Roundtable I: The Global Economic Development Opportunity

On this panel:

• Michael Hirsh — National Economics Correspondent, Newsweek
• Cynthia Carroll — CEO, Anglo American PLC
• Dr. John J. "Jack" DeGioia — President, Georgetown University
• Jamshyd N. Godrej — Chairman and Managing Director, Godrej & Boyce Manufacturing Company Limited
• Hélène Pelosse — Director-General, International Renewable Energy Agency

Michael Hirsh: Americans like to ask what is the new new thing? So what's the new new thing on energy? There are lots of discussions on new solutions but not many specifics. What incentives can government create, and what should the post-carbon economy look like? What should be a comprehensive plan -- is getting to a post-carbon world attainable?

 Hélène Pelosse: Look at Germany, Denmark, and Spain -- achieving a 20% reduction in by 2020 is a good goal. One of the main efficient ways of doing that is a tarriff. We're going to bring the price down. We should avoid stop-and-go politics. We should create agreements and figure out where we spend energy and set worldwide standards. More standardization is better for business.

Michael Hirsh: What can universities do?

Jack DeGioia: There are three different ways universities respond. Institutional agencies -- our practices. Most significantly, we've been trying to reduce carbon emissions -- goal of 50% reduction by 2020. A lot of what's entailed in that is significant rethinking of our institutional processies. Some of it is changing technology and how we use it. Additionally, behavior change -- recycling programs, LEED criteria in building new infrastructire. We're also shaping the agenda in our classrooms and our research and engaging all parts of the university community -- not just science departments. Law, policy, etc. are inextricably linked to all of this. A variety of disciplines can come together. Third piece: on our campuses are the future leaders of our world. Are we preparing them for that responsibility? This is a moral imperative -- we can't leave behind the questions of human development, but we can't solve that unless we come up with new solutions.

Michael Hirsh: How can India be a model?

Jamshyd Godrej: Competitiveness issues are paramount for India as we develop economically. Energy costs are very high in India and the system is unstable, so there's a high imperative on efficiently. Unless we work strongly and diligently on this, we won't have a competitive cost structure. An organization I'm involved in promoted green buildings because there was so much building going on. Green buildings can influence the community to offer lower rent because they save up to 40% on energy -- it's made a difference in our ability to compete in terms of cost. We also realize that we're not very efficient, so we're creating policies that encourage renewable energy. Biggest opportunity for India will be solar. With costs coming down, this will make a huge difference in the competitive landscape. An Indian company made a small car at about half the price of normal small cars with solar tech. My company developed a refrigerator that's a third cheaper than other ones on the market. We're seeing interest in agriculture waste being converted for energy. By 2030, India could be among the most efficient nations on a per-GDP basis.

Michael Hirsh: How difficult is it to move to green technologies?

Cynthia Carroll: Two-thirds of our business is in developing countries. Our energy usage today is about 2100 megawatts, we're going to grow to 6000 megawatts. On the other hand, we see a wide range of energy policies across the places where we operate -- Australia, for example, is very sophisticated, and we generate energy there. In developing nations, the immediate crisis isn't low-carbon -- that's not what government officials are thinking about. The issue is energy availability. In South Africa, they need a great deal of energy and export a great deal to surrounding countries. Going forward, they're boing to need to spend $133 billion -- they're funding about $50 billion, but the funding isn't determined. The growth demand has outstripped supply by at least double. We're hardly there. Last week, a minister pointed out that the focus is on supply and delivery before they can focus on reducing carbon. It's an enormous challenge -- focusing on carbon might be unrealistic.

Michael Hirsh: How can government create incentives to make it realistic?

Cynthia Carroll: We're taking initiative where government in South Africa can't -- introducing solar heaters to rural communities, for example. Governments connecting to global companies can help. The economics aren't feasible.

Michael Hirsh: What are some best practices for government policies?

Hélène Pelosse: Create incentives -- bonuses for buying clean cars. We gave car manufacturers standards for CO2 consumption to drive innovation. Giving the right signal makes people move. Polciy framework is key to make sure business is moving in the right direction.

Jack DeGioia: Since WWII, the US government has invested in research university, and it correlates to an investment in moral imperatives. A lot of investment was made in life sciences, clinical research, etc. In most recent stimulus bill, money was put into R + D in green tech. We had 60 years of investment in life sciences -- can we have that kind of sustained support in green tech?

Michael Hirsh: How do we turn this into a moral imperative and direct our best minds to this challenge?

Jack DeGioia: The energy that's needed is needed for human development. Unless we can find energy solutions there will be no human development. This is a global challenge, and it requires an integrated response.

Jamshyd Godrej: We should shift subsidies etc. to renewables from oil and gas. It's possible that in India ana China the capacity exists to completely change the energy profile from coal to solar, especially with solar cell prices. In ten years, coal electricity could be more expensive than solar electricity. In India, you used to have to wait for ten years to get a landline phone -- but now it takes five minutes to get a new mobile phone, because technology and government policy enabled it to happen and the consumer market was there. With standards on appliances being well-known, consumers want to buy the five-star product, not the one-star.

Hélène Pelosse: We need infrastructure. We need to work with scientists and build a worldwide database. We have data on oil and gas going back 100 years -- we need to start building a database on renewable energy. The cheapest solar kit is $300 -- that's not enough for developing countries. We need to make this technology more affordable for poorer communities.

Cynthia Carroll: Coal's not going away. It's only going to grow as a principal supply to energy generation to satisfy growth. We need to develop coal technology.

Michael Hirsh: Copenhagen: setting a global standard. Some of the economic obstacles are so large that only stigmatizing failure will help us get there.

Jamshyd Godrej: Can we grow in a low-carbon way? Studies are showing that it's possible that by 2030, 2050, we can follow a low-carbon path. If we have the right policies, I have no doubt that by 2030 India can create a very efficient use of energy in our economy. These are theoretical numbers that have to be pressure-tested, but the right mix of policy can make this happen. I don't think we need to be despondent. We can't accept a cap, because we're growing, and our CO2 use is going to go up. But we can make it happen that India is among the most efficient carbon users in the world. We need to work out how it can be done for the future.

Michael Hirsh: How would you advise someone going to Copenhagen to focus? What are you most concerned about?

Hélène Pelosse: Movement from the old building blocks. Some governments need more time, so I would focus on where we have broad consensus. Agreement on renewable energy -- governments can achieve it through different instruments and targets. Create agreements by sector on energy efficiency, appliances, computers, manufacturing, cars. We're going to move to a green car and we need standards. Get a program for technology transfer and target so that developing countries have increased access to clean energy.

Jack DeGioia: Copenhagen will be a success in my mind if we establish a trajectory that this is the first in a series of steps we'll take, and if we recognize that no single corporation or country can take steps on their own. This needs to be a collaborative process. We need to recognize the long-term characterization of this. We need to get better and better and better at this. There are competing dynamics for the developing world and the developed world. Our old assumptions can't guide the world for the next 50 years.

Jamshyd Godrej: We need to agree on minimum standards and efficiency for appliances and products, particularly cars. The developed world has to have significant cuts. There are political issues connected with that, but if we can define how to get to the sweet spot, that would be a good development. We should reconvene to have Copenhagen II and check our progress.

Cynthia Carroll: We need to understand the price of carbon. That's fundamental. Any agreement needs to be comprehensive and flexible, so nations can apply different policies with clear milestones. It needs to be simple, something that everyone can take on.

Michael Hirsh: What technologies or research do you think are the most promising? There's a cacophony of ideas.

Hélène Pelosse: Photovoltaics. There's a huge way to get the costs down. It has the biggest potential. Electric car also has tremendous opportunity.

Jack DeGioia: We built a building in 1981 with a roof made for photovoltaics. We've been reducing carbon emissions -- 70% of that will be through the redesign of our central power plant. We spend a lot of energy chilling water, and there's a lot of better ways to do that.

Jamshyd Godrej: Solid-state cooling devices in appliances. This came reom the computer industry, and we're showing that you can replace current tech. Energy efficiency and savings could result.

Cynthia Carroll: Wind power in Ireland, Chile, methane in Australia, Botswana, South Africa. One thing we haven't talked about is efficiency -- our target is 15% reduction. That's an enormous challenge because our use is only increasing. Carbon capture and storage -- the economics are overwhelming.

After a quick break: the business reasons why sustainability is important.

— Sarah Spooner

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