Article by IndianOil Chairman: "Green equilibrium - creating a low carbon economy
New Delhi 08-Oct-2010
B M Bansal,
Chairman,
Indian Oil Corporation Ltd.
Where there is consumption, there is likely to be some waste. From a purely business perspective, no one would like waste. Businesses spend time and money to ensure that operations are efficient with the most optimum consumption of material resources and time. Therefore, building a low carbon global economy would be a natural progression for us.
Building a truly low carbon economy is not just for the governments. It is a collective responsibility of all. This concept is necessitated by the consequences of industrialisation — the spiralling impact of mass consumption. Beyond the esoteric definitions, a low carbon economy would be that which is sustainable today as well as tomorrow. Mahatma Gandhi once said, ‘’The difference between what we do and what we are capable of doing would suffice to solve most of the world’s problems.’’
Aim of a low carbon economy
The aim of a low carbon economy is to integrate all productive aspects of the economy around technologies that produce energy and materials with minimal greenhouse gas emissions. It is to ensure that populations, buildings, machines and devices use energies and materials efficiently.
From the perspective of an oil & gas company, low carbon economy means decoupling economic growth and consumption of carbon resources. It is perhaps ironical and a cruel twist of fate that just when the developing world have begun to industrialise and break out of decades of poverty, we have to deal with the blow of global climate change.
The status of developing countries from a development perspective can at best described as ‘work in progress’. Suddenly, a decade of prosperity in the developing countries is being targeted and people often forget the rampant exploitation of resources by the developed world for over a century.
The World Resources Institute estimates, in terms of historical emissions, show industrialised countries account for roughly 80% of the carbon dioxide build-up in the atmosphere till date. Since 1950, the US has emitted a cumulative total of roughly 50.7 billion tonne of carbon, while China (4.6 times more populous) and India (3.5 times more populous) have emitted only 15.7 and 4.2 billion tonne respectively. Annually, more than 60% of global industrial carbon dioxide emissions originate in industrialised countries, where only about 20% of the world’s population resides.
Of course, this is not to shy away from the responsibility of mitigating climate change. For the developed world, climate change is a sporadic occurrence. But for the developing world, it is a matter of survival and the victims are most often those who are the poorest of the poor. The tragedy is that global climate change will affect the developing countries more than the developed ones. And the sooner the developing countries formulate plans and mechanisms to mitigate the impact, the better for them.
For a developing country, the challenge of transition into a low carbon economy is multipronged. The following paragraphs spell out some of the issues.
A majority of the global workforce is in the unorganised sector and agriculture is a dominant part of it. In fact, in India, the agricultural sector accounts for 52% of the work force. Though the country has the second largest worldwide farm output, its agricultural yield is just about 50% of the highest average yield in the world. Farming contributes about a quarter of the total greenhouse gas emissions. So, one of the tasks could be to introduce more efficient irrigation processes, reduction of synthetic fertilisers and better crop mixes, etc.
Secondly, the information technology revolution changed the way we perceive business. It empowered us, shrank distances, empowered people with information, reduced costs and digitised our lives. Similarly, we need a new revolution centered on sustainability. The model adopted to encourage environmental awareness amongst government agencies, architects, engineers, developers, and builders has already become a standard in many countries. Developing countries, including India, too would need `green approach' to construction design, waste management, energy and water consumption, etc. We need to re-look the way we build our offices and homes, the way we travel and the way we live. In the future, when engineers and designers plan a building, process plant or an industrial unit, they will do so keeping in mind sustainability issues. Training the construction force to build green buildings would be a huge opportunity.
Coming to sustainable models of transport, we can see that the US models of individualised transport requires another look in developing countries. In India, car ownership is rising and we cannot afford to build roads for 200 million cars in the future. The focus, rightly, is shifting to mass rapid transit systems and freight corridors.
The explosion in the number of computers, mobiles and gadgets is another area where expertise is required to ensure efficient design and maintenance. In fact, IT infrastructure is one of the biggest power guzzlers in companies and persons operating such facilities would do well to have `green computing' ability.
Competition for green talent will rise. Though India's vast technical manpower will continue to make available adequate resources for domestic companies, there is competition to retain good talent. This would mean making more efforts to train semi-skilled labour in deploying cutting-edge green technologies. Green Collar jobs will pick up in the future. We could be soon seeing a new category of workers whose job would be to bring in sustainable concepts to business. In the post industrialisation era, the shift was from blue-collar workers to white-collar workers. We might as well see a further shift to green-collar workers who will be a vital part of a corporate's operational strategy.
IndianOil's green initiatives
IndianOil was among the pioneers in tapping alternative energy opportunities. We have set up wind farms and solar charging stations. We have one of the largest bio-fuel ventures for production of bio-diesel. There is a dedicated renewable energy group in the company that explores the potential in this field and invests resources.
Liquefied petroleum gas has been a big tool in preventing deforestation. As a reliable and convenient domestic cooking fuel, LPG is supplied in cylinders. I remember that when we introduced bottled LPG in 1970s, there were apprehensions. People were not comfortable with compact cylinders which are called refills. We embarked on a countrywide multimedia awareness campaign and managed to change the mindsets of an entire generation of Indians. Today, LPG has lead to a substantial improvement in the health of women in rural areas by replacing smoky and unhealthy chullahs with Indane. And LPG has emerged as one of the biggest success stories in preventing deforestation in the country.
Similarly, when natural gas emerged as an alternative, we made plans to rollout city gas distribution networks for homes and automobiles.
IndianOil's network of retail stations, numbering over 18,000, dots the Indian landscape. Provision of automated facilities and solar-powered lighting at our retail outlets have contributed to a paperless and low-power consumption environment. But more needs to be done. We have taken several initiatives like the consolidation of servers which has helped improve power efficiency.
Corporate accounting and reporting of Green House Gas (GHG) emissions are not regulated in India. But the Carbon Disclosure Project (CDP) in the year 2009 notes that 44 companies out of 200 Indian companies responded to the CDP survey.
Recently, Prime Minister's Council for Climate Change in India has led to the identification of eight core `national missions' for sustainable development in the country. This includes the national solar mission and enhanced energy efficiency mission which is expected to save 5% of India's annual energy consumption by the year 2015. The Energy Conservation Act of 2001 first established the Bureau of Efficiency which develops policies, schemes and strategies to encourage reduction of energy intensity in the economy.
Every citizen of the world has a responsibility to ensure that our future generations have an equally fulfilling and equitable life full of opportunities, if not more. The efforts need to be made across regions, countries, groups and beliefs. Building the skills or green talent for a low carbon economy is a joint responsibility. If we fail today, the future will judge us as a generation that failed them.
