In this critical time of preparation for the Copenhagen summit, I cannot resist making a parallel between the present economic crisis and the ecological one. In both cases we have been living on credit. On both fronts, the time has come to pay the debt.
Our denial of environmental costs, notably our failure to price natural resources into the economy, has brought about the climate crisis. The financial collapse was also caused by overlooking “negative externalities,” in financial reporting, balance sheet structures and risk assessment.
In both cases, we have tried to privatize profits and socialize losses.
The post-crisis society requires the emergence of a new economy, less demanding on resources, more frugal, less brutal with nature. We already see new models emerging: the “circular” economy where the waste of one industry becomes the raw material of another; the “performance” economy in which people prefer to purchase a usage rather than a product; or slim cities as opposed to slum cities, where for example water is reused in the same neighborhood.
The business model of Suez Environnement, meanwhile, is already adapting to this post-consumer society with the focus increasingly on preventing pollution rather than managing and controlling its effects. Today, the group manages the cycles of resources such as water and secondary waste products that are becoming rare.
The new reality of climate change for the earth’s water resources is especially alarming.
Between 2008 and 2030, for example, the number of people living in countries affected by water stress will grow from 2.9bn to 3.9bn, reaching close to 50 per cent of the world’s population.
Solutions already exist and are now being developed on a large scale. Besides greater agricultural water efficiency, the saving of municipal water is a highly productive option. For example, in Casablanca where we manage the water system, the savings achieved from leak reduction are equivalent to the consumption of 800,000 inhabitants.
There is also huge potential to tap more non-conventional water sources. Only half of the 368 cubic kilometers of wastewater collected in the world each year is treated, and less than five per cent is reclaimed. Last August, we renewed a water recycling operation and maintenance contract in the Los Angeles area, a region suffering chronic droughts. Mostly reused for industrial and irrigation purposes, the treated water also replenishes groundwater reservoirs and serves as a barrier against saltwater intrusion from the Pacific Ocean.
In our waste activities, we are also pioneering new industrial models. Last July we opened a PET recycling unit, capable of recycling 40,000 tonnes of plastic bottles per year and converting them into 30,000 tonnes of recycled raw material for food packaging. This “bottle to bottle” process is one of the first of its kind in Europe.
Climate change is also a spur to innovation when it comes to reducing our own emissions. Between 2007 and 2008 Suez Environnement reduced CO2 emissions by close to ten per cent while at the same time increasing production of renewable energy by more than eight per cent. Such commitments should not be halted with the economic crisis. Quite the contrary.
Over the last 20 years businesses have made major gains in the productivity of labor and capital but until now they have neglected the productivity of resources. There are therefore many opportunities to reduce environmental impacts and simultaneously make considerable savings.
This new development model allying economic growth with environmental preoccupations calls for a new form of international governance. For this reason we cannot miss the opportunity offered in Copenhagen.
Jean-Louis Chaussade is CEO, Suez Environnement.