Illustration – LED technology triggers new value proposition.

Is behavior management key to Greenhouse Gas (GHG) reduction? Demand management is a great place to understand GHG sources. Reasonable observations are they not?

Then in a discussion with Carbon Professionals was added an illustration of the view that maintaining interest in the effects of product life cycle is essential  – because the product itself can morph so quickly into another business matter.  If you think business then you will understand – “When things are going wrong in a supply chain, the first reaction is all too often ‘if we could forecast demand better, most of our problems would go away.’” CO2Land org speculates it is not the inability to better forecasting demand that is the main cause of what is ailing that company’s operations….it is the changing conditions that it operates under in creating the demand. It is the need to hold and speculate the demand for its inventory.

CO2Land then postulates the opening paragraph in this post and a position on this: Agreed, it is an interesting statement on the connects that occur with behaviour management and demand management. But: reinforcement can be more difficult after the initial effort, a diminishing return for the effort. Why? The initiative came from a policy and policy can be altered, definitions diffused and vested interests will separate DM and GHG as coincidental to each other. If you follow that you will understand that the business will settle on the economic differences – the measurable, and initially DM works to reduce GHG and then technology (like LED Lighting) removes the need to think about it any more – a new policy is then needed. Motivation must then be linked to another driver.

While discussing this issue a story was printed as

http://www.energymanagertoday.com/shift-to-led-lighting-may-trigger-cataclysmic-change-in-building-automation-industry-095407/

“Shift to LED Lighting May Trigger Cataclysmic Change in Building Automation Industry.”

The story overtly portrays “As we go forward, the case for retrofitting buildings with LED lighting will become very compelling and with it will come a much broader application of controls.

The key difference, though, is that these controls applications and projects will be lighting-centric rather than HVAC-centric and that will make all the difference. These lighting-centric projects will be motivated by LEDs but will naturally incorporate wireless and cloud technology. The result will be the emergence of new players, new technologies and new application delivery mechanisms. The existing industry structure and business models could easily come tumbling down.”

If technology shifts, the business model – what is the value?

Lessons learnt, and studied results suggest that industry structure will remain during the commencing and product development process of the evolutionary change, and this provides incremental gain in the existing value proposition of the company. Once that process markets the technology or change the technology enabled so changes the value propositions, and business survival requires changes in the industry structure.

The example for the building automation industry is that Digital controls were an evolutionary technology shift away from pneumatics, and now LEDs are doing more than making an evolutionary change they are enabling whole new value propositions built on the fact that light affects people and behavior. In this case you can predict the LED transition is and will be far more disruptive to the industry than the introduction of digital controls.

The impact of LED lighting is creating demand for coincident adoption of two other technologies, wireless networking and cloud services. Why? The incumbents in the traditional industries are not geared to extract value from the technology! It is very likely a small company will build a value proposition that is the right combination of business model and technology to drive the industry. Why a small company? Large companies need linear projection for outputs and evolution tends to be non-linear. A smaller company is more likely to be agile and able to adapt, and not shackled by conventional wisdom.  That is they attack with vision and gusto, and not defend with placards to impress the public.

Has the pace of change, changed? Business as usual for industry has powerful reasons for resisting change, and techniques are deployed to slow down the introduction of new technologies and systems. It is not unexpected for 10 to 25 years being considered reasonable for a company to adapt to new technology. But LEDs “come from an industry that moves very quickly, as do wireless networking and cloud services technologies. So, to the extent that companies in these adjacent industries choose to involve themselves directly in LED lighting and controls, the historical rate of change in building automation may be a poor indicator of the future.

It is worth noting that in 2005 there was no You-Tube. The cost and complexity of creating and posting video on the web was prohibitive for casual users. Now, only eight years later, almost anyone can create and post videos on the web … and millions of people do every day.”

The above quote does answer the question:  That is how fast things are changing. So, government policy has to get it right too – to survive another election – eh the needs of society!

 

 

 

You can’t sit on a fence, a barbed wire fence at that, and have one ear to the ground

While reflecting on the days of Joh Bjelke-Peterson, those who had a life in Queensland then would be familiar with 3 particular characteristics that the Premier himself attributed: Running along a barbed wire fence with a foot on either side: ‘it doesn’t work and it’s not very comfortable’; you need to celebrate Queensland difference and treat outsiders with contempt; talking to the media he would ‘feed the chooks’ and watch them fight over the crumbs.

Then while lamenting another of his quotes ‘You can’t sit on a fence, a barbed wire fence at that, and have one ear to the ground’, a friend passed on a piece reported through Queensland Country Life (Story by Lenore Taylor 07 Aug, 2012) called Soil Carbon Sweetener:  The story is how the Coalition is planning to pay farmers to store carbon in their fields for, not 100 years under current plans, but 25 years. This is a measure still claimed to be capable of solving 60 per cent of Australia’s total efforts towards long-term greenhouse gas reduction.

Offered is a critic of the coalitions plan:

For:

  1. Reducing the time you lock-up your land if you choose 25 Years (optional).
  2. If a better solution were found for greenhouse reduction the problem would have gone away (but carbon process might be rebadged as some other national imperative).
  3. Farmers can still take relatively easy steps to increase the quantity of carbon stored in soils by different agricultural practices, tilling methods and by deliberately introducing a charcoal-like substance called biochar.

Against:

  1. Very low carbon prices proposed in the ”Direct Action” plan.
  2. Reduced long-term liability would transfer to federal government the needs and rights to find replacement programs after each 25-year contract expires (Government could simply impose more stringent liabilities more regularly) so less certainty of the liability.
  3. Scientists are still working on how to measure the amount of carbon stored and understanding how it might be reversed by drought or fire.
  4. Uncertainty would continue and an example is that some forestry projects have been allowed to offer temporary 10-year credits as part of the international clean development mechanism, and these credits have a low demand and not allowed to be traded in the European Union trading scheme. Australia is heavily reliant on offshore credits for its schemes to work.

The promises:

1. The Coalition has budgeted in its $10.5 billion ”Direct Action” policy, the Opposition Leader, Tony Abbott, has said not a dollar more would be spent over the 10 years of the scheme. He is silent on the need for review periods, as was the practice of when he was a cabinet minister in a previous coalition government.

Claims of the views of farmers:

  1. Michael Kiely (Carbon Farmers of Australia), said “farmers were very pleased to be offered a ‘more realistic’ 25-year timeframe, but would still need to be paid a lot more than $10 a tonne to take the offer up…I’d rather get $100 a tonne because I understand what it means”.
  2. Norman Marshall (Australian Soil Management), said his company was ”finding it very difficult at the moment to convince farmers that changing their soil management was worth their while….If the Coalition introduced 25-year credits ”at around the $10 mark … that should do it”.

Other influences that could destabilize any scheme:

  1. Andrew Macintosh (ANU) said “the Coalition was ignoring more promising sources of land use greenhouse abatement from reforestation or reductions in land clearing for agricultural purposes”.
  2. Farmers need to be very careful of the ramifications of any future government using the review to impose at the stroke of a pen greater imposts or take all rights away from farmers in earlier timeframes. This will effect succession planning in particular.

CO2Land org first looks at all the approaches and notes that each political approach is a form of modified feudalism – you just take the number as 25 or 100 years. By this is meant, you are in effect indentured and your children and possibly their children are bonded to the will of the lord and taxes. The second look is a considered intrepid analysis of where we could say nature will make all things right. With this in mind you could be resolute in saying while carbon-reducing land use changes are to remain in place for 100 years under greenhouse gas reduction schemes, I will do nothing and the guiding hand will fix all. If it was that simple! No, it is not because regardless of what your view on anthropogenic climate change, the reality of the necessity of economics will drive the need to change. Not participating in a scheme will not be an option in either side of politics.