A veteran freelance management consultant and professed 'enemy' of renewables, Sakis Galigalis explores the relationship between free-market globalisation and overconsumption
By Nathan Johnson
Photo courtesy of Sakis Galigalis
Tell a little about yourself, including something about your current position and how you arrived there.
I am a nature lover, and trained as a mechanical and electrical engineer at NTUA in Athens, and as a management scientist at Brunel University in London. I have over 35 years of professional experience ranging from industry, trade, the energy sector, and management consulting. I've worked in many countries in the EU, the CEE and NIS regions, the Middle East, Arab Gulf Cooperation countries, and in Africa.
I've worked for the last 15 years as a freelance management consultant, with frequent assignments in the fields of energy and the environment.
In assessing the severity of the Earth's current environmental situation, do you think we can somehow manage to turn things around? If indeed we can, how is this going to happen?
To answer whether we can turn things around, we should first try to diagnose what has brought the planet to its current environmental situation.
I would quickly point to two diseases, though I'm sure there are others, too. Explosive population growth is certainly one of them. The selfish and arrogant behaviour of ourselves, the human species, towards the environment seems to me to be the other illness. In the last centuries, we have gradually developed less and less respect for other species and the planet's resources. Even worse, we have moved away from anthropocentric and socio-centric values, and we seem to have almost completely surrendered to the contemporary siren song of leading shallow, material-driven lifestyles.
If this diagnosis is correct, then we should ask ourselves if we can do something about world population growth and the inhuman material lifestyles that we in the so called 'developed' world have more or less all adopted. Admittedly, these are very challenging issues to touch upon.
You have been fairly outspoken about the need for strict forms of regulation to rein in profligate amounts of consumption. What kind of regulations do you have in mind, and how and where should they be applied?
I'll leave aside for now the human and social component of our modern life, but which certainly calls for thorough review, as we definitely have to restore our broken social web. Insofar as society and economy influence one another, I'll turn to economy.
The 'affluent society' model has spread quite ruthlessly all over the world via the 'free market' approach, especially in the last centuries. Despite some very strong points inherent in the free market system, this has led to overconsumption of valuable resources, whether energy, water or the environment in general. In other words, I believe that promotion of the 'glamour lifestyle' though the free market mechanism has led to unsustainable situations. We in the developed world have come to consume far too much. And now globalisation, with all of its good and evil features, is spreading our overconsumption pattern at a gallop to 'developing' countries.
It is true that in the last decades a green movement has emerged, which originated in the developed world and now covers virtually the whole planet, to stand up against this degradation. For example, thousands if not millions of NGOs have been established — even in the most remote locations. We have ministries of environment in most countries. We even have exclusive 'green' political parties in some countries. Formal education curricula, at all levels, now include environmental subjects. Significant effort and resources have been applied worldwide to raise awareness of environmental issues through advocacy, through lobbying and so on — all in the expectation that persuasion will result in voluntary behavioural change on part of the people. It is therefore natural to wonder: Has all this paid off? Has the situation started to improve, or even to stabilise?
Obviously, these are counter-factual questions for which there are no scientifically sound answers. While I don't have the latest figures at hand, my feeling is that the situation is, unfortunately, getting worse. Our compatriots still seem to find the pursuit of a flashy lifestyle irresistibly attractive. It is striking that even when crude oil prices rocketed to about 150 US dollars barrel, a year ago or so, energy demand showed little sign of decline!
On these grounds, I maintain that we in the developed world have to admit that persuasion, though very useful, is not enough. If we are truly sincere about looking after the environment, we have to resort to coercion.
Specifically, what types of coercion?
In the current free market environment, the tool for exercising coercion is what the economists call market regulation. This should entail a mixture of suitable restrictions and/or prohibitions, coupled with steep taxation that is strictly reciprocal and allocated, first of all, to the weakest and poorest parts of our societies for the damage inflicted on them; and, second, to environmental actions. Restrictions and prohibitions can cover things like private cars with engine volumes above, say 900ccs, and disposable items — which are not only responsible for a huge waste of resources, but contribute to the urban solid waste plague. Steep taxation should cover all forms of final energy — through carbon tax schemes, for example — water usage, et cetera.
We should be prepared to use regulation in a dynamic way, because there are things that we don't know. We have no experience with measuring demand elasticity alongside final energy retail price increases, for example. We might increase taxation as much as necessary in order to bring down demand and consumption patterns, so as to reach sustainable situations. A long-term trial and error approach seems unavoidable.
I understand that most people will dismiss my proposal as crazy. All I can reply to them is that the situation with environment is so severe that, if we want to be serious, we do have to 'break eggs'. In fact, we have to break many.
Let me highlight some features of the 'recipe' that I propose. It is cost-free for state budgets. Through public consultations, governments simply need to develop, plan and administer the regulations. It is also socially fair. It doesn't ignore the poor, and it provides them with full and parallel compensation for damages inflicted on them. It will create strong incentives for all of us, both poor and rich, to use resources more carefully. But those who insist on over-consumption of resources will have to pay a steep price.
You're also critical of the Kyoto Protocol from the point of view that it doesn't go far enough?
Yes indeed, but in the meantime I have developed second thoughts about it. I recently came to admit that I have been rather unfair in my criticism of the Kyoto Protocol and what is to follow. I rather underestimated the inherent difficulties in creating international action for a subject so broad and vital like greenhouse gas, or GHG, emissions. Still, I have to highlight some of the Kyoto issues which puzzle me.
First, there are some climate scientists, mainly Canadians, who question the scientific basis of the Kyoto Protocol, and more broadly the work of the Intergovernmental Panel for Climate Change. They argue that the IPCC is more a political than a scientific body. They claim that climate is not changing only now, but has been changing over centuries and millennia. A further claim is that human-induced GHG accumulation has a limited impact on climate change, and that it seems predominantly dependent on solar activity — solar spots — and cloud formations. And while I'm not a climate scientist, I am inclined not to turn a blind eye to these reservations. The second point of the Kyoto Protocol that I find difficult to swallow concerns the so-called 'flexible mechanisms' — especially the Joint Implementation and the Clean Development Mechanism, which were adopted to reduce compliance costs for the rich countries.
How would you assess the EU's record in tackling environmental issues, and how does its performance compare with those of other blocs/countries/regulatory bodies around the world?
The EU is dominated by countries like Germany, France, Italy, the UK, and so forth, which have vested interests in all sorts of technology. Look at what the European Commission, essentially the EU government, is promoting. Rather than pushing Europeans to reconsider their lifestyles, it is promoting the replacement of energy-consuming equipment like cars and domestic appliances, or even renewables. Europe's powerful technology-oriented lobbies essentially bar the EC from serious engagement in primary energy demand management. How can I forget the fact that these lobbies have managed to bury the idea of introducing carbon tax schemes to the EU, which EC services studied for long in the past?
Another striking example is renewables. The EC has come to promote renewables more or less as a panacea, i.e. a medicine for all illnesses, meanwhile pretending to ignore the fact that renewables are related to energy supply and not demand, and it is demand that is the root cause of the problem. To cut a long story short, I believe that if you seriously want to cure somebody who suffers from obesity, you should start by putting that person on a diet, and not confine treatment to the administration of pills — even if the pills happen to be green.
But, allowing for the comments above, I think that the EU compares well against other blocs and countries in its engagement with environmental issues.
The current global economic meltdown is manifesting itself in a number of interesting and disturbing ways. One, of course, is that environmental efforts are being scaled back or dropped completely.
Yes, it is reasonable to expect that the unfolding financial crunch will make less money available for environment-related purposes. But there's a bright side to the economic crisis, as well, as it is pushing economies into recession, which entails declining demand for everything, including energy. Therefore, I anticipate less pressure on the environment.
What can we do, as world citizens, to be better stewards of the earth and its resources?
Always keep in mind that the best energy of all, by far, is the energy which is not demanded in the first place — the energy which is not consumed.
