Broadsights (February 2014)

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February 2014 - Issue no. 9 Copyright © 2014 Broadsight - A Broadgate Initiative 1 Innovative

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t is with great pleasure to introduce a new revamped of Broadsight. The corporate monthly magazine from The Broadgate Financial Group. To view full interactive of Broadsight February 2014, go to http://joom.ag/EaGX

Transcript of Broadsights (February 2014)

Page 1: Broadsights (February 2014)

February 2014 - Issue no. 9

Copyright © 2014 Broadsight - A Broadgate Initiative 1

I nnova t i ve

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3 Foreword

4-5 Broadgate - How To Become a Homeowner In Thailand - Asia Internship Programme

6 News Report

7-9 Interview - Ullrich from University of Bangkok

10-11 ISR - A Day Visit at The Hub

13-14 Eco-Business - Greenpacs Green Gaff

15-16 Green Technology - 2 Ways To Lighten Your Bills You May Not Know

17-20 Analysis of the Month - China is Smokin’

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5 15

Generic

Insight

Individual Social

Responsibility

Sustainability

How to navigate

Broadsight is broken into four colour coded sections. To navigate, click on the page numbers or the coloured bars to jump straight into the page you would like to read. Broadsight has additional interactive functionality and many utilitarian features that makes viewing the digital edition a unique and rewarding experience with Interactive audio and video contents.

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E D I T O R I A L

February 2014 - Issue no. 9

Copyright © 2014 Broadsight - A Broadgate Initiative 3

Dear Reader,

It is with great pleasure that I introduce our new version of Broadsight. in this new edition we have improved in number of areas. in particular

1) Interactivity. Audio and visual content have now been included to enhanced your experience

2) Content Enhancement. Our authors are now write objectively and independently

3) Nagivation. Broadsight is now broken down into four colour coded sections allowing you to jump straight into the articles you want to read.

These improvements were made as a result of our feedback survey. So thank you very much for giving up your thought on how best to improve and ultimately innovate our magazine. We are taking Broadsight in a new editorial direction by becoming an independent information, digital magazine focusing on sustainable development across Southeast Asia. Once again thank you for your continuous support and readership.

Please enjoy.

John Mills President & CEO Broadgate Financial Group.

E d i t o r i a l

Vincent Houzet

[email protected]

Christoffer Axelsson

[email protected]

Muhammad Farhan Azama

[email protected]

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Broadgate Consultants (Thailand) Ltd.

2811, Level 28,The Offices at Central World,

999/9 Rama 1 Road, Patumwan, Bangkok10330 Thailand

+66 2264 5706

+66 2646 1004

[email protected]

John Milles

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E D I T O R I A L

February 2014 - Issue no. 9© Broadgate - A Broadgate Initiative 4

How To Become A Homeowner InThailand

Using a limited company is one of them. A foreigner can create a company or join one as long as his shares do not exceed 49%. Indeed, for protection reasons, a Thai company cannot be fully owned by foreigners. Once the farang is part of a local company, they can buy a land and build their house. This will still be the company’s property and in that way, it represents a danger, as the foreigner cannot have real control on it. In the previous years, many aliens created Thai companies for this only purpose, benefiting from the loopholes in the law. The government aware of this practice

decided to pay attention to every suspicious company and took actions against the simulated ones as shutting them down. Thus, creating a company should only be for the purpose of running a business and not a way to acquire property.

Finally, a last solution remains by renting land. A foreigner is able to get long-term lease agreements with Thai landlords. Those contracts can last a maximum of 30 years but are renewable twice. Thus, the foreigner may only rent the land but fully owns its

property and in this way seems an acceptable option.If you are willing to construct your own property in Thailand, Broadgate Construction has a solution for you. Our Easy Panel’s i n n o v a t i v e c o n s t r u c t i o n technology offers   a fast, economical and easy construction method for building a wide variety of projects, including security walls, individual or multi-family housing, as well as large multi-story residential and o f fi c e b u i l d i n g s a n d manufacturing facilities with green options.

Bénédicte Ciotti

Source

has never dreamt about sun, palm trees and a nice view on the beach? Getting a house in Thailand can represent a will for many foreigners either aiming to make investment or just to enjoy holidays. But regarding the “Act Promulgating the Land Code, B.E. 2497(1954)”, the “farangs” (foreigners in Thai) are not allowed to own any land. How can this dream become true then?

Despite the law, the purchase of one special kind of accommodation is possible. A condominium is an apartment where you share the use and access to the common facilities with the other owners. The purchase of such apartments represents the only exception for the foreigners. Therefore, the “Section 19 bis of the Condominium Act” states that the total area of a condominium owned by aliens should not exceed 49% of its total area. This option represents so an easy way for the farangs to obtain property with few limitations. Though it may not fulfil the dream of having a house; two other options remain.

Who

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R O A D G A T E

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Asia Internship Programme“Connects organizations based in Southeast Asia with young talented professionals looking for an internship”.

A job is what is going to drive your life and an internship is probably the most important step into a career. With the increasing number of candidates passing out each year, recruiters have more options. CVs that don’t strike or show a unique asset are just thrown away. Candidates struggle to get the job they have been preparing for so long and without professional exposure; things are less likely to work out. National Association of Colleges and Employers (NACE) in Internship & co-op survey revealed 51% from NACE employer members had been offered at least one job from doing an internship. As it is, Asia Internship Program (AIP) has been developed to help students get a walkthrough in their field of opportunity. Initiated by Broadgate Financial, it helps students connect with the best organizations in Southeast Asia. The first fully integrated professional internship placement service provider for Southeast Asia, AIP ensures that companies are able to recognize the best talents who could come and work for them and help students realize their potential.

The sooner candidates realize what an organization does and how, the sooner they are ready to take upon the responsibilities themselves. Most pass outs are unfamiliar with the environment, activities and objectives of a workplace or industry. An internship assisted by AIP will help them better understand organisational politics, the importance of working in

a team, confidentiality and other aspects of a profit and goal oriented organization. There is really no time to waste in the early years of a career. It takes half a lifetime to achieve your dreams and how, where and when you choose to take a step, matters a lot.

Discussing the selling points with Dr. Ted Fitzpatrick, General Manager of AIP, he quoted, “We are proud of our service because we have a close connection with both students and companies before, during and after the internship. We look for the balance between having the best intern for the company and the best company for the intern.”

As cliché as it sounds, today’s students are meant to be leaders of tomorrow and organizations are more than eager to take up and groom potential candidates into professionals who can become the next generation leaders to successfully run the company towards new achievements. If you are really looking for an opportunity, there is no dearth for one. In reality, success has no short cut and one who struggles to achieve his dream is the one who is finally able to prosper. It seems appropriate to summarise with the Asia Internship Programme slogan

“What are you waiting for? ”

Muhammad Farhan Azama

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N E W S R E P O R T

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Vietnam

HCM CITY (VNS)— The excessive number of industrial parks and export processing zones have caused serious environmental pollution in the experts said at a seminar held in HCM City last Friday.

Source

Indonesia

Indonesian President Susilo Bambang Yudhoyono wants families to stop at two children to prevent a burgeoning population overwhelming schools and services. Facing slower investment and one of the highest youth unemployment rates in the Asia-Pacific region, the government is concerned the demographic dividend that attracts companies seeking a young, cheap workforce will become an economic time bomb.

Source

North Korea

Even though North Korea isn’t part of ASEAN community it is a fellow neighbor and their latest accomplishment is worth a mentioning.

Once again, North Korea made a historical moment where they have sent an astronaut to the sun. Korean borned astronaut Hung II Gong was sent to the destination as an objective to bring some sample back to the earth. In North Korea, Kim II-sung is represent as a god by the Korean where as Kim Jong-ill is represent the “Sun of the Nation”

Source

Myanmar

Aung Sann Suu Kyi could be the next president of Myanmar: according to the current constitution the nobel laureate cannot stand for the elections scheduled for 2015 because her late husband and children are British. But the parliamentary committee could repealed this clause and at the same time allowing Suu Kyi to run in the elections.

Source

Thailand

Some 70% of small and medium-sized enterprises (SMEs) expect their revenue to drop this year compared to 2013 due to the political unrest, reports a survey by the Federation of Thai Industries (FTI) 

Among the 350 SMEs surveyed last week, none said their revenue this year would increase compared to 2013, while 10% said revenue would remain flat. Around 20% of the participants predicted their revenue

Source

ASEAN NEWS

BONUS NEWSFEED

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T h a i l a n d : E n t r e p r e n e u r i a l b u t n o t i n n o v a t i v e ?A global study on entrepreneurship

As a foreigner myself always looking out for income-opportunities I was quite happy to hear that a close friend of mine, Shariar Zadeh, already established in Bangkok, was getting involved with a research project conducted from Bangkok University which aims to discover the link between entrepreneurship and economic development in Thailand.

The research project represents only one part of the nationwide Global Entrepreneurship Monitor (GEM) project, the largest on-going study of entrepreneurial dynamics in the world, according to their website. Being eager to find out more I met with Ulrike Guelich, one of the key people involved in conducting the study for Thailand.

With the 2012 report covering Thailand just completed, Guelich’s job is now focused on presenting the results.

“The results are interesting. Thailand has a very high rate of entrepreneurs in their population, in fact the highest in the world regarding established business ownership with nearly 30% of the population. To compare the results of the report with other countries, especially within ASEAN, might help to develop policies and determine our failures.” said Guelich.

According to the study an entrepreneur is defined as someone

who starts, owns or runs a business. A business can be started by necessity or by opportunity. Necessity means a business started because of no other option of income or work. Opportunity means a business started due to an opportunity presenting itself to achieve a higher income and / or greater independence. Opportunity-based entrepreneurship is seen as the more dynamic entrepreneurial activity, which more often leads to the hiring of employees in the first years.

Geulich mentions Thailand has distinguished itself especially in 3 aspects:

-The high rate of total entrepreneurs in the population, with a majority of them being started by opportunity.

-A low rate of business discontinuance (meaning business’s being sold, shut down or abandoned)

-High rate of female entrepreneurs, being the highest compared to all other nations in the study. Which finds that for every 10 male entrepreneurs there are 12 women entrepreneurs, and that more women than men are found to be involved in business start-ups in Thailand.

Shariar Zadeh and Ulrike Guelich, working at Bangkok University School of

Entrepreneurship and Management.

Global Entrepreneurship Monitor (GEM) is a global study conducted by Bangkok

School of Entrepreneurship and Management (BUSEM), sponsored by Bangkok University since 2011. More

information about the report and BUSEM’s work is found at their website http://busem.bu.ac.th/mme/. the GEM

report can be found in its whole under this link:

http://www.gemconsortium.org/docs/3087/gem-thailand-2012-report

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The high female rate is something worth highlighting. As a westerner coming from a country that frequently reports about the issue of large gender gaps in society, inequality between males and

females in the working environment and with research suggesting a correlation between gender equality and development within the economy. Perhaps Thailand has something to teach us about this area, Guelich’s explanation is that it is a cultural thing “Thailand has historically, and through stories, described their women as strong and when asking Thai business-women they say themselves they can be very tough in doing business.”

Does that mean women perceiving themselves as strong and tough in doing business, will also be considered strong and tough by their customers? It is a question of attitude. If you blame the problems on in-equality on factors you have little impact on (e.g. social factors) are the problems less likely to diminish?

Another distinguishing fact, is that they could be perceived as slightly contradictive in that Thailand also has a very high (3rd highest) rate of ‘fear of failure’, with only Greece and Italy being rated higher. Asking Guelich can something be done in order to change this, she says little focus lies on this since it doesn’t seem to be so much correlated to entrepreneurship in the study. “There are other issues to work with, according to the report there is no problem with the Thai’s starting a business. However, the problem occurs when there are intentions of expansions or improvement through creativity and innovation, which leads to start a business that are already known to the market, a “me-too approach”.

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The report also discovers constraining factors for entrepreneurship. Ranking lack of Financial support as the highest followed by Government policies. The third constraining factor and the one targeted at BUSEM is Education.

“The constraining factor of lacking finance is ranked the highest all over the world and what we can do is to present our results to decision makers and try to influence better policies.” The educational constrainment found in this report is dealt with at BUSEM through the realisation of Thailand’s first entrepreneurship master programme. Their one-year Master of Management in Entrepreneurship (MME), a highly progressive educational program that has been designed in collaboration with Babson College specifically for future business owners.

Looking at previous data, before and after the 2008 financial crisis, it seems like Thai entrepreneurs have a good capability of coping with difficulties effecting the economy. This is shown by the fact that the same rate of business start-ups before the crisis was the same rate as established businesses after the crisis, indicating that the business start-ups had moved on to become established and managed to stay alive during the crisis.

As the report indicates the Thais don’t discontinue their business easily and Guelich believes that “ups and downs” has to be considered a natural part of being an entrepreneur and is factors an entrepreneur has to cope with.

Next, I wanted to know Guelich’s thoughts about the future of entrepreneurship in Thailand.

“Hopefully innovation will grow and if you look historically, entrepreneurs and especially women don’t have any higher level of education behind them. Today most entrepreneurs have a higher level of education, and whilst research shows a connection between higher education and a higher level of innovation, this will hopefully also show in the future of entrepreneurship in Thailand.”

Finally I ask something not mentioned in the report; the challenges a foreigner like myself faces if wanting to start a business in Thailand. Guelich first mentions the legal terms regarding the fact that you have to have a Thai national owning at least 51 % of the company, also that different areas of business, e.g. manufacturing, services, etc. will be treated with different support by the government, and the fact that there are also some industries foreigners are not even allowed to operate.

Regarding cultural differences Guelich points out that as a foreigner you have to adapt to the terms your facing and the people you would like to do business with, “it’s their country and their choice of whom they want to do business with.” One important thing Guelich mentions “It’s important to realise that it is no harder to start a business in Thailand than anywhere else, entrepreneurship

has different challenges wherever you go. Many people failing in running a business in Thailand would fail in their home countries also.” After all said and told it comes down to the point on whether the person is an entrepreneur or not. You can blame the failure on a number of circumstances but many people failing to run a business do it not because of specific regulations but because they started out for the wrong reasons or because they are simply not entrepreneurs.

Guelich’s last words are something I will take with me in the future, that it’s about the attitude and the realisation that it’s not a harder challenge to start a business in Thailand than anywhere else, but that it is a different challenge and there will be different challenges wherever you go. Some being easier and some harder.

From what I’ve learnt from my meeting with Guelich there seem to be a welcoming climate for entrepreneurship and a big potential for innovative idea’s to grow in the future. Two factors that I interpret as a promising future for entrepreneurship in Thailand.

Guelich’s work is already focusing on the next study while she at the same time will be travelling around the globe with the results from this report, comparing and discussing the results from other nations and how they can be used to influence decision makers and government policy’s, in order to improve the climate for entrepreneurship around the globe.

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“Ups and downs is a natural part of being an

entrepreneur and is factors an

entrepreneur have to cope with”.

So, are YOU an entrepreneur?

Christoffer Axelsson

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The hub is a youth club situated close to Hualampong train station in central Bangkok, run with the mission to protect children rights and provide support with whatever needs they may have. I’ve been invited to come along on a fieldtrip with the purpose to learn about family planning. I arrive at their location where I’m being welcomed by their friendly staff and before I know it I found myself being the one helped out and served instead of the other way around, since my intention was to come and offer myself as a volunteer. I asked them what I can do to help out and they put me to work serving food to the kids. Although the assignment I’ve been given, gives me the impression I might be more or less considered an obstacle between them and their food, I also know that they live under simple conditions not asking for much. I feel my simple presence is being appreciated providing them with a few smiles by the perplexing impression I give from behind the dining table.

After lunch we take off in their special designed van, decorated by the children themselves, to a nearby Museum. Khun Noth and Khun Gem are the two leaders with me on the trip, which is a

kind of educational trip they try to do on a weekly basis, Khun Noth tells me.

Today’s activity, along with everything else that the hub offers, is totally optional for the children to attend. By leaving the choice of attending to them it also increases their involvement in the activities at The Hub, feeling they’re not being forced to do anything.

With a range of five to thirty kids and teens coming and going at The Hub, eight of them with the addition of two older “veterans”, decided to join the trip today because even though The Hub is primarily for youngster between 5- 18 years, Khun Noht explains that if they a have place over and more people want to come it’s usually no problem.

The day at the museum goes well and everybody leaves with good spirits along with some new insights about family planning. Once back at the Hub I get the opportunity to have a chat with Ilya Smirnoff, executive director of The Hub as well as being involved in the Childline Thailand foundation, which is the network handling

the coordination between the different child-support

centers around Bangkok.

He shares his knowledge about what problems children in the poorer areas of Bangkok face. Child abuse, violence and other violations of the children’s rights is a problem that occurs in many of these areas. The issue isn’t that there is no regulation or laws’ prohibiting the abuse, but rather the lack of awareness about these laws and wrong practices, or what actually is classified as abuse.

Many violations, such as child molestation or exposure to pornography is occurring because people are unaware about it being illegal. A lot of the foundations work is therefore aimed at raising this awareness in targeted areas. Something which is being done by simple educational means, such as putting up stickers and posters illustrating what is considered as abuse, things that are easy to hand out and easily understood, even by people without reading skills.

A DAY AT THE HUB!

Khun Gem (to the left), me and

Khun Noth (to the right) posing outside

The Hub

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Love and compassion are necessities, not luxuries. Without them humanity cannot survive

Something which is being done by simple educational means, such as putting up stickers and posters illustrating what is considered as abuse, things that are easy to hand out and easily understood, even by people without reading skills. Whoever wants to come to help and spend a day with the kids at The Hub are welcome to do so. If you have special skills to teach, e.g. music skills, English teaching skills, computer skills etc, it’s extra welcome, or you can just come and help out on a daily field trip like I did. Donations and gifts are also very welcome. Money is needed to sponsor the purchase of school books, instruments, toys and clothes amongst other things. Daily activities at The Hub rely on donations, mainly from private donors, but also from corporations and other institutions. Some involvement with the government is also necessary, but this funding is dependent on

certain regulations and conditions being fulfilled.

My day at The Hub is something I will take with me as a positive experience. Easy accessible places like The Hub are needed in order to draw attention to the problems that exist in some childrens reality, a reality that is easy to miss for many that have been fortunate enough to never experience it themselves

There is no reason to hesitate whether you can contribute or not. If you can’t think of a way for how to contribute yourself, the staff at The Hub surely can. If you want to help out and get a good experience while doing it, visit their website http://thehub.childlinethailand.org/for further information.

Christoffer Axelsson

- Dalai Lama

The Hub Saidek Youth Club

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“The sooner you advertise here, the better”

CONTACT TO RENT THIS SPACE

+66 2 264 5703

[email protected]

Page 13: Broadsights (February 2014)

F U N G A T E

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Presently many people globally are realizing the benefits of going green and most of us are trying to create an optimistic impact on our environment. Harmful effects of global warming, threats caused to the ozone layer and several other weather changes stresses upon us the importance of going green.

From packaging supplies to light bulbs to recycling our waste are among a number of things that are now made as environmentally friendly. As packaging supplies are mostly turned into waste after usage they can have an immense effect on our environment. Fortunately, it is now possible to find out packaging materials that are completely eco-friendly and do not cause any harm to our environment. Greener products are supported by many government agencies but not all the manufacturers are ready to start up with green products.

Businesses that have understood the effects of carbon emissions are setting up processes to reduce these emissions. Green business is flourishing in different parts of the world and Greenpac of Singapore is the first in the industry to support green packing.

Those who believe going green is an expensive concept must listen to the words of Susan Chong the Chief Executive of Greenpac as she reveals that the factory is constructed within a limited budget of $20m.

Chong proudly says that Greenpac is a sustainable building where sustainable products are manufactured. They are different from the rest of the factories as Greenpac is comprised of people favoring a greener environment involved in making eco-friendly products.

Greenpac Tailor-made Innovative Packaging System

1. Easy to Store

2. Easy to Assemble

3. Low Weight

4. Increases Density

5. Reduces Freight Volumes

6. Reliable Deliveries

7. Minimizes Damages

Greenpacs Green Gaff

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S E Q U O I A C L U B

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They measured their carbon footprint even at the time of construction and made sure their carbon footprint is significantly less than usual buildings. The rooftop of this building is designed with solar panels which assures reduced energy consumption. A minimum of 30% of energy usage is saved with the use of solar panels. Since less energy is required during weekends, excess energy generated with solar panels is sold back to the national grid. This office is a zero energy setup and the solar panels generate 568000kwh of energy that is more than 160000kwh of the total office requirement.

Greenpac has introduced the concept of Revolutionary Systems Concept Packaging (RSCP™). Through this design it is possible to reduce carbon emissions more than usual models and at the same time it maintains the quality and durability of the product. Greenpac has also been awarded the Singapore packaging star award for this innovation.

The RSCP concept was originally developed by Greenpac in order to cater for the demand of a particular client. As they requested a contemporary packaging that does not cause damage to any of their products, this new concept was introduced. They complained the pointing nails used in traditional wooden pallets were continuously causing harm to the goods present inside. So the RSCP technology was developed in which nail-less technology is used.

As well as its packaging operation, Greenpac also enhances green energy through diverse methods. Employees of this factory are cultivating vegetables and herbs for their personal use. Hydroponics and compost are used for cultivation. Rainwater storage and many other innovative techniques used in Greenpac makes them distinct from others and they are standing as a role model for a greener and better future.

Muhammad Farhan Azama

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S E Q U O I A C L U B

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The global warming, combined to the growth of human population over the past 50 years has aggravated water use in concerned areas restricted during hot and dry seasons for the luckiest, and a more precious resource than oil in some parts of the world. In this kind of situation, it looks inappropriate to waste the “blue gold” to fill swimming pools or watering the flowers, but it’s also delicate to forbid that in developed countries. But there is solution for every problems, and sometimes this is not as sophisticated as we imagine. That’s what we will show with the rainwater harvesting system.

Already used by the farming communities in the actual Pakistan to irrigate the agriculture around three centuries BC, it simply consists to recuperate the water from rains and to store it in tanks for a future use. But if the principle remains the same, the new technologies permitted more sophisticated and automatic subsurface

systems to provide water for garden and appliances, and also drinking water with pump and filtering technologies. Largely used for agriculture, it became more and more popular for domestic use with the recent water restrictions that happened in USA and the south of Europe, places where people consume around 150 liters of water daily. Here is a demonstration of how a complete rainwater harvesting system that can save from 30 to 50 % of the total consumption from the mains in houses.

As the world population tends to be more and more concentrated in the big cities, it has been adapted to bigger structure such as residential and commercial buildings. In these cases the saving of water can reach 80 % of the total use. In addition of lightening operational costs, it became a major necessity in the driest regions of the globe.

2 W a y s T o L i g h t e n Y o u r B i l l s Y o u M a y N o t K n o w

Above Ground System Underground System

R a i n w a t e r H a r v e s t i n g

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S E Q U O I A C L U B

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These electrochromic windows became mainstream as show the increasing investments recently made in this technology, with the latest announcement of 100 millions USD from Madrone Capital Partners, a private equity firm. View, the company that got benefits of this amount, actually runs 50 projects in North America and claims an energy saving of 20% with its intelligent glasses.

Due to a thin film of metal oxides that can be electrically activated to tint the window, with a small amount of voltage, the glass get darker outside while staying clear and translucent inside. Adjusting the windows shades allows a lowered HVAC (Heating, Ventilation and Air-Conditioning) by limiting the sun’s impact on the indoor temperature.

The price of the product that tends to limit it to be a boutique product is going to reach a more reasonable point. Indeed, the multiplication of high end projects involving it and the possibility to adapt the glasses to the car market, suggested the cost to fall by 50% within 2020 by

economies of scale due to higher production and so economies of scale.

In addition of that, these windows start to prove their durability after already 6 years marketed by View Company. On the other hand, the product would be really considered as stable and truly profitable after 10 years in use, but the financial commitment operated in 2013 by reputable firms show how confident people can be concerning this Technology

E l e c t r o c h r o m i c W i n d o w s

Vincent Houzet

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A N A L Y S I S O F T H E M O N T H

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is SMOKIN’

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It indeed became usual to observe whole industrial park activities interrupted for days by the Chinese government in an effort to reduce carbon emissions during pollution peaks. In its wish to perpetuate a consequent economic growth rate, the communist party has started to realize the sacrifices of having an economy over-focused on heavy and polluting industry instead of orienting it towards a more service-based one. The necessity for setting up a real sustainable development plan appears now as unquestionable, even amongst the most skeptical of officials.

It is extremely difficult to evaluate the cost of air pollution in this country without any serious and stable national studies but an official

reported to the NY Times that 230 billion USD of environmental degradation was attributable just in 2010. This means that around 3.5% of the GDP created during this year will remain as a bill for future generations. As it is obviously not a worthy way to develop the country, the ministry of environmental protection took the initiative to reduce the level of inhalable particulates matter in cities by at least 10% against 2012’s level. However, with a more realistic vision in place, how to match a yearly GDP’s growth rate of between 7 - 8% with a greener vision of China, within just a few years? In Broadsight’s magazine, we believe that there are economically viable solutions to be considered!

,China again faced hazardous levels of air pollution in the major big cities such as Shanghai, Beijing and Harbin, rising in some parts up to 30 or 40 times the maximum level recommended by the World Health Organisation. Thick smog spread within the streets is very well-known for causing health issues to the population including lung cancer and asthma, but it also has severe economic, environmental and social consequences.

RECENTLY

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February 2014 - Issue no. 9

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First of all, let’s analyze where the pollution mostly comes from. After a quick look toward the sources of electricity production in China, it is obvious to determine the main cause of atmospheric pollution in the country: IEA has reported in 2012 that 79 % of electricity consumption is based on coal use which is almost double the world average rate of 41 %! The energy policy over the past twenty years, as represented in the chart below, is responsible for a third of all global nations emissions with 3’332 Mt of CO22 yearly pumped into the atmosphere. It is a revealer of the short-term vision based on cost efficiency only that China is now trying to change.

Now when we know that this is the most polluting way of producing energy (around two times more than natural gas as required by EIA) and as the nations consumption is rising by 10% a year, the priority appears clear.

Fortunately, the Chinese government seems to be conscious of that as one of the

main goals of their State Council Action’s Plan is to reduce the part of coal consumption within total energy usage to 65% by 2017.

It means that the country will have to totally reorganize its energy’s mix, preferably in favour of renewable energies. With no carbon emissions and increasing efficiency and the opportunities for green technologies to boost the economy, this looks by far the best option. The higher cost of electricity is indeed quickly compensated by attracting environmentally friendly technologies investment while it reduces the future expenses to fight air pollution. The CEC (Chinese Electricity Council) targets are going in this direction: wind power’s production is envisaged to rise from 68.6 GW in 2011 to 180 GW in 2020, while solar power should jump from 3 to 25 GW in the same period of time.

Although a 2013 Solidiance study shows us Hydropower will remain the main alternative to coal with 430 GW of capacity estimated by 2020,this source is clearly approaching decline due

to the potential lack of development sites and social conflicts that it causes.

Other renewable sources tend to be more and more attractive because of a non-impact on the environment and the support it could garner for a market largely dominated by Chinese firms: Chinese wind turbine manufacturers are in the top 10 for 27.1 % share of the global market in 2012, while 6 Chinese solar panel manufacturers are in the top 10 representing 22.85% of the global market.

Besides diversifying the energy mix, there are of course plenty of ideas to enhance air quality in large Chinese cities. One of them particularly caught our attention: a buildings energy efficiency. There is still a lack of data in this country so we will take the example of the United States to show that 38% of their carbon emissions come from the buildings themselves.

It means that the country will have to totally reorganise its energy’s mix, preferably in favor of renewable energies

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February 2014 - Issue no. 9© Broadgate - A Broadgate Initiative 20

Developing countries are building and developing exponentially as a logical consequence of economic growth. In other words, this is a golden opportunity to build energy efficient and green-friendly commercial and residential infrastructures. According to Berkeley National Laboratory’s researches the tertiary industry, residential and urban uses of electricity represents more than 25% of the total consumption in China (16% just from air conditioners) and it is important to notice that it’s the fastest growing part (around 10.6% yearly). Below shows some examples of energy saving solutions that could be set up in major buildings and their potential positive impact on environment:

If it is true that building green is usually 2% more expensive than classic constructions, the average saving of operational costs by 20% makes this investment quickly profitable5. Its benefits to the environment are combined with an enhanced comfort for employees via a better control of the temperature and lightening. In the case of China, it mostly could be a clever way to reduce carbon emissions while investing in long-term and sustainable development, avoiding in the same time any sacrifice to economic growth.

However air pollution is now a priority for the Chinese government, consequence enough to risk slowing down economic growth since it has been proved that the environmental damage is equivalent, or even bigger than, any gain of a few more percent of GDP. It is also good to notice the growing concern from the population protesting against health issues and poor quality of life. Furthermore, a survey reported that 80% of citizens consider environmental protection to be a higher priority than economic development. As there is probably nothing China fears more than their own people it’s reasonable to believe in their more sustainable-oriented development’s policy.

Vincent Houzet

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