Environmental Valuation & Cost-Benefit News

Unless there is a shift in world energy policies, global energy demand is set to accelerate, putting increasing strain on the world economy and the environment. Yet additional annual investments in energy productivity of $170 billion through 2020 could cut global energy demand growth by at least half—the equivalent of 64 million barrels of oil a day or almost one and a half times today’s entire U.S. energy consumption.

McKinsey Global Institute (MGI) research suggests that the economics of investing in energy productivity—the level of output we achieve from the energy we consume—are very attractive. With an average internal rate of return of 17 percent, such investments would generate energy savings ramping up to $900 billion annually by 2020. Energy productivity is also the most cost-effective way to reduce global emissions of greenhouse gases (GHG). Capturing the energy productivity opportunity could deliver up to half of the abatement of global GHG required to cap the long-term concentration of GHG in the atmosphere to 450-550 parts per million—a level experts say will be necessary to prevent the mean temperature from increasing by more than two degrees centigrade. Moreover, the opportunities to boost energy productivity use existing technologies that pay for themselves and therefore free up resources for investment or consumption elsewhere.

The capital required appears to be well within reach. The annual sum is equivalent to some 1.6 percent of global fixed-capital investment today, or 0.4 percent of current global GDP.
MGI finds that global industrial sectors need just under half of the total capital required to capture the energy productivity opportunities we have identified—$83 billion a year. Residential sectors around the world need some $40 billion a year, roughly one-quarter of the total. The capital needs of commercial and transportation end-use sectors are smaller at $22 billion and $25 billion a year, respectively. Breaking down capital requirements geographically, developing regions represent two-thirds of the incremental capital needed, with China alone accounting for $28 billion or 16 percent of the total $170 billion annual requirement. The United States accounts for $38 billion or 22 percent of the total.
A wide range of energy-market failures currently discourage consumers and businesses from embracing higher energy productivity, and they deter investors from making the capital outlays that would help end users to overcome initial financing barriers. These market failures include fuel subsidies that directly discourage productive energy use, a lack of information available to consumers about the kinds of energy productivity choices that are available to them, and agency issues in high-turnover commercial businesses.

To overcome today’s barriers to higher energy productivity MGI identified four areas for action: setting energy efficiency standards for appliances and equipment, upgrading the energy efficiency of new buildings and remodels, raising corporate standards for energy efficiency, and investing in energy intermediaries.

http://www.mckinsey.com/mgi/publications/Investing_Energy_Productivity/

America's drinking water and wastewater facilities can now save energy and reduce their carbon footprint with expanded tools available from EPA's Energy Star Program. Enhancements to Portfolio Manager, the agency's popular energy tracking tool for commercial facilities, allow water utilities to track energy use and associated carbon emissions, set targets for investment priorities, and verify efficiency improvements. Water and wastewater facilities are energy intensive, accounting for more than one-third of municipal energy use. Improving the energy efficiency of America's drinking water and wastewater systems by 10 percent would save more than 5 billion kilowatt-hours each year representing a cost savings of about $400 million annually.

Drinking water and wastewater systems spend about $4 billion a year on energy to pump, treat, deliver, collect, and clean water at the 52,000 community drinking water and 16,500 wastewater facilities in the United States. Through Energy Star, EPA provides a proven energy management strategy and no-cost tools for public and private organizations to save energy and money, as well as demonstrate environmental leadership.

More than 800 organizations - including more than 150 local governments and water utilities - are leading the way toward improved energy efficiency by responding to the Energy Star Challenge, EPA's national call-to-action to improve the energy efficiency of America's commercial and industrial facilities by 10 percent or more. In June 2007, the U.S. Conference of Mayors endorsed the Energy Star Challenge as a key strategy in meeting the goals of the Mayors Climate Protection Agreement.

Energy Star was introduced by EPA in 1992 as a voluntary, market-based partnership to reduce greenhouse gas emissions through energy efficiency. Today, the Energy Star label can be found on more than 50 different kinds of products, new homes and commercial and industrial buildings. Products and buildings that have earned the Energy Star designation prevent greenhouse gas emissions by meeting strict energy-efficiency specifications set by the government. Last year alone, Americans, with the help of Energy Star, saved about $14 billion on their energy bills while reducing the greenhouse gas emissions equivalent to those of 25 million vehicles.

Learn more about Energy Star and Portfolio Manager for drinking water systems and wastewater plants at: http://www.energystar.gov/waterwastewater

Other activities that explore the nexus between water and energy are described at: epa.gov/waterinfrastructure/bettermanagement_energy.html

U.S. Environmental Protection Agency (EPA) www.EPA.gov
http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/7019553e604c49d8852574010067ce3f!OpenDocument
March 3, 2008

A newly built cargo vessel was towed by the innovative wind propulsion of the Hamburg-based company SkySails on the North Sea near Bremerhaven, Germany for the first time in January 2008. The 160m2 SkySails supported the main engine of the 132m long Multi Purpose Heavy Lift Carrier MS “Beluga SkySails” of the Bremen-based Beluga Shipping with approximately five tons tractive force at low wind.

The shipping company and the manufacturer calculate that by using the towing kite system, a ship’s average annual fuel costs can be reduced by 10 to 35%, depending on the prevailing wind conditions. Under optimal wind conditions, SkySails estimates that fuel consumption can temporarily be cut by up to 50%. The first true test results are to be expected in the next few months.

The SkySails System is the only sail system to date that can be used in commercial shipping without restricting ship operation.

Of all known concepts for effective and sustainable alternative propulsion of merchant vessels, SkySails offers numerous advantages:
* no masts on deck which may obstruct loading and unloading,
* no restriction of storage space on board,
* no risk to the crew, cargo or ship, as well as simple handling and high reliability.

The main engine load and thus fuel consumption can be reduced by harnessing wind energy with the use of the towing kite - the Bremen-based company Beluga Shipping expects 10 to 15 percent less bunker consumption during the initial phase of operation.

This enterprise, which will cost approximately four million Euros in total, is funded by the EU with 1.2 million Euros in the framework of the WINTECC project.

The MV “Beluga SkySails” is equipped with a kite of 160 square meters in size. In 2008 the sail will be scaled up to 320 square metres. The Hamburg-based manufacturer SkySails then expects a savings potential of between 20 and 30 per cent.

Beluga Shipping GmbH initially reckons a reduction of the current bunker costs in the low four-digit US dollar range per operating day of the towing kite system. According to the shipping company, part of the savings will be passed on to the ship’s crew to enhance motivation.

Two larger project carriers of the Beluga P1-series that are currently under construction and which are to be equipped with SkySails Systems in the near future, will use kites with a sail area of up to 600 square metres.

Consequently and based on present-day knowledge, fuel savings of up to ten tons per day could be generated. This corresponds to a reduction of the daily bunker costs by approximately 6,000 US dollars.

With its maiden voyage transporting project cargo from Bremen to Venezuela, the MV “Beluga SkySails” opens up a new chapter in the history of shipping. The first newly built vessel with a SkySails System will be the practical demonstration of an innovative hybrid propulsion system that cuts ship operating costs and simultaneously reduces climate-damaging emissions.

For more information see:
www.wintecc.de
www.beluga-group.com
www.skysails.de
www.oceanwaves.de and
www.aldebaran.org

A recent report commissioned by the U.N. International Maritime Organization found that ship-related emissions, at 3.5 percent of global carbon emissions, were significantly underestimated and nearly double than previous estimates of 1.4 percent. Carbon emissions could rise another 30 percent by 2030 because of predicted increases in world seaborne trade. The industry is responsible for shipping more than 90 percent of traded goods by volume, according to Reuters.
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Cargo ships can produce smog-forming emissions equal to 350,000 new cars, according to environmental group Friends of the Earth.
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A recent study from Energy Futures found that U.S. container ports are among the biggest sources of pollution and greenhouse gas emissions in the country because (1) ports are traditionally located near densely populated coastal settings, (2) containers and big rigs trucks using the ports use diesel and a main fuel source and (3) prevailing winds sweep fumes and pollutants

http://www.wintecc.de/news_en.html
www.skysails.de
http://www.climatebiz.com/sections/news_detail.cfm?NewsID=55596
Press Releases December 15, 2007 and January 18th, 2008.

The paper examines three dynamics – impact, information and relationships - and makes recommendations that will help companies develop an integrated Corporate Social Responsibility (CSR) strategy geared to growth opportunities.

Summary: Businesses are rapidly moving beyond the idea of Corporate Social Responsibility (CSR) as simply a necessary cost of doing business. Behind this new development is the unique role of the Internet in influencing buying behavior by providing ubiquitous, in-depth information about companies, their global supply chain partners, and their impact on society and the environment. To gauge how deeply CSR has penetrated the core of the corporation — it's strategies and operations, IBM surveyed more than 250 business leaders globally and found that two-thirds of them are focusing on CSR activities to create new revenue streams. Yet fewer than one-quarter believe they understand their customers' CSR expectations well, a potentially alarming finding at a time when new customer expectations - and clout - are rapidly growing. Our analyses uncovered three dynamics for companies to understand and act upon in dealing with the threats and opportunities of CSR:
* Impact - from cost to growth
* Information - from visibility to transparency
* Relationships - from containment to engagement

by George Pohle 1 and Jeff Hittner
1. VP and Global Leader, IBM Business Strategy Consulting Practice
2. Corporate Social Responsibility Leader, IBM Institute for Business Value

To read the full report for free go to
http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03019-usen-02.pdf
IBM Institute for Business Value www.IBM.com

TRAVELERS who don’t trust the water from a mountain stream or a hotel-room faucet have often used chemicals or filters to purify it. Now they can ... swirl the water with the SteriPen JourneyLCD, a portable wand weighing 5 ounces that beams rays of ultraviolet light. It will be sold beginning in April at a cost of $129.95 at stores and www.rei.com

The wand can clean up a quart of water that could harbor stomach-wrecking microorganisms — in 90 seconds. The high-frequency light damages the DNA of bacteria, viruses and protozoa in the water like giardia and cryptosporidium so they can’t reproduce and create havoc.
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Meridian Design, of San Jose, Calif., also makes a portable ultraviolet water purifier, the mÜV ($49 at the company Web site, uvaquastar.com) that is rechargeable

By Anne Eisenbery
The New York Times www.NYTimes.com
FOR FULL STORY GO TO:
http://www.nytimes.com/2008/03/02/business/02novel.html?th&emc=th
Published: March 2, 2008

The Planet, the world’s largest privately held dedicated hosting company, today announced results of its six-month trial to reduce power consumption and increase data center operating efficiency. Initial results demonstrate that while critical server loads increased by 5 percent, power used for cooling decreased by 31 percent. Overall, the company experienced power reductions of up to 13.5 percent through a broad range of improvements. The new “green” initiatives, conducted across its six world-class data centers, are expected to deliver cost savings in excess of $1 million in 2008 alone.

The Planet also improved its “coefficient of efficiency,” an EPA- and Uptime Institute-recognized measurement of the total power necessary to operate a data center divided by critical power, which represents the energy required to operate its computers. The company increased its rating to 1.7 – a near-ideal number – from its previous “good” ranking of 2.0.

The Planet operates more than 150 30-ton computer room air conditioning (CRAC) units across its six data centers. In one data center alone, the company was able to turn off four of the units. The cooling requirement on two of the units was reduced to 50 percent of capacity, while another nine now operate at 25 percent of capacity. The company also extended the return air plenums on all of its down-flow CRAC units to optimize efficiency. In some cases, The Planet team was able to increase CRAC unit temperature settings by as much as 10 degrees while still meeting the thermal guidelines for data processing environments set by the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE).

Overview of Improvements

Across the board, the company evaluated both its data center footprint and recommended guidelines from the Site Uptime Network, an invitation-only consortium of companies that operate data centers around the globe. The Planet also evaluated standards for air conditioning efficiency from ASHRAE to optimize operating performance. Among these improvements are the following:
* Rearranged floor tiles to better manage cold airflow
* Installed seals and grommets in the ceilings, walls and floors to reduce bypass airflow
* Installed blanking plates in server cabinets to direct airflow more efficiently
* Sealed power distribution units to reduce bypass airflow

About The Planet

The Planet is the leading provider of On Demand IT Infrastructure solutions, hosting more than 22,000 small- and medium-size businesses and 6.7 million Web sites worldwide. By offering the best choice of servers, software tools and world-class support, backed by state-of-the-art facilities and unmatched network connectivity, The Planet helps turn information technology into a powerful competitive advantage that enables customers to successfully grow their businesses. For additional information, visit http://www.theplanet.com.

The Planet www.theplanet.com
http://www.theplanet.com/news/pr/pr021208.asp

The Metropolitan Transportation Authority says it will need $29.5 billion over the next five years for system improvements, including buying new subway cars, upgrading signals and expanding. ...The question is how to find all that cash without sticking up riders again. A big part of the answer should be congestion pricing.
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Congestion pricing, of course, has many other virtues. New Yorkers would enjoy the health and economic benefits of less gridlock and tailpipe emissions — and faster commutes. Getting money to help fix mass transit is yet another reason why the City Council and state lawmakers should approve congestion pricing....

A proposal by a joint state-city commission calls for charging most drivers $8 to use Manhattan’s busiest streets. The commission projects that it would bring in nearly $500 million annually for mass transit....
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FOR FULL EDITORIAL GO TO:
http://www.nytimes.com/2008/03/05/opinion/05wed4.html?th&emc=th
The New York Times www.nytimes.com
Published: March 5, 2008

With health care once again a leading issue in a presidential race, candidates have offered plans for controlling spiraling costs while enhancing the quality of care. A popular component of such plans involves greater promotion of preventive health measures. The first element in Hillary Clinton's plan is to "focus on prevention: wellness not sickness." ... Barack Obama has argued that "too little is spent on prevention and public health."

Indeed, some evidence does suggest that there are opportunities to save money and improve health through prevention. Preventable causes of death, such as tobacco smoking, poor diet and physical inactivity, and misuse of alcohol have been estimated to be responsible for 900,000 deaths annually — nearly 40% of total yearly mortality in the United States. Moreover, some of the measures identified by the U.S. Preventive Services Task Force, such as counseling adults to quit smoking, screening for colorectal cancer, and providing influenza vaccination, reduce mortality either at low cost or at a cost savings.

Sweeping statements about the cost-saving potential of prevention, however, are overreaching. Studies have concluded that preventing illness can in some cases save money but in other cases can add to health care costs. For example, screening costs will exceed the savings from avoided treatment in cases in which only a very small fraction of the population would have become ill in the absence of preventive measures. Preventive measures that do not save money may or may not represent cost-effective care (i.e., good value for the resources expended). Whether any preventive measure saves money or is a reasonable investment despite adding to costs depends entirely on the particular intervention and the specific population in question. For example, drugs used to treat high cholesterol yield much greater value for the money if the targeted population is at high risk for coronary heart disease, and the efficiency of cancer screening can depend heavily on both the frequency of the screening and the level of cancer risk in the screened population.
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by Joshua T. Cohen, Ph.D., Peter J. Neumann, Sc.D., and Milton C. Weinstein, Ph.D.
New England Journal of Medicine www.nejm.org
http://content.nejm.org/cgi/content/full/358/7/661?query=TOC

The inspector general of New Jersey sharply criticized a developer and a politically powerful law firm, accusing them of bungling a billion-dollar project to clean up landfills in the Meadowlands and replace them with golf courses and houses. The official asked the state attorney general to determine whether a criminal investigation was warranted.

...EnCap Golf Holdings LLC, a subsidiary of a company based in North Carolina, was accused of deliberately misleading several government agencies about the progress of its cleanup work and its ability to finance the decade-old development despite receiving at least $315 million in loans from local and state agencies.

Gov. Jon S. Corzine requested the inspector general to investigate the project’s finances more than a year ago, after EnCap asked for an additional $450 million in bonds backed by the future tax revenue of several towns near the landfills.
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“EnCap represented more than once that they could not make some pending payment without state concessions,” the report said. “However, when state representatives refused to make the concession, private funds materialized.”

By Ken Belson and David W. Chen
FOR FULL STORY GO TO:
http://www.nytimes.com/2008/02/29/nyregion/29encap.html?th&emc=th
The New York Times www.NYTimes.com
Published: February 29, 2008