSR Under Pressure
Rising disenchantment over perceived corporate spin and backsliding will drive an ‘acid test’ approach to business claims and initiatives, and real results will be crucial rather than soft social responsibility
The year brought an upward spike in scrutiny on corporate ‘social responsibility’ claims, especially with the dramatic events surrounding one-time CSR darling BP.
From 2011 onwards we will see more focus on differentiating between corporations that ‘do CSR’ (like many big banks and mining companies) and those that make sustainability solutions core to their business models (GE, Dupont and Unilever are some that spring to mind).
Elections & Politicking
With elections in South Australia, Tasmania, Victoria, Australia-wide and NSW over the next year and a bit, the usual political horse-trading over green preferences will be back in business. It’s a scenario where the green vote can be golden at the critical margins!
What a mixed bag! In Australia doing power-sharing deals with Greens and/or socially progressive Independents saved the Federal Labor Government and at least one state counterpart. Close to home, there are early hopes that an incoming conservative Coalition Government in NSW, Australia’s largest state, will be stronger on sustainability than its federal equivalent. In the UK the Tory Party, encouragingly green in its own right, has to govern in coalition with Liberal Democrats. But in the US the Republicans romped back in mid-term elections and the Tea Party is on the loose.
On a parochial note, there is no plausible scenario for Green preferences to save the Labor Government in my now home state of NSW in the March 2011 poll. More broadly, I am concerned that fear-mongering over the huge changes required to achieve a sustainable future will strengthen reactionary conservatism in the short term, and this will be apparent in 2011. We will have to wait a while longer for green/sustainable to be the political mainstream. I expect a growing discussion about a new Centre Left force in Australian politics as Labor seeks to rediscover itself in the 21st C to deliver socially and environmentally progressive policies in tandem with sound economic management.    
Behaviour Focus
Consumers Do Rule? There’s a rising focus on consumer behaviour change among governments, businesses and community organisations
The proliferation of ‘green’, ‘ethical’ and ‘sustainable’ labels came on to the radar strongly over the past year, with mixed results for engaging consumers. Greenwashing is putting good offerings in peril. Failure to engage the consumer in key areas such as rolling out smart meters for the smart grid provoked community backlash (see more below).
Expect concerted efforts at regional, national and international levels to bring some order to the sustainability labels arena in 2011. This will be a growing challenge for major retailers and brand owners. There will be more pressure on energy utilities to become energy service providers and more investment in engaging consumers in the ‘smart and clean’ grid of the future (see more below). User pays road charging will get more attention and has to be ‘sold’ to consumers.
Technology Steps Up
The Grid is meeting Internet Protocols. Information and Communications Technology (ICT) is gaining momentum for demand-side energy use and management solutions
Although still poorly understood by the consuming public, the smart grid made real progress in 2010 and will accelerate in spite of community concern about cost, privacy and other issues surrounding smart meters. At an elite level, 2010 brought greater understanding that the smart grid has a lot more to it than rolling out smart meters. This includes meeting the need for more flexible energy demand to match more variable supply e.g. from wind, solar etc & the integration challenge for electric vehicles.
Fast-rising energy prices, the advent of electric vehicles and the need to integrate clean energy generation into the system are key drivers for smart grid investment in 2011 and beyond. There will be a lot more work done on making the economic and environmental cases to both business and domestic consumers. There will be greater linking of renewable and distributed energy, energy efficiency and new transport alternatives as key pillars for carbon reduction.
Energy Costs Stay in Play
Even without a price on carbon, energy prices have been going up rapidly and this is likely to continue,  boosting the case for the neglected motherhood solution of energy efficiency
In 2010, the cost of electricity bills became the hot topic for water cooler and BBQ conversations, certainly in Australia. Energy efficiency gained the attention of a prime ministerial task force and became a Ministry in Australia. Energy saving is a major focus in many major economies including the US and China. A doubling or tripling of electricity prices by 2020 is now expected in Australia.
For 2011 in Australia, the scene is set for more confusion. Creating a robust national energy efficiency scheme is held back whenever carbon trading is ‘on the table’ - and it is again! This is partly because of a lack of political and bureaucratic headspace to address both together. More positively, however, the fact that electricity prices are starting to get noticed like petrol (gasoline) prices means that politicians are feeling pressure to act. Watch!
Science to Rebound
Climate scientists are warning that 2010 may well set new temperature records in Australia and globally, with the likelihood that the latest bounce-back by climate deniers will fade under the weight of heat and science.
Even though a La Nina year, 2010 has been one of the hottest years on record, with plenty of severe weather-related natural disasters. The ferocious attack of the climate skeptics late in 2009 and early 2010 has subsided, and their claims and attacks have since fallen flat i.e. the eventual outcome of the ‘Climategate’ scandal.
For 2011, there are signs that scientists around the world are getting better positioned to present and argue the case for climate action now. The next COP in South Africa in December 2011 and Rio+20 in 2012 provide the major set piece opportunities to sweep aside denial and doubt. But watch out for people believing ‘the climate has fixed itself’, especially in post-drought Australia.
People like clean energy and governments are supporting it more and more as a popular aspiration for householders and businesses.
Wherever governments offered householders and businesses rebates and other incentives (e.g. feed-in tariffs) to take up solar installations and energy audits, they were rapidly swamped by eager applicants. People do love clean energy! On the negative side, 2010 was politically disastrous for national schemes in Australia to encourage greener and more efficient homes while stimulating the overall economy. Home insulation, home energy audits and green loans all had big problems.  
For 2011, there will be a build-up of pressure on governments to move from short-term ‘band-aid’ incentives for clean energy solutions to sustained action that will deliver long-term progress on distributed energy and renewable solutions. Government programs of the past few years have created a boom-bust cycle for business in areas like energy efficiency and renewable energy, and some (if not most) have failed politically as well. The policy focus has to shift to more sustainable sustainability!

If you’ve made it this far you’ll know my sustainability trends for 2011 are an amalgam of personal experience, observations and beliefs, leavened with a bit of hope. How do you feel about 2011 and the years beyond? And do you think we can exert positive influence on the future we’ll get by promoting informed discussion of what it can and needs to be?

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