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Clean Development Mechanism – A guide to Profit in slow Economy

30 Dec

The Year 2011, history would record as a year of Change. Many unprecedented changes happened around the world. In the context of Global Warming & Climate change, there were many changes.

During cold La Niña episodes the normal patter...

The UNFCCC meet at Durban, South Africa  announced that 2011 was is tied for the 10th-hottest year since records began in 1850, (Read more:http://www.azcentral.com/news/articles/2011/11/29/20111129world-growing-warmer-un-says.html#ixzz1hzDYvmH3) and that to in a “La Niña” . ( La Niña is a coupled ocean-atmosphere phenomenon that is the counterpart of El Niño as part of the broader El Niño-Southern Oscillation climate pattern. ) During a period of La Niña, the sea surface temperature is lower than normal by 3–5 °C. It is the opposite of El Niño, where the latter corresponds instead to a higher sea surface temperature by a deviation of at least 0.5 °C, La Niña is often preceded by a strong El Niño.

As the Durban meet closed, being extended by 2 days which by itself speaks volumes about the concern and dangers being faced by the OASIS, ALBA, LDC and many nations from the G77 + China. Although far too short form what the above mentioned nation groups wanted, the EU & BASIC Countries  along with the Indian Environment Minister, in a classic climax situation could get all to agree to a draft which read –

An agreed outcome with legal force, for emission reduction with common but differentiated responsibility and respective capabilities”- The Durban Declaration from the UFCCC [United Nations Framework Convention on Climate Change] COP-17.

We are with the current consumption pattern heading towards a temperature lock-down of a +4°C, Global warming of humongous proportion which could bring Armageddon for some Nations. And there would be tremendous losses in the rest, as per The Stern Review  without action, the overall costs of climate change will be equivalent to losing at least 5% of global gross domestic product (GDP) each year, now and forever. Including a wider range of risks and impacts could increase this to 20% of GDP or more. Many forecasts (http://www.global-warming-forecasts.com/2025-climate-change-global-warming-2025.php ) deal in detail on what could happen.

Whether some like it or not, the present economic model of “Capitalism” armed with Democracy is the best we have. It may not be perfect, the chaos in Europe & USA prove that, but best among the lot. Having said that, if we reverse the “Greed-a-listic” ( read unethical Capitalistic practices ) into a better business model which looks at inclusive and sustainable growth as “profit” and not the so-called Corporate thinking of  : “get-quickly- rich- and- push- everything- else- into- the- ditch” type of profit, we may yet have the chance to reverse the effect of disastrous Climate change.

To do that we must cut carbon intensity without shutting down development opportunities; Innovate development opportunities to find ways to adapt the effects of climate change; Change completely to new ways of operating in response to climate change.

With the UNFCCC ratifying the extension of Kyoto Protocol for the second phase, the carbon market ( Carbon credit ) in EU is set to grow back . From the modest € 7 to the high of €30 -50 is being predicted. Businesses and environmentalists have heaped pressure on the European Commission to bolster the EU Emissions Trading Scheme. Following a letter last week to the president of the European Commission, 15 companies and lobby groups, including Dong Energy, Alstom, Vestas and Shell issued a joint statement on Sunday, calling on the European Parliament to back measures to support the EU ETS.

As per experts the Clean Energy would be a $ 250 Billion business and by 2015 -16 we should be seeing a $ 5-6 Billion worth of business and growing by 2012 onwards.

Focusing on the Infrastructure and Construction Industry, it is well documented that the Building Industry produces 40% of the GHG and 60% of waste production can be attributed to building related activities on a Global scale.

The Urban Development Planners, Builder Associations must start taking Global Warming and the inherent economic & social risk it entails by creating Laws and Industry practices which look into eliminating fuel poverty through better building and retro-insulation;developing less polluting public transport and new sustainable transport programs in urban and rural areas;evolving more localized and self-sustaining food growth and production systems; encouraging community-owned and managed assets for energy generation, water and sanitation, resource recycling, and waste exchange (reuse);promoting regional community-owned and community-managed energy programs harnessing new technologies (bio-generation and other alternatives).

Residents of climate-friendly communities absorb the skills and capabilities that can help them strengthen community resilience to climate change, and take
advantage of new and sustainable economic development opportunities.

Taking it to the Indian context, where the economy has slowed down as opposed to a recession seen in many countries around the world. And especially the complete slowdown in the realty space in Mumbai, Climate Responsive Architecture is the best bet to improve the profit margins. However, one must be cautioned that stepping into high-technology and smarter technique adaptation is not easy. It requires a complete re-learning process and debunking the traditional methods of conducting the business. For some it would be a tall order and unless forced by legislation, would not change. However there are many who already have taken the first step towards Better Building Design and seek advice in LEED / GRIHA ; but most need to still improve their mindset from using it just as a trend to making it a mainstay in their future business policy.

It is time that civil society and state governments to focus and ask leaders in the construction industry to recognize that business can be part of the complex solution to the climate challenges we all face now and in the future.

 

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