Environmental Valuation & Cost-Benefit News

Link: http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=585&ArticleID=6163&l=en&t=long

From paying fishermen to 'fish for litter' to laws banning food vendors from using plastic cups and plates in coastal parks, governments and local authorities around the world are increasingly turning to market-based instruments to cut litter and waste entering the sea.

These are among the findings from a new UN Environment Programme (UNEP)-commissioned report presented today at the World Oceans Conference in Indonesia, where over 120 nations are gathering to boost the health of the global marine environment.

In the US, for example, food vendors in national public parks are required to use biodegradable plates, cups, and other disposable food containers and discouraged from distributing straws with drinks unless specifically requested by the customer.

In Hawaii, US, an initiative that gives fishermen cash awards by the weight of abandoned gear they report resulted in nearly 75 tonnes of debris removed over a two-year period.

A levy of US$ 0.02 (€0.15) per plastic bag in Ireland generated nearly US$ 13 million (€9 million) and led to a 90 per cent reduction in consumption of disposable plastic bags. The money generated was channelled into environmental initiatives in the country.

These types of incentives create opportunities for policy makers to exercise their political will, given that they are able to generate the necessary funds to implement an environmental plan.

A private-public partnership in Honolulu saw the collection of nearly 26 tonnes of net and monofilament line, which were processed and converted into electric power.

In South Korea, cost sharing between cities and payment to fishermen were used to tackle marine litter.

Achim Steiner, UN Under-Secretary General and UNEP Executive Director, said: "Smart market mechanisms, from feed-in tariffs to stimulate renewable energies to paying communities for ecosystem services can transform the economics of sustainability."

"Today we present evidence that the same approach can be brought to bear in the area of marine litter underlining yet another area where a Green Economy can be glimpsed and one day soon realized," he added.

Marine debris damages marine industries, but is also an economic cost to society and the environment. Globally, as much as 80 per cent of marine debris entering the ocean each year is thought to come from land-based sources, with the remainder coming from shipping and other maritime sources.

The report made a number of recommendations to address the problem. These include measures to:

Invest in the waste management infrastructure – from the smallest items (waste cans conveniently located by beaches and piers) to state-of-the-art landfills and environmental-friendly materials that will not persist in the environment and substitution of materials to increase degradability.

Encourage strategies that will prevent or reduce the amount of litter entering inland waterways from towns, streets, parking areas, etc. This can be done in conjunction with an educational campaign that helps people understand how all watersheds are connected, and how their piece of litter can impact natural resources, marine habitats, navigation, health and safety.

Create opportunities for all stakeholders (public and private sectors) to communicate, exchange information, share technological expertise, the latest marine litter research, guidelines, and successes.

Build a stronger sense of environmental stewardship among ocean users as well as people who live inland through education and community outreach. This ethic is critical given the global nature of marine litter, its inability to be confined within territorial boundaries and the complexity of identifying sources.

Enhance and encourage collaboration among NGOs, industry, governments, citizens, academia, fisheries management organizations, local communities and municipalities. A variety of partners bring different skills and resources to the table, leading to a stronger foundation for success.

Support and promote voluntary efforts to remove litter from the marine environment (e.g., beach and river clean-up events)

Deposits-refund systems, user and administrative charge, and sales taxes and cost sharing are among market-based instruments cited as most suitable in controlling marine debris.

In relation to the economic costs and losses associated with marine litter, these include the loss of fishing and tourism opportunities, as well as the costs of clean-up campaigns and waste management systems.

Marine litter results in lost revenues for the fishing industry due to the time and effort involved in removing debris from their nets, contaminated catch due to debris and the damage and repair of nets due to debris. In the Shetland Islands, fishermen estimated that 69 per cent of their catch has been contaminated or bruised by marine litter with additional costs incurred due the snagging of nets on the seabed. The cost and time spent on clearing nets and propellers of marine litter can often be high, especially when the litter has to be removed by divers. It is estimated that between £6,000 and £30,000 (USD 9,096- 45,48013) per boat can be lost per year (Hall, 2000). Other estimates put the cost of marine litter for the UK fishing industry at over €33 million (USD 31 million) a year (MPMMG, 2002).

The loss of economic opportunities for the tourism industry due to marine litter can also be great. In Sweden, it is estimated that the substantial accumulation of litter on the beach depresses tourism by between one and five per cent. In the worst case scenario, this equates to the annual loss to the local community of approximately £15 million (USD 30.03 million), in addition to 150 person-years of work (OSPAR, 2007). In the US, large quantities of medical wastes posing health risks to humans led to expensive beach closures in New Jersey and New York in 1987-88 with a loss of several billion dollars (MPMMG, 2002).

It is more difficult to quantify the environmental costs associated with marine litter but these should not be overlooked when accessing the true costs of marine litter. Beach clean-ups are a common practice for local and national authorities in many countries in Asia, the Caribbean, Europe, the Mediterranean and the Americas. Beach clean-ups are labour intensive and can be costly depending on the scale of the activity.

According to Hall (2000), the total cost reported by local authorities in Denmark, Sweden, UK and Norway for beach clean-ups was £2,913,795 (USD 4.42 million). The clean-up of marine litter from other waterways is equally expensive. An estimated cost to effectively remove litter from South Africa’s waste water streams is about R2 billion (USD 279 million) per year (Lane, 2007). In the UK, the costs to harbour authorities to remove floating debris can be as high as £15,000 (USD 30,025) per year.

The environmental impact of clean-ups can also be significant. In the UK, beach clean-ups are a common practice for district councils reliant on the tourist industry. Recent surveys suggest that 43 per cent of the UK clean-ups are done manually, while 57 per cent use manual and mechanical techniques. The mechanical techniques threaten natural habitats as the machines affect species diversity and abundance and there are also concerns about the impact of mechanical clean-ups on the stability of the beaches (MCS, 2002). For example, mechanized beach cleaning can uncover and destroy sea turtle nests, and leave ruts or ridges that disorient hatchlings as they leave the nests (Lutz and Musick, 1996).

The report can be downloaded free of charge at
http://www.unep.org/regionalseas/marinelitter/publications/docs/Economic_Instruments_and_Marine_Litter.pdf

United Nations Environment Program www.unep.org
Press Release dated May 13, 2009

Link: http://www.aeaweb.org/issue.php?journal=JEP&volume=23&issue=2

The Spring, 2009 Journal of Economic Perspectives offered a "Symposium on Climate Change" featuring the following three articles by prominent economists:

"Market-Based Policy Options to Control U.S. Greenhouse Gas Emissions"
by Gilbert E. Metcalf
pages 5-27
http://www.aeaweb.org/articles.php?doi=10.1257/jep.23.2.5
Abstract: The United States is moving closer to enacting a policy to reduce domestic emissions of greenhouse gases. A key element in any plan to reduce emissions will be to place a price on greenhouse gas emissions. This paper discusses the different approaches that can be taken to price emissions and assesses their strengths and weaknesses.

"The Economic Effects of Climate Change"
by Richard S. J. Tol
pages 29–51.
http://www.aeaweb.org/articles.php?doi=10.1257/jep.23.2.29
Abstract: Richard S. J. Tol reviews the literature on the economic impacts of climate change, an externality that is unprecedentedly large, complex, and uncertain. Only 14 estimates of the total damage cost of climate change have been published, a research effort that is in sharp contrast to the urgency of the public debate and the proposed expenditure on greenhouse gas emission reduction. These estimates show that climate change initially improves economic welfare. However, these benefits are sunk. Impacts would be predominantly negative later in the century. Global average impacts would be comparable to the welfare loss of a few percent of income, but substantially higher in poor countries. Still, the impact of climate change over a century is comparable to economic growth over a few years. There are over 200 estimates of the marginal damage cost of carbon dioxide emissions. The uncertainty about the social cost of carbon is large and right-skewed. For a standard discount rate, the expected value is $50/tC, which is much lower than the price of carbon in the European Union but much higher than the price of carbon elsewhere. Current estimates of the damage costs of climate change are incomplete, with positive and negative biases. Most important among the missing impacts are the indirect effects of climate change on economic development; large-scale biodiversity loss; low-probability, high-impact scenarios; the impact of climate change on violent conflict; and the impacts of climate change beyond 2100. From a welfare perspective, the impact of climate change is problematic because population is endogenous, and because policy analyses should separate impatience, risk aversion, and inequity aversion between and within countries.

"The Coming Global Climate-Technology Revolution"
by Scott Barrett
Pages 53–75.
http://www.aeaweb.org/articles.php?doi=10.1257/jep.23.2.53
Abstract: Emissions of CO2 and other greenhouse gases can be reduced significantly using existing technologies, but stabilizing concentrations will require a technological revolution a revolution because it will require fundamental change, achieved within a relatively short period of time. Inspiration for a climate technology revolution is often drawn from the Apollo space program or the Manhattan Project, but averting dangerous climate change cannot be "solved" by a single new technology, deployed by a single government. The technological changes needed to address climate change fundamentally will have to be pervasive; they will have to involve markets; and they will have to be global in scope. My focus in this paper is not on the moderate emission reductions that can be achieved using existing technologies, but on the breakthrough technologies that are needed to reduce emissions dramatically. The challenges are formidable. Indeed, it is possible that the revolution needed to dramatically reduce emissions of greenhouse gases will fail. Should the climate change abruptly, the incentive to "engineer" the climate will be strong. There will be a climate-technology revolution, but its nature will depend on the institutions we develop to address the challenge we face.

Journal of Economic Perspectives via American Economic Association www.aeaweb.org
Volume 23, Number 2; Spring, 2009; pages 5-

Link: http://dx.doi.org/10.1016/j.apenergy.2009.02.015

Abstract:
Repowering fossil fuel power plants by means of gas turbines has been traditionally considered to increase power output and reduce NOx and SO2 emissions both at low cost and short outage periods. At present, reduction in CO2 emissions represents an additional advantage of repowering due to partial fuel shift and overall efficiency increase. This is especially important in existing installations with a CO2 reduction mandatory that should be carried out in a short time and in a cost-effective manner.

Feedwater and parallel repowering schemes have been analysed using thermodynamic, environmental and economic simulations. The objective is not only to evaluate the cost of electricity and the efficiency increase of the overall system, but calculate and minimize the cost of CO2 avoided as a function of gas turbine power output. It seems that integration of larger gas turbines reduces the overall CO2 emissions, but there is a compromise between CO2 reduction due to fuel shift and a optimum integration of waste heat into the power plant to minimize the CO2 avoided costs. Results highlight the repowering as a suitable technology to reduce 10–30% of CO2 emissions in existing power plants with cost well below 20 €/tCO2. It could help to control emissions up to the carbon capture technologies commercial development.

Keywords: Repowering; CO2 emissions; Energy optimization; Energy integration

by Jesús M. Escosa and Luis M. Romeo both of Centro de Investigación de Recursos y Consumos Energéticos (CIRCE), Universidad de Zaragoza, Centro Politécnico Superior, María de Luna, 3, 50018 Zaragoza, Spain

Applied Energy via Elsevier Science Direct www.ScienceDirect.com
Volume 86, Issue 11; November, 2009; Pages 2351-2358

Link: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/794&format=HTML&aged=0&language=EN&guiLanguage=en

Emissions of greenhouse gases from EU businesses participating in the EU Emissions Trading System (EU ETS) fell 3.06% in 2008 compared with a year earlier, according to the information provided by Member State registries. With the 6.5% reduction in emission allowances that the Commission has secured for the second trading period, the EU ETS really started to make a difference to emissions in 2008. Last year marked the beginning of the second trading period of the EU ETS, which runs from 2008 to 2012.

Environment Commissioner Stavros Dimas said: "The 3 per cent reduction was partly due to businesses taking measures to cut their emissions in response to the strong carbon price that prevailed until the economic downturn started. It confirms that the EU has a well functioning trading system, with a robust cap, a clear price signal and a liquid market, which is helping us to cut emissions cost-effectively. This should encourage other countries in their efforts to set up comparable domestic cap-and-trade systems, which we would like to see linked up with the EU ETS to create a stronger international carbon market.”
...
Verified emissions of greenhouse gases from all installations in the EU ETS in 2008 totalled 2.118 billion tonnes of CO2-equivalent. 2008 emissions (excluding those of Bulgaria, Liechtenstein and Norway where 2007 data is incomplete or unavailable) were 3,06% lower than the 2007 level. Emissions were reduced despite GDP growth in the EU-27 of 0.8% last year.

While the economic slowdown was felt strongly in the sectors covered by the EU ETS, the drop in emissions was also due to emission reduction measures undertaken by installations in reaction to the robust carbon price which prevailed for most of 2008 before the onset of the recession.

While the EU ETS had previously covered only emissions of carbon dioxide (CO2), from 2008 onwards it also includes emissions of nitrous oxide from the production of nitric acid in the Netherlands and in Norway.
...
The number of installations with open accounts, i.e. those participating in the system, was 11,359 in 2008, which is 213 fewer than in 2007. This reduction resulted from the application of a rule that took many smaller installations out of the system.

Despite this, the volume of emissions covered by the EU ETS expanded to activities with emissions amounting to around 50 million tons of CO2-equivalent last year due to Member States adopting a more harmonised interpretation of definitions of activities covered. In addition, Iceland, Liechtenstein and Norway joined the EU ETS in 2008 (although at present no installations in Iceland are covered).
...
Of all the installations participating in the scheme last year, 0,9% did not surrender the required quantity of allowances by the deadline of 1 May 2009. These installations are typically small and together they account for less than 0,5% of all emission allocations in the EU.

2,2% of the installations, accounting for 0,1% of all emission allocations in the EU failed to submit verified emissions for the year 2008 before 1 May 2009.
...
Last year it was possible for the first time for installations to surrender emission credits generated through the Kyoto Protocol’s flexible mechanisms[1] in order to offset part of their emissions. CERs accounted for 3.9% of all surrenders. 41% of these originated in China, 31% in India, 15% in South Korea and 7% in Brazil, with a further 14 countries of origin accounting for the remaining 5%.

ERUs accounted for only 0.002% of all surrenders. The combined CER and ERU surrenders in 2008 used up only roughly 6% of the approximately 1.4 billion credits that are allowed over the 2008-2012 trading period.

92% of the surrenders were allowances which had been given to installations for free while the remaining 4.1% of surrenders were of allowances either purchased in auctions or free allowances allocated for 2009.

For Further information:
The CITL homepage: http://ec.europa.eu/environment/ets/
The registries homepage of DG Environment on EUROPA: http://ec.europa.eu/environment/climat/emission/citl_en.htm
The revised ETS and Frequently Asked Questions: http://ec.europa.eu/environment/climat/emission/ets_post2012_en.htm

Europa http://europa.eu Portal Site of the European Union
Press Release dated May 15, 2009

Link: http://www.luxresearchinc.com/press/RELEASE_Water_SMR_3_17_09.pdf

The global desalinated water supply will grow at a CAGR of 9.5% over the next decade, reaching 54 billion m3/year (cubic meters per year) in 2020 – 54 trillion liters/year – or triple what it had been in 2008, according to a new report from Lux Research entitled “Desalination’s Future Champions.” According to Lux’s analysis, the demand for desalinated water will foster a rising wave of new water treatment technologies, all aiming to challenge the incumbent reverse osmosis (RO) in desalination’s three market segments – seawater desalination, inland brackish water, and water recycling. RO dominated the desalination equipment market with a 54% revenue share as of 2008, and the relative success of its challengers will vary by market segment. “The bottom line is that there are growth opportunities in brackish water and recycling,” said Michael LoCascio, a senior analyst at Lux Research and the report’s lead author. “But RO is so entrenched that its variations will dominate for 20 years, with new technologies coming to market only through RO hybridization.” The report offers the first commercial analysis of emerging water treatment technologies, offering strategic insight to corporations, utilities, bulge-bracket banks and early stage investors looking to tap growth opportunities enabled by emerging desalination technologies. To determine which technologies will succeed, the report establishes a benchmark with 13 criteria across two axes measuring each contender by its value and maturity. Because the factors for success differ so by market segment, Lux Research’s report weighted the criteria to come up with separate rankings for each segment. It then scored 18 current and future desalination technologies in this framework, learning that: Forward osmosis (FO) and RO variants will win in the seawater segment. Set to grow from 10.9 billion m3/year in 2008 to 38.4 billion m3/year (or 71% of total supply) in 2020, the seawater segment could see simpler technologies, like cloud-point and ammonium carbonate FO, beat RO on energy and cost.

The brackish water segment will fragment with nine successful technologies. Increasing comparatively slowly from 6.4 billion m3/year (35% of total) in 2008 to 7.2 billion m3/year (13% of total supply) in 2020, brackish water’s widely varying operating conditions combined with the water market’s hyper-locality will foster nine sustainable technologies.

RO will go unchallenged in recycling. The fastest-growing segment – increasing from 0.9 billion m3/year in 2008 to 8.4 billion m3/year in 2020 (16% of total supply) – the recycling market’s low energy needs and levels of brine waste minimize RO’s weaknesses, securing its dominance in the segment for decades.

“Of particular interest are firms that build, own, and/or operate desalination facilities,” said LoCascio. “Since they are technologically agnostic, these firms stand to benefit as the value of desalinated water continues to increase over the next 20 years, while the cost to produce it declines.” “Desalination’s Future Champions” is part of the Lux Water Intelligence service. Clients subscribing to this service receive continuous research on water industry market trends and forecasts, ongoing technology scouting reports and proprietary data points in the weekly Lux Research Water Journal and on-demand inquiry with Lux Research analysts.

Lux Research www.LuxResearchInc.com
Press Release dated March 17, 2009

Link: http://cleantech.com/about/pressreleases/040109.cfm

On April 1, 2009 The Cleantech Group™, released preliminary 1Q09 results for clean technology venture investments in North America, Europe, China and India, totaling $1.0 billion across 82 companies.

The 1Q09 total is down 41 percent from the previous quarter, and down 48 percent from the same period a year ago. Cleantech venture investments have now declined for two consecutive quarters since peaking at $2.6 billion in 3Q08, representing the lowest level of venture capital investment in clean technology companies in two years. The average round size has contracted from $20 million in 3Q08 to $ 12.3 million in 1Q09.

“Cleantech financing is moving into a new phase, characterized by diversified funding sources, as the global recession and liquidity issues impact venture investors. Venture funds continue to invest significant sums, albeit at a slower pace and smaller scale than in the past two years,” said Brian Fan, Senior Director of Research, Cleantech Group.

Meanwhile, governments globally are allocating historic amounts of capital to clean technologies through stimulus packages, loan guarantees and tax incentives, which will enable the cleantech industry to continue to develop. A report titled ‘Towards a Global Green Recovery’ to be presented at the G20 Summit in London later this week estimates that almost $400 billion of some USD $2.6 trillion in economic stimulus allocations announced so far by G20 nations are earmarked for clean technologies such as renewable energy, improved electrical grids and cleaner cars.

Additionally, utilities and corporations are increasingly playing a leadership role in developing the sector. “Governments are not the only significant new investors in cleantech…Utilities are also stepping up to fill the funding void and making equity investments in companies,” said Scott Smith, Leader of CleanTech for Deloitte. “Investment plans range from building and operating solar and wind systems to financing third party, shovel-ready projects. These moves underscore cleantech’s emergence as a significant and maturing market that will remain highly relevant—both during and following the economic downturn.”

By TECHNOLOGY SECTOR
The leading investment areas from the quarter were solar, biofuels, advanced batteries and electric vehicles.
* SOLAR - $346 million
Deals included Norsun, a Norwegian polysilicon producer, which raised a $72 million round led by Good Energies. Concentrated PV startup SolFocus raised $67 million from Apex Venture Partners, NEA and NGEN. Solar service provider Solar Power Partners raised $47 million, and thin-film startup Sierra Solar Power raised $40 million.
* BIOFUELS - $96 million
Deals included BioMCN, which has developed a process to convert crude glycerine, a byproduct of biodiesel, into methanol. It raised $46 million from Waterland Private Equity. Cellulosic ethanol company ZeaChem raised a $34 million round led by Globespan Partners and Prairie Gold Venture Partners.
* ADVANCED BATTERIES - $94 million
Deals included lithium-ion startup Boston Power, which raised a $55 million round led by Swedish investor Foundation Asset Management. Boston Power’s Sonata batteries were chosen by HP for nearly 70% of its consumer line of notebooks. UK-based Nexeon raised over $14 million from Invesco Perpetual and others for its silicon anode technology for lithium-ion batteries, while Swiss startup ReVolt Technology raised over $13 million for its Zinc-air battery technology for consumer electronics devices
* ELECTRIC VEHICLES - $78 million
Deals included Dutch transmission manufacturer Fallbrook Technologies, which raised $25 million from NGEN Partners and Robeco. Scuderi Group raised $20 million for its split cycle internal combustion engine, PHEV manufacturer Bright Automotive raised $11 million from White Pines Partners and Duke Energy, and Smith Electric Vehicles, which manufactures electric trucks and vans, raised $10 million.

M&As and IPOs
Clean technology M&A totaled an estimated 111 transactions in 1Q09, of which totals were disclosed for 25 transactions totaling $3.0 billion. This is down 42% from 4Q08, which saw 134 M&A transactions, of which 45 were disclosed for a total of $4.8 billion.

Cleantech Group noted four cleantech IPOs in 1Q09, three in China and one in Switzerland. The largest deal was China Singyes Solar Technologies Holdings Ltd, a solar service provider, which raised $8.1 million on the Hong Kong Futures Exchange.

BY GEOGRAPHY
North America accounted for 68% of the total, while Europe and Israel accounted for 28%, China for 2%, and India for 1%.

* EUROPE: European and Israeli companies raised USD $281 million in 31 disclosed rounds, down 11% from 4Q08 and down 31% from 1Q08. Despite the overall reduction in amount invested, Europe and Israel increased its proportion of overall global investment to 28%, up from 19% in 4Q08 and 21% in 1Q08. The largest deal was a USD $71.6 million round for Norwegian solar company Norsun, one of the top ten largest deals ever in Europe and Israel, and pulled Norway ($79.2 million in 4 deals) into first position in the country rankings in Europe. The UK was second ($52.9 million, 11 deals) and the Netherlands third (where BioMCN's $46 million round was the only investment of disclosed value).
* CHINA: In 1Q09, two Chinese companies, solar equipment company Jiangyin Aikang Solar Equipment Co., and Shanghai Insuring Polymer Materials Co., Ltd. raised USD $21.5 million.
There were seven M&A deals in China totaling USD $517.5 million; three of these transactions were joint ventures between Chinese companies and multinationals. Cleantech Group noted three cleantech IPOs in China in 1Q09: China Singyes Solar Technologies Holdings Ltd on the Hong Kong stock market, heat exchange manufacturer SmartHeat on NASDAQ, and sustainable fertilizer manufacturer China Green Agriculture Inc. on AMEX.
* INDIA: In 1Q09, a total of USD $54 million was invested across 3 deals, out of which one company did not disclose the amount. Jain Irrigation, India’s largest provider of micro-irrigation systems; Sri Biotech, an agri-biotech company and Polygenta all received funding in the quarter. Active investors include IFC, Rabo Equity and Aloe Private Equity. ACME Group, an India-based telecom power solutions company also made an overseas investment of $30 million in California-based eSolar and PAE acquired a strategic stake in Shurjo Energy, a solar panel manufacturer, for $10 million. Despite the low investment amount and number of deals recorded in the region, the renewable energy sector in India continues to be very active. Major Indian companies, such as Tata Power, BHEL and Greenko Group, announced initiatives to ramp up investment in clean energy projects across the country. Several Indian state governments in India also announced policies this quarter to increase the use of solar power and biomass for energy generation.
...
TOP INVESTORS:
--Kleiner Perkins Caufield & Byers (Alta Devices, Fisker Automotive, Silver Spring Networks, Think Global)
--21 Ventures (Advanced Hydro, Graphene Energy, Variable Wind Solutions)
--CMEA Ventures (CFX Battery Inc., Draths Corp., SuperProtonic)
--Quercus Trust (Advanced Hydro, Graphene Energy, Sencera International)

The Cleantech Group and Deloitte reviewed key findings of their 1Q09 data in a webinar on April 7, 2009

The CleanTech Group www.cleantech.com
Press Release dated April 1, 2009