Back onto the nuclear tip with this blog!
Sellarfield is centre stage for this diatribe, as it exemplifies the problems that persist for nuclear energy, in the perceptual, economic and technical context.
My comments are based upon the report from the National Audit Office and an article in the guardian on the subject, which provides some great graphics to support the underlying data.
In essence, Sellarfield is a complex site dealing with a range of complex waste, from spent nuclear fuel to decommissioning and weapons waste. This has an advantage of allowing the UK to develop marketable high tech solutions to radioactive problems, however most of these projects are running over budget and behind schedule!
The NAO report flags these failings and places a significant amount of emphasis on the spiralling costs. This will have the unfortunate consequence of undermining the credibility of Sellarfield as a World leader in these technologies and will also taint public confidence, both in the site and and the wider industry.
It does beg the question as to how much costs might run out of control for the whole decommissioning process? The Government appears not to be overly concerned as the overall cost will not have a significant impact on the unit cost of nuclear generation, and anyway, it looks as though the taxpayer will bear much of the cost for legacy plant!!
Nonetheless, there has to be some concern, because the numbers we are talking about are still quite large, large enough even, to stifle enthusiasm amongst investors and operators. alike
Another concern that I have are around the decommissioning process itself, as Sellarfield is being prosecuted for not following the rules on proper disposal of low level radioactive waste. This should be met with disbelief, when you consider how long this has been going on and the processes and expertise that are in place!
Once the wider scheme of decommissioning starts to roll out, it is probable that costs will again start to spiral and work schedules stretch, as has been the case with Sellarfirld. My worry with this, is not so much who will bear this additional cost, but what will happen with the management of the process and handling of the waste. Experience dictates that it is always in these areas where time constraints and cost overruns, lead to poor practice and corner cutting. Not something you would wish to see when dealing radioactive waste (albeit very low level).
Link to Guardian article:
http://www.guardian.co.uk/environment/2012/nov/16/nuclear-waste-sellafield?intcmp=122
Link to NAO site:
http://www.nao.org.uk/publications/1213/sellafield_risk_reduction.aspx
Saturday, 17 November 2012
Saturday, 10 November 2012
Sandy, legacy, planning and adaptation.
After a respectable period its a good time to revisit the aftermath of Sandy and raise a few important questions about living on the front line of coastal plains and tidal waterways. When the storm does come and the defences are rendered ineffective, the inevitable happens to the land and infrastructure that supports us.
The storm passes quickly enough and the waters subside in time, but the damage that remains is often persistent, unseen and potentially more lethal than the event itself. A storm surge carries huge power, it picks up what it wants and leaves it where it likes, it has no respect for man nor permit! It can strip back the land, move good from shelves and swamps tanks and drainage systems.
A lot of what we use in our everyday lives, the engine and fuel oils released, the cleansing and disinfection fluids, paints solvents and infection bearing sludges. These are toxic in the wrong environment and when many substances are mixed up and distributed in a diffuse way, they can be difficult to detect and quantify in terms of risk. This is precisely what has happened with Sandy, the water has ingressed the old and ailing infrastructure of New York. Sandy stripped out toxins, leaving them in dense heterogeneous sediments to leach back out in what amounts to a game that has become a cross between hide and seek and Russian roulette!
In time these sediments will give up their chemicals slowly leaching back into streams and rivers and percolating down into the groundwater, where it can enter water supplies. This will impact upon
people and ecosystems and the clean up could prove prohibitively expensive, due to the range and distribution of toxins.
There is no point in being smug that it wasn't you this time around either, all low lying populace areas are becoming increasingly vulnerable. Climate change is accelerating and extreme weather events will increase in frequency raising the risk of a growing legacy of toxic sediments being built up in many locations. This will become a growing cost of climate change, as already discussed, clear up will be very expensive and retro-fit to provide greater protection will be costly too!
As I see it now, however we mitigate (and we will have to), we will have to adopt a lot of new ways to adapt to our changing and increasingly extreme climate. I believe that this require a lot of planning on a large scale and much better integration between aspects of land use in terms of how and where urban populations exist and how they are supported by a hinterland.
More local resilience will be needed, with major infrastructure designed to offer support at a more strategic level (i.e. more decentralised generation, but connected to a simplified grid that offers options on storage). This is an option for renewal but there is no easy solution for what is already in place, it is likely that many location will quickly change from pleasant seaside real estate to deserted liability!
The storm passes quickly enough and the waters subside in time, but the damage that remains is often persistent, unseen and potentially more lethal than the event itself. A storm surge carries huge power, it picks up what it wants and leaves it where it likes, it has no respect for man nor permit! It can strip back the land, move good from shelves and swamps tanks and drainage systems.
A lot of what we use in our everyday lives, the engine and fuel oils released, the cleansing and disinfection fluids, paints solvents and infection bearing sludges. These are toxic in the wrong environment and when many substances are mixed up and distributed in a diffuse way, they can be difficult to detect and quantify in terms of risk. This is precisely what has happened with Sandy, the water has ingressed the old and ailing infrastructure of New York. Sandy stripped out toxins, leaving them in dense heterogeneous sediments to leach back out in what amounts to a game that has become a cross between hide and seek and Russian roulette!
In time these sediments will give up their chemicals slowly leaching back into streams and rivers and percolating down into the groundwater, where it can enter water supplies. This will impact upon
people and ecosystems and the clean up could prove prohibitively expensive, due to the range and distribution of toxins.
There is no point in being smug that it wasn't you this time around either, all low lying populace areas are becoming increasingly vulnerable. Climate change is accelerating and extreme weather events will increase in frequency raising the risk of a growing legacy of toxic sediments being built up in many locations. This will become a growing cost of climate change, as already discussed, clear up will be very expensive and retro-fit to provide greater protection will be costly too!
As I see it now, however we mitigate (and we will have to), we will have to adopt a lot of new ways to adapt to our changing and increasingly extreme climate. I believe that this require a lot of planning on a large scale and much better integration between aspects of land use in terms of how and where urban populations exist and how they are supported by a hinterland.
More local resilience will be needed, with major infrastructure designed to offer support at a more strategic level (i.e. more decentralised generation, but connected to a simplified grid that offers options on storage). This is an option for renewal but there is no easy solution for what is already in place, it is likely that many location will quickly change from pleasant seaside real estate to deserted liability!
Thursday, 25 October 2012
Evidence of emerging waste trends.
In my last blog, I spoke about how I perceive some changes taking place in the waste industry, as we struggle to move waste up the hierarchy and close loops within the existing regulatory framework.
I'm happy to be able to produce some timely evidence to support those views, gleaned from this weeks news headlines from around the waste sector.
John Lewis, a company that embraces CSR, is looking to close the loop on waste it produces, by maintaining tighter control downstream of production. They also want to keep as much of the secondary raw material produced in the UK as possible, which is a form of extended producer responsibility. This will of course need to be supported by producing quality materials and having the reprocessing capacity available to do this, but is certainly a step in the right direction.
As I pointed out, moving towards a circular economy, will create green jobs and low carbon growth, especially within the 3rd sector of charities and social enterprise. The value of this market is estimated to rise to around £600M by 2020 (taken from the recent Creating Social Value report). This has been driven in part by the provisions of the Public Services (social value)Act 2012, which I'm sure will be ceased upon by the 3rd sector to open up the public procurement system.
The Government in Ireland has recognised the importance of End of Waste criteria this week, warning its waste recycling industry that it is ill prepared to meet the criteria that are likely to be set to determine the point at which, waste can legally be defined as having been recycled. This is an important driver towards the segregated collection, handling and subsequent treatment of waste. It will be an important factor in infrastructure investment, which again, will create opportunities for new players into what is an established market.
It appears that the more forward thinking companies are taking this on board and we are starting to move down these paths. How the rest of the industry reacts and how this impacts upon our ability to meet targets remains to be seen. More as it happens!
I'm happy to be able to produce some timely evidence to support those views, gleaned from this weeks news headlines from around the waste sector.
John Lewis, a company that embraces CSR, is looking to close the loop on waste it produces, by maintaining tighter control downstream of production. They also want to keep as much of the secondary raw material produced in the UK as possible, which is a form of extended producer responsibility. This will of course need to be supported by producing quality materials and having the reprocessing capacity available to do this, but is certainly a step in the right direction.
As I pointed out, moving towards a circular economy, will create green jobs and low carbon growth, especially within the 3rd sector of charities and social enterprise. The value of this market is estimated to rise to around £600M by 2020 (taken from the recent Creating Social Value report). This has been driven in part by the provisions of the Public Services (social value)Act 2012, which I'm sure will be ceased upon by the 3rd sector to open up the public procurement system.
The Government in Ireland has recognised the importance of End of Waste criteria this week, warning its waste recycling industry that it is ill prepared to meet the criteria that are likely to be set to determine the point at which, waste can legally be defined as having been recycled. This is an important driver towards the segregated collection, handling and subsequent treatment of waste. It will be an important factor in infrastructure investment, which again, will create opportunities for new players into what is an established market.
It appears that the more forward thinking companies are taking this on board and we are starting to move down these paths. How the rest of the industry reacts and how this impacts upon our ability to meet targets remains to be seen. More as it happens!
Friday, 19 October 2012
Future values for waste.
In this latest blog, I want to explore ways in which we can value waste. This is important because currently we regulate using the term 'waste' very much as the legal entity, and yet, we want to move to a resource oriented low carbon economy. Resource efficient behaviours are harder to embed when speaking about waste, however we need to stick with it for now as this is also how we manage all the associated risks and impacts.
It is not something that can be quickly or easily resolved, however if we can appreciate all the values that exist within our waste streams, then it will be somewhat easier to make the links to a green/low carbon economy and resource efficiency.
I have identified below some potential value chains to explore:
Recent changes and upheaval in the planning system however, have led to a bit of an impasse with an unwillingness to invest, created by the uncertainty and the recession. The regulatory framework (revised Waste Framework Directive and Industrial Emissions Directive) have sustainability at their core and thus, provide some stability from which to build in terms of new and refurbished infrastructure.
The Waste Hierarchy being designed to signpost the most sustainable options for waste and resource management delivers on the triple bottom line, hence working to it, should deliver economically sound options. The only question to really be answered is how the issue between longer term investment (which should be more sustainable), plays out against other shorter term market mechanisms (such as RHI and ROC's)?
The waste industry, both physically and economically, will shortly find itself at a crossroads. The advent of disruptive technologies and markets methods will, sooner or later, focus on the waste industry. I believe that the current model supported by long term contracts and large scale plant will find itself outflanked by smaller, more nimble and flexible logistics companies, who will break down the collection of currently mixed waste streams, into discreet and segregated streams that will get treated and recovered at specialised facilities.
This will be driven not only by market disruption, but also by regulation and the fact that as values for materials (of good quality) improve, the bulking and value realisation will move downstream towards the re processors. This will be a realisation of Producer Responsibility (in part) and also of CSR driving a wider producer responsibility. The days of large MBT/MRF type plant, handling a huge range of wastes are likely to be numbered as waste streams and value fall away and they become confined to municipal waste streams. It is likely that municipal waste will be treated in the same way for a longer period, as behaviour change in this domain will take longer, although it is still likely that retail will take much of its waste back in-house over time.
It will however, herald great opportunities better distribute the value of waste and for more of it to benefit the community in which it arises, through the setting up of social enterprises to deal with collection, re-use and stage one sorting (clean up) and bulking. This would require more modest facilities with lower capital and running costs, however this would need to realise higher values as economies of scale would be lost.
This might overcome many of the conflicts associated with large waste handling and treatment facilities, as the greater number of smaller facilities would be dealt with as local planning issues and would be much lower key in terms of impacts.
Use of green buildings, green transport and the creation of green/low carbon jobs locally would see a much greater acceptance of facilities. Hopefully there would be something for everyone in return for something that we all contribute to (i.e. community compost for gardens and refurbished bikes)!
It is not something that can be quickly or easily resolved, however if we can appreciate all the values that exist within our waste streams, then it will be somewhat easier to make the links to a green/low carbon economy and resource efficiency.
I have identified below some potential value chains to explore:
- Resource efficient saving and associated reduction in emissions and impacts from designing out waste and designing in re-use/recyclability. Triple bottom line sustainability.
- Improved potential for closed loop use of materials/resources through high quality collection and handling techniques.
- Improved resource security for Rare Earth metals and other essential materials.
- Potential for 3rd sector involvement through breakdown and segregation of waste streams and fragmentation of large contracts to localise collection and treatment. This will create more jobs through improved collection rates and end quality, as well as improved scope for community buy-in.
- High quality recyclate for UK re processors or export that will command best price and maintain confidence in supply chain.
- Options for recovery of materials through treatment and use to substitute virgin materials, thus improving amenity and protecting against price increases for raw materials.
Recent changes and upheaval in the planning system however, have led to a bit of an impasse with an unwillingness to invest, created by the uncertainty and the recession. The regulatory framework (revised Waste Framework Directive and Industrial Emissions Directive) have sustainability at their core and thus, provide some stability from which to build in terms of new and refurbished infrastructure.
The Waste Hierarchy being designed to signpost the most sustainable options for waste and resource management delivers on the triple bottom line, hence working to it, should deliver economically sound options. The only question to really be answered is how the issue between longer term investment (which should be more sustainable), plays out against other shorter term market mechanisms (such as RHI and ROC's)?
The waste industry, both physically and economically, will shortly find itself at a crossroads. The advent of disruptive technologies and markets methods will, sooner or later, focus on the waste industry. I believe that the current model supported by long term contracts and large scale plant will find itself outflanked by smaller, more nimble and flexible logistics companies, who will break down the collection of currently mixed waste streams, into discreet and segregated streams that will get treated and recovered at specialised facilities.
This will be driven not only by market disruption, but also by regulation and the fact that as values for materials (of good quality) improve, the bulking and value realisation will move downstream towards the re processors. This will be a realisation of Producer Responsibility (in part) and also of CSR driving a wider producer responsibility. The days of large MBT/MRF type plant, handling a huge range of wastes are likely to be numbered as waste streams and value fall away and they become confined to municipal waste streams. It is likely that municipal waste will be treated in the same way for a longer period, as behaviour change in this domain will take longer, although it is still likely that retail will take much of its waste back in-house over time.
It will however, herald great opportunities better distribute the value of waste and for more of it to benefit the community in which it arises, through the setting up of social enterprises to deal with collection, re-use and stage one sorting (clean up) and bulking. This would require more modest facilities with lower capital and running costs, however this would need to realise higher values as economies of scale would be lost.
This might overcome many of the conflicts associated with large waste handling and treatment facilities, as the greater number of smaller facilities would be dealt with as local planning issues and would be much lower key in terms of impacts.
Use of green buildings, green transport and the creation of green/low carbon jobs locally would see a much greater acceptance of facilities. Hopefully there would be something for everyone in return for something that we all contribute to (i.e. community compost for gardens and refurbished bikes)!
Saturday, 29 September 2012
The nuclear energy paradox.
Recently there has been a lot column space dedicated to the place of nuclear energy as a low carbon alternative capable of displacing fossil generation and thus reducing carbon emissions. The suggestion that more nuclear energy is a solution to climate change problems has triggered quite a lot of debate and raised many issues with the anti-nuclear lobby. Many suggest that the money would be better spent on renewable energy sources and deliver a quicker and (over time ) cheaper response. I wanted to look at some of these arguments and justifications to see how they stack up.
Amongst the issues to look at are:
Some recent reports relating to the Fukushima incident seem to suggest that the death toll has been and will remain quite low (although what is an acceptable mortality rate must be open to debate), however some new reports are emerging that suggest the findings are premature and that the impacts could be more significant. The latest report the World Nuclear Organisation can be found here:
http://www.world-nuclear.org/info/fukushima_accident_inf129.html
A study, published in the journal Energy and Environmental Science, uses a three-dimensional model of the atmosphere to look at how radioactive materials spread after last year's massive earthquake and tsunami damaged the Fukushima Daiichi nuclear power plant.
This study quantifies worldwide health effects of the Fukushima Daiichi nuclear accident on 11 March 2011. Effects are quantified with a 3-D global atmospheric model driven by emission estimates and evaluated against daily worldwide Comprehensive Nuclear-Test-Ban Treaty Organisation (CTBTO) measurements and observed deposition rates. Inhalation exposure, ground-level external exposure, and atmospheric external exposure pathways of radioactive iodine-131, caesium-137, and caesium-134 released from Fukushima are accounted for using a linear no-threshold (LNT) model of human exposure. Exposure due to ingestion of contaminated food and water is estimated by extrapolation. We estimate an additional 130 (15–1100) cancer-related mortality's and 180 (24–1800) cancer-related morbidity's incorporating uncertainties associated with the exposure–dose and dose–response models used in the study. We also discuss the LNT model's uncertainty at low doses. Sensitivities to emission rates, gas to particulate I-131 partitioning, and the mandatory evacuation radius around the plant are also explored, and may increase upper bound mortality's and morbidity's in the ranges above to 1300 and 2500, respectively. Radiation exposure to workers at the plant is projected to result in 2 to 12 morbidity's. An additional![[similar]](http://www.rsc.org/images/entities/char_223c.gif)
600 moralities have been reported due to non-radiological causes such as mandatory evacuations. Lastly, a hypothetical accident at the Diablo Canyon Power Plant in California, USA with identical emissions to Fukushima was studied to analyse the influence of location and seasonality on the impact of a nuclear accident. This hypothetical accident may cause 25% more moralities than Fukushima despite California having one fourth the local population density due to differing meteorological conditions.
By comparison a lot more is known about the consequences of the incident at Chernobyl and the findings of this WHO report provides some interesting insight:
Ch WHO Report into deaths and casualties: http://www.who.int/mediacentre/news/releases/2005/pr38/en/index.html
5 September 2005 | Geneva -A total of up to 4000 people could eventually die of radiation exposure from the Chernobyl nuclear power plant (NPP) accident nearly 20 years ago, an international team of more than 100 scientists has concluded.
As of mid-2005, however, fewer than 50 deaths had been directly attributed to radiation from the disaster, almost all being highly exposed rescue workers, many who died within months of the accident but others who died as late as 2004.
A great deal of work has been done in both instances, the science and effort is commendable, but this does not detract from the fact that containment failures at nuclear reactors lead to a significant number of mortality's over time, along with a number of other health and environment related problems. It would be fair to assume that as we learn from such disasters, over time our preparedness and systems should improve (in the case of such incidents to an almost imperceptible level), however recent events suggest that this may well not be the case and that there is cause for some concern.
Following the Fukushima Diachi incident there was a requirement to complete stress tests on all existing and proposed reactors. The resultant reports provided some startling evidence about the frailties of many of the initial risk assessments and back up systems put in place. This is going to be both costly in terms of upgrading existing facilities, but also means that the risks of failure may be severely underestimated for many plant. This is clearly exemplified in the examples given below, as is the fact that this both a commercially and politically sensitive area.
In the US recently, following completion of the stress tests, it came to light that risks in relation to flood damage from collapsed or breached dams, had been clearly underestimated. Employees working for the US Nuclear Regulatory Commission tried to raise concerns, but there was inaction, despite the risks having been known about for some time. In the end this information was made public by invoking whistle blower status in order to publish the information (see story below).
http://www.huffingtonpost.com/2012/09/14/flood-threat-nuclear-plants-nrc_n_1885598.html?utm_campaign=091712&utm_medium=email&utm_source=Alert-green&utm_content=FullStory
A recent study has also highlighted the fact that 23 nuclear sites, including some under construction are vulnerable to tsunami conditions! China and Japan would appear to have the greatest, however Japan is running down its nuclear capacity, in favour of renewable energy, whilst China is building 27 new reactors. Of these, a high proportion are described as being in geologically dangerous positions, it defies belief that UK is considering doing deals with China over nuclear capacity!
More on this story below:
http://www.redorbit.com/news/science/1112699014/nuclear-power-plants-tsunami-risk-092212/
On the issue of costs, one of the main arguments supporting nuclear generation is that it is cheaper than many current fossil fuel technologies and also many renewable options too. The link below is to a recent DECC commissioned report for a generation cost model:
http://www.decc.gov.uk/assets/decc/11/about-us/economics-social-research/2127-electricity-generation-cost-model-2011.pdf
The table below gives levelised costs for a selection of generation technologies as at 2010.
Divide the above figures by 10 to obtain the price in pence per kilowatt-hour.
More recent UK estimates are the Mott MacDonald study released by DECC in June 2010 [14] and the Arup study for DECC published in 2011.[15]
From the table, it can be seen that some renewable technologies are already competitive with the more traditional generation technologies, however they could become even more efficient with the right policies and infrastructure in place.
At the moment most governments in developed countries are looking to extend and integrate their distribution grids, in order to ensure security of supply and to enable sale/transfer when there is spare production. This makes sense in the context of strategic supply, however there is a developing case for decentralised generation and greater degree of storage capacity. Current policies tend to support (through large subsidies) fossil or nuclear generation with large plant connected to the grid, which in turn tends to shape investment in grid infrastructure. This can however, become expensive to maintain and is not a very efficient means of distribution in all circumstances, particularly for dispersed communities.
If the same levels of subsidy were offered to renewable generation, then the shape of the grid infrastructure would probably change to better accommodate renewable technologies and decentralise generation with local grids. All of this would serve to make renewable generation cheaper!
As with any costing exercise, you have to draw up an envelope for the costing process, which may or may not take into account certain externalised cost (i.e. carbon trading), however depending upon where you draw those lines, may confer a cost advantage in respect of certain fuels and generation technologies.
For nuclear generation, most of the figures are quoted for 'new nuclear', which may well beg the comparison with old nuclear (whatever that might be?), but it is generally a convenience that allows assumptions about disposal costs to be made. This could be considered a little disingenuous as a huge amount of active waste from operation and decommissioning has yet to be disposed of. Also in the case of disasters such as Chernobyl and Fukushima, the generating company cannot be held liable for the full cost of reparations and clean up, as this cost is beyond their capability. Because of this insurance will only cover a certain amount, beyond that the cost falls to the taxpayer! More on UK costs can be found in this FT article:
http://www.ft.com/cms/s/0/2efd47ba-27fa-11e0-8abc-00144feab49a.html#axzz27V8ezxHc
Although there is a current spate of nuclear generation in development, global Uranium deposits are being depleted and have an uneven geo-political distribution. This means that security of supply is not guaranteed and that ultimately it will need to be replaced or substituted. The link below is to a US document on deposits for further information on the subject:
http://home.tu-clausthal.de/~mrbl/pdf/AMS_Lehmann_EN_S16-26.pdf
From this it is quite striking that two of the main nuclear economies (US and China) have very limited supplies of their own ore. The most useful quality ore deposits are found in Canada and Australia, both countries have strong lobbyists against developing uranium ore mines (although economically there will certainly be some exploitation).
Thorium has been suggested as an alternative fuel source, it is more abundant and has some operational advantages in terms of conversion efficiency. It is not without disadvantage however, there are still a number of technical issues to be resolved and the isotope requires treatment with Uranium or plutonium in order to achieve criticality. This will mean that there will be a longer lead in time and it is likely to cost more. There would also be a need for different technologies to be deployed for treatment.
A nuclear renaissance would also bring with it the risk of weapons and waste (in the sense that it could be accessed) proliferation. There are numerous types of reactor and several configurations within each generation (i.e. R & D power generation etc.). Although the act of building more reactors for power generation does not pose a significant direct risk of proliferation, the fact that more material that can be used for enrichment will be produced, means that there will be an increased risk.
The following points summarise the problem and potential solutions that can be applied.
Commonly identified problems
In essence it is careful monitoring of the fuel supplied and used, allied to what comes out, that will determine the overall risk of proliferation. New more efficient reactors can also help, but it must also be borne in mind that specific reactors designed for enrichment exist around the globe and are those that require the most careful monitoring.
Given the costs and risks that are associated with nuclear energy, are we any closer to resolving the paradox that exists? Current public and political policy/strategy may give some clues as to whether or not a consensus is forming.
The diagram below maps the current global status of nuclear power generation.
The status of nuclear power globally:
IAEA 2012.
In summary, it would appear that the paradox is not yet resolved, however there are some patterns emerging.
The oil producing states seem to favour nuclear as a replacement for fossil fuels, although this is tempered by investment also in renewables.
The BRIC's also seem to be favouring some development of nuclear generation, this appears to be as a means of maintaining competitive energy supplies as their economies and outputs grow. Most are embarking on nuclear generation for the first time which means that they do not have first hand experience problems associated with generation, ageing plant and waste disposal.
The communist (and former communist) countries have wide adoption of nuclear power generation and are experienced in operation and building of plant. They have however, experienced the worst examples of the downside of nuclear energy with the meltdown at Chernobyl. Because these states have very limited public participation in planning processes, policy determination and human rights to protest, it is not surprising that it is here where the paradox is most stark and also, the area of most concern going forward.
Many developed nations are starting to reign back on development of nuclear power generation, Japan not surprisingly, is moving away from nuclear as is Germany. France and the US are both finding that costs associated with upgrading (following stress tests) and maintaining older plant to run for longer are becoming increasingly prohibitive. Europe, the US and Japan seem to be leaning more towards renewables, perhaps this will help to provide a clearer, more balanced evidence base upon which to answer the paradox.
Amongst the issues to look at are:
- Safety and overall risk.
- Cost and comparison with renewables.
- Proliferation.
- Perception and political acceptance.
Some recent reports relating to the Fukushima incident seem to suggest that the death toll has been and will remain quite low (although what is an acceptable mortality rate must be open to debate), however some new reports are emerging that suggest the findings are premature and that the impacts could be more significant. The latest report the World Nuclear Organisation can be found here:
http://www.world-nuclear.org/info/fukushima_accident_inf129.html
A study, published in the journal Energy and Environmental Science, uses a three-dimensional model of the atmosphere to look at how radioactive materials spread after last year's massive earthquake and tsunami damaged the Fukushima Daiichi nuclear power plant.
This study quantifies worldwide health effects of the Fukushima Daiichi nuclear accident on 11 March 2011. Effects are quantified with a 3-D global atmospheric model driven by emission estimates and evaluated against daily worldwide Comprehensive Nuclear-Test-Ban Treaty Organisation (CTBTO) measurements and observed deposition rates. Inhalation exposure, ground-level external exposure, and atmospheric external exposure pathways of radioactive iodine-131, caesium-137, and caesium-134 released from Fukushima are accounted for using a linear no-threshold (LNT) model of human exposure. Exposure due to ingestion of contaminated food and water is estimated by extrapolation. We estimate an additional 130 (15–1100) cancer-related mortality's and 180 (24–1800) cancer-related morbidity's incorporating uncertainties associated with the exposure–dose and dose–response models used in the study. We also discuss the LNT model's uncertainty at low doses. Sensitivities to emission rates, gas to particulate I-131 partitioning, and the mandatory evacuation radius around the plant are also explored, and may increase upper bound mortality's and morbidity's in the ranges above to 1300 and 2500, respectively. Radiation exposure to workers at the plant is projected to result in 2 to 12 morbidity's. An additional
600 moralities have been reported due to non-radiological causes such as mandatory evacuations. Lastly, a hypothetical accident at the Diablo Canyon Power Plant in California, USA with identical emissions to Fukushima was studied to analyse the influence of location and seasonality on the impact of a nuclear accident. This hypothetical accident may cause 25% more moralities than Fukushima despite California having one fourth the local population density due to differing meteorological conditions.By comparison a lot more is known about the consequences of the incident at Chernobyl and the findings of this WHO report provides some interesting insight:
Ch WHO Report into deaths and casualties: http://www.who.int/mediacentre/news/releases/2005/pr38/en/index.html
5 September 2005 | Geneva -A total of up to 4000 people could eventually die of radiation exposure from the Chernobyl nuclear power plant (NPP) accident nearly 20 years ago, an international team of more than 100 scientists has concluded.
As of mid-2005, however, fewer than 50 deaths had been directly attributed to radiation from the disaster, almost all being highly exposed rescue workers, many who died within months of the accident but others who died as late as 2004.
A great deal of work has been done in both instances, the science and effort is commendable, but this does not detract from the fact that containment failures at nuclear reactors lead to a significant number of mortality's over time, along with a number of other health and environment related problems. It would be fair to assume that as we learn from such disasters, over time our preparedness and systems should improve (in the case of such incidents to an almost imperceptible level), however recent events suggest that this may well not be the case and that there is cause for some concern.
Following the Fukushima Diachi incident there was a requirement to complete stress tests on all existing and proposed reactors. The resultant reports provided some startling evidence about the frailties of many of the initial risk assessments and back up systems put in place. This is going to be both costly in terms of upgrading existing facilities, but also means that the risks of failure may be severely underestimated for many plant. This is clearly exemplified in the examples given below, as is the fact that this both a commercially and politically sensitive area.
In the US recently, following completion of the stress tests, it came to light that risks in relation to flood damage from collapsed or breached dams, had been clearly underestimated. Employees working for the US Nuclear Regulatory Commission tried to raise concerns, but there was inaction, despite the risks having been known about for some time. In the end this information was made public by invoking whistle blower status in order to publish the information (see story below).
http://www.huffingtonpost.com/2012/09/14/flood-threat-nuclear-plants-nrc_n_1885598.html?utm_campaign=091712&utm_medium=email&utm_source=Alert-green&utm_content=FullStory
A recent study has also highlighted the fact that 23 nuclear sites, including some under construction are vulnerable to tsunami conditions! China and Japan would appear to have the greatest, however Japan is running down its nuclear capacity, in favour of renewable energy, whilst China is building 27 new reactors. Of these, a high proportion are described as being in geologically dangerous positions, it defies belief that UK is considering doing deals with China over nuclear capacity!
More on this story below:
http://www.redorbit.com/news/science/1112699014/nuclear-power-plants-tsunami-risk-092212/
On the issue of costs, one of the main arguments supporting nuclear generation is that it is cheaper than many current fossil fuel technologies and also many renewable options too. The link below is to a recent DECC commissioned report for a generation cost model:
http://www.decc.gov.uk/assets/decc/11/about-us/economics-social-research/2127-electricity-generation-cost-model-2011.pdf
The table below gives levelised costs for a selection of generation technologies as at 2010.
| Technology | Cost range (£/MWh)[citation needed] |
|---|---|
| Biomass | 60–120 |
| Coal with CO2 capture | 100–155 |
| Natural gas turbine, no CO2 capture | 55–110 |
| Natural gas turbines with CO2 capture | 60–130 |
| New nuclear | 80–105 |
| Offshore wind | 150–210 |
| Onshore wind | 80–110 |
| Solar farms | 125–180 |
| Tidal power | 155–390 |
More recent UK estimates are the Mott MacDonald study released by DECC in June 2010 [14] and the Arup study for DECC published in 2011.[15]
From the table, it can be seen that some renewable technologies are already competitive with the more traditional generation technologies, however they could become even more efficient with the right policies and infrastructure in place.
At the moment most governments in developed countries are looking to extend and integrate their distribution grids, in order to ensure security of supply and to enable sale/transfer when there is spare production. This makes sense in the context of strategic supply, however there is a developing case for decentralised generation and greater degree of storage capacity. Current policies tend to support (through large subsidies) fossil or nuclear generation with large plant connected to the grid, which in turn tends to shape investment in grid infrastructure. This can however, become expensive to maintain and is not a very efficient means of distribution in all circumstances, particularly for dispersed communities.
If the same levels of subsidy were offered to renewable generation, then the shape of the grid infrastructure would probably change to better accommodate renewable technologies and decentralise generation with local grids. All of this would serve to make renewable generation cheaper!
As with any costing exercise, you have to draw up an envelope for the costing process, which may or may not take into account certain externalised cost (i.e. carbon trading), however depending upon where you draw those lines, may confer a cost advantage in respect of certain fuels and generation technologies.
For nuclear generation, most of the figures are quoted for 'new nuclear', which may well beg the comparison with old nuclear (whatever that might be?), but it is generally a convenience that allows assumptions about disposal costs to be made. This could be considered a little disingenuous as a huge amount of active waste from operation and decommissioning has yet to be disposed of. Also in the case of disasters such as Chernobyl and Fukushima, the generating company cannot be held liable for the full cost of reparations and clean up, as this cost is beyond their capability. Because of this insurance will only cover a certain amount, beyond that the cost falls to the taxpayer! More on UK costs can be found in this FT article:
http://www.ft.com/cms/s/0/2efd47ba-27fa-11e0-8abc-00144feab49a.html#axzz27V8ezxHc
Although there is a current spate of nuclear generation in development, global Uranium deposits are being depleted and have an uneven geo-political distribution. This means that security of supply is not guaranteed and that ultimately it will need to be replaced or substituted. The link below is to a US document on deposits for further information on the subject:
http://home.tu-clausthal.de/~mrbl/pdf/AMS_Lehmann_EN_S16-26.pdf
From this it is quite striking that two of the main nuclear economies (US and China) have very limited supplies of their own ore. The most useful quality ore deposits are found in Canada and Australia, both countries have strong lobbyists against developing uranium ore mines (although economically there will certainly be some exploitation).
Thorium has been suggested as an alternative fuel source, it is more abundant and has some operational advantages in terms of conversion efficiency. It is not without disadvantage however, there are still a number of technical issues to be resolved and the isotope requires treatment with Uranium or plutonium in order to achieve criticality. This will mean that there will be a longer lead in time and it is likely to cost more. There would also be a need for different technologies to be deployed for treatment.
A nuclear renaissance would also bring with it the risk of weapons and waste (in the sense that it could be accessed) proliferation. There are numerous types of reactor and several configurations within each generation (i.e. R & D power generation etc.). Although the act of building more reactors for power generation does not pose a significant direct risk of proliferation, the fact that more material that can be used for enrichment will be produced, means that there will be an increased risk.
The following points summarise the problem and potential solutions that can be applied.
Commonly identified problems
No technological fix can overcome a country’s resolve to proliferate
Enrichment and reprocessing present the highest risks
Commercial reactors have much lower risk, but can contribute to proliferation
A combination of institutional and technology solutions will be required
Suggested means to address identified problems
Provide an institutional framework to avoid new enrichment/reprocessing capabilities (the“Attractive Deal')
Develop more proliferation resistant reprocessing technologies to be used by countries that recycle fuel
Further improve the proliferation resistance of reactors, especially those that are deployed to new nuclear countries
In essence it is careful monitoring of the fuel supplied and used, allied to what comes out, that will determine the overall risk of proliferation. New more efficient reactors can also help, but it must also be borne in mind that specific reactors designed for enrichment exist around the globe and are those that require the most careful monitoring.
Given the costs and risks that are associated with nuclear energy, are we any closer to resolving the paradox that exists? Current public and political policy/strategy may give some clues as to whether or not a consensus is forming.
The diagram below maps the current global status of nuclear power generation.
Operating reactors, building new reactors
Operating reactors, planning new build
No reactors, building new reactors
No reactors, planning new build
Operating reactors, stable
Operating reactors, considering phase-out
Civil nuclear power is illegal
No reactors
In summary, it would appear that the paradox is not yet resolved, however there are some patterns emerging.
The oil producing states seem to favour nuclear as a replacement for fossil fuels, although this is tempered by investment also in renewables.
The BRIC's also seem to be favouring some development of nuclear generation, this appears to be as a means of maintaining competitive energy supplies as their economies and outputs grow. Most are embarking on nuclear generation for the first time which means that they do not have first hand experience problems associated with generation, ageing plant and waste disposal.
The communist (and former communist) countries have wide adoption of nuclear power generation and are experienced in operation and building of plant. They have however, experienced the worst examples of the downside of nuclear energy with the meltdown at Chernobyl. Because these states have very limited public participation in planning processes, policy determination and human rights to protest, it is not surprising that it is here where the paradox is most stark and also, the area of most concern going forward.
Many developed nations are starting to reign back on development of nuclear power generation, Japan not surprisingly, is moving away from nuclear as is Germany. France and the US are both finding that costs associated with upgrading (following stress tests) and maintaining older plant to run for longer are becoming increasingly prohibitive. Europe, the US and Japan seem to be leaning more towards renewables, perhaps this will help to provide a clearer, more balanced evidence base upon which to answer the paradox.
Monday, 10 September 2012
Quantitative Easing, ideologically pleasing?!!!
Chancellor George Osborne was roundly booed when he attended the Paralympics recently, and not without good reason! After all he has presided over calamitous economic policies based on austerity that have not brought about growth, as promised. He is also seen as the villain of piece in demolishing totally the credibility of the greenest government ever, by trying to ride roughshod over planning regulations and cutting subsidies for renewable energy, whilst supporting fossil fuels.
The tendrils of the Treasury extend into every facet of government business, not just in departmental spending budgets, but also policy areas. But what of core economic policy, who is this affecting and how, what lurks in the big red box?
I want to have a bit of a rant about the ideological impacts, as well as the economic ones, of Quantitative Easing in all of its various guises and ask how this economic instrument might deliver a bigger ideological impact than it does an economic one.
Quantitative Easing (QE) was sold to us as a means to deliver money into the economy in order to stimulate lending, thus helping those looking to buy a new home or for those wanting to expand their business. The reality however, appears to be quite different, for the following reasons:
In the US where multiple phase QE was also in use, we had case studies available, which when considered, you may wonder why we went ahead with further rounds of QE.
The Fed's Quantitative Easing Part 2 has destroyed $4.6 trillion in household wealth, all to boost the stock portfolios of the top 10%.
The Federal Reserve's stated goals in launching QE2 were to trigger a "wealth effect" and boost inflation. The net result of their program is a massive destruction of household wealth. The basic idea is that goosing "risk assets," i.e. stocks, then consumers will feel wealthier and thus motivated to open their wallets and spend, spend, spend. This spending won't be based on any increase in income (household income fell in 2009 despite the massive run-up in stocks) but on the illusion of greater wealth created by a temporarily rising stock market.
Read more: http://articles.businessinsider.com/2010-11-10/markets/30039943_1_household-wealth-wealth-effect-total-financial-assets#ixzz265cR7N8d
The rich, that’s according to a Bank of England study, out today, on the distributional effects of quantitative easing.
This from the research:
In terms of the number of rounds of QE that are issued, it would appear that there is a diminishing utility associated with further rounds of QE, but also an increase in the inherent level of risk.
In effect the top 1% have the most to gain (this is the political, financial and industrial elite) and the 99% are left with the scraps and an enhanced economic risk.
Those risks are hard to pin down, but as in the report to the BoE (above), a part of this lies in the fact that QE may not deliver any long term benefits in employment, guilt yields or house prices (general asset values). You cannot just go printing money without the risk of impacts and probably the most dangerous of those for most of us, is the risk of an unpredictable and explosive dose of inflation!
So, coming back to the question of fiscal policy or ideology, it would appear that this is slight of hand, providing opportunity for wealth creation/harvesting by the few through asset enhancement. Meanwhile the vast majority might say that they have detected little or no benefit but are however, now saddled with the devaluation of the domestic economy and the risk of an inflation bubble.
Some might say that there is a greater degree of certainty over the ideological outcome (in terms of where the wealth ends up, its difficult to call it a distribution), than there are over the economic outcomes!
The tendrils of the Treasury extend into every facet of government business, not just in departmental spending budgets, but also policy areas. But what of core economic policy, who is this affecting and how, what lurks in the big red box?
I want to have a bit of a rant about the ideological impacts, as well as the economic ones, of Quantitative Easing in all of its various guises and ask how this economic instrument might deliver a bigger ideological impact than it does an economic one.
Quantitative Easing (QE) was sold to us as a means to deliver money into the economy in order to stimulate lending, thus helping those looking to buy a new home or for those wanting to expand their business. The reality however, appears to be quite different, for the following reasons:
In the US where multiple phase QE was also in use, we had case studies available, which when considered, you may wonder why we went ahead with further rounds of QE.
The Fed's Quantitative Easing Part 2 has destroyed $4.6 trillion in household wealth, all to boost the stock portfolios of the top 10%.
The Federal Reserve's stated goals in launching QE2 were to trigger a "wealth effect" and boost inflation. The net result of their program is a massive destruction of household wealth. The basic idea is that goosing "risk assets," i.e. stocks, then consumers will feel wealthier and thus motivated to open their wallets and spend, spend, spend. This spending won't be based on any increase in income (household income fell in 2009 despite the massive run-up in stocks) but on the illusion of greater wealth created by a temporarily rising stock market.
Read more: http://articles.businessinsider.com/2010-11-10/markets/30039943_1_household-wealth-wealth-effect-total-financial-assets#ixzz265cR7N8d
The rich, that’s according to a Bank of England study, out today, on the distributional effects of quantitative easing.
This from the research:
By pushing up a range of asset prices, asset purchases have boosted the value of households’ financial wealth held outside pension funds, but holdings are heavily skewed with the top 5 per cent of households holding 40 per cent of these assets.The Bank's strategy has been criticised by groups representing savers and pensioners because of its impact on interest rates, annuity rates and gilt yields, which have all fallen since QE began.
In terms of the number of rounds of QE that are issued, it would appear that there is a diminishing utility associated with further rounds of QE, but also an increase in the inherent level of risk.
In effect the top 1% have the most to gain (this is the political, financial and industrial elite) and the 99% are left with the scraps and an enhanced economic risk.
Those risks are hard to pin down, but as in the report to the BoE (above), a part of this lies in the fact that QE may not deliver any long term benefits in employment, guilt yields or house prices (general asset values). You cannot just go printing money without the risk of impacts and probably the most dangerous of those for most of us, is the risk of an unpredictable and explosive dose of inflation!
So, coming back to the question of fiscal policy or ideology, it would appear that this is slight of hand, providing opportunity for wealth creation/harvesting by the few through asset enhancement. Meanwhile the vast majority might say that they have detected little or no benefit but are however, now saddled with the devaluation of the domestic economy and the risk of an inflation bubble.
Some might say that there is a greater degree of certainty over the ideological outcome (in terms of where the wealth ends up, its difficult to call it a distribution), than there are over the economic outcomes!
Thursday, 30 August 2012
Part 3 - CSR who owns it and what should it achieve?
On to part 3 blogging about CSR, I have tried to examine who has ownership and why, if this is effective or indeed a tool yet to realise its full potential. I have made some comparisons in the context of different capitalist models (Liberal v State), to see what differences emerge.
On this last leg I want to cover more ground on what CSR means to people, the state and corporations and what it might achieve depending upon where ownership lies. It is also worth exploring an extended version (or future direction) for CSR and where this might take us.
Under the current liberal model it is predominantly the larger corporations that practice CSR, using it as means to promote green credentials outwardly and exercising control over their supply chain inwardly. The whole process can be quite complex and therefore, quite hard to monitor and evaluate. There can be little doubt that some large corporations are taking their obligations seriously and making improvements to their efforts on sustainability. This kicks on down the supply chain, which can multiply the positive i,pacts, however this system is not without its problems.
Firstly, whilst reporting can be put in one place the systems for monitoring are many and varied, ranging from statutory controls (permits for example) through voluntary accreditation schemes (i.e. sustainable forestry) and also internal management systems (again with varying levels of accreditation).
Statutory compliance is generally good (which says something about effective regulation) and is usually the most active part of any internal management system. It is also true however, that large corporations will use the existence of their own internal systems to lobby against further tightening of regulation and to seek to get dispensation with regulators. This may seem reasonable on the face of it, however there is compelling evidence that many internal management systems are not as robust as they are thought to be and accidents and non-compliance can be similar to sites that don't have such systems. Is this compatible with the objectives of CSR then, or would it be more ethical to continue to be inspected at greater frequency, to help build even greater resilience into internal systems?
Voluntary schemes suffer even greater vulnerabilities and cover various aspects of a number of supply chains. Large corporations are willing to join voluntary schemes (such as sustainably sourced timer, CDM and Fair Trade), however these supply chains span the globe. It has proven very difficult to monitor the performance of these schemes and often the operators of the scheme do not have the capacity to monitor or fully implement. NGO's have investigated some supply chains and found them to be lacking in terms of regulation and auditing leading to, for instance. corruption and fraud within the system (hardwood logging), or unsustainable projects being certified (as has happened with CDM).
Whilst failures of this nature cannot be placed directly at the door of the large corporations, the ethical question around ownership of CSR remains. There is a basic paradox between corporations signed up to CSR making promises (or setting targets) and costs to shareholders of delivering these as obligations within a liberalised market. Many reported 'successes' are genuine triple bottom line gains, however these gains may often be offset by displacement or growth to other product ranges, which may not be measured and reported.
By way of a case study to demonstrate the paradox, take the energy industry. It is becoming more evident that investment in renewable energy technologies is both sustainable and sound, however the scale of the industry creates an impasse in moving towards more sustainable options. The UK estimates that investment of £200bn will be required over the next decade to upgrade energy infrastructure, however this is based on the presumption of a continued heavy reliance upon the National Grid and gas generation. This is not the most sustainable option and therefore, flies in the face of CSR objectives, as a more decentralised supply base with less reliance on the grid and gas would be a much more sustainable option and would encourage greater (and more diverse) renewable generation closer to point of demand, which in turn should significantly reduce transmission losses and create more jobs. This situation is echoed in the US and other countries.
Without the investment we face power cuts and outages, however it seems that investors are only willing to support investment in large energy companies and the grid model. Could this be because tax payers money is still being used to support fossil fuel and nuclear energy companies, something that is surely unacceptable under CSR?
So what about CSR within a state capitalist model? The level of direct intervention is key here! If a government is operating a company on behalf of the state (and therefore the general population) the obligations of that company should reflect very closely the mandate of that government in respect to all issues of sustainability. Nevertheless, this could still be carried out merely as a box ticking exercise, or more positively, the company could be a flagship where policy can actually be formulated, researched and tested. This might be relatively easy on a state owned railway (as they are very efficient in terms of CO2) and are a relatively safe means of transport, however this might become more difficult if you are operating a nationalised oil company!
If policy is correct, then it should be easier within this model to raise investment for the most sustainable option (Chinese solar expansion is a good example), dependent upon the level of private money that might be sought (as most large infrastructure models work this way) and their willingness to participate (a problem UK and France have encountered with nuclear generation ambitions).
This all brings us back very nicely to the central question(s) about CSR and about who should operate it and how. Could CSR actually be a tool for transition to a more socialist model (as predicted by Marx) at one extreme, or will it just be a badge for large corporations to polish that will have little meaning or impact to the man and woman on the street?
For so long as we operate within a liberalised market, it is a given that the shareholder will be king! It is imperative therefore, that CSR becomes a priority with the board and of the shareholders. I believe that this is starting to happen, with a number of ethical investment options emerging and a number of blue chip companies trading on green credentials. It is important to recognise however, that the whole edifice only stands, so long as the foundations are solid, something which is not completely proven as yet. Failures will undermine confidence and devalue CSR, therefore it is important to ensure robust monitoring and regulation to uphold these values.
Central to making CSR a driver for change and investment within the liberal capital context, is the education of shareholders and investors alike, to recognise true sustainability and to have faith in the science and research that underpins it. I think there is a long way to go here yet as shareholders and CEO's alike, have to be able to differentiate between short term variations (in markets, economies etc.) and the longer term objectives required by CSR. This has been witnessed recently with the economic downturn and the growth at all costs mentality seen in governments let alone individual companies! If it were sustainable before and added to the triple bottom line, then the same holds true now!
Within the state capitalism model CSR has the potential to be more joined up with national policy and as a result may have more credibility with people. If large state owned companies are seen to be driving the CSR agenda forward, this will impact across the whole supply chain and can be a major component in delivering policy and meeting obligations. In a reverse of the liberal model state owned companies can be used themselves as examples of good practice and can educate at the same time.
It will also offer people a direct means by which people can measure the degree of success of implementation of green policies through the performance reporting of state industries and allow them to align their thinking with sustainability issues.
As we move forward there is a greater degree than ever before of economic uncertainty, there is also the spectre of looming resource shortages and the impacts of climate change to factor in. Actively seeking to make CSR work can tell us more about how our largest companies perform in these respects, I see it at the very least as a means to communicate with large corporations about their efforts to reduce impacts. The more people that understand and use CSR as a means to judge ethical performance and link it to buying habits and choices the more effective it will become.
In conclusion I would say that CSR ownership needs to be with all of us and that it can only be effective where there is a wide understanding of the objectives, such that we can ask the right questions. The underpinning mechanisms are very complex, especially for the liberal model, making proper audit and regulation difficult, however this is essential to credibility.
The liberal and state models operate in different ways, however the state model may offer a little more in terms of connectivity with the end user and feedback through to political agenda setting.
It may of course all become quickly irrelevant, if as predicted, the current model succumbs to the pressures of population growth, resource depletion and climate change!
Hope you enjoyed the diatribe, please feel free to add any comments and look out for new topics!
On this last leg I want to cover more ground on what CSR means to people, the state and corporations and what it might achieve depending upon where ownership lies. It is also worth exploring an extended version (or future direction) for CSR and where this might take us.
Under the current liberal model it is predominantly the larger corporations that practice CSR, using it as means to promote green credentials outwardly and exercising control over their supply chain inwardly. The whole process can be quite complex and therefore, quite hard to monitor and evaluate. There can be little doubt that some large corporations are taking their obligations seriously and making improvements to their efforts on sustainability. This kicks on down the supply chain, which can multiply the positive i,pacts, however this system is not without its problems.
Firstly, whilst reporting can be put in one place the systems for monitoring are many and varied, ranging from statutory controls (permits for example) through voluntary accreditation schemes (i.e. sustainable forestry) and also internal management systems (again with varying levels of accreditation).
Statutory compliance is generally good (which says something about effective regulation) and is usually the most active part of any internal management system. It is also true however, that large corporations will use the existence of their own internal systems to lobby against further tightening of regulation and to seek to get dispensation with regulators. This may seem reasonable on the face of it, however there is compelling evidence that many internal management systems are not as robust as they are thought to be and accidents and non-compliance can be similar to sites that don't have such systems. Is this compatible with the objectives of CSR then, or would it be more ethical to continue to be inspected at greater frequency, to help build even greater resilience into internal systems?
Voluntary schemes suffer even greater vulnerabilities and cover various aspects of a number of supply chains. Large corporations are willing to join voluntary schemes (such as sustainably sourced timer, CDM and Fair Trade), however these supply chains span the globe. It has proven very difficult to monitor the performance of these schemes and often the operators of the scheme do not have the capacity to monitor or fully implement. NGO's have investigated some supply chains and found them to be lacking in terms of regulation and auditing leading to, for instance. corruption and fraud within the system (hardwood logging), or unsustainable projects being certified (as has happened with CDM).
Whilst failures of this nature cannot be placed directly at the door of the large corporations, the ethical question around ownership of CSR remains. There is a basic paradox between corporations signed up to CSR making promises (or setting targets) and costs to shareholders of delivering these as obligations within a liberalised market. Many reported 'successes' are genuine triple bottom line gains, however these gains may often be offset by displacement or growth to other product ranges, which may not be measured and reported.
By way of a case study to demonstrate the paradox, take the energy industry. It is becoming more evident that investment in renewable energy technologies is both sustainable and sound, however the scale of the industry creates an impasse in moving towards more sustainable options. The UK estimates that investment of £200bn will be required over the next decade to upgrade energy infrastructure, however this is based on the presumption of a continued heavy reliance upon the National Grid and gas generation. This is not the most sustainable option and therefore, flies in the face of CSR objectives, as a more decentralised supply base with less reliance on the grid and gas would be a much more sustainable option and would encourage greater (and more diverse) renewable generation closer to point of demand, which in turn should significantly reduce transmission losses and create more jobs. This situation is echoed in the US and other countries.
Without the investment we face power cuts and outages, however it seems that investors are only willing to support investment in large energy companies and the grid model. Could this be because tax payers money is still being used to support fossil fuel and nuclear energy companies, something that is surely unacceptable under CSR?
So what about CSR within a state capitalist model? The level of direct intervention is key here! If a government is operating a company on behalf of the state (and therefore the general population) the obligations of that company should reflect very closely the mandate of that government in respect to all issues of sustainability. Nevertheless, this could still be carried out merely as a box ticking exercise, or more positively, the company could be a flagship where policy can actually be formulated, researched and tested. This might be relatively easy on a state owned railway (as they are very efficient in terms of CO2) and are a relatively safe means of transport, however this might become more difficult if you are operating a nationalised oil company!
If policy is correct, then it should be easier within this model to raise investment for the most sustainable option (Chinese solar expansion is a good example), dependent upon the level of private money that might be sought (as most large infrastructure models work this way) and their willingness to participate (a problem UK and France have encountered with nuclear generation ambitions).
This all brings us back very nicely to the central question(s) about CSR and about who should operate it and how. Could CSR actually be a tool for transition to a more socialist model (as predicted by Marx) at one extreme, or will it just be a badge for large corporations to polish that will have little meaning or impact to the man and woman on the street?
For so long as we operate within a liberalised market, it is a given that the shareholder will be king! It is imperative therefore, that CSR becomes a priority with the board and of the shareholders. I believe that this is starting to happen, with a number of ethical investment options emerging and a number of blue chip companies trading on green credentials. It is important to recognise however, that the whole edifice only stands, so long as the foundations are solid, something which is not completely proven as yet. Failures will undermine confidence and devalue CSR, therefore it is important to ensure robust monitoring and regulation to uphold these values.
Central to making CSR a driver for change and investment within the liberal capital context, is the education of shareholders and investors alike, to recognise true sustainability and to have faith in the science and research that underpins it. I think there is a long way to go here yet as shareholders and CEO's alike, have to be able to differentiate between short term variations (in markets, economies etc.) and the longer term objectives required by CSR. This has been witnessed recently with the economic downturn and the growth at all costs mentality seen in governments let alone individual companies! If it were sustainable before and added to the triple bottom line, then the same holds true now!
Within the state capitalism model CSR has the potential to be more joined up with national policy and as a result may have more credibility with people. If large state owned companies are seen to be driving the CSR agenda forward, this will impact across the whole supply chain and can be a major component in delivering policy and meeting obligations. In a reverse of the liberal model state owned companies can be used themselves as examples of good practice and can educate at the same time.
It will also offer people a direct means by which people can measure the degree of success of implementation of green policies through the performance reporting of state industries and allow them to align their thinking with sustainability issues.
As we move forward there is a greater degree than ever before of economic uncertainty, there is also the spectre of looming resource shortages and the impacts of climate change to factor in. Actively seeking to make CSR work can tell us more about how our largest companies perform in these respects, I see it at the very least as a means to communicate with large corporations about their efforts to reduce impacts. The more people that understand and use CSR as a means to judge ethical performance and link it to buying habits and choices the more effective it will become.
In conclusion I would say that CSR ownership needs to be with all of us and that it can only be effective where there is a wide understanding of the objectives, such that we can ask the right questions. The underpinning mechanisms are very complex, especially for the liberal model, making proper audit and regulation difficult, however this is essential to credibility.
The liberal and state models operate in different ways, however the state model may offer a little more in terms of connectivity with the end user and feedback through to political agenda setting.
It may of course all become quickly irrelevant, if as predicted, the current model succumbs to the pressures of population growth, resource depletion and climate change!
Hope you enjoyed the diatribe, please feel free to add any comments and look out for new topics!
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