Tag: risk management activities

Confronting Risk – its about the marketing effort

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Being corrected by a 15 year old can be confronting – but she was right – the risk model is about marketing potential, not financial exposure. Potentially all those years of study, and all those educators that instilled what was expected of us – all wrong!  So fellow innovators we can look to the thought leaders for inspiration, can we not?

A friend recently attempted to post a story, and complained that the story was not just moderated but removed as a post. In this instance the group, the Carbon War Room, may have thought the scenario too cheeky? However, Co2Land org found the story was a visualization of how branding can prevent an innovator from getting the correct exposure, and how opinion might be too concentrated and worried about marketing risk, which inadvertently prevent a fair review of the financial exposure of not following the innovator.

The author below I will identify as Peter:

“I have heard that Richard Branson has a 1 $billion private investment plan to help Island nations with adopting renewable energy, they are just waiting to identify the best technology to go with. Our plan for the Pacific Rim Island nations facing the same problems is to get some of our island friends going ourselves in the mean time with a properly designed and integrated biomass gasification system and containerized syngas reformer and invite him and his corporate mates across, have them picked up from the airport in a renewable alcohol fueled jeepnee and delivered to the jetty where a Green diesel fueled inter island boat takes them to their coconut shell powered hotel on the next island while they deliberated their options over locally caught and syngas fried fish & prawns with side of biochar grown fruit & vegies, sipping wine cooled using waste heat driven absorption chillers, and distilled activated carbon filtered water from the evaporators while their used biodegradable plates and cups are quietly taken away with the rest of the rubbish and recycled through the gasifier where the reformer can also produce a little aviation fuel to refuel his plane while he visits…all of which helps build the local economy and create far more permanent jobs than importing solar panels and wind turbines (though these certainly to do have their place as part of the overall energy mix). All of the above is possible with existing proven technology. The solutions are out there, just not supported by big business yet”

So as not to prejudice this discussion in any way Peter was quick to add “I am not a depositor in a bank in Cyprus….”.  Now that, Co2Land would say is outside the risk model of this discussion, and cheeky! On reflection, maybe we should look at how many brand banks are exposed in Australia?

 

Danger in oversimplifying energy savings – built environment

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When organizing energy procurement opportunities you can experience frustration with the need to use simplified language in order to tell your client how they will make the cost savings. The danger in presenting over simplified information is the data might be clearly shown the distortion of savings that may occur. However, the simplified information package cannot illustrate the effects when small but significant changes to operations, occupancy rates of building, seasonal variations, how government policy changes will impact on the cost equation.  What comes to mind immediately is the Carbon Price in government policy, and the opposition in Australia stating they will retrench that price – it then becomes important to consider how different energy retailers might treat it in the energy agreement – something very few thought about until recent times.

And, it appears universal that the common mistake in the information delivery is the over simplified explanations that can be interpreted as all actions the client takes is a linear function in terms of costs. When in reality the issue is the bigger the contract in terms of dollars the greater the impacts of what you do to affect energy used will affect your price paid for the total energy consumed.

Then we find we are not alone: It is common to make mistakes, and it all comes down to oversimplifying the estimates when presenting the cost savings.

When researching the phenomena it was found Lindsay Audin wrote  “Common Mistakes Made By Energy Managers” recently and we share much of his thoughts. So similar in fact, it is also what Co2Land org has been discussing with Ecoprofit Management (www.ecoprofitmanagement.com.au ). What we need to exercise care in is the data has a message, and to paraphrase into simplified information may miss very important part of that message:

1.    Beware of using averaged electricity rates. Customers in a tranche other than domestic tariffs will be rated for electricity charges for both how much electricity is used in terms of kilowatt-hours (kWh) and for how fast electricity is used in terms of kilowatts (kW) – The  “peak demand charge” and the variance of how fast you use electricity can be as much as 50% of a total bill change.

Note a) The danger in using averaged electricity rates as a simplify in estimating dollar savings from energy upgrades, is it is likely you might calculate an average electricity rate by dividing the total cost of electricity in a month by the kWh used in the same time period – therefore the rate includes the cost of peak demand in it.

Note b) Some upgrades to equipment may fail to reduce peak kW demand – examples are using motion sensors to control lighting needs and such measures will save kWh, but may fail to reduce peak kW demand because of changes to occupancy rates and timing of production loads changing to operational needs to be met. It also follows that controlled lighting might also only happen when the peak of energy use has already passed. In the case of motion sensors for lighting if they don’t cut peak demand, they won’t reduce the kW charge of the bill.

Note c) “This same problem arises with photovoltaic (PV) panels that generate power. A system rated (for example) at 100 kW will, at some point, provide that level of capacity – but not necessarily at a building’s peak time. Full PV output occurs when the sun is highest (between noon and 1 PM), unless the panels are mounted on a motorized platform that follows the sun. Commercial buildings usually peak between 3 and 5 PM, at which point PV output may have dropped considerably.” – Audin.

Note d) “Under a power purchasing agreement (PPA), a PV vendor owns the system and sells the output to the host customer at a small discount off the average utility price, typically for 15-20 years. Once again, that averaged price assumes all the PV power is being provided during the building’s peak. Studies have found that is often not the case. Depending on how much of one’s bill is for peak kW, the true value of the kWh from PV may be significantly lower than the vendor’s price.” – Audin.

Note e) It is then obvious that an averaged electric price overestimates dollar savings, and in all likelihood and unless there is data to prove otherwise, only savings based on the kWh can be assumed as a simple measure.

2.    Beware HVAC savings might not result from a lighting upgrade. Do not assume a watt for watt drop in cooling or assume a heating constant to replace the lamping output. It will not be a proportional saving of kWh in a linear fashion.

Note f) “Reducing lighting kWh cuts fixture heat output, but – for several reasons – that may not always translate into a proportional air conditioning (A/C) savings. For example, chillers run for only a portion of the year, while lighting is on most of the year. When lighting wattage is reduced in a room served by a constant volume air system containing electric reheat coils, a drop in cooling load may be made up – watt for watt – by an increase in reheat output. Not only will there be no cooling savings but even the kWh savings from the lighting upgrade may be negated.” – Audin.

Note g) “A 100% outside air system (e.g., serving a lab) may remove a significant portion of fixture ballast heat in its exhaust air instead of returning it to the cooling coil, thus mitigating some of the assumed A/C savings. If any of the upgraded light fixtures are outdoors or in uncooled spaces (e.g., stairwells, bathrooms, basements, mechanical rooms), their reduced heat output will never be seen by the A/C system. If, on the other hand, that reduced heat output necessitates an increase in winter heating through electric resistance baseboards, the net winter electric savings from the lighting upgrade may also be minimal.” – Audin.

3.    In Co2Land org’s mind the greater mistake is assuming maintenance savings will occur.  Repeated again and again are claims that new equipment will need less maintenance. It may be true, but in all likelihood it will have a cause and effect that might not be adequately assessed.  Consider this scenario: A new boiler is fitted with inverter technology and will require less maintenance. Staff will be cut because of this, or retrained, or reassigned elsewhere. But when maintenance is required of a harmonic distortion occurred the building’s maintenance budget will blow out and little or no actual measurable savings from new equipment will be reported. Admittedly it will most likely be in the preceding budget periods that this affect will show itself.

Note h) Research you case studies thoroughly, and do not assume marketing is telling the truth, the whole truth.

Our underlying message is to exercise caution when you try to explain with too little detail, and do not assume the other party is wanting you to explain all as a simplified explanation.  It might even pay to ask – can you make the time to understand all the implications?

Think eco profit management

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Think eco profit management and it means reducing energy options to affordable solutions that improve the organizational bottom line, enhance brand image and accommodate operational expansion. It is showing clients how to implement energy and carbon management systems with confidence. A piece of cake – easy to understand.

Winton Evers the MD of www.EcoProfitManagement.com.au practices sustainability management . Formerly a Chartered Accountant, Winton came across the GHG Accounting Standard and realised how much organisations could improve their financial and environmental performance by managing their carbon emission sources. So why the frustration Winton, asks CO2Land org? The answers could be obvious, it is the obtuse that form opinions in our ‘smartphone’ world at the expense of ‘real’ experiences.

Then we read of another sustainability professional, Mary C. Alford, PE, in another part of the world saying the facts are “The largest companies have embraced sustainability – why? Because it has been shown to save hard dollars – and it has the side advantage of positive spin to customers and even employees (and many other advantages that we know, but let’s pick our battles). But when the corporation is ultimately answering to stockholders, the interest is only in one pillar of the triple bottom line: profit”

Mary continues to ask us to think of the following “What is the carbon footprint of inefficiency? What is the carbon footprint of a failed project? What is the carbon footprint of meaningless travel or pointless meetings? I believe that the selling of sustainability starts with the selling of ‘lean’ business practices. They go hand in hand. Sustainability needs to be rebranded away from granola and polar bears and recycling for corporate boardrooms and rebranded for profitability. (And just for the record – I like granola and polar bears and I recycle everyday – but when I bought a Prius, I only pointed out, to my corporate clients that asked, how much money I saved).

Co2Land org has also noted the increasing use of the connotation of sustainable and the inferences of deniers of change that one that practices sustainable is part of the ‘green’ or ‘granola’ sect. It is possible but, increasingly as Winton and Mary are saying it is about the need to balance the economy, for profit of longer than the short term and CO2Land org advocates if we evaluate and cost benefit is part of the equation it would seem mother nature is fighting back and cost of doing nothing has no benefit. We are clearly saying Climate Change is real, and it does not matter if it is man made or other cause, we have the technology, but do we have the will to innovate?

On a lighter note Urban Dictionary enlightened us with the following definition and antidotes:

Definition 1 granola

Thumbs 475 up, 233 down

 

 

  
  A person who dresses like a hippy, eats natural foods (granola), and is usually a Liberal, but in all other ways is a typical middle class white person, and is likely to revert back to being straight when they finish college.

Did you see that granola chick at the farmer’s market buying bean sprouts?

Yeah, her new Volvo was parked next to me.
Definition 2 granola

Thumbs 278 up, 126 down

 

 

  
  A tree hugging, free spirited hippie minus all the drugs.

Melissa is a granola.
Definition 3 granola

Thumbs 753 up, 189 down

 

 

  
  An adjective used to describe people who are environmentally aware (flower child, tree-hugger), open-minded, left-winged, socially aware and active, queer or queer-positive, anti-oppressive/discriminatory (racial, sexual, gender, class, age, etc.) with an organic and natural emphasis on living, who will usually refrain from consuming or using anything containing animals and animal by-products (for health and/or environmental reasons), as well as limit consumption of what he or she does consume, as granola people are usually concerned about wasting resources. Usually buy only fair-trade goods and refrain from buying from large corporations, as most exploit the environment as well as their workers, which goes against granola core values. The choice of not removing body hair (see amazon) and drug use are not characteristics that define granola people, and people, regardless of granola status, may or may not partake in said activities. This definition is sometimes confused with hippy.

Jack: My best friend is vegan and only buys produce that is organically grown from local farmers. Her and her feminist, vegan boyfriend are both in Greenpeace and advocate for queer rights. She waxes her legs but she’s still granola.

Jill: So that means she’s not a dyke? And she grows her own reefer?

Jack: Just because she’s granola, doesn’t mean she does drugs. Also, granola status has nothing to do with sexual preference.

Jill: Well maybe she’ll know where to buy hemp and how to tie-dye?

Jack: She’s granola, not a hippy. Some granola people are hippy and vice-versa, but they’re not the same thing.

 

Maybe the real medicine is: if we have a bit of a laugh and settle down we can work an understanding – a sustainable one!

the notion of “cool” patch burning

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January 2013, has been very distracting and the extreme fire conditions have woken us from our usual persistence to stay in holiday mode a little longer. Traditionally it is a less than optimum time for putting forward ideas and getting anything done. Friends schooled in adult education training warned us NOT to try and run courses in January because people retain their school holiday mindset well into their senior years, and even if you can get them to turn up they will be distracted and inattentive.

Fire has been often characterized as the best servant and the worst master (you may have heard this expressed in many different ways). Last evening at a local rural firefighting service get together, as expected, the politics of fire was in the forefront of casual discussion. Yet, some very important debate happened of interest: We talked of fire management and the attitudes of each of us towards, and the implications for, landscape management.

Introduced into the discussion was how the government measured success of their many programs. We at this point input our interest to expand the Carbon Farming Initiative (CFI) methodology on savanna burning to a more focused area of controlled burning as was practiced by the indigenous in times past and the difference being in those traditional ways the management was to avoid total incineration and encourage regeneration and improve soil fertility.

In relation to the traditional burning practices cited, the various land managers, both government & private, agreed the need to stimulate considerable discussion was evident. Those that opposed said they were having some trouble accepting the notion of “cool” patch burning. They don’t like it because it leaves too much charcoal on the ground which they think will fuel the next fire, and the only answer is to ensure hotter more complete burns to reduce the fuel back to mineral ash. One even went so far as to say, ‘do you think the indigenous knew what they were doing, they had no intention of managing the landscape, fire was an accident that just got away from them and the benefits were accidental’. Our reply, does it matter that they planned the benefit, what matters was they learned something and have knowledge from the experience, and the issue must be effective communication is needed for a better understanding and to ensure that knowledge is not lost. To have the attitude that all that we need to do to manage the risk for the environment is indulge in recursive behavior is nonsense.

Saying there was a communication problem was the catalyst for a more rational response and the group was then more open to accept they needed to engage in more than polite conversation and to actually open themselves to the thought our indigenous colleagues deserve an audience for what they say is a solution to our degrading rural scape.

Further background material can be followed up as Posted on January 20, 2013 by co2land

CFI – ‘black swan event’ treatments

CFI – ‘black swan event’ treatments

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Friends recently said they have been challenging conventional thinking, and they are tiring of the seemingly ‘black swan event’ treatment for their CFI ideas. It seems despite what is obvious until it is policy it cannot be measured and the process to change that view requires a consensus from the vested interests. In open discussion it was thought the matter centered around influence and the funding facility too old school as it measures either through historic evaluation or by a formulae that has not been questioned. This could be relevant because we are talking of the action of innovation being exercised to get results as opposed to standard measures for an outcome.

It follows that I was told a few years ago ‘ as a courageous person we need to reward you, a generous package should do it. But beware your ability to see through the veneer of policy, and act with sincerity is not the true reality of the politics. This of course points to how easy it is that the person acting out of moral fortitude can be seen as counterproductive in the minds of those that ‘play the game’. CO2Land org postulates that the ultimate manifestation of the artificial reality is by manifesting confusion and resentment and formulating as if the views were facts in order to direct perceptions of ‘doing good’ in their public decision-making declarations.  Postulating in this way shows that the courageous are seem as dangerous to those maintaining the Status Quo, or business as usual, and to get momentum for your good ideas or even get a fair audience on the carbon risk products you might offer will be subject to a difficult path.

A very good example is provided by Peter & Kerry Davies <realpowersystems@gmail.com>where they said it is eerily quiet when we asked about Bio char Methodology using Traditional Indigenous burning techniques. When questioned it was obvious they have products and advanced thinking capabilities that can reduce emissions and control waste impacts. They also actively showcase what is possible and are prepared to demonstrate the possible and as a direct quote from them where they asked a government officer in Climate Change a question on business as usual in the hope it could receive a fair audience, or influence for a commonsense response:

“Can you tell us whether there is any Carbon Methodologies based on Aboriginal burning practice under consideration or proposed?

The reason we ask is that we were privileged to have Rod Mason the Monaro Landscape Connectivity Project’s Indigenous Land Manager out to our property yesterday. He was showing us how they would manage some woodland and forest restoration using small patch burning. Now the question was asked of us by one of the other project officer’s present ‘Did we understand what he was doing and how it actually worked?’(Because they had witnessed some outstanding results but had no good scientific explanation for what was really happening).

The funny part is we do, but only because of our multidisciplinary background in sustainable forest management AND bio char production and use. What he showed us was a distillation of several thousand years of practice evolved through observation of the response.”

The Davies are uniquely qualified for their perspective, and know that these methods are actually optimised in situ bio char production techniques where temperature and duration of the process is controlled and aimed at minimizing damage to living plants and creating a interconnected pathway “for mycorrhizal fungi growth, which in itself is one of the key reasons  Bio char provides benefits well above its inherent fertiliser value”.

CO2Land org knows there is lots more to this and the material viewed shows a viable business we are quietly excited about. What is needed is recognition of the methodology. It is proposed that CFI and ACCU creation is the way forward. The ACCU could be more effective in encouraging the benefit from the concepts – it will also provide the incentives for training and education and research that might fill in our own knowledge gaps. It is certainly worthy of much greater research than we are aware is happening.

Some numbers you might like to think about in terms of conversion to bio char:

Method as proposed – char ratio yield approx. 5%

Uncontrolled bushfire – char ratio yield approx. 1%

In perspective (back of the envelope calculation) the yield volume of the method proposed would produce a suggested volume equivalent to around 1.25 tonnes/ha bio char application through this managed patch burning. The Davies’ mention that “this practice should not to be confused with large area mosaic burning as practiced by National Parks Managers”. The point out being “mosaic burning is a poor parody of the indigenous practices”.

It should also be added that “Rod Mason indicated that Wattles, Tea trees and Eucalypts produced different chars that were applied in specific areas to encourage particular plant communities” – Interesting is it not?

Contaminated Land – Research data

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Reported is that research is ramping up into the number of areas responsible, or have responsibility for management of contaminated land. Worldwide, it appears the impediment to date has been the concern of uncovering unintended consequences by the actions that might be taken. This is understandable if you add that in order to take notice you need to understand the problem. It also follows that any data collection effort will serve as a proving ground for a methodology to deal with the problems that are uncovered. That in itself introduces another problem in that developing a Methodology requires funding or promises for funding.

Knowing that even governments have funding issues internal to themselves we could ask: So where should we start in Australia?  The immediate noticeable group addressing the quality of data issues of ‘real’ remediation challenges is the federal Department of Finance and Deregulation (DoFD) which has a Special Claims and Policy Branch that is leading a strategic data collection project examining the manner in which contamination issues are addressed. However, its purpose is to address Commonwealth Land Decisions-making and gather data only from entities covered under the FMA Act (Government Agencies) and CMA Act (Authorities). The Department has set out the project is to be collecting information in the earlier part of 2013. Whilst a let down to some, it is a start to identifying the effort needed.

Concurrently, Canada is turning its attention to those that refuse to clean up where they have polluted, and Environment Canada is beginning feasibility studies of remediation technologies that could be used on federal properties contaminated by chemicals.  Source: http://mobile.firehouse.com/news . A watching brief on Canada’s and other overseas, state and private groups suggests it is very wise to manage contamination within property decision-making groups and that they undertake research into solutions under key terms that may be available to reference available literature and what might be uncovered.

What CO2Land org has noted is that DoFD is finding the need to validate their understanding of the Commonwealth’s legal obligations relating to contamination liability – to clarify what they must manage as opposed to should manage.  (Those that follow this thread might recall – Posted on January 6, 2013 by co2land, Contaminated Land – Obligations to manage – was written to help the reader to understand that managing the environment means many things and it is not necessarily so that moral decisions will be made). This implies there are many areas of uncertainty and any contamination related advice would be welcome to help them target key areas of uncertainty.

In relation to the DoFD data project, Posted on January 8, 2013 by co2land , Contaminated Land – Remediation challenges was written Presently for a majority of contaminates, there are no endorsed standards or guidelines within Australia that define, for each category of land use, safe levels of soil contamination. What we do have within the National Environment Protection Measures Act 1998 (NEPM Act) guidelines is an adopted remediation criteria recommending investigation levels. Our suggestion is this investigation criterion is far too conservative and not well adopted or able to properly adept to manage health and environmental risks. Also written was CO2Land org noted that the federal Department of Finance and Deregulation has a number of areas responsible or have responsibility pertinent to management of contaminated land and wonders if it might be data collection that is the greater weakness in terms of the abilities for adequate and timely responses. This new post suggests DoFD is now prepared to push the boundries into uncertainty for those areas not previously covered by the scope of the land policy functions. CO2Land org also notes the timeframes for the project indicates the willingness for the data to be available for the 2013/14 Strategic Review Program – we applaud you for that. Small steps by a leap forward in terms of past efforts.

Contaminated Land – Remediation challenges

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Presently, for a majority of contaminates, there are no endorsed standards or guidelines within Australia that define, for each category of land use, safe levels of soil contamination. What we do have within the National Environment Protection Measures Act 1998 (NEPM Act) guidelines is an adopted remediation criteria recommending investigation levels. Our suggestion is this investigation criterion is far too conservative and not well adopted or able to properly adept to manage health and environmental risks.

Posted on January 6, 2013 by co2land, Contaminated Land – Obligations to manage – was written to help the reader to understand that managing the environment means many things and it is not necessarily so that moral decisions will be made. From that story it follows that a natural discussion point is to now look at the remediation challenges, or if you prefer to call it – appropriate actions, and the point is made that to manage contamination the issues may involve: risk management activities, including actions to limit exposure to contaminates; remediation, such as physical containment, capture and on-site treatment, or removal/offsite for disposal; or whatever combination of above. In today’s political climate it is unlikely a government officer would go along with addressing the challenges unless due diligence investigations and factoring the results into a cost-benefit analysis was done ‘appropriately’. As a Carbon Manager, we might say extensive due diligence investigations and cost-benefit analysis has cost and time implications that science clearly indicates we do not have the luxury to indulge into – the earth as we know is dependent on our actions.

Notwithstanding the urgency matter, ‘real’ remediation challenges include managing the uncertainty associated with the costs of remediation, remember it was said investigative sampling could only provide an estimate of the actual problem (the nature, extent and concentrations of what is the contaminant(s)). Therefore any property management decision can attract significant cost risk when considering changes to land use. To recant the start of this discussion it was said recommendations are part of the NEPM Act and the conservative responses that will be elicited are not strong. It may be that the data available is part of the problem and that needs to be addressed in a more robust or targeted way.

CO2Land org noted that the federal Department of Finance and Deregulation has a number of areas responsible or have responsibility pertinent to management of contaminated land and wonders if it might be data collection that is the greater weakness in terms of the abilities for adequate and timely responses. Stronger more targeted data collection could be better used to quantify the risk and might lessen the likelihood of ‘excessive’ or redundant analysis on a project-by-project basis. The potential is to save money too!

We will expect we will increasingly see this approach being implemented and would applaud where issues such as uncertainty is reduced; improved decision making processes are covered off; and more efficient funding approval processes are followed. We believe additional benefits could accrue and if it is transparent shared lessons learnt and reports could give improvement in practice and the moral and the legal be much the same outcome.