The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Monday, November 26, 2018

Strategic CSR - AC

The editorial in the url below poses an interesting question:
 
"What is the single most effective way to reduce greenhouse-gas emissions?"
 
As was no doubt intended by the nature of the question, the answer may well surprise you:
 
"Go vegetarian? Replant the Amazon? Cycle to work? None of the above. The answer is: make air-conditioners radically better."
 
It seems there is plenty of low-hanging fruit in terms of reducing the pollutants associated with air conditioning units:
 
"On one calculation, replacing refrigerants that damage the atmosphere would reduce total greenhouse gases by the equivalent of 90bn tonnes of CO₂ by 2050. Making the units more energy-efficient could double that. By contrast, if half the world's population were to give up meat, it would save 66bn tonnes of CO₂. Replanting two-thirds of degraded tropical forests would save 61bn tonnes. A one-third increase in global bicycle journeys would save just 2.3bn tonnes."
 
The reason for this low-hanging fruit seems to be mostly because the AC industry is largely ignored in most countries—neither regulated nor sufficiently profitable to attract much attention from firms. This means, of course, that the worst pollutants have not been controlled, while the competitive pressures to innovate have also been lacking. This becomes apparent when you compare the rate of progress with products in more heavily regulated and competitive industries:
 
"Air-conditioning is one of the world's great overlooked industries. Automobiles and air-conditioners were invented at roughly the same time, and both have had a huge impact on where people live and work. Unlike cars, though, air-conditioners have drawn little criticism for their social impact, emissions or energy efficiency. Most hot countries do not have rules to govern their energy use."
 
The danger lies not only with the air conditioners that we have, however, but those that are coming in the very near future:
 
"In the next ten years, as many air-conditioners will be installed around the world as were put in between 1902 (when air-conditioning was invented) and 2005."
 
Apart from obvious solutions, like continuing to make efficiency improvements and replacing old units, the biggest suggested change in the editorial requires legislation and, therefore, political action, particularly around the coolants used in these machines:
 
"One category of these, hydrofluorocarbons, is over 1,000 times worse than carbon dioxide when it comes to trapping heat in the atmosphere. An international deal to phase out these pollutants, called the Kigali amendment, will come into force in 2019. Foot-draggers should ratify and implement it; America is one country that has not done so."
 
Take care
David
 
 
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Rebirth of the cool
Editorial
August 25, 2018
The Economist
Late Edition – Final
10