Information of Interest, Jan 2012

1. A National Security Imperative to Reduce U.S. Oil Dependence

( – The Center for Naval Analysis’ (CNA) Oct. 2011 report, A National Security Imperative to Reduce U.S. Oil Dependence, is the latest in the organization’s energy security series driven by its primarily 3-and 4-star Military Advisory Board (MAB). According to the MAB, “Discussions of energy are discussions of national security. One directly affects the other. Our previous reports have made clear the deep connections between energy, the economy, climate change and security. As we narrow in on one aspect of our energy posture – our heavy reliance on oil, especially imported oil – the connections among these issues are again painfully obvious. Immediate and aggressive action to move our transportation sector away from oil and toward alternative, domestically produced sources of energy is needed to improve our national security posture. The consequences of inaction, or even delayed action, are grave.

“We view this issue with a sense of genuine urgency and find the time to act is now. We focus the efforts of our study on a 10-year time frame – less time than one might expect, given the scale of energy infrastructure investments the transition demands – because it is a window within which one can reasonably predict the pace of technology changes. We also chose it because we believe that, with respect to our energy posture, America does not have the luxury of time. To the contrary, we find that American leadership is at a perilous point. We note that while many of our allies are looking inward, distracted by their own domestic challenges, the worldwide demand for oil is increasing at an alarming rate. Within 10 years, China, India and other developing nations’ growing demand for oil will undoubtedly change the oil market. Our military experience tells us that transitional moments, such as these, are important, and they come and go quickly. When the moment is ripe, nations must act or, all too often, be prepared to fight their way out of the consequences of inaction.

“Americans, with good reason, are concerned about the current domestic economic crisis. But that crisis must not divert Americans from moving away from our reliance on oil. In fact, moving away from oil could contribute to restoring our economic strength. The opportunity to show global leadership on energy issues exists now. This is our moment, and we must act.”

Report Findings:

  1. America’s dependence on oil constitutes a significant national security threat;
  2. A 30 percent reduction in America’s use of petroleum would significantly improve its national security;
  3. The U.S. can achieve a significant portion of a 30 percent reduction through greater efficiency in how it uses oil;
  4. Many promising alternatives to oil as a transport fuel exist – some available today, others on the horizon. If managed properly, they can lower overall national security risks rather than continuing America’s overreliance on oil as a singular fuel source.


Report Recommendations:

  1. To assure U.S. national security, the federal government must take action to promote the use of a more diverse mix of transportation fuels and to drive wider public acceptance of these alternatives;
  2. In the immediate future, the Nation’s leaders must develop a comprehensive energy roadmap, or strategic plan, to enable consistent and strategic energy policies and investments;
  3. The U.S. must take swift and aggressive action to reduce its oil use;
  4. The Department of Defense (DoD) should continue to be a leader in advancing alternative transportation fuels while balancing mission effectiveness and overall efficiency. Government should provide DoD with the necessary resources so innovation and experimentation with alternative fuels is not traded for military capability and capacity. It should also provide the Defense Department with the necessary authority to establish long-term alternative fuel contracts as a way to assure markets and lower the alternative fuel price.

2. MIT’s 2011 Study on the Future of the U.S. Electric Grid

( – MIT’s 2011 report, The Future of the U.S. Electric Grid, “aims to provide a comprehensive, objective portrait of the U.S. electric grid and the identification and analysis of areas in which intelligent policy changes, focused research and data development and sharing can contribute to meeting the challenges the grid is facing. . . .

“One of the most important emerging challenges facing the grid is the need to incorporate more renewable generation in response to policy initiatives at both state and federal levels. Much of this capacity will rely on either solar or wind power and will accordingly produce output that is variable over time and imperfectly predictable, making it harder for system operators to match generation and load at every instant. Utilizing best resource locations will require many renewable generators to be located far from existing load centers and will thus necessitate expansion of the transmission system, often via unusually long transmission lines. Current planning processes, cost-allocation procedures and siting regimes will need to be changed to facilitate this expansion. . . .

“Increased penetration of electric vehicles and other ongoing changes in electricity demand will, if measures are not taken, increase the ratio of peak to average demand and thus further reduce capacity utilization and raise rates. Changes in retail pricing policies, enabled by new metering technology, could help mitigate this problem. Increased penetration of distributed generation will pose challenges for design and operation of distribution systems. New regulatory approaches may be required to encourage adoption of innovative network technologies.

“Opportunities for improving the functioning and reliability of the grid arise from technological developments in sensing, communications, control and power electronics. These technologies can enhance efficiency and reliability, increase capacity utilization, enable more rapid response to remediate contingencies and increase flexibility in controlling power flows on transmission lines. . . .

“All these new technologies involve increased data communication, and, thus, they raise important issues of standardization, cybersecurity and privacy.”

The main recommendations of the Report are summarized below:

  • To facilitate integration of remote renewables, the Federal Energy Regulatory Commission (FERC) should be granted enhanced authority to site major transmission facilities crossing state lines;
  • To cope more effectively with increasing cybersecurity threats, a single federal agency should be given responsibility for cybersecurity preparedness, response and recovery across the entire electric power sector, including both bulk power and distribution systems;
  • To improve the grid’s efficiency and lower rates, utilities with advanced metering technology should begin a transition to pricing regimes in which customers pay rates that reflect the time-varying costs of supplying power;
  • To improve utilities’ and their customers’ incentives related to distributed generation and energy conservation, utilities should recover fixed network costs through customer charges that do not vary with the volume of electricity consumption;
  • To make effective use of new technologies, the electric power industry should fund increased research and development in several key areas, including computational tools for bulk power system operation, methods for wide-area transmission planning, procedures for response to and recovery from cyberattacks and models of consumer response to real-time pricing;
  • To improve decision-making in an increasingly complex and dynamic environment, more detailed data should be compiled and shared, including information on the bulk power system, comprehensive results from “smart grid” demonstration projects and standardized metrics of utility cost and performance.


3. BSR’s 2011 State of Sustainable Business Poll

( – BSR conducted its 2011 State of Sustainable Business Poll from Sep. 28, 2011 to Oct. 17, 2011, with 498 member organization respondents completing the survey. The sample population of private industry, NGOs, government and academia represented North America (58 percent), Europe (21 percent) and other regions (21 percent – Africa, Asia/Pacific and Latin America). Respondent job level included: vice president or above (15 percent), director (28 percent), manager or below (52 percent) and other (5 percent).

Below are the main points from the executive summary.

  • The most important leadership challenge facing business today is “integration of sustainability into core business functions.” Almost two-thirds of respondents selected this as the most significant challenge, followed by “convincing investors that sustainability enhances value” and “planning for the long-term” (both mentioned by 30 percent).
  • Company communications functions are most engaged with the CSR/sustainability department. Very few companies report high engagement levels from finance, human resources, investor relations, R&D and even marketing.
  • Respondents expect human rights, climate change and workers’ rights to be the focus areas of their organization’s 2012 sustainability efforts. Water availability/quality was the only other issue mentioned as a significant priority compared to last year’s results.
  • Eighty-four percent of respondents remain optimistic that global business will embrace CSR/sustainability as part of its core strategy within the next five years, which is on par with previous polls. Measuring sustainable return-on-investment (SROI) is not yet a majority practice. However, almost four-in-10 respondents said their organization did measure SROI in 2011, compared to three-in-10 in 2009.
  • Although most respondents consider CSR/sustainability as integral to the global business agenda, they expect most activities in their CSR program to remain the same in 2012. Only CSR/sustainability communications (internal and external) are predicted to increase within the next year.
  • The belief that the public currently has little trust in businesses prevails. However, respondents maintain that businesses can build trust by increasing transparency and by measuring and demonstrating positive social and environmental impacts. Innovating for sustainability is overwhelmingly considered the most significant driver of overall business success and is the activity in which respondents believe business is currently showing the most leadership.
  • Energy efficiency is clearly the most important focus of businesses’ climate strategies. Short-term financial pressures, competing priorities and complexity of implementation are considered the most significant barriers to organizations’ doing more to address climate change.


4. Environmental Trends Threaten Global Progress for Poor

( – Development progress in the world’s poorest countries could be halted or even reversed by mid-century unless bold steps are taken now to slow climate change, to prevent further environmental damage and to reduce deep inequalities within and among nations, according to projections in the U.N. Development Programme’s (UNDP) 2011 Human Development Report. The Report argues that sustainability must be approached as a matter of basic social justice for current and future generations alike.

Despite the human development progress of recent years, income distribution has worsened, grave gender imbalances still persist and accelerating environmental destruction puts a “double burden of deprivation” on the poorest households and communities. One-half of all malnutrition worldwide is attributable to environmental factors, such as water pollution and drought-driven scarcity, which perpetuates a vicious cycle of impoverishment and ecological damage.

High living standards need not be carbon-fueled and follow the examples of the richest countries. The Report presents evidence that fossil-fuel consumption does not correspond with other key measures of human development, such as life expectancy and education. In fact, many advanced industrial nations are reducing their carbon footprints while maintaining growth.

UNDP calls for electricity service to be provided to the 1.5 billion people now off the power grid and say this can be done both affordably and sustainably, without a significant rise in carbon emissions. This new U.N.-backed “Universal Energy Access Initiative” could be achieved with investments of about one-eighth the amount currently spent on fossils fuel subsidies, which is estimated at US $312 billion worldwide in 2009.

UNDP adds its voice to those urging consideration of an international currency trading tax or broader financial transaction levies to fund the fight against climate change and extreme poverty. A tax of 0.005 percent on foreign exchange trading could raise $40 billion or more yearly, significantly boosting aid flows to poor countries, which amounted to $130 billion in 2010.

“The tax would allow those who benefit most from globalization to help those who benefit least,” the Report argues, estimating that about $105 billion is needed annually just to finance adaptation to climate change, especially in South Asia and sub-Saharan Africa.

UNDP forecasts that unchecked environmental deterioration – from drought in sub-Saharan Africa to rising sea levels that could swamp low-lying countries like Bangladesh – could cause food prices to soar by up to 50 percent and reverse efforts to expand water, sanitation and energy access to billions of people, notably in South Asia and sub-Saharan Africa.

“These absolute deprivations, important in themselves, are major violations of human rights,” the Report authors say.