The car and the phone

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I recently bought a new car. Well actually, it was almost a year and a half ago, but it was a really cool new car, one of the flagship models from a leading car manufacturer. It cost me 40.000 Euros. The car moves like a dream and I was really pleased with it. After a couple of months I started buying and installing some extra equipment, an upgraded stereo, some extra lights. And I even had an engine upgrade for 5000 Euros.

Then, one morning, after a year and three months, the car suddenly wouldn't start. For no apparent reason. When I called the dealer they asked me to send the car, at my cost, to their repair center in France. Can you imagine? After a month I got a message back – my warranty doesn't cover the malfunctioning car and it will cost me another 25.000 Euros to repair (more than half the cost of the new car), so it makes more sense buying a new car. Oh, and if I want the car back, I also have to pay the return transport from France, whether they fix the car or not.

Do you recommend me to buy my next car from the same dealer? Or from the same manufacturer? Didn’t think so.

Why should I or anyone else accept such poor customer treatment for an exclusive item of any kind? That it should just break down beyond the point of repair after a year, and that the manufacturer and the dealer both say that it is not their business?

The story above, is a true story, almost. I didn’t buy a car, however. I bought a mobile phone. The latest model, the Milestone from Motorola. And the dealer in my case was a company called Expansys.

Lessons learnt:

  •  The first consequence of this story is that I havet o get a new phone = Unsustainable consumption.
  •  The second consequence is that I am so pissed that I will never buy anything from Motorola or from Expansys again (and I encourage you to do the same) = unisustainable economics.
  •  The third consequence is that in the web 2.0 age I am spreading this story to the world over the internet = very unsustainable economics for Motorola and Expansys.

 

As little as we can afford to have expensive stuff that breaks beyond repair after a year in a world with limited resources, as little companies can afford to dismiss their customers with bad service in the web 2.0 era.

I hope this little story becomes a lesson not only to me. Need I say that you are welcome to share this?

Cheers :)

 

New project models for Sustainable Development through CDM

CDM (Clean Develoment Mechanism) has since its introduction in 2001 grown to become an imortant financial instrument, which contributes to significant transfer of funds from industrialized countries to developing countries. CDM is a ”flexible mechanism” under the Kyoto Protocol which ends in 2012, but the general assumption is that CDM will continue in the period after 2012 also. At the current rate of projects, the total reduction of CO2 through CDM until 2012 will be up to 2.5 billion ton. With an average price of around 15€/ton CO2, this equals a total transfer of almost 40 billion € to developing countries. Clearly a significant figure.

However, it is worth recalling that CDM has two primary purposes: One is to meet CO2 reduction targets in industrialized countries. To achieve sustainable development in developing countries is the second.

A vast majority of investments in CDM are made from a purely financial perspective. They are done in order to meet required CO2 reduction targets in the most cost effective way. However, what is most cost effective for a company in the industrialized world is not necessarily (or even likely) what contributes most to sustainable development in developing countries.  The largest volumes in CDM projects so far have been to destroy industrial gases (HFC-23), mainly in China and to large-scale wind power farms in China. Although these projects are certainly important from a climate perspective, they add little value regarding other aspects of sustainable development. There are other projects, which are more effective in providing sustainable livelihoods to local communities in developing countries. These projects are often smaller scale, and can have difficulties meeting the stringent administrative requirements set up by the CDM framework.

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In a recent study for the Swedish International Development Cooperation Agency (Sida), we investigated the opportunity for creating CDM projects with more positive impact on sustainable development by identifying synergies with corporate sector engagement in developing countries. Many large corporations are engaged in developing countries, with large supplier networks. They spend large resources on education and development of supplier companies, in order to improve the quality and reliability in the supply chain. This typically includes also compliance with ethical codes of conduct.

Large corporates work in long-term relationships with their local suppliers. Quite often, the supply chain is jointly developed over decades. But factors in focus for development are mostly those that have a direct impact on product quality. A broader perspective on sustainable development in these relations could have great long-term effects on social development, environmental development and on economic development. If, for instance, more effort was put into energy efficiency among suppliers, this could make the suppliers more profitable long-term. If the project is done in the form of a CDM project, funds for the project can be found through the mechanism. This also has the opportunity of generating more jobs locally and to provide funds for proper schooling for children etc.

The corporate sector are generally interested and enthusiastic about finding this type of synergistic project. However, it is a new area, where they have no experience at all, since their engagement in CDM has so far been purely financial, and their understanding of sustainable development in developing countries is often limited.

This is a win-win area to be explored. Multiple goals can be achieved: tackle climate change, eleviate poverty and also improve the quality and reliability in the supply chain for companies. This also means that multiple sources for funding can be identified. The projects are in the interest both of development organisations, local governments, large companies and investors in CDM.

Since this is a new area, not so explored yet, some recommendations for governments are in place:

-        Identify in which corporate sectors the potential is greatest

-        Collect information about ongoing projects which can inspire as show cases

-        Educate businesses regarding sustainable development and CDM

-        Provide the forum to discuss and explore joint project initiatives

And some recommendations to companies with interests in developing countries:

-        Evaluate your supply chains (both up and down) to find opportunities

-        Look for private-public partnerships and long term collaboration

-        Learn from peers and pilot cases

-        Build sufficient knowledge regarding sustainable development in developing countries and regarding CDM

Great and long-term opportunities exist in this field. Opportunities that will substantially contribute to sustaninable development in an economic way. It will be exciting to follow how this new sector develops.