Comments on the OECD Green Growth Study: Energy currently in draft
Ethical Markets Media welcomes the OECD Green Growth Study on Energy which is currently in draft and appreciate the opportunity to comment. Overall, we support the priorities given to energy efficiency improvement and its system-wide benefits and to phasing out fossil fuel subsidies – not only the focus on consumers, but even more we would add on producers, particularly nuclear power. We also agree with the focus on the need for private sector investment and improved indicators. Thus, we track bi-annually such private investment totals globally since 2007 in our Green Transition Scoreboard®, with our Q2 2011 update now at $2.4 trillion (purposefully excluding nuclear, CCS and food and agricultural-based biofuels, all of which we regard as unsustainable).
We at Ethical Markets Media (USAand Brazil) see the transition to a green economy globally as viable, cost-saving and inevitable. Thus, we urge our colleagues who are also members of the UP Principles for Responsible Investment whose AUM are $30 trillion, to shift at least 10% of these assets from risky fossilized sectors, hedge funds, high-frequency trading and commodity ETFs to direct investments in green companies and technologies with a focus on developing countries which can leapfrog obsolete structures (“Good News on the Global Green Transition“).
We endorse correcting prices by full-cost accounting and where needed, taxes on carbon and other pollutants, made revenue-neutral by lowering income and payroll taxes (“Introduce Green Tax“). We are dubious about global carbon trading since markets are still unreformed and much trading has proved fraudulent (“From Rigged Carbon Markets“). We concur with the OECD’s report’s focus on the structural and political problems impeding the green transition in many OECD countries, particularly evident in the USA. While our many partners and affiliates in Brazil are embracing leapfrog strategies (www.mercadoetico.com.br), we in theUSA are encumbered by stranded assets and incumbent fossil fuel and nuclear industries. They are blocking the needed policy innovations, such as those employed in Germany, Denmark, Italy, Austria, Korean and now, since Fukushima, in Japan.
Further to the phasing out of fossil fuel subsidies, we would suggest adding references to those to producers, which are larger in many cases: oil, coal and nuclear, than those to consumers. If, for example, these subsidies to nuclear were fully accounted, including the insurance under our US Price-Anderson Act, nuclear power would be priced out of markets. Even today, nuclear is more costly than solar PV, which is already cheaper in the USAand Australia. As the report mentions, when externalities are full internalized, prices will be corrected and economic models and GDP account can be overhauled (Beyond GDP).
While we agree with the need for smart grids and more use of information technology for monitoring, we would like to see mention of micro-grids to avoid new lock-in problems with incumbent electric utilities still opposing decentralized local-owned solar PV and wind generation and “islanding” solutions. These technologies, as well as biofuels from sea-grown algae and all the possibilities now in developing countries also offer them decentralized and off-grid solar wind and low-head hydro. See Hazel Henderson’s forthcoming CSRwire Green Economy article in October which points to biomimicry companies developing based on the work of Dr. Gunter Pauli’s Blue Economy, Janine Benyus’ Biomimicry Institute, Dr. John Todd’s Living Machines, Dr. Allan Savory and the Savory Institute, and Tomorrow’s Company management programs. Such new investments will be monitored in future Green Transition Scoreboard® updates, as we dig deeper and cover deals below $100 million, measured using The Economics of Ecosystems and Biodiversity (TEEB).
All these specific comments are backed up by all the studies from the UN and many other private sector studies we reference in our Green Transition Scoreboard®. We also concur with the forthcoming report from the RMI accessed in Reinventing Fire by Amory Lovins, as well as the Sustainable Economy in 2040 Roadmap for Capital Markets by Forum for the Future sponsored by Aviva Investors (UK, 2011). With the exception of its mentioning nuclear power and CCS for coal, we fully endorse this report and will promote its use on our websites.
HAZEL HENDERSON, D.Sc.Hon., FRSA
President – Ethical Markets Media (USA and Brazil)