Sustainability, the Sri Lankan context

Thursday, 25 September 2014 00:11 -     - {{hitsCtrl.values.hits}}

By K.C. Somaratna John Elkington, the social entrepreneur who coined the word sustainability and promoted the concept of the triple bottom line – planet, people and profit – was in Sri Lanka under the auspices of Dialog, the Daily FT and the British Council and shared his latest thoughts on sustainability with Sri Lankan CEOs and those who are concerned about sustainability. The writer of this article who attended the second session where he addressed the so-called activists of the sustainability movement, attempts to relate Elkington’s thoughts to the Sri Lankan context in this short write-up, using the document titled ‘Breakthrough,’ which was distributed during this program as the basis of his presentation. It is my opinion that his visit was timely, pronouncements were timely and what is yet to be seen is how Sri Lankans make use of all these in the next few years. I mentioned a few years as the next few years is the crucial timeframe which will determine whether we get into the middle income country trap and fail to get out of it or we go beyond. To me, the fact that certain countries managed to go beyond while others who followed these few countries got into the trap was simply a matter of historical coincidence. Those earlier countries had some technologies, industries developing and in vogue at that particular time which enabled these countries to invest heavily into these sectors and succeed while those who followed did not have such industries to leverage on. Does this mean that Sri Lanka will also fall into that second category? No; it depends on whether Sri Lankans follow the advice given in this publication ‘Breakthrough’ or not. If we follow, Sri Lanka will go much beyond many others and if we don’t follow, we will end up in the same trap. But the irony will be that while others got into the trap not knowing how to get over it, we get into the trap merely on our own accord and as a deliberate step, while knowing of other alternative ways which will help them to go beyond.   Current scenario The publication ‘Breakthrough’ identifies certain characteristics of the current state which fit the Sri Lankan situation perfectly. It talks about climate change, resource crunch and population growth. Each of these is relevant to Sri Lanka, of course to different degrees. Sri Lanka has become alive to impact of climate change, truant monsoons, unusual droughts impacting agricultural production to an extent, that the Central Bank itself has taken note of it and put the same into its annual report for the first time. Along with the aforesaid, resource crunch has set in – especially in respect of potable water and we have started looking at desalinating ocean water. Population growth itself is going on. What was mentioned subsequently in ‘Breakthrough’ fitted us even better. Here it talks about incurring ever-greater debt, including environmental debt imposed upon future generations and the absolute necessity of a giant sustained deleveraging of our economy. Then it goes on to talk about an appalling reluctance to effectively inculcate tomorrow’s more equitable radically lower carbon economy. May I mention here that it was only a month ago, I wrote to the Daily FT regarding the need of converting the trade balance to be positive by a sustained deleveraging of our economy and effectively incubating a more equitable, radically lower carbon economy. ‘Breakthrough’ then goes on to emphasise the fact that whatever breakthrough one would implement, it would depend on a massive sustained investment in deployment of technologies in infrastructure and what we were promoting in our article was such an investment in infrastructure in the energy field. ‘Breakthrough’ also had some pronouncements which were soothing to us – the sustainability activists if I were to call myself so. One such soothing statement was the statement by Jeff Bezos of Amazon fame that sustainability activists or solution providers for environmental issues should be willing to be misunderstood for long periods of time. Another soother was the figure depicting barriers to breakthrough change which was based on a survey carried out in 2012. It depicted 68% of respondents agreeing that lack of political will is a major barrier while 46% agreed that vested interests in current approaches also as a contributory factor and these two were identified as the major barriers to breakthrough change. These pronouncements well establish the current scenario in almost all the countries in the world irrespective of it been in the north or the south or in Americas or Asia and it is interesting to note that the study includes both India and China into the list of countries where there is an immense inertia in the current political system in respect of environmental initiatives. Another interesting thing which is emphasised in this publication is the interconnected risks we are facing today. In my opinion, these are not risks, but threats which could be impacting a particular component of a country thereby leading to a risk which could be quantified. Sri Lanka is also vulnerable to some of these threats namely climate change, extreme weather, flooding, biodiversity loss, air pollution, etc., and quite rightly climate change is adequately amplified to denote its significance. The other two threats in the same axis extreme weather and flooding have been bothering us in Sri Lanka – a South Asian country having monsoons more than a normal other country of similar size in another part of the world. What does this Grid of Interconnected Risks (threats) indicate? Simply the fact that we need to take action to mitigate these threats. There, of course, will be a greater interest to take adaptation action because there will be that Mad Max Economy mentioned in ‘Breakthrough’. Mad Max Economy is described as a multibillion-dollar-a-year collection of industries that thrive when things get really bad. As we have mentioned in the local newspapers sometime back, the USA is planning to put up walls near New York, New Orleans and San Francisco at a cost of about twenty billion dollars to keep the ocean waters away. So the USA is jumping into the adaptation phase even without looking at opportunities for mitigation. What we have always been emphasising is that no adaptation strategy adopted today will be adequate tomorrow unless some mitigation strategies are also adopted to prevent the escalations in the extent and intensity of disasters and this aspect was vividly demonstrated by the inadequacy of levees in Louisiana which got washed away during Katrina. Another important statement in the book is by Peter Bakker, the President of the World Business Council for Sustainable Development who quite rightly says that “the time of creating awareness is behind us; if you are not aware today then you are not a global leader in business”. Can we or shall we say the same thing about the leaders in our public administration? Or even say that if you are not taking action today, you are not a global leader in business.   Framework for action So we have established the framework for sustainability initiatives in the country as follows. (1) We have identified three major issues confronting us. (2) We have identified the degeneration-economic and environmental – that is taking place. (3) We have identified the key barriers to breakthrough change. (4) We have identified the need to indulge in breakthrough change and its two components as (a) deleveraging of the economy and (b) incubating tomorrow’s more equitable radically lower carbon economy. (5) We are aware of the completely cross linked web of interconnected risks/threats which keeps on looking in our face as if to ask “Are you not aware of us? Do you really need another dose of these threats to make you act?” The sound of hurricane Sandy, sound of flooding water, etc. should definitely be reverberating in our minds. Then ‘Breakthrough,’ quoting from Prof. Robert G. Eccles at Harvard Business School, goes on to identify where we need to start; start with those 83 global public quoted companies who are right at the top contributing to one third of the $ 32 trillion revenue of the top 1,000 companies. It says that this concentration might help. When we wrote a month earlier, we were even more focused. We said that 13 of the top 25 companies were either oil companies or automobile companies and that these two sectors will undergo a revolutionary change during the next 10 years or so. And we strongly believe that this is where we need to act and penetrate. This is where we could be doing the most amount of deleveraging and also where we could be the pioneers in establishing incubators for green economy enterprises. We, of course, need to remember deleveraging itself could confront humanity to greater threats than been confronted with today. As I write these lines, I can see the back cover of the Fortune magazine of 1 September 2014 depicting Shell’s determination to make China generate electricity from natural gas rather than from coal. Looking at a time horizon of 230 years, Shell is confident about having enough gas to do that. As we had mentioned earlier, Shell is exploring for natural gas close to Australia using the biggest floating refinery ever and thus would have enough gas to supply China. China has also signed up a $ 400 billion deal with Russia to obtain gas from Russia. With all these sincere attempts to clean up its energy generation what China will actually be doing is for every citizen of the world, to experience torrential rains. This is so because coal does not have any significant hydrogen; but gas has 25% hydrogen which leads to the formation of water vapour. A very rough calculation indicates that if China were to convert all its power plants to natural gas, and if this entire amount of additional rainfall were to fall on Chinese territory alone, it would double the annual increase in rainfall to be observed otherwise. With USA also attempting to convert its own coal power plants to natural gas in order to make use of its newly found gas reserves in North Dakota, global population could look forward to some torrential rains right across the world, throughout the year, and ‘Day After Tomorrow’ could be a reality within this century itself much earlier than the planned time span of 230 years. All this gives new dimensions to sustainability efforts in the Sri Lankan context, if in the right direction.   The ‘Breakthrough’ solution We strongly believe highway solarisation as the only undisputed breakthrough solution which will respond to all the issues identified in the publication ‘Breakthrough’. (A) It clearly qualifies to be a breakthrough solution as per the four criteria given in the booklet. (a) It is future ready with the promise of working well in a world of seven-going-on-nine billion people providing affordable access of needed products or services, while respecting planetary boundaries. (b) It is ambitious, aiming to transform key aspects of capitalism and drive radically better outcomes across the triple bottom line. It will save the planet from all this piercing done for the sake of a few more tons of fossil fuels; it will save the people from been washed away and it will yield enormous profits. (c) It is fair and will help to tackle critical equity issues including the transfer of intergenerational debt created by public borrowing, natural resource extraction and environmental destabilisation. (d) It promises to disrupt the current economic system moving the needle towards system change. More than all these, it will establish a new world economic order where energy will be available in the same ratio as the land occupied and the degree to which transportation is mechanised. (B) It addresses the key threats identified in the cross linked web of interconnected risks relevant to Sri Lanka; namely climate change, extreme weather, flooding, etc. It eliminates these three due to the following: (a) It eliminates blackish, bituminous highways absorbing solar radiation thus leading to global warming. (b) It eliminates generation of waste energy during the conversion of chemical energy in fossil fuel into other forms of energy – electrical in power generation and mechanical in transportation. (c) It eliminates the generation of two key greenhouse gases – (i) water vapour which when in the atmosphere is 13 times more dangerous as a greenhouse gas than Carbon Dioxide and (ii) Carbon Dioxide – which prevent the escape of any solar radiation absorbed by the climate system and any waste energy generated by mankind out of our climate system. (d) It eliminates generation of water vapour during power generation or transportation thus eliminating the probable increase in precipitation, flooding, etc. Now that we have a breakthrough solution addressing the threats confronting us what is needed is putting the same into action and deleveraging the economy and incubating this equitable, radically low carbon economy. When put into action it implies laying photovoltaic solar panels above and along the highways and using that energy either to feed the main grid in respect of the day time 10-hour long 700 MW peak above the continuous 24 hour 1000MW load or to power battery electric vehicles. We can incubate this low carbon economy by establishing an incubator park at Hambantota for green economy enterprises as envisaged by the document titled ‘Green Economy’ published by UNEPA in July 2012. This incubator will be the first of its kind in the world and similar to Silicon Valley. Enterprises at this incubator park could work on manufacture of PV solar panels, assembly of battery electric vehicles, manufacturer of lithium batteries, promote highway solarisation in countries in the region. These industries will provide the impetus that would be much required to get Sri Lanka beyond the middle income country trap and ensure that we will go further. The four trillion dollar revenue of the oil and automobile companies within the top 25 companies or the Fortune 500 listing should be adequate motivator for companies in this incubator park to work hard on the agenda. I wish Elkington had indicated some nascent industries like what is mentioned above when he addressed the CEOs forum in Colombo for them to get engaged in. So the breakthrough solution is there, all avenues for deleveraging and incubating are open and what it could achieve in reversing economic and environmental degeneration is crystal clear and the potential for Sri Lankan economy arising from this is apparent and what is lacking is the leadership for the project. Going by what is given in ‘Breakthrough,’ there is only a 32% chance that political leadership will be willing to act and then we need to turn to the business leadership. That is exactly what leadership is all about. Leaders lead the way and laggards follow timidly behind them. This is why I said at the beginning that Elkington’s visit was timely, his presentation was timely and appropriate and the final outcome of all that is to be seen in the next few years. This is how I understood and interpreted his presentation and if there has been another way of understanding and interpreting his presentation, Sri Lankan business community and the masses would be the losers if such different opinions are not expressed in public. (The writer is Managing Director, Somaratna Consultants Ltd.)