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Climate Deal Day work on mobility deals.

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Welcome to the Mobility and Systems project notes. These will be edited over the course of Climate Deal Day. Stay tuned for more information as the day progresses. 

 

Stan Stalnaker: "Getting people together to work on deals," working with Aimee Christensen. Build a platform to accelerate change. "Co-working" programs. 

Aimee: Explains the day.  

Jack Hitery of Hertz Simon of Renault Nissan

 

 

 

Jack "The year of the EV. All the elements are together. We have critical mas from OEM. Nissan Leaf, Renault has a number of EV. Charging community stepping up. We have government public.

In 1990's, EV did not take off. 1.0 did not take off. 2.0 will take off. Now we have internet, web. That means that every charging station can be networked. You can now use GPS to know where the next charging station. Standardization. Today we have a standardized J.

Simon: "Classic chicken and egg. The first cars were electric. The breakthrough has been infrastructure." The breaktheough is that people don't think of it as an electric car. They think about it as "just a car." Building the entire network. Need infrastructure that makes it easy to operate. In Davos, ABB has the charging stations. The breakthrough is about the infrastructure. If you think about what you do in your car, very rarely do you go more than 40 miles. In most two car families, there will be big appetite for 2nd "around town" car. Will meet 90% of daily needs for most people. 2011 is the year that the EV comes of age. Not just esoteric for holywood.

 

Jack: "Picking up on the point about the interstate highway. 161,000 gas stations in the U.S. NRG is going ahead with Houston and Dallas to put up cars. A meeting to plan the infrastructure for the next 100 years. In New York and San Francisco, parking lot owners want to get in for economic reasons. This is moment zero, 1901."

 

Simon: "Closed loop system for gas system - gasoline. The primary way governments affect is through gasoline. In EV, the discussion is opening up. Much more collaboration is needed. Airports, cities. Infrastructure is needed, but most people are cleaning up at home. The network is for comfort, but the

 

Stan: Potential Deal: a database of parking lots would be worth a ton. What kind of deals are available for.

 

Jack: What was missing in the 90s was the meta-layer. Now you can go online and download to find the nearest. Average car has 15 to 20. Data oriented businesses that can get on board. 

My deal with wal mart is that I will build a charging station. At hertz they have announced a deal with a hotel buisenss.

 

Simon: The auto business was. With the EV they are online with the customer at all times. "the ultimate customer relationship." Leaf is connected 24 hours a day 7 days a week, stream services into the car. 

 

Stan: The car becomes the network. Outfitting taxi cabs

 

Jack: A place like Davos is a good example. People travel here, don't use their own cars. Hertz is exploring car-sharing. "Very Hub." We don't need to have one way of owning a car. There are new flexible models. How do we help bring in others? 

 

Simon: Several pieces had to come into play. Always about the car + the infrastructure. Government support was important. You see it in Japan, the U.S., and others. Need the short term to get that moving. Specifically, we are seeing. Important ways that governments play a role. 

 

Jack: Any Fortune 500 company that realizes that EVs are scalable. Every corporation wants a small fleet. About 900 million vehicles in world. 250 million in us, 90 millin in US. Opportunity to engage with China to "leapfrog."

 

Simon: 800 cars per 1000 people in US, 50 cars per 1000 people. 

Jack: The pitch to China is to pitch on the practical level. 

Stan: How do we get there? How do we get the business to make it happen. 

Jack: Everyone wants to see the ecosystem get built out. 

Jack: It is a wormhole that connects transportation save oil through EV is kind of silly. Now we need to think new about the grid. PG&E.

Tine: With Above&Beyond, she is running a fashion summit. They want to have electric cars at their fashion shows. 

Jack: At pre oscar parties, at oscar parties. Actually, one of the last places they put it in is the green community. 

Aimee: Connecting the energy to the grid. Builds awareness and people ask where

 

Potential Deals:

With cities, 2 to 3 thousand deals to be done with cities to get them to adopt. Cities say HOV lane is free. It would be great to see those types deals in place.

IT infrastructure between -- startups to help organize the data and help people use electric cars. 2, 3 dozen IT start-ups around the world. They have signed 2, 300 partnerships. 

FROM LONDON:

 

Back in London
Sandrine Dixson-Decleve, The Prince of Wales's EU Corporate Leaders Group on Climate Change and University of Cambridge's Programme for Sustainability Leadership in Brussels:
This segment focuses on mobility and energy vertical -- they're linked but we need to look more broadly at the energy and power sector.

Jasper Sky, Oxford University:
The way we need to think about this is to have a four-part analysis. First, the root of problem, the top of supply chain -- we're burning fossil fuels (coal, oil, natural gas, with limited nuclear energy and renewables). What can we do to reduce fossil fuel demand? But it's not only about fossil fuels.

And the next part of the analysis: if you're not in fuel supply business, but in a business with operations that generates carbon emissions -- there, the opportunity is to look for efficiencies, but not a solution.

The third part: the consumers -- the end users who choose to buy a product or not. How to influence them?

Finally, the policy world, how do we incentivize behaviour?

Around this table the concern is how to change networks (not individual usage). Like the Carbon War Room solution -- whose focus is on sectors -- there needs to be ways to make a level playing field and get policies on the table. They don't necessary have to be global. Eg Europe could apply border controls on China if our rules are more stringent. The WTO seems to be ruling in this direction.

Sandrine:
That's an interesting example being debated right now at the Court of Justice if legal. 

Jasper:
Who do we want in the room? Consumers can get together with family and friends who are trusted to work on projects -- like groups of companies getting together -- and share results. Is this useful? Every quarter, we could have a Deal Day -- that would be useful because it's good to work to deadlines to report progress, it makes things real rather than leaving them vague, and providing accountability. This won't happen overnight.

Sandrine:
There is a need to create same level of trust with businesses, but is it the same with government. There were five visits with Commission figures and China on ETS to develop trust. It's just like bringing together family and friends. But while we've been talking about the sector approach, the multi-sector is also ideal -- because you exchange ideas -- eg retail sector exchanging with energy. We also  need to look at multi sectoral deals and exchange of ideas across sectors as well as working together.

Peter Boyd, Carbon War Room:
When defining what a deal is, I like to take a McKinsey curve….  On the left side are the things possible now, and you move across to the end. In the middle is government support and policy. A sector looks at the 'strips' of what is achievable, multi-sector is complementary.

It's all about having a working marketplace. We could all believe if only the consumer would buy one green thing, everything would change, but we don't. That's not to say the consumer doesn't have an important role… Our climate deals solve those pieces you need to bring together policy, capital and technology -- then the marketplace starts talking back to policy makers.

Sandrine:
If we look at mobility, and address policy, capital and technology. Is a deal anything we do with CO2, or do we want to define it (eg a consumer buys a product)? We can't constrain it too much but maybe we should. Is it about scale or impact? Do we want to put in place tangible criteria?

Jasper:
It's up to us to decide. I propose a simple framework: A McKinsey-esque way to look at what a consumer can do day to day, a household level analysis (drive one SUV to the mall). And share those stories on a website, then invite others to submit stories and rank them. Invite other people to copy this. There may be an analogy at the business level, I don't know. Maybe we want to be looking at the top of the food chain -- getting policy makers into a room to reach a consensus.

Sandrine:
Let's start with examples. We have a shipping example from the Carbon War Room, which is already huge. Aviation could apply the same.

Christian Teriete, GCCA:
Shah Agassi of Better Place comes to mind in this discussion. Bringing different players together. Agassi started in Tel Aviv -- a small-scale project with success to expand across the country. For it to work, you must have local authorities on board, a tech provider and consumers who are interested in cooperation with the technology providers because I don't think it's something you can buy in a shop.

Sandrine:
His project is also about putting in the infrastructure and working with his partner Nissan for the vehicles.

Christian:
Maybe bring everyone together in a pact?

Greg, AON:
What I'm not hearing is the challenge of the b2b sector. In any deal, we don't face the same challenges as other high-profile companies face like retailers. We have a tremendous role to play -- AON -- insurance industry more broadly -- sees itself as an enabler.

Peter, Carbon War Room:
The insurance industry is an interesting point -- whether it agrees or not with climate change -- events like floods have been increasing. Munich Re and Zurich have been vocal.

Sandrine:
Also the insurance industry can bring forward what climate risk means. Your own analytical capabilities for interpreting these risks are essential for other companies.

Greg:
We see a bigger role than mitigation. There's a fear of raising questions first with our clients.

Sandrine:
Better Place… many cities are going beyond the electrical car, and adding in collaborative packages to consumers encompassing trains, electrical vehicles and bikes, etc. Many deals are being made -- eg in Brussels -- with the private sector and public sector, which are then packaged for the consumer, for example to use a combination of trains from outside the city to electrical vehicles or bikes inside the city.

Christian:
It doesn't have to be limited to local scale. There are incentives for German car makers for EVs in China -- so Germany put its money into this, tried to create a market in China, for German car companies.

Jasper:
This brings up what we can do around this table. With a sectoral approach, there is a pile of money (eg through the ETS) that no individual company feels they alone could otherwise afford. Agassi, I admire -- he didn't do one thing, he's a one-man climate deal.
The airline industry, agreeing to an upcharge on every ticket. Put in a tech solutions fund to build those solutions, you can then take risks with that money. So you can make a quantum leap.
Or the shipping sector -- it's in its own interest to make a usage charge.
An aggregated fund based on user fees with a separate company managing it is fair, and at no cost to shipping company.

Sandrine:
The biggest problem is on lorries, and private vehicles. Lorries can be done and it's being discussed. Private vehicles -- there could be a tax on vehicles (charge if buy an inefficient car) but it is more difficult or just raise tax on fuel but the consumer is already complaining fuel is too expensive in Europe.
I think climate user fee could be interesting if properly thought through and managed.

Jasper:
It's not an attempt to affect behaviour. Politically, that's a non-starter. I'm talking about a fee that is so small people don't notice, but in the aggregate it's huge.

Sandrine:
You could add it into VAT, so it's not seen.

Jasper:
But adding it into VAT is less efficient than a fund. For political reasons, you don't want people to notice, just add it in.

Christian: The question is do we talk about this openly.

Jasper:
It's not a tax but a user fee.

Mark, Carbon War Room:
In the golden years of 2005-08, words like "climate  change" resonated with the public. Now they don't. It's wealth creation, job creation. Language drives changes with the stakeholders. With every idea we talk about, we should be qualifying where we are today -- where's the job creation?

Sandrine:
We have to talk about where the opportunities are.

Peter:
How can we make sure that the consumer is aware? Shah's model goes to government to make sure policy is, has technology, has capital and the consumer buzz/pull through -- all four are important.
In terms of shipping -- we have got to be careful in a sector-by-sector approach about what really works, on a large scale. With the user fee example: if you introduce a fee, there's a worry about how you do it -- is it a levy? Etc.
You have hundreds of technologies, but who gets it first (Maersk, etc)?
Tesco, Wal-Mart, Sainsbury's can't pick the ship, Maersk can't say look at my beautiful ship…the market isn't synchronised like that. If Tesco is paying the fuel, why would Maersk pay to put all the bells and whistles on a ship? How do you get to the market players?
[see case study on Hub website]
Over 60,000 of the 100,000 active commercial vessels now have an A-to-G grade rating. Imagine now what shippers can do differently? The whole market starts to reward efficiency. (An "A" ship get cheaper rates, "G" (emitting more emissions) ships have to wait longer before docking at a port). Container ships know what works best [environmentally], but have sitting on it because there hadn't been incentives out there.

Jasper:
Can I agree and disagree? All that is doing is addressing efficiencies, but not getting investments into an entirely new technology. It doesn't motivate the replacement of perfectly working engines, doesn't influence a massive step change in technology. Concerns can be worked out on a competitive market basis. The way forward is to do what you're doing, and have the aggregate fund in parallel, because it will take time to work out. It does require mobilizing big aggregated funds.

Sandrine:
Someone has to agree to pay the fee, once it is there. Who decides where it goes? Who manages the fund? There are modeling, methodology issues about what is right technology.

Jasper:
We don't have much time. I've been running a project the past few years -- asking experts how much time is too much (Amazon, the tipping points). I'm telling you we don't have much time. We shouldn't go over 1.5% change. We're seeing 3% change. We can't worry about offending anyone but say, "Shippers: it's not going to hurt you."

Peter:
The number of times I've heard: "You don't understand shipping." The key piece: for the fund we need a timeline -- how quickly, who pays. This can be done in the next year. 40% savings can be made with current technology.
One model is aligning contracts. As you heard in Cancun, nice glossy thing showing how everyone needs to do something.

Jasper:
You overcome that problem. Get the IMO involved. Everything I've just said applies to technology.

Sandrine:
What I want is more examples of what's happening now.

Mark: Information is there for Tesco, Sainsbury (how much a consumer saves it this and this happens), so there is a hard discussion in retailing (that info isn't there in shipping)

Sandrine:
How do we get that information out so we unleash more deals?

Mark: And what are the tools.

Christian Teriete, GCCA: But if a deal is too small doesn't get us to where we need to be; too big, it hits all problems we're talking about.

Jasper Sky, Oxford University:
I'm not that worried about that. The IMO already exists. We can serve as conveners. We don't call up IMO and say please do this. Get them around a table.

Sandrine:
You cannot only go through the IMO as will bog the process

Christian:
Other countries have funds. There are opportunities but also challenges if you bring it too much to a global scale because of conflicting views on how to use funds (HIV vs climate change…) if at, say, the UN level.

Jasper:
We’ll always get controversy.

Sandrine:
On the energy side, the EU 2050 Energy road map from ECF sets out a clear pathway to de carbonisation and focuses on demand side solutions such as efficiency as well as supply side to transition from coal e.g. wind, solar, nuclear, and etc.. here we could think of an enormous amount of deals…

Jasper:
People around this table have a convening power. To deal with skeptics at the corporate level, create more of a consensus with similar companies, set up seminars with real climate practitioners. The power of proof -- being in the same room who have already bought into this.

Peter:
The challenge is to find out which bit don't they agree with. In China, they need to hear stability and competitiveness, harmony -- no riots.
In the US, it's national security.
Don't use the phrase 'climate change' to talk about climate change.

Manish:
We were in China, and we talked with local people and they couldn't get their heads around the fact that people in the West don't believe in climate change, they see it every day. Just get on with it.

Greg:
I think that's true with mitigation. From our perspective adaptation is important.

Peter:
The London team uses climate resilience.

Greg:
You'd be surprises by amount of people questioning the data.

Christian:
I see the challenge, but there is a way to change discussions. Oxfam, etc are going through a similar re-narrative on adaptation -- going to stories that work.
 

 

Key Questions:

What are the big deals that have occurred to date in mobility?

Can these deals be replicated, and if so, where, with whom, and how?

Where are ripe opportunities for new mobility deals? In electrification, in diversification of liquid fuels, in reduction of VMT?

Who should we reach out to and involve going forward to help make new deals happen?