Archive for November 2011

Natural capital: putting a price on the priceless | Guardian Sustainable Business |   Leave a comment

“With all eyes fixed on the latest global share prices and bond yields, there was relatively little interest in the most recent figures published in the annual red list.

This is the world’s most comprehensive inventory of the global conservation status of biological species. It shows that 25% of all mammals and one in three of the world’s amphibians are at risk of extinction.

While these trends are not as turbulent as the global financial markets, the steady decline of the world’s biodiversity could be just as critical to long-term economic success and prosperity.

This is because the loss of biodiversity causes ecosystems to stress, degrade or even collapse altogether. This reduces the environment’s ability to deliver the goods and services that nature provides for free, such as clean air, water, soils and waste disposal, as well as the raw materials that industry depends upon.

As a result, it is evident that the protection of biodiversity, while complex to value and quantify accurately, is essential for future well-being and economic development.

Policy will inevitably have to rise to this challenge and businesses must look ahead to what this might mean for them and how they should act responsibly.

That is why the Aldersgate Group, an alliance of leaders from business, politics and society, has recently convened a series of discussions on how to make this agenda more tangible for key decision makers. The findings were published today at the Business of Biodiversity Symposium with government ministers and leading chief executives.

It became immediately evident from our dialogue that the value of biodiversity must be reflected in prices and policy appraisal. We cannot take for granted the services that ecosystems provide for free – such as regulating the climate, absorbing pollution and reducing flooding.

The UN estimates that these services deliver to humankind over $72tn a year – comparable to World Gross National Income – but nearly two-thirds of the globe’s ecosystems are considered degraded. The global importance of understanding, measuring and capturing the value of nature is undertaken by the UN through TEEB, a major international initiative to draw attention to the global economic benefits of biodiversity.

The endeavour to reflect environmental values in prices is an essential one, but for complex challenges such as biodiversity loss, some tipping points exist beyond which damage to human welfare is irreversible. Already in certain coastal areas there are “dead zones”, where coral reefs and lakes are no longer able to sustain aquatic species.

Inevitably, there are limits to pricing the priceless. For example, how can you put a value on a species of Himalayan yew tree, on the brink of extinction, that is used to produce Taxol, a chemotherapy drug used to treat cancer?

That is why good resource management requires a combination of price, regulation and information to achieve the desired behavioural change, and caution is required when there is uncertainty about nature’s thresholds.

As policy develops, what should businesses be doing to address these risks and take advantage of the potential opportunities?

It is evident that many businesses are assessing their dependency on biodiversity and integrating measures for the sustainable use of natural resources into their corporate strategies. This is vital as all businesses, directly or indirectly, depend upon biodiversity and ecosystem services for their ongoing commercial success and should therefore address the significant risks and opportunities relating to their impact on nature.

In the first instance, an organisation needs an efficient method for determining the materiality of biodiversity to its operations and stakeholders. While a number of reports claim that there is an increased awareness from communities, NGOs, customers, consumers and shareholders on biodiversity issues, the evidence is mixed.

And businesses also struggle to communicate the more technical language of biodiversity and ecosystems to their customers, who are much more familiar with concepts of nature, place and landscape.

Despite improvements, the measurement of biodiversity remains challenging and identifying the implications for decision making can be complex. This is why it is often treated superficially in company reports.

However, that has not stopped forward-looking businesses leading the way. The Aldersgate Group’s upcoming report illustrates case studies from a range of companies in a variety of sectors such as M&S, PepsiCo, Puma, Willmott Dixon, InterfaceFlor and The Co-operative Group.

One example is Wessex Water which has undertaken an initiative to protect water quality upstream rather than pay for removing pesticides downstream – achieving bottom-line savings of more than 80%.

The failure to address risks can lead to significant costs. The Gulf of Mexico oil spill, for example, demonstrates how a major oil company was suddenly faced with society’s valuations of marine and coastal ecosystems, and forced to internalise the costs of environmental damage.

As more businesses begin to address such impacts, it is essential that biodiversity rises up the political and boardroom agenda. While we might be some way off the chancellor presenting a natural capital budget alongside the fiscal budget, more attention on the long-term implications of the red list would be a good start.

Andrew Raingold is executive director at the Aldersgate Group, an alliance of leaders from business, politics and society that drives action for a sustainable economy.”

via Natural capital: putting a price on the priceless | Guardian Sustainable Business |

Posted November 30, 2011 by arnoneumann in biodiversity, Sustainability, TEEB

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FAO Media Centre: Scarcity and degradation of land and water: growing threat to food security   Leave a comment

“Prospects for the future

FAO estimates that by 2050, rising population and incomes will require a 70 percent increase in global food production. This equates to another one billion tonnes of cereals and 200 million tonnes of livestock products produced each year.

“For nutrition to improve and for food insecurity and undernourishment to recede, future agricultural production will have to rise faster than population growth and consumption patterns adjusted,” says SOLAW.

More than four-fifths of production gains will have to occur largely on existing agricultural land through sustainable intensification that makes effective use of land and water resources while not causing them harm.


Improving the efficiency of water use by agriculture will be key, according to the report. Most irrigation systems across the world perform below their capacity. A combination of improved irrigation scheme management, investment in local knowledge and modern technology, knowledge development and training can increase water-use efficiency.

And innovative farming practices such as conservation agriculture, agro-forestry, integrated crop-livestock systems and integrated irrigation-aquaculture systems hold the promise of expanding production efficiently to address food security and poverty while limiting impacts on ecosystems.

FAO recently highlighted its vision for the sustainable intensification of agricultural production in its publication, Save and Grow: A New Paradigm for Agriculture, released earlier this year.

Another area where improvement is needed is increasing investment in agricultural development. Gross investment requirements between 2007 and 2050 for irrigation water management in developing countries are estimated at almost $1 trillion. Land protection and development, soil conservation and flood control will require around $160 billion worth of investment in the same period, SOLAW reports.

Finally, greater attention should be paid not only to technical options for improving efficiency and promoting sustainable intensification, but also to ensuring that national policies and institutions are modernized, collaborate together and are better equipped to cope with today’s emerging challenges of water and land resource management.”

via FAO Media Centre: Scarcity and degradation of land and water: growing threat to food security.

Posted November 29, 2011 by arnoneumann in agriculture, Global Crisises

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By Barcoding Trees, Liberia Looks to Save its Rainforests by Fred Pearce: Yale Environment 360   Leave a comment

Can something as simple as barcoding enable Liberia to resume its timber trade while still protecting its forests? The system’s inventors at the British company Helveta call it “the world’s most advanced nationwide verification system for wood products.” Initially funded by USAID, the scheme has covered all the country’s commercial logged forests for the past two years.

Every tree in a forest with a logging concession must be tagged with a unique barcode. When that tree is cut, the action is recorded and new tags are attached to each log. Every log that turns up at a port has to be traceable back to a stump in a forest. It’s as simple and as foolproof as checking out at the supermarket, says Ivan Muir, the local boss of SGS, the Swiss specialists in forest certification systems who are in charge of making it happen. Muir also issues export permits for the timber — which mostly gets turned into furniture and paneling — and monitors royalty payments to the government.”

via By Barcoding Trees, Liberia Looks to Save its Rainforests by Fred Pearce: Yale Environment 360.

Posted November 27, 2011 by arnoneumann in Africa, Forestry

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Arab League risks Russian wrath by approaching West over Syria | World | Deutsche Welle | 18.11.2011   Leave a comment

Seldom does a nation’s internal affairs remain with influence singularily within  its own borders. The interplay of politics on the global level is not that simplistic..

“Catalyst for a wider conflict?

Any military intervention in Syria could act as a catalyst for a wider conflagration in a volatile region already primed to explode, with al-Assad’s main ally Iran under increased pressure from the West over its nuclear program and under threat from an Israeli administration which appears to be preparing to take matters into its own hands.

Not only would Western-led intervention in a major Arab state threaten to plunge the Middle East into a wider regional conflict, it would also ratchet up the tensions between the West and Syria’s powerful allies in Russia.

Russia, a long-term supporter of the Syrian regime and one which maintains a naval base in the country, has already accused Western countries of inciting opposition to al-Assad’s rule, as well as condemning the Arab League’s decision to suspend Syria. Moscow, in tandem with China, also blocked a UN Security Council motion last month to bring sanctions against Syria. “


via Arab League risks Russian wrath by approaching West over Syria | World | Deutsche Welle | 18.11.2011.

Posted November 27, 2011 by arnoneumann in Syria

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Squabbling while the world burns – Climate change, Science and Policy   Leave a comment

The sceptics aren’t the block to action on climate change.They just wish they were.

When you write about climate change, you get even more angry emails than when you write about Muslims. Last time I tried, one reader berated me for mentioning “fictional pompous Al Gore’s enriching scheme of global warming” in my “ridiculous article”. This man ended with a quote from Einstein: “Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.” Another reader, whose sign-off cited his PhD, explained to me that all the international summits weren’t “about man-made climate change ‘science’ … but really about a larger ‘global wealth distribution scheme’.”

It’s tempting to blame “climate sceptics” for the world’s inaction on man-made climate change. (The United Nations’ latest summit, starting in Durban on Monday, won’t save the planet either.) Greens often talk as if the enemy were not climate change itself, but a self-taught band of freelance sceptics. No wonder, because fighting culture wars is the fun bit of politics. However, this fight is pointless. The sceptics aren’t the block to action on climate change. They just wish they were. Instead, they are an irrelevant sideshow.

Sceptics and believers quarrel about the science because they both start from a mistaken premise: that science will determine what we do about climate change. The idea is that once we agree what the science says, policy will automatically follow. That’s why the Nobel committee gave Gore and the Intergovernmental Panel on Climate Change a peace prize.

Mysteriously, though, the policy still hasn’t followed the science. Almost all scientists already agree on the science. An article in the PNAS, journal of the US National Academy of Sciences, last year found that 97 per cent of actively publishing climate scientists believe man-made climate change is happening. Nonetheless, the world hasn’t acted.

Clearly then, science doesn’t determine policy, concludes Daniel Sarewitz of the Consortium for Science, Policy and Outcomes in Washington. Yet the pointless quarrel about science continues.

It’s pointless first of all because what most people believe about climate change has little to do with science. After all, hardly any layperson understands it. Rather, people’s beliefs about climate change follow from their beliefs about the world. “We disagree about climate change because we have different belief systems,” writes Mike Hulme, professor of climate change at the UK’s University of East Anglia.

American sceptics, for instance, are disproportionately likely to be conservative white males, say the sociologists Aaron McCright and Riley Dunlap. Conservative white males don’t like governments interfering with business. They don’t like global co-operation. Nothing will convince them that we need global co-operation to interfere with business and tackle climate change, especially not if Al Gore says so.

Conversely, liberals who do like global co-operation and interfering with business are going to believe in climate change, even though hardly any of them understand the science either. “Climate change has joined gun control, taxes and abortion as a form of social identity marker,” writes Matthew Nisbet, social scientist at American University in Washington. In this debate, and not just in the US, almost nobody is open to persuasion.

Beating the sceptics around the head with the science just gives them attention. It also allows them to roar in triumph whenever the believers get any bit of science wrong, as when the IPCC exaggerated the melting of Himalayan glaciers. The squabble also creates a one-dimensional argument about climate change: do you believe it’s real or not? I’ve found to my cost that many people can only read articles about climate change as statements of either belief or scepticism. This obscures better questions, such as what exactly we should do about climate change.

The quarrel with the sceptics is additionally pointless because they are a small minority – under a fifth of the 35 million Americans who actively engage in this issue, estimates Jon Krosnick, social psychologist at Stanford University. In a poll sponsored by the World Bank in 15 countries in 2009, “in each country the public believed climate change to be a serious problem,” writes Roger Pielke Jr, political scientist at the University of Colorado. He adds: “The battle for public opinion has essentially been won.” Admittedly, he cautions, most people who believe that climate change exists feel only lukewarm concern. However, trying to convince them with even more science is probably pointless too.

The sceptics and the apathetic will always be with us. There’ll never be full consensus on climate change. But if governments could only act when there was unanimity, no law on anything would ever be passed. The US invaded Iraq, bailed out banks and passed universal healthcare with much less consensus than exists over climate change. In short, the sceptics are not the block to action.

Rather, the block is that the believers – including virtually all governments on earth – aren’t sufficiently willing to act. We could do something. But shouting at sceptics is easier.

via Squabbling while the world burns –

Posted November 27, 2011 by arnoneumann in Climate_change, Science

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Loneliest Man in Davos Foresees 2015 Bank Crisis While Global Elites Party – Bloomberg   Leave a comment

‘An Avoidable History’

Wilkinson’s report, titled “The Financial Crisis of 2015: An Avoidable History,” isn’t so sanguine. The 24-page study describes how banks, unwilling to accept the lower returns on equity, or ROEs, that result from higher capital requirements, may fuel a new bubble by chasing high returns in commodities or emerging markets. Regulators, by focusing their restraints on banks, may drive risk-taking into unregulated funds that also pose danger to the system.

The report urges bank executives and shareholders to accept that returns of the past are unsustainable and that they need to do a better job of monitoring risks, especially in areas that produce unusually high profits.

“Banks need to be less leveraged,” said Wilkinson, 38, who has an engineering degree from the University of Cambridge’s Trinity College and has worked since 1993 at Oliver Wyman, where he focuses on risk management. “The true test for me of whether they’ve deleveraged is if the industrywide ROEs come down. If they don’t, I’m very suspicious that there are hidden risks in the system.”

via Loneliest Man in Davos Foresees 2015 Bank Crisis While Global Elites Party – Bloomberg.

Posted November 27, 2011 by arnoneumann in banking, finance

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European Banks Get ‘False Deleveraging’   Leave a comment

Interesting how creative banking gets, and how the Banks, the Regulators, and the Buyout Groups interplay in the behind the scenes financial world.

“The use of such funding can reduce the riskiness of the assets and free up regulatory capital, David Abrams, in charge of European nonperforming loan investments at Apollo Global Management in London, said in an interview.

“The risk for the banks changes,” he said. “In a way, they are turning nonperforming loans into performing loans.”

The buyers need to inject sufficient equity for the banks providing vendor financing to benefit from a regulatory capital point of view, said Alexander Greene, managing partner at New York-based private-equity firm Brookfield Asset Management LLC.

“Ultimately, regulators scrutinize those deals,” Greene said. “The question is then, will the investors be able to earn their returns if they overcapitalize?”

Banks must be innovative to sell the “stickiest” of their assets, said Ian Gordon, an analyst at Evolution Securities Ltd. in London.

“Banks will be naive if they use vendor finance to notionally dispose of assets at whatever price the market will take,” he said. “They could fall in the trap in giving away the upside without meaningfully reducing the downside.” ”

via European Banks Get ‘False Deleveraging’ – Bloomberg.

Posted November 27, 2011 by arnoneumann in banking, finance

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