Energy, the enviornment, sustainability, and China

China and an Inefficient Truth

Somewhere in the CBD
Cafe crawling
1535 hrs.

Over in the UK, the environmental organization Global Action Plan has produced a sobering report on the amount of energy used by information technology. The full report, entitled An Inefficient Truth, along with a more quickly digestible executive summary, can be accessed at their website.

The general point is not new: IT is an acknowledged and growing source of energy suckage. What makes this report so compelling is the factoids that it cranks out.

Any fair assessment of the situation would suggest that all of this noise is driven in part by a growing group of enviro-luddists who generally see technology as something of an unnatural scourge. It would also be wrong to suggest that the industry is indifferent to the issue of the energy used by computers and other technology devices.

What I derive from the growing battle between green and tech is that the technology industries have much to gain by focusing their justly vaunted engineering prowess on making their companies, their processes, and their products meaningfully more sustainable.

Inefficient Informatization?

The central government has been actively encouraging the widespread adoption of information technology for over a decade, seeing in the microprocessor an answer to China’s discouraging productivity and an elixir for the nation’s ailing state-owned enterprises. The audience bought the messages: a survey completed by The Economist Intelligence Unit and SAP in 2004 found that something like 95% of China’s executives had seen the future of their businesses, and it was information technology.

If you believe the statistics, China is adding computing power and Internet users at remarkable rates. As “informatization” (the government’s term for economic transformation via information technology) spreads, China looks to follow the rest of the world down an economic path lined with power-sucking machines.

It remains remarkable that the nation’s policymakers have yet to draw a connection between their commitment to creating an innovation-based economy and the opportunity implicit in the nation’s (and the world’s) need for more efficient, more sustainable servers, laptops, desktops, and handhelds.

I do not expect that to last for long.

Efficient Action

There are some very intelligent people just below the director general level in the Ministry of Information Industries, in the State Environmental Protection Agency, the National Development and Reform Commission and other bodies who already see the connection. The challenge is forging them into a bloc to share information and to begin polling industry on what is possible in this regard. A good step would be putting An Inefficient Truth into the hands of one of these quiet crusaders and letting it circulate.

Hmm…

Meantime, this is a superb opportunity for companies who are already focused on dropping energy use in laptops and data centers to stand up and get proactive. Not to name names, but Intel, Apple, HP, Dell, and the leader of the greener computer pack – Lenovo – should publicly take the lead in calling on themselves and others to do more in China in this regard.

Efficient Informatization belongs alongside Independent Innovation. This is one area, however, where the foreigners can and should claim a lead, and use that as a starting point for action that would be both financially rewarding and environmentally responsible.

We need one more ingredient to fire up the greening of IT in China, and that would be an NGO who would be acceptable to all parties to coordinate the effort. My first thought comes to the United Nations Development Program, mostly because I worked with them on an electrical appliance efficiency program about eight years ago and their efforts have borne fruit.

Any ideas about who else might complete the triad?

Harbinger of a Green Tech Gold Rush

Somewhere beneath the Ascott Beijing
Shearing the Wolf
1446 hrs.

One need only look around this amazing, frustrating, enchanting country to realize that we are slowly killing the environment, and it is slowly killing us, and that something (a lot of things, actually) need to be done to change this.

The attention of the world’s growing cadre of green technology and clean energy companies was bound to wake up to the China opportunity at some point, and it seems that these nascent industries already see China as a massive opportunity. They are certainly being told as much by otherwise credible sources of business information. CNET networks’ BNET Report in my mailbox this morning said:

“Dirty China could lead to clean profits. China has the green. It’s just not green…yet. And that’s exactly where the opportunity will be for American business as the pressure builds for the pollution-ridden country to clean up its act.”

Not so fast.

There will be opportunity for companies selling green tech in China. First, however, local businesses need to get motivated. Despite the ugliness in the nation’s environmental situation, there is a lot of resistance among companies, local governments, and farmers to cleaning up their respective acts. For most businesses in China, It just doesn’t pay to be green, not yet, and until it does do not expect businesses to shell out the cash needed to make their businesses more sustainable.

Second, consumers need to wake up. Most consumers are far more interested in improving their lifestyles – or just getting by – than they are in environmental protection. Most of China has an environmental consciousness level that approximates pre-Earth Day America. They will not drive the greening of China until they have a clear picture of the alternative, and see a path to a better life that coincides with sustainable living.

Even the central government – arguably the strongest force for change – is sending out conflicting messages about the environment. While they understand that something has to change, they see enough economic and political risk in moving smartly to protect the environment that they are largely paralyzed, resigned to half-measures and token efforts. Most Americans don’t realize that the nature of government has changed in China. Decisions are reached by consensus. Policy is no longer made at the whim of a single individual. Change cannot simply happen as quickly as it once did.

If history is any guide, what is likely to build widespread local support for greentech and clean energy is the growth of a large domestic sector in those industries. When you can make the case to the government that every job lost in dirty industries is one (or two) gained in clean ones, and that the investments in sustainability will not mean another river of capital flowing offshore, you will see things change very quickly. Government will become an advocate of environmental cleanliness, and the propaganda machine will kick into motion to help raise public support for more sustainable lifestyles.

None of that means opportunity for American businesses in particular, but none of that by definition excludes American business. It just means that a green tech company should not expect to land in China, set up shop, and start printing money, regardless of what the hype-mongers at BNET and elsewhere might think.

CleanTech Forum XV is Coming

In the Hutong
Hiding from Expat Trick-or-Treaters
1647 hrs.

For those of you with an interest in clean technology and not otherwise occupied on the day, the Cleantech Forum is coming to Beijing on December 3-4. The real interest here will be for firms looking for interesting venture opportunities, as well as for the usual suspects seeking to sell their services to said firms.

Check out the information below:

Registration – Cleantech Forum XV, Beijing , December 3-4

Program – Cleantech Forum XV, Beijing , December 3-4

Tip of the hat to Dennis Best for the heads-up.

Beijing’s Hybrid Hypocrisy

Starbucks Pacific Century Place, Beijing
Digesting raw fish
1254 hrs.

Here in the Hutong we are looking for ways to lower our carbon footprint while enjoying the conveniences of modern life. Tired of driving a car that is getting too small for the family, not wanting to own two cars, wanting a tough vehicle, and at the same time seeking to lower our carbon footprint, our natural instincts are to look for a vehicle that will give us more room and yet move us to a more sustainable lifestyle.

Despite all of the hype at the Shanghai Auto Show earlier this year, there are not a ton of options out there. The Prius is too small, so that was out. Our eyes naturally reached the Lexus RX400h as being a pretty good combination, an SUV with a hybrid drive.

Until, that is, we saw the price. For a car that fetches around $43,000 in the U.S., the dealer in Beijing was quoting us RMB 816,000, a tidy US$109,156. Trying very hard to make a sale, the dealer hinted that the standard RX400, without the more environmentally-friendly hybrid drive, could be had for around RMB 700,000, or a full US$16,000 less.

Is there a price difference between the two vehicles? Certainly there is – somewhere around $4,000, if US prices are any indication.

But what this means is that in China, in a nation where air pollution caused by automotive emissions is becoming a serious threat to public health, an environmentally-conscious car buyer is taxed by the government an extra 16-20% for wanting to make a better automotive choice.

Clearly, somebody very senior in government is not thinking this through.

Granted, from a policy standpoint, the fewer cars with large engines that are on the road, the better. And granted, from the same standpoint, the more domestically-produced cars (rather than imports) on the road, the better. This is the reason that imported cars with engines larger than 3 liters are already subject to a whopping 100% tariff.

But if someone is going to buy that imported vehicle, from an environmental standpoint it makes more sense to do everything practical – up to and perhaps including actually subsidizing that purchase – to encourage the consumer to make the right choice. At the very least, you would not want to penalize the buyer any more than the actual cost differential of the vehicle.

I cannot believe the problem is with the environmental bureaucracy. This sounds like a simple case of the General Administration of Customs doing their jobs and collecting as much money as possible for imported vehicles. To bring about a change, somebody very senior in government needs to get involved.

This sounds like something that, if the large automakers handle correctly, could redound very much in their favor, both publicly and among their dealer community. What I suspect, however, is that the major hybrid-makers (Toyota, Ford, GM, Honda) are not interested in fighting this battle.

The big question is – why not?

Motherboards Aren’t The Only Green Technology

In the Hutong
Hugging Trees
2206 hrs.

We’re following green technology VERY closely here in the Hutong…in fact, we’ll have a major announcement along those lines in the coming weeks.

So the fact that Vermont’s governor is coming to China to help promote green industries caught our eye. Talk all you want about biotech. The reality is that the next Great Tech Wave will be coming from companies developing clean energy and other technologies designed to help us live and work greener.

Jim Douglas has figured that out, as has California’s Governator. What continues to mystify me is why China remains so dead set on reinventing the microprocessor, Wi-Fi, 3G, and other technologies when opportunities like Eco-tech – where there are as yet no multibillion-dollar sector leaders – beckon with the promise of both local leadership and global dominance.

If China’s government doesn’t get moving in this direction quickly, they’re going to find themselves playing catch-up in EcoTech the same way they are doing in information technology and communications technology.

Given the magnitude of China’s challenges in that area, that would be a great pity indeed.

Green Guards

“Xi’an Marks the Spot: The state of China’s student activist movement” by Dongli Zhang and Nathan Myeth, Grist 17 October 2006

A fascinating article suggesting that the government is allowing – if not encouraging – the growth of a student-based environmental activist movement in China.

It makes sense for two reasons. First, it’s a relatively safe direction in which to channel the political discontent of China’s students. Second, it becomes a boogie-man the government can use to help bring to heel local officials whom, for reasons of self interest, refuse to strictly enforce environmental regulations.

All of which sounds good, and which promises to be interesting to watch. Best case scenario would be for these kids to do some real good in raising awareness, saving a few species, serving as hard-to-corrupt watchdogs, and perhaps even solving a serious problem or two. China could use it.

But political movements, no matter how benign their roots, can take unpredictable courses. I can’t help but be concerned that eventually a lot of these kids are either going to a) wind up in jail, b) wind up as tools of the government, c) wind up as pawns in a political struggle, or d) become a force of nationalism.

I hope not. I really hope this movement gets China thinking about cleaning up its environment the way the environmental activists in the U.S. managed to do during the late 1960s and the 1970s.