Life Cycle Assessment as a Strategic Tool - Part 1/2

Life Cycle Assessment

Life Cycle Assessment (LCA) is a holistic scientific process used to evaluate the environmental impact of a material, produce, system or service. An LCA quantifies the impact of each component of the activity on the environment. LCA quantifies the use of physical resources as inputs and environmental impacts as outputs for any activity. Inputs may be raw materials, water, energy, land use, etc. whereas outputs are pollution, air emissions, water emissions, solid waste, radiation, etc. To be able to quantify and measure the environmental impact, numerous impact categories and indexes are used such as toxicity, carbon emissions, embodied energy, waste generation, land clearing, eutrophication, embodied water, acidification, etc. LCA breaks down all the parts and processes going to a material or a product to then be able to assess in detail where environmental impacts occur across the entire life-cycle of an activity. The final report entails these specific impacts and their effects on climate change, human health, ecosystem quality and non-renewable resources. This is an internationally recognized assessment tool used to inform decision-makers allowing them to reduce the negative impacts of new products on the environment, identify what can be improved in existing products, avoid modifying one aspect that may cause more significant issues at another stage in a product’s life and compare the environmental performance of similar products.

Everything that is created goes through several key life-cycle stages namely –

• Supply of raw material by suppliers
• Transportation
• Manufacturing
• Packaging
• Use
• Disposal

Some analysts use a Cradle to Gate analysis which includes the first four stages of getting a product to the market. Others use a more holistic approach called a Cradle to Grave analysis which considers all 6 stages from sourcing materials all the way to waste disposal. We propose Cradle to Cradle analysis considering a full loop of recycling and re-using as an alternative form of waste disposal. Cradle to cradle design derives inspiration from nature where there is no waste. Broad implementation of cradle to cradle design would allow space for responsible consumption while enriching and revitalizing damage in environmental systems.

Under LCA, consumers have the purchasing responsibility to consider the impact of their choices on the broader environment. Government has the responsibility to protect us from the harm of environment degradation by unsustainable production and consumption through regulation and monitoring. Businesses have the responsibility to continually reduce their ecological footprint.

Circular Economy

Living systems have been around for billions of years and will be sustained for many more. In the living world there’s no landfill. Instead, materials flow. One species’ waste is another’s food, energy is provided by the sun, species grow and die, and the nutrients return to the soil.

As humans, the current economic system we live in is linear relying on cheap easily available resources and functional energy. We take, make, use, and dispose; eating into a finite supply of materials and resources which generates toxic waste. As a result, resources and energy deplete and are increasingly becoming difficult and expensive to exploit. This system is unsustainable in the long run. This invites a change in the perception of the operating system of ownership we currently possess.

In a circular economy, consumers don’t buy goods, but license them. In this model, manufacturers and retailers remain the owners of the products while maintenance and repair become a part of the deal. In such a system, we can design products which can come back to their makers to reuse their technical parts and letting their biological parts add value to agriculture. It makes sense for the companies to retain precious materials when their future availability is uncertain and prices are forecasted to rise. In such a system, buying expensive goods upfront would no longer be a necessity. This system is already in place for cars and mobile phones. There is no reason why it cannot be extended for refrigerators, washing-machines, irons, etc. There would be a need to cycle valuable metals, polymers and alloys so they maintain their quality and continue to be useful beyond the shelf-life of individual products. Increasingly, these products would be made and transported using renewable energy. This converts the goods of today into the resources of tomorrow. The culture shifts from the present throw-away and replace one to that of return and renewing where products and components are designed to be disassembled and regenerated. This model builds prosperity long-term. Such a system even encourages companies to provide better maintenance service extending the responsibility of the product at their end.

Every product faces a wide variety of needs both from the viewpoint of a consumer as well as that of a producer. A one-size-fit-all proposition cannot be applicable. Tailored contracts and innovative solutions would be the need of this system. The essence of this system would be in variety, freedom, flexibility, and frequent upgrades. Communication technologies would be needed to find, exchange and re-market goods and services. The crux of the system lies in access to the information. The aim is to reduce our energy needs which assists the switch to renewable sources.

A circular economy works long-term by designing out waste, keeping valuable materials in the loop, maintaining and remanufacturing them, creating jobs in the process. In a circular economy, there’s a world of opportunities for individuals as well as businesses through creativity and innovation. The focus remains using waste to build capital rather than reducing it. However, the circular economy cannot work for just one manufacturer changing one product. It has to incorporate all interconnecting companies that form our infrastructure and economy.

LCA as a part of Strategic Sustainability

LCAs can be time consuming and therefore costly. Yet, are a powerful and critical path of the product development process. General knowledge available to assist us in life-cycle thinking increases with the number of LCAs conducted. This further introduces strategic decision making for sustainable designs into the product development process inviting innovation in outcomes. Product design engineers incorporate the use of a streamlined assessment tool into the design process.

Initially, the occurrence of environmental hotspots in product design and material choice are identified. Once an environmentally preferable product design has been achieved, alternative materials are considered. Also, the new material must be tested for interactions with the design specifications.

LCA Framework

LCA is a robust scientific process governed by the framework set out in ISO:14040 which details the ways an LCA can be conducted, reported and promoted. A detailed framework can be viewed as follows.

Goal and definition (ISO:14041)	The basis and scope of the evaluation are defined.
Inventory analysis (ISO:14041)	Creating a process tree in which all processes from raw material extraction through waste water treatment are mapped out and connected mass-energy balances are closed, i.e. all emissions are accounted for.
Impact assessment (ISO:14042)	Emissions and consumptions are translated into environmental effects. The environmental effects are grouped and weighed.
Improvement Interpretation (ISO:14043)	Areas for improvement are identified.

Full LCAs are used to understand where impacts are occurring and assess different products and processes to define environmentally preferable alternatives.

This provides a company with many strategic advantages by using LCA such as:

Help to secure market and competitive positions	A number of companies use sustainability/life cycle thinking as a part of their product marketing pitch. In some industries (e.g. floor coverings), it’s part of the marketing approach for all companies.
Answer requests for environmental and social information	Company stakeholders are increasingly asking for more and better information on the environmental footprint of products. Being able to quickly supply that information shows the customer that it is something that a company is paying attention to on a regular basis.
Enhance a company’s public image	Communication of environmental information, including life cycle or sustainability data, can help to improve the image of some industries and companies that have problems.
Participating in green purchasing policies	Over the past few years, there has been a growth in the number of global and domestic initiatives that require a company to report product specific environmental information. Some examples: ·         The Federal Biobased Product Purchasing Program ·         European Ecolabel for paints and varnishes ·         The Waste Electric and Electronic Equipment initiative
Define R&D strategies and EMS systems	LCA has traditionally been used as an R&D tool to evaluate material and production alternatives, and it can be linked with an EMS system to ensure that process improvements and innovations are carried through the organization.
Identify cost savings	In a number of instances, the big picture provided by life cycle assessment has helped companies identify a number of significant cost savings.

Illustration: Wooden Pencils vs Plastic Pencils

In a simple example to show how LCA can help us to make more ecologically sensible decisions, we consider the comparison between wooden pencils and plastic pencils. While wood is a renewable resource, wooden pencils face a limited lifespan. Plastic pencils can be refilled and reused for years. Their life is limited only by misplacement and destruction. We consider a life-cycle assessment of both the products considering all the inputs and outputs used and made in the production of the 2 varieties of writing instruments.

Wooden cased pencils have a 4 times the raw material consumption than plastic pencils. The energy consumption of the 2 varieties is similar in nature. In terms of CO emissions, wooden pencils fare poorly by 5-6 times.

However, plastic pencils have twice the consumption of non-renewable resources and use 40% more water. There is a higher requirement of non-renewable energy and 90% more organic pollutants are emitted. The waste-water effluents are greater and there more solid waste is generated in the process. It can be said that plastic pencil production creates significantly more hazardous waste as compared to wooden pencils.

Individually, there seems to be a lesser environmental impact to make a wooden pencil than a plastic pencil. However, plastic pencils last much longer than wooden pencils. The only differences in environmental impacts are in solid waste generation, water consumption and CO₂ emissions. While wooden pencils fare better by a marginal amount in the first two categories, it makes up for the gain in CO₂ emissions. It is not possible for one to ascertain what is better for the society, clean land, water or air and so we give all parameters equal importance. It may be for specific economies to decide what they need to value more. In this case, we consider that environmental impacts are similar enough for life-span to make a difference. When refilled as intended, plastic pencils seem to have a smaller impact.

A better solution can still be posed by extending the life of plastic pencils by providing a larger eraser which allows more graphite in the barrel. Another aspect may be improving the quality of the plastic to make it last longer and discouraging misplacement as that is the most often reason cited to lose a plastic pencil. Waste can also be reduced by minimizing packaging.

Walmart’s Sustainibility Product Index

Walmart has developed a Sustainibility Product Index which gives life cycle scores to each product on its shelves via a sustainibility labelling system. This system is deemed to be in place by 2016. This measure is deemed to drive product innovation while improving the brand image of Walmart showcasing it as a socially-conscious company.

Walmart has also committed to reducing GHG emissions by eiminating suppliers which are responsible for 90% of its emissions. Walmart expects to reduce 20M tons of GHG emissions by 2015.

Toyota Prius

Under the current Global warming discussion, Toyora focussed on the impact of its vehicles on the environment over its whole life-cycle. Toyota committed itself to reduce CO₂ emissions at every stage of its life by incorporating LCA.

Toyota Prius is built in Toyota’s Tsutsumi plant which is one of Toyota’s 5 sustainable plants. The plant’s overall CO₂ emissions have been cut by 50% between 1990 and 2006. The installation of 50,000 photovoltaic solar panels in 2008 reduced CO₂ emissions by a further 740 tons/year. The total output of the panels is 2 MW, viz equal to the consumption of 500 Japanese households. This provides for half of the electricity requirements of the plant. The remaining half is produced by gas co-generation. Water recycling plants have led to a 50% reduction in plant water discharge to the local river system. The discharghed water is 5 times cleaner than the river itself. The assembly building is painted with 22k m² of photocatalytic paint which has the same effect as planting 2k trees which cleans the air by producing oxygen in sunlight. In 2008, 50k trees were planted at and around the factory. Prius incorporates a hybrid battery which upgrades by increasing in performance but decreasing in size. The hull is made of ecological plastic which is the world’s first injection moulded material to be derived by plants. Eco-plastics emit 20% less CO₂ during a product’s life-cycle. The driving phase accounts for 71% of Prius’ whole life-cycle  CO₂ emissions. An ECO mode is provided which monitors the ecological impact of driving Prius. This can reduce CO₂ emissions by 10-15%. Every new Prius contains 5.7 kg of recycled plastic materials including soundproofing products. More than 85% of Prius is recyclable and more than 95% is recoverable. A near-zero emission recycling process ensures that 95% of Prius’ high-voltage battery components are recovered for reuse. The battery case, wires and electrial parts are reused for steel and electronic component manufacturing. The power cells are recycled using an induction based vacuum thermal process. Concentrated Nickel alloy is reused in battery production. After a 150k km Prius’ total CO₂ emissions are 37% less for a comparable diesel or petrol vehicle.

Sony

Sony continues to promote the collection and recycling of end-of-life products, as well as to design products that are easily recyclable. Sony also continues to develop recycling systems for global markets that suit local needs. Since the new legislation was enacted, Sony India has handed over more than 88 tons of E-Waste, including generated service waste, to the recycler. Additionally, Sony India has expanded its focus to include the creation of a broad network of E-waste collection centers, thereby making it easier for customers to turn in their e-waste. As of the end of March 2013, approximately 20 collection points across the country had been established. Sony India plans to review the results of this initiative at the end of its financial year and formulate future plans accordingly.

Sony incorporates the following measures.

• Campaign to green minds
• Involving the last mile repair shops
• Adhering to the rules
• Developing products that can be upgraded to extend product life
• Develop products that can be reused or disposed of safely at the end of product life
• Develop and manufacture products that use recycled materials where technically and economically justifiable
• Develop products that provide improvements in energy efficiency
• Develop products that minimize resource use and environmental impacts through the use of environmentally preferred materials and finishes

Tropicana

Tropicana assessed the impact of 3 factors in the production of orange juice along with independent partners at Earth Institute, Columbia University. The facors were as follows:

• Growing and squeezing oranges
• Energy use in manufacturingg
• Distances that raw materials and finished goods were shipped

Earth Institute combined all the lifecycle inputs to calculate the product’s carbon footprint. The full lifecycle assessment, all assumptions and caculatons, and the conclusions were independently verified by the Carbon Trust. According to the analysis Tropicana found out that a 2L tetrapack of pure-premium orange juice produces 1.8 kg of CO₂ equivalents. On the basis of the findings, Tropicana started initiatives according to a priority order to reduce factory energy consumption which is given as folows:

• Agricultural Practices
• Sourcing Locations
• Packaging Material - (a) Quality, (b) Reusability
• Thermal and Electrical Efficiencies
• Transportation Methods

3M

An LCA study helps in discontinuing ScotchGard™ and related fluorochemical products (produced by 3M), based on assessment of potential fate, transport, and exposure pathways throughout the supply chain in the continental U.S.

Bristol Myers Squib

Since 2000, Bristol-Myers Squibb integrated PLC (product lifecycle) into their product development process. The company has, as for example, developed a new, enzymatic-based, and more environmentally friendly process for synthesizing the antibiotic Cefprozil.

Limitations of LCA

The major disadvantage of quantitative LCAs is their complexity and effort required. Designers and manufacturing engineers find it almost impossible to practically work with LCAs because of the material and energy inputs and outputs in a dynamic system. The consistent lack of solid data about all aspects of a products life cycle adds to the problems. Further, the nearly infinite amount of decisions to make and data to deal with makes the process cumbersome. The lack of standardization results in numerous conversions and interpretations which may be left to the analysts’ judgement which in turn results in different views on what is environmentally correct. Finally, the approach is currently only suitable for design analysis and evaluation rather than design synthesis. LCAs are "static" and only deal with a snapshot of the picture rather than entire dynamic flowing environment.

References

1. Life Cycle Assessment as part of Strategic Sustainability for Product Design. Autodesk. 2012.
2. Life Cycle Assessment. Cascades Fine Paper. 2011.
3. Toyota Prius Life Cycle Assessment Film. Toyota. 2010.
4. Life Cycle Assessment (LCA). Aebico. 2013.
5. Piekarski C M, da Luz L M, Zocche L, de Francisco, A C. Life Cycle Assessment as Entrepreneurial Tool for Business Management and Green Innovations. Journal of Technology Management and Innovation. J Technol Manag Innov. 2013. Volume 8.
6. Lifecycle Assessment: Where is it on your sustainibility agenda? Deloitte Development LLC. 2009.
7. Understanding Our Carbon Footprint. Tropicana.
8. Tate C, Padilla J, Jiang G. Wood-Cased Pencils vs Mechanical.

India Inc.'s Role as an Enabler in an Era of Constant Change

Changes Needed In Leadership Education

Abstract

Modern Education system is based on scientific principles which most business schools accept for academic credibility. However, Leadership Education is more of an art than a science and needs to be taught like an art.

Next we discuss the reasons modern business schools fail to produce leaders whose careers, in general are successful as compared to their counterparts without business school education. We study the causes of decline of business school education and discuss some remedial measures.

Assumptions

While references and explanations are given to most statements in this paper, there are 3 fundamental assumptions I make without any explanation.

1. Human behavior is unpredictable in nature
2. "Leadership” and “Leadership Education” are not entirely the same thing and may have differences
3. Leadership Education is primarily delivered by Business Schools

Leadership Education as an Art

The current Education system is predicated on the idea of academic ability. Reason being that the whole system was invented round the world in the 19^th century prior to which there were no uniformly structured public systems of education. They all came into being to meet the needs of industrialism.

The hierarchy came to be rooted in two ideas. One, the most useful subjects were science, technology and math, which came to define academic institutions and academic credibility. Two, the idea of academic ability came to be as a measure of intelligence, because the universities designed the system in their image. The whole system of public education around the world was a protracted process of university entrance (Sir Ken Robinson 2006).

In 1959, the Gordon and Howell report described American business education as “a collection of trade schools lacking a strong scientific foundation” (Zimmerman, 2001). The Gordon and Howell Report and funding from the Ford Foundation and the Carnegie Council (Pierson, 1959) started business schools on their continuing trajectory to achieve academic respectability and legitimacy on their campuses by becoming applied social science departments. In the process of achieving academic legitimacy, business schools took “on the traditions and ways of mainstream academia” (Crainer & Dearlove, 1999). Quantitative, statistical analyses gained prominence, as did the study of the science of decision making. In both their teaching and research activities, business schools “enthusiastically seized on and applied a scientific paradigm that applies criteria of precision, control, and testable models” (Bailey & Ford, 1996).

However, unlike scientific research, research at a b-school need not necessarily be implementable or even reproducible elsewhere. Infact, results observed by a company might not necessarily be implementable in another. This is because traditionally, science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions (Wilson, 1998); while leadership deals with humans behavior which denies predictability.

Moreover, scientific method works on the principle of reproducibility, which govern that any experiment has the ability to be entirely reproduced, in similar environments, at any point in space and time, either by the researcher or someone working independently. The unpredictability of human emotions and mindsets do not grant this right to leadership theories based on scientific principles.

If Leadership Education were to be visited by an alien who asked what is it for, looking at the output, who does everything they should, who are the winners, one would conclude that the whole purpose of Leadership Education throughout the world is to produce university professors who teach and research on Leadership Education.

Leadership Education is more of an art or craft than a scientific study. When an artist breaking the traditional rules of her/his craft does not make a bad art, but rather a new art which may or may not be appreciated. However, scientific theory is either right or wrong, and remains so at any point of time anywhere in the universe. Leadership decisions, like art, change credibility with context, audience, and time. Hence, it is safe to say that concrete theories are not the path to follow for Leadership Education, but rather contextual stories help develop leadership. One may read all literature available on Leadership and still, going against the theorized principles might make good decisions.

Leadership, like any art, is better learnt with practice than simply studying the available models. Leadership problems demand imagination, creativity and out-of-the-box thinking for their solutions. Teaching Leadership as a science with theories and numbers sounds good for academic credibility, but not for real world applications. That is similar to teaching dance via lectures in the field of human anatomy; or teaching cycling with an expectation that once one has learnt all the principles of physics and balance, one can learn to ride a bicycle without falling.

Why Business Schools fail to produce good Leaders

In the last half-century, the business of business schools has grown exponentially. Between 1956 to 1998, the number of MBA degrees awarded in the US grew from 3200 to 102000, i.e. by almost 32 times (Zimmerman, 2001). By 2001, 92% of all accredited colleges and universities in the US offered an undergraduate major in business (US News and World Report. 2002). In Britain, the number of business schools rose by 6 times from 20 to 120 between 1980 and 1996 (The Economist, 1996).

Since the mid-1980s, 36 Americans have each given more than $10M to business schools (The Economist, 1996). In the United Kingdom, business schools “are among the top 50 exporters, attracting over $640M a year from other countries” (Crainer & Dearlove, 1999). A McKinsey-Harvard report from 1995 estimated that non-degree executive education “generated around $3.3 billion and was growing at a rate of 10% to 12% annually” (Crainer and Dearlove, 1999).

The business and growth of business schools is depicted in Appendix 1.

Given the overbuilt setup of the MBA industry (Gaddis, 2000), and the huge profit-making sector it has turned out to be, it is not surprising that so many MBA schools have come up in such a short span of human existence. Usually, business schools charge between $7k to $110k for an MBA degree. This is much more than a regular engineering degree and lacks infrastructure such as laboratories and high-costing experimental equipment. The rationale behind this is that business schools offer faculty who are capable to earn more than engineering faculty in their respective areas. Also, a business school graduate, in general, tends to earn more than an engineering graduate. While this is true in most cases, this has led to business schools as a fast-profit generating enterprise where sometimes small incapable players jump in to have a slice of the pie.

From data gathered from Business Insider, Businessweek, The Economist, US News, Forbes and Financial Times (2011) on 341 US business schools, a study conducted shows that judging on the basis of starting salaries as a measure of Education competency, most business schools fail as compared to the premier ones.

As with any status based system, status is achieved partly through the status of the organizations with which one associates (Podolny 1994). However, most business schools fail to even come close to the standards set by the premier business schools.

Given the vast supply of an MBA degrees and everyone wanting one, the degree is being sold easily, however, each MBA degree does not have the same value as conferred in the above study. Low cost price and high selling price of business education makes it a “cash cow” at many universities. This is also proved by the numbers of programs which have proliferated including, more recently, part-time, evening, and weekend programs; executive MBAs; and expansion of existing programs. This huge supply of MBAs automatically translates into less advantage in terms of salary or other career outcomes for MBA graduates.

The current system of Management Education has created a bottleneck for competition even in good accredited universities where it’s difficult to get in but getting insanely easy, making grades or completion useless measures of learning. Grade inflation is pervasive in American higher education (Kuh & Shouping, 1999; Muuka, 1998; Redding, 1998).  As a consequence, almost no one fails out of MBA programs, which means the credential does not serve as a screen or an enforcement of minimum competency standards. If the MBA degree doesn’t really distinguish among people then it is no surprise that it doesn’t have much affect on career outcomes.

Armstrong, a professor who has taught MBAs for more than 30 years observed, ‘In today’s prestigious business schools, students have to demonstrate competence to get in, but not to get out. Every student who wants to (and who avoids financial and emotional distress) will graduate. At Wharton, for example, less than 1% of the students fail in any given course, on average… the probability of failing more than one course is almost zero. In affect, business schools have developed elaborate and expensive grading systems to ensure that even the least competent and least interested get credit (1995).’

In India, a city named Kota has come up with a network of non-accredited educational institutes which coach candidates for India’s most competitive university entrance examination, IIT-JEE where the intake is almost 1% of the appearing candidates and is decreasing annually by about 0.05% due to increasing number of candidates.

Kota specializes in coaching institutes which train students for IIT-JEE. In every institute, there are batches of students. Monthly tests determine the batches of each student. For example, the top 100 scorers will be put in one batch, the next hundred in another batch and so on up to the last hundred. This creates a discriminatory class division of which every one of the 80,000 students of Kota are a part. While it becomes highly depressing for students in the bottom-most batches, it tells the students where they presently stand by the IIT-JEE standards and which of them need to work the hardest.

Often, this discrimination on the basis of knowledge results in severe anxiety, depression and even suicides. While this is too extreme a measure to be taken at university level, it clearly shows that there needs to be a regular check on students academically to keep them in check and to let them know where they currently stand, so as to let them know what the prospects of their current position are. In business schools, this characteristic of education seems to be lost and is resulting in a pool of MBAs who do not know where they stand when it comes to looking for career opportunities.

References

• AACSB Newsline. 1999. Number of undergraduate business degrees continue downward plunge, while MBA degrees awarded skyrocket. Doctoral degrees on the decline.
• Armstrong J S. 1995. The devil's advocate responds to an MBA student's claim that research harms learning. Journal of Marketing. 59: 101-106
• Bailey J & Ford C. 1996. Management on science versus management as practice in postgraduate business education. Business Strategy Review. 7(4); 7-12
• Crainer S & Dearlove D. 1999. Gravy trainings: Inside the business of business schools. San Francisco: Jossey-Boss
• Gaddis P O. 2000. Business schools. Fighting the enemy within. Strategy and Business. 21(4): 51-57
• Gordon R & Howell J. 1959. Higher Education for business, New York Columbia University Press.
• Kuh G D & Shouping S 1999. Unravelling the complexity of the increase in college grades from the mid-1980s to the mid 1990s. Educational Evaluation & Policy Analysis. 21: 297-300.
• Pfeffer J & Fong C T. 2002. The End of Business Schools? Stanford University.
• Pierson R C. 1959. The education of American businessmen. New York: McGraw-Hill.
• Podolny J M. 1994. Market uncertainty and the social character of economic exchange. Administrative Science Quarterly. 39; 458-483.
• Sir Robinson K. 2006. Do Schools Kill Creativity? TED.
• The Economist. July 20, 1996. Dans and Dollars.
• US News and World Report. 2002. Top Business Schools: 2002.
• Wilson E O. 1998. Consilience: The Utility of Knowledge. New York, NY: Vintage Books. 49-71.
• Zimmerman J L. 2001. Can American business schools survive? Rochester NY: Unpublished manuscript, Simon Graduate School of Business Administration

Resources, Energy, and Growth in the Indian Context

Introduction

It takes nature about 5 million years to produce the fossil fuels the world consumes in 1 year. The modern way of life is dependent on fossil fuels whether it be for furniture, entertainment, comfort materials, etc. However, fossil fuels are non-renewable in nature. Since 1860, geologists have discovered over 2 trillion barrels of oil (318 km³). Since then, the world has used approximately half of it. ^[1]

Once a source starts producing fossil fuels, be it oil or coal, it’s only a matter of time before it a matter of time before it enters a decline. Individual mines and wells have different production rates. When taken together, we find that the production increases after the source has been discovered, reaches a peak and enters a permanent fall. In 1956, Shell geoscientist M King Hubbert predicted that the overall petroleum production would peak in the US between 1965-75.^[2] In 1970, the US oil production peaked and entered a permanent decline. Subsequently in 1974 Hubbert projected that global oil production would peak in 1995.^[3] Various predictions were made by others as trends fluctuated in the intervening years claiming different dates for global peak oil. Hubbert’s theory, and its implications for the world economy, remain the only factual proof about the case.

Evidence is mounting that the world’s oil production is peaking, or is close to it. The rate of discovery of new oil fields peaked in the 1960s. Over 50 years later, the decline in discovery of new oil fields seems unstoppable. 54 of the 65 major oil producing nations have already peaked in production. India said to have peaked in 2007.

Modern cities are fossil fuel dependent. Even roads are made from asphalt, a petroleum product, as are the roofs of many homes. Large areas would be uninhabitable without heating in the winter or air-conditioning in the summer. Suburban sprawl encourages people to drive many miles between work, school and stores. Major cities have been zoned with commercial and residential areas placed far apart forcing people to drive. This concept of Suburbia was designed on the assumption of plentiful oil and energy. Chemicals derived from fossil fuels, i.e. petrochemicals are essential in the manufacture of countless products from phones to footballs. The modern system of agriculture is heavily dependent on fossil fuels, as are hospitals, aviation, water distribution systems, and the military. Fossil fuels are also essential for the creation of plastics and polymers which become the key ingredients in computers, entertainment devices and clothing.^[1] We are so dependent on oil and other fossil fuels that even a small disruption in supply may have far-reaching effect on every aspect of our lives.

Energy

The average Indian uses 6.42 MWH of energy per year, i.e. the equivalent of 2.4k slaves working 24 hours a day.^[4] Materials which store this energy for work are called fuels. Different fuels have different energy densities, i.e. the amount of extractable energy in the material per unit mass or volume. Of these fuels, oil is the most critical. India consumes 211.42 MT of oil per year, which is equal to 267.62 m³. In the year 2011-12, 81% of India’s oil was imported from Saudi Arabia (28.17%), Iraq (14.09%), UAE (10.68%), Nigeria (9%), Kuwait (8.91%), Iran (6.38%), Malaysia (4.97%), Angola (3.98%), Indonesia (3.31%) and few others (10.51%).^[5] Several factors make oil unique. It is energy dense (46.3 MJ/kg), liquid at room temperature, easy to transport, and usable in small engines.

To acquire energy, energy needs to be used. The trick lies in using smaller amounts to find and extract larger amounts. This is called EROEI (Energy Returned On Energy Invested). If more energy is used to get the fuel than is extractable from the fuel, it’s not worth the effort of extraction.

It is possible to convert one fuel source into another, at the expense of energy density contained. For example, there are unconventional fuels such as tar sand and shale, both of which can be converted to synthetic crude oil. However, this requires large amounts of heat and freshwater reducing their EROEI which varies from 1.5-5.

Coal exists in vast quantities and generates almost half of the India’s electricity. India uses almost 535.88 MT of coal per year. Production issues arise as surface coal is depleted and miners have to dig deeper and in less accessible areas. Many use destructive mountain-top removal to reach coal deposits, causing environmental mayhem.

Natural gas is often found alongside oil and coal. Indian gas production is said to have peaked in 2001.^[6] Recent breakthroughs have allowed the extraction of unconventional natural gas, such as shale gas, which might offset the decline in the years ahead. However, it is controversial as it needs high prices to be profitable.

Large nuclear fuel reserves for fission still exist. To replace the 3.57 petawatt hours India currently produces per year by fossil fuels would require 303 nuclear power plants.^[4] At that rate, the known reserves of fossil fuels would last for only 2 years. Experiments with Plutonium based fast breeder reactors in France and Japan have been expensive failures. Nuclear fusion faces massive technical obstacles.

Wind power has a high EROEI, but is undependable. Hydropower is reliable, but most rivers are already dammed. Conventional geothermal power-plants use existing hotspots near the Earth’s surface. They are limited to those areas. In the experimental system, 2 shafts are driven 10 km deep. Water is pumped down one shaft to be heated in fissures then rise up the other generating power. This technology might supply 138µ% of India’s energy. Wave power is restricted to coastal areas. The energy density of waves varies from region to region. Transporting wave generated energy in land is challenging. Also, the salty ocean environment is corrosive to turbines. Bio-fuels are fuels that are grown. Wood has an energy density of 18 MJ/kg, i.e. 39% of that of crude oil, and grows slowly. India uses 216 MT of wood per year. Bio-diesel and ethanol are made from crops grown from petroleum powered agriculture. The energy profit from bio-diesel is 42.2 MJ/kg and that of ethanol is 30 MJ/kg. Some scientists consider turning corn into ethanol. Using ethanol to supply 10% of India’s oil demand in 2012 would require 3% of India’s land, i.e. 5% of the agricultural area of India. To supply all of India’s oil consumption, would take 50% of the land used to grow food.

Hydrogen has to be extracted from natural gas, coal, or water; which uses more energy than is generated from hydrogen. This makes a hydrogen economy unlikely. All of India’s photovoltaic solar panels working at 100% efficiency are expected to generate as much electricity as 9 coal power plants by 2020. The equivalent of 1-4 tons of coal are used in the manufacture of 1 solar panel. 29,293 km² of panels would have to be covered to meet India’s energy demands. As of 2010, there were only 133 km². Concentrated solar power, or solar thermal, has great potential. However, at the moment, only 6.42 km² of installations have been made.^[7] They are limited to sunny climates using large amounts of electricity to be transmitted over long distances.

All the alternatives to oil depend on oil powered machinery or require material such as plastics that are produced from oil. When considering future claims of amazing new fuels or inventions, it must have a working commercial model of the invention. The energy density must be high enough to make it commercially viable to extract energy out of it. It must be easy to store and distribute, reliable, scalable, devoid of hidden engineering challenges and environment friendly. A transition from fossil fuels is a monumental challenge. As of 2013, coal generates 50% of India’s electricity; 10% is from natural gas, 9% is from oil and 31% from hydro. Nuclear and renewables other than hydro only generate 1% of India’s energy demands. It is difficult to replace a system based on fossil fuels with a patchwork of alternatives. Major technological advances, political will and cooperation, massive investment and international consensus would be needed. It would involve a retro-fitting of the $1.8 trillion Indian economy including transportation, manufacturing industries, agricultural systems and officials competent enough to manage the transition. If such a change is put in place, the current way of life must change.

Growth

Humanity has lived on a model of growth since the discoveries of oil and coal. Growth, low or high, produces large increases in total volume over time due to an exponential effect. At a 1% growth rate, an economy doubles every 70 years. At 2%, it doubles in 35 years. At a 10% growth rate, it doubles in only 7 years. If India keeps growing at the current rate of 3.2%, it will double every 22 years. With each doubling, the demand for energy and resources will exceed all the previous doublings combined.

Banks lend money they don’t have, in effect, creating it. The borrowers use the newly created money to build their businesses and pay back the debt with an interest payment, which requires more growth. Due to this debt-created money, most of the world’s money represents debt with interest to be paid.^[8] New and ever-larger generations of borrowers produce growth and thus pay off these debt, inflating the balloon of world economy to the point near its collapse. This system is meant to either expand, or die. Partly through this debt system the effects of economic growth have been spectacular in GDP, damming of rivers, water use, fertilizer consumption, urban population, paper consumption, motor vehicles, communications, and tourism. Economic expansion has also resulted in increases in atmospheric nitrous oxide and methane, ozone depletion, increases in great floods, damage to ocean ecosystems, including nitrogen runoff, loss of rainforest and woodland, increases in domesticated land, and species extinctions.

Conclusion

The Indian Economy grows at about 3.2% an year consuming increasing amounts of non-renewable fuels, minerals and metals, as well as renewable resources like water, forests, soils and fish faster than they can be replenished. At this rate, the economy will double every 22 years. The problem is intensified by other factors: Globalization allows people on one to buy goods and food made by those on another. The lines of supply are long, placing strains on a limited oil resource.^[9] We now rely on distant countries for basic necessities. Modern cities are fossil fuel dependent. Most Banking Systems are based on debt, forcing people into a spiral of loans or repayments - producing growth.

Conservation will save money, but it alone won't save India. If some people cut back on oil use, the reduced demand will drive down the price, allowing others to buy it for less. In the same fashion, a more efficient engine that uses less energy will, paradoxically, lead to greater energy use. In the 19th century, English economist William Stanley Jevons realized that Better steam engines made coal a more cost effective fuel source, which led to the use of more steam engines, which increased total coal consumption.^[9] Growth of use will consume any energy or resources saved through conservation.

So called sustainable growth or smart growth won't help, as it also uses non-renewable metals and minerals in ever increasing quantities. Recycling will not solve the problem, as it requires energy, and the process is not 100% efficient. It is only possible to reclaim a fraction of the material being recycled; a large portion is lost forever as waste.

Many economists believe that the free market will substitute one energy source with another through technological innovation. However, the main substitutes to oil face their own decline rates. Substitution also fails to account for the time needed to prepare for a transition. The issues of energy shortages, resource depletion, topsoil loss, and pollution are all symptoms of a single, larger problem: Growth. As long as our financial system demands endless growth, reform is unlikely to succeed.

What should a person do to prepare for such a possible future? The society must fall back to a simpler state, one in which energy use is a lot less. This would mean a harder life for most. More manual labor, more farm work, and local production of goods, food and services. Supplies of food and goods from far-away places must be decreased. Walking and recycling must gain importance. People must get used to using less electricity and debt, and try to avoid banks. Instead of shopping at megastores, local businesses must be supported. Food grown locally must be brought. Gardening to grow one’s own food is also an option, while learning how to preserve it. Should the larger economy fail to function^[10], local currencies will need to be used while developing greater self-sufficiency. None of these steps will prevent collapse, but they might improve chances in a low energy future, one in which we will have to be more self-reliant, as our ancestors once were.^[11]

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