LONDON: Richard Lambert, director of the Confederation of British Industries, stood before an assembly of businesspeople and journalists in this city’s spiraling, hypermodern City Hall last week and opened his talk on carbon emissions with a bludgeon of a fact. “Oil was $136 dollars per barrel this morning, he said. That is, roughly double what it was one year earlier.
Days later, oil prices jumped to record high levels above $142 a barrel.
The conference, sponsored by technology behemoth Siemens, sought to show how deep the push among corporations and governments toward greener technology has been over the past few years, as oil prices and fear of climate change have propelled alternative energy from the realm of public relations lip service to classic profit-maximizing, risk-minimizing investments.
As many of the conference speakers noted, this shift is requiring more nuanced teamwork between governments and firms: One speech produced a slide titled “running cities like businesses, and much of the scramble to reduce greenhouse emissions has been spurred by state legislation.
Back in Egypt, public-private partnerships have been buzzwords for years, as contracts to build and manage schools are doled out and formerly state-run banks and department stores are auctioned off.
Mohamed El-Mahdi, president and chief executive officer of Siemens Egypt, admitted reducing carbon emissions rarely falls among the highest priorities in Cairo. But saving money does, and rising fuel prices are not just a problem in the developed world. “Everything needs energy, he said.
“Basically all our business is affected by energy.
Generally, Egyptians are not alert to conservation because energy is still so cheap here, El-Mahdi said. “If you get into any office area, you see all the lights lit when the people aren’t there anymore, or they cool with the air-conditioner to levels that are unnecessarily low.
Rising fuel costs are a particular concern for the Egyptian government, which subsidizes firms and individuals at a rate that seems lavish compared with some states.
Much of the public does not understand the impact of their behavior on the “government bill, El-Mahdi said. To try to remedy this, Siemens is launching its National Energy Campaign this July alongside Procter and Gamble and the Ministry of Environmental Affairs.
The campaign will last three months and will introduce several energy-saving products as well as traditional advertising in Egypt.
The structure of Egyptian fuels subsidies is another concern, El-Mahdi said, although he said the state is moving in the right direction. “If you say that benzene is at LE 2 something and the normal price would be about LE 7, the bigger your Mercedes is, the more subsidy you consume, he said. “There’s something wrong with those mechanics.
At the London conference, a garden exhibit offered a tableau of humorous answers to the threats posed by climate change, including sun-resistant soccer jerseys to be shipped to Rio de Janiero and a comically oversized life preserver for the Statue of Liberty. The sheer amount of marketing dollars pouring into such displays is evidence that the global move is gaining traction.
But although Jeremy Oppenheim, director of McKinsey London, spoke of a “profound societal shift toward alternative fuels, many others admitted that alternative energy would not be taken seriously unless there is some strong, often cash, motivation attached.
In the United Kingdom, where industry energy subsidies are low compared to Egypt, oil prices are quickly providing just such a spur.
But at Siemens in Cairo, education has often been a more pressing concern.
During a visit in February 2007 by German Chancellor Angela Merkel, Siemens signed a contract with the Ministry of Trade and Industry’s Industrial Training Council to improve Egyptian training centers. Through the partnership, the state nominates centers, and then Siemens provides equipment at a discounted rate and develops training curriculums. Having set up about 26 centers, split between university-style and vocational training, the contract is about halfway complete.
The general move toward openness over the past few years has been to Egypt’s benefit, El-Mahdi said. But education is still lagging, he said. “We have a red flag here.
Enough money is spent on education in Egypt, he said, but what students learn is often irrelevant to the demands of the modern market.
“A lot of money is being spent in areas where there is no real market demand, El-Mahdi said. “This is an area where no government alone can succeed unless they go into partnership with the private side.
Such partnerships must be examined from two sides, he said. “If industry and the government are cooperating in an open and transparent manner to bring the industrial capabilities of the country forward, it makes sense, El-Mahdi said. “If it is being used to provide basic infrastructures, I’m a little bit more concerned.
In Egypt, knotty legislation and regulations could hinder deals with private companies to build infrastructure like schools and seaports, he said. “What this means basically is if the private side is asked to set up ‘PPP’ models under such a vague system, it will be damn expensive and it will not make sense.
Education and transportation are vital to keeping the economy competitive, and so the government will have to stay active, El-Mahdi said.
“It’s a fact that we are living in a globalized world, he said. “If we produce anything here in Egypt, we are competing against neighboring countries, but then countries that are further away like India and China.
“We have the growth of the population on the one side, which is not going to stop – Mubarak was very clear on this, about his concerns, he said.
“We need 1 million jobs per year, and if we fall below this seven percent [economic growth], we will have a huge gap on the employment side.
