ACKNOWLEDGMENT The chairman of the AUC‐EUR sustainable development workshop , Dr. Salah El‐ Haggar , acknowledge with gratitute the Organizing and Technical Committee : • • • • • • • • •
Salah El‐Haggar, Egypt, Chair Don Huisirgh , USA Frank Boons , Netherlands Leo Baas , Netherlands Dalia Sakr , Egypt Lama El‐Hatow , Egypt Mona Bahgat , Egypt Wessam El‐Baz , Egypt Mohamed Serag , Egypt
Who have contributed to make this international event very successful .Papers have been printed without editing (except formatting) as submitted by the authors. This proceeding is a collection of papers presented at the AUC‐EUR Sustainable Development Workshop held in the new campus of The American University in Cairo, Egypt during 27‐29 October 2009.
Foreword Sustainable development encompasses our daily activities and thus enables us to make a difference in all aspects of our life. More often than not, sustainable development is misunderstood as environmental development and preservation. However the holistic definition of sustainable development is the synergy between the economic, social, and environmental development of our communities altogether. In today’s world we are faced with so many different plagues including the global economic crisis, the food security crisis, and the impending climate change. Unless we begin to look at our issues with a holistic approach, we will be able to tackle the problems compounded upon us. This is simply based on the fact that our major concerns today are not sector based, but in fact cross‐cutting and interdisciplinary. Climate change for instance is the new “Buzz” word everyone hears, but essentially falls directly into this relation. Climate change is not restricted to effects on the environment, but however will impact every single sector including agriculture, water, housing, IT and telecommunications, tourism, industry and of course the environment. It is cross‐sectors, cross‐themes, cross‐cultures, and most importantly cross‐borders. It affects us all and requires immediate attention. In the 1600s Galileo claimed the earth was round and was attacked for it and imprisoned. Today there are still scientists that persist that Climate Change is a fallacy and attack its very essence. Climate Change to our generation is Galileo’s discovery to the 1600s. Yet the difference is the rapid and extreme consequences that will engulf this planet in the very near future. Thus today we must speak about the actions that we can begin to do as a society, and a civilization.
Schedule Table Section 1: Sustainability tools and Indicatiors
Chapter1 GRREN ECONOMY “Recyling Into A Better World” Ms.Rawi Mansour Ramsco........................................................................................................10
Chapter 2 Education for Sustainable Development Prof. Dr. Donald Huisingh..........................................................................................................14 Chapter 3 EcoVillage for Sugarcane Industry S. M. El Haggar & M. M EL Gowini............................................................................................69 Chapter 4 Sustainable Financing – Role of Financial Institutions in Contributing to Sustainable Development Yasser Ibrahim.............................................................................................................................86 Chapter 5 Carbon Footprint Assessments: Capitalizing on Sustainability Tobias Bandel and Lama El Hatow ....................................................……..............................99 Chapter 6 Social and cultural capitals as tools for managing natural capital for sustainable development A.Latapi.......................................................................................................................................108 Chapter 7 EcoInnovations Distinguished N. Hofstra and D.Huisingh.......................................................................................................115
Section 2: Climate Change Chapter 8 Assessment of Impacts of Climate Change on Water Resources in Egypt L.El Hatow..................................................................................................................................143 Chapter 9 3
Meta Early Warning System to Manage Drought Disaster in South Asia M.Jabeen.....................................................................................................................................172 Chapter 10 Towards Sustainable Flood Management J.van Ast......................................................................................................................................194 Chapter 11 Urban Climate Change Policies : Roles , Strategies and Programs in Municipalities Towards Mitigation and Adaptation W.Hafkamp.................................................................................................................................208 Section 3: Society, Culture and Education Chapter 12 Environment as a Crucial Element in Egypt's Development Plans What are we Missing Ihab M. Shaalan.........................................................................................................................232 Chapter 13 Role of Businesses in Sustainable Development Policy Implementation Waleed Mansour.......................................................................................................................240 Chapter 14 Ashoka's Housing for All: Unlocking the Purchasing Power of Slum Inhabitants Iman Bebars...............................................................................................................................250 Chapter 15 A Case Study of Management of Biomass Resources: Organic Composting in Egypt A.ElDorghamy............................................................................................................................256 Chapter 16 SD Promo: Promoting Education in Sustainable Development Kadria Motaal............................................................................................................................275 Section 4: Industrial Ecology and Natural Resources Conservation Chapter 17 Role of Egypt National Cleaner Production Centre in Promoting Sustainable Industrial Development in Egypt Hanan El Hadary.......................................................................................................................283 Chapter 18 4
Östergötland: Towards a 100% Renewable Energy Region L. Baas.........................................................................................................................................296 Chapter 19 Zero Waste Production System in Small/ Medium Industrial Cluster as the Core of Sustainable Innovative Village (Pilot Project: SamigaluhVillage in Kulon Progo District, Indonesia) A.Utami ,A. Palupi, Benny & A.Gibran...................................................................................303 Chapter 20 Projects, parks, and Policy Programs: The Evolution of EcoIndustrial Parks in The Netherlands, 1999–2009 F. Boons and Y. Mouzakitis.....................................................................................................313 Chapter 21 Critical Success and Limiting Factors for EcoIndustrial Parks: Global Trends and Egyptian Context D.Sakr,L.Baas,S.M.ElHaggar&D.Huisingh.............................................................................320 Section 5: EcoDesign of Products Chapter 22 Remanufacturing for the Automotive Aftermarket – Strategic Factors: Literature Review and Future Research Needs R.Subramoniam,D.Huisingh& R.Chinnam............................................................................348 Chapter 23 A Holistic Approach for Sustainable Electrical/Electronic Products Design M.Edeid.......................................................................................................................................365 Chapter 24 Slow Design: Can New Strategies in Local and Artisinal Production Impact Sustainability? D. Murray& A. Welsh................................................................................................................377 Chapter 25 Implementing Product Policy in the United States: The Emerging Argument for a Greater Federal Role G. Hickle......................................................................................................................................384 Section 6: Sustainable Construction and Land Use Planning Chapter 26 Promoting Earth Architecture as a Sustainable construction Technique in Egypt 5
S. Sameh.....................................................................................................................................400 Chapter 27 Identification of Key Attributes and Trends in Green Building Tools: A Comparative Assessment of Three, Prominent Programs C. Wilt,B. Tonn &D.Huisingh..................................................................................................422 Chapter 28 A New Approach Towards Obtaining Biodiesel to Supply The Car Fleet of Puerto Rico’s Main Dairy Production Plant Dorimar Morales.......................................................................................................................432 Chapter 29 Urban Lake Management Systems: Towards Sustainable Urban and Ecological Planning of Cities M.Bal...........................................................................................................................................443 Section 7: Environmental Management System,Green Supply Chain, and Cleaner Production Chapter 30 Cleaner Production as a vehicle to Implement Chemical Management Services Y.Askar........................................................................................................................................469 Chapter 31 Environmental Management Systems in Telecom Companies S.Eissa..........................................................................................................................................481 Chapter 32 Determination of some Persistent Organic Pollutant (POPs) in Marine Organisms from Arabian Gulf Region: An Environmental Assessment Toward Cleaner Production and Sustainable Development A. El‐Mubarak , A. Rushdi , K.Al‐Mutlaq and K. Subat.......................................................492 Section 8: Water and Wastewater Management Chapter 33 Water Management of Common Pool Resources Case Study: Nile River Basin in Egypt L.ElHatow..................................................................................................................................506 Chapter 34 6
Sustainability and Managing River Basins: The Challenges and Threats of Liberalization and Privatization J.Bouma......................................................................................................................................516 Chapter 35 Inplant Control for Water Minimization and Wastewater Reuse: A Case Study in Pasta plants of Alexandria Flour Mills and Bakeries Company M. Abd El‐Salam&H. El‐Naggar..............................................................................................529 Section 9: Environmental Planning Chapter 36 EcoVillage : Concept & Implementation S. El‐Haggar................................................................................................................................545
Sustainability tools and Indicatiors
Chapter 1 GRREN ECONOMY Ms.Rawi Mansour “Recyling Into A Better World” Good morning , Ladies & Gentlemen, The first environmental oath ever was by the Pharos upon death the diseased were questioned that the whether they had polluted the land and the Nile. Quoting from the Eco‐cities of the Mediterrian Forum 2008 in Jordan the Eco‐Cities (www.eco‐cities.net) Egypt, for example, contributes less than 1 percent of the world’s carbon dioxide, but is expected to experience some of the worst impacts of climate change. Last year, the World Bank reported that millions could be forced from their homes because of potential global‐ warming‐induced sea rise, which could flood the Nile River delta That, in turn, could prevent the country from feeding itself, since areas surrounding the Egyptian river provides most of the nation’s arable and residential land.” 78 million Egyptians are living in the 5% of the total area”, where 15% of Egypt’s GDP is from agriculture” 80% of Egypt water is used in farming. Ms. Rawya’s dream is to transform the Nile delta’s agriculture waste into bio fertilizers & bio energy and build sustainable “eco‐villages, agro food park, as our future is in reclaiming our desert, One of the main world problems is food deficiency; this���can help Egypt become self sufficient instead of self‐reliant Egypt’s desert is one of the purest areas of the world’s as the rest of the world’s soil is degraded from the excessive usage of chemical fertilizers and over grazing 700 million hetctars are wasted. While the world continues to discuss topics like climate change & increasingly high food prices, someone had to take action to make a concrete change & to give a substantial contribution to support the poor who are the most ones affected by the environmental changes & encourage the creation of eco‐villages to meet our Egyptian environmental needs & must be cost effective The main objective is to create ecological rural community “Eco‐village” as a part of comprehensive sustainable development to enhance the livelihood of the marginalized poor people that to be integrated with a supportive social environment, help immigration from the urban to the rural area & produce organic food , Egypt only produces less than 0.04% & there is a great demand on organic products throughout the world.
Which will promote (educational tourism, recreational tourism & eco tourism & commercial business tourism ) Quote from the Islamic conference held in Kuwait in 2008 which I attended
King Abdullah of Jordan in the Islamic forum to eradicate poverty in the Islamic world “The key to poverty solution is in Green Economy “ “Green economy means a direct focus on meeting human & environmental needs” Use value instead of exchange value …. This is a fundamental principle of the Green Economy. Following the natural flows instead of accumulation of money & materials which caused the Economic crises.
Principles of the Green Economy: Waste Equals Food: In nature there is no waste, as every process output is an input for
some other process, outputs and by‐products are nutritious and non‐toxic as food is becoming one of the main crisis in the world following the economic crisis. The solution is by creating permaculture which is the Design of systems integrating humans, plant, animals, energy, and structures.
” As mentioned in Egypt State of the Environment Report 2006”, we are dumping
60 million tons of waste (worth of LE 14.3 billion) which is wasted resources, out of it (36.5 million tons agriculture wastes (worth of LE 1.6 billion) , only 8 million tons are used as animal feedstock, the rest is accumulated or burned causing the emission of greenhouse gas & causing leachates & contaminating our aqua fills thus leading to global warming . This has been improved sufficiently lately under the great management of Dr. Maged George ( Minister of State for environmental affairs). We are here eradicating the causes instead of curing the symptoms. RAMSCO’s target is to create a sustainable project a holistic integrated agriculture waste management system both in urban and rural areas (country side) and turn agricultural waste into bio fertilizers, animal feedstock, building material & renewable energy sources (green line products). RAMSCO will launch a small pilot project of an agro‐food park & eco‐village with the usage of organic composting &renewable energy from agricultural wastes.“Our future is in our desert”
Step 1, Pilot compost plant Feasibility Study, Business plan made by BCG “ Boston Consulting Group”, the aim for is to make a chain of composting plants as Egypt will need 20 million ton of organic fertilizers “The business plan is available for discussion upon request”.
What are the advantages of compost? Less degrading to soil Less harmful to human beings & soil
Cost effective Needs less water Cheaper than chemical fertilizer which cost L.E 1800/TON
Step2, Agro Food Park “feasibility & researches are still to be done”
One of the key players for the implementation of the ecological rural community is the building of a Agro Park tailored to the Egyptian society with a chain development in greenhouse and intensive livestock production. This will help in lowering the costs by reducing post harvest losses, transportation costs and energy costs and by lowering environmental emissions & creating traceability.
Creation of Bio Fuels …… here we are talking about the 2nd generation of crops not the 1st generation , not food into bio fuel, agrowastes into bio fuel Advantages of Biofuels • Reduce pollution • Address increasing demand for energy • Generate CDM
Challenges meeting biofuels:
• Technology to be adapted in Egypt • Cost Efficient • Competition with currently subsidized fuels
Using the Kyoto protocol & the CDM are one of the most efficient financial mechanism to improve Egypt’s Environmental problems. In spite of that for every ton reduced from Green house gas carbon dioxide methane … there is 20 Euros pert ton … there is also the Kyoto protocol to exchange the CDM credits & developing countries …. While in Egypt we have only 4 CDM projects accomplished. While if we work on such projects … we can do : Composting for better food & cheaper food for the mass. Fossil fuels Poor housing Recycling water “Social entrepreneurship improves environmental, humanitarian demands We want to lead Egypt to use a circular economy instead of a linear one By following the 3 Chinese mantras reduce; recycle; reuse It features low consumption of energy, low emission of pollutants and high efficiency… …Unlike a traditional economy, the circular economy is a 'triple‐win' economy (CE.) Through implementing CE China Individuals have also become richer, with annual GDP per head rising during the reform time 379 renminbi in 1978 to 10, 502 renminbi in 2004. The challenge of the 21st century is aiming at 0 waste scenario and No land fill. Sustainable development is not about subsidizing what goes into the land fills… it’s subsidizing the resources.
Chapter 3 Eco-Village for Sugarcane Industr S. M. El Haggar and M. M EL Gowini ABSTRACT There increasingly diminishing rate of natural resources is a pressing factor for the implementation of Sustainable Development. The World Commission on Environment and Development defines Sustainable Development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" [United Nations, 1987]. It can be implemented through Industrial Ecology which transforms industries to resemble natural eco-systems, where one industry’s wastes are consumed by another. This can be achieved by grouping industries that re-use each other’s wastes in the form of Eco-industrial parks. This paper aims at developing an eco-industrial park for one of Egypt’s largest industries: Cane Sugar Industry. The problem with the cane sugar mills in Egypt is that they are highly polluting and operating inefficiently. An illustration of the current operation technique of the sugars mills in Egypt and the devastating damage to the environment are presented.
INTRODUCITON Brewster  has implied from the Cleaner Production “CP” definition that CP focuses only on individual activities or a single production process rather than focusing on the environmental impacts of the entire range of industrial activity. With the evolvement of the CP, many decision makers, scientists and engineers begin to break our dependence on single use of the finite natural sources which will lead to the ultimate depletion of these sources. As an alternative, biological eco systems should be the guidance to establish industrial systems with “no waste” but only residual materials that could be consumed by another process in the same industry or different one. This preceding recognition is the main concept for the Industrial Ecology (IE). Therefore industrial ecology seeks strategies to increase eco‐ efficiency and protect the environment by minimizing the environmental impacts to be within the allowable limits. In other words, industrial ecology seeks to move our industrial and economic systems toward a similar relationship with Earth's natural systems or “artificial ecology”. IE seeks to discover how industrial processes can become part of an essentially closed cycle of resource use and re‐use while considering the natural environmental systems in which we live. There are some similarities between IE and CP, but CP puts more emphasis on the sustainability of industrial practices over time and more frequently looks beyond individual firms and their existing processes, products, and services. One of the most important goals of industrial ecology [Frosch, 1994]—making one industry’s waste another’s raw materials—can be accomplished in different ways. The most ideal way for IE is the eco‐industrial park (EIP). They are industrial facilities clustered to minimize both energy and material wastes through the internal bartering and external sales of wastes. Robert Frosch – an executive in GM ‐ put the question in 1989; “why would not our
industrial system behave like an ecosystem where the waste of a species may be resource to another species?” (Wikipedia 2006). One industrial park located in Kalundborg, Denmark has established a prototype for efficient reuse of bulk materials and energy wastes among industrial facilities. The park houses a petroleum refinery, power plant, pharmaceutical plant, wallboard manufacturer, and fish farm that have established dedicated streams of processing wastes (including heat) between facilities in the park. The gypsum from neutralization (‘scrubbing”) of the sulfuric acid produced by a power plant is used by a wallboard manufacturer; spent fermentation mash from a biological plant is being used as a fertilizer, and so on. The success of the EIP depends on the ability to innovate, access to talent, markets, and the ability to meet profit conditions or cost constraints and on achieving close cooperation between different companies and industrial facilities. Nemerow  defines EIP as “a selective collection of compatible industrial plants located together in one area (complex) to minimize both environmental impact and industrial production costs. These goals are accomplished by utilizing the waste materials of one plant as the raw materials for another with a minimum of transportation, storage and raw material preparation”. There are a lot of definitions regarding EIP but all of them have taken into consideration the three main criteria for sustainable development namely, environmental, economic and social dimension and they emphasize the main role of eco‐industrial parks as a tool for industrial ecology and for achieving the objectives of sustainable development.
BENEFITS OF EIP EIP aims at achieving economic, environmental, social, and governmental benefits as follows: •
Economic: minimize costs of raw material, energy, waste management, and treatment, in addition reduce regulatory burden and increased competitiveness in the world market as well as the image of the companies. Environmental: Reduced demand on finite resources and make natural resources renewable. Reduce waste and emissions to comply with environmental regulations. Make the environment and development sustainable. Social: New job opportunities through local utilization and management of natural resources. Develop business opportunities and increase co‐operation and participation among different industries. Government: Reduce cost of environmental degradation, reduce demand on natural resources, reduced demand on municipal infrastructure and the government may receive higher tax revenue.
SUGAR INDUSTRY IN EGYPT Sugar cane is cultivated in tropical and subtropical areas, 60 inches of irrigation or rainfall per year at least are required for its cultivation. Among South African sugar producing countries Egypt ranks second. Over the past decade Egypt’s sugar production contributed 13‐16% of Africa’s total sugar production (F.O.Lichts GmBH). The amount of total sugar production and cane sugar production in Egypt are shown in table (1) and (2) respectively.
Table (1) Egypt’s Sugar Production [F.O.Lichts GmBH]
95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05
1000 tons 1222
The sugar produced in Egypt is either from cane or beet, however, cane sugar constitutes 70‐ 90% of Egypt’s annual total production (F.O.Lichts GmBH). Table (2) Egypt’s Cane Sugar Production [F.O.Lichts GmBH]
There are eight cane sugar producing factories in Egypt as shown in figure (1), most of them located in Upper Egypt and there are three sugar refineries located in Lower Egypt. Egypt’s average annual refined sugar production is 1.03 Million tons, which is 10% by weight of cane production. The average proportions of the resulting bagasse and cachaza are 35% and 4%, respectively by weight as shown in table (3). The bagasse has 50% moisture content and the cachaza’s moisture content ranges from 50‐60%. The average annual cane consumption, solid waste generation and refined sugar production of the sugar mills in Egypt are shown in Table (3). Table (3) Average Annual Cane consumption, Solid Wastes Generation and Refined Sugar Production of the Sugar mills in Egypt (El Haggar, El Gowini, 2005 )
Although Egypt is among Africa’s largest sugar producers, its average annual consumption, which ranges between 2‐2.2 Million tons (F.O.Lichts GmBH) exceeds local production. Egypt, therefore, is a net importer of sugar. Table(4) below illustrates Egypt’s sugar imports over the past few years. There is a major reduction in the value of imports from 98/99 to 99/00, this is
primarily related to the major drop in sugar world market prices at the same year [F.O.Lichts GmBH] Table (4) Values of Egypt’s imports of Refined Sugar (El Haggar, El Gowini, 2005 )
Figure (1) Locations of Cane Sugar Factories and Refineries in Egypt (El Haggar, El Gowini, 2005 )
TRADITIONAL ENERGY FORM The sugar production process is highly energy intensive. Significant amounts of steam and electrical power are required at different stages in the sugar production process. A detailed description of the sugar production process can be found in (El Haggar et. al., 2005). Bagasse; a by‐ product of the cane sugar production process is frequently used by Sugar mills in its loose bulky form as a boiler fuel. It has a gross calorific value of 19,250 kJ/kg at zero moisture and 9,950 kJ/kg at 48% moisture [Deepchand, K. 2001]. The net calorific value at 48% moisture is around 8,000 kJ/kg [Deepchand, K. 2001].
Figure (2) Traditional Sugar Mill. In Egypt [EL Haggar, et al, 2005]
The current use of bagasse in its loose bulky form is an inefficient procedure because a proportion of the burnt bagasse remains and is dumped with the cazacha in a landfill. This alternative is adopted by sugar mills as it helps to reduce production costs. Figure (2) illustrates the operation of a typical sugar mill in Egypt such as Komobo‐Aswan .
IMAPCTS OF THE TRADITIONAL ENERGY FROM The traditional energy form, which is adopted by all sugar mills in Egypt has major negative impacts: 1. Contamination of the Surrounding Environment: Fly ash is generated from burning bagasse in its loose bulky form, which is a major pollutant to the surrounding environment. The sugar mills will require expensive scrubbers and filters to purify the emissions. Figure (3) reveals the severity of air pollution due to burning of bagasse in the Komombo, Aswan, sugar mill.
Figure (3) Air Pollution due to burning of bagasse in loose bulky form in Komombo Sugar mill (El Haggar, El Gowini, 2005 )
2. Loss of Resources: the ash generated in burning is lost to the atmosphere and can not be obtained due to the bulkiness of bagasse and the lack of control over the burning process. The fly ash is rich in nutrients which can be processed and used efficiently as a fertilizer. The chemical composition of bagasse is shown in Table (5). Table (5) Chemical Composition of Ash [Dasgupta 1983]
3. Energy Inefficiency: the bulkiness of bagasse causes it to have a low energy content per unit volume and leads to a low burning efficiency of 60%. In addition, due to the uncontrolled burning approximately 30% of the bagasse, by weight does not burn in
sugar mills. The remaining amount could be used as a fuel for brick manufacturers but is usually dumped. Other countries dump bagass and cazacha in a landfill [Nemerow, N. L, 1995]. Currently most sugar mills in Egypt dump most of the remaining cachaza and bagasse although their chemical composition, shown in table (6) reveals a high cellulose content for Bagasse and a high organic content for cachaza, which qualifies them as possible energy sources. In addition, the high nutitional value of both bagasse and cazacha qualifies them as a good candidate for fertilizers. Table (6) Chemical and Physical Composition of Bagasse and Cachaza [Dasgupta. 1983]
Fats and Wax
The sugar production season lasts for 5 months in Egypt, starting in December and ending in May. The mills operate 24 hours a day 7 days a week throughout the 5 months. Due to the tight schedule and the high costs of production, high efficiency is a vital issue that needs to be maintained and constantly improved. The current process of production in Egyptian sugar mills, is highly inefficient. Resources such as bagasse, cachaza and ash should be utilized by the sugar mills. The traditional energy form is one of the major problems in sugar mills. In addition to its negative impacts, it also causes the loss of these rich resources. Therefore, an alternative energy form should be adopted and alternatives that utilize the excess bagasse, cachaza and ash should be developed. The possible alternatives for increasing production efficiency and overcoming the negative impacts of the traditional energy form are three‐fold; Bagasse briquetting, biogas, and Natural
gas or oil fuel. Adoption of any of these alternatives will require modifications to the sugar mills. A description of each of the possible alternatives is provided below.
ALTERNATIVE 1: SOLID FUEL USING BRIQUETTING TECHNOLOGY This alternative involves compressing the bagasse and cachaza at high pressure into density packed briquettes. The cachaza acts as a binding agent due to its fat and wax content. The resulting briquettes are a possible fuel for boilers in the sugar production process as they have a calorific value of 15000 [kJ/kg]. High compression pressure increases density of the briquettes, which improves handling and storage properties of the briquettes. In addition, higher density leads to higher energy per unit volume, which is more economical. Residue size changes density, however, high pressure leads to densities ≥ 0.7g/cm3 for all residue sizes (fine, coarse, stalk), which is sufficient to provide a high energy per unit volume (Ishaq, 2003). The optimum process conditions are (Ishaq, 2003):
• • •
Pressure applied: 100‐120Mpa. Residue moisture content should range between 9‐12%. Cachaza inclusion should not exceed 10%.
Briquettting increases combustion efficiency from 60% to 80%, this increase in efficiency reduces the amount of harmful pollutants to the atmosphere, leads to a more controlled burning process, increases time efficiency and reduces the amount of bagasse required for burning. The use of briquettes allows the ash, which is rich in nutrients to precipitate in the boiler, therefore, reducing harmful emissions to the environment. The ash can also be easily collected after burning and used as a fertilizer. The implementation of this process requires the establishment of a briquetting unit. The sugar mill will be more efficient by combining the briquetting unit with the sugar mill to form an Environmentally Balanced Industrial Complex (EBIC). Figure (4) illustrates a model of an EBIC for a sugar mill that processes 1,000 tons of cane per day, utilizing the Briquetting technology. The quantities of bagasse and cachaza generated from processing 1,000 tons of cane are, 270 and 34 tons respectively, [Nemerow, 1995]. The amount of cachaza used in the production of briquettes should not exceed 10%, therefore, 27 tons are sent to the briquetting unit with the bagasse and the remaining 7 tons will be used in production of fertilizer. Assuming the mass of a briquette is 100g, the number of briquettes generated from 270 tons of bagasse and 27 tons of cachaza is 2.97 Million Briquettes. The entire quantity of briquettes produced will be used as boiler fuel. At 80% combustion efficiency, the boiler produces 3.56 GJ of steam. The steam produces 270,735 KWh of electricity. The electric power generated will be used to supply a proportion of the power requirements at the sugar mill and the remaining amount of power, 169,265 KWh will be purchased from the grid.
The amount of ash precipitating in boilers is 29.7 tons per 1,000 tons of cane. The ash is collected and mixed with the excess cachaza in the organic fertilizer unit to produce 18.5 Tons of fertilizer that can be either used in the cane growing area or sold to local consumers depending on requirements. The price of 1 Ton of fertilizer is L.E 250.
Economic Evaluation Although the amount of electric power generated due to the combustion of briquettes is quite high, yet it is insufficient for the mill requirements and remaining amount of electric power is bought from the grid at a price of L.E 0.16 per KWh. The cost of Electric Power from the Grid is L.E 27,080 per 1,000 Tons of cane (per day). For the briquetting unit, the total Labor cost is L.E 240 per 1,000 Tons of cane (per day). In the organic fertilizer the total Labor Cost is L.E 30 per 1,000 Tons of cane (per day) and the revenue from Selling of Fertilizer is L.E 4,625 per 1,000 Tons of cane (per day). Processing of 1,000 tons of cane using Briquetting technology costs L.E 22,725. Although in the EBIC the revenue from selling the fertilizer does not cover the costs of processing 1,000 Tons of cane, yet, it has to be compared to the traditional alternative, where processing 1,000 Tons of cane cost L.E 70,400 since all of the power requirements of the mill are bought from the grid.
ALTERNATIVE 2: GASIFICATION OF BAGASSCAZACHA, BIOGAS In sugar mills the processing of cane generates a mixture of bagasse and cachaza with an average 8:1 ratio respectively. Traditionally, 70% of the bagasse is inefficiently burnt in boilers. The remaining mixture of bagasse and cachaza, which is usually dumped has an average ratio of 2.4:1 respectively. Dasgupta (1983) investigated the possibility of utilizing the bagasse‐cachaza mixture in the generation of biogas (70% methane and 30%��� carbon dioxide gas) through anaerobic fermentation. Anaerobic digestion is performed by a microbial culture that is developed for this substrate.
Figure (4) Environmentally Balanced Sugar cane Industrial Complex using Briquetting Technology [EL Haggar 2005 et. al.]
Trials were performed using both mixture ratios of bagasse to cachaza and the resulting gas yield was measured. Results revealed that the 2.4:1 ratio of bagasse to cachaza led to a higher gas yield, [Dasgupta, 1983]. The optimum process parameters for biogas generation are, [Dasgupta, 1983]: • Organic loading of 1.0 g V.S./l.d • Detention time of 30days. • 100%circulation of the filtrate. • 6ml of nutrient solution per liter per day. Given the above optimum conditions the gas yield is 0.33l/g V.S added resulting in a methane yield of 0.24l/g V.S added. Volatile solid reduction under this condition is 41%. The complex proposed in figure(5) below illustrates the concept of biogas generation in a sugar mill. For illustrative purposes the estimated mass balances are based on processing 1000 tonnes of cane per day. The corresponding amounts of bagasse and cachaza generated are 270 and 35 tonnes, respectively, [Nemerow, 1985]. Most of the bagasse produced, 189 tonnes (70%) is used in the production of animal fodder and the remaining amount, 81 tonnes is mixed with the resulting chachaza, 34 tons and used
in the production of biogas. Anaerobic digestion of the bagasse/cachaza mixture generates about 12,300 cubic meters of gas, 70% of which is methane, 36 tons of filter cake and 4 tons of filtrate. The filtrate is recirculated to the digester to enhance the digestion process. The gas burnt in the boiler produces 325,000,000 kJ of steam, which is used in energy (heat and electricity) production. The generator uses the steam to produce 72,215 kWh, of the 440,000 kWh of electric power required by the mill. The residual amount of power can be bought from the national grid. Approximately 3,640 hectares of land are required for harvesting 180,000 tons of cane as feedstock for the refinery at a rate of 1,000 tons per day, for a 180 days growing and harvesting season. The filter cake produced, 36 tons, is used as fertilizer, however, the lack of essential nutrients in the filter cake necessitates the addition of and mixing with commercial fertilizer to guarantee healthy cane growth. Fertilizer and pesticide residues are washed off to a Runoff collection Basin that drains excess water to the Algae Growth Basin. Plant growth from the Runoff basin and algae from the Algae growth basin are mixed together and reused with excess water from the growth basin in the sugarcane growing area as fertilizer. Animal Fodder: Bagasse is a suitable animal fodder due to its high fiber and carbohydrate content, as seen in Table (6). There are several processes for treatment of bagasse and making it a suitable for animal fodder. The following is a brief description of the processes. 1) Mechanical Process: it involves shredding the bagasse and soaking it in steam under high pressure and temperature. This process accelerates the digestibility of the fodder without giving it much time for complete digestion. The main drawback of this process is its high cost. 2) Chemical Process: this involves the shredding of bagasse into fine sizes and adding chemicals such as Urea or Ammonia. The chemicals increases the nutritional value of bagasse by increasing its protein content and increasing its digestibility. Treatment of bagasse with chemicals lasts for two to three weeks depending on surrounding temperature. This procedure is inexpensive due to the cheap price of Urea and can be easily applied. 3) Biological Process: bagasse is buried in the soil, with no aeration for a period of two to three months, after which it becomes suitable for feeding to animals. The bagasse can be kept in the soil and used for as long as eighteen months. This process is inexpensive and is simple to apply. The produced fodder has a high nutritional value and is easily digested.
Economic Evaluation In this evaluation it is assumed that the sugar mill will use the chemical process for treating bagasse and making it suitable for animal fodder. The price of Urea and the labor required for processing of bagasse to animal fodder is low and can be evaluated at L.E 30 per ton. The selling price of one ton of animal fodder ranges from L.E 200 – 400. At the given prices and quantities revenues from the selling animal fodder will cover the cost of buying electric power for the mill and cost of Urea and labor if sold at a price of L.E 350. This price may be considered high in some areas and the mill might have to sell it at a lower price. Yet, the mill is
still running more efficiently than in the traditional form because the revenues compensate some of the costs of buying electric power. Initially the mill paid for its entire power supply (444,700 KWh) which cost L.E 71,000. Amount of Animal fodder is 189 tons per 1000 tons of cane. Cost of processing 1 ton of bagasse (Urea and Labor) is L.E 5,700.Revenues from selling animal fodder at a price of L.E 250 is L.E 47,250. Cost of buying electric power (at L.E 0.16 per KWh) is L.E 60,000 per 1000 tons of cane.
Figure (5) Environmentally Balanced Sugar cane Industrial Complex using Biogas Technology
ALTERNATIVE 3: TRADITIONAL FOSSIL FUELS A) Natural Gas
Natural gas is a strong candidate for boiler fuel in the sugar mill if there exists a Natural Gas Network in the area. Combustion of natural gas produces mainly carbon dioxide and water, which do not causes serous pollution problems to the surrounding environment. It causes the
least pollution as opposed to other fossil fuels and has a high calorific value, 1 Ton of Natural Gas is equivalent to 1.1 TOE (Ton Oil Equivilant). One Ton of Natural Gas generates 12,795KWh of electric power. In this alternative the sugar mill will supplies all of its natural gas requirements from the grid. The power requirement in a sugar mill for the processing of 1,000 Tons of cane is 440,000 KWh, which requires 35 Tons of Natural Gas. The bagasse and cachaza produced during the sugar mill process will be used in the production of organic fertilizer. The fertilizer is sold at a price of L.E 250 per ton.
Economic Evaluation The price of 1,000 ft3 of Natural Gas is US$0.8. At an exchange rate of US$1=L.E 5.8 the cost of 35 Tons of Natural Gas is L.E 7,300 per 1,000 Tons of cane, as opposed to L.E 70,400 in the traditional alternative. In addition, to the low price of fuel, revenue is generated from the production of organic fertilizer. The bagasse and cachaza generated during the processing of cane, 270 and 34 tons respectively, produce 152 Tons of organic fertilizer. The cost of producing 1 Ton of fertilizer is L.E 30, therefore, producing L.E 152 tons of fertilizer costs L.E 4,560 and generates a revenue of L.E 38,000. Therefore, Processing 1,000 tons of cane generates a profit of L.E 26,140.
B) Heavy Oil (Mazout)
Heavy oil is a high density, highly viscous petroleum product from petrochemical refining called Mazout. It’s high content of sulpher, heavy metals, wax and carbon residues make it unsuitable for combustion. Although major pollution and health problems arise due to the combustion of Mazout, sugar mills in Egypt are using it as a boiler fuel. Mazout has a high calorific value, not as high as Natural gas, 0.972 TOE. One ton of Mazout generates 11,306 KWh of electric power. In this alternative the mill purchases sufficient Mazout to supply all of its electrical power requirements. The sugar mill will require 40 Tons of Mazout per 1,000 tons of cane. The bagase and cachaza generated will be used in the production of organic fertilizer.
Economic Evaluation The price of Mazout is L.E 250 per ton. The cost of purchasing Mazout is L.E 10,000 per 1,000 tons of cane, as opposed to L.E 70,400 in the traditional alternative. The revenue generated from the production and selling of fertilizer covers the cost of Mazout, generating profits for the mill. The quantities of bagasse and cachaza produced during processing produces 152
Tons of organic fertilizer at a cost of L.E 4,560, which generates a revenues of L.E 38,000. Therefore, Processing 1,000 tons of cane generates a profit of L.E 23,440. Table 7: Comparative Analysis
Conclusion A comparative analysis of alternative fuel technologies for sugar mill boilers in Egypt was presented in this paper. Each technology was presented and theoretically applied to a mill that processes 1,000 tons of cane per day, for means of illustration. It was found that all alternatives were far more efficient than the traditional alternative, which burns 70% of the resulting bagasse from the cane processing. In addition, it was shown that bagasse can have other utilizations than a boiler fuel, such as animal fodder and production of fertilizer. According to the economic evaluations of the different alternatives the use of Natural Gas and Mazout would yield profits from the selling of fertilizer. However, economic assessment of the damage costs due to environmental degradation was not included in the economic analysis, which if included would not justify Mazout as a feasible alternative for boiler fuel. The economic analysis performed was very brief, it included only the running costs, further detailed feasibility studies are required for taking decisions regarding the adoption of any of
the alternatives. The detailed feasibility study should take into consideration the damage cost due to pollution since the main objective of this paper is to present alternative fuel technologies that preserve the surrounding environment. The most appropriate alternative should be selected based on the capacity and requirements of each sugar mill. Further studies are required for each of the technologies since factors such as energy conversion efficiency, depreciation, operational costs, etc have not been considered.
REFERENCES Brewster, J. Alan (2001), “Industrial Ecology and Its Relationship to Cleaner Production”, International Conference on Cleaner Production, Beijing, China – September, Paper 9 of 30. Dasgupta, A., “Anaerobic Digestion Of Solid Wastes Of Cane Sugar Industry”, Ph. D Dissertation, University of Miami, May 1983. Deepchand, K. , “Commercial Scale Cogeneration Of Bagasse Energy In Mauritius”, Energy For Sustainable Development, Volume V No. 1, March 2001.
El‐Haggar, S.M. and M.M.El Gowini (2005) “Comparative Analysis of Alternative Fuels For Sugarcane Industry In Egypt”, 1st Ain Shams International Conference on Environmental Engineering, 9‐11/4/2005, Cairo, Egypt. El‐Haggar, S.M., M.M.El Gowini, N.L.Nemerow and N.T. Veziroglue (2005) “Environmentally Balanced Industrial Complex For The Cane Sugar Industry In Egypt”, International Hydrogen Energy Congress, 13‐14/7/2005, Istanbule, Turkey.
El-Haggar, S.M., I.O.Adeleke and M.Gadallah (2005) “Briquetting of Solid Wastes from Cane Sugar Industry”, Cairo 9th International conference on Energy and Environment, Sharm El-Sheikh, 14-17 March, 2005. Frosch, R.A. (1994), “Physics Today”, Nov, Vol. 47, Issue 11. Lichts, F. O. , “INTERNATIONAL SUGAR AND SWEETNER REPORT”, Vol. 136 No. 29, October 5, 2004. Namerow, N. L. (1995), “Zero Pollution for Industry”, NY: John Wiley and Sons Inc. United Nations 96th Plenary Meeting (1987), “Report of the World Commission on Environment and Development”, December 11.
Chapter 4 Sustainable Financing – Role of Financial Institutions in Contributing to Sustainable Development Yasser Ibrahim ABSTRACT Financial Institutions contribute positively to the micro and macroeconomic growth of developing countries. However, financial institutions take part in financing projects that might have adverse impacts on the environment or societies. The credit or liability risks associated with poor management of environmental risks could affect the operation of financial institutions. For a number of years, banks working in the project finance sector had been seeking ways to develop a common and coherent set of environmental and social policies and guidelines that could be applied globally and across all industry sectors to address environmental and social risks in project financing and adopted voluntarily those policies under the Equator Principles. This paper underlines the importance of managing environmental and social risks associated with the various financial products and the role of financial institutions contributing to the national management of environmental risks and the experience of Equator Principles Financial Institutions. Then the paper describes the main elements and importance of transforming the environmental management system or the corporate social responsibility elements into a Social and Environmental Management System (SEMS). Finally, it discusses the main problems which institution building efforts have to cope with. The objective is to result in sustainable financing through better assessment, mitigation, documentation and monitoring of credit risk and reputation risk associated with financial operations of banks and private equity funds.
Keywords: Financial Institution, Credit Risk, Liability Risk, Environmental Management
System (EMS), Social and Environmental Management System (SEMS), Sustainable Financing
DISCLAIMER This material is intended for informational purposes and it is not intended that it be relied on to make any investment decision. While the author has used information from sources he believes reliable, the report and information therein are provided on a strictly as‐is basis. While every effort is made to ensure that the content of the information is accurate, the author makes no representations or warranties in relation to the accuracy or completeness of the information found on it. The views expressed in this document unless otherwise indicated constitute the author’s judgment at the time of issue and are subject to change and does not reflect the view of any institution/organization the author is or was affiliated to. This document is only for professional use. This document was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. Under no circumstances will IFC or any of its licensors or partners be liable in any way for any third party content or user content. This report is provided without IFC or any of its licensors or partners warranty of any kind.
INTRODUCTION As early as 1970s "sustainability" was employed to describe an economy “in equilibrium with basic ecological support systems."  In 1983, the World Commission on Environment and Development (WCED) also known as the Brundtland Commission convened in United Nations to address the then growing concern "about the accelerating deterioration of the human environment and natural resources” and in their report in 1987 the term sustainable development was introduced and used ever since as the most common definition to describe “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”  Thus the scheme that closely describes sustainable development ties the elements of environment, social welfare and economy. Though there is a close relation between sustainability and economy, yet the financial sector, despite its important role in the development of economy, did not consider environment until recently. “Beginning in 2000, environmental organizations such as Friends of the Earth (FoE) and the Rainforest Action Network (RAN) challenged the industry with high‐profile campaigns that highlighted cases in which commercial banks were “bankrolling disasters”. In 2002, a global coalition of non‐governmental organizations (NGOs) including FoE, RAN, World Wide Fund for Nature (WWF‐UK) and the Berne Declaration came together to promote sustainable finance in the commercial sector.”  Though various sustainable development initiatives were launched in the early 1990s, the term sustainability finance was approached in a different perspective. There is “no one universal definition, Corporate Social Responsibility (CSR) or sustainable finance can be defined as the provision of financial capital and risk management products and services in ways that promote or do not harm economic prosperity, the ecology and community well‐ being.” . The objective of this paper is to highlight the main efforts to date that have been piecemeal and diverse – ex. screening for HC laws, adopting CSR strategies, establishing environmental management system (EMS), etc. The notion of the Social and Environmental Management System (SEMS) can be introduced to incorporate existing initiatives and enhance these in areas that are lacking o result in sustainable financing through better assessment, mitigation, documentation and monitoring of credit, liability and reputation risks associated with operations of financial institutions (FIs). In order to realize the importance and implementation of an SEMS, this paper first illustrates the different types of financial institutions to realize the types of environmental and social risks affecting the industry, then lists the international efforts to promote financial sustainability to reach to the elements of setting an SEMS and finally, it discusses the main problems facing FIs to build appropriate capacity and the role that could be played by Development Financial Institutions (DFIs) and financial regulatory bodies to foster the adoption of SEMS.
FINANCIAL INSTITUTIONS AND ENVIRONMENTAL AND SOCIAL RELATED RISKS The financial institutions are responsible to transfer funds from investors to the companies. Typically, these are the key entities that control the flow of money in the economy. So FIs act as the intermediaries between the capital market and debt market. “Financial institutions are the firms that provide financial services and advices to its clients. Commercial banks, credit unions, stock brokerage firms and asset management firms are the major types of financial institutions. Insurance companies, finance companies, building societies and retailers are the other types of financial institutions. The financial institutions are generally regulated by the
financial laws of government authority.”  But the service provided by financial institution depends on its type and accordingly the associated risks. Financial institutions face different types of risks, direct and indirect. To clearly understand the types of risks, it is important to clearly identify the types of services provided by the various FIs. The financial system provides five key services: (a) savings facilities, (b) credit allocation and monitoring of borrowers, (c) payments, (d) risk mitigation, and (e) liquidity services. The services provided by the various types of financial institutions may vary from one institution to another. Commercial banks typically offer insurance services, mortgages, loans and credit cards, while brokerage firms add securities, money market and check writing. The insurance companies; however, offer insurance services, securities, buying or selling service of the real estate as well as brokerage firm services. The credit union, on the other hand, is co‐operative financial institution, which is usually controlled by the members of the union. The major difference between the credit unions and banks is that the credit unions are owned by the members having accounts in it. The stock brokerage firms are the other types of financial institutions that help both the corporations and individuals to invest in the stock market. Another type of financial institution is the asset management firms. The prime functionality of these firms is to manage various securities and assets to meet the financial goals of the investors. The firms also offer fund management advice and decisions to the corporations and individuals.  As mentioned earlier, FIs could face direct and indirect risks; for sake of this research environmental and social risks discussed in this section would be typical to commercial banks and finance companies though other FIs might share some of the risks. Key direct liability risks to commercial banks could be caused by: 1. Obtaining ownership of contaminated collateral site in the case of a client’s default; 2. Strict lender liability for the costs of cleanup of an environmental hazard; and /or 3. Class action which raise the stakes of liability for a lender.  Indirect risks could be credit risk and/or reputational risks. Credit risks may be caused by client’s insufficient cash flow due to 1. Escalation of project costs (e.g. delays, additional investments); 2. Fines, penalties, liabilities; 3. Loss of production capacity (e.g. closure of business which is a market risk); and/or 4. Low competitiveness, low sales (another market risk as well). Additional credit risks may also be caused by impaired collateral due to site contamination or poorly maintained equipment. Reputational risks may result from poorly managed impacts due to local resistance, consumer campaigns, and/or governmental investigations as these are the ones that manifest first and can be the most difficult to manage. An international survey carried out in 1993 by the European Bank for Reconstruction and Development (EBRD) provides evidence of the extent to which environmental risks have affected banking practices throughout the US, western Europe and southeast Asia. “The survey incorporated the experiences of 56 lenders from 7 countries and found out that:
- Over one third (1/3) of the banks stated that they had experienced significant losses resulting directly or indirectly from environmental risks. - The most common sources of loss were defaulted loans, written off in preference to exercising rights over collateral which could have exposed lenders to the costs of undertaking remedial work. - Large numbers of financial institutions also reported losses arising from remedial work undertaken by the lender after foreclosure and from loans which defaulted as a result of environmental upgrading or costs for remedial work incurred by the borrower. - Smaller but significant numbers of banks testified to reduced share values and dividend payments resulting from environmental violations or costs incurred by clients, together with the increased volatility of share prices as a result of increased environmental risk across their equity portfolios.”  In 2005, the International Finance Corporation (IFC), private sector arm of the World Bank, conducted a survey of 120 institutions that had participated in the Competitive Business Advantage workshops between October 2002 and September 2005, covering 43 countries, the following figure represent the key social and environmental risks identified by commercial banks. Results of the survey shown that reputational risk is ranked the highest at 83% due to its impact on the long term, followed by credit risk due to defaults or payment rescheduling at 68%, then security at 49% and strict liability risk at 34%, the least of risks at 20% was the loss of depositors or retail clients. 
Figure 1: E&S Risks identified by Commercial Banks
DFIs conducted the studies above to survey the E&S risks, and could be used to promote sustainable finance, which leads to illustrating the various efforts to date of international institutions to promote sustainable development.
INTERNATIONAL���EFFORTS TO PROMOTE SUSTAINABLE FINANCE “Private finance has always been associated with ‘profit driven’ development with little regard for the social and environmental consequences. Since the Earth Summit in Rio there have been a number of initiatives to encourage financial institutions to finance sustainable development.”  Below is a list of the various efforts and initiatives that promoted sustainable finance 1. The United Nations Environment Programme (UNEP) Financial Initiative (UNEP FI) is a global partnership between UNEP and the financial sector. Over 170 institutions, including banks, insurers and fund managers, work with UNEP to understand the impacts of environmental and social considerations on financial performance. The initiative was established following the Rio Earth Summit in 1992 initially between the banking sector and UNEP and subsequently incorporating the insurance and asset management sectors in 1995 to promote sustainable development via joint working groups and conferences.  2. The London Principles is a joint initiative between the Corporation of London and the UK Government to promote best practice in financing sustainable development by encouraging financial institutions to adopt seven core principles based on economic prosperity, environmental protection and social development. The Principles have been developed by Forum for the Future in 2002.  3. Forge I & II are joint UK finance industry and Government initiative designed to develop guidelines on corporate social responsibility for the financial services sector.  4. Sustainability Integrated Guidelines for Management (SIGMA) are an overarching integrated system developed to manage the social, environmental and wider economic impacts of an organization’s activities, launched in 1999.  5. The Principles for Responsible Investment are implemented by UNEP Finance Initiative and the UN Global Compact with the aim to help investors integrate consideration of environmental, social and governance (ESG) issues into investment decision‐making and ownership practices, and thereby improve long‐term returns to beneficiaries; the principles emerged in 2006 and signatories are about 500 in 36 countries.  6. Global Reporting Initiative (GRI) started 1999‐2000 to encourage all business organizations to voluntarily report on their individual success in implementing steps to become sustainable. GRI partnered with United Nations Environment Program – Financial Institutions (UNEP FI) and 2006 more than 850 organizations released their sustainability reports and in 2008, the platform included 507 organizational stakeholders from 55 different countries.  According to Ruan Kruger ‐ Development Bank of Southern Africa, in an article in the Enviropedia, “The IFC (2003) further states that financial institutions have been pursuing efforts that not only reduce environmental risk and improve their ecological footprint, but also add value via new products/services ... within this community, multilateral/bilateral institutions were the first to include environmental and social requirements as part of the financing terms. The World Bank Group (including the IFC), the European Bank for Reconstruction and Development, the Asian Development Bank, the Inter‐American Development Bank and the Development Bank of Southern Africa all have such policies/procedures in place. As the largest financiers in emerging markets, the inclusion of
environmental and social loan conditions can significantly influence financial institutions’ contribution to sustainable development.”  Accordingly, in 2003 ten banks from seven countries adopted the "Equator Principles," a set of guidelines developed by the banks for managing social and environmental issues related to the financing of development projects. The ten Equator Principles (EP) provide a roadmap for assessing and managing social and environmental risks in project financing and serve only as a common baseline and framework for the implementation by each EPFI of its own internal social and environmental policies, procedures and standards related to its project financing activities. The EPFIs are more than 65 institutions.  Unlike most initiatives, the EP set the procedures that need to be implemented to manage the E&S risks, and in doing so, FIs are encouraged to establish a Social and Environmental Management System (SEMS) to build on resources available from any existing EMS or CSR units and make sure that SEMS is not an extension of any available systems rather being a system on its own. The following section illustrates the process needed to be in place to ensure sustainable system implementation.
SOCIAL AND ENVIRONMENTAL MANAGEMENT SYSTEM Implementation of a social and environmental management system is very specific to the operation of financial institutions, so detailed procedures would differ from one organization to another. However, this section presents an overview of a general approach that would path the route to FIs to set up an SEMS to manage E&S risks in a sustainable manner and promote the role of FIs in integrating the national environmental and social laws and regulations to ensure implementation and compliance of borrowers. Setting up of an SEMS could be covered in two phases: design phase and an implementation phase. 1. The design phase is a three step process starting with Risk Identification and classification. The risk classification level has direct effect on the environmental procedures in credit deal selection as risk is directly proportional to control measures that need to be practiced. Based on four factors, e.g. type (sector/industry), location (proximity to environmentally sensitive areas), sensitivity (potential impact irreversible/reversible) and extent of environmental/social issues. In order to properly determine risks, the risk department would need to set up a working group consisting of at least four, ideally, (i) a representative from the legal department who would be able to pick on environmental laws and identify fines and liabilities, (ii) corporate/credit department who would express the borrower constraints and the market understanding; (iii) industrial technical specialist who would be able to identify the types of risks by sector, and (iv) representative of the risk department who would be able to judge on the risks identified according to the organization’s risk appetite. Accordingly to the workgroup decision, projects could be identified according to the following classification, however, further elaboration and examples would need to be identified according to national requirements: High-Risk Category project are investment projects which are likely to have potentially significant adverse environmental impacts, which are sensitive, diverse and may be unprecedented. Medium-Risk Category projects result in environmental impacts, which can be readily identified, the impacts may be site specific and few if any are irreversible; Low-Risk Category projects are likely to have minimal or no adverse environmental impacts at all. Category FI. A loan is when the FI plays as an intermediary.
2. Set Priorities is a result of the workgroup discussions, where a set of priorities would
be identified including the risk appetite of the FI and perhaps a set of exclusion list of activities or sectors the FI would not want to work in due to the high exposure and risk factors. 3. Management commitment is important to allocate resources to the actual drafting and setting of the SEMS manual and procedure. In addition to endorsing the list of priorities and perhaps the exclusion list (if any), and setting the broad lines for the organization direction to ensure smooth transition to the implementation phase. 4. As a first step in the implementation phase, drafting of the organizational policy regarding sustainability, environment and social issues is to be performed according to the broad lines set by the management. 5. SEMS drafting of procedure is an iterative process where feedback is required from all involved stakeholders as the credit department, legal department, and management approval. A typical SEMS manual would be organized in the manner below: a. Policy: section of the policy after endorsement of management b. Roles and Responsibilities: identifying the involvement of various departments and clear definition of roles and responsibilities c. Project Categorization & Rationale (an annex could be added listing examples of project categories) d. Appraisal procedures: could list the social and environmental due diligence procedures listed as per project category. e. Portfolio Management: indicating how monitoring & supervision would be done over the portfolio in addition to identifying any risk rating rational that could trigger client visit. f. Legal involvement in the process and responsibility to monitor any changes to E&S legal requirements & notify the Manager/officer who would be in charge of the SEMS. In addition to identifying the proper E&S covenants to be used in the loan agreement. g. Document control and reporting would clearly identify the reporting lines, reports required, annex samples, and identify the process of communication to the outside world in case E&S branding is an objective. h. Annexes: Checklists & Questionnaires 6. Resource allocation is essential to ensure successful implementation of the SEMS. Training and HR department need to be involved to ensure proper training is offered to all parties involved in the SEMS implementation including loan officer, credit department, legal department, and SEMS officers. 7. No system should be dogmatic, instead continuous monitoring is required after an ample time of implementation to ensure bottlenecks or pitfalls are captured and handled. The figure below presents an overview on a typical process diagram during appraisal and supervision starting with the loan application and involving the SEMS officer, legal department, and management.
Figure 2: SEMS process diagram during appraisal and supervision/ portfolio management SEMS Procedures that follow the project financing investment cycle. 1. Environmental Screening: the first step starts with the loan application, where loan officers need to be trained to disclose to the client the corporate environmental policy and inform the borrower of the required documents and the due diligence process that might include site visit to ensure cooperation. Initial screening could be performed as per a check list to ensure compliance to national requirement in terms of permits, clearances, environmental impact assessment study (if available) and perhaps application of an exclusion list if applies. All information is then sent along with a memo to the SEMS officer to conduct a desk review and risk categorization which should consider both the activities of the company and the purpose of the financial provision. Because in some cases, the main activity of a company may be low risk while the purpose or the location of the investment may be high risk, or vice versa. 2. Site Visit and Environment Screening Questionnaire: The SEMS officer should check and receive relevant copies of permits/approval for proposed activities and more importantly the Environmental Impact Assessment study. An environment screening questionnaire could be devised and completed by the borrower. A Site visit is conducted to identify gaps to compliance. Focus should be paid on customer's
willingness and capability of taking related prevention and mitigation measures. Should there is any issues required for further investigation, it should be clearly identified. CAP should be drafted and agreed with the client. Plans for ongoing management of the project to ensure that environmental impacts be limited to a minimum throughout the life of the projects. Following issues would be covered: Identification and prioritization of feasible and cost‐effective mitigation, management and monitoring measures to prevent significant adverse impacts or reduce them to acceptable levels; Identification of requirements regarding resources and capabilities and/or identification of institutional training requirements; Definition of responsibilities; Time frame for the realization of the measures. 3. Visit findings along with agreed CAP and environmental covenants should be sent to the credit committee. When loan is approved, environmental compliance/requirements should be incorporate into the legal loan documents. 4. Disbursement should not happen unless the SEMS officer clears on the compliance to the conditions of disbursement (if any) in a disbursement memorandum. 5. Portfolio management would require conducting site visits to the borrower by the SEMS officer. SEMS officer is required to audit the borrower against selected environmental and social standards. Another visit report would be filed and gap analysis conducted, for non compliance the CAP might need to be amended or another drafted from scratch, most importantly is setting of time line to meet compliance. For high E&S risk identified, management might need to be made aware to agree on suitable actions. In all cases, relationship manager is to communicate the visit findings with the borrower and agree on implementation plan. So the SEMS is simple and has been widely used by FIs dealing with various DFIs. The benefits of having an SEMS as illustrated in IFC Sustainability banking report are:  - Systematic and consistent approach to social and environmental issues - High impact on cost/benefit ratio - Easy integration into existing organization and management systems, leading to improved risk control - Better communications, resulting in improved public relations, greater stakeholder dialogue, and credible commitment toward staff and external stakeholders - Improved access to international capital markets and funding from multilateral institutions and development banks.
Reference to the survey conducted by IFC in 2005, the following figures present the views of 120 institutions of the benefits of considering E&S and sustainability issues. 86 percent of the commercial banks that responded to the survey reported positive changes as a result of the steps taken to integrate social and environmental issues in their business. 19 percent perceived these changes as significant. Not a single respondent reported a negative change from considering social and environmental issues.  The reduced risk and improved access to international finance were marked the higher points at 74 and 45% respectively in regards to E&S issues and on the sustainability issues increased credibility, demand by investors and lower risk better return were the highest at 68, 64 and 52% respectively. The survey results show that there is growing evidence that innovative approaches to sustainability can bring substantial benefits to a bank’s overall business performance.
(a) (b) Figure 3: Benefits for considering (a) E&S issues and (b) Sustainability Issues
WAY TO GO FORWARD As being illustrated, worldwide efforts led by international agencies, organizations and DFIs were exercised to promote sustainable development principles to the financial industry and yet they remain a voluntary option to all businesses. The positive angle to this is that ‘big business’ is increasingly forcing the implementation of this approach by not doing business with organizations that do not subscribe to the same philosophy. “A problem being experienced in the developing countries/ emerging markets is that these governments are often so eager to attract foreign direct investment that environmental and social legal requirements are not made strict enough.”  However, going forward I would recommend further collaboration of DFIs with governments and financial regulatory authorities to set in place set of incentives that would appeal to the financial sector to encourage adoption of sustainable principles without really forcing the industry. Similar to some initiatives by Central Banks in emerging markets to promote investment in renewable energy and environment abatement by offering subsidized loans, terms and capital allowance. An important tool is also needed to be made available to the financial market to realize quantitative gains from implementing the systems. Credit risk rating agencies would need to indicate any changes in the rating due to enhanced management of E&S risks. In regards to the borrowers markets, private equity and asset management, insurance companies also could play an important role in establishing premium benchmarks to elements of fire, occupational safety and community disturbance as due to the proper implementation of a system like SEMS along with EP like standards, insured facility would be abiding to international standards in case of fire for example, or occupational health and safety or continuous public consultation. In order for the financial sector to be sustainable, extensive advisory/consultancy work needs to be done to ensure that development that meets the needs of the present does not compromising the ability of future generations to meet their own needs.
ACKNOWLEDGMENT I would like to thank Atiyah Curmally and Robin Sandenburgh for their time and effort in reviewing this document and providing support and information to bring this paper before your hands. I would also like to express my gratitude to Sandra Schnellert for being my mentor and sharing her extensive experience in financial markets to help build mine. I like extend my thanks to everyone thorough out my career life and especially my colleagues in IFC, Environment and Social Development Department who exemplified professional attitude in sharing their experiences and added a lot to mine, in particular investment support group FI and real sector teams. Needless to be thankful to my family for their continuous support, my wife and daughters.
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15. Global Reporting Initiative. [Online] [Cited: 09 25, 2009.] http://www.globalreporting.org. 16. Kruger, Ruan. Sustainable Development ‐ The Banking & Finance Sector. Enviropedia. [Online] [Cited: 09 27, 2009.] http://www.enviropaedia.com/topic/default.php?topic_id=259. 17. The Equator Principles. [Online] [Cited: 09 25, 2009.] http://www.equator‐ principles.com/index.shtml. 18. Competitive Business Advantage Workshop. . s.l. : Developed for IFC by EcoFact, 2004. 19. Augusto de la Torre, Sergio Schmukler, and Luis Servén. Back to Global Imbalances? Macroeconomics and Growth Research. The World Bank. [Online] [Cited: 09 25, 2009.] http://go.worldbank.org/EVFZO42ZY0.
BIOGRAPHY Yasser Ibrahim holds a Masters of Science in Environmental Engineering from the American University in Cairo. Mr. Ibrahim started his environmental career in 1996 as a Compliance Auditor in the Egyptian Environmental Affairs Agency, and then moved to work in various USAID projects and as a technical director of Global Environment – Global Group. Mr. Ibrahim joined IFC in 2007 moving from Barclays and since Dec. 2008, he is the Environmental Specialist based in Cairo to support financial markets and funds, and general manufacturing and services in Middle East & North Africa (MENA). Throughout his career, Yasser Ibrahim has gained more than 10 years of experience in managing and conducting various engineering projects, with particular background in conducting Environmental Impact Assessments and environmental auditing of oil refineries, industrial plants, tourism establishments, marinas, ports, and petroleum and bunkering facilities. Mr. Ibrahim has been involved in preparing the EIA for Sohar Airport in Oman, Hardamount Port in Yemen, Port Said East Port Bunkering Terminal, and conducting scoped EIAs and screening forms for various resorts and tourism establishments along the Red Sea including the biggest marina in the Middle East in Marsa Allam as well as participating in Phase 1 Environmental Assessment for Halliburton in Libya,. As a consultant to USAID – RSSTI project, prepared the national Monitoring Guidelines for the Fuel Stations along the Red Sea. He also participated in various Crude Oil Tank Cleaning De‐sludging operations using different technologies. Conducted HSE Audits for various depots and fuel station plants. Mr. Ibrahim has audited over 75 industrial plants in the industrial cities, of 6th of October, Sadat, 10th of Ramadan, and Borj El Arab. He also carried out several Pollution Prevention Diagnostic Assessments in the textile, metal finishing, metal processing, food processing, and foam industries.
Chapter 5 Carbon Footprint Assessments: Contributing Towards Sustainable Development in Egypt Tobias Bandel and Lama El Hatow ABSTRACT With the onset of Climate Change and the impending risks of our deteriorating environment around us, it no longer becomes a luxury to be environmental conscious and sustainable, but an obligation placed on every citizen. Environmental concerns first come with transparency, and making products and companies more transparent with respect to the amount of emissions they produce annually, and hence how best to be able to reduce those emissions. This can first be done by a Carbon Footprint assessment of either a product such as a citrus fruit, or a full fledged company with its headquarters and retail outlets, or an event such as a festival or a rock concert. This is done to determine the amount of CO2e emitted annually. From this assessment we can determine the problem areas, or bulk area concentrations of CO2e, upon which we can propose recommendations for reduction and alleviation. If these alterations are not feasible at that point in time within the system, propositions of offsetting or neutralizing the remaining emissions through an Egyptian GHG emission reduction project are offered. This project is a compost facility in Alexandria and Belbeis that reduces CO2e through methane avoidance. It is important to emphasize the value and importance of local VER Egyptian carbon credits. These local efforts to reduce GHG emissions and climate change mitigation internally, do not solely fulfil the function of carbon emission reductions, but provide a holistic approach to sustainable development in Egypt. The advantages of this initiative are numerous including; 1) The creation of jobs and employment for Egyptian citizens which ultimately decreases the migration from rural to urban centers; 2) The enhancement of desert areas into arable land with compost to provide sufficient yield and reduce the existing food security problem; 3) Reduce the water consumption in irrigation through compost's water retaining characteristics; 4) Carbon sequestration in soils and reducing GHG emissions; 5) More efficient land use on the mid and long term; and 6) The extensive development socially, economically and environmentally of such areas in Egypt. We at Soil & More specialize in carbon footprint services and carbon offsetting. We are based in the Netherlands, with bases all over the world including Mexico, India, Brazil, South Africa and Egypt. Soil & More’s Egyptian base provides such services to its clients in order to ensure environmental sustainability in Egypt and contribute to the ongoing fight against climate change.
INTRODUCTION The objective of this document is to give more insight into the carbon footprint methodology that Soil and More uses for carbon footprint assessments for products. It clarifies the underlying methodology that Soil and More uses for carbon footprints of products, while at the moment no official internationally approved standard methodology exists to calculate a carbon footprint of a product. It is meant for transparent communication with potential
costumers that want to have more insight in the way how carbon footprint assessments are carried out. Methodological decisions, system boundary definition, differences and overlap with other carbon footprint approaches will be explained in the document. A carbon footprint will identify the environmental performance of a product related to greenhouse gas emissions. This means that the life cycle of a product is studied and greenhouse gas emissions in the different production stages of a single product are taken into account. The carbon footprint of a product will inform companies about setting priorities to reduce emissions in the life cycle of a product. It can be used for benchmarking and advertisement on sustainability Furthermore a carbon footprint enables to offset/compensate emissions by purchasing VERs in order to sell the product as climate neutral. Soil and More uses a cradle‐to‐gate approach that includes the greenhouse gas emissions from the primary production stage until 1 kg of a product or one product is at the retail shelf.
BACKGROUND INFORMATION: LOCAL AND GLOBAL IMPACT Transparency in products is becoming more and more of a pressing concern to consumers today. The importance of carbon footprint assessments on products to enable the consumer to diligently choose the products with the least carbon footprint is a matter of awareness, and a matter of transparency. As awareness is growing amongst business operators, sustainable sourcing has become a point of differentiation in the marketplace. Moreover, the consumers they serve are increasingly concerned about where their food comes from and pay great attention to whether it is produced in a responsible way, from farm to fork. Looking at our food production system, the biggest impact lies in influencing primary production. So enhancement of sustainable sourcing and sustainable agriculture are key opportunities when this system is challenged. This understanding has a place at the top of the corporate agendas (SAI‐SFL, 2009). Recently we have come to see how companies such as Tesco in the United Kingdom are requiring carbon footprints labels on all their products to be sold in their retail outlets. This form of transparency is beneficial in a multitude of forms. By placing a higher demand on farmers and growers to conduct carbon footprint assessments on their products, you enable them to understand where the bulk areas of reduction of GHG emissions are within their products. This also promotes consumers to begin buying the product with the least carbon footprint and enhancing awareness on the issue of climate change. Ultimately these carbon labels on products are utilized for the case of transparency, but will eventually cause organic products to be much more competitive to conventional products due to the fact that consumer demands will rise towards the product with the least carbon footprint. Some of the biggest environmental problems Egypt has to face are the lack of fertile land and soil degradation due to chemical fertilizer application, as well as inappropriate waste management. In the last 50 years, the available area of arable land per person has shrunk from 923m2 per person to 456m2 per person (FAO, UN 2007).
As a result of intensive agricultural practises, using huge amounts of chemical fertilizers, as well as pest and disease control agents, most soils are degraded and leached out, and farmers increasingly see themselves confronted with various crop diseases and continuously decreasing yields. Due to non sustainable agricultural systems, more than 12 Mio hectares arable land are lost every year. Even though the Egyptian economy has been steadily growing since 5 years, the country’s Gross Domestic Product remains rather low. Not all classes of the population benefit from Egypt’s economical growth, and a considerable number of people live just above the poverty level, especially in rural areas. Only 5% of Egypt’s geographical surface is arable land, but the agricultural sector remains the third largest employer in Egypt – meaning that the well‐being of the population’s majority depends on a non‐sustainable agricultural system.
COMPANY PROFILE Soil & More International B.V. is a company based in Holland, active in the setting‐up and management of large scale composting sites in developing countries as well as CO2 emission reduction and carbon assessment projects. Soil & More International BV was founded in 2007 on the principle that economy and ecology are indissolubly connected. The company’s corporate objective is to contribute to commercial as well as ecological and ethical values in the global market. Soil & More offers to carry out comprehensive Carbon Footprint Assessments: • of your company, as well as; • of your products’ entire supply chain; • of your event, such as conferences, seminars, and festivals.
Social, economic and ecological aspects
Soil & More Egypt’s composting sites help to improve: (i) the economic situation of growers in the area, (ii) the social development, (iii) and the ecological situation of the region. (i) The application of high quality compost brings up yields, whilst avoiding high costs of chemical fertilizers and pesticides – thus considerably improving the economic situation of the farmers. (ii) Soil & More Egypt also supports the social development of the area, creating year‐round employment at above average working conditions, which leads to a secured and stable income. Being very committed to social justice, Soil & More Egypt supports social and cultural activities such as kindergartens, schools; advanced training, medical healthcare, and training of disabled people. The company’s policy is to invest a portion of its returns into the neighbourhood’s social and cultural activities. (iii)The application of compost provides a sustainable way of building up soil fertility in the poor or degraded desert and delta soils of Egypt; also remarkably increasing the water holding capacity of the soils by up to 70%, thus guaranteeing a more efficient use of the
irrigation water. Thanks to its microbiological nature, the compost acts as natural predator against most known soil born diseases and other pathogens.
Carbon Footprint Assessments: Upon request, the assessments can be certified by TÜV‐Nord, a designated operational entity accredited by the United Nations Framework Convention on Climate Change (UNFCCC). Carbon Footprint Assessment: Soil & More carries out a comprehensive CO2e (carbon dioxide equivalent) assessment of your company, product or event, according to TÜV‐Nord standards (TN‐CC 010:2008‐01). This assessment includes equipment energy consumption, international and local travel, waste generated, and more; everything that contributes to your company’s CO2e footprint. Some of the data needed to perform footprints on companies for instance includes: • Electricity consumption • Fuel consumption • Catering orders (as an evidence for catering transport) • PR material • Waste management Only data provided by the IPCC (Intergovernmental Panel on Climate Change) or from other accredited sources was used for the calculation. Soil & More has carried out the carbon footprint assessment of the company according to the mentioned standards based on the data provided by the Customer and its subsidiaries.
Neutralizing emissions/sale of Verified Emission Reductions (Carbon Credits) Knowing in detail how much emission a product, a company, or an event causes offers the customer the possibility to market the product, the company, or the event in question as ‘climate neutral’, using the unique TÜV‐Nord ‘carbon neutral product/company/event label’ – an ecological and commercial opportunity mitigating climate change whilst capitalizing on changing consumer expectations. Knowing this, these emissions can easily be offset through the purchase of carbon credits. These carbon credits are generated through projects that avoid CO2e emissions. Soil & More offers UNFCCC verified emission reduction rights (carbon credits) from Soil & More composting projects in developing countries implementing highest sustainability standards.
SOIL & MORE’S CARBON CREDITS Soil & More sells premium offsets, as they not only are generated through projects individually verified by a third party accredited by the United Nations, but also include a range of other beneficial “added‐extras”, in that they focus on environmental and social issues, such as supporting the local economic development in the region where they take place, and creating employment. Furthermore, Soil & More’s compost helps to bring back the balance of our ecosystem and the water holding capacity, providing better soil fertility and
avoiding the use of chemical fertilizers, thus creating true sustainability and a better, healthier world for future generations. Soil & More sells premium carbon credits, focusing on environmental, ecological and social issues.
GHG Emission Reduction Project in Egypt In this project methane emissions are avoided by composting organic waste. Soil and More International have developed standards and techniques to produce high quality compost out of waste, suitable for organic and conventional farming. Through an Egyptian agricultural producing facility (Libra/Sekem), controlled microbial compost (CMC) is produced. The agricultural waste is obtained from farms, animal husbandry industries, municipalities as well as private and public organizations. In Egypt the most common practice for disposing agricultural waste is by dumping it at municipal waste sites, dumping it in the desert or by simply burning it. The organic agricultural waste is consists of wood, straw, coffee residues, fresh green material and manure. The problem with dumping is that the organic waste decomposes anaerobically, leading to methane emissions into the atmosphere. Methane is a very potent Greenhouse Gas.
SUSTAINABLE DEVELOPMENT The fertility of the degraded desert soil is improved sustainably without exposing people and nature to chemicals
• A substantial amount of the returns are re‐invested into kindergartens, schools, advance training, medical healthcare, and handicapped training • The water holding capacity of the soil is improved by up to 70%, which means more effective use of irrigation water (crucial in a desert environment) • In addition around 100 workers are employed at the project site
With the help of carbon financing there is now the incentive for not dumping the waste. In effect, agricultural waste is not worthless waste anymore, but a waste with monetary value.
VER CARBON CREDITS LOCALLY IN EGYPT The Customer may express interest in the purchase of local credits from Soil & More's Alexandria Composting Site in Egypt, depending on the outcome of the carbon footprint assessment. Soil & More would like to emphasize the value and importance of local Egyptian carbon credits. These local efforts to reduce GHG emissions and climate change mitigation internally, do not solely fulfill the function of carbon emission reductions, but provide a holistic approach to sustainable development in Egypt. The advantages of this initiative are numerous including;
1) The creation of jobs and employment for Egyptian citizens which ultimately decreases the migration from rural to urban centers; 2) The enhancement of desert areas into arable land with compost to provide sufficient yield and reduce the existing food security problem; 3) Reduce the water consumption in irrigation through compost's water retaining characteristics; 4) Carbon sequestration in soils and reducing GHG emissions; 5) More efficient land use on the mid and long term 6) The extensive development socially, economically and environmentally of such areas in Egypt. 7) Contributing to the global spread of sustainable agriculture
Soil & More Egypt; Project Profile
Local partner: Libra Organic Ltd. ‐ Member of the Sekem Group. Location and operation: The 1st composting site began operating in January 2007. It is located 60km northeast of Cairo, in the desert, at the border of the Nile Delta close to the city of Belbeis. Since then, a 2nd composting site was established close to Alexandria in March 2008. The following information applies to both sites.
Input material (nature and quantity): Organic waste such as wood, straw, coffee residues, green fresh material and manure. 200 tons of such “wastes” are processed each day.
Production capacity: Currently, around 60 000 tons of compost are produced annually on each site. Production will soon increase to 75 000 tons a year.
Greenhouse Gas (GHG) Reduction: Currently, each Soil & More Egypt composting site reduces GHG emissions by about 60 000 tons CO2e a year.
Certification by TÜVNord: The composting sites implementing Soil & More’s composting technology were validated and verified by TÜV‐ Nord – a designated operational entity accredited by the United Nations ‐ as a greenhouse gas emission reduction project according to the guidelines of the United Nations Framework Convention on Climate Change (UNFCCC).
Social impacts: Since Soil & More Egypt’s composting sites have started operating, 20 full‐ time jobs and about 60 indirect jobs were created on each site. In addition, due to its integration into the Sekem Group, the Egyptian composting sites support all social and cultural activities of the Sekem initiative.
Quality of compost: The compost is produced according to the strict guidelines and specifications of Soil & More International’s composting technology.
Purchase of compost/contact: Should you be interested in purchasing Soil & More Egypt’s compost, or should you have further questions and inquiries please contact Soil & More Egypt under “contact us”.
Future plans: Our plan is to increase the compost production of the existing sites and also set up new sites, thus proportionally reducing greenhouse gas emissions. A new site is planned to be established on the Sinai Peninsula, and another one in the oasis of Wahat. Soil & More Egypt strives to continuously improve soil fertility without exposing people and nature to chemical hazards. In doing so, the company helps to turn previously degraded soil into arable ground, thus gaining farming land. Through Soil & More Egypt, the farmer’s dependence on chemical fertilizers and (international) fertilizer suppliers decreases. The application of high quality compost leads to fertile soil, good yields and a stable income, which – in return – is the first step towards a (good) education, a good health, and a better future. Globally, Soil & More Egyptian composting sites reduce GHG emissions, thus mitigating the impacts caused by climate change.
REFERENCES • Soil & More International. (2009). Soil & More Carbon Footprint Methodology. Rotterdam, The Netherlands. • FAO, Food and Agriculture Organization. (2007) • Sustainable Agriculture Initiative and Sustainable Food Lab (SAI‐ SFL), (2009). Short Guide to Sustainable Agriculture. SAI Platform and Sustainable Food Lab; June, 2009 • PAS 2050. Carbon Trust • ISO 14044, 2006. Environmental management‐Life Cycle assessment‐ Requirements and guidelines. ISO, Geneva.
Chapter 6 Social and Cultural Capitals as Tools for Managing Natural Capital for Sustainable Development A.Latapi ABSTRACT Sustainable development is a star for directing our navigation. Culture is the way to know how we can reach the star. And society is our infrastructure; it depends on how we organize it.Our idea is that that culture and society socializes nature. So it depends in how we socialize nature. It becomes in what we name it, in what we understand. So the tools and indicators for cultural changing to sustainable development are the ones that are in our society, in the way we interpret ourselves and outside.Tolls are in our belief systems that we share with mental models and languages, that has been our adaptative efficiency and the way we manage our relation with nature. So our societies emerge in how we construct a way to relate for survival. That’s the same for sustainable development. Our tools for directing culture and society to sustainable development are the identification of the social perceptions, capacity to change, external and internal factors. The cultural indicators are the symbolic world, collective memory, identity, values and the most important our beliefs systems. Directing our cultural indicators to society with social objectives, and capacity to innovation will turn the point to the direction that we want sustainable development.
HOW DO WE TRANSIT TO SUSTAINABILITY •
Transit to sustainable development requires from my point of view to understand the relationship between nature and society
Natural capital is how we understand it, according to our ideas, knowledge, beliefs and the way we manage it . So is the way society understand it through culture.
Culture is what we understand through science, myths or popular knowledge
TRANSIT AND CHANGE Are we in transition ? •
Demographic y spatial. From rural to urban society
Epidemiologic and food from infections to chronical diseases
Modernization, From ritual societies (comunitas) to autonomous and efficient socities
Change in in the traditional familiar relationship. Segmentary dynamics
Lost of traditions, myths, peasant fiestas and costumes to relate with nature
From small scale economics to globalization, Migration, poverty and global climate change
¿AND WHERE IS THE TRANSITION TO SUSTAINABLE?
Where are we now, culture and society Culture is to society what the software is to hardware Culture is our imagination, our myths, our science and all the ideas, our beliefs, and is at the same time our dynamic capacity for putting knowledge in practice. Culture is the know how Society is our social organization an the way we direct our knowledge through institutions and capitals
HOW DO WE UNDERSTAND CAPITALS In which capital where do we invest ? In economy …. Money, money, money Who cares, who manages, who invest and how In Social organization, etc cultural in knowledge and environment/ natural capital And how do we know where to invest for SD? First : Understanding the history of the capitals Historic examples how did it happened AMAZONAS ARID NORTH AMERICA TEOTIHUACAN MAYAS INDO VALLEY ANCIENT EGYPT
Second, understand today behavior of capitals making a diagnosis method
SOCIAL CAPITAL Social organization Health Religion Education Politics Demography
ECONOMIC CAPITAL Income Debts Production Spent Commerce Work Finance
CULTURAL CAPITAL Identity Values Collective memory Symbols Patrimony
ENVIRONMENTAL/NATURAL CAPITAL Water Air Biodiversity Land use Energy
Capitals ( + or ) case study 4 communities in Yucatán
SOCIAL CAPITAL Social organization Health Religion Education Politics Demography
ECONOMIC CAPITAL Income Debts Production Spent Commerce Work Finance 110
CULTURAL CAPITAL Identity Values Collective memory Symbols Patrimony
ENVIRONMENTAL/NATURAL CAPITAL Water Air Biodiversity Land use Energy
NATURAL / ENVIRONMENTAL CAPITAL case study Yucatan
+ OR -
BIODIVERSITY LAND USE
FAMILY HEALTH RELIGION EDUCATION POLITICS Demography
ECONOMIC CAPITAL Income Debts Production Spent Commerce Work Finance CULTURAL CAPITAL Identity Values Collective memory 112
+ OR -
Symbols Patrimony INTERACTIONS BETWEEN CAPITALS RELATION (NO BALANCE) SOCIAL + ECONOMIC CULTURAL+ NATURAL SOCIAL+ECONOMIC NATURAL+ECONOMIC RELATION SOCIAL+ ECONOMIC+CULTURAL+NATURAL: SUSTAINABLE DEVELOPMENT Final remarks Understanding interactions between capitals, is the way to develop tools for sustainability The way capitals interact is the place to invest
Chapter 7 Eco-Innovations Distinguished N. Hofstra and D.Huisingh ABSTRACT In this paper the authors investigate different approaches within the so‐called ‘eco‐ innovation’ area. The research is based upon an extensive literature study done to develop a comprehensive understanding of the roots of ‘eco‐innovation.’ It summarises the recent and current applications, the dynamic developments in ‘eco‐innovation.’ This is helpful in providing a better foundation for understanding how the short and long‐term prospects of firms can be improved when they incorporate such holistice concepts and approaches into their product and service development that can help them make contributions to ecological and societal sustainability. Eco‐innovations are defined as new solutions for fulfilling human’s and nature’s needs in ecologically sound ways. Within the concepts surrounding eco‐innovations there are many deeply rooted anthropocentric ideas. Fortunately, progress is being made in using more eco‐ centric designs, like bio‐mimicry and cradle‐to‐cradle. From an economic point‐of‐view, commercial applications are essential for innovational success. From an ecological point‐of‐view, the objectives and targets to prevent or to reduce negative environmental and human health impacts are or will increasingly be prerequisites for business licenses to operate within societies that are truly striving to become sustainable. The differentiation of exploitative, restorative, cyclical and regenerative innovations within the eco‐innovation concept offers the possibility of integrating innovation policies with life cycle thinking and therefore, provide the potential for developing and implementing a more holistic, long‐term thinking. This brings the authors to an alternative approach, the so‐called ‘ecology of invention’, in which the relation between man and nature plays a distinguished role. Within the research on eco‐innovation, dissemination and diffusion are provided central roles, whereas, the phases of stimulation of new, ecologically sound ideas and supporting such experimental inventions have been inadequately addressed in most eco‐innovation efforts. Besides that, within innovation theories, nature is seldom seriously considered to be an integral stakeholder, neither is it in the area of eco‐innovations. Eco‐innovations often seem to be viewed as a blueprint for continuing traditional innovation approaches. But new ideas and initiatives are rapidly entering the scene, entailing quite different methods and techniques that build upon the essentiality of working with the eco‐system rather than against it. The authors chart a more sustainable model for the future based upon some exciting new opportunities within eco‐innovations. The central question of this paper is:
“Are eco‐innovations that result from using different approaches to nature, yielding innovations that help or will help society to live in a more ecologically and socially sustainable manner?” Key Words: Eco‐innovation, sustainable production, anthropocentric world view, deep ecology, bio‐mimicry, cradle‐to‐cradle, humans with nature.
INTRODUCTION In this article, we examine the origins some of the current concepts in eco‐innovations from which the ecological imperative within the innovation field emerged. An extensive study of historical and recent literature is used as the basis for examining the different types of the relationship between man and nature. We not only take issue with the strong anthropocentric ideas in the field of eco‐innovations, but we also attempt to look for eco‐innovation as it was conceived of from an eco‐centric point of view. Eco‐innovation, in its broader meaning, considers new solutions for fulfilling human’s and nature’s needs in ecologically sound ways. As assumed, there are many deeply rooted anthropocentric ideas within the concepts surrounding eco‐innovations. Fortunately, progress is being made in using more eco‐centric concepts and designs, such as bio‐mimicry and cradle‐to‐cradle approaches. From an economic point‐of‐view, it is clear that commercial applications are essential for innovational success. From an ecological point‐of‐view, objectives and targets to prevent or to reduce negative environmental and human health impacts are or will increasingly be prerequisites for companies to obtain or retain their ‘licenses‐to‐operate,’ within societies that are striving to become sustainable. Within research on eco‐innovation, dissemination and diffusion are provided central roles, whereas, the phases of stimulation of new, ecologically sound ideas and supporting experimental testing of such inventions have been inadequately addressed in most eco‐ innovation efforts. Besides that, within innovation theories, nature is seldom seriously considered to be an integral stakeholder, neither is it in the area of eco‐innovations. Eco‐ innovations often seem to be viewed as a blueprint for continuing traditional innovation approaches. But new ideas and initiatives are rapidly entering the scene, entailing quite different methods and techniques to build upon the essentiality of working with the eco‐ system rather than against it! The central question of this paper is: Are eco‐innovations that result from using different approaches to nature, yielding innovations that help or will help society to live in a more ecologically and socially sustainable manner?
THE ECOLOGICAL IMPERATIVE Increased attention to environmental issues and subsequently also to the concept of sustainability has evolved since the midst of the last century. At the beginning, debates on
economic growth and sustainable development were kept under wraps and were mainly limited to discussions between idealistic and realistic scientists. The first steps in recovering and restoring a balance with nature started with measures to limit and prevent environmental damages in the sixties of the last millennium (Baas, 2005), but already since the mid 19th century, environmental issues related to industrial production were debated and acted upon. Today’s reality is that nature has been exploited and exhausted to its very limits by numerous firms, consumers and governments. In the book, “Europe by Nature,” Ernst Ulrich von Weizsacker, a former member of the German Bundestag, wrote in 1992, that we are reaching the limits of destructive growth and that the ‘wonderful days of naïve economic consensus are numbered’ (Moscovici, 1992, p. 8). In his opinion, no invisible hand can ward off the ecological collapse, which he called the ‘Rape of Nature’. Despite many technological developments in the last decades, we still generate and replicate numerous exploitative innovations, even exploitative ‘eco‐innovations. One of the great challenges for today is to develop eco‐innovations that are truly innovative in an ecological sense. To build a sustainable future, we need a turning point in human ecological and ethical progress and a consequent shift to more eco‐centric approaches. Some challenging illustrations of changes in that direction include the rise of bio‐mimicry as a new discipline and the cradle‐to‐cradle perspective in the design stage of innovations. If economic goals are not subordinated to the ecological imperative they will lose all credibility in the short and long run. Humanity is deeply in the need for innovations to help it reduce and reverse the tension between nature and human culture (culture seen as a collective program expressing human values, norms, expectations and goals) especially to reverse paradigm of short‐term profit at all costs; this driving ambition has led decision‐ makers to exploit and plunder nature, thereby underestimating or ignoring the concepts and values of nature. Therefore, survival within a sustainable market economy in ‘traditional markets’, forces firms to innovate, in order to perform better than their competitors. This explains why commercial application is the decisive factor in valuing the successfulness of innovations. Unfortunately, with few exceptions, ecological successfulness (eco‐effectiveness) remains relatively insignificant after the requirement that the product be economically successful in the short‐ term (efficiency). When focusing upon ecological innovations, Nature is a stakeholder of urgent importance. Unfortunately, emergent stakeholder theories do not adequately encompass this important stakeholder. This requires a shift away from the deeply rooted anthropocentric thinking from the very beginning in the innovation process. In making such a shift in paradigm, nature is no longer understood to be primarily used to serve human beings, but as a new source of knowledge, ideas, and ‘nature’s hundreds of other services. But how does an idea come up in the imagination of culturally and economically ingrained man ‘hard‐wired’ to focus upon profits, and therefore ‘forced’ to act out a predestined role to feel superior to have dominion over and to focus upon short‐term profits?
Ecological innovations should be studied carefully (Benyus, 2002, p. 46). ‘We are culturally and economically entrenched in the way things have been and are done. How do new ideas come into the mind's eye, free from preconceptions? We are shaped by reductionist science, socio‐cultural‐religious‐political norms and by the drive for ‘material’ comfort.’’ This has led many humans to ‘believe’ that they can solve their problems by: a.Focusing, reductively, on smaller and smaller pieces of the issue; b. Believing that any new technology is fully adaptable and will ‘solve’ all of our problems; c. Acting as if there are no limits to growth; d. Believing that we cannot live without acquired ‘progress’’. Getting beyond these mental traps and replacing them with concepts such as: a.Respecting nature’s limits and opportunities; b. Becoming inspired and challenged by the boundaries of nature; c. Leaving our narrow preconceptions and replacing them with holistic and long‐term thinking. Our creativity is limited by its deep‐rooted beliefs, values, knowledge and technological structures as well as by the changing economic conditions. Until now only a small body of knowledge on nature has been developed. To understand and unveil the underlying assumptions on nature within the ecological imperative, several questions have to be raised. Questions like, what is nature, how do we perceive nature, how does change occur and how can we solve ecological problems in dialogue with nature?
OLD BELIEFS AND NEW PERSPECTIVES The study on the relationship between man and nature currently and historically brought the following insights. The replacement of a basically religious approach to life by a secular approach brought a perspective on nature that could be thoroughly understood and controlled by the advance of systematic scientific knowledge through observation, experiment and rational thought (Bohm, 2008; Collingwood, 1945; Carson, 1962; Nicolis & Prigogine, de Valk 1992). In Bohm’s opinion a postmodern science should not disconnect matter and consciousness, facts, meaning and value. He sees separation between man and nature as a part of the reason why we find ourselves in ecological troubles. The beginning of a non‐ mechanistic physics brought into perspective new concepts of space, time and matter (relativity theory). The notion of long‐distance connection, called ‘’locality’’ by physicists, represents separate elements that are not internally related and are not connected to things. This is in stark contrast with the animistic view that “spirits were behind everything and that those spirits were not located anywhere’’, so being everywhere and united. The idea that different fields in space exist separately and are not internally related underwent a revolution in thought when quantum theory was developed. In this view, a quantum is a discrete indivisible unit of matter and energy, which are dual in nature and exist within “nonlocality’’; that means that things can be connected whereby, the whole organizes the parts at a distance
(Bohm, 2008, p. 392). Bohm appeals for a truth of internal relatedness and proposes a postmodern physics, which begins with the whole. Post‐modern science must overcome the separation between truth and virtue, value and fact, ethics and practical necessity. To call for non‐separation, is to ask for a tremendous revolution in our whole attitude to knowledge.’’ (Bohm, 2008, p. 395). The necessity of defragmentation and non‐partition in knowledge was also expressed by Ilya Priogine. He emphasized that humanity goes through an age of transition, in which instability, irreversibility, fluctuation and amplification are present in every human activity (Prigogine, 2008). He believes that science is a dialogue between mankind and nature, the results of which have been unpredictable. In his opinion endeavors to understand nature are based on the idea of control (Prigogine, 1996, pp. 154‐155). According to Prigogine, we are entering the age of uncertainty. Instead of embracing a world ruled by deterministic laws ‘which leaves no place for novelty, and a world ruled by a dice‐playing God, where everything is absurd, acausal, and incomprehensible’ (1996, p. 188). Prigogine suggested the replacement to be the increasing role of human creativity in science. Whitehead (North Whitehead, 1920/1986) suggested that nature is that which we observe in perception through the senses. Nature is therefore independent of thoughts. From that point of view, nature is thought of as a closed system whose mutual relations do not require the expression of the fact that humans do or do not think about them. This is called a ‘homogeneous’ vision on nature. John Stuart Mill (1843) developed two principal meanings in the word Nature: firstly, it means ‘all the powers existing in either the outer or the inner world and everything which takes place by means of powers’ and secondly it means, ‘not everything which happens, but only what takes place without the agency, or without the voluntary and intentional agency, of man’ (Mill, 1843, p. 8). This polarity of man and nature, a ‘heterogeneous’ vision of nature, is ubiquitous in Western thought. Western sciences made it possible that we studied nature as an objective reality. According to Mary Midgley, who is quoted in: (Lovelock, "The Revenge of Gaia", 2007) “the dominance of atomistic and reductionist thinking in science during the past two centuries has led to a narrow parochial view of the Earth”. Even more pessimistically, Rachel Carson (Carson, 1962) dedicated her work to Albert Schweitzer who declared that, “Man has lost the capacity to foresee and forestall. He will end by destroying the earth.’’ Carson stated that the balance of nature is not the same today as in Pleistocene times, but still it is a complex, precise and highly integrated system of relationships between living things. “The balance of nature is not a status quo; it is fluid, ever shifting, in a constant state of adjustment’’. Carson considered man as also a part of this balance. “Sometimes the balance is in his favor, sometimes and all too often through his own activities, the balance shifts to his disadvantage” (Carson, 1962, p. 246). The earth is under threat, because humans increase their fatal damages of it. Carson blamed science for being so primitive in concepts and practices that ‘’control of nature’’ as a ‘’phrase conceived in arrogance’’ is based on the assumption that nature exists for the convenience of man (Carson,
1962, p. 297). In fact this assumption has its origins from the Judeo‐Christian belief that man is separate from nature and is predestinated to dominate it James Lovelock (2007) holds science responsible for not acknowledging the Earth as a self‐ regulating entity, because we lack a coherent and complete vision of the world. “There was no coherent vision of the Earth’’ and …..even those who take a systems‐science approach would be the first to admit that our understanding of the Earth system is not much better than a nineteenth‐century physician’s understanding of a patient. But we are sufficiently aware of the physiology of the Earth to realize the severity of its illness.’’ (Lovelock, 1988, pp. 6‐7). John Gray linked this blindness to our Christian and humanist worldviews and stated that since prehistoric times animists believed that matter is full of mind. He postulated that when machines develop more and more, they would also have a mind. (Artificial intelligence, robotics, nanotechnology). (Gray, 2007; p. 174). A more optimistic view on developments between science and nature is provided by Prigogine and Stengers (1984) who foresaw a new dialogue between humans and nature by re‐implementing the time concept in science and restoring the relationship between men and nature. Time, in their opininion, is a construct transmitting ethical responsibilities. Holmes Rolston III questioned if we have responsibilities to nature at all, or just responsibilities to humanity concerning nature (1989). Is nature merely a resource for human needs, an instrumental value, or are there intrinsic values in nature apart from human concerns. He also wondered, what kind of domination over nature is appropriate and when should humans follow nature. And last, but not least, what is the nature of nature to evaluate the appropriateness or inappropriateness of experiments in the light of contemporary sciences. Societies are inconceivably complex systems and therefore, very sensitive to fluctuations. This is a reason for hope and fear. Fear, because our confidence of ‘right’ knowledge and ‘predictability’of the universe is lost forever. These uncertainties are difficult to accept. Prigogine (2008) pointed out that the twentieth century was a remarkable era in physics. It began with entirely innovative theories and concepts, like quantum mechanics and relativity and later on with some tremendously unexpected discoveries. Discoveries that nobody could have predicted; among them the finding that matter is unstable and that elementary particles can transform into each other. Secondly, that our universe has a history. And thirdly, that non‐equilibrium irreversibility can be a source of organization. As a consequence our perspective on space and time changed radically. To Prigogine (2008, p. 406) it is quite remarkable that fundamental changes appear at the moment that ‘’humanity is going through an age of transition, when instability, irreversibility, fluctuation, amplification are found in every human activity.’’ Prigogine is challenged by an amalgamation of these unexpected and unpredicted discoveries into a more consistent representation. In his words, “I want to emphasize that from the point of view of classical physics, there was a dichotomy – on the one hand, physics had the view of the universe as a giant automation, at some stage we were satisfied with time reversible and deterministic laws. On the other hand, when we see our own internal spiritual life, we see the importance of creativity, the fact that time is irreversible, and the fact that we have at least the feeling that
we see, in a sense, order coming out of disorder – new ideas from fragments coming together.’’ (p.401). A separation between man and nature signifies that nature has an intrinsic value and is studied as a disconnected entity. Bartram and Shobrook (2000) tried to unfold the debate on the relationship between nature and environmental conservation. They sought to turn away from the debate of simply revealing nature as a “social construct’’ to dismantle the debate on relational dialectics as a way of reconstituting nature’s reality. They investigated how nature has been ‘perfected’ through scientific and technological simulation to become ‘ecotopia’ (for example the Eden project and Biosphere I and II). The assumption behind these experiments was that nature can be duplicated or perfected. The pursuit of a perfect world opens up debates on nature and on attempts in re‐theorizing nature by a critical engagement with nature‐society dialectics. Within this epistemology the assumption is still that nature can be reclaimed, protected or remade. In the eyes of the authors of this paper, it is suggested that nature’s reality can no longer be assumed as having an original single condition, but that different perspectives on nature must be challenged and not dismissed or forgotten. According to Prigogine, nature is a nonlinear, dynamic system capable of performing transitions in far‐from‐equilibrium conditions. Human societies have to realize that, in addition to its internal structure, they are firmly embedded in an environment with which it exchanges matter, energy and information. The interplay between man and nature is a unique specificity in which desired and actual behavior of species bring forward constraints of a new type. His principal message is the danger of short‐term, narrow planning based on the direct extrapolation of past experience. These ‘static methods threaten society with fossilization, or, in the long term, with collapse.’ In his opinion the main source of survival, in the long run, is the adaptive possibility of societies, to innovate and to produce originally by launching new activities or new innovations (Nicolis & Prigogine, 1989, pp. 238‐242).
A PARADIGM SHIFT Worldviews of scientists were analyzed in detail by Thomas Kuhn (1995). In his opinion science doesn’t bring forward one single truth. What is truth is a social construction within scientific communities. He posed that when paradigms change, the world itself changes too. By accepting new paradigms, scientists accept new insights, adopt familiar insights from a different perspective and are even willing to change to new methods, instruments and techniques (Kuhn, 1995, p. 190). “The shift of vision that enabled astronomers to see Uranus, the planet, does not, however, seem to have affected only the perception of that previously observed object. Its consequences were more farreaching. Probably, though the evidence is equivocal, the minor paradigm change forced by Herschel helped to prepare astronomers for the rapid discovery, after 1801, of the numerous minor planets or asteroids.’’ (Kuhn, 1995, p. 193). Feyerabend (1995, p. 199) expressed a pluralistic vision on how science should proceed. ‘The idea of a fixed method, or of a fixed theory of rationality, rests on too naïve a view of man and his social surroundings’.Some of the antecedents of our contemporary approach to nature can
be found in the rise of mathematics, the instinctive belief in a detailed order of nature and the rise of rationalism in the late Middle Ages. Alfred North Whitehead paid critical attention to the ideas varying from Galileo to Newton and from Descartes to Huygens. The issue of their combined works are considered to be ‘the greatest single intellectual success which mankind has achieved’, but it constructed a vision of the material universe based on calculations of the minutest detail of a particular occurrence, which contained ‘the repudiation of a belief which had blocked the progress of physics for two thousand years’, he referred to this phenomenon as the ‘Fallacy of Misplaced Concreteness’ (Whitehead, 1925, pp. 46‐51). Howard (Howard‐Grenville, 2007, p. 37) quoted Cronon who questioned the balance of nature. “ ..the conviction that nature is a stable, holistic, homeostatic community capable of preserving its natural balance more or less indefinitely if only humans can avoid “disturbing it’’ ….is in fact, ‘a deeply problematic assumption’. Howard posed that the concepts of nature and environment are used to draw attention to what they exclude: the technological artifacts created by human action and the non‐physical but tangible outputs of human endeavor. And these concepts also refer to physical existence and generative forces of their own. She questioned whether it is more important what these evidences of nature convey than how they are mentioned. ‘Nature is at times fearsome, powerful, chaotic and outside the realm of human control; at other times it is pure, unspoiled, balanced, and a garden for retreat from human civilization. It is subject to scientific study to reveal its underlying ‘’law’’, yet also admired for a beauty that cannot be reproduced by human means. The environment has value because of what it gives – water, medicinals, shelter – and what it cannot give – open space, untrammeled wilderness.’ Howard concludes that the only constant feature is that the natural and the cultural often show some kind of a dialectical relationship. In Lucretius’ view (in: (Coates, 1998/2005) “man’s body made him part of nature, but his mind set him apart and equipped him to investigate nature’’. The traditional ways of reductionist and human‐centered studies of nature gave no space to knowledge on cooperative relationships, to self regulating feedback cycles and to interconnectedness of a holistic system (Benyus, 2002, pp. 4‐15). A radically new approach of viewing and valuing nature introduces a new era in science, in which nature functions as a model, a mentor and a measure. Biomimics or biomimicry, as a new science, studies innovations inspired by nature. In solving societal problems, models in nature can be a source of knowledge. Nature can be imitated, an example is the solar cell based on the design of a leaf. Besides that, nature’s designs and processes can teach us how to live sustainable on the earth, to be shared. Our perspective on Nature determines what we see as nature (definition and demarcation), how we evaluate and estimate environmental problems (analysis), how we evaluate and judge situations (diagnosis) and how we want to conserve nature or prevent future problems (application and policy). To inquire and understand the concept of nature is a precondition for studies in sustainability. A ‘heterogeneous’ vision of nature is arising, in which we feel separated from or united with nature, in which we envision contradiction or connectivity The idea that in taming nature, we also tame ourselves is vanishing. The idea that how we treat nature is how we see nature and ourselves is increasing. To understand who and what we are
in relation to nature can be an enormous challenge to restrain ourselves from further destruction.
TRADITIONAL THOUGHTS ON INNOVATION The generation, exploitation and diffusion of knowledge are fundamental to economic growth, development and the well being of nations (OECD, 2005). Key factors of successful innovations are mainly based on technological improvements (Jacobs, 2007). By differentiating themselves in the market, firms can use innovative mechanisms, which can lead to economic ‘value creation’. But on the firm level, companies are also confronted with many risks. Jacobs argues that creativity, in itself, does not bring economic value, but needs to be combined with productive processes that lead to ‘a successful exploitation of new ideas’ and commercial realization of it. This Schumpeterian view, the commercial application of an idea and doing things differently in the realm of economic life, needs further amplification. In the eyes of Schumpeter, it is not the traditional competition within a rigid pattern of invariant conditions and methods of production that counts, but competition from the new commodity, the new technology, the new source of supply, the new type of organization (the largest-scale unit of control for instance) – competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their lives. Schumpeter claimed that the problem is not how capitalism administers existing structures, but the relevant problem is how it creates and destroys them. He considers, ‘as long as this is not understand, the investigator does a meaningless job’. When it will be understood, and this is our appraisal of economic performance, the outlook on capitalist practice and its social results changes considerably (Schumpeter J. A., 1976, p. 84). Schumpeter’s addition was an important step to emphasize innovation and entrepreneurship in its role in economic systems. Jacobs (2007) noticed that in product and process innovation theories success is scarcely part of the definition. As he mentioned it, ‘transaction innovations’ (sometimes also called ‘presentational’ innovations) refers to innovative ways to bring products and services under the attention of potential consumers. Most innovation literature only emphasizes a specific part of the issue. As a consequence many innovations have not been understood properly in Jacobs’ opinion. These misapprehensions are partly caused because they are mainly understood in technical or technological terms. Drucker (1985) defined successful entrepreneurs as those who create value and make a contribution. In his opinion they are not simply improving what already exists or modifying it, but try to create new and different values and new and different satisfactions, for example to combine existing resources or convert ‘material’ into a ‘resource’. Here we recognize the ‘cradle-to –cradle’ concept in which waste is considered to be food (McDonough & Braungart, 2002). Turpitz (2004)emphasized that integration is a prerequisite to promote product-related ecoinnovations. ‘’These, in turn, depend on both support for the development of environmentally friendly products and stimulation of demand for such products. However, it is companies that play the crucial role in the ecological optimization of products as it is they, who - during the R&D phase - determine the basic environmental characteristics for the product utilization and disposal’’. 123
There are many differences in the approaches firms take as they begin to become more conscious about the ‘slightly longer-term’ future. They emphasize the importance of design in products and processes and the need to cooperate with partners in long term projects. They focus with partners on sustainable product development, marketing programs, sourcing and supply chains to improve health, social justice and long term prospects. When innovation is defined as the adoption of an idea or process that is new for the firm and society (Daft, 1978, Damanpour and Evan 1984) (Damanpour, 1996) it means that the adoption of innovation is conceived as a process that encompass the generation, development and implementation of new ideas or processes. Innovation then is seen as a vehicle to change processes or to response to environmental changes or pressures anticipatory to influence the surroundings. Like Drucker, the most successful innovations bring forward change (Drucker, 1985). Environmental conditions often provide an impetus for organizational change and innovation and effect both the magnitude and the nature of the innovations. From a traditional point of view, firm size, formalization and complexity have been viewed as barriers to innovation (( (Burns & Stalker) (Thompson J. D., 1967) (Rogers, 1983)Burns & Stalker, 1961; (Kanter R. M., 1985). Examples of innovation research from a contingency perspective include studies typically related to organizational variables. These studies control one or more predictable contingency factors. Innovation, however, depends upon a complex congregation of factors, that’s why contingency theory has limited predictive capacity (Damanpour, 1996).Often the role of the environment is seen as implicit in many empirical studies; however these effects have seldom been investigated explicitly. Exceptions are the researches of Kimberly and Evanisko (1981) and Meyer and Goes (1988). They added value to Damanpour’s research (1996) in that they distinguishing radical and incremental innovations as being important, because of their dissimilar dynamics. Baumol (Baumol) argued that innovation plays an important role in the theory of the firm and thereby affects their competitively (p.15). In his opinion, the heart of the free-market growth process is the competitive pressure that forces firms to create innovations. Along with the price mechanism and other relevant factors, the role of markets is a major determinant of innovative activity. In Baumol’s opinion (p.55) the role of innovation is a primary competitive weapon and the routinizaton of innovation that transforms it from a sequence of unintentional occurrences into a businesslike activity that can be relied upon and is plausibly predictable. The design concept in innovations is rather underemphasized. Hawken et al. (Hawken, Lovins, & Hunter Lovins, 1999) stated that a design mentality can reshape production processes and even the entire structure and logic of a business. There are no easy rules to create these invention processes. How sustainability is related to innovation is still disputed. Some argue that it supports unsustainable production and consumption (debates on downcycling within the ‘cradle-to-cradle concept); others accuse them of an overemphasis on ideological imperatives. (Deep Ecology movement). The concept of Gaia, for example, has implications for the way we look and evaluate the world around us and beyond the way we conduct ourselves (Lovelock, 2007). Lovelock postulated that we are fenced in a vicious circle of positive feedback, so that what occurs somewhere soon will have system-wide effects because of the wholeness and interconnectedness of the 124
system. The dynamic energetics of an ecosystem, create counterpoints to the extractive economy. “ Our transition to sustainability must be a deliberate choice to leave the linear surge of an extractive economy and enter a circulating, renewable one.’’ (2007, p. 56). These changes will have a considerable influence on our future thoughts on innovations.
ECOINNOVATIONS The viable use of ecological knowledge to bring forth ecological progress is frequently named eco‐innovation (Fussler & James, 1996). Eco‐innovation refers to a broad range of innovations in the field of environmental studies and practices and can be associated with a mixture of related terms, such as ‘design for environment’, sustainable technology and eco‐efficiency (Beveridge & Guy, 1995). Many industries have been developing environmental innovations to improve sustainable developments. Mostly, these are products and processes aimed to decrease environmental costs (eco‐efficiency). The discussion is whether these efficiency improvement strategies actually achieve improved environmental effectiveness. Additionally, innovations often focus on technological aspects, rather than on societal or political ones (James, 1997). Cleaner production is often a combination of better technology and improved management that is sometimes seen as a basic distinction between end‐of‐pipe, pollution control technologies and holistic, prevention‐oriented cleaner technologies designed to prevent the production of the pollutants rather than only treating the wastes as symptoms of inefficient management. (Skea, 1995) Kemp (1997) defines environmental technology broadly as each technique, process or product, which conserves or restores environmental qualities. The emphasis is on conservation or restoration of these qualities. According to Kemp, environmental qualities may be conserved directly, through the treatment of pollution, re‐use of waste materials and they may be conserved in an indirect way by technologies and materials that are less environmentally harmful than comparable processes, products and substances. Klemmer, Lehr, et al, (1999) goes a step further to define environmental innovations as encompassing any innovation, which serves to improve the environment, regardless of any additional economic advantage. Arundel, Kemp, et al (2007) define environmental innovation as follows: ‘’ ..consists of new and modified processes, equipment, products, techniques and management systems that avoid or reduce harmful environmental impacts. A substantial fraction of environmental innovation is based on the simple adoption of new technology, although firms may need to adapt the technology to their own production processes. A smaller fraction of environmental innovation is probably based on the firm’s own creative activity. In some cases, reducing environmental impacts may be the sole purpose of an environmental innovation. In other cases, the environmental benefit may be a fortuitous by‐product of other innovation activities…Environmental innovation is ‘technical’ when it involves new equipment, products and production processes and ‘organizational’ when it involves
structural change within the organization to institute new habits, routines, orientation and practices…’’ In this description we meet, next to technical, organizational, social or institutional distinctions, a reference to markets and the basic competences of firms: ‘A smaller fraction of environmental innovation is probably based on the firm’s own creative activity.’ This addition is more in accordance with the proposed definition of the Systematic panel on eco‐innovation (INNOVA, Eco‐innovation report, p.4): ‘’the creation of novel and competitively priced goods, processes, systems, services, and procedures designed to satisfy human needs and provide a better quality of life for everyone with a lifecycle minimal use of natural resources (materials including energy and surface area) per unit output, and a minimal release of toxic substances’’. The proposal of this panel, place central to its approach, resource and energy efficiencies. It shows attention for the creation of novelties in a competitive way, but still insufficient light is shed on eco‐effectiveness, the concept of nature and its intrinsic values. In the third edition of the Oslo Manual (OECD, 2005), guidelines were presented for collecting and interpreting innovation data to make them internationally comparable. Whereas, in the first edition, technological product and process innovation in manufacturing was accentuated, the second edition expanded coverage to service sectors and refined the framework in terms of concepts, definitions and methodologies. In the third edition we recognize a shift to non‐ technological innovations and an expansion to marketing and organizational innovations. Besides that, the systemic dimension is added, which is focused on linkages. It deals with innovation at the level of the firm, where it covers diffusion up to “new to the firm’’ and excludes changes, which are not considered innovations. However, it is stated in the manual that innovation that is developed or adopted does not have to be new to the world (Kemp, 2008). In his study on eco‐innovation, Hellstrom (2007) analyzed concepts of ventures, that contributed to a national environmental innovation competition. The analysis took place based upon the Schumpeterian perspective on innovation (radical‐incremental and component‐architectural). He pointed out that innovation towards a sustainable society may be envisioned as being threefold: on a technological, a social and an institutional level. To achieve true innovations that conform with principles of nature, serious reconstruction has to be accomplished, which means that radical innovation is a prerequisite. Besides that the architectural‐design based on nature principles, is of most importance.From that perspective the role of nature within eco‐innovations is important. The idea on nature has consequences for how we design innovations. Ecological responsiveness requires much more than just bringing the environment into consideration; it also requires opportunity alertness and recognition of knowledge in nature that we must understand and learn. It has been proven (Wubben, 2000) (Baas, 2005) that the introduction of new production processes, new products and the reduction of the amount of waste was started because of environmental regulations. These regulations created pressures upon companies to innovate. Compliance with legislation has���been the major driving force for investments in ecologically sound technologies (Dobers, 1993). But first‐mover advantages accelerated by pro‐active
innovations in the environmental field. Re‐invention of our production and consumption modes requires a complete reengineering of our innovation processes and cannot solely be based on technological insights, market challenges or cost‐benefit analyses. Sustainable innovation calls for rising above old system inertia and advancing creative thinking. This legitimates a reassessment of economic paradigms and a reconsideration of innovation models, as the following shows. Five hundred examples of new technologies (materials, products, processes and practices), which come with benign environmental effects, were researched by Joseph Huber. Life cycle analysis and product chain analyses were used as key indicators to come to the following conclusions: 1. Innovations merely aimed at improvements in eco‐efficiency do not, in most cases, represent significant contributions to improving the properties of industrial metabolism. This can be better achieved by technologies that fulfill the criteria of eco‐consistency (metabolic consistency), also called eco‐effectiveness. 2. Ecological pressures of a technology are basically determined by their conceptual make‐up and design. Therefore, the most promising technologies are in earlier rather than later stages of their life cycle (i.e. during R&D and customisation in growing numbers), because it is during the stages before reaching the inflection point and maturity in a learning curve, where technological environmental innovations can best contribute to improving ecological consistency of the industrial metabolism while at the same time delivering maximum increase in efficiency, as well. 3. Moreover, environmental action needs to focus on early steps in the vertical manufacturing chain rather than on those in the end. Most of the ecological pressure of a technology is normally not caused end‐of‐chain, in use or consumption, but in the more basic steps of the manufacturing chain (with the exception of products, the use of which, consumes energy, e.g. vehicles, appliances). “There are conclusions to be drawn from refocusing attention from the downstream to the upstream, in life cycles and product chains, and for a shift of emphasis in environmental policy from regulation to innovation.’’(Huber, 2005). In the beginning of the 1990s, changing insights on nature appeared and initial classical visions resurfaced. Serge Moscovici (taken from Levinas) wrote, “Instead of an ecology of intention which is winning more and more ground, we have to continue claiming an ecology of invention, which is in accordance with its most profound inspiration. This is why it is necessary to return to initial visions of nature, bearing in mind that the question of nature has been and still is a question.’’ (Moscovici, 1992). Moscovici stated that nature has been given to man to make a non‐natural use of it. This is to say, to act not as a man that sets himself as a goal, beyond the possibilities of species. In this case, he refers to conservation and mere survival of nature, to understanding processes of men in the world in which they live and to
understand the history of the universe. In his opinion, only then will advantages be acquired beyond the usual waste of resources and energy and to create the extraordinary values beyond the limits set by nature. According to Kemp (2008), innovations should be distinguished from inventions, because inventions refer to discovery. He emphasizes that the overwhelming majority of innovations are not based on discovery but on the outcome of systematic applied R&D and research processes not resulting in new discoveries. The recommendation to continue an ecology of invention touches the antagonism between the human and the non‐human world, between culture and nature. The prevailing concepts since the 17th century will be transformed by framing new images and new references, based on the question of nature. Moscovici forecast that when the three abstract references, like species, nature and the ecosystem become concrete; this will have an enormous influence in many areas of human life. When nature becomes the main inspiration for innovations, it will influence technology, law, ethics and economics to evolve and this, in turn, will change our collective consciousness and sensibility toward nature.
RECENT DEVELOPMENTS To reach sustainability targets, the gradual improvement of existing technologies is not sufficient. (evolutionary or co‐evolutionary). Radical inventions and innovations are necessary and technological systems have to be reconstructed significantly (Hellstrom, 2007) (Huesemann, 2003). A quite new approach within the ecological field is ‘Biomimics’ or ‘Biomimicry’ (from bios which means ‘life’ and mimesis which is ‘imitating’). By studying organisms and imitating knowledge from nature, business processes can be improved effectively and effectiveness and technical solutions can be found by observing plants, animals, microbes and so on. Many of the problems we encounter, have been solved already by nature. Benyus (2002) wrote that the real survivors are the Earth inhabitants that have lived millions of years without consuming their ecological capital, the base from which all abundance flows’’. Biological knowledge inspires us toward new kinds of innovation. Research into self‐healing materials for concrete, plastics, ceramics, composites and even metals is being done on a large scale, although it is still in its infancy. The real breakthroughs will be in the area of self‐assembling materials. Material’s scientist Mehmet Sarikaya of the University of Washington said: “We are on the brink of a material’s revolution that will be on par with the Iron Age and the Industrial Revolution. We are leaping forward into a new age of materials. Within the next century, I think biomimetics, will significantly alter the way in which we live.’’ Learning from nature can become a great challenge for future management’. Nielsen (2006) suggest that the eco‐mimetic development of society will pay much more attention to characteristics of natural systems. Making more use of the knowledge drawn from natural principles will help us to solve present environmental problems and to maybe prevent future ones. Also the idea is that all production should be renewable as well as completely biodegradable.
”buildings, that like trees, produce more energy than they consume and purify their own waste water; factories that produce effluents that are drinking water; products that, when their useful life is over, do not become useless waste but can be tossed onto the ground to decompose and become food for plants and animals and nutrients for soil or alternately ca return to industrial cycles to supply highquality raw materials for new products; billions, even trillions of dollars worth of materials accrued for human and natural purposes each year; transportation that improves the quality of life while delivering goods and services’’ (McDonough & Braungart, 2002). Criticism on the ‘cradle‐to‐cradle’ concept is still in its infancy. The idea of producing more, based on zero emissions and zero waste, instead of less waste, is attractive for present and future industries and nations; when it is combined with ecological, social and economic principles, it is even more useful. Several critics of these developments emphasize that we must take into consideration a broader social and cultural acceptance of eco‐innovations and of the need to widen their possibilities. Not merely products and processes but also industries and landscapes can/should become part of the innovative scope. Besides that, both the cultural embeddedness and the learning processes are centrally important. These developments have brought and will continue to bring new insights into ecological innovations.
ECOINNOVATIONS DISTINGUISHED The concept of eco‐innovation is evolving. Developers of products and processes with a generative and recyclable character are establishing new tracks in the field of more sustainable societies. But such efforts have not taken us far enough. The next stage in the development of eco‐innovations should be based upon the principles of environmentally sustainable living, which refers to a broader scope than solely production and consumption systems. Further, it should be based upon systems that assimilate societal needs within the ‘genuineness’ of nature. We will call this type of innovations, regenerative. Regenerative innovations refer to systems that restore, renew or revitalize their own sources of energy and materials taking into account future needs, wants and desires of society and nature. This type of innovations requires work to integrate human uses so that they are in harmony with not in opposition to nature. We defined eco‐innovations broadly as being new solutions for fulfilling human and nature’s needs in ecologically sound ways. In this definition human and nature are equally considered. Usually, definitions of eco‐innovations are based on a human‐centered approach. Steps forward are being made to make use of more eco‐centric perspectives, like in biomimics and in cradle‐to‐cradle designs. We have recognized a range of types of relationships between man and nature. These types vary from completely contradictory and separated to being united and connected. At all times, the way of looking to the concept of nature played an immense role in scientific thought and had a powerful grip on the feelings, visions, and actions of mankind. The demythologizing of phenomena in nature, replaced by rationality and causal reasoning was
already started in the 7th and 6th centuries B.C (Ionian philosophers, Presocratics). The relation between man and nature has always been characterized by dichotomies, showing different meanings and opposing representations. Nature can be seen as gorgeous and pleasant, but also as antagonistic, fearful and threatening. Different conceptions of what nature is, range from anthropocentrism to biocentrism and eco‐centrism to kin‐centrism. These views left their marks on measures to cope with environmental problems. These problems caused great anxiety, but are still not associated with an attitude towards nature, in the sense of eco‐effectiveness (de Valk, 1992). Our attitude towards nature is all top often still characterized by ambivalences and contradictions. These ambiguities embody different values such as diversity and unity values, stability and spontaneity values, dialectical values and sacramental values (Holmes Rolston, 1989, p. 89). The complexity of the differences between instrumental versus intrinsic values is a difficult one. It was Naess (2002) who built the foundations of an innovative and feasible relationship between man and nature, in which he saw nature as a mentor, measure and partner, rather than a servant or a reservoir. We distinguish the following relationships with nature, based on this review of the history of humans & nature.
Table 1: Nature – Human relationships: Contradiction
Contradiction, emphasizes that there are clashing interests between nature and humanity. Separation, means that there is a disconnection and divorce between man and nature. The distinctions and differences are stressed, rather than the common characteristics and interdependencies. Connection or connectivity refers to a joined association in which an alliance and coherent dependent relationship between man and nature is identified in which one change can cause another change to happen. The relationship is based on community of shared beliefs and ideas within a close relationship. Unity is envisioned as an organic totality in which man and nature act in cooperation and join forces to grow together. By sharing the same beliefs and goals, the state of the earth can be improved, being in agreement with man and acting together for a common purpose to reach a turning point in human and nature’s progress. Within the concept of eco‐innovations we also distinguish different types. Expoitative, Restorative, Cyclical and Regenerative ecoinnovations. This distinction will be used for further empirical research, based upon this document.
Table 2: Ecoinnovations distinguished, related to mannature relationships EcoInnovations
What exactly is the problem upon which we seek to provide insight? We sought to expand the perspectives on human relationships with nature so as to be better able to perform an holistic and integrated assessment of the value of eco‐innovations. Firstly, we conclude that systematic identifications and assessments of innovations based upon to their degree of radical divergence from or opposition to nature’s design should become part of eco‐innovation theory building and should be the basis of future empirical research. Secondly, we conclude that as we increasingly learn to work with the uncertainty of knowledge about nature, we will find new opportunities for making improved innovations in the initial product design and invention stages rather than only in later phases of implementation and utilization. Thirdly, we conclude that the added value of eco‐innovations is based upon their exploitative, restorative, cyclical or regenerative characteristics Bringing the concept of nature into innovation models is part of many efforts to integrate the disciplines of economics and ecology. This can cause a collision with the economic establishment with regard to innovation theories. To turn the restrictions and limitations of our dominant models into challenges and opportunities will be a difficult journey. A journey in which the end of the path is invisible and unpredictable. Prigogine focused the dialogue with nature into original conceptual structures. These kinds of structures will provide us new visions, and opportunities to bring new forms of intelligibility into the relationships between the human knower and nature as the known (Prigogine, 1996). The scientist and the object or subject under study will face new horizons under uncertain circumstances in which creativity,
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Section 2 Climate Change
Chapter 8 Assessment of Impacts of Climate Change on Water Resources in Egypt L.El Hatow ABSTRACT Climate change is essentially a cross‐cutting issue that will be reflected on all sectors and industries. There are of course challenges within specific sectors that are most at stake and are at the highest of priority including water resources scarcity. In Egypt one of the biggest dilemmas with respect to the water resources and its availability upon the impacts of climate change is in fact the variability and uncertainty of the impact. Egypt relies heavily on the Nile River as its source for water resources, supplying 95% of Egypt's fresh water needs, thus making it extremely vulnerable to changes in rainfall patters throughout the Nile Basin. As Egypt is the most downstream nation of the Nile River Basin it ultimately is the most at risk. With the growing stresses due to climate change, it has been predicted that Egypt will be one of the nations at extreme water stress by the year 2025. There are studies that suggest that with the increase in global temperatures there will be increased evaporation in the Nile River and thus less water supply and ultimately water scarcity. Other studies suggest that with the increased evaporation in Egypt will result in increased precipitation in the Ethiopian highlands (more upstream from Egypt) which will lead to increased runoff in the Nile River flows downstream in Egypt. This may ultimately cause floods as the Aswan Dam at Lake Nasser in Egypt may not be able to cope with this increased runoff. The ultimate problem is that these two scenarios require completely opposite adaptation strategies; one entails floods and increased runoff, the other is water scarcity and possible drought. This report assesses the existing studies and literature to date regarding the climate change impacts on water resources in Egypt. A compilation of all studies and literature done to date both locally and globally was performed in order to have a clear assessment of predictions towards the impacts of climate change on water resources and Nile River flows in Egypt. A certainty matrix was developed based on a qualitative and quantitative assessment on the severity of impact and its degree of certainty. A further synthesis of the degree of confidence and likelihood of the Nile river flow to either increase or decrease by the years 2025, 2040, 2050, 2060, and 2090 was developed, in accordance with IPCC 2006 guidance notes on defining
uncertainty and classifying them accordingly. It can be summarized that the impacts on water resources are of great concern, and need to be efficiently planned for including, increased evaporation in Lake Nasser, decreased river flow and decreased water supply, and possible major flooding events. There are still many uncertainties that lie in the GCM models used. Better precision and accuracy is needed for more accurate data and assumptions. It is important to note that the lack of ground data from field stations in this region is a contributing factor and is a serious problem for modelers of this region as calibration based on observations is a large factor towards the accuracy of the model. From this assessment it is evident that there are still many gaps within the research conducted with respect to the impacts of climate change on water resources in Egypt and on the Nile River Basin as a whole and that further research is needed to be able to plan for effective adaptation strategies.
INTRODUCTION Environment and pollution has no longer become a national issue, but with the growing effects of climate change we begin to feel the pressure on a global level. The catastrophes that have been by the the Intergovernmental Panel on Climate Change's 4th Assessment Report (IPCC AR4) have been shown to be detrimental. It has been shown that the developing countries, the least polluters globally, are the nations that will being feeling the brunt of climate change the most due to the polluting by industrialized developed countries. Egypt, a developing country, has signed the Kyoto Protocol on 15 March 1999 and ratified it on 12 January 2005. The Convention entered into force on 16 February 2005. As a non‐Annex I Party to the Protocol, Egypt is not bound by specific targets for greenhouse gas emissions, but has modified its national policy to incorporate these initiatives into the system. Egypt first produced the Initial National Communication on Climate Change in June 1999, and is in the phase of preparing its National Climate Change Action Plan (NAPA). Egypt has been raising public awareness to anticipate and manage the physical and socioeconomic impacts of climate change, as well as training of technical staff to improve their technical capacities. It has introduced climate change implications in national planning as well given high priority to research on climate change areas. Egyptian national policy within the context of climate change is lacking not within its failure to act, but within its lack of definitive data to be able to place efficient adaptation mechanisms on. Without certainty of impact, there is no proper basis for planning. This is the ultimate dilemma within Egypt today. With 1.1% of the world's population, Egypt accounts for only 0.5% of global emissions; an average of 2.3 tonnes of CO2 per person (EEAA, 2009). Table 1 below shows how Egypt is ranked 29 in terms of global polluters, whereas table 2 shows the division of GHG emissions in Egypt in the different sectors. This table illustrates that energy, electricity, and transportation are the leading sectors contributing to GHG emissions in Egypt. Table 3 shows a comparison between GHG emissions locally and globally, illustrating Egypt's contribution on a global spectrum. Figure 1 maps the global variation of CO2 emissions. Table 3 presents that Egypt's contribution to
global CO2 emissions is 0.5% through polluting 0.158 Gt CO2 in 2004. Even though this number is considered minuscule in comparison to global emissions, figure 1 compares Egypt's CO2 contribution to both North Africa and the whole of Africa as a continent. This figure thus portrays that Egypt contributes 31% of the CO2 emissions from North Africa, and 13% of the CO2 emissions from the whole of the African continent. This in of itself is a fairly large share that needs to be addressed with the utmost urgency.
Table 1: Total GHG Emissions in Egypt (excluding landuse change)
Table 2: GHG Emissions from Different Sectors
Source: CAIT, 2000
Table 3: GHG Emissions Globally
Source: UNDP Human Development Report, 2007/2008
Figure 1: Mapping the Global Variation in CO2 emissions
Source: UNDP Human Development Report, 2007/2008
Background Information Climate change is essentially a cross‐cutting issue that will be reflected on all sectors and industries. Affected sectors include water resources, agriculture, public health, housing and settlements, coastal zones, biodiversity and coral reefs, fisheries, telecommuinicaitons, etc. There are of course challenges within specific sectors that are most at stake and are at the highest of priority. These include: 1. Water resources scarcity 2. Sea level rise 3. Agriculture crop deficiency In Egypt one of the biggest dilemmas with respect to the water resources and its availability upon the impacts of climate change is in fact the variability and uncertainty of the impact. Egypt relies heavily on the Nile River as its source for water resources, supplying 95% of Egypt's fresh water needs, thus making it extremely vulnerble to changes in rainfall patterns throughout the Nile Basin. As Egypt is the most downstream nation of the Nile River Basin it ultimately is the most at risk. Egypt is in a hot arid region with little to no rainfall. The mean annual rainfall in Egypt varies from a maximum of 180 mm/year on the north coast, which extends for a distance of 1000 km, then decreases to an average of 20 mm near the city of
Cairo, and diminishes to as little as 2 mm close to the city of Aswan in Southern Egypt. Please see table 4 below.
Table 4: Mean Total Rainfall in Egypt according to geographic location. Month
Sharm El‐ Sheikh
Source: El Shahawy, 2007
Figure 2: Seasonal Rainfall Coverage over the Nile River Basin
Source: Information Products for Decisions on Water Policy and Water Resources Management in the Nile Basin: NBI, 2006
Egypt is bordered by Libya to the west, Sudan to the south, and by the Gaza Strip and Israel to the east. Apart from the Nile Valley, the majority of Egypt's landscape is a big, sandy desert. The winds blowing can create sand dunes over one hundred feet high. Egypt includes parts of the Sahara Desert and of the Libyan Desert (El‐Shahawy, 2007). Egypt as the most downstream country of the Nile River Basin is very sensitive to variations in flow due to seasonal precipitation. See figure 2 for details. Egypt generally experiences extreme climate due to the presence of desert but with a difference in the climate of the North Egypt and South Egypt. The Summer Season in Egypt is exceptionally hot. The average temperature during summers in the south can rise up to 41oC and around 35oC in the north. The Spring Season experiences temperate climatic conditions accompanied by dust storms. The Winter Season bring with them pleasant climate. The average temperature during winters is around 21oC in the south and 13oC in the north (El‐ Shahawy, 2007). Temperatures average between 27 ‐ 32 °C in summer during the months of May to August, and up to 42 °C on the Red Sea coast. Temperatures average between 13 to 21 °C in winter. A steady wind from the northwest helps hold down the temperature near the Mediterranean coast. The Khamaseen is a wind that blows from the south in Egypt, usually in spring or
summer, bringing sand and dust, and sometimes raises the temperature in the desert to more than 38 °C. Temperatures vary widely in the inland desert areas, especially in summer, when they may range from 7° C at night to 43° C during the day. During winter, temperatures in the desert fluctuate less dramatically, but they can be as low as 0° C at night and as high as 18° C during the day (El‐Shahawy, 2007). The average annual temperature increases moving southward from the Delta to the Sudanese border, where temperatures are similar to those of the open deserts to the east and west. Please see table 5 below for details. Throughout the Delta and the northern Nile Valley, there are occasional winter cold spells accompanied by light frost and even snow. At Aswan, in the south, June temperatures can be as low as 10° C at night and as high as 41° C during the day when the sky is clear (El‐Shahawy, 2007).
Table 5: Egypt's Mean Daily Minimum and Maximum Temperatures( C0) Month
Sharm El‐ Sheikh
18.9 11.0 21.5 13.3 21.7
20.4 11.4 22.6 13.7 22.4 10.2 25.2
23.5 14.0 25.2 16.1 25.1 13.8 29.5 11.0 29.3
28.3 17.8 29.1 20.1 29.8 18.9 34.9 16.0 35.0
32.0 21.9 32.9 23.8 33.9 23.0 38.9 20.4 38.9
33.9 24.8 35.3 26.5 37.0 25.2 41.4 22.8 41.1
34.7 26.4 36.2 26.7 37.5 26.0 41.1 23.9 40.9
34.2 26.2 36.1 28.0 37.5 25.8 40.9 23.5 40.6
32.6 24.2 34.3 26.5 35.4 24.0 39.3 21.6 38.8
29.2 20.9 31.1 23.4 31.5 20.6 35.9 17.8 35.3
24.8 16.6 26.8 18.9 27.0 15.0 29.1 12.0 29.4
20.3 12.5 22.7 15.0 23.2 10.5 24.3
Source: El Shahawy, 2007.
The long term annual average Nile River flows to Egypt between 1872 ‐1986 is about 88 km3/year. The floods typically occur between the months of July‐September. Figure 2 below is a record of annual Nile flows at Aswan between this period. The Nile River inside Egypt is completely controlled by the dams at Aswan in addition to a series of seven barrages between Aswan and the Mediterranean Sea. Egypt relies on the available water storage of Lake Nasser to sustain its annual share of water that is fixed at 55.5 BCM annually by agreement with Sudan in 1959. Figure 3 shows us the historical River Nile discharge at Aswan at Lake Nasser. Table 6 shows the average annual P, E and T for some relevant Nile Basin countries for a basis of comparison. From this table it may be observed that Egypt has the harshest conditions, with the hottest temperatures, the highest evaporation rate, the lowest precipitation, the highest population living on the Nile Basin area, and the lowest freshwater per capita, out of all Nile Basin Countries.
Table 6: Average Annual Precipitation, Evaporation and Temperature (P, E, T) for Nile Basin countries. Country
Mean Min Mean Max Mean Mean annual Population Renewable Temperature Temperature annual Precipitation in Nile Internal (C) (C) (mm) Basin (%) freshwater Evaporation (mm) Per Capita (m3)
Source: NBI, 2006 and WDI 2009 Egypt lies in a hot arid zone with an already existing situation of water scarcity. With the growing stresses due to climate change, it has been predicted that Egypt will be one of the nations at extreme water stress by the year 2025. Please see figure 4 below.
Figure 3: Historical River Nile Discharges at Aswan, Egypt between 1872 and 1986
Source: ElShahawy, 2007.
Table 7: Agricultural Inputs in Egypt
Source: World Development Indicators, 2009
Table 8: Freshwater Availability and Use in Egypt
Source: World Development Indicators, 2009
Table 9: Rural Population and Land use in Egypt
Source: World Development Indicators, 2009
Figure 4: Water Projections in the year 2025.
Source: IWMI Water Scarcity Map, 2000
Tables 7, 8, and 9 above show Egypt’s share of freshwater in the Agricultural sector. It is evident that Egypt consumes a large percentage, roughly 86%, of its water for irrigation of Agricultural lands. A large percentage of these irrigation practices utilize inefficient irrigation methods such as flood/surface irrigation. More efficient irrigatin methods need to be enforced for proper management of the consumption patterns. With climate change it is still unknown what the impacts upon the Nile River flow will be. There are studies that suggest that with the increase in global temperatures there will be increased evaporation in the Nile River and thus less water supply and ultimately water scarcity. Other studies suggest that with the increased evaporation in Egypt, will result in increased precipitation in the Ethiopian highlands (more upstream from Egypt) which will lead to increased runoff in the Nile River flows downstream in Egypt. This may ultimately cause floods as the Aswan Dam at Lake Nasser in Egypt may not be able to cope with this increased runoff. The ultimate problem is that these two scenarios requires completely opposite adaptation strategies; one entails floods and increased runoff, the other is water scarcity and possible drought. This report assesses the existing studies and literature to date regarding the climate change impacts on water resources in Egypt.
Methodology A compilation of all studies and literature done to date both locally and globally was performed in order to have a clear assessment of predictions towards the impacts of climate change on water resources in Egypt. The assessment was done by exploring the following
statements made by globally produced reports, locally produced reports, and projects within Egypt on the issues that are either in progress or are completed. Most studies drew upon Global Climate Models to draw their conclusions. There were two approaches taken to reach the hydrological impacts. These were the GCM approach shown in figure 5 and the Sensitivity approach shown in figure 6. The GCM approach draws upon the GCM model with resolution boxes of 200 x 200 km. This input material is fed into the Regional Climate Models (RCM) where the resolution is approximately 50 x 50 km boxes. This tends to be more accurate, yet still requires further enhancement. The GCM input can also be placed into statistical downscaling models to extract data that may later be further enhanced and placed into hydrological models. The statistical downscaling models and the RCMs input their data into hydrological models to be able to determine factors such as precipitation, runoff, and evapo‐ transpiration in specific basin areas. The sensitivity approach however places a series of plausible scenarios based on precipitation, temperature, CO2 emissions, etc. For example a scenario where the temperature increase is 1 degree C, will translate into specific conditions in the hydrological models where precipitation, runoff and evapo‐transpiration will be altered.
Figure 5: Global Climate Modeling (GCM) Approach to determine hydrological impacts.
Global Climate M o d e l s ( G C M )
D o w n s Regional Climate c M a od l el i s n (R g C M )
Hydrological M o d e Water Supply: l s • Runoff • Precipitation • Evapotranspiration
Figure 6: Sensitivity Approach to determine hydrological impacts.
∆T = T + 1ºC, T + 2ºC, etc.
R ∆P = P + 10%, P + 20%. etc. e g ∆CO2 = CO2 x 1, CO2 x 1.5, etc. i o Hydrological n M a o l d Hydrological e S Il c m s e p n A table was developed in the results section to summarize the hydrological impacts of climate a a change in Egypt by all the studies. Through this table, a certainty matrix was developed based c r on a qualitative and quantitative assessment. Criteria for this uncertainty t matrix was i provided by IPCC 2006 guidance notes on defining uncertainty and classifying them s o accordingly. Two categorizations were utilized to define uncertainty. First being the degree or s level of confidence, and the second being the likelihood of occurence. Please see tables 7 and 8 respectively below. A p p r o a c h
Table 7: Qualitatively calibrated levels of confidence
Source: IPCC, 2006
Table 8: Likelihood Scale
Source: IPCC, 2006
When refering to the level of confidence of a specific event, it can be categorized accordingly to relate the degree of uncertainty involved. This relays the correctness of a model, analysis or statement (IPCC, 2006). This qualitative assessment method is often used in areas of major concern due to a specific risk. When referring to the likelihood of an occurrence it refers to a probabilistic assessment of the outcome occuring. Likelihood is based on quantitiave analysis (IPCC, 2006). In most instances of uncertainty, it may be deemed more efficeint to categorize uncertainty using both degrees of confidence and likelihood of occurence (Risby, 2007). This assesment shall thus analyze the studies conducted and determine the level of uncertainty of the hydrological impacts of climate change on Egypt using both the levels of confidence and the likelihood of occurence. Through this assessment a matrix can be developed on the severity of impact and its degree of certainty. Through this matrix it will become evident what the gaps are in the research that has been compiled and what is remaining to be researched. At this point it will also become clear what is still uncertain and what needs to be known for suitable adaptation strategies to be put in place. Results and Discussion A compilation of all studies and research that has been done with respect to the impacts of climate change on the water resources and Nile river flows in Egypt is shown in table 8. It has been divided according to the model used, scenario, hydrological model, prediction year, precipitaiton change in the White Nile, precipitation change in the Blue Nile, and finally Nile runoff to Egypt. Some sources were lacking in the availability of data such as prediction year or hydrological model. Thus not all cells are filled in accordingly. The most important column in table 9 is the final column of Nile runoff to Egypt indicating either an increase or decrease in the Nile flows due to the results generated from its respective model. Table 10 is a synthesis of the degree of confidence and likelihood of the Nile river flow to either increase or
decrease by the years 2025, 2040, 2050, 2060, and 2090. This assessment was conducted according to the IPCC 2006 guidance notes for addressing uncertainties. Table 11 is a matrix that summarizes the severity of the impact on water resources in Egypt versus the degree of certainty.
Table 9: Compilation of previous literature on Nile River Runoff to Egypt Source
Hydrologic al Model
Precipitation Precipitation Nile runoff to Egypt change white change blue Nile Nile
Mohamed Sayed, GCM 2006
MGICC & NFS SCENGEN
‐ 1.43% to ‐ 2.14% to + ‐ 14% to + 32%. +9.94%. 10.65%
National Communication on CC, 1999
Mohamed ElShamy 2006
A2 & B2
SDM to NFS 2020
A2 & B2
2.Increase in B2, Decrease in A2
A2 & B2
Conway and Seven Hulme 1996 equilibrium GCM scenarios for 2025
50% reduction in runoff in the Blue Nile catchment due to a 20% decrease in rainfall
Range (due to differences between GCM scenarios) –9% to +12% change in mean
annual Nile flows for 2025
Yates and GCM Strzepek 1998
Five out of six climate models produced an increase in Nile flows at Aswan, with only one showing a small decrease.
al. 8 GCM
‐30 to ‐60% decreasse by 2050
Christensen et al.
MMD – A1B 2080 and ‐ 2090 emision scenario
Riebsame et al. GCM 1995
General decrease in flow in 8 out of 8 scenarios. ‐40 to ‐50% decrease by 2025
‐10 to +39% flow
Decrease in rainfall per season
Decrease of ‐6% with an inter‐ model range of ‐ 44% to +57%. Decrease in all seasons (ranging from ‐4% to ‐ 18%)
Reduced runoff by 3%
‐83 to +18% flow
GISS GDFL OSU
Milly et al., 2005
A1B emission sceanario
Beyene et al., 2007 11 GCMs A2 and B1 based on IPCC AR4
+10 to +30% increase flow
+11 and +14% increase flow (A2 and B1)
‐8 and ‐7% decrease
‐16 and ‐13% decrease
Abbreviations: GCM: Global Climate Model MAGICC/SCENGEN: Model for the Assessment of Greenhouse‐gas Induced Climate Change/ A regional climate SCENario GENerator. ECHAM4: European Centre Hamburg Atmospheric Global Climate Model version 4 (developed by Max Planck Institute for Meteorology) GCM2: Global Climate Model version 2 HadCM3: Hadley Global Climate Model version 3 UKMO: United Kingdom Meteorological Office: Global Climate Model GISS: Goddard Institute for Space Studies, New York, NY: Global Climate Model
GDFL: Geophysical Fluid Dynamics Laboratory steady‐state, Princeton, NJ: Global Climate Model OSU: Oregon State University: Global Climate Model SDM: Statistical Downscale Model NFS: Nile Forecasting System (Hydrological Model) MMD: Multi Model Data IPCC AR4: Intergovernmental Panel on Climate Change 4th Assessment Report
The Emissions Scenarios of the Special Report on Emissions Scenarios (SRES) – IPCC AR3 A1. The A1 storyline and scenario family describes a future world of very rapid economic growth, global population that peaks in mid‐century and declines thereafter, and the rapid introduction of new and more efficient technologies. Major underlying themes are convergence among regions, capacity building and increased cultural and social interactions, with a substantial reduction in regional differences in per capita income. The A1 scenario family develops into three groups that describe alternative directions of technological change in the energy system. The three A1 groups are distinguished by their technological emphasis: fossil intensive (A1FI), non‐fossil energy sources (A1T), or a balance across all sources (A1B) (where balanced is defined as not relying too heavily on one particular energy source, on the assumption that similar improvement rates apply to all energy supply and end‐use technologies). A2. The A2 storyline and scenario family describes a very heterogeneous world. The underlying theme is self‐reliance and preservation of local identities. Fertility patterns across regions converge very slowly, which results in continuously increasing population. Economic development is primarily regionally oriented and per capita economic growth and technological change more fragmented and slower than other storylines. B1. The B1 storyline and scenario family describes a convergent world with the same global population, that peaks in mid‐century and declines thereafter, as in the A1 storyline, but with rapid change in economic structures toward a service and information economy, with reductions in material intensity and the introduction of clean and resource‐efficient technologies. The emphasis is on global solutions to economic, social and environmental sustainability, including improved equity, but without additional climate initiatives.
B2. The B2 storyline and scenario family describes a world in which the emphasis is on local solutions to economic, social and environmental sustainability. It is a world with continuously increasing global population, at a rate lower than A2, intermediate levels of economic development, and less rapid and more diverse technological change than in the A1 and B1 storylines. While the scenario is also oriented towards environmental protection and social equity, it focuses on local and regional levels.