Environmental Valuation & Cost-Benefit News

Abstract: This study evaluated the cooking energy costs and efficiencies, the air pollution impacts of cooking energy consumption and the impact of the energy policy in the cooking energy sector in Nigeria. Water boiling and cooking experiments using the common cooking energy sources (fuel wood, kerosene, liquefied petroleum gas (LPG) and electricity) and common food items (water, yam and beans) were carried out. Energy surveys were carried out to determine the cooking energy use patterns in the urban and rural areas. It was found that fuel wood is the least expensive cooking energy source and LPG is the most expensive. Energy use efficiencies for boiling water were estimated at 25%, 46%, 73%, 79%, 66% and 90% for fuel wood, kerosene, gas, electric immersion coil, electric heating coil and electric hot plate, respectively. Energy intensity was found to be a comparative measure of energy efficiency. The impacts of air pollution from household cooking suggested a possibility of significant air pollutants contribution to the ambient environment using any of the energy carriers considered except electricity. The cooking energy use patterns showed that fuel wood is the predominant energy source for cooking in the rural areas while kerosene is the predominant energy source in the urban areas, revealing that the energy policy in the country had made no impact in the cooking energy sector. Recommendations for improving the energy supply situation were given and for removing the barriers that prevent the implementation of the recommendations.

Keywords: Cooking energy; Cost; Efficiency; Impact on air pollution; Policy

by A.N. Anozie 1, A.R. Bakare 1, J.A. Sonibare 1 and T.O. Oyebisi 2
1. Department of Chemical Engineering, Obafemi Awolowo University, P.O. Box 013, Ile-Ife, Nigeria
2. Technology Planning and Development Unit, Obafemi Awolowo University, P.O. Box 013, Ile-Ife, Nigeria

Energy via Elsevier Science Direct www.ScienceDirect.com
Volume 32, Issue 7; July, 2007; Pages 1283-1290
http://dx.doi.org/10.1016/j.energy.2006.07.004

U.S. Department of Energy (DOE) Assistant Secretary for Energy Efficiency and Renewable Energy Andy Karsner today highlighted DOE’s selection of 13 industry-led solar technology development projects for negotiation of up to $168 million (FY’07-’09), subject to appropriation from Congress. These solar projects serve as the centerpiece of the President’s Solar America Initiative (SAI), which aims to make solar energy cost-competitive with conventional forms of electricity by 2015.

As part of the cost-shared agreements, the industry-led teams will contribute more than 50 percent of the funding for these projects for a total value of up to $357 million over three years. These projects will help significantly reduce the cost of producing and distributing solar energy and are an integral part of the President’s Advanced Energy Initiative (AEI).

The projects announced will enable the projected expansion of the annual U.S. manufacturing capacity of PV systems from 240 MW in 2005 to as much as 2,850 MW by 2010, representing more than a ten-fold increase. Such capacity would also put the U.S. industry on track to reduce the cost of electricity produced by PV from current levels of $0.18-$0.23 per kWh to $0.05 - $0.10 per kWh by 2015 – a price that is competitive in markets nationwide.

The Energy Policy Act of 2005 (EPAct), signed by the President in August of 2005, provides incentives for purchasing and using solar equipment. Now extended through 2008, these incentives could provide a credit equal to 30 percent of qualifying expenditures for purchase of commercial solar installations, with no cap on the total credit allowed. EPAct also provides a 30 percent tax credit for qualified PV property and solar water heating property used exclusively for purposes other than heating swimming pools and hot tubs. Private property owners of qualified property could be eligible for a credit up to $2,000 for either property, with a maximum of $4,000 allowed, if both photovoltaic and solar hot water qualified properties are installed. More information on available incentives for solar installations is available at: http://energystar.gov/index.cfm?c=products.pr_tax_credits.

Teams Selected For Negotiations under the Solar America Initiative

Amonix - A low-cost, high-concentration PV system for utility markets. This project will focus on manufacturing technology for high-concentrating PV and on low-cost production using multi-bandgap cells. Partners for the project include CYRO Industries, Xantrex, the Imperial Irrigation District, Hernandez Electric, the National Renewable Energy Laboratory (NREL), Spectrolab, Micrel, Northstar, JOL Enterprises, the University of Nevada Las Vegas, and Arizona State University. Subject to negotiations, DOE funding for the first year of the project is expected to be roughly $3,200,000, with approximately $14,800,000 available over three years if the team meets its goals.

Boeing - High-efficiency concentrating photovoltaic power system. This project will focus on cell fabrication research that is expected to yield very high efficiency systems. The partners for the project will be Light Prescription Innovators, PV Powered, Array Technologies, James Gregory Associates, Sylarus, Southern California Edison, NREL, the California Institute of Technology, and the University of California Merced. Subject to negotiations, DOE funding for the first year of the project is expected to be approximately $5,900,000, with approximately $13,300,000 available over three years if the team meets its goals.

BP Solar - Low-cost approach to grid parity using crystalline silicon. This project’s research will focus on reducing wafer thickness while improving yield of multi-crystalline silicon PV for commercial and residential markets. Project partners include Dow Corning, Ceradyne, Bekaert, Ferro, Specialized Technology Resources, Komax, Palo Alto Research Center, AFG Industries, Automation Tooling Systems Ohio, Xantrex, Fat Spaniel, the Sacramento Municipal Utility District, Recticel, the Georgia Institute of Technology, the University of Central Florida, and Arizona State University. Subject to negotiations, DOE funding for the first year of the project is expected to be approximately $7,500,000, with approximately $19,100,000 available over three years if the team meets its goals.

Dow Chemical - PV-integrated residential and commercial building solutions. This project will employ Dow’s expertise in encapsulates, adhesives, and high volume production to develop integrated PV-powered technologies for roofing products. Partners include Miasole, SolFocus, Fronius, IBIS Associates, and the University of Delaware. Subject to negotiations, funding for the first year of the project is expected to be roughly $3,300,000, with approximately $9,400,000 available over three years if the team meets its goals.

General Electric - A value chain partnership to accelerate U.S. PV growth. This project will develop various cell technologies – including a new bifacial, high-efficiency silicon cell that could be incorporated into systems solutions that can be demonstrated across the industry. Partners include REC Silicon, Xantrex, Solaicx, the Georgia Institute of Technology, North Carolina State University, and the University of Delaware. Subject to negotiations, DOE funding for the first year of the project is expected to be $8,100,000, with approximately $18,600,000 available over three years if the team meets its goals.

Greenray - Development of an AC module system. This team will design and develop a high-powered, ultra-high-efficiency solar module that contains an inverter, eliminating the need to install a separate inverter and facilitating installation by homeowners. Research will focus on increasing the lifetime of the inverter. Partners include Sanyo, Tyco Electronics, Coal Creek Design, BluePoint Associates, National Grid, and Sempra Utilities. Subject to negotiations, DOE funding for the first year of the project is expected to be $400,000, with approximately $2,300,000 available over three years if the team meets its goals.

Konarka - Building-integrated organic photovoltaics. This project will focus on manufacturing research and product reliability assurance for extremely low-cost photovoltaic cells using organic dyes that convert sunlight to electricity. Partners for this project include NREL and the University of Delaware. Subject to negotiations, DOE funding for the first year of the project is expected to be $1,200,000, with approximately $3,600,000 available over three years if the team meets its goals.

Miasole - Low-cost, scalable, flexible PV systems with integrated electronics. This project will develop high-volume manufacturing technologies and PV component technologies. Research will focus on new types of flexible thin-film modules with integrated electronics and advances in technologies used for installation and maintenance. Project partners include Exeltech, Carlisle SynTec, Sandia National Laboratories, NREL, the University of Colorado, and the University of Delaware. Subject to negotiations, DOE funding for the first year of the project is expected to be $5,800,000, with approximately $20,000,000 available over three years if the team meets its goals.

Nanosolar - Low-cost, scaleable PV systems for commercial rooftops. This project will work on improved low-cost systems and components using back-contacted thin-film PV cells for commercial buildings. Research will focus on large-area module deposition, inverters, and mounting. Partners include SunLink, SunTechnics, and Conergy. Subject to negotiations, DOE funding for the first year of the project is expected to be roughly $1,100,000, with approximately $20,000,000 available over three years if the team meets its goals.

Powerlight - PV cell-independent effort to improve automated manufacturing systems. This project will focus on reducing non-cell costs by making innovations with automated design tools and with modules that include mounting hardware. Partners include Specialized Technology Resources and Autodesk. Subject to negotiations, first-budget period funding for this project is expected to be approximately $2,800,000, with approximately $6,000,000 available over three years if the team meets its goals.

Practical Instruments - Low-concentration CPV systems for rooftop applications. This project will explore a novel concept for low-concentration optics to increase the output of rooftop PV systems. The project will also explore designs using multi-junction cells to allow for very high efficiency modules. Project partners include Spectrolab, Sandia National Laboratories, SunEdison, and the Massachusetts Institute of Technology. Subject to negotiations, funding for the first year of the project is expected to be roughly $2,200,000, with approximately $4,000,000 available over three years if the team meets its goals.

SunPower - Grid-competitive residential solar power generating systems. This project will research lower-cost ingot and wafer fabrication technologies, automated manufacture of back-contact cells, and new module designs, to lower costs. Project partners include Solaicx, the Massachusetts Institute of Technology, NREL, and Xantrex. Subject to negotiations, first-budget period funding for this project is expected to be approximately $7,700,000, with approximately $17,900,000 available over three years if the team meets its goals.

United Solar Ovonic - Low-cost thin-film building-integrated PV systems. This project will focus on increasing the efficiency and deposition rate of multi-bandgap, flexible, thin-film photovoltaic cells and reducing the cost of inverters and balance-of-system components. Partners include SMA America, Sat Con Technology Corporation, PV Powered, the ABB Group, Solectria Renewables, Developing Energy Efficient Roof Systems, Turtle Energy, Sun Edison, the University of Oregon, Syracuse University, the Colorado School of Mines, and NREL. Subject to negotiations, funding for the first year of the project is expected to be roughly $2,400,000, with approximately $19,300,000 available over three years if the team meets its goals.

http://www.energy.gov/news/4879.htm
U.S. Department of Energy www.energy.gov

Government intervention is often called for when markets do not perform well. Presenters at this event will revisit the important debate about the appropriate role for markets and government. Clifford Winston will summarize his new Joint Center book, Government Failure vs. Market Failure: Microeconomics Policy Research and Government Performance (AEI-Brookings Joint Center, 2006). In his book, Winston describes how government efforts to improve market performance have turned out in practice. He also suggests how to improve government policy. Newt Gingrich will offer his views on how government can and should complement markets.

AGENDA
9:40 A.M.: Registration and Continental Breakfast
9:55: Welcome - ROBERT HAHN, Joint Center
10:00: Presentation - CLIFFORD WINSTON, Joint Center
Discussant: NEWT GINGRICH, AEI
11:00 Adjournment

Videos of these events are generally available as Webcasts at www.aei-brookings.org and CSPAN shows after the event

AEI-Brookings Joint Center www.aei-brookings.org
http://www.aei-brookings.org/events/page.php?id=162
Wohlstetter Conference Center, Twelfth Floor, AEI; 1150 Seventeenth Street, N.W., Washington, D.C. 20036
For more information, contact Molly Wells at or mwells@aei.org.

Abstract: Under the Kyoto Protocol, countries can meet treaty obligations by investing in projects that reduce or sequester greenhouse gases elsewhere. Prior to ratification, treaty participants agreed to launch country-based pilot projects, referred to collectively as Activities Implemented Jointly (AIJ), to test novel aspects of the project-related provisions. Relying on a 10-year history of projects, the authors investigate the determinants of AIJ investment. Their findings suggest that national political objectives and possibly deeper cultural ties influenced project selection. This characterization differs from the market-based assumptions that underlie well-known estimates of cost-savings related to the Protocol's flexibility mechanisms. The authors conclude that if approaches developed under the AIJ programs to approve projects are retained, benefits from Kyoto's flexibility provisions will be less than those widely anticipated.

Keywords: abatement, abatement costs, approach, Biological Diversity, carbon, carbon dioxide, carbon offset, carbon taxes, Clean Development Mechanism, Climate Change, cost assumptions, democratic institutions, developed countries, development assistance, discount rate, Economics, emission, emission levels, emission reduction, emission reductions, emissions, environmental, environmental issues, foreign direct investment, foreign investment, fossil, fossil fuels, GDP, global emissions, greenhouse effect, greenhouse gas, greenhouse gas emissions, greenhouse gases, heating systems, income, international investors, investment activity, investment choices, investment climate, investment decisions, investment flows, investment opportunities, investment projects, investor countries, joint implementation, marginal cost, option value, Ozone Layer, per capita income, pilot projects, pollution, portfolio, present value, private investment, profitability, public funds, quotas, reducing emissions, savings, streams, tons of carbon, tradable permit, tradable permit markets, transaction costs, transition economies, valuation

by Gunnar Breustedt and Donald F. Larson

The World Bank www.worldbank.org
Research Working Paper Number WPS 4131; February 1, 2007; 32 pages
http://go.worldbank.org/587J4ZXFA0

Abstract: Solid waste management (SWM) facilities are crucial for environmental management and public health in urban regions. Due to the waste management hierarchy, one of the greatest challenges that organizations face today is to figure out how to diversify the treatment options, increase the reliability of infrastructure systems, and leverage the redistribution of waste streams among incineration, compost, recycling, and other facilities to their competitive advantage region wide. Systems analysis plays an important role for regionalization assessment of integrated SWM systems, leading to provide decision makers with break-through insights and risk-informed strategies. This paper aims to apply a minimax regret optimization analysis for improving SWM strategies in the Lower Rio Grande Valley (LRGV), an economically fast growing region in the US. Based on different environmental, economic, legal, and social conditions, event-based simulation in the first stage links estimated waste streams in major cities in LRGV with possible solid waste management alternatives. The optimization analysis in the second stage emphasizes the trade-offs and associated regret evaluation with respect to predetermined scenarios. Such optimization analyses with multiple criteria have featured notable successes, either by public or private efforts, in diverting recyclables, green waste, yard waste, and biosolids from the municipal solid waste streams to upcoming waste-to-energy, composting, and recycling facilities. Model outputs may link prescribed regret scenarios in decision making with various scales of regionalization policies. The insights drawn from the system-oriented, forward-looking, and preventative study can eventually help decision-makers and stakeholders gain a scientific understanding of the consequences of short-term and long-term decisions relating to sustainable SWM in the fast-growing US–Mexico borderland.

by Ni-Bin Chang 1 and Eric Davila 2
1. Department of Civil and Environmental Engineering, University of Central Florida, 4000 Central Florida Blvd., Orlando, FL 32816, USA; Telephone: +1 407 7547521.
2. Llano Grande Center for Research and Development, Elsa, TX, USA

Waste Management via Elsevier Science Direct www.ScienceDirect.com
Volume 27, Issue 6; 2007; Pages 820-832
http://dx.doi.org/10.1016/j.wasman.2006.05.002

Abstract: This study derives the relationship between environmental production functions and environmental directional distance functions. These two approaches make different assumptions when modeling the joint production of good and bad outputs. The environmental production function credits a producer solely for expanding good output production, while the directional environmental distance function credits a producer for simultaneously increasing production of the good output and reducing production of bad outputs. Estimates of technical efficiency and pollution abatement costs are calculated using data from coal-fired power plants. These results provide the empirical basis for comparing the environmental production function to the environmental directional distance function.

Keywords: Environmental production functions; Environmental directional distance functions; Pollution abatement costs

by Rolf Färe 1, Shawna Grosskopf 2 and Carl A. Pasurka, Jr. 3,
1. Department of Economics and Department of Agriculture and Resource Economics, Oregon State University, Corvallis, OR 97331, USA
2. Department of Economics, Oregon State University, Corvallis, OR 97331, USA
3. US Environmental Protection Agency, Office of Policy, Economics and Innovation (1809T), 1200 Pennsylvania Ave., N.W., Washington, DC 20460, USA

Energy via Elsevier Science Direct www.ScienceDirect.com
Volume 32, Issue 7; July, 2007; Pages 1055-1066
http://dx.doi.org/10.1016/j.energy.2006.09.005

Abstract: This paper introduces an integrated approach based on data envelopment analysis (DEA), principal component analysis (PCA) and numerical taxonomy (NT) for total energy efficiency assessment and optimization in energy intensive manufacturing sectors. Total energy efficiency assessment and optimization of the proposed approach considers structural indicators in addition conventional consumption and manufacturing sector output indicators. The validity of the DEA model is verified and validated by PCA and NT through Spearman correlation experiment. Moreover, the proposed approach uses the measure-specific super-efficiency DEA model for sensitivity analysis to determine the critical energy carriers. Four energy intensive manufacturing sectors are discussed in this paper: iron and steel, pulp and paper, petroleum refining and cement manufacturing sectors. To show superiority and applicability, the proposed approach has been applied to refinery sub-sectors of some OECD (Organization for Economic Cooperation and Development) countries. This study has several unique features which are: (1) a total approach which considers structural indicators in addition to conventional energy efficiency indicators; (2) a verification and validation mechanism for DEA by PCA and NT and (3) utilization of DEA for total energy efficiency assessment and consumption optimization of energy intensive manufacturing sectors.

Keywords: Energy efficiency; Optimization; Energy intensive manufacturing sectors

by A. Azadeh, M.S. Amalnick, S.F. Ghaderi and S.M. Asadzadeh; all of Department of Industrial Engineering, Faculty of Engineering, Center of Excellence for Intelligent Experimental Mechanics, Research Institute of Energy Management and Planning, P.O. Box, University of Tehran, Iran; Telephone:; fax:.

Energy Policy via Elsevier Science Direct www.ScienceDirect.com
Article in Press, Corrected Proof
http://dx.doi.org/10.1016/j.enpol.2007.01.018

* Location: San Diego, CA
* Building type(s): Commercial office
* Renovation of a 1981 building
* 78,000 sq. feet (7,250 sq. meters)
* Completed 1995
* Rating: Green Building Challenge

The Ridgehaven Building is a relatively nondescript 1981 commercial office building that was renovated for the City of San Diego's Environmental Services Department. The renovation provided an opportunity to showcase cost-effective energy efficiency improvements, resulting in a remarkably efficient building for a very reasonable price.

Environmental Aspects

Goals for the project were healthy indoor air quality, resource efficiency, and efficient building operations. The following criteria to address these goals were ultimately included in the project specifications: minimize the environmental impact of selected materials, systems, and construction; create a healthful work environment by minimizing material chemical emissions; improve indoor air quality through mechanical systems selection and construction; maximize resource conservation and recycling in both material selection and construction; and maximize energy conservation through mechanical and electrical system efficiency.

Healthy indoor air quality was a primary goal since some of the EDS employees had chemical sensitivities. Additionally, the city wanted to avoid any issues with sick building syndrome and wanted to create a healthful work environment.

Cost data in U.S. dollars as of date of completion.
* Total project cost (land excluded): $2,700,000
* Property cost: $3,000,000

The project cost approximately $37/ft2 ($398/m2) for renovation, on top of the $41/ft2 ($441/m2) purchase price.

The city saved approximately $76,000 in energy expenses after the first year of operation. With the specified energy management system now in place, the Environmental Services Department (ESD) can expect to save well over $80,000 in annual energy costs. The ESD estimates an average payback period of 4 years on the energy-saving systems.

On average, the environmentally friendly building materials used in this project cost more than conventional materials. To lower the overall project costs, creative use of the materials was necessary, such as forgoing more expensive wall coverings. Other tradeoffs included sealing or painting the cabinetry in place of costlier laminating, and using cellulose insulation rather than fiberglass batts.

Another method of addressing building costs included a life-cycle analysis approach to building materials cost. For instance, carpet tiles in general cost more than broadloom carpet. However, worn carpet tiles can be moved from high-traffic areas to low-use areas, thus extending the useful life of the material. In addition, the perlite acoustical ceiling tiles have a longer estimated useful life than conventional ceiling tiles. Linoleum is extremely durable and also has a longer life expectancy than conventional resilient flooring. By averaging the cost of the material over the extended life of the product, specifying durable products was another way to lower material costs.

By diverting over 186 tons (170 tonnes) of debris from the landfill, the city saved approximately $93,050 ($1.27 per ft2) by avoiding landfill tipping fees. Since the owner, ESD, also runs the landfill, this helps the city meet requirements of California Law AB939.

Energy-saving lighting and controls were specified based on the DOE2 computer analysis of the lighting engineer's recommendations. Energy-efficient mechanical heating, ventilation, and air-conditioning (HVAC) systems and controls were also specified based on the DOE computer simulation of the mechanical engineer's recommendations.

Energy-efficient T-8 fluorescent lamps and 2x4-foot (0.6 x 1.2 m) parabolic fluorescent light fixtures were installed. These fixtures are considerably more efficient than the original building lighting. Daylight sensors and occupancy sensors were installed to control the lighting and reduce energy consumption. Occupancy sensor plug strips were installed at computer workstations for added energy savings.

Although the original building facade had recessed windows, solar control film was installed on the east-, south-, and west-facing window elevations to further reduce solar heat gain. At the upper-level corner offices, overhead, sloped glazing of the original structure created a greenhouse effect. Awning shades were installed to minimize solar heat gain at these locations.

The entire existing mechanical HVAC system was replaced with high-efficiency water-source heat pumps (14.9 EER), adjustable-speed condenser pumps, variable-air-volume boxes for outside air, and an energy-efficient cooling tower. Direct digital computer (DDC) controls were installed to balance the system for additional energy savings. (A substitute system was installed the first year that was not as effective as the specified system, yet still surpassed the annual energy consumption goal of 9 kWh/ft2 [97 kWh/m2]. The building has been operating more efficiently since the specified system was installed in March 1997; however, the system has increased the building's energy consumption.)

Currently, the building uses approximately 60% less energy in building operation than the original structure. In addition, the building surpasses Energy Efficiency Standards (California Title 24 requirements) by over 50% through the installation of state-of-the-art energy-saving electrical and mechanical systems. The actual energy consumption of the renovated building is now 8.2 kWh/ft2 (88.3 kWh/m2) per year compared to 21 kWh/ft2 (226 kWh/m2) per year that the conventional office building used prior to energy upgrades.

The Ridgehaven Office saves over 60% in energy consumption compared to a nearly identical office building, with no energy-efficient systems upgrades, on adjacent property.

Added to Database February 5, 2007

U.S. Department of Energy Energy Efficiency and Renewable Energy Division www.eere.energy.gov
Building Technologies Program
http://www.eere.energy.gov/buildings/database/overview.cfm?projectid=41

Abstract: The U.S. mortgage market has experienced phenomenal change over the last 35 years. This paper develops and implements a technique for assessing the impact of changes in the mortgage market on households. Our framework, which is based on the permanent income hypothesis, that allows us to gauge the importance of borrowing constraints by estimating the empirical relationship between the value of a household's home purchase and its future income. We find that over the past several decades, housing markets have become less imperfect in the sense that households are now more able to buy homes whose values are consistent with their long-term income prospects. One issue that has received particular attention is the role that the housing Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, have played in improving the market for housing finance. We find no evidence that the GSEs' activities have contributed to this phenomenon. This is true whether we look at all homebuyers, or at subsamples of the population whom we might expect to benefit particularly from GSE activity, such as low-income households and first-time homebuyers.

by Kristopher Gerardi, Harvey S. Rosen and Paul Willen
National Bureau of Economic Research (NBER) www.NBER.org
Working Paper Number 12967; Issued in March 2007
http://papers.nber.org/papers/W12967

The BREN School of Environmental Science and Management at the University of California, Santa Barbara presented "A California Climate Policy Forum" on March 19, 2007 Organized by the Environmental Economics Group and the Governance Group at the Bren School

The Forum asked the question "Do California’s efforts to control greenhouse gases – such as the passage of AB32, the California Global Warming Solutions Act of 2006 – represent genuine leadership and meaningful progress in addressing climate change? Or are they merely expensive posturing by the state that will raise the cost of doing business and drive away jobs without reducing greenhouse gas emissions?"

Five policy experts, representing the state legislature, the Public Utilities Commission, the Air Resources Board, Southern California Edison, and the Harvard Environmental Law Program, will convene at the Bren School to debate the status and future of California’s climate policies. The panel discussion will feature each expert making a short presentation, followed by a moderated discussion and questions from the audience.

The panelists were:

Mike Hertel, Southern California Edison
Jody Freeman, Director, Harvard Environmental Law Program
Fran Pavley, Former California Assemblywoman
Michael R. Peevey, President, California Public Utilities Commission (PUC) and
Catherine Witherspoon, Executive Officer, California Air Resources Board (ARB)

The Moderator was Charles Kolstad, Professor of Environmental Economics, UCSB

http://fiesta.bren.ucsb.edu/~kolstad/events/ClimateForum/webcast.htm
http://www.bren.ucsb.edu/events/climate_forum.htm
The BREN School of Environmental Science and Management at the University of California, Santa Barbara www.bren.ucsb.edu
http://fiesta.bren.ucsb.edu/~kolstad/events/ClimateForum/webcast.htm

Abstract: This paper assesses the three leading technologies for capture of CO2 in power generation plants, i.e., post-combustion capture, pre-combustion capture and oxy-fuel combustion. Performance, cost and emissions data for coal and natural gas-fired power plants are presented, based on information from studies carried out recently for the IEA Greenhouse Gas R&D Programme by major engineering contractors and process licensors. Sensitivities to various potentially significant parameters are assessed.

Keywords: CO2; Capture; Electricity; CCS; Costs

by John Davison; IEA Greenhouse Gas R&D Programme, Orchard Business Centre, Stoke Orchard, Cheltenham, GL52 7RZ, UK; Telephone: +44 1242 680753; fax: +44 1242 680758.

Energy via Elsevier Science Direct www.ScienceDirect.com
Volume 32, Issue 7; July, 2007; Pages 1163-1176
http://dx.doi.org/10.1016/j.energy.2006.07.039

Economic perspectives and analyses of multiple forest values and sustainable forest management
Pages 733-740
by Shashi Kant

Pluralism in the economics of sustainable forest management
Pages 743-750
by Sen Wang and Bill Wilson
Prevailing societal values have enthroned sustainable forest management (SFM) as a new paradigm governing forest practices. Calling for respecting a range of dynamic conditions instead of a single, static target, SFM differs from conventional forest management on account of its acceptance of plurality in management objectives, approaches and decision making processes. Forest economics has evolved accordingly, in response to the need for accommodating pluralism. This paper examines several issues of pluralism in the economics of SFM, principally: (i) multiple forest uses under extended forest rotations, (ii) the panarchy framework, and (iii) the stakeholder's approach. The merits and limitations of these approaches are discussed. The paper ends with some suggestions for future research.

Sustainable forest management, pecuniary externalities and invisible stakeholders
Pages 751-762
by Colin Price
Agreement of all stakeholders is crucial to sustainable forest management. But timber production may be an externality in participatory decision making. Reduced supply under local environmental constraints influences price and hence timber supply elsewhere. Such pecuniary externalities are generally ignored in cost–benefit analysis, but for questionable reasons. Modelling shows that they induce significant net distributional and technological effects: thus stakeholders exist outside the local participatory context. Quasi-markets for environmental and social effects, as in sale of certified timber, appear to internalise such effects, rendering spillovers from local decisions welfare-neutral. However, the nebulousness of certified markets makes this improbable: demand is for a symbolic warm glow, little related to either consequences for sustainability or costs of achieving them. Pecuniary externalities remain an unresolved problem in evaluating local decisions.

An evolutionary game-theoretic approach to the strategies of community members under Joint Forest Management regime
Pages 763-775
by Chander Shahi and Shashi Kant
Joint Forest Management (JFM) has been analyzed using an evolutionary-game-theoretic approach. The interactions between the different groups of a community, for forest use under state regime and JFM regime, are modeled as n-person asymmetric games, and the concepts of evolutionary stable strategies (ESS) and asymptotically stable states (ASS) are used to understand the variations in the outcomes of JFM program. The n-person game of forest use under the state regime has a unique Nash equilibrium in which the defectors or lawbreakers will continue to harvest forest resources illegally until the net returns from harvests become negative. The n-person forest resource use game under JFM regime has many Nash equilibriums, but has only one sub-game perfect defection equilibrium. However, the n-person game for JFM regime has four evolutionary strategy equilibriums: cooperators (C) equilibrium, defectors (D) equilibrium, defectors–enforcers (D–E) equilibrium and cooperators–enforcers (C–E) equilibrium, but has only two asymptotically stable (C–E and D–E) equilibriums. Implications of these results are discussed, and a need to enhance evolutionary game-theoretic formulation of JFM is highlighted.

Economic analyses of multiple forest values
A framework for developing marked-based policies to further biodiversity on non-industrial private forests (NIPF)
Pages 779-788
by Jagannadha Matta, Janaki Alavalapati and George Tanner
With the increasing concerns for healthy forests and enhanced habitat for wildlife, private landowner involvement has become a critical component of biodiversity conservation in the US. Since biodiversity conservation is largely a public good, landowners have little incentive to promote it at their own cost. Strategies to develop socially optimal policies for biodiversity conservation should however consider three aspects—identifying forest practices that best promote habitat for a wide range of species at landscape level, estimating the costs associated with adoption of identified practices, and assessing the adoption potential of the identified practices among landowners. In this paper, we developed a framework to achieve these three tasks, applying an analytical hierarchy process, a dynamic optimization model, and an attribute based contingent valuation technique, respectively. The framework was applied to the context of enhancing habitat for biodiversity on private forests in Florida.

Carbon credits and management of Scots pine and Norway spruce stands in Finland
Pages 789-798
by J. Pohjola and L. Valsta
Carbon storage in forests can be increased to reduce carbon dioxide in the atmosphere. We use a joint production model of timber production and carbon sequestration to analyse the financially optimum silvicultural strategies for Scots pine and Norway spruce at the stand level in Finland. This study expands the earlier analyses by taking into account thinnings as measures to increase carbon stocks in forests, in addition to lengthening the rotation age. The results indicate that, in joint production, both the growing stock level and rotation length are increased, compared to pure timber management. The results show clearly the importance of including thinnings in the analysis. For Scots pine stands, a major share of the increase in average carbon storage during the rotation period was obtained by modifying thinnings while lengthening the rotation age had a minor impact, with carbon prices of 10 and 20 €/t CO2. On the other hand, in the case of Norway spruce, delaying the clearcutting provided most of the increase in average carbon storage. The carbon tax/subsidy programme was found to increase discounted net revenues to the forest owners considerably. The carbon tax/subsidy programme had a positive impact on the average timber yield in a fully regulated forest framework due to the considerable increase in the yield of sawlog, whereas the yield of pulpwood was somewhat decreased.

Shadow prices and input-oriented production efficiency analysis of the village-level production units of joint forest management (JFM) in India
Pages 799-810
by Dinesh Misra and Shashi Kant
Joint forest management (JFM) has emerged as the most promising institutional arrangement for sustainable forest management, and village-level organizations (production units) are responsible for all the productive activities of JFM. Employing a parametric linear programming approach, a deterministic input distance function is estimated characterizing the production structure of JFM organizations, in the Gujarat state of India, using the production data from 50 organisations. The distance function includes economic, biological and social outputs, and neo-classical – land, labour, and capital – as well as non-neo-classical – social, political, institutional, and organisational – factors. The results are used to calculate the production efficiency and shadow prices of neo-classical as well as non-neo-classical factors of different village-level JFM organizations. Policy and management implications of production efficiency and shadow prices are discussed.

Selection of tree species for plantations in Japan
Pages 811-821
by Ichiro Fujikake
The selection of species used for planting is an important factor that affects how plantation forests ecologically benefit society. Sugi (Japanese cedar, Cryptomeria japonica) and hinoki (Hinoki false cypress, Chamaecyparis obtusa) are the two main plantation species in Japan. Although sugi was once the favored species in many regions, forest owners have increasingly opted to plant hinoki. We examined the effect of economic factors on the choice between these two species. We modeled the proportion of sugi planted in each prefecture in Japan using a generalized estimating equations method. The results suggest that changes in stumpage prices and forestry wages are the cause of changes in the choice of species. These findings agree with theoretical predictions derived using a Faustmann-type rotation decision model. Forest owners in Japan thus appear to choose species for planting according to current trends in economic desirability. In terms of carbon sequestration and soil conservation functions of forest, hinoki forest is considered to be somewhat inferior to sugi forest. Thus our observation implies that the Japanese forestry has shifted to the species that is desirable from the economic perspective at the expense of the ecological functions of forests.

Economic analysis of sengon (Paraserianthes falcataria) community forest plantation, a fast growing species in East Java, Indonesia • Pages 822-829
by Ulfah J. Siregar, A. Rachmi, M.Y. Massijaya, N. Ishibashi and K. Ando
Despite strong efforts to rehabilitate degraded forests and lands in Indonesia, successful cases of reforestation are rare. A previously identified problem was unclear land tenure in certain forest areas creating conflict between local communities and other forestry stakeholders. Although communities claim to be interested in forestry, encouraging them to conduct reforestation or establish forest plantations has proven to be very difficult because it is regarded as non-profitable. In Kediri, East Java, sengon (Paraserianthes falcataria) mixed plantations are usually found because they are profitable and give more routine income to communities. Sengon is mixed mostly with pineapple, and planted with a density of 800 trees/ha. Pineapple is planted only once, and then harvested every year for 4 years. Within the 8 year rotation age of sengon, a farmer can harvest pineapple 4 times before cutting the trees. To analyze whether mixed plantations give more income to communities than planting pure sengon, the Net Present Value (NPV) and Benefit–cost Ratio (BCR) of mixed plantations were calculated. Using an interest rate of 17.53% as a Minimum Acceptable Rate of Return (MARR), the result showed that mixed plantations are profitable, however community decisions were influenced by the amount of land owned, the cost of mixed plantations, the timber price and the period of gaining the income of harvesting that is difficult to cover monthly living cost. The importance of other factors in determining community interest in reforestation is discussed.

Policy instruments for managing multiple forest values

Policy instruments to enhance multi-functional forest management
Pages 833-851
by Frederick Cubbage, Patrice Harou and Erin Sills
Sustainable forest management has become the salient cross-cutting theme in forestry throughout the world today. This paradigm recognizes that forests are managed for a wide variety of ecological, economic, and social benefits. This explicit recognition of many outputs and services as management objectives has recast our economic analyses on the values of forests. Similarly, our policy tools must adapt to achieve the goals of multi-functional forestry across a broad range of ownerships and values. We review factors that affect forest policy selection, including the nature of goods and services, social values, and economic values. We then discuss traditional and newly developing natural resource policy tools in this context and discuss their applications in meeting the objectives of forest landowners and society in achieving multi-functional sustainable forestry goals in the future.

Efficiency and equity of forest policies: A graphic analysis using the partial equilibrium framework
Pages 852-861
by Pere Riera, Leticia Aranda and Robert Mavsar
The paper examines efficiency and equity implications of three types of forest policies –forest subsidies, forest certification, and command and control measures–, using some Spanish data. First, the three types of forest policies are analyzed for efficiency; the winners and the losers are identified and the net welfare for the society as a whole is examined. Next, the analysis is undertaken in income distributional terms; the distributional implications for the Spanish society are examined using a Lorenz curve. The results depend largely on the assumptions. In general, subsidies seem to provide greater welfare improvements than the other two policies, being command and control measures the most questionable. The income distribution analysis yields less clear results, although it shows the circumstances under which each policy would result in a more equal income distribution.

Do certified tropical logs fetch a market premium?: A comparative price analysis from Sabah, Malaysia
Pages 862-868
by Walter Kollert and Peter Lagan
The controversy about the benefits of certification to timber producers has centered on the “market premium” and “market access” arguments. Some studies claim evidence that consumers are willing to pay a market premium between 2% and 30% for sustainably produced, certified timber products. Others doubt or flatly deny this notion. Most of these studies are based on willingness-to-pay surveys of consumer demand leaving aside the crucial question whether or not the producers of certified logs, which bear the costs of forest certification, obtain a financial reward for their efforts.

The paper contributes quantitative evidence to the on-going debate. Time series of prices of certified and uncertified logs (2000 to 2004) provided by three forest management units from Sabah, Malaysia, were examined in a comparative analysis (ANOVA) of 6 species groups. The results suggest that forest management certification achieves a market premium for certified logs. In particular high quality hardwoods (e.g. Selangan Batu, Keruing) destined for the export market fetch a price premium of 27% to 56%. Lower quality timbers (e.g. Kapur, Seraya) also fetch a price premium, however the difference is less pronounced (2% to 30%).

Forest environmental incomes and the rural poor
Pages 869-879
by Paul Vedeld, Arild Angelsen, Jan Bojö, Espen Sjaastad and Gertrude Kobugabe Berg
To what extent do rural people in developing countries depend on forest environmental income? This study addresses this question through a meta-analysis of 51 case studies from 17 countries. Cases were selected on the basis of a broad literature search, focusing on (i) data on household environmental income as well as other income sources; (ii) productive assets and socio-cultural information; and (iii) information on contextual variables that are likely to influence the use of forest sources of income. Results reveal that forest environmental income represents on average 22% of the total income in the population sampled. The main sources of forest environmental income are fuelwood, wild foods and fodder. Forest environmental income has a strong equalizing effect on local income distribution. Income diversification declined with total income; diversification did, however, increase with dependence on forest resources up to a point, beyond which diversification declined. The partial or complete omission of environmental income in current poverty assessments may lead to an underestimation of rural income and, under certain circumstances, to flawed policies and interventions.

Edited by S. Kant
Forest Policy and Economics via Elsevier Science Direct www.ScienceDirect.com
Volume 9, Issue 7, Pages 733-882 (April 2007)
Special Issue: Economic perspectives and analyses of multiple forest values and sustainable forest management
http://www.sciencedirect.com/science/journal/13899341

Urban greens have significant amenity and recreational use value which contribute significantly to the quality of urban life. Politicians, bureaucrats, industrial houses, and real estate developers, especially in developing countries, often attempt to
utilize these space for projects that reduce or eliminate these oases.

Non-market benefits of such areas are generally not correctly valued and incorporated in to cost-benefit analysis of development projects. Dr. Pradeep Chaudhry selected Chandigarh, one of the planned cities of India to estimate the non-market value of recreational benefits provided by the urban forestry of the city was estimated, because it is known for its parks, gardens and urban greenery.

The focus of this study, in the form of Ph.D thesis, was on city’s parks, gardens, tree-avenues, reserved forests and the Sukhana wild life sanctuary. The main objectives were to estimate the recreational use value of above areas from the point of view of residents as well as tourists coming to the city, and to assess the predictive abilities of various functional forms for developing suitable models to estimate willingness to pay (WTP).

Two economic valuation methods -- Contingent valuation method and Travel cost method were applied.

The mean willingness to pay (WTP) for the betterment of existing green landscape features and for creating new parks/gardens on the part of each "reasonably earning" family residing in the city has been found as Rs. 153/- per year for a period of five years, which indicates an annual recreational use value of the city’s urban forestry assets to Rs. 2.75 crores (Rs. 27.50 millions) at 2002-03 prices.

The Contingent valuation method (open ended) was used for this purpose and data was collected from 2358 residents of the city. The Contingent valuation method, open-ended version (CVM) and Zonal travel cost method (TCM) were used to estimate the annual recreational use value of city’s urban greenery on the part of tourists coming to the city. The reasons for variation in the results of two methods have been discussed. The inherent tendency of most of the Indian middle and upper middle class, which has the capacity to move as tourists, not to reveal actual income on record due to huge black economy of the country, has been found as one of the major reasons for poor results in CVM (OE). Estimates of recreational use value provided by the TCM has been considered more reliable in the Indian context, which was estimated as Rs. 9.24 crores (Rs. 92.40 millions). Therefore, total annual recreational (use) value of the city’s parks/gardens, boulevards, green avenues, reserve forests, wild life sanctuaries and other landscape features at 2002-03 prices, equates to approximately Rs. 12.00 crores (Rs. 2.75 crores plus Rs. 9.24 crores). This amount is the recreational use value only on the part of people using or approving of this particular environmental asset and should not be misunderstood as environmental or ecological value.

The urban forestry in Chandigarh city contributes 87.67% in making the city attractive with respect to tourism. The City’s unique architecture, openness, comparative cleanliness and other features account for the balance. or 12.33%. This exhibits the immense power of urban forestry in attracting tourists.

by Dr. Pradeep Chaudhry
PhD. Thesis
Forest Research Institute(deemed university) Dehradun-248006, India; e-mail: pradeepifs@yahoo.com
2006

Abstract: It seems an established empirical fact that Superfund sites lower local property values. Two recent literature reviews (Farber, 1998, Boyle and Kiel, 2001) report that published academic papers on the topic verify that point. The EPA’s approach assumes that all sites negatively impact property values, and that the impact is similar for all sites. This paper examines 74 National Priorities List (NPL) sites in 13 U.S. counties in order to test these two implicit assumptions. Following the hedonic approach of Kiel (1995) and Kiel and McClain (1995), we find that some sites have the expected negative impact, while other sites have either no impact or a positive impact on local property values. We also consider the possibility of ‘stigma’ from sites by looking at those sites that have been cleaned during our sample period and find that some sites do appear to suffer from stigma, while others do not. We then use a meta-analysis approach to examine what factors affect the likelihood and extent of a decrease in property values near the sites. We find that larger sites in areas with fewer blue-collar workers are more likely to have the expected negative impact on local house prices.

Keywords: Environment; Superfund; Hedonic regressions; meta-analysis; property values (search for similar items in EconPapers)

by Katherine Kiel and Michael Williams
Katherine Kiel: Department of Economics, College of the Holy Cross; (kkiel@holycross.edu)
Michael Williams: Department of Economics, College of the Holy Cross

College of the Holy Cross, Department of Economics via Econ Papers/REPEC http://econpapers.repec.org
Working Paper Number 505; March 2005
Published in Journal of Urban Economics, Vol. 61:1, January 2007, pp. 170-192.
http://econpapers.repec.org/paper/hcxwpaper/0505.htm

Abstract: The authors assessed the willingness of residents to pay for urban green-space conservation in Hangzhou, China, using the contingent-valuation method. The aim of the study was to provide policy makers with information that would be useful for making informed decisions in urban-development planning. The findings of the study are as follows: 1) The willingness of residents to pay for urban green-space conservation was positively correlated with their perceptions of the benefits of green spaces and negatively correlated with perceptions of the annoyances. 2) The willingness to pay a higher premium for green-space conservation is directly related to gender, income level, and residential-ownership status. Age and education level are not significantly correlated with willingness to pay. 3) A majority of respondents view the conservation of urban green spaces as a very important function of the city, and most of them are willing to pay additional taxes for this conservation. 4) The total value per year to the public of the conservation program in Hangzhou is about $15.4 million. These qualitative and quantitative findings can be used in the policy-making process for urban-development plans.

by Bo Chen, Zhiyi Bao, Zhujun Zhu
Journal of Environmental Health via National Environmental Health Associates www.neha.org and Proquest www.proquest.com
http://proquest.umi.com/pqdweb?did=1177151261&sid=2&Fmt=3&clientId=13371&RQT=309&VName=PQD
http://www.neha.org/JEH/recent_issues.htm
Volume 69, Issue 5; December, 2006; pages 26-31

Abstract: Economic evaluation of projects involving changes in mortality risk conventionally assumes that lives are statistical, i.e., that risks and policy-induced changes in risk are small and similar among a population. In reality, baseline mortality risks and policy-induced changes in risk often differ among individuals although these differences are imperfectly known. We examine the effects of information about heterogeneity of risk on economic evaluation. Although social welfare (defined as aggregate expected utility) is unaffected by information about risk heterogeneity, the economic valuation of changes in risk (the sum of individual compensating or equivalent variations) is sensitive to this information. The effect of information on economic valuation and hence the outcome of a benefit-cost analysis (BCA) depends on: i) whether information is about heterogeneity of the baseline and/or change in risk, ii) whether risk is valued using willingness to pay (WTP) or willingness to accept (WTA) measures, iii) the status quo policy, and iv) whether individuals are risk-averse or risk-neutral in wealth. We show that BCA does not systematically favor identified over statistical lives and suggest some political factors that may explain the apparent public-decision bias toward protecting identified lives.

by James K. Hammitt 1 and Nicolas Treich
1. Harvard University; 718 Huntington Avenue; Boston, MA 02115; United States; (Phone), (Fax);
jkh@harvard.edu
2. National Institute for Agricultural Research (INRA), 147, rue de l'Universite; 75338 Paris CEDEX 07; France; (Phone); (Fax); ntreich@toulouse.inra.fr
CESifo www.cesifo-group.de
Working Paper Number 1931; February, 2007
http://www.cesifo-group.de/portal/page?_pageid=36,302752&_dad=portal&_schema=PORTAL&p_file_id=13941

The cost of heat energy from coal is $1-$2 per million BTUs, compared to $6-$8 for natural gas and $8-$12 for oil. Where it is plentiful therefore -- as in the United States and China -- coal is the economic fuel of choice for new, electricity-generating power plants at today's fuel prices.

What about coal as a substitute for imported oil? Coal can be converted into liquid fuel suitable for transportation use; engineering estimates of the cost of deriving this synthetic fuel from coal (or shale oil) vary from $50 to $80 per barrel of oil equivalent. If world oil prices, currently in this price range, persist, this synfuel might become an attractive option.

So what is the problem? The environmental impact.

Here there is some good news: The so-called "criteria air pollutants" (sulfur oxides, nitrogen oxides and particulate matter) emitted from power plants have been effectively controlled at an affordable incremental cost. More recently, the EPA has placed restrictions on mercury emissions; it is not yet clear how well or how cheaply power plants will be able to meet this new constraint. However, on balance, we've achieved much "cleaner" generation of electricity from coal since the Clean Air Act of 1970.

Global warming is another matter. Coal combustion contributes about 40% of the global emissions of carbon dioxide, the major greenhouse gas; and most qualified scientists believe human-generated greenhouse gas emissions are causing global warming. Oil contributes another 40% and coal-derived substitute fuels would roughly double the carbon dioxide emissions per gallon.

The scale of the emissions is enormous. About two pounds of CO2 are emitted for every kilowatt-hour of electricity produced from coal combustion. A modern 1000 megawatt coal plant emits over 20,000 metric tons of carbon dioxide per day. Thus the urgent need to find practical and economic technologies and policies that permit the continued use of coal without increasing CO2 emissions into the environment. This need motivated "The Future of Coal: Options for a Carbon-Constrained World," an MIT study released yesterday.
...
In the U.S., much of industry and many environmental groups believe that the best method for sequestration is IGCC -- the acronym for coal gasification integrated in a combined cycle with combustion and steam turbines. Coal is partially burned with oxygen (not air, to avoid wastefully heating up nitrogen) to form a gas that is subsequently "shifted" to a mixture of carbon dioxide and hydrogen by the addition of steam. The CO2 is separated before combustion, compressed and transported to the site for injection into the aquifer; the hydrogen is sent to a combustion turbine to produce electricity.

This IGCC system can remove 90% of the CO2, but as it is a more complex process than conventional coal electricity production, it will add about 50% to the cost. This translates into about a 25% increase of the cost of electricity to the consumer, a substantial but not crippling increase for developed economies. With current technology and with additional experience, this appears to be the lowest cost option.

Europe is following a different technology path: oxygen-fired supercritical pulverized coal combustion (as well as a process called fluidized bed combustion, suitable for low-quality coal). The "oxy-fired" plant is, like IGCC, designed for coal combustion in oxygen rather than air, and the CO2 is also captured for sequestration, but after combustion. The advantage of the pulverized coal combustion process is simplicity; the disadvantage is the increased cost, as more oxygen is required to burn all the coal to carbon dioxide.

This cost disadvantage could be reversed if a cheaper way is found to separate oxygen from air -- a challenging but entirely plausible technical prospect. And the pulverized coal/fluidized bed technologies more easily accommodate a diversity of coal types.
...

by John Deutch and Ernest Moniz; both former undersecretaries of the Department of Energy and co-chairs of the MIT study on which the essay is based.

AEI-Brookings Joint Center www.aei.brookings.org
Policy Matters 07-13; March 2007
http://www.aei.brookings.org/policy/page.php?id=284
This article appeared in The Wall Street Journal on March 15, 2007

Karnataka is the driest state in India after Rajasthan. Large parts of the state are prone to recurrent droughts. Three quarters of all farmland is rain-fed and does not have access to irrigation.

Farm productivity is low. With limited access to water, farmers are only able to grow a narrow range of one or two dry land crops.

Without the proper management of water resources, groundwater tables are falling. Most wells run dry in the long summer months, restricting the growing season.

Rising populations are increasing pressures on land. Forests have been cut down to make way for agriculture, causing rapid soil erosion and rendering large areas unproductive.

The extensive use of chemical fertilizers and pesticides is further reducing soil fertility, leading to declining crop yields. Common lands are deteriorating.

There is an urgent need to conserve both soil and moisture and harvest rain water to improve farm productivity. Till now, however, watershed development has largely been the responsibility of the government with little or no participation from village communities.

Example of Impact:

• Wells and ponds now retain water for longer periods – from only three to four months earlier to four to six months now. Groundwater yields have increased by nearly 1,000 liters per hour.
• Farmers are now able to diversify into higher value crops. In many cases, they now grow an extra crop.
• Where the project has been completed, crop yields have increased by 24%. Milk yields have also risen by 15 to 20%.
• Average annual household income has increased by about 66% to some US$373. As a result, young men no longer have to leave the community to find work; migration has consequently reduced by about 70%.
• The project has set up 4,300 farmer groups to sustain participatory watershed management across 7,000 communities in 742 micro-watersheds.
• Communities now have greater ownership and commitment and are preparing highly integrated micro-watershed plans.
• Some 6,600 new self-help groups have also been established. These groups have mobilized more than US$4 million in savings to help their members establish small businesses. The majority of members are women. More than 60% of the self-help groups are now linked to commercial financial institutions, leveraging additional credit for larger enterprise start-ups. Money-lenders are no longer a major force in these communities.
• The project has resulted in a new government policy for co-management of common lands in watersheds that will have long-term impacts on improved natural resource conservation and rural livelihoods. It has also helped strengthen decentralization.

Approach:
• The project aims to improve soil and water conservation to raise farm productivity in selected watershed areas in five drought-prone districts in Karnataka.
• It covers 432,000 hectares of arable and non-arable lands with a population of one million people whose average annual income is some US$22