Environmental Valuation & Cost-Benefit News

Global clean-energy markets are expanding rapidly, with revenues in four benchmark sectors — biofuels, wind power, solar photovoltaics, and fuel cells — up 40 percent from $55 billion in 2006 to $77.3 billion in 2007, according to the Clean Energy Trends 2008 report released today. The four sectors are projected to more than triple over the next decade, growing to $254.5 billion by 2017. The annual Clean Energy Trends report, produced by leading clean-tech research and publishing firm Clean Edge, can be downloaded at no cost at www.cleanedge.com. The 2008 report finds that for the first time three leading clean-energy technologies each surpassed $20 billion in revenue.
* Global production and wholesale pricing of biofuels reached $25.4 billion in 2007 and is projected to hit $81.1 billion by 2017. The global biofuels market last year consisted of more than 13 billion gallons of ethanol and more than 2 billion gallons of biodiesel production worldwide.
* Wind power is expected to expand from $30.1 billion in 2007 to $83.4 billion in 2017. Last year's global wind power installations reached a record 20,000 megawatts (MW), equivalent in size to 20 conventional fossil-fuel power plants.
* Solar photovoltaics (including modules, system components, and installation), which totaled $20.3 billion last year, will more than triple to $74 billion by 2017. Annual installations in 2007 were just shy of 3,000 MW worldwide.

New global investments in energy technologies — including venture capital (VC), project finance, public markets, and research and development — have expanded by 60 percent from $92.6 billion in 2006 to $148.4 billion in 2007, according to research firm and Clean Energy Trends content provider New Energy Finance. In the U.S., venture capitalists invested $2.7 billion in the clean-energy sector, representing almost 10 percent of total VC activity. Clean Energy Trends 2008 also outlines five trends poised to make an impact on the markets this year. They describe:
* How small start-ups are powering markets for electric vehicles
* Sustainable cities are being designed and built from the ground up
* Overseas players are powering the U.S. wind market boom
* Geothermal energy is experience a global renaissance as a clean-energy resource
* New technologies are helping oceangoing ships take a cleaner tack

"Clean energy has moved from the margins to the mainstream and the proof is in these numbers," said Clean Edge co-founder and principal Ron Pernick. "Amid last year's plummeting housing prices, rising foreclosure rates, and record high oil prices, clean energy continued to provide a bright spot in an otherwise sluggish economy."

About Clean Energy Trends 2008
Clean Edge issues its annual Clean Energy Trends to track key developments in clean-energy markets. Past reports have been downloaded by tens of thousands of individuals in government, finance, industry, and the media. Clean Energy Trends 2008 is made possible by the support of its sponsors, including premier sponsors Deloitte; Hobbs ® Towne; Jefferies ® Company; and New Energy Finance. Major sponsors include Benaroya Companies; Pacific Growth Equities; RockPort Capital Partners; Stoel Rives; The NASDAQ OMX Group; and Page One Public Relations. The report can be downloaded for free at http://www.cleanedge.com/reports/accessReport.php?rp=/reports/index.php&report=Trends2008

Clean Edge Inc. www.cleanedge.com
http://www.cleanedge.com/about/press.php
Press Release Dated: March 11, 2008

Abstract: Whereas the uncertainty of environmental impacts and damage costs is usually estimated by means of a Monte Carlo calculation, this paper shows that most (and in many cases all) of the uncertainty calculation involves products and/or sums of products and can be accomplished with an analytic solution which is simple and transparent. We present our own assessment of the component uncertainties and calculate the total uncertainty for the impacts and damage costs of the classical air pollutants; results for a Monte Carlo calculation for the dispersion part are also shown. The distribution of the damage costs is approximately lognormal and can be characterized in terms of geometric mean μg and geometric standard deviation σg, implying that the confidence interval is multiplicative. We find that for the classical air pollutants σg is approximately 3 and the 68% confidence interval is [μg / σg, μg σg]. Because the lognormal distribution is highly skewed for large σg, the median is significantly smaller than the mean. We also consider the case where several lognormally distributed damage costs are added, for example to obtain the total damage cost due to all the air pollutants emitted by a power plant, and we find that the relative error of the sum can be significantly smaller than the relative errors of the summands. Even though the distribution for such sums is not exactly lognormal, we present a simple lognormal approximation that is quite adequate for most applications.

Keywords: Monte Carlo calculation; Geometric standard deviation; Lognormal distribution; Dispersion models; Dose-response functions; Monetary valuation

by Joseph V. Spadaro and Ari Rabl, both of Ecole des Mines, 60 boul. St.-Michel, 75272 Paris, Ile de France, France; Tel.: +33 6 3263 0431.

Environmental Impact Assessment Review via Elsevier Science Direct www.ScienceDirect.com
Volume 28, Issues 2-3; February-April, 2008; Pages 166-183
http://dx.doi.org/10.1016/j.eiar.2007.04.001

Abstract: We use a stylized gas system to study the use of access-to-gas storage in a seasonal model. In a duopoly setting, we find that welfare is higher under vertical integration and open access organization than under separate management of storage and distribution. This raises questions about recent regulatory reforms in the gas sectors in the US and Europe, supporting the separation of storage and merchant activities. In the absence of other justifying reasons such as encouraging competition by creating a level playing field, separating the management and accounting functions of storage activities from those of distribution may be a better option than real divestiture, on the basis of welfare arguments.

Keywords: Gas market; Equilibrium; Open access

by Michèle Breton 1 and 2 and Mohammed Kharbach 2
1. GERAD, 3000 Chemin de la Côte Sainte-Catherine, Montréal, QC, Canada H3T 2A7; Tel.: +1 514 340 6490; fax: +1 514 340 5634.
2. HEC Montréal, 3000 Chemin de la Côte Sainte-Catherine, Montréal, QC, Canada H3T 2A7

Energy Economics via Elsevier Science Direct www.ScienceDirect.com
Volume 30, Issue 3, May 2008, Pages 732-747
http://dx.doi.org/10.1016/j.eneco.2007.02.002