The Kyoto treaty formalises in political legal speak the world response to global warming. It is the result of political negotiation and diplomatic compromise and on the surface not a lot more than promises to reduce emissions that make politicians look good that their successors cannot possibly keep. It is not a strategy for survival into the future. Kyoto may however by putting a legal cost on carbon just manage to catalyse the required long term response that involves re-engineering the techno-process which is the physical interface of the economy in favour of making carbon dioxide a resource. In this way the external costs of producing the gas become internalised benefits; a real resource rather than virtual cost.

The growth of the techno-process is the direct causes of the carbon problem. This is driven by population growth and industrialisation. When John Harrison our MD was born in 1949 there were less than two billion people on the planet. At nearly 7 billion three times as many are now pillaging and polluting the earth. There is evidence and a lot more hope that the rate of growth of world population has peaked. The frightening prospect remains however that even if runaway growth is slowing that there will be a further doubling or tripling in the next 50 years.

Fig. 1 - World Population Growth

Industrialisation is the other main factor. Many so called third world countries are starting to rapidly accelerate towards the same levels of consumption and production characteristic of the west as the plot of GDP growth below demonstrates.

Fig. 2 - 2006 World GDP Growth

These countries want to enjoy the affluence we have and have no intention of rapidly reducing emissions by not building power stations or burning oil. We may not be able to do much about population growth but we can change the way the third world industrialise.

The Kyoto treaty is obviously the work of politicians with aspirational targets, lots of promises and little else. It is like an aspirin not the required surgery and contemplates an unreal virtual world where carbon has a legal cost rather than a real value and restraint is the only solution offered. There remains a fear of enforcement and little is being achieved[1]. A strategy of restraint only has no hope of succeeding because under Kyoto as population further rises, per capita emissions will have to plummet to unrealistic levels for there to be any net reduction at all. Assuming Kyoto commitments are met (which is unlikely) it is estimated that global emissions will be 41% higher in 2010 than in 1990 [2]. The bottom line is that we are tracking far worse than previously estimated worse case scenarios and making no progress towards reducing net emissions at all with current policy settings.

Like any other badly constructed law a lot of promises to behave when current economic and technical paradigms promote environmental vandalism will not work . Externalities must be internalised and for real success this will not in the long term be by legislation alone. Technology got us to where we are and can, if driven by more intelligent masters get us to where we must be to survive. At last this may be starting to be recognised as the World Business Council for Sustainable Development and International Chamber of Commerce issued a communique from the recent round of Bali talks and at point four said: "Technology is key, for addressing the climate challenges. There is a need for scaling up of R&D jointly between Governments and Business as well as accelerating the deployment of technologies."

The current obsession with underground storage of carbon dioxide driven by the oil and coal industries is of considerable concern and like Kyoto short term because the crust is inherently unstable. In our economics section we demonstrate that if there is leakage of greater than point one percent (.1%) within a relatively short period of time geosequestration becomes ineffective with emissions from leakage consuming the entire possible carbon budget.

That a different approach is required becomes obvious when it is realised that the problem is one of balance not emissions per se. In nature carbon in one of the most important of atoms. The lesson is that we must learn to make carbon equally important in our physical economy[3] to survive the future. It is essential that within a few short years externalities such as carbon emissions are internalised by technical paradigms that convert them to resources. For efficient removal of carbon dioxide from the atmosphere on a large scale carbon must also add real value to the economy. As in nature it must become the building block for our physical world. By changing the technical paradigms the physical flow of substances in our techno-process[3] will change and properly engineered the underlying molecular flows will change so as to reduce pollutant impacts. In this way carbon, which is currently a pollutant, will soon acquire a real value and economics, the driving force of human endeavour will take care of the problem.

To start the process we admit that a politically driven legal price (the current "virtual price" direction) is required but this must be first augmented by and then replaced as soon a possible by real prices supported by real resource value provided by new technical paradigms that redefine wastes such as CO2 as resources (as is the case with Gaia Engineering, our preferred direction.) What is blatantly missing at the moment is the realisation that this is the case. Kyoto does not signal a long term and high price of carbon (See economics summary ) and unsupported by such a high price the research required is not be undertaken by private enterprise. Governments are not filling the gap and without technical direction the countdown to the inevitable demise of civilisation continues.

The role of politicians is to establish the conditions whereby technology and economics working together will solve the problem and to kick start the research and development required for such massive change to occur. Not only will the legal and financial frame work have to be redesigned so that markets work in the required direction, but massive support for the research and development of technologies like Gaia Engineering will need to be provided to establish the technical paradigms of the future. Massive R & D and procurement support required by governments.

Kyoto with it's culture of constraint is going down like a lead balloon with the third world. We put it to the world that given a technical challenge instead it would be much easier to harness the international co-operation required. TecEco and other partners of Gaia engineering have established that it is potentially profitable to consume more CO2 than we produce and we hope in time that others find better ways of doing so.

There are two simple steps that would go a long way towards establishing the basis of a politically acceptable replacement treaty to Kyoto that will work. It is essential if private enterprise is to be properly and fully engaged that any future agreement to reduce emissions signals a long term price (See economics summary ) and a recent article in the Company Director Magazine[4]. Massive technical and cultural change is required that must be managed properly and a strategy for achieving this must be also be incorporated.

There is no alternative as fossil fuel energy and our economies are totally coupled and any decoupling to alternatives just cannot happen quickly enough. WIP, the World physical industrial product is rising strongly and 99.5% [6] coupled with CO2 emissions which are also rising at an increasing rate due to increasing rather than decreasing use of fossil fuels as drivers of global economies.

Fig. 3 - World Industrial Product (deflated world `GDP' in real value - i.e. the physical equivalent)[5][6]

A world in which carbon has a real value is obviously the most desirable as real resources can contribute real internal as well as external value compared to virtual ones which provide only external value. The key is for governments to foster the development of technical paradigms which follow Pilzer's first law [7] [8] thereby converting externalities such as CO2 (a waste) to "internal" resources. In this way externalities are brought to account as real inputs to the global economy.

Fig. 4 - Avoiding Reduced Response through Thermodynamic Constraints

The failings of Kyoto are becoming more noticeable as time marches on. At first per capita emissions reductions were mostly being achieved through thermodynamic efficiencies and technology substitutions. As these have diminishing returns which are now starting to be observed it is essential that research and development into new technical paradigms such as Gaia Engineering is undertaken on a massive scale as soon as possible if we are to reduce not only per capita but net emissions into the future. If we do not do this quickly enough then our responses to global warming will reduce, not increase, as we encounter resistance from energy users, the law of diminishing returns on thermodynamic efficiency improvements, run out of substitutions and population growth really starts to control the outcome (See economics summary ). Research must be undertaken now into new technical paradigms in which CO2 and other wastes are resources for there to be any hope of future net emissions reduction.

Such a huge response backed by research and development on a massive scale has been achieved before in relation to for example the development of the atomic bomb and artificial rubber. Unfortunately the research and development of new technical paradigms in favour of making carbon a resource is not occurring as global warming is gradual and yearly changes not so noticeable. We must stop behaving like frogs slowly coming to the boil. So far no companies such as TecEco have received help from governments worth mentioning. How much longer are we expected to alone carry the burden of knowledge about the survival of the human race?

TecEco contemplate atmospheric CO2 as a major input for the production of man made carbonates and in this paradigm have demonstrated that massive sequestration is achievable. What is important is how much carbon there is in the air, not how much we produce. This lesson comes from nature not economists or thermodynamics practitioners and must be understood by politicians. Only by making the removal of CO2 from the atmosphere a profitable business that ultimately does not rely on caps or taxes can we build into the way we live a long term solution. We can make keeping the atmosphere healthy by the removal of CO2 part of making a living rather than a virtual legal and economic construct to deal with externalities. This is the challenge our economists and politicians should be setting out for our scientists and engineers. The problem is about the amount of CO2 in the air. Emissions can either be curtailed or balanced by sequestration. We put it to the world that given the Gaia engineering technical paradigm, the latter is profitable and therefore easier to achieve in every way..

If 50% of all building and construction were man made carbonate as TecEco advocate, company modeling indicates that the required reduction in atmospheric carbon dioxide would be achieved by 2025 and the problem of global warming solved. Considering that over 70% of materials used in building and construction are mineral based changing 50% to man made carbonate is not impossible to achieve. On the contrary, it is potentially profitable. Once stability is achieved this percentage will of course have to be monitored and adjusted. Following this strategy other problems such as that of waste and the supply of fresh water are incidentally solved as a bonus. All governments have to do is legislate that a proportion of all new structures have to be man made carbonate.

By "internalising" CO2, businesses will harness new technologies and innovations such as our Gaia Engineering technology that radically alter the flow of matter on the planet in favour of reducing emissions and increasing sequestration and for that matter solving many other environmental problems as well. TecEco is a lead company in this new and emerging field of planetary engineering with amazing technologies that will shift construction in favour of using man made carbonates and other wastes. We can bring the world to a level of affluence that will axiomatically reduce population growth without destroying our atmosphere. See Gaia Engineering for details.

The present system of accounting for carbon elsewhere in the world essentially follows the WBSCD and World Resources Institute Corporate Accounting and Reporting Standard[9]. The procedure is complex and divides emissions into scopes 1, 2 and 3 and does not provide adequate guidance in relation to scope 3. We believe a much simpler system is possible, especially if carbon trading is to be successful in more complex areas of the economy than addressed by scopes 1 and 2. One such area is the construction industry.

Australia is late in coming to the Kyoto table and carbon emissions trading is likely to be introduced by 2009 or 2010. So far few details have been released as to how that trading will be conducted, what emissions targets will be set or which sectors may get favourable treatment. As of 2008, as in most other countries, scope 3 emissions are essentially off the agenda and these are mainly generated in complex business areas such as building and construction which have the potential to solve the problem.

There are some 600 billion tonnes of substances moved around the planet. What is not wasted within a few short weeks probably amounts to around 70 billion tonnes. When we talk about the physical economy the lion's share is represented by the construction industry at around 50 billion tonnes. According to the research group researchandmarkets[10] “Buildings make a large contribution to the energy consumption of a country. It is estimated that, of the total energy generated in the industrialised world, 40% of it is used in the construction and operation of residential, public, and commercial buildings. Approximately one third of primary energy world-wide is consumed in non-industrial buildings such as dwellings, offices, hospitals, and schools where it is utilised for space heating and cooling, lighting and the operation of appliances. In the European Union (EU), energy consumption for buildings-related services accounts for between 33% and 40% of total EU energy consumption. Energy used for heating, lighting and powering buildings can account for up to half of a country’s total energy consumption. In an industrial economy domestic water heating can account for over 5% of total energy use, domestic space heating up to 20% and appliances and lighting up to 30%. In terms of the total energy end use, consumption of energy in the building sector is comparable to that used in the entire transport sector.”

Major barriers along the way to including scope 3 emissions in the construction industry include a long and complex supply chain with many operators in which double counting could occur. To get over this it has been suggested that a system similar to GST (in Australia) or VAT (in the UK and elsewhere) could be implemented with carbon assessments canceling each other out on the way up or down the supply and waste chains to the points of greatest carbon concentration. Such a system would ensure that designers, engineers, builders and end user all benefit from future carbon credits attributed to their input into sustainable design, materials use and construction.

The fact that in the construction industry there is more than one source of potential credits in building and construction further complicates implementation. Not only do materials have embodied energies and emissions. The way they are used by designers contributes to reductions in net emissions. As Kyoto is quite specific about not double counting careful analysis is required of the two contributions. Are reductions that emanate from good design a double count because they represent a use of a material that itself has embodied energies and emissions? In our view the inclusion of both types of credit is essential and does not result in double counting. Design is a contribution of intellectual property and not therefore a material and thus distinctly different. It is also worth further noting that although there is a very long supply chain most decisions relating to design or materials used occur at the design stage.

Lifetime energy reductions through good design are very important however what materials are chosen by designers have a maintenance consequence that must not be forgotten. Materials on the other hand are very important as not only do they have process and chemical releases associated with them, they contribute to what design can achieve.

The legal cost of carbon provided by Kyoto will in the short term help overcome economies of scale so that a real cost/benefit can be established. What is needed are much longer term signals so that the massive investment required in new technology platforms is encouraged. The challenge lies with our engineers and scientists, especially in the construction industry (given the impact it has - demonstrated above) to reduce scope three emissions by improving how we build, what we build with and how we operate the physical economy (the techno-process). Politicians need to realise this and much more actively engage in developing a system that supports the long term signals and R & D required.

[1] which one day may evolve to policing, a self appointed global carbon cop and other horrifying scenarios. No wonder existing constraint policies are not succeeding.

[2] Ford, M., A. Matysek, et al. (2006). Perspectives on International Climate Change. Australian Agricultural and Resource Economics Society 50th Annual Conference, Sydney, Australian Agricultural and Resource Economics Society.

[3] We call the physical interface or our economy through which goods move and physical change is created the techno-process.

[4] Parkinson, G. (2008). A Kyoto Alternative: Warwick McKibben explains to Giles Parkinson why he doesn't support the Kyoto Protocol and suggests and alternative solution to Australia's climate change dilemma. Company Director. 24.

[5] The unit is an index number, set as base=100 in 1963. To obtain with good approximation the value in US$ (1990 value) multiply by 212.1 billion. Doubling time is approximately 17 years. Data: the World Bank; statistics : GDI World Physical Industrial Product

[6] di Fazio, A., The Fallacy of Pure Efficiency Gain Measures to Control Future Climate Change.

[7] Pilzer's first law simply put is that the technical paradigm defines what is or is not a resource.

[8] Pilzer, P. Z. (1990). Unlimited Wealth - The Theory and Practice of Economic Alchemy, Crown Publishers.

[9] WBCSD (2007). The Greenhouse Gas Protocol - A Corporate Accounting and Reporting Standard, World Business Council for Sustainable Development and World Resources Institute.

[10] http://www.researchandmarkets.com/