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Technology company explains balance between low carbon and financial economies
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04/01/2008
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Jeff Whiting energy spokesman at Mitsubishi Electric says: “We all know that running a profitable business isn’t easy, and for some years climate change considerations have made it even more difficult. But now the Climate Change Bill requires that we address both of these simultaneously. The imperative to make money remains, but now there is a need show equal aptitude at reducing carbon.
“Actually a drive to low carbon is good for Mitsubishi, because we sell the technology that is required to achieve it. Also, Mitsubishi is a very ethical company that has already gone a long way to putting its own house in order, which means we have some real live experience under our belts. Our UK headquarters, for instance was built at a time when energy efficiency wasn’t so high up the agenda, but last year we refurbished and brought all the systems up to standard.
“But in truth very few of the companies are prioritising carbon reduction in their development plans and very few business managers list carbon as a high priority, although a few talk about cost saving through energy efficiency.
“Critically, most business managers are today concerned far more with financial success than carbon reduction. Astute ones claim carbon reductions on the back of cost savings, but few have actually fully embraced the consequences of the carbon economy.
“The disciplines required for maintaining profitability in competitive markets oblige companies to focus on the short-medium term. They find it very hard to look more than a year or two ahead. An investment that will pay back handsomely in five years is very much a dent in the bottom line for the preceding four years.
“Resolving this to its simplest form we see that carbon reduction is required for the long term continuance of the human race, but this is transformed in a free market economy into energy management driven by economic criteria. These two approaches are in fact fundamentally different, but currently coincident. Left to their own devices they will drift apart again relatively soon.
“The Climate Change Bill is an attempt to keep them together for longer. But on its own it is not enough. To succeed it has to bring the 60 percent of disinterested companies onside with a long term commitments to carbon reduction. I suspect this will always be by creating the economic necessity to improve energy efficiency and reduce carbon generation. But ideally we need to move from the idea of retrofits and upgrades to one of a sophisticated strategy for continuous improvement.
“The benefits come in the form of the European Energy Trading Scheme, which should allow investors to realise a return on expenditure in low carbon technologies, but the problem is that it’s sophisticated economic analysis requires a commitment to long term investments. Large parts of an open economy do not do these things, small businesses, low margin operators and rapidly growing markets are going to be very hard to get on side.”
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Author
Chris Rowlands
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