Raufer Updates

I was quite pleased earlier this year when I was asked to be an instructor in IFP’s new Executive MBA program in Energy Management, which is run in conjunction with the BI Norwegian School of Management and the Business School of Singapore’s Nanyang Technological University.  So I added some additional lectures in this year’s Paris visit, for a group of young executives from around the world….  but truthfully, I’ve never had any trouble adding a bit more time to my Paris visits!

EDF’s Chine

I had flown to Paris from Beijing, and during my China stay I had had discussions about a proposed new programmatic CDM project there that would be developed by Électricité de France (EDF).  Interestingly, when I got to Paris, I found that EDF’s Foundation was sponsoring an exhibition entitled “Chine, Célébration de la Terre,” which  focused on the relationship that Chinese farmers have long had with the land….  and so of course I had to check that out.

For the Love of God, Laugh

Some of you may be worried that I seem to be o.d.’ing on China lately – writing about Chinese farmers in my Paris postings, no less! — but you can rest assured that that was not my only Parisian stop.  I also checked out an exhibit in the Musee Maillol with a more modernist bent, entitled Vanités de Caravage à Damien Hirst.  You might have heard about Damien Hirst – the controversial, death-oriented doyen of the ‘Britart’ scene, and probably the richest artist in the world today.  He is most famous, of course, for his 2007 piece “For the Love of God,” a platinum cast of a human skull encrusted with 8601 diamonds.  The Paris exhibit included several Hirst pieces, as well as other ‘memento mori’ by Picasso, George Braques, Andy Warhol, Jean-Michel Basquiat and others.  I didn’t get to see the original skull, but instead a print entitled “For the Love of God, Laugh” – a derivative piece sprinkled with diamond dust, instead of diamonds.  Well…..  okay.  But still, perhaps as far from Chinese peasant life as one could get…  n’est pas??!

On this trip I was reading the new book by Jonathan Watts entitled When a Billion Chinese Jump:  How China Will Save Mankind – Or Destroy It.  Watts is an award-winning, Beijing-based environmental correspondent for the U.K.’s Guardian newspaper, and I had met him in China on a previous visit.  He told me then that he was writing an environmental book about the country, & so I’ve been keeping an eye out for it…. and anxiously bought it as soon as I saw it.

It’s an interesting & very insightful read….. but also what one top UK literary critic called “a revealing and depressing book.”  In it, Watts travels around the country, discussing the wide range of environmental concerns in appropriate settings – biodiversity and the demise of the Yangtze dolphin in Hubei Province; urban consumption in Shanghai; logging in the forests of Heilongjiang; coal and pollution problems in Shanxi; etc., etc.  Having spent the weeks of this trip talking about monitoring, reporting and verification (MRV) aspects of energy/environmental conditions within the country, I readily recognized the situation when I read that:  “a political haze obscures the subject of pollution,” or later, a legal expert’s view that “only a tenth of China’s environmental laws are enforced…”

But Watts throws an interesting curve at the end:

“Having visited almost every province in the country, I am far more concerned about Shanghai’s friendly shoppers than Henan’s snarling polluters.  The latter are a recognized problem that can be cleared up with sufficient time, money and government effort.  The former, however, are hailed as potential saviors of the global economy.  Nobody wants to stop them.”

Beida lecturer

I spent a full ten days in mid-June as a guest of Peking University, meeting with faculty members & students in the College of Environmental Sciences and Engineering, and giving a couple of lectures there entitled “The Development of Emissions Trading in the U.S.” and “Next Steps for Emissions Trading in China?”   The students were really quite knowledgeable about this topic – no doubt because of Prof. Zhang Shiqiu and her other faculty colleagues (including a new addition, Prof. Xu Jianhua, who completed her Ph.D. in the Engineering & Public Policy program at Carnegie Mellon in 2007, and who coordinated all of my lecture arrangements).

Another interesting part of this Beijing visit was a chance to meet up with Prof. Lu Yonglong & his colleagues at the Research Center for Eco-Environmental Sciences (RCEES) of the Chinese Academy of Sciences.  An article in the 19 March 2010 issue of Science about China’s efforts to clean up its environment mentioned that Prof. Lu advocated using real-time monitoring systems to speed up progress and to identify ‘who is doing the polluting.’  I contacted him about his quotes in that article, and he graciously invited me to come and make a presentation to his group during my Beijing visit.  Those of you who have incredible memories might remember that this was not my first visit to RCEES – I was there in late 2006 & gave a presentation for Prof. Zhuang Yahui and his colleagues about the Clean Development Mechanism.   Prof. Zhuang is now long retired, but it was really very nice to be back at RCEES once again, and I look forward to further collaborations with Prof. Lu and his colleagues.

Star Ferry coming in to Wanchai

In early June I was in Hong Kong & Shenzhen once again, exploring some opportunities associated with real-time energy & environmental monitoring.  Chris Tung in HK and Dr. Yu Yanqui in Shenzhen were especially helpful on this trip, arranging for me to make presentations about this subject in their respective cities.   I had previously worked with Chris on a study for the Hong Kong Stock Exchange, and he set up a presentation at his law firm K&L Gates for colleagues, clients, and selected guests.   Dr. Yu arranged for a similar presentation at the Shenzhen International Technology Promotion Center for Sustainable Development, for a group of energy and environmental officials associated with a newly developing emissions exchange there, and I got some very useful feedback from both audiences.  Other business meetings kept the schedule pretty full — although I still found time to ride the Star Ferry back to Wanchai from Kowloon on a beautiful summer afternoon.

The rough life in Cheung Chau

Another high point of this visit — and another ferry ride! — was a delightful weekend trip to see Liam Salter (pictured right).  Liam runs a carbon consulting company called RESET (see previous Oct. ’08 HK posting), and lives out on Cheung Chau, a 35 minutes trip from Central on the ‘outlying islands’ ferry.  The lanes & alleyways are very narrow there – special vehicles are required for police & fire & trash collection – and we first walked around the island, & then had lunch in an open air restaurant overlooking the beach, a few hundred paces from Liam’s home (nicely nestled in a lush, green setting).  Liam’s wife Ina Pozon coordinates the Asia Water Project: China project, a research/web-portal effort which targets China’s environmental concerns on the water side, and I had a chance to meet her too, as well as the rest of the family.  I have to admit that I’m more than a bit envious of Liam’s lifestyle — it makes suburban Philadelphia seem more than a bit conventional and bourgeois!

Still another highlight was a chance to catch up with Hubert Tose, whom I had previously worked with at IETG & Anemone.  An even earlier HK posting (August ’07) showed Hubert in the Hong Kong Tatler, and by hanging around with him, I too was able to make the ‘high society’ scene in HK on this trip….  with proof,  a photo in the Asian Tatler!  The reason for this was an invitation to the Asian premier of ‘Sharkwater,’ an award-winning documentary film decrying the ongoing slaughter of sharks in the world’s oceans.  The target, of course, is their fins — long used to make ‘shark fin soup,’ a Chinese delicacy since the Ming Dynasty.   Demand for this luxury item has increased along with China’s growing economic power, and the film highlights the devastation this has caused for that creature, as well as the ocean’s ecosystem.   HK has been a center of the fin trade, and although demand in the city is apparently decreasing, that of the Mainland has been increasing – yet another powerful example of very short-sighted thinking (or, better yet, lack of any thinking at all) on the environmental front.

In late April 2010 I was invited to a two-day workshop on the Geopolitics of Global Resources, sponsored by the International Relations program at Penn. The invitation came from Prof. Anne Louise Antonoff, whom I had met and worked with in last year’s IASC meetings, & I made a presentation about China’s energy and environmental situation.  I realize that it probably sounds like a platitude — but even given an IR perspective, and working within a broader resource framework (i.e., food, water, strategic minerals, etc.), China still seems to be the key.  A similar viewpoint for climate change, under the title ‘The Radical Pragmatist’ (in the print version), can be found in this month’s Wired.

If you’ve noticed just a touch of heaviness in recent postings – Death in Venice musings, etc. – it might have something to do with the fact that my father has been quite ill over recent months, and passed away on April 7^th.

Young PECO engineer

My dad was truly an engineer’s engineer – completely at home in the mechanical world, with a fundamental understanding of the way machines worked, how to keep things running, and how to fix them when they didn’t.   After graduating from Drexel U. in the early 1950s, he started out as an electrical engineer at the Philadelphia Electric Company (PECO), working at the Schuylkill Station (the photo is from a company newsletter at that time) — and he was  quite pleased when I too worked at that site in the 1990s, helping to bring the fifth generation of combustion technology with the Grays Ferry Cogeneration project (please see the website’s ‘power plant’ page).  In the late 1950s he moved into the metallurgical field, working at Inductotherm (a company which makes electrical furnaces for the metals industry) and later at Consarc, a subsidiary company which specializes in vacuum technology (i.e., for making high quality specialty alloys).

But such a technical history hardly begins to describe his life….   or his profound influence on me.  Remember those Philadelphia row houses in the movie Rocky?  That was similarly my dad’s early life, before he joined the Navy in WWII and fought in the Pacific.  He then raised a family of eleven children (I’m the oldest), and even more amazing than its size was the fact that he moved that family overseas — to both England in the 1960s and Brazil in the 1970s — and proceeded to take us on world travels and explorations that you might have noticed in recent postings (e.g., my boyhood trips to Florence and Venice).

He used his wonderful technical skills, and created a world for his family that was rich & vibrant & loving – and when growing up, more than anything else in the world, I wanted to be just like him.  I will miss him immensely!

“Where did one go when one wished to travel overnight to a unique, fairy-tale-like location? Why, that was obvious.” It was obvious to Thomas Mann, who penned those lines in his classic novel Death in Venice — and it was obvious to me as well. And so I took a couple of days after the Florence training sessions and headed over to Venice, a city I had first visited at the age of 14 – exactly the same age, in fact, as the youthful Tadzio in Mann’s novel. Now, of course, I’m more the graying Aschenbach.

Michael Cunningham has written a very perceptive Introduction to the recent M.H. Heim translation of Mann’s work, and claims that Heim has given us “an Aschenbach who is more clearly and unavoidably all of us, who wants more than life is willing to provide…” He pictures him as Icarus, flying high near the end of the novel — dyeing his hair dark, rouge on his cheeks, and a gaudy striped ribbon in his hat – before crashing & burning on the beach at Lido.

My own Venetian visit was certainly a bit less flamboyant than that (i.e., my hair is still gray, & I didn’t lose that engineer’s sartorial look!). But that quest for beauty and vigor and life-affirming experience burns in all of us — and Venice is particularly adept in bringing it out. I did many of the things that folks usually do when they visit the city: took a walking tour around the old sections, and got lost several times in the narrow maze-like, winding alleyways; marveled at the gold ceiling mosaics in St. Mark’s; took a vaporetto ride the length of the Grand Canal; had a drink at Harry’s Bar; and, yes – I’ll spare you those photos of me riding around in a gondola.

La Fenice

But one of the more interesting attractions was ‘La Fenice’ – the Venetian opera house that was burned to the ground by arsonists in 1996. I had recently read John Berendt’s book The City of Falling Angels, and he described the pre-fire Fenice as “arguably the most beautiful opera house in the world, and one of the most significant.” (It had, for example, premiered Verdi’s La Traviata and Rigoletto). Berendt is better known for his book Midnight in the Garden of Good and Evil, and his Venetian book starts off a bit slow….. but it soon gets better as it moves along. ‘La Fenice’ means ‘the Phoenix’ (due to previous rebuilding efforts from fires in 1774 and 1836), and the theater was rebuilt from the ashes this time com’era dov’era (i.e., “as it was, where it was.”) I wanted to check out the new ‘same-as-before’ reconstruction, and found the theater to be absolutely stunning inside. (You can get just a hint about that from La Fenice’s website.)

Faded grandeur alongside stunning beauty — Mann certainly chose the appropriate city for his novel!

Such was the title of an article in the Economist – notably, though, without the question mark — during the very week I was lecturing in Florence about that subject and carbon markets. An article in the International Herald Tribune the same week asked the question: “Why did cap and trade die?”

News has certainly been unremittingly bleak over recent months: the failures of Copenhagen, VAT tax fraud on carbon transactions in Europe, the sale of ‘recycled’ credits from Hungary, and a brutal political environment for cap & trade in the US Congress. The State of Arizona recently withdrew from the Western Regional Initiative, carbon market traders are being laid off, and markets of any kind – regulatory or otherwise – took a considerable beating after the financial meltdown of late 2008.

But I guess I’m just an incurable optimist, because those obituaries still seem a bit premature to me. Even at this point, any US plan is likely to use such a mechanism for power plants (e.g., building on RGGI’s experience), and perhaps adding other industrial sources down the road. Other countries continue to explore how they might develop new markets to address GHGs and related environmental concerns. Strictly speaking, many of these are not cap-and-trade efforts (e.g., China’s energy intensity trading in Tianjin) – but they could nonetheless have beneficial effects.

I’ve been working over recent months with China’s Ministry of Commerce and the China Beijing Environment Exchange to foster VER transactions within that country, and Business Week cited yours truly in a piece about Japan’s proposed market-based system. One of my students is currently studying the development of RECs and white certificate markets in India. Overall, we seem to be moving more and more towards a wide range of small-scale, nation-based environmental markets, built from the bottom up — rather than one large, global, top-down approach (as in the Kyoto Protocol). This is very much in line with David Victor’s ‘Madisonian’ approach, discussed in the CLSA report I wrote a couple of years ago with Christine Loh. So don’t give up hope….. & stay tuned!

Hotel view of Santa Maria Novella

In late March I was in Florence once again, giving presentations at GE’s Oil and Gas University in conjunction with my colleagues at IFP. We stayed in a wonderful, old-world hotel at Santa Maria Novella, and it was really great to be back in this beautiful city once again. This year’s class had 25 young engineers from all around the world, representing 21 countries. And although I was prepared to give four lecture modules, the participants were so inquisitive and asked so many questions that I was only able to cover two.

I came to Florence well prepared on another front as well. Dr. Michael Willingham, a friend & colleague for thirty years now, has spent a considerable amount of time in Florence – and so he & his wife Linda passed along a listing of their favorite local restaurants. I was able to visit a number of them – e.g., the ZaZa Trattoria on Piazza del Mercato Centrale; the Osteria de’ Benci near Santa Croce, etc. – and it made for an especially appealing (i.e., gastronomical!) trip. Linda is now fluent in Italian, having spent time in language schools in the city – and I’m sure the waiters at these establishments would have much preferred to deal with her; they usually quickly decided that English was the safer choice after hearing my own initial forays into their language.

Fra Angelico’s Annunciation

The trip was special in another way as well – I was able to re-visit the Museo Nazionale di San Marco, to see the Fra Angelico frescoes once again. I remember first seeing Annunciation as a boy, several weeks after studying the work in an art history class. I was used to seeing great art hanging in picture frames in museums – but this was unexpectedly different, a fresco painted right onto a hallway wall, in a dormitory corridor near the top of some stairs. The fresco, painted in the early 1440s, is well known for its architectural and spatial perspective, and the sparseness of the scene for that period (leading many to suggest Angelico’s focus was the spiritual relationship between its two characters). The setting didn’t surprise me on this visit – and the fresco is still sublime!

A number of folks have now asked me whether I’ve read Martin Jacques’ recent book, When China Rules the World: The End of the Western World and the Birth of a New Global Order. I have indeed — and found it to be a thought-provoking & interesting read.

It’s certainly an antidote to many – like George Friedman, whose The Next Hundred Years is mentioned in a previous posting – who see China breaking up in the near future as a result of stress from an unresponsive political system. Jacques highlights the forces of unification that have held sway in the nation-state (or, in his view, the ‘civilization-state’) over millennia, and sees a homogenized racial status (i.e., Han Chinese) supporting this unity. He also draws attention to the considerable economic success of the Communist Party over recent decades – a Party significantly different than the Soviet model, and rooted in a long-running Chinese ‘state-tradition’ that has been accepted by its citizens, without ever relying upon popular electoral mandates. The imperial dynasty didn’t share power with other competing groups – e.g., the Church, the merchant class, or other elements of what Westerners considers ‘civil society’ – and its legitimacy does not rest upon their approval either.

Much of this is dependent upon a Confucian world-view, and any Westerner trying to understand Asia has to wrestle with that fundamental difference. [And btw, I’ve found Richard Nisbett’s The Geography of Thought to be a particularly useful guide to that topic. His book is subtitled ‘How Asians and Westerners Think Differently…. and Why,’ and my lectures often contain stories & examples found in that book to illustrate differences.] Jacques discusses this culture, and its collective — rather than individualistic – focus; the corresponding family-orientation of its social mores; and the lack of a rule-of-law approach for resolving conflicts. He throws in many other nuggets as well, discussing the tributary — rather than co-equal – historical relationship with surrounding countries; the implications of the sheer size of the country (a population bigger than North America & Europe combined); China’s simultaneous developed/developing country status; etc.

He does see some problems ahead, mostly in the cultural area. China’s ‘Middle Kingdom mentality’ will struggle to deal with outsiders and other racial types, with “a sense of inherent superiority” (p. 270) that is likely to become even more pronounced.

I’m sure you realize by now that my own views tend to be filtered through an energy/environmental prism, and Jacques pays some attention to these issues, including a section about China’s ‘environmental dilemma.’ He suggests that no one really knows how the country will handle the problem of sustainable growth, but that its leaders have already recognized that a resource-intensive growth model is ultimately impossible – even its current model will ultimately become prohibitively expensive. The very real physical damage being done to that country – its air, water and land – in the name of economic development is extremely worrisome, and I’d add that its lack of a rule-of-law tradition has certainly been a major problem within the environmental arena. Given the poor natural resource base of the country, it also seems that the rest of the world will be dealing with the issues Jacques raises in his book sooner rather than later. (Another recent book well worth a look, Michel & Beuret’s China Safari: On the Trail of Beijing’s Expansion in Africa, makes clear that that road will not necessarily be smooth!)