Environmental Valuation & Cost-Benefit News

"Solutions to the key environmental challenges are available, achievable and affordable, especially when compared to the expected economic growth and the costs and consequences of inaction", OECD Secretary General Angel Gurria said at the worldwide launch of the 2008 OECD Environmental Outlook in Oslo, hosted by Norway's Prime Minister, Jens Stoltenberg.

"The Outlook is an impressive body of work. It combines hope for the future with an urgent call for action today. It offers important guidance for decision-makers and integrates economic and environmental analysis", said Prime Minister Stoltenberg.

The 2008 OECD Environmental Outlook is a pathbreaking report that marries economic and environmental projections for the next few decades and simulates specific policies to address the key challenges. It identifies four priority areas where urgent action is needed: climate change, biodiversity loss, water scarcity and the impact on human health of pollution and toxic chemicals.

Economic-environmental projections show that world greenhouse gas emissions are expected to grow by 37% to 2030 and by 52% to 2050 if no new policy action is introduced. To meet increasing demands for food and biofuels world agricultural land use will need to expand by an estimated 10% to 2030; 1 billion more people will be living in areas of severe water stress by 2030 than today; and premature deaths caused by ground-level ozone worldwide would quadruple by 2030.

"Countries will need to shift the structure of their economies in order to move towards a low carbon, greener and more sustainable future. The costs of this restructuring are affordable, but the transition will need to be managed carefully to address social and competitiveness impacts, and to take advantage of new opportunities", Secretary-General Gurría said. (read the complete speech)

The 2008 OECD Environmental Outlook projects that world GDP will almost double by 2030. And the OECD policy simulation shows that it would cost just over 1% of that growth to implement policies that can cut key air pollutants by about a third, and contain greenhouse gas emissions to about 12% instead of 37% growth under the scenario without new policies.

OECD recommends use of policy mixes, and to keep the costs of action low these should be heavily based on economic and market-based instruments. Examples are the use of green taxes, efficient water pricing, emissions trading, polluter-pay systems, waste charges, and eliminating environmentally harmful subsidies (e.g. for fossil fuels and agriculture). But more stringent regulations and standards (e.g. for transport and building construction), investment in research and development, sectoral and voluntary approaches, and eco-labelling and information are also needed.

Mr. Gurría said that technological developments will also contribute to the solution but that the generalised application of breakthrough technologies poses important challenges in the area of intellectual property rights which will have to be confronted.

The Outlook identifies ways to share the cost of policy action globally. Developed nations have been responsible for the majority of greenhouse gas emissions to date, but rapid economic growth in emerging economies - particularly Brazil, Russia, India and China - means that by 2030 the annual emissions of these 4 countries together will exceed those of the 30 OECD countries combined. Fair burden-sharing and distributional aspects will be as important as technological progress and the choice of policy instruments.

"We must be aware that getting it right in the field of the environment is not only about what to do and how to do it. We also need to address the question of who will pay for what. The global cost of action will be much lower if all countries work together", Mr. Gurría underlined.

The report can be purchased in paper or electronic form through the OECD's Online Bookshop. Subscribers and readers at subscribing institutions can access the online version via SourceOECD.

The highlights of the report are available at www.oecd.org/environment/outlookto2030.
Organization for Economic Cooperation and Development www.oecd.org
http://www.oecd.org/document/22/0,3343,en_2649_34487_40221270_1_1_1_1,00.html

Abstract: The performance of a hybrid wind–solar power plant in southwestern Minnesota is modeled for a 2-yr period using hourly wind and solar insolation data. The wind portion of the plant consists of four interconnected wind farms within a radius of 90 km. The solar component of the plant is a parabolic trough solar thermal electric generating system using a heat transfer fluid that drives a steam turbine. The market value of energy produced, retail value of energy produced, and levelized cost of energy of the hybrid plant are compared to those of an energy equivalent wind-only plant. Results show that adding solar thermal electric generating capacity to a wind farm rather than expanding with additional wind capacity provides cost–benefit trade-offs that will continue to change as the two technologies evolve. At the present time, we find that capital cost and levelized cost of energy favor a wind-only plant while electric load matching favors a hybrid wind–solar plant. Regional differences in the solar resource in the US influence the economic viability of the hybrid plant, and a comparison using the present model is made with one location in the Southwest. The hourly data analysis presented here is a possible tool for evaluating the overall economic feasibility and generating characteristics for a hybrid wind–solar thermal electric power plant for any location with available wind, solar, electric load, and price data.

Keywords: Solar energy; Wind energy; Renewable energy; Hybrid power systems; Electricity markets

by J.P. Reichling and F.A. Kulacki; both of Department of Mechanical Engineering, University of Minnesota, 111 Church Street SE, Minneapolis, MN 55455, USA; Tel.: +1 612 625 6517; fax: +1 612 624 5230.

Energy via Elsevier Science Direct www.ScienceDirect.com
Volume 33, Issue 4; April, 2008; Pages 626-638
http://dx.doi.org/10.1016/j.energy.2007.11.001

One of the major shortcomings in last year’s admirable energy bill was its failure to extend vital tax credits to producers of wind, solar and other renewable fuels. This was entirely the doing of the Senate, which caved in to the oil companies and their White House friends.

The House had approved the credits but insisted — under the Democrats’ pay-as-you-go rules — that they be paid for by eliminating the same amount in tax credits for oil and gas producers. Industry (which is rolling in cash these days) howled, President Bush lofted veto threats, and the Senate caved.
...
The Senate now has a chance to redeem itself. Last week, the House approved a new $17 billion package of credits, spread over 10 years, to encourage the development of renewable energy sources and to promote energy-efficient buildings and appliances.

As before, the House insisted that the credits be paid for by terminating an equivalent $17 billion in tax breaks over 10 years for oil and gas companies.
...
It should be equally clear that an industry whose five biggest producers generated $145 billion in profits last year can easily sacrifice $1.7 billion in annual tax breaks it does not need to help develop the cleaner fuels the country does need.
...
New York Times Editorial www.NYTimes.com
http://www.nytimes.com/2008/03/03/opinion/03mon4.html?th&emc=th
Published: March 3, 2008

At its current growth rate, global installed wind power capacity will top 100,000 megawatts in March 2008. In 2007, wind power capacity increased by a record-breaking 20,000 megawatts, bringing the world total to 94,100 megawatts—enough to satisfy the residential electricity needs of 150 million people. Driven by concerns regarding climate change and energy security, one in every three countries now generates a portion of its electricity from wind, with 13 countries each exceeding 1,000 megawatts of installed wind electricity-generating capacity.

In Europe, the 8,660 megawatts of wind power capacity added in 2007 accounted for 40 percent of all new power installations. This marks the first year in history that wind power additions in Europe exceeded the additions of any other power source, including natural gas. Europe’s installed capacity currently totals 57,100 megawatts, and its new installations in 2007 accounted for 43 percent of total global installations. Wind-generated electricity now meets nearly 4 percent of Europe’s electricity demand, enough to supply electricity to 90 million residents.

Germany is still the frontrunner in total installed wind power capacity, with 22,200 megawatts, but in 2007 it lagged the United States, Spain, China, and India in terms of new capacity added. (See data.) Growth in Germany is slowing because of a saturation of suitable onshore sites and a decrease in the feed-in tariff for wind power. Countrywide, Germany generates more than 7 percent of its electricity from the wind. In the northern states of Saxony-Anhalt, Mecklenburg-Western Pomerania, and Schleswig-Holstein, wind meets an impressive 30 percent of electricity needs.

Spain proved to be the shocker in the European market in 2007, installing 3,520 megawatts—the highest number ever in Europe in a single year. Spain now ranks third in total installed wind capacity with 15,100 megawatts. And with wind energy supplying 10 percent of the country’s electricity, Spain is second only to Denmark in terms of percentage of electricity generated this way.

France also demonstrated impressive gains in 2007, increasing its total installed wind capacity by 57 percent to 2,450 megawatts. The French government’s goal is to increase installed wind capacity to 25,000 megawatts by 2020.

For the third consecutive year, the United States led the world in new installations, with its 5,240 megawatts accounting for one-quarter of global installations in 2007. Installations in the fourth quarter of 2007 alone exceeded the figure for all of 2006, and the United States is on track to overtake Germany as the leader in installed wind power by the end of 2009. Wind farms are now found in 34 states and total 16,800 megawatts. The electrical output from these farms is equivalent to that from 16 coal-fired power plants and is enough to power 4.5 million U.S. homes. The recent exceptional growth in the United States is largely due to an extension of the wind production tax credit under the 2005 Energy Policy Act.

After passing California to become the leader in installed U.S. wind power capacity in 2006, Texas maintained its lead in 2007 by expanding its total capacity to 4,360 megawatts. Minnesota, Iowa, and Washington round out the top five leading states. Texas is now planning the development of 23,000 megawatts of wind power capacity, enough to satisfy over half the residential electricity demand in the state. Southern California Edison is planning a 4,500-megawatt wind project, and a task force established by Maine’s governor, John Baldacci, is recommending the development of 3,000 megawatts. At the national level, wind farm proposals exceed an astounding 100,000 megawatts, roughly six times the current installed capacity.

India installed 1,730 megawatts of new wind power capacity in 2007. With total installed capacity reaching 8,000 megawatts, India retained its fourth place on the list of top wind power countries. But due to the lack of a national renewable energy law that establishes cohesive goals and provides economic incentives for Indian wind energy projects, China will likely overtake India in total installed wind power capacity in late 2008 or early 2009.

China installed 3,450 megawatts of wind capacity in 2007, a 156-percent increase over 2006. With 6,050 megawatts of total installed capacity at the end of 2007, China has already exceeded its recent 2010 goal of 5,000 megawatts. The more than 40 Chinese turbine manufacturers now operating supply 56 percent of the Chinese market, up from 41 percent in 2006. The Renewable Energy Law (REL), which entered into force on January 1, 2006, is encouraging wind energy growth. The REL was established to help China meet its goal of generating 15 percent of the country’s energy from renewables by 2020. It mandates power producers to increase their ownership of non-hydro renewables to 3 percent by 2010 and 8 percent by 2020. While the government target for 2020 is 30,000 megawatts of wind power capacity, the Chinese Renewable Energy Industry Association projects that with a feed-in tariff and greater investment in offshore wind farms, wind power installations in China by then could exceed four times that target.

Offshore wind capacity accounts for almost 1,170 megawatts worldwide, roughly 1.2 percent of the 94,100 megawatts of installed capacity at the end of 2007; while this is a small share of the total, it is up from less than 0.3 percent in 2000. Denmark maintained its leadership position, with 426 megawatts of installed offshore wind power capacity, followed by the United Kingdom, Sweden, the Netherlands, and Finland. In 2008, the United Kingdom is expected to overtake Denmark for the top spot and Germany is poised to move into the top five. With more than 1,200 megawatts presently under construction worldwide, primarily in Europe, offshore wind capacity is expected to more than double by the end of 2009.

U.K. Secretary of State for Business, Enterprise, and Regulatory Reform, John Hutton, is advocating 33,000 megawatts of offshore wind power by 2020, enough to meet the electrical needs of every home in Britain. Helping to achieve this goal will be the 1,000-megawatt London Array in the Thames Estuary, scheduled for completion in 2012. Airtricity, an Irish energy development firm, and ABB, a leader in building energy infrastructure, have proposed a 10,000-megawatt wind farm project in the North Sea. To help offset the high cost of offshore development, some countries such as Germany and Ireland have implemented feed-in tariffs. The Irish tariff guarantees producers a 15-year fixed price of 20¢ per kilowatt-hour for electricity generated from new offshore wind farms.

The cost of onshore wind power has decreased by more than 80 percent since the early 1980s to roughly 7¢ per kilowatt-hour at favorable wind sites. In some markets, wind is now competitive with conventional power generation. In most markets, however, due to subsidies for conventional energy sources, the growth of wind power still depends on economic incentives. For example, the dearth of wind power installations in the United States in 2002 and 2004, when the Production Tax Credit (PTC) for wind was allowed to lapse, underscores the importance of extending the PTC for wind that is set to expire at the end of 2008. (See data.) If the full cost of carbon emissions were incorporated into the price of natural gas and coal, onshore wind would become the cheapest electricity source.

With mounting concerns over global climate change and energy security, wind energy is rapidly taking center stage in the new energy economy. Unlike conventional energy sources, electricity generation from wind does not release greenhouse gases associated with global warming. Wind also offers long-term energy security, since it is inexhaustible, widely distributed, and free. If the present 27-percent annual growth rate of installed wind power capacity is maintained, total capacity in 2020 will hit 2 million megawatts. With aggressive economic incentives, it could reach 3 million megawatts by that date—which would be 30 times as much as is available today.

Jonathan G. Dorn
Earth Policy Institute www.earthpolicy.org
http://www.earthpolicy.org/Indicators/Wind/2008.htm
Source: Press Release dated March 4, 2008

Abstract: The fuel crisis arising from the dramatic increase in vehicular population and environmental concerns have renewed interest of scientific community to look for alternative fuels of bio-origin such as vegetable oils. Vegetable oils can be produced from forests, vegetable oil crops, and oil bearing biomass materials. Non-edible vegetable oils such as linseed oil, mahua oil, rice bran oil, etc. are potentially effective diesel substitute. Vegetable oils have high-energy content. This study was carried out to investigate the performance and emission characteristics of linseed oil, mahua oil, rice bran oil and linseed oil methyl ester (LOME), in a stationary single cylinder, four-stroke diesel engine and compare it with mineral diesel. The linseed oil, mahua oil, rice bran oil and LOME were blended with diesel in different proportions. Baseline data for diesel fuel was collected. Engine tests were performed using all these blends of linseed, mahua, rice bran, and LOME. Straight vegetable oils posed operational and durability problems when subjected to long-term usage in CI engine. These problems are attributed to high viscosity, low volatility and polyunsaturated character of vegetable oils. However, these problems were not observed for LOME blends. Hence, process of transesterification is found to be an effective method of reducing vegetable oil viscosity and eliminating operational and durability problems. Economic analysis was also done in this study and it is found that use of vegetable oil and its derivative as diesel fuel substitutes has almost similar cost as that of mineral diesel.

Keywords: Vegetable oil; Blending; Biodiesel; Transesterification; Particulate matter

by Deepak Agarwal 1, Lokesh Kumar 2 and Avinash Kumar Agarwal 2
1. Environmental Engineering and Management Program, Indian Institute of Technology Kanpur, Kanpur 208 016, India; Tel.: +91 512 259 7982; fax: +91 512 259 7408
2. Department of Mechanical Engineering, Indian Institute of Technology Kanpur, Kanpur 208 016, India

Renewable Energy via Elsevier Science Direct www.ScienceDirect.com
Volume 33, Issue 6; June, 2008; Pages 1147-1156
http://dx.doi.org/10.1016/j.renene.2007.06.017

Introduction:
In 1997, Maryland burst into the national spotlight with the passage of its Smart Growth and Neighborhood Conservation initiative. As this incentive-based approach to managing growth reached its 10th anniversary last year, Maryland and states across the country continued to wrestle with the challenges of community development and land conservation.

In order to critically examine the program’s impact and effectiveness, land-use researchers joined state legislators, local government officials, home builders, environmentalists, and academics in early October 2007 for a three-day conference entitled “Smart Growth @ 10: A Critical Examination of Maryland’s Landmark Land Use Program.” Organized by the University of Maryland’s National Center for Smart Growth Research and Education and Resources for the Future, the conference took place in Annapolis and College Park, Maryland. This report provides some background on the conference, summarizes the presentations and discussions that took place over the three days, and provides a brief roadmap for the future.

The conference was co-sponsored by the University of Maryland’s National Center for Smart Growth Research and Education and Resources for the Future.

Slides and Videos available at http://www.rff.org/rff/Events/SmartGrowthat10.cfm

by Margaret Walls; Senior Fellow, Resources for the Future
Resources For the Future (RFF) www.RFF.org
http://www.rff.org/rff/Documents/SG10_Final_Conference_Report.pdf
January, 2008

Abstract: Economic tools, include a number of tax-related tools, are often seen as efficient and effective transport–environmental policy tools. However, since tax policies are usually under the authority of non-transport actors, transport–environmental policy makers face a major challenge in mobilizing these actors to promote policies that conform with transport–environmental goals. The challenge can be regarded as a framing exercise since it affects the public debate, the rhetoric against and for the policy, the coalition structure and the likelihood of promoting and implementing the policy. To demonstrate the importance of policy framing, this paper examines the case of Israel’s taxation policy on company cars and the efforts to increase these taxes. The policy proposal was framed as a fiscal policy. Both institutional and public discourse concentrated on tax issues and transport and environmental issues were hardly raised. Tradeoffs exist between different choices of policy framing and there is a need to distinguish between institutional framing and public framing.

Keywords: Company car; Transport politics; Taxation; Policy framing

by Galit Cohen-Blankshtain; Department of Geography and School of Public Policy, The Hebrew University, Mount Scopus, Jerusalem 91905, Israel

Transportation Research Part D: Transport and Environment
Volume 13, Issue 2; March, 2008; Pages 65-74
http://dx.doi.org/10.1016/j.trd.2007.11.002