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Edited transcript from the Shanghai debate
An essay about the discussion can be read here, plus watch videos and read key quotes from the debate. Participants
Welcome to the discussion from Lui Xiaowie, director of communications for Shell in China. Michael Elliott: Juliet, why are alternatives energy sources so important to any rational discussion on where we go from here? Juliet Davenport: If I start where I started from and my journey into this world, I came in as n atmospheric physicist and was working in the field of climate change. And one of the issues that appears to be was that we have a society based around energy and the situation we have today is based on an energy economy. If you look at climate change you have two things on a collision course. To increase our economy and develop as we are, we're going to need to use more energy, but at the same time climate change and the effects of climate change are going to increase and they are beginning to impact on our lifestyle. So you have a conflict in economic development between energy and climate change. The only way to resolve that conflict is to move to a lower energy economy. So it's really about a massive innovative change, so we need to rethink this and take us in a new direction. The route I've come at it is giving power back to people. I think we've taken power away, I think its' been very centralized and people don't understand the value of power and the value of their use. I think renewable is very good for bringing that home; it's very visual. And from our experience once people take that first step it become much easier. So we see it as a process moving from one high energy economy to a low energy economy. Michael Holmes: How do you take small scale, worthwhile, innovative initiatives and scale them until they have a massive impact in countries like China?
The second big approach is engaging the market. We've seen a huge surge of activity by the private sector in the area of green investment for financing renewable energies. How do we take the very successful cases and scale them up? This is the next big challenge of the next five years.
Michael Holmes: How realistic are these options of alternative energy when it comes to major users of energy? Jeremy Leggett: Let me say a few more words about the upsides of this technology. Solar is just one member of clean energy technologies, it's no magic bullet and I'm sure everyone here appreciates there are no magic bullets in energy. But to give you a feel for it, in a cloudy country like Britain, my company can go out with the right partners in the construction industry today and put up buildings that are essentially zero emissions, we do solar photo optics and solar thermal, so under our cloudy skies it's perfectly feasible. Now when you think in a country like Britain that more than half of greenhouse gas emissions come from directly or indirectly from buildings, not transport that's the biggest problem, it buildings if you count power stations, it's a incredible achievement, because we can go to not just low carbon but to no carbon. And there are other methods from the renewables family that can do this, but when you use these technologies in strategic harness and with energy conservation and energy efficiency you have a fantastic array or opportunities to make deep cuts in emissions. So that's the good news, and you can see that huge investment is flowing into this area. I serve on the board of an investment fund that invests in all this stuff and if you think we invest around $1 trillion a year in energy in the world, this year more than $100 billion will go into renewables, yet less than 1 percent of global primary energy. So here you get to the first downside: the magnitude of the challenge. We know we have to get to low carbon, even zero carbon and manage a withdrawal from fossil fuels in time, we know this from the advice of the world's best climate scientists and we know we can do it with the existing technologies, but, boy, do we have a huge challenge time wise. I think my final thought would be another aspect of the downside, my personal belief is that we're headed for an enormous energy crisis as we try and make this transition. In my previous career I was a geologist and a creature of the oil industry and looked at oil source rocks, funded at times by BP and Shell, so I followed this debate as it's been emerging over the past few years where people will be aware, there's a growing body of people in the industry that are saying "we just don't have enough of this stuff out there, we're not finding it at the rate we need." This is going to hit us with a premature peak in oil production and it's going to force us to go even faster and harder for these survival technologies. So as I see it we're in a race against time and it's a race that's both driven by climate change and the physical availability of oil and gas. Michael Holmes: To what extent do you think new ways of thinking about how we live have percolated into society?
And I think if there's anything to be positive about, because climate change is not a positive thing in my view and with energy running out, both of those things coming together causes us major issues. Kishan Khoday: The focus really has to be on integrating energy efficiency to the end user. Up to two thirds of future green house gas emissions can be prevented through improvements in end use energy efficiency. In China as in other large emerging economies industry is driving energy consumption, about 70 percent of energy consumption in China is from industry. I think there are good examples that we need latch on to and scale up. I think of the role of Shell in the use of sustainable transport and trying to support hybrid vehicles. UNDP are about to launch a new program in Shanghai to support the government on a national road map for hybrid vehicle production over the next 20 years and introduce pilot hybrid fuel cells into the public transport system. In the industry sector, the steel sector is approximately 20 percent less efficient than those in the west. How to take best practices from leaders for example? A very strong partner we're working with Mittal, the forth largest steel producer and one that actually has a very good record in integrating energy efficiency in its operations. Now how do we bring this experience and scale it up to provide solutions in China. I think this is the key challenge to bring the private sector, multinationals and local companies to try and find practical solutions. Michael Holmes: Beginning of question....Some of the biggest wind farms in the world are in China, correct? Kishan Khoday: The richest woman in the world is a Chinese paper recycler. These changes are taking place here and not anywhere else because in China there is a very pragmatic approach to these kinds of issues. Once there is a practical solution that is identified it is latched on to and worked to succeed. China is now exploring the moon, India too. I think the level or ambition and imagination and creativity that these countries are bringing to the challenges will I think bring new solutions to the problems through new technologies. Michael Elliott: Jeremy, is the rich world learning from what is happening in the developing world?
Michael Elliott: Is there a corporate realism coming in now that business believe something really has to be done.
Juliet Davenport: I think it's really interesting. I see the environmental movement in two sectors really. The new environmentalist are very much embracing it but you have to prove it works on a financial model as well as an environmental model and you need to bring these two things together. The new entrepreneurs that are coming in today and saying you can make good money being green. In a sense with our business Good Energy, that was the whole premise behind it to demonstrate you can make profitability out of a green business and then trying to get people to be a part of that. Until you get money flowing into a business. To me there's the environmental framework which gives you how you operate, and you've got the financial rules to make that work, so they come together hand in hand. Michael Elliott: You're not going to set up a wind farm that will run a city, so how will you marry up the technologies to give you the end result?
Michael Elliott: This will take a long time, in the U.S. the car is ingrained, yet time is short. Juliet Davenport: They've stopped building pavements which has stopped people walking in the States. You're right there is an infrastructure issue. New buildings, new towns are very important, so we have to look at existing infrastructure and how we adapt that. We're going to have to come up with way to do it and fast. Michael Elliott: Is retro fitting of buildings going to be a possibility? Jeremy Leggett: Absolutely, as small as my company is, we're doing this already in Britain. We've clad a 28 storey insurance company HQ from top to bottom on the service tower with solar photovoltaic panels. When you do that kind of thing there are other ways to innovate. Financially for example, that building had a decorative façade that was beginning to fall off, so you're replacing something that was costly and utterly functionless with something that is equally beautiful, perhaps a bit more costly because we don't have the economies of scale in manufacturing at the moment that we're going to have, and yet you put a façade up that's functional, generating a lot of energy. It gives you a feel for what can be done. Retrofitting is going to be very important. We can't just do it with new buildings. The single most important thing of all this is not the generating technologies it's the energy saving technologies and conservation. Selected audience questions:
Jeremy Leggett: We're all living in a world that is geared to its rivets of growing supplies of generally affordable oil and every sector is geared to that assumption. Growing number of people with reason to know are telling us were about to transition into something totally different where we have rapidly shrinking supplies of increasingly unaffordable oil, you can extrapolate from that what would happen. I really hope it's not correct, and when I talk at oil industry events, I'm told it's not correct, but more voices are coming from within the oil industry - the former head of exploration and production at Ramco Energy, said in his view we're already at that peak. We've had flat production for the past three years and we're not going to get about 85 million barrels a day. God forbid that is right, because that would give us a real problem. In more own analysis of this, I tent to follow the petroleum review where one of the flagship oil industry journals set out to prove it wasn't true a few years ago, but the editor wound up finding it was in fact correct, he thinks the peak is coming as quickly as 2011. Do you see a potential for conflict out of this too? Juliet Davenport: Someone quoted to me the other day, if we want to grow our way out of poverty we'd need 15 planet earths, so we going to have to find another way of growing so we can solve the other problems we've got, because this isn't the only problem we've got. I think if we don't make the shift to another source of resources then you are going to get more conflicts in the world and the ones we're seeing now are mere skirmishes to what may happen in the near future.
Juliet Davenport: Every single company has a responsibility or how they behave so should they be looking to include on their expense claim, CO2 use for example, that is a very simple little message to show people the impact of the things that they do. We use controls in lots of things we do, you just have to apply them to environment use as well. Do you think we have to rethink progress? Juliet Davenport: What's you have to look at is lifestyle. In the west people have got much richer, but have become less happy. What is progress? Quality of life is very important, and money has been central to that, but if you redefine it you can change the way you go forward. Do biofuels put too much pressure on arable land? Jeremy Leggett: I think in the modern where arable land is coming under such stress, it's absolutely crazy if we allocate any of it biofuels. That isn't to say there isn't a great role of biofuels going forward, the second generation of biofuels that's being developed based on cellulosic ethanol, there's all kind of agricultural residues and forestry residues that can be used. Shell has calculated that just from organic, domestic and industrial waste, if that was put to biofuels by fermentation and the rest of it by pyrolysis, you could, amazingly enough create as much gasoline as America is currently using, so there is plenty that can be done, but the corn ethanol idea is a disaster. And it's a disgrace for our system if we can't get that right. In Mozambique there is a dreadful famine going on and they are in receipt of food aid and they are turning land over to cassava ethanol to export biofuels. That's a crime against humanity in my book. |
Shanghai hosted the Principal Voices debate on Alternative Energy on November 13, 2007, where a panel of esteemed experts discussed ways in which alternative energy can counter the twin threats of climate change and dwindling natural resources. 
Moderators Michael Holmes, co-anchor and reporter for CNN, and International editor of TIME Magazine, Michael Elliott.
Kishan Khoday: I think that is the main challenge at the UN that we're trying to address with our partners in China. Our chief focus is on how to integrate issues of sustainability into the development pathway and when we look at large, emerging economies like India and China, Brazil, it raises the issue of scale. Huge populations, with improved standards of living, increased consumption levels, if you look at China, more than a third still survive on less than $2 a day. In India as well there are plans to increase growth rates, the challenge then is how to integrate sustainability to that through energy efficiency and other ways of becoming a resource conservation society. From our perspective we see three key ways to achieve this. First, is related to the challenge of institutions, how to engage them into the challenge of climate change. At the local level in China what we're trying to do is focus on building capacities for enforcement in national frameworks, ways to improve monitoring and evaluation on the ground, accounting for the actual emission and improvements that the private sector and government are making locally. 
The third big focus is on knowledge and education. One of our main roles of the UN in the international community is to increase communication and connectivity between countries and increasingly between developing and emerging countries facing similar challenges. How do we share the successes that we have made in China in the last decade on energy efficiency and share that with other countries facing the same challenges. And how to engage civil society and citizens? Recent polls in China suggest that there is quite a good engagement in China among ordinary people on the importance of climate change. We need to engage the co-benefits of this issue for the reduction of health impacts on communities and towards this opportunity for green livelihoods. 
Juliet Davenport: I think it's quite interesting over the last 18 months is a significant change in awareness by individuals of what the issues are going forward, and I have to say that Al Gore has had a major part in that in terms of general awareness worldwide and where your looking at what has traditionally been the green people called environmentalist, but we're also looking at a whole range of people in society that are waking up to the fact that continuing to use energy in the same way that we have over the last century cannot be sustained. So I think from that point of view what's really interesting is that we've got more people now involved in the process and more people interested, so the brain power we have round the world is quite significant. 
Jeremy Leggett: We're learning from each other, but there's so much going on in this area at the moment, there's money flooding into it. Just in the last six month $12bn of investment has gone into solar and wind energy in the private equity and public markets. Sure, a lot of that is going into China, there are 60-odd publicly quoted companies on the stock exchange and most of these are Chinese and some of them are raising really large sums of money. But it's also going into other countries where their governments "get it" about market enablement and the need to stimulate these markets just for a few years so you can get to economies of scale. In Germany they've created 200,000 jobs since they brought in their law in 2000, if you think about California where there is genuine leadership from a Republican politician that's' really driving the market. If you look at Japan where some of the biggest renewable energy companies have been created from traditional electronics giants. I hold my head in abject shame when I think of the United Kingdom in this regard. But where there is leadership in the world we're doing very well and I think when you look at the business community, a company like Wal-Mart, the biggest company in the world is rewarding its store managers worldwide as much on how much carbon they save as the profitability of their stores. It has a target of zero carbon, not low carbon, in all its stores and operations worldwide. Unlike governments that tend to say a great deal but do very little, business people generally do something if they say they're going to do it, so I think there's genuine leadership out there especially in the retail sector. The race is on, we're far from defeated yet but it's a big task ahead?
Jeremy Leggett: I think there's a tipping point, I think we're just at the inflection point. There are enough companies now that really have it in their DNA that this makes sense. Not just because you can't do business in a world that is killing itself, it's as serious as that. There's a realisation that you're going to make more money - just look at BP since they started making their own operations energy efficient, they've saved $600 million, which is a fantastic sum to drop on the bottom line - so you've got that realisation that it makes business sense, as well as for our children and grandchildren. 
Juliet Davenport: That's fascinating and that's what's coming up now. People are looking at buildings at a whole new way, so when you put in your electrical systems you put in an alternative and a direct current system, so you can actually reduce the loses in that building and take power directly from wind into DC. With technologies coming together and load management tech, my vision in the UK is that you only wash your clothes when it's windy, where everyone has a micro turbine that runs when the wind is blowing. I see that kind of things as the way forward. It's not just about these iconic technologies by themselves it's how you use them and how you integrate them into people's lifestyles
What we're really talking about in terms of transport, is not whether or not you have a car, its how you get there. It's this service that transport provides for you and this is where we need to get the thinking right. What do people really want in their lives? Do they want a car they can't drive because of too much pollution and traffic, or do they want to get from A to B?
What will a world in energy crisis look like?
What do we do about air travel?
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