Roberto’s Numero Uno Blog

[ Note: This blog entry is intended to answer the question "What emerging realities do you see in light of the emerging economies? Which among these new economies do you feel will outpace the others?  Quote examples and facts to support your argument. ]

It’s a balmy evening in Bengaluru as I write this entry.  Suddenly, the flourescent lamp flickers and the overhead fan slows down to a halt.  It’s not unusual for people in the emerging economies to experience brown-outs.  Infrastructure has challenged with the rapid pace of development.

If you read my first blog (The Good Road to Bengaluru), you know about what I call my ”3E Plan.”  In brief, it states that I want to help increase equality  and environmental sustainability in the emerging economies.  Your natural follow-up question is likely “OK, Roberto, that sounds all nice and soft, but what doyou specifically intend to do to make a difference?”  Well, I’m glad you asked…

The biggest emerging reality that I see ahead for our emerging economies is the energy challenge.  To me, this challenge is all about basic economics, namely demand, supply and externalities.  I intend to work on solving this challenge.  My fourth “E” is energy.  I describe the challenge first, then I’ll discuss how I intend to contribute.

Demand for energy around the world is increasing exponentially.  With populous countries like India and China lifting millions of people out of poverty every year, the growth of demand is unprecedented.  To visualize the demand growth in an Indian context, just think about these economic steps:  (1.) When you’re poor, your consumer wants are basic: to own a watch, a radio and a sewing machine.  (2.) As your income increases, your desires turn to a television, an iron and a gas stove.  (3.) When you get to the middle class, you want a computer, a refrigerator and a vehicle.  Each step up the economic ladder means using products that consume more energy.  Empirical studies have shown a positive correlation between increased income levels and energy use. 

Supply of energy is not keeping pace with the energy demand.  Studies predict that by 2015, the supply of energy from conventional fuels (oil, gas and coal) will lag behind demand.  Most of the conventional (or “easy”) oil in this world is located in relatively ‘unstable’ regions of the world, such as the Middle East, Russia, West Africa and Venezuela.  The world needs to begin reducing consumption and develop new sources of energy.  Hundreds of new coal power plants are being built in China to continue fuelling its economic growth.  India has taken steps to produce nuclear energy at home by signing technology-sharing agreements with the US and France.  A global boom of alternative energy sources is under way, with India having a home-grown global player in Suzlon Energy.  Unfortunately, limited actions are being taken to reduce energy consumption.

CO2 emissions from energy provision will continue to rise.  The 2007 report by the Intergovernmental Panel on Climate Change showed that with virtual certainty climate change is occurring.  CO2 emissions, the main culprits for climate change, will continue in the foreseeable future.  These increases will lead to catastrophic consequences, and emerging economies will be the most negatively impacted.

My contribution to the energy challenge is to develop renewable energy sources and implement energy-efficiency solutions.  I have taken a number of concrete steps over the past year to begin contributing after business school.  During my first-year, I was very active in the energy/environment scene at Yale.  I interned with a global energy company over the summer.  At IIMB, I am leading a study on strategic sourcing of components for concentrating solar-thermal plants in India.  I am also learning about a solar energy provider for rural villages.  I am committed to making a positive difference in these fields after my MBA. 

Brazil continues to outpace the pack (in carbon emission reductions)

MBAs know about the BRIC countries and can make interesting arguments over which countries will outpace others in economic terms.  Since I am interested in energy/environment, I thought I would make an argument of which country will outpace the pack in terms of carbon emissions reductions. 

Find below a table highlighting the largest carbon emitters (due to energy use) in the developing world.  Of the countries listed, I believe that Brazil will outpace the pack in reducing its carbon footprint and developing renewable energy resources.