Doc's Green Blog

Mitigation vs Adaptation: What's The Difference?

noreply@blogger.com (David) — Thu, 08 Nov 2012 18:09:00 +0000

We hear a lot about climate change "mitigation" these days . . . or is it "adaptation"? What's the difference and why should we care? The video says it in a nutshell:

"Mitigation" means making something less severe. Like reducing carbon emissions to reduce the rise in atmospheric greenhouse gases and thus slow global warming. "Adaptation" means dealing with a problem once it exists, like moving north to avoid heat waves, or installing more air conditioning, or attempting geoengineering projects to roll back climate change.

Mitigation--doing something now to slow global warming and make its impact on future generations less harmful--seems to be very difficult. We haven't been able to achieve much, even with the Kyoto Agreement and lots of handwringing among liberal Western consumers. In spite of Kyoto and a global economic recession CO₂ levels in the atmosphere are increasing faster today than they were back in 1990, the Kyoto base year. And there seems to be little prospect of a more effective global political agreement to reduce greenhouse gas emissions, or even to extend the Kyoto program in modified form.

The reasons are easy to see. People don't want to sacrifice if they aren't going to benefit.

The real beneficiaries of emission reduction are future generations. Future generations don't vote (yet).
Greenhouse gases emitted anywhere have impacts everywhere: Unless almost everybody sacrifices, nobody benefits.
There is a "freeloader" problem. Many consumers may sacrifice (change consumption patterns or pay extra costs) to reduce emissions, which will have world-wide benefits if enough participate. But those benefits will also accrue to those who chose not to make those sacrifices.

The result is that we are doing practically nothing and we are on a path to global temperature rises of 4, 6, or more degrees celsius. (We've seen less than 1°C so far.)

So what will happen if we continue on this path? Global warming, climate change, and sea level rise. Some have characterized the potential impacts as "hell on Earth".

	Feasibility	Cost
Mitigation	Politically very difficult; needs worldwide cooperation; present costs benefit future generations; externalities	Significant costs: Maybe 1%-2% of GDP
Adaptation	Politically easier: Local investments to address local threats; immediate benefits	High costs: Maybe 3%-5% of GDP or more

More on the future we are heading toward at sister blog A Very Different Earth.

The course mentioned in the video is described in more detail here.

Classic Reposted: Storm Warning From Katrina Era

noreply@blogger.com (David) — Thu, 01 Nov 2012 17:21:00 +0000

[This is a repost of a "Science In Action" classic, just to illustrate that the idea that big hurricanes might owe something to global warming is not news.]

Is Hurricane Katrina an example of "Global Warming" affecting the local weather? Recent evidence suggests that the warming of the oceans caused by our generation of greenhouse gases over the past century or two may be causing more intense hurricanes.

Climate scientists have known for some time that

The Earth is heating up, and
As the Earth's surface and atmospheric temperatures increase, this will affect the distribution and intensity of weather events.

Global Warming Is Real

Among scientists, any remaining arguments about global warming are questions of degree. There are a few lonely holdouts, as there are with any paradigm shift in science (Leading 19th century American scientist Louis Agassiz went to his grave opposing Darwin's theory of evolution by natural selection). But most of the denial is outside the scientific community and is purely political. (That is to be expected -- see my earlier post on science and politics.)

Source: This Wikipedia page

Sea Temperatures Affect Storms

One predicted effect of global warming is an increase in the intensity of hurricanes and tropical storms. As sea surface temperatures increase, these storms can draw more energy and moisture from those warmer waters.

What Drives a Hurricane?
The intense tropical cyclonic storms we call hurricanes (or typhoons, baguio, or cyclones) are driven by transfer of heat from the ocean to the atmosphere. They can form only over warm water (at least 26°C). The air over the sea is warmed, decreases in density, and therefore rises. The coriolis effect is strong enough to cause these rising currents to form spiraling winds. As the warm air expands and rises it cools, and eventually the water vapor in it condenses, releasing heat.

Heat of Condensation
As everyone knows, to boil water into steam (convert it into water vapor) you have to apply heat. When that water vapor recondenses that heat is released. Since water is a polar molecule, it takes a lot of heat to vaporize (evaporate) it, and a correspondingly large amount of heat is released by condensation.
This heat warms the air, causes further expansion, and reduces the atmospheric pressure below even further. As long as the system remains over warm water this cycle can build and the storm grows in size and windspeed. [Update: more about how this works in this Science In Action post on latent heat of water.]

Recent Research Has Shown:

1. Sea surface temperatures are clearly rising. This is one of the clear signs of global warming.

An influential study demonstrating that human activities have caused these sea surface temperature increases was reported in this press release from the Scripps Institution of Oceanography. Here is a pdf file of the article "Penetration of Human-Induced Warming into the World's Oceans" in Science. (If that link to the pdf doesn't work, get it through Dr. Pierce's publications site.)

Abstract
A warming signal has penetrated into the world's oceans over the past 40 years. The signal is complex, with a vertical structure that varies widely by ocean; it cannot be explained by natural internal climate variability or solar and volcanic forcing, but is well simulated by two anthropogenically forced climate models. We conclude that it is of human origin, a conclusion robust to observational sampling and model differences. Changes in advection combine with surface forcing to give the overall warming pattern. The implications of this study suggest that society needs to seriously consider model predictions of future climate change.

2. Increasing sea surface temperatures will cause stronger hurricanes.

A recent paper, "Increasing destructiveness of tropical cyclones over the past 30 years", published in Nature, confirms what theory predicts: hurricanes have increased in intensity as seas have warmed, and the two factors are highly correlated. Here is a pdf file of the article.

Abstract
Theory and modelling predict that hurricane intensity should increase with increasing global mean temperatures, but work on the detection of trends in hurricane activity has focused mostly on their frequency and shows no trend. Here I define an index of the potential destructiveness of hurricanes based on the total dissipation of power, integrated over the lifetime of the cyclone, and show that this index has increased markedly since the mid-1970s. This trend is due to both longer storm lifetimes and greater storm intensities. I find that the record of net hurricane power dissipation is highly correlated with tropical sea surface temperature, reflecting well-documented climate signals, including multi-decadal oscillations in the North Atlantic and North Pacific, and global warming. My results suggest that future warming may lead to an upward trend in tropical cyclone destructive potential, and--taking into account an increasing coastal population--a substantial increase in hurricane-related losses in the twenty-first century.

Whether we are seeing an increase in the number of hurricanes and typhoons is less clear. The theoretical basis for such an increase based on higher sea surface temperatures is also not established. [Update: Evidence in: See this more recent post.]

Breaking News

Another study has recently been published: "Changes in Tropical Cyclone Number, Duration, and Intensity in a Warming Environment". (Editorial about the findings, which is the source of this graph; link to full text in Science)

Abstract and concluding paragraph
We examined the number of tropical cyclones and cyclone days as well as tropical cyclone intensity over the past 35 years, in an environment of increasing sea surface temperature. A large increase was seen in the number and proportion of hurricanes reaching categories 4 and 5. The largest increase occurred in the North Pacific, Indian, and Southwest Pacific Oceans, and the smallest percentage increase occurred in the North Atlantic Ocean. These increases have taken place while the number of cyclones and cyclone days has decreased in all basins except the North Atlantic during the past decade.

We conclude that global data indicate a 30-year trend toward more frequent and intense hurricanes, corroborated by the results of the recent regional assessment. This trend is not inconsistent with recent climate model simulations that a doubling of CO2 may increase the frequency of the most intense cyclones, although attribution of the 30-year trends to global warming would require a longer global data record and, especially, a deeper understanding of the role of hurricanes in the general circulation of the atmosphere and ocean, even in the present climate state.

The research reported in these articles is not the last word, and some other scientists don't completely agree with these findings. But it sure is beginning to look like the evidence supports the existence of these trends and implications.

Hurricane Warning

These changes have been caused by an increase in the temperature of the top 300 meters of the world's oceans of about one-half degree Celsius over the past fifty years. Global temperatures are expected to rise between 2°C and 4°C over the coming century. Think how this will affect hurricane strength and other weather! And consider the enormous amount of heat that had to be added to the oceans to raise their surface temperatures even 0.5°C. It would take centuries for them to cool down (or even to stop warming up!) even if we immediately stopped the human activities that contribute to global warming. Maybe we and our descendants had better get used to a stormier future.

Update

[2013-03-19 1530GMT: Recent research found a "twofold to sevenfold increase in the frequency of Katrina magnitude events for a 1 °C rise in global temperature". That is pretty scary. Reuters item here. Abstract of PNAS article here.]

Additional Resources

The world scientific consensus on global warming is summarized by the Intergovernmental Panel on Climate Change of the UNEP and WMO. Here is its summary of evidence for sea surface warming trends. Here are graphs of sea surface temperatures from that report.

Wikipedia article on global warming.

The Tropical Storm Risk consortium predicts a record-severe hurricane season this year. Here is a press release regarding their updated forecast of 5 August (here is the pdf file with details).

Technorati tags: science, weather, science education, global warming, climate, hurricanes, Katrina, Science In Action

Green eLearning: On-Line Business Sustainability Education

noreply@blogger.com (David) — Mon, 15 Oct 2012 21:33:00 +0000

Learn how to
make the
business case

"Green is nice, but the real reason businesses do it is to save money." Now on-line learning tools make these money-saving advantages available to every business.

Big multinational businesses have been spending billions for many years to make their products, facilities, supply chains and operations more "green" and more "sustainable". The main driving force has been the ability to save money by reducing waste and inefficiency.

Many smaller and medium-sized businesses have yet to sieze these competitive advantages. This is partly because "green" seems like a luxury, rather than a business necessity, and because it seems confusing and complicated. True, it is complex, and changing rapidly, but the benefits of improved efficiency and cost savings are so important that every business should be taking advantage of them.

Fortunately, many good on-line sustainability learning tools for business have become available. These can be a very quick and cost-effective way for businesses to get up the sustainability learning curve, and to actually see concrete benefits in their operations.

Some courses are quite elaborate, more like on-campus executive education programs, both in content and price. An example is the University of Vermont's Advanced Certificate in Sustainable Innovation. It offers three eight-week courses, and costs thousands of dollars.
Other programs offer more detailed technical training. For instance, Schneider Electric's Energy University offers courses on such topics as "Boiler Types and Opportunities for Energy Efficiency" and eight courses on "Building Controls".
A recent entrant is the Talearnt Green Tech program, which is kicking off with a free mini-course on "Basics of Business Sustainability", targeted at managers in small and medium-sized businesses and those who aspire to business careers. [Full disclosure: I am the Director of the Talearnt Green Tech program, and the instructor for the "Basics of Business Sustainability" course.]

My opinion is that every business can save money and become more competitive by reducing waste and increasing efficiency. Businesses starting today can learn from the successes and failures of those that have gone before. But you should follow a proven method: walk before you try to run. The savings from early, easy green actions can help pay for more complex projects later. Don't start with hard-to-justify green branding programs or capital-intensive on-site renewables schemes. Start at the beginning.

Since every business can benefit from effective green action (and maybe help save the planet a little at the same time), that means every manager and every employee should understand sustainability issues. And these inexpensive, efficient, and effective on-line programs can be an essential tool to build those skills and achieve both corporate and career goals.

Image credit: Everaldo Coelho and YellowIcon from https://commons.wikimedia.org/wiki/File:Crystal_Clear_app_business.png

What Adam Smith Said About Making Businesses Sustainable

noreply@blogger.com (David) — Fri, 12 Oct 2012 19:04:00 +0000

Adam Smith said many insightful things in his book An Inquiry into the Nature and Causes of the Wealth of Nations. He didn't have a great deal to say about what we currently call "sustainability", the efforts of companies to be more "green". But he did point out what motivates businesspeople to do things, and these motivations also apply to getting businesses to reduce their (and thus our) environmental impacts.

Green is nice, but the real reason companies do it is to save money.

Unless you are a hermit or a subsistance farmer disconnected from all commerce, most of your environmental impact is due to things you buy. That includes food, shelter, electricity, gas, water, stuff (like cars, clothes, books, or electronics), services (like travel, education, entertainment, cloud computing, waste disposal, or health care), food, motor fuel, public services, and all sorts of other purchases. Thus your environmental footprint is essentially the environmental footprint of the producers and deliverers of those products and services--mostly businesses. They affect the environment as they produce and deliver those things you demand.

You can reduce your environmental footprint by buying and consuming less of those products and services. For example, you could probably cut your carbon footprint in half by taking fewer car and airplane trips (if any) and using a bicycle or telepresence instead. Or maybe you could eat less beef.

But those businesses (or public agencies) that provide those products and services could also help you reduce your environmental footprint by becoming more efficient in their own operations. And they have a very strong motivation to become more efficient: it can save them money and thus increase their profits.

Self-Interest Gets Things Done

We can try to urge businesses to be more sustainable for the good of the planet, or we can try to force them to be more sustainable with laws and regulations. But as Professor Smith perceived, the strongest motivation for any business is its own self interest. And if you look at what businesses are actually doing that results in reduced environmental footprints you can see that saving money, increasing sales, and remaining competitive is exactly what is driving them.

(For some examples and more discussion of why and how businesses can be more efficient, and more green, and more profitable, you are welcome to access the free Talearnt Green Tech Basics of Business Sustainability mini-course.)

You can read this famous passage of The Wealth of Nations here.

The Pitfalls of "Green" Standards: Defeat of EPEAT?

noreply@blogger.com (David) — Tue, 10 Jul 2012 19:06:00 +0000

EPEAT^® is an environmental rating system that is supposed to help buyers choose green and sustainable computers and electronic equipment. Recyclability is one of its criteria. But apparently modern tablets and mobile devices don't fit easily into its standards. Apple has withdrawn all its certified products and won't submit future products for approval. Does this mean EPEAT is obsolete? What does this suggest for other "green" standards?

[Update 2012-07-13 2245gmt: Apple has announced that it will rejoin the EPEAT system and that all of its products that were formerly registered there are back on the EPEAT list. However, "We look forward to working with EPEAT as their rating system and the underlying IEEE 1680.1 standard evolve." Such standards have to evolve if newer, cooler products are to receive the EPEAT certification. Much of this post is still relevant: Certification systems need to be adaptable if they are not to be left behind by advancing technology.] [See further updates below.]

Dare to Share:

The voluntary EPEAT standard was developed in 2003-2004 by a team representing "manufacturing, environmental advocacy, academic, trade association, government and recycling entities", including Apple Computer Inc.

However, computers have evolved quite a bit from the desktops, CRTs and laptops of that period. Apparently Apple has decided that its current and future designs will be unable to be disassembled and recycled as the EPEAT standard requires. So it has asked that its products be removed from the registry, and will not submit products for certification in the future (see this WSJ blog post).

According to that post,

One of Apple’s newest products, the MacBook Pro with a high-resolution “Retina” display, was nearly impossible to fully disassemble, said Kyle Wiens, co-founder of iFixit.com, a website that provides directions for users to repair their own machines. The battery was glued to the case, and the glass display was glued to its back. The product, released just a month ago, had not been submitted for EPEAT certification, according to the organization.

[Robert] Frisbee[, CEO of EPEAT,] said that the structure of that laptop would have made it ineligible for certification. “If the battery is glued to the case it means you can’t recycle the case and you can’t recycle the battery,” Frisbee said.

Presumably other manufacturers of tablets, smartphones, and newer laptops are facing similar design challenges. (No tablets are listed in the EPEAT registry.)

Green Standards

This situation raises a question that applies to all green certification, labeling, and registration schemes: What happens when technology outruns your carefully crafted compromise criteria?

And what happens when an obsolete certification scheme has become embedded in purchasing requirements? Many educational and public-sector institutions have established purchasing preference for EPEAT-registered electronic equipment. ("On 2007-01-24, President George W. Bush issued Executive Order 13423, which requires all United States Federal agencies to use EPEAT when purchasing computer systems." Source Wikipedia article.) Presumably educational institutions and government agencies will still want to buy Apple products sometimes. They will have to find ways to work around their outdated purchasing rules. Or maybe they will forego Apple products, as San Francisco threatens to do.

There are hundreds of green seals, badges, certifications and the like. Some, like ENERGY STAR, are managed by government agencies. Others, like LEED, UL Environment, and Marine Stewardship Council, and are administered by industry groups or private organizations. All are meant to provide a shorthand way to communicate with purchasers, compressing elaborate evaluation criteria into a simple symbol or three- or four-level rating ("platinum, gold, silver, bronze").

It is a symptom of all such efforts to cram real-world complexity into a few simple categories that much information is lost, and sometimes unintended consequences result. Maybe such "seals of approval" make sense on a consumer product. They show that someone (but who?) has done some homework for you (and how?). But this is the information age: purchasing managers should be able to handle a certain degree of complexity.

[Update 2012-07-16 1500gmt: EPEAT has issued a statement welcoming Apple back (currently on its home page). It says in part:

We look forward to Apple’s strong and creative thoughts on ongoing standards development. The outcome must reward new directions for both design and sustainability, simultaneously supporting the environment and the market for all manufacturers’ elegant and high-performance products.

An interesting question for EPEAT is how to reward innovations that are not yet envisioned with standards that are fixed at a point in time. Diverse goals, optional points awarded for innovations not yet described, and flexibility within specified parameters to make this happen are all on the table in EPEAT stakeholder discussions. And of course, timely standards development, as with newly created Imaging Equipment and Television standards, and the current refresh of the PC/Display standard, is critical as well.

Elsewhere it is reported that Apple's "MacBook Pro computer with Retina display, rumored to have been the reason for Apple's withdrawal from the registry in the first place, was added to its list of certified products, achieving an EPEAT Gold rating, said Apple spokeswoman Kristin Huguent." (Source GreenBiz.com item).

So has EPEAT shown unexpected flexibility to enable the new MacBook Pro to be registered, or was Apple's earlier withdrawal based on some other issues? (Remember, just a couple of days ago the CEO of EPEAT "said that the structure of that laptop would have made it ineligible for certification" [see above].) And what will happen with tablets, which still aren't registered on EPEAT? I guess "ongoing standards development" and "flexibility within specified parameters" can make standards like EPEAT adaptable enough to survive after all. Especially when a participant with the clout of Apple throws their weight around.] [See more updates below the line.]

How Green is Apple?

Apple hasn't focused on green or sustainability as a marketing angle. It has been in the middle of the pack in Greenpeace's Guide to Greener Electronics. This post from last year reviews some of Apple's steps and missteps in sustainability. But the company has become increasingly transparent and responsive on green issues, as reflected in its environmental reports here.

[Update 2012-07-13 1430gmt: Greenpeace has upgraded Apple's rating on greenness of power used for its iCloud servers, though it still ranks Apple behind leaders in green power for the cloud.]

And Apple has clearly decided that it can be green on its own terms, even if that means its cutting-edge designs won't meet the requirements of EPEAT certification. Obviously it will still comply with the raft of existing regulations that cover hazardous materials and recycling of electronics, such as RoHS and WEEE. And many of its products are still listed as ENERGY STAR qualified, including those that have been removed from the EPEAT registry.

[Further update--2012-10-15 2318UTC: Apple's MacBook Pro with Retina display, and several other ultra-thin compact computers with similar disassembly problems, have been given EPEAT's seal of approval, though Greenpeace still objects. See Environmental Leader story.]

[Yet another update--2012-10-16 1832UTC: More on environmental groups' concern that EPEAT relaxed its standards under pressure from Apple: businessGreen story.]

The image of the iMac G4 is in the public domain

The image of the "iPad 3" is by pahudson, used under a Creative Commons Attribution 2.0 Generic license

Gmail Up To 80 Times Cooler (More Energy Efficient)?

noreply@blogger.com (David) — Thu, 08 Sep 2011 20:11:00 +0000

In a recent blog post David Jacobowitz, Google's Program Manager, Green Engineering and Operations, says cloud-hosted gmail is many times more energy efficient than privately hosted corporate email systems. He says:

"We compared Gmail to the traditional enterprise email solutions it’s replaced for more than 4 million businesses. The results were clear: switching to Gmail can be almost 80 times more energy efficient than running in-house email."

Dare to Share:

You can read the analysis this claim is base on here (PDF). The case study considered energy used by the local clients, the network, and the servers in both Gmail via Google Apps and small, medium, and large corporate email systems.

There are two reasons, Google says, that its cloud is more efficient than your in-house-served email:

Many thousands of emails systems share the virtual servers in Google's cloud. Thus storage and computing cycles can be allocated much more efficiently. Since peaks of use of the different users and systems won't generally overlap, less reserve capacity needs to be kept available per account compared to a single-company system. Also, a small company on Gmail can use only a fraction of a server if that is all it needs, which wouldn't be possible if it had to provide its own.
Google's custom server and power supply hardware, custom software, and sophisticated data center engineering (cooling) make Google's systems among the most energy efficient in the world.

Larger systems (their case considered a firm hosting 10,000 email users) are significantly more energy efficient than small users (the case modeled a 50-user system)--using perhaps one-twentieth as much juice per user. Google just extends this, provisioning millions of users and operating with correspondingly greater efficiency per user.

Here are the results Google calculated:

Business Type	Annual Energy Per User
Small (50 users)	175 kWh
Medium (500 users)	28.4 kWh
Large (10,000 users)	7.6 kWh
Gmail	<2.2 kWh

Thus an email user on a system hosted locally by a small business uses 80 times as much energy per year than a Gmail user. Gmail is 80 times "cooler".
In fact the carbon footprint of Gmail is even smaller than this energy comparison would imply. Since 2007 Google says it has been completely carbon neutral, buying carbon offsets to cover emissions that it hasn't been able to eliminate by efficiency measures or purchase of renewably generated electricity.

The Google post also gives some figures on the energy consumed when you watch a YouTube video.

This article in InformationWeek mentions some of the other issues beyond pure energy economics that are relevant to the cloud vs in-house decision.

Reposted from Doc's SCN blog.

Ford Mines Drivers' Minds (Behaviors) To Save Gas

noreply@blogger.com (David) — Fri, 26 Aug 2011 20:04:00 +0000

Can your car anticipate your driving patterns and optimize its performance to use fuel more efficiently, or extend your range if you are driving an electric vehicle (EV)? Can it see into the future? Ford is trying to develop the software and systems to enable it to do so.
Dare to Share:

Google has been developing technology for cars to drive themselves, but the Ford project has more limited aims. If your car could gather information as you drive, and gradually build a model of your driving habits, plus download information about your driving environment, it could fine-tune its operation to save energy.

Chevy Volt

Ryan McGee, technical expert on vehicle controls architecture and algorithm design at Ford, says, “We have this massive amount of data. The question is what to do with it.”

A recent piece from Greentech Media outlines the concept:

"Code-named Green Zone, the software tries to anticipate where you plan to drive. Say it’s 8 a.m. on Tuesday. Your car knows that this is the second day in a five-day sequence in which you drive 23.5 miles to the same destination. The software crunches data about your driving habits, the topography of the drive, any details about traffic and time-to-destination, and information about how the car performs. It then tries to maximize the power the car draws from the battery pack and minimize the work performed by the gas engine."

This scenario is for an EV with a backup gas engine, like the Chevy Volt. But the same concept could be applied to hybrid vehicles like the Toyota Prius, plug-in hybrids, full battery-electric vehicles like the Nissan Leaf, or even just internal combustion gasoline or diesel vehicles.

The article says the car's systems would connect to cloud-based data resources to manage all the necessary data. In addition to data from the car and driver themselves, such a system would obviously also incorporate data such as the local current and forecasted weather, the local topography and traffic along the anticipated route, the availability of charging points at the likely destination, and so on. Each of these is a complex data model of its own.

Your car would know (probabilistically from historical data, via models, or via real-time data collection along the route) what the traffic was like ahead. In hybrid vehicles the different systems (electric motors, gasoline engine) operate optimally under different conditions. The car could plan its use of these resources to most efficiently deal with different speeds, idling times in stop-and-go traffic or at lights, anticipated episodes of acceleration or braking, and so on. It wouldn't have to wait for you to press the gas or the brake to know what was going on.

Greentech says "The probabilistic principles underlying the experiment are similar to predictive algorithms exploited by search engines. In fact, Ford uses Google’s predictive APIs."

We are all familiar with the computers that have become important parts of automobiles to operate their many high-tech systems. But now we should get ready for cars that have whole IT systems, and communicate moment-by-moment with vast data structures in the cloud.

Reposted from Doc's SCN blog.

The photo is by Mario Roberto Duran Ortiz from Wikimedia Commons, used under his Creative Commons Attribution-Share Alike 3.0 Unported license.

Sustainability and the CFO

noreply@blogger.com (David) — Thu, 25 Aug 2011 02:00:00 +0000

Sustainability, environmental issues and "green" have long since moved from "nice to have" parts of Corporate Social Responsibility, often part of the Corporate Communications (PR) portfolio, toward the center of management of the firm. A sign of this is the increasing involvement of the Chief Financial Officer (CFO) in sustainability issues. Most sustainability and environmental data is like financial data. It is financial data in many cases. (See this previous post for a discussion of the types of green data firms are faced with managing these days.).
Dare to Share:

A new report (pdf) from consultants Ernst & Young discusses this trend. It says, among other things:

The old "social responsibility" and "corporate citizenship" silos are crumbling.
Institutional investors are deciding that "climate change and sustainability issues often bear directly on companies’ risk profiles, their reputations and their financial performance."
"These trends are changing the CFO's role in three critical areas: investor relations; external reporting and assurance; and operational controllership and financial risk management." The report discusses each of these three areas.

What does this mean for IT?
Finance, bookkeeping, control, and financial reporting, all managed by the CFO, are leading consumers of IT. Thus the office of the CFO is very experienced and sophisticated about the management of such data, and the products and services that are available. By contrast the Chief Sustainability Officer (CSO) or equivalent manager in charge of sustainability was often connected to PR or communications, corporate health and safety, legal and regulatory, or facilities. These functions don't have the clout and experience that the CFO has in using IT to efficiently manage data, or using data for management (BI).

So my theory is that getting the CFO involved in managing the firm's sustainability will lead to the use of much more sophisticated data management tools and services. Also, mining corporate sustainability data to provide guidance to management will be obvious to the CFO. And the CFO has the clout to get the data management products he or she needs.

External reporting in particular has traditionally been the responsibility of the CFO. The formal quarterly and annual reports, and the auditable data that underlies them, have been his or her job. As companies try to assemble data and submit reports, for instance under the Global Reporting Initiative, they are reinventing approaches that have been mastered by the finance department.

So if you have been involved in designing or implementing financial software, there is a whole new world awaiting your attention.

Reposted from Doc's SCN blog.

Earlier post about Timberland's decision to have the sustainability function report to the CFO.

The Green Data Firehose: Where Is All This Green Data Coming From?

noreply@blogger.com (David) — Tue, 09 Aug 2011 21:59:00 +0000

Companies have many kinds of data that they have to manage, and from which they try to learn how to run their businesses better. "Green" or "sustainability" data is a relatively new category, at least compared to financial data which companies have been dealing with for centuries.

Here are some of the current and future sources of the data filling the Green Data firehose. Companies are at early stages of figuring out how to manage and benefit from many of these data streams. Essentially every company can save 10% or more of costs in many of these areas by more sophisticated collection and use of data.
Dare to Share:

Energy Use Data--The main driver for most companies' efforts to become more "green" has been the potential to significantly reduce costs. The place they usually start is on reducing energy costs. This means tracking energy use in order to judge the effectiveness of conservation steps. The degree of sophistication can range from just looking at monthly utility bills to detailed analysis of every energy use, process, light bulb, and server on a minute-by-minute basis.

Emissions Data--Many businesses, non-profits and government entities are trying to compile data on how much CO₂ and other greenhouse gases they emit. This may be for regulatory compliance (government requires them to submit the data) or for their own "footprinting" efforts associated with sustainability goals. Of course air quality rules, cap-and-trade schemes, and other demands already require many facilities to measure, log, and report emissions of many pollutants on a minute-by-minute basis from smokestack sensors.

Building Performance Data--Computerized building management systems track building energy consumption and performance factors, to enable fine tuning of building systems. They typically track environmental parameters such as light, temperature and humidity at many points, and measure and adjust the operation of HVAC systems, lighting systems, and the like.

Vehicle Data--Obviously firms with large delivery or transportation fleets, such as FedEx, UPS, The USPS, or Coca-Cola, already track many parameters of their vehicles (including aircraft). These parameters include engine performance and fuel use, driver performance, speed, location and the like. The purpose of collecting this data is to minimize cost by efficient capacity utilization, route planning, and operation, which saves fuel, and thus as a potential secondary benefit reduces GHG emissions. I believe increasingly all companies with corporate vehicle fleets will collect similar data, which will create large data-management requirements. OnStar and SYNC generate lots of data on private vehicles, much of which could be used to help owners reduce their emissions. Battery-electric vehicles will have their own data systems to monitor charge, locate charging points, interact with electric utilities, etc.

Smart Grid--The conversion of electricity meters from traditional "dumb" meters to "smart" meters that communicate wirelessly with the utility every few minutes is generating vast data streams. Several firms are selling utilities software systems use this data to make power generation and dispatching more efficient, manage demand response programs, and identify faults.

Water Use and Discharge Data--The Clean Water Act and similar legislation require most firms to measure and track their water discharges and other releases to assure toxic substances are within acceptable limits. Increasingly, users are finding that reducing water use through increased process efficiency and reuse saves them money, both the cost of water and the cost of treating wastewater. In the future they will manage data on water the same way they manage data on fuel and power to achieve green goals and savings.

Waste Data, Including Electronic Waste Data (WEEE)--Reducing waste reduces cost, since it costs something to dispose of waste. Also, waste reduction efforts often reduce packaging, which cuts manufacturing and shipping costs as well as waste disposal costs. Waste management systems involve measuring and tracking waste, verifying proper recycling and disposal, calculating energy and emissions savings, and so on.

ISO 14000 and ISO 50001 Data--ISO 14000 is an international set of environmental management standards and ISO 50001 is a developing standard for energy management. Both use protocols similar to the ISO 9000 series for quality management, which require significant data assembly, retention, auditing, and data quality systems.

Environmental Health and Safety Data--Most large firms uses sophisticated data tools like SAP's EHS Solutions to track safety, toxic substances, and regulatory compliance, including spills and incidents, accidents and injuries, toxic exposures, required employee training, monitoring and certification, and other measures.

Data From Tracking Toxic Components--Regulations such as the Restriction of Hazardous Substances Directive (RoHS), as well as a healthy concern about liability, drive many organizations to track hazardous substances in their production chains to be sure none end up in jurisdictions where they are forbidden. Lead paint, bisphenol A, or cadmium can only be used in certain products but not in others. Effective management of such components requires reaching back to suppliers--see the next item.

Supplier Quality Requirements--To be sure suppliers are not using unacceptable production or waste disposal practices, that they are using energy efficiently, and that they are complying with packaging and waste reduction rules calls for elaborate systems of questionnaires, monitoring, inspections, reports and so on. All this needs to be imposed across complex international supply chains.

Carbon Footprint Calculations--Thousands of companies, including of course SAP, gather data and calculate their environmental footprints for their sustainability reports. (See recent post on SAP's latest quarterly environmental report.) They use sophisticated protocols such as those of the Greenhouse Gas Protocol Initiative and the Global Reporting Initiative.

Regulatory Compliance Processes and Quality Control--To avoid defects in environmental regulatory compliance many firms use sophisticated software to prepare submissions for and monitor the vast number of rules and regulations to which they are subject.

Product Life Cycle Analysis--Approaches are being developed to analyze the environmental impact, cost, and other parameters across complete product life cycles. This covers everything from the extraction of raw materials through transportation, several manufacturing steps, distribution, sale, use by the consumer, and final disposal or fate. Because suppliers, consumption patterns and designs can change, such analysis is excruciatingly complex.

Strategic Sustainability Goals Development and Tracking--In the executive suite tools are needed to understand the implications of developments in the increasingly competitive sustainability field, and plan and act as seems best for the firm. This applies to every company, not just those that claim to be "going green". Environmental risks and perception issues apply to all organizations. Some will have sophisticated planning tools to address these challenges.

Carbon Emissions Issues in Logistics--Although shipping decisions have traditionally been made on the basis of cost, speed and reliability, these days GHG emissions are often being included as a criterion.

Carbon Assets Tracking and Trading--Companies have to juggle a range of carbon credits, emission allowances, carbon offsets, renewable energy certificates and other valuable assets. These all have specific identities, and many have fluctuating values or expiration dates. They are traded either with specific suppliers or through open markets. Some have associated futures markets. The decisions about acquisition or divestiture of such assets are complex, and sophisticated modeling is needed, in addition to verifiable audit trails for each individual asset.

Risk Management for Climate Change Risks--Climate change is creating many new risks that companies need to model, forecast, and analyze. How will new regulations, heatwaves, sea level rise, or storms affect our operations? Answering these questions requires a lot of data crunching. Environmental risk analysis is a growing field.

Employee Sustainability Training and Motivation Systems--"Green Teams" are increasingly common. Building and managing these communities is one data need. Many cost-saving initiatives require ongoing and effective training, cooperation and monitoring programs. To change behaviors it is not enough to just put up a few signs. Many of these programs involve elaborate reward systems and employee participation.

Social Data on Public Perception of Corporate Sustainability--"Green" perception is one of the topics that some companies are tracking as they analyze the vast streams of comment in social media, news media, and other sources. Such tracking requires sophisticated analytics.

Many of these data streams and databases are or can be connected to other enterprise data systems, such as ERP, Personnel, Financial, and other tools. Some, such as environmental health and safety (EHS) systems or carbon accounting systems come as complete packages.

The availability of this wealth of data presents many opportunities for BI tools to help management reduce costs, reduce or at least anticipate risks, and connect energy and environmental data resources to corporate planning and goals.

I will try to discuss some of these areas in more detail in weeks to come.

This is reposted from David Wheat's post on SCN.

Why Did Facebook Opt For Coal Power?

noreply@blogger.com (David) — Thu, 04 Aug 2011 00:03:00 +0000

The always-excellent Economist blogger Babbage posts about Facebook's new Prineville, Oregon, datacenter. Why did Facebook opt for a location where most of its electricity will be generated by coal? Google, for example, built on the Columbia River and has access to cheap, renewable hydropower.
Dare to Share:

The answer, apparently, is that Facebook prefers the desert environment of Prineville because it allows ambient outside air to do most of the cooling without the need for energy-hungry air conditioning. The desert air is cool at night and in the winter, of course. But even in the summer, when the air is hot, it is very dry and can be cooled economically with evaporative coolers that spray water through the airstream. (Study up on the reason this works, the high latent heat of water, here.)

Facebook claims a power usage effectiveness of 1.07 at the new facility. Generally corporate datacenters achieve around 2, and Google claims a weighted average PUE of 1.16 for all its datacenters for the 12 months ending in March.

The Babbage post has some additional interesting info about Facebook's datacenter. There is also the Prineville Data Center's Facebook page, of course.

My guess is that their siting evaluation didn't include thinking very much about whether the electricity came from coal or not--either that or they just didn't care. They were willing to emit a lot more carbon to get some economic advantage available from the Prinevile location.

Facebook's next datacenter will be built in Rutherford County, western South Carolina, a location not noted for its desert conditions. (See Charlotte Observer article.) The electricity there will come from Duke Energy. Electricity is cheap there (Google and Apple are also in South Carolina), but much of it comes from coal. According to this Wikipedia article, half of Duke's Carolinas power comes from nuclear. The rest would be from coal and natural gas.

How Much Juice Do Datacenters Use? New Study Says About 1.3% of All Electricity

noreply@blogger.com (David) — Wed, 03 Aug 2011 17:35:00 +0000

Datacenters world wide use 1.1-1.5% of all electricity, according to a new study. In the U.S. the figure is 1.7-2.2%. Over the period 2005-2010 global electricity use by datacenters grew by around 56%, and in the U.S. by about 36%. Both global and U.S. electricity use by datacenters had doubled between 2000 and 2005, so this is a significantly slower growth rate over the more recent period.
Dare to Share:

The study, carried out by consultant Jonathan Koomey for the New York Times, is described here, where you can also find a link to the pdf. There is also an item about the study in Environmental Leader here.

Datacenter electricity use grew more slowly over the past five years because fewer servers were installed than in the earlier period, both because of the economic recession and due to increased use of virtualization and other energy-saving technologies. And many of the newer servers are serving the cloud, with higher utilization levels.

Even though Google has a large installed base of servers, the study estimates that "Google’s data center electricity use is about 0.01% of total worldwide electricity use and less than 1 percent of global data center electricity use in 2010. This result is in part a function of the higher infrastructure efficiency of Google’s facilities compared to in-house data centers, which is consistent with efficiencies of other cloud computing installations, but it also reflects lower electricity use per server for Google’s highly optimized servers."

The study points out that cloud computing datacenters are more efficient than in-house servers, because they have much higher server utilization levels and much better infrastructure efficiencies. This implies that if computing continues to shift to the cloud the average efficiency of datacenters will continue to increase.

But even with these improved efficiencies, the growth in demand for computing will continue to drive growth in electricity demand for datacenters. Is there any limit to such growth? Can we expect electricity use by datacenters to grow to 2%, then 3%, then 4% of total global generating capacity?

This is crossposted to the SAP Community Network here.

How Big is the Green Software Market? Expected worth at $5 billion by 2013

noreply@blogger.com (Unknown) — Mon, 01 Aug 2011 00:55:00 +0000

The Green software field has been growing for years, but as current estimates have pegged it to more than double in value by 2013, major players in the high tech world are sitting up and taking notice. Chief Sustainability Officers have been added to company boardrooms and corporate sustainability plans can be found on almost all major high tech company websites.

The acquisition of companies providing sustainability related IT (“green data management”) solutions by much larger corporations, such as Clear Standards by SAP in 2009 and NDEVR by Oracle earlier this year, confirms that important companies in the high tech industry are taking note of the booming growth in the Green software market. In fact, the growth rate of the sustainability related software sector is one of the fastest out of all enterprise software markets, far outstripping that of the enterprise software field as a whole, according to estimates made by Forrester and IDC.

With over 100 different resource usage reporting schemes worldwide, many of them government-mandated, businesses have no choice but to deal with the vast amounts of green data they produce on a regular basis. In addition, businesses searching for new ways to cut costs in their operations have noticed that running more resource efficient and less polluting businesses is a good way to save money and please stakeholders. All these factors have contributed to the expansion of the green data management sector, currently estimated at $2 billion, but expected to grow to $4.8 billion as soon as 2013 by Forrester Research.

With the growth of stakeholder interest in corporate sustainability, it becomes increasingly important for companies to make their green data public and prove that they are taking efforts to become more sustainable. Requests from stakeholders for green data have become almost as frequent as those for financial data, and it is crucial that companies present this data and their sustainability goals in a way that demonstrates the importance with which they regard sustainability. The value that stakeholders have been placing on being environmentally friendly has helped the green data management market grow to the multi-billion dollar industry it is today, and will only fuel its growth in the future.

Among all the products and services offered in this sector are resource (often, specifically carbon) management tools. Many companies in the IT field have expanded their service offerings to include management and reporting programs, and these tools have become very popular with executives of larger, multi-national corporations, who use them to manage their green data and create corporate sustainability plans across their branches.

In addition to carbon accounting products, many companies in this sector provide other sustainability related products and services, many of which are GRC (government, risk, and compliance) focused. These include: operational risk management products (to help companies comply with safety regulations) and products to assess workforce and supply chain sustainability. Overall, the value of all these products and services can add up, as it did for large enterprise software company SAP. In fact, the value of all SAP’s sustainability related products sold in 2010 was estimated to be in the triple digit million euros range, making the GRC product sector one of their fastest growing.

Whether it is to cut costs, please stakeholders, or to report to the government, companies everywhere are increasingly finding the need to use green data management software, leading to the sky-rocketing growth in this industry. It is clear that in the next couple decades, the sustainability related software market will be one to keep an eye out for, as it begins to play a more important role in the enterprise software market as a whole. In fact, it might be advantageous for companies already in the enterprise software line of business to begin looking into green data management solutions, as there is a good chance that this sector will become the future of the enterprise software market. - Maanya Condamoor

Maanya Condamoor is a former Green Data Intern at KloudData Inc. and an undergraduate student at UCLA

For Further Reading:
http://www.bloomberg.com/news/2011-05-17/sap-corners-11-billion-green-software-market-takes-on-ibm.html

http://www.environmentalleader.com/2010/07/01/carbon-management-software-market-to-grow-33/?graph=full&id=1

http://www.eweek.com/c/a/Green-IT/Green-IT-Service-Market-to-Grow-to-48-Billion-in-2013-Forrester-587606/

http://www.thegreenitreview.com/2011/06/carbon-management-software-and-services.html

http://searchitchannel.techtarget.com/news/2240038891/Energy-carbon-management-apps-offer-new-twist-on-enterprise-software

http://crmsearch.com/enterprise-software-market.php

Green SmartPhone Apps

noreply@blogger.com (David) — Fri, 29 Jul 2011 17:10:00 +0000

There are hundreds of "green" iPhone apps. Many of them are junk. Some of them actually can help you live more sustainably. Here are a few I think are cool.
Dare to Share:

Walkscore
"Find a walkable place to live." Of course it is good for that--enter any address and see how convenient it is for walking to the things you need. Great for house- or apartment-hunting. It can use your current location, or you can enter one. My favorite use is to enter the addresses of companies that say they are "green" and see whether their offices are in walkable neighborhoods. Usually they are not.

Seafood Watch
When purchasing or ordering fish and seafood you don't want to support harmful harvesting or environmentally destructive practices, do you? With this app you can either enter a specific fish or seafood, or browse the guides. Also has crowdsourcing feature that lets you add restaurants that serve sustainable seafood, etc. Based on the Monterey Bay Aquarium Seafood Watch program.

Transit helpers
If you are green you are using public transit, right? Nextbus is fantastic, where it is available. It depends on your local bus company or transit agency participating--some do and some don't. There are many apps that use Nextbus-like technology to help you arrive at the bus/tram/rail stop just before the bus/tram/train does. Never miss the bus again! Explore the App Store for apps that apply in your town. Search for "nextbus". In the SF Bay Area try Transporter.

PlugShare
You may not have an EV or PHEV (yet), but PlugShare is ready when you are. It's "a community-powered electric vehicle charging network that includes an up-to-date listing of all public charging stations compatible with the newest generation of electric vehicles like the Nissan LEAF and Chevy Volt." The coolest feature for non-EV-owners (EV-nonowners?) is that you can list your outlet as a shared resource for EV drivers who need a charge. This vastly increases the availability of charging and helps keep EV drivers from getting stranded.

Skeptical Science
You don't want to get into arguments with climate skeptics--You can't win, and it is just too discouraging. But if you ever want that warm glow of self-satisfaction that comes from having those arguments literally at your fingertips you can get this comforting app. The app summarizes peer-reviewed climate science and helps you learn about what the science says, even if you can never use that information to convert climate skeptics (they can't be convinced by facts).

Bicycling
The Google Maps app for the iPhone doesn't offer the bicycling route technology that the web-based Google Maps has, unfortunately. And I can't find any other free cycling apps that I'd recommend. Any readers know of any?

iRecycle
Find nearby places to recycle all kinds of stuff. Old car battery weighing you down? Busted NES? Mushrooming cloud of plastic grocery bags? Moldy mattress? Mountain of Styrofoam™ packing peanuts? Tangle of wire clothes hangers? This app uses your location to query Earth911.com's database and tell you where you can get rid of them where they will be properly recycled. (Some places charge to take some things off your hands, but phone numbers are provided.)

Any other suggestions?

All of these are free. I am sure there are some nice apps that cost something, but you will have to check those out yourselves.

Many of these apps are available for other platforms too, but I tried them on the iPhone.

Seafood Watch image from the Seafood Watch site.

PlugShare image from this GigaOM article.

This is also crossposted to the SAP Community Network.

Move to Cloud Can Save $ Billions, C Millions of Tons

noreply@blogger.com (David) — Thu, 21 Jul 2011 21:17:00 +0000

A new report from the Carbon Disclosure Project, prepared by consultancy Verdantix, finds that there are significant savings in energy costs and carbon emissions for large companies that shift IT functions from dedicated servers to the cloud.
Dare to Share:

The findings suggest that as large U.S. companies move a significant fraction of their IT functions to cloud platforms the total reduction in CO₂ emissions could be in the range of 100 million tons per year by 2020.

Although that is a Big Number, it is only about 1.5% of current U.S. greenhouse gas emissions. Cloud computing isn't going to save the world. But it can make the dollar cost and the environmental cost of business computing grow more slowly.

The corresponding projected annual savings in energy costs is $12.3 billion by 2020, with widespread adoption of cloud computing. That may be more interesting to companies than the emission reductions.

Case Studies

Verdantix used a case study approach, collecting data from 11 global firms which have used cloud computing for at least two years. The findings from the case studies were used to build models to estimate savings. They looked at both private and public clouds. Both had very significant energy and carbon savings over traditional IT platforms, though public clouds were better. They also assert that there were other non-financial benefits found in their case studies, from improved business flexibility, rapid implementation, greater process efficiency and the like.

The case studies came from such firms as Applied Materials, Boeing, Dell and Deutsche Bank. They also got input from cloud computing suppliers AT&T, CloudApps, IBM and Hewlett-Packard.

There were some barriers to switching to cloud-based services. For instance financial firms felt they couldn't move customer information to a public cloud because of the strict data security requirements of the Gramm-Leach-Bliley Act and other regulations. Similarly, drug companies were concerned about the security of intellectual property in the cloud.

The study's business model calculates that a typical large food and beverage firm could move its HR functions to a public cloud with a payback of less than one year, and to a private cloud with a payback under two years. The financial attractiveness of switching to cloud systems was so strong that their analysis suggested that 69% of the IT spend of large firms in the U.S. might be on cloud computing by 2020.

This study might be interesting to anyone interested in the future of enterprise IT, and it is relatively short and clear.

(Of course the notion of projecting cloud adoption to 2020 is a bit comical, since the rapid technological advance of IT may mean that "cloud computing" will be a quaint and old-fashioned concept by then, when technologies we haven't anticipated will be having significant impact.)

CDP's page on the report is here. The full report is in PDF here.

This has been cross-posted to the SAP Community Network here.

Carmageddon: Short-Term Pain to Prolong the Agony

noreply@blogger.com (David) — Sun, 17 Jul 2011 18:46:00 +0000

This weekend's disruptive construction event on the I-405 freeway through the Sepulveda Pass in Los Angeles will, theoretically, increase the capacity of this vital artery. More cars will use it to take advantage of that increased capacity until it is as crowded and choked as it was before. The result of this expensive project ($1 billion in direct cost, plus the costs imposed on society by the delays and inconvenience of having the road closed for 53 hours) will be to encourage more people to make more automobile journeys, measurably increasing the consumption of petroleum and the emission of greenhouse gases.

"There's nothing wrong with you that an expensive operation can't prolong." -- Surgeon (Graham Chapman) to Mr. Notlob in Monty Python sketch.

Dare to Share:

Making More Pollution Possible

When highway construction is undertaken "to ease congestion" the additional capacity is always absorbed by additional usage. Congestion stays the same, but there are more cars traveling and thus more pollution. (This L.A. Times piece has some good info on this well-known effect.) (For more detailed analysis see "The Fundamental Law of Road Congestion" by Gilles Duranton and Matthew A. Turner here.)

This billion-dollar multi-year construction project will enable more people to commute to jobs far from where they live. This is what causes global warming, among other problems.

A substantial part of such a project's environmental impact comes from the larger and more isolated homes that people commute from when they have more highway capacity. These homes require cars for every errand, have thirsty lawns, and are larger and more energy-intensive than city dwellings. So the carbon impact of such lifestyles goes far beyond the gasoline burned during the commute. (This is why Leafs, Volts and Priuses don't reduce their owners' carbon footprints very much--they still live in the suburbs.)

Telecommuting's Carbon Footprint: Not As Green As You Think?

noreply@blogger.com (David) — Wed, 13 Jul 2011 01:39:00 +0000

Experience shows that telecommuting can save companies piles of money (hot-desking means they need less real estate, so they can save millions in rent). And it can save workers piles of money (not driving means not buying gas). And it is sometimes asserted that telecommuting reduces a company's carbon footprint. But is that really true? As usual, it depends.
Dare to Share:

The purported savings in greenhouse gas emissions (see endnote for one such assertion) are based on the gas not burned by not commuting by car. But in estimating net emission reductions a lot depends on where the telecommuter works when he or she is not in the office, on how he or she commutes to the office, and on the climate.

If the worker would have commuted by shared transportation (carpool, bus, subway or the like) then his or her commute might have virtually no carbon footprint. The marginal emissions from one more rider are essentially zero. If he or she would have walked or bicycled--same answer.
If the worker would have commuted by private car the footprint of the commute could be substantial, but would depend on the vehicle and the distance. (The average U.S. auto commuter travels about 15 miles to work, and so probably burns less than two gallons of gas per day commuting.)
If a worker has to heat or cool his or her workspace when he or she does not come to the office (for instance if there would be no one home if the teleworker were not there and the heat or air conditioning needs to be used when the teleworker works from home) then there is probably a net increase in energy use for heating or cooling compared to when the worker is in the office. This has to be balanced against the carbon footprint of the worker's commute.

A lot depends on where this telecommuting is taking place. In Boston in the winter heating an apartment for 10 hours might create significant emissions. In Oakland it might create virtually none. Air conditioning depends both on the climate and on the telecommuter's budget.

If the telecommuter works from a coffee shop or other shared space, then there is no incremental heating or cooling emission, but there are some transportation emissions.

So a Manhattanite telecommuting from his or her apartment would have essentially the same carbon footprint as a colleague who went to the office (if the office was also on Manhattan). Most residents of Manhattan travel to work by public transportation.

But if the teleworker avoided a 50-lbs-of-CO₂ round trip commute (50 miles at 20 miles per gallon--see previous post) and doesn't have to additionally heat or cool his or her home while working there, the overall carbon (dioxide) footprint of the day's work might be reduced by 50 pounds. This could easily happen in the Bay Area. Or in Los Angeles if the worker didn't use air conditioning at home.

Elsewhere the net carbon footprint would be influenced by the time of year and local climate.

In general the carbon cost of running a room air conditioner is several pounds of CO₂ per day (1,000 Watt air conditioner running four hours = 4kWh, at about one pound CO₂ per kWh--almost 2 lb in some places but only about 0.7 lb in California).
The carbon cost of heating a home is higher. A home heated by natural gas could easily cause the emission of 20 or 30 pounds of CO₂ per day during the heating season.

Another factor to consider: When the worker is in the office his or her carbon footprint is somewhat under the control of the employer. When he or she is at home who knows how much carbon is being burned? How many lights are on? By letting the employee control the environment, you may be increasing your carbon footprint.

In Summary

Telecommuting in mild climates with long commutes reduces CO₂ emissions.
Telecommuting when it is hot or cold (and the worker lives in a home that is otherwise vacant during the day) with short commutes or public transportation increases emissions.
Telecommuting when it is hot or cold with long commutes might result in little change in emissions.

So claims that telecommuting is going to green your company are probably false. If you want to make such an assertion please do the math.

1. The recent report The State of Telework in the U.S. (pdf here) says "The existing 2.9 million US telecommuters save 390 million gallons of gas and prevent the release of 3.6 million tons of greenhouse gases yearly." But it cites no source for this assertion and doesn't support it in any way. I have contacted the authors at Telework Research Network to see if they can clarify.

2. Considerations are different for the economy as a whole. If enough users of public transportation telecommute, for example, perhaps fewer trains would have to be run and savings could be significant.

This has been cross-posted to the SAP Community Network here.

Timberland Puts Sustainability Management Under CFO

noreply@blogger.com (David) — Mon, 11 Jul 2011 21:15:00 +0000

In a previous post ("How Big Is Green?") I speculated that eventually sustainability issues would be managed under companies' Chief Financial Officers, since sustainability management has so much in common with financial management. Now two years later we see an example of this actually happening at Timberland.
Dare to Share:

Green Counting and Bean Counting

A recent article in Sustainable Life Media discussed Timberland's hiring of a new VP for Social Responsibility. Interestingly, this new position will report to the Chief Financial Officer.

HaraBara has been following the structure of sustainability management for several years, and this is the first sustainability officer reporting to the CFO that we have seen. (There are instance of the CEO acting as Chief Sustainability Officer, CSOs reporting to the CEO, and many cases of CSOs or the equivalent reporting through corporate communications, marketing, environmental health and safety, and facilities management.)

Most sustainability actions of firms are basically dollars-and-cents decisions (energy savings, cost reduction, waste reduction, supplier behavior, building management, transportation efficiency and the like). To date they have been focused on minimizing waste (and thus reducing costs). Accounting systems essentially similar to financial accounting and control systems have to be set up. ("If you don't measure it you can't manage it".) Why not create these systems within the finance department, where the expertise for such systems resides?

As trading of carbon allowances under cap-and-trade or other regulatory programs becomes more common, the connection between environmental health and safety (EHS) information and corporate finance will become ever more explicit. This is already a fact of life for European companies, and may become so for Australian ones if recent proposals are carried through. California is haltingly developing a cap-and-trade system, and generating plants in the U.S. Northeast already buy allowances under the Regional Greenhouse Gas Initiative.

All of these schemes, and many other regulatory obligations, require quantitative analysis and detailed tracking of many environmental parameters and product components. The data collected must have an audit trail back to the underlying transactions, sensor readings, or event logs. All this sounds like bookkeeping to me.

An obvious byproduct of such environmental accounting is potential business information analysis to assist managers. SAP and many other providers of enterprise sustainability software and services already offer many BI tools for sustainability management. Could carbon, water and other sustainability accounting become as big as financial accounting?

This has been cross-posted to the SAP Community Network here.

Is There Scientific Consensus on Climate Change?

noreply@blogger.com (David) — Sun, 03 Jul 2011 19:32:00 +0000

Research Shows Scientists Agree on Global Warming

Researchers at Stanford and the University of Toronto noted that some people dispute whether there is "scientific consensus" on the reality and causes of climate change. They decided to find out how much consensus there really is.
Dare to Share:

The Intergovernmental Panel on Climate Change concluded that anthropogenic greenhouse gases have been responsible for "most" of the "unequivocal" warming of the Earth's average global temperature over the second half of the 20th century. But how many scientists who study the subject really believe that? And which scientists disagree?

They tried to "examine a metric of climate-specific expertise and a metric of overall scientific prominence as two dimensions of expert credibility in two groups of researchers", that is, those who agree with the IPCC's conclusion and those who do not.

They "compiled a database of 1,372 climate researchers based on authorship of scientific assessment reports and membership on multisignatory statements about ACC [anthropomorphic climate change]. We tallied the number of climate-relevant publications authored or coauthored by each researcher (defined here as expertise) and counted the number of citations for each of the researcher’s four highest-cited papers (defined here as prominence) using Google Scholar. We then imposed an a priori criterion that a researcher must have authored a minimum of 20 climate publications to be considered a climate researcher, thus reducing the database to 908 researchers."

Of those climate researchers, only a few percent were unconvinced of the IPCC's conclusion. The other 97-98% agreed with the IPCC that climate change is real and is mostly caused by human activities. The study also found that those researchers who published more and were cited more often in the field were more likely to be convinced by the evidence, and that those unconvinced by the evidence were generally those with fewer publications and citations.

"Not all climate researchers are equal"

They concluded that "the expertise and prominence, two integral components of overall expert credibility, of climate researchers convinced by the evidence of ACC vastly overshadows that of the climate change skeptics and contrarians. This divide is even starker when considering the top researchers in each group. Despite media tendencies to present both sides in ACC debates, which can contribute to continued public misunderstanding regarding ACC, not all climate researchers are equal in scientific credibility and expertise in the climate system."

The abstract of the PNAS paper is here, with access to the full paper as PDF. (Bless scientists and their grant providers who pay so that their papers can be open access, not restricted just to the academic community and other professional researchers.)

Dueling Experts

Often debates about climate policy come down to "My experts can beat up your experts". This research shows that there are objective measurements that can reveal which experts are more expert, and therefore should be given more weight in guiding policy. (Not that policy is driven by experts--it's politics.)

Science, after all, is substantially about measuring and quantifying. Even scientific expertise can be measured and quantified. This particular method is not the last word in such analysis. It is true that the lonely dissenter, out of step with the general consensus, who can't get a grant and therefore publishes less, may have a useful contribution to make. In fact she may be right and all the experts may be wrong. But this is not likely. When the skew is 881 to 27, the consensus is clear.

Cross-posted from Science In Action, from a post dated 23 June 2010.

Propaganda Yes, Safety No

noreply@blogger.com (David) — Sat, 25 Jun 2011 16:48:00 +0000

The more we learn about the incompetence of Japanese nuclear power operators the more discouraging it gets. This fascinating article in the New York Times reveals some astonishing facts about how much Japanese government and industry invested in brainwashing the public about the absolute safety of nuclear power generation. Of course nuclear power is very safe (see this earlier post for a comparison with coal, and this post for an overall review of the cost of the Fukushima disaster). But blind belief that "nothing can go wrong" has made the current Fukushima disaster much worse.
Dare to Share:

This year, 2011, the Japanese government is spending $12 million on propaganda programs promoting the absolute safety of nuclear power generation, and the nuclear industry is propably spending as much again (see NYT article). Yet both the industry and government resisted for decades spending on robot technology that could be helpful in the case of a disaster like Fukushima, and on plant upgrades and safety measures that could have minimized the damage at Fukushima. In convincing the Japanese public that nuclear power generation was absolutely safe, the industry convinced itself that it didn't have to use the latest safety improvements. They saved a few yen and ran unnecessary risks, and now it is costing them.

Although the full analysis of the cost-cutting and other safety compromises at Fukushima (and, of course, at other Japanese nuclear power plants) is yet to be completed, there are several obvious issues:

Although told that a big tsunami was possible, TEPCO, Fukushima Number One's operator, decided not to build a tsunami wall robust enough to prevent damage from a big one. Many other nuclear power plants in Japan still face this same vulnerability.
Obviously TEPCO hadn't felt it necessary to invest in more disaster-resistant backup power supplies.
Flimsy ducting for venting hydrogen was damaged early in the accident, letting hydrogen into the reactor containment building spaces where it later exploded, adding significantly to the damage and the difficulty of managing the disaster. Nuclear plants elsewhere recognized this vulnerability and built more robust hydrogen stacks.
Japan had no robots suitable for use in damaged nuclear power plants, though such robots had been found useful at Chernoble and Three Mile Island, and were manufactured in other countries in anticipation of employment in nuclear accidents.
TEPCO didn't have enough radiation badges for the workers who were rushed to the site to try to deal with the disaster, or proper training or procedures for working in high-radiation conditions. It wasn't able to track the workers or their radiation exposure. It blames this on its contractors and subcontractors. (See Mainichi Daily News and this Reuters story.)

The hundreds of millions the Japanese government and nuclear industry have spent over the years to convince the public that nuclear power was "absolutely safe" might, if spent on safety upgrades, training, and preparation, have actually made it more safe. It could have prevented the Fukushima disaster, which is undermining the credibility of industry and government and causing the public to question its blind support of nuclear power generation and its cozy regulation. These continuing revelations of joint incompetence could have long-term political repercussions in Japan.

Nuclear Power Moves East

noreply@blogger.com (David) — Wed, 01 Jun 2011 16:15:00 +0000

Nuclear power generation is being phased out and new plants delayed or cancelled in several western countries, even as new plants are planned and built in the East.

The Decline of Nuclear in the West

Kernkraftwerk Philippsburg

The recent decision by the German government to plan for the closure of Germany's remaining operating nuclear power generation facilities by 2022 (see BBC article) is the latest in a European trend. Switzerland had previously announced that it would build no new nuclear power plants, but that its existing plants would be allowed to run for their currently planned lives (Reuters story). Plans to build nuclear plants in Italy have been put on hold (see Guardian article). [Update 14 June 2011--Italians voted overwhelmingly in a referendum not to construct any nuclear plants for the foreseeable future--See Guardian story.]

In the United States it is economically infeasible to build new nuclear power plants, although some are in various stages of planning and permitting and one is under construction (for which ground was broken in 1973). The recent decline in the price of natural gas has been a major factor, making natural-gas-fired plants much more financially attractive than nuclear ones. Public concerns about nuclear power also make it difficult, costly, and time consuming to get permits for construction. And without substantial government loan guarantees, liability limits, and other subsidies (more difficult in this deficit-cutting age?) no plants can be built in the U.S.

The attitude in Japan toward nuclear power generation is becoming more similar to that in the West, only perhaps more so. In the '70s Japan faced a situation like that of France (high engineering skills but few domestic sources of energy) and made a similar commitment to nuclear generation. Nuclear accounts for 70% of Japan's power generation (before the Fukushima-related shutdowns). (In France it is close to 80%.) The revelations of sloppy management at TEPCO and cozy regulation by the government, plus first-hand experience of the consequences of that management and policy style, may turn Japanese voters against continued unquestioning support for nuclear power generation. [Continuing saga: see updates below.]

France remains committed to nuclear power generation, but it already has more plants than it needs for domestic consumption. Some are shut down on week ends for lack of demand (according to this article). In most places nuclear provides base-load power, with plants running continuously at optimum efficiency and peak demand above that baseline satisfied by other energy sources such as natural gas. But France has built so much nuclear capacity that it exceeds base demand. France exports a lot of electricity (it is the nation's fourth largest export product).

The Rise of Nuclear in the East

Both China and India have plans to greatly increase the generation of electricity from nuclear power.

Although China has called for a review of nuclear plant safety in the light of Fukushima, it remains committed to substantial expansion of nuclear power generation capacity (See Huffington Post item from AP). China plans to increase the fraction of its electricity it gets from nuclear power from about 1% to roughly 6% by 2020. This will require building new capacity greater than that of France today. (Wikipedia article)

All of China's nuclear power program and the operation of its nuclear plants is in the hands of state-owned "central enterprises". The extreme amount of capacity China is building over the next decade will require very rapid expansion of its nuclear engineering industry, with potential for corruption and corner-cutting. Since China has demonstrated that it cannot even build schools that withstand expected seismic risks, one might be concerned about the long-term safety of its nuclear power generation facilities. On the other hand, China will develop a major nuclear power engineering industry with potential to play a major role world wide.

India has plans to substantially increase its nuclear generation capacity, from about 4.8 GW installed capacity to 20 GW or more by 2020 (compared to China's plan for 70-80 GW). Prime Minister Singh has recently said that India will continue with its nuclear expansion (Hindustan Times article).

Other Mideast and Asian nations are developing nuclear electric power generation facilities. These include Iran, of course, as well as Turkey, the United Arab Emirates, and Vietnam. (See this paper.)

The Role of Government

Much of the decline in the attractiveness of nuclear power generation in Europe is due to the undeniable political cost of supporting it, at least outside France. Germany's abrupt turnaround from extending the lives of its old nuclear plants to shutting them completely can be credited to the success of Green political parties winning local elections on the issue. Voters in Germany don't like nuclear and can be expected to punish parties that back it. The same trend is seen in several other European countries.

It is also notable that wherever private companies are expected to provide the investment and take the financial risk of building and operating nuclear power plants, such plants are not being built. The business costs of problems at nuclear plants is the primary reason that nuclear power generation will grow only where government effectively absorbs those risks.

In France the main operator of the nation's nuclear plants is EDF, majority owned by the French state. The state, and the taxpayer, explicitly accept most of the financial risk of building and operating nuclear power plants in France. So far the French taxpayer seems to accept this arrangement. Elsewhere in the West voters are turning against backing such programs.

The government of the Peoples Republic of China has no such problem. Because China's nuclear power industry is state owned, the concerns about financial risks associated with nuclear power do not exist. Therefore the drive to preserve the firm and its assets by avoiding or managing those risks is also absent. (On the other hand, some Chinese managers and regulators who have been convicted of harming the public have been executed, a fate western managers don't have to worry about.)

All of India's nuclear power operations are owned by Nuclear Power Corporation of India Limited, a government-owned public sector undertaking. Thus the taxpayers of India, rather than any private investors, take the financial risks related to problems with nuclear power generation. The Civil Liability for Nuclear Damage Act 2010 provides limits on the liability exposure of plant operators and the government, which are lower than those in many other countries (some details here). The Act tries to shift some of the liability to suppliers of nuclear technology, such as the makers of nuclear reactors. It is unclear that reactor manufacturers will be willing to accept this liability.

It is my contention that nuclear power will never be as safe as it can be (which is pretty safe) unless those who build and operate nuclear plants have to accept the financial liability for anything that goes wrong. The fact that the government is accepting, and in effect limiting, that liability in India and China may partly explain the continuing construction of nuclear plants in the East.

Impact of Fukushima

After the disaster at Fukushima I (see Wikipedia article), all nuclear authorities were quick to assert that all plants under their jurisdiction were earthquake proof and that a similar problem couldn't happen to them (see previous post). (Of course the Japanese authorities said the same up until 11 March 2011.) Nonetheless they have all promised or initiated reviews of the design and operation of their plants in light of the experiences at Fukushima.

The greatest impact of Fukushima may be on policies toward storage of spent fuel. The loss of coolant to spent fuel storage pools at Fukushima has been a major part of the disaster. Such storage pools are not within containment structures like the reactors themselves. Nearly every nuclear plant in the world has spent fuel rod storage on site, and significant investments may be required to be sure such storage is safe even in the case of possible problems at the plants, including earthquakes, sabotage, operator error, power loss, backup power loss, etc..

Although the Fukushima disaster has, paradoxically, demonstrated that even cataclysm at a nuclear plant presents little threat to workers and the public, compared to coal, it has made people around the world less willing to accept the risks and worries associated with nuclear power generation.

And of course the horrendous cost to the plant's owner, Tokyo Electric Power Company, and to the Japanese taxpayer and electricity customer, has caught the attention of all involved in the nuclear power industry. TEPCO may survive, being judged too important to fail by the Japanese government (the holders of its debt have considerable political clout), but its investors and maybe even its bondholders may be forced to take a haircut. (See previous posts here and here.)

The Future of Nuclear

Until Chinese and Indian voters begin to respond to environmental concerns more like German ones, nuclear power generation will expand in the East. And in India and China people have much more immediate environmental concerns, such as clean water, sewage treatment, heavy air pollution, particulates and the like, which have been taken care of (to a degree) in the West. Perhaps squeamishness about nuclear power generation is a luxury they will come to share in time.

On the other hand, attitudes toward nuclear power could change in the West, if no new disasters like Fukushima occur for many years and the environmental and health costs of coal-fired power generation become more widely appreciated.

Update 2012-05-13 1630UTC: Nice chart of where nuclear plants are under construction or planned here. It says Russia is building and planning more than India. Of course this chart shows Japan building 3 and planning 10 more, so it may be a little out of date.

Update 2012-09-14 1615UTC: Japanese government announces policy to phase out nuclear by building no new plants and limiting the lifetime of existing plants, leading to zero nuclear generation by 2030s. See Reuters item. Decisions still have to be made on restarting existing plants, and this will remain a political issues for Japan.
Further Update 2012-09-19 1530UTC: Japanese Cabinet refuses to endorse nuclear phaseout. See Guardian item.

Photo by Lothar Neumann, Gernsbach, used under Creative Commons Attribution-Share Alike 2.5 license. Sourced from Wikimedia Commons.

The End of "Green" Products

noreply@blogger.com (David) — Wed, 11 May 2011 16:18:00 +0000

When Ford Motor Company attributed much of its recent earnings boost to "green" products (see TriplePundit item), did it signal that "green products" has become a meaningless, obsolete category? Has "green" gotten so mainstream that most products can be labeled by their manufacturers as "green"?

Obviously it is possible to identify products which are not green. Like gasoline from tar sands, coal, or rayon. And some products are greener than others. For instance most analyses would find electricity from wind to be greener than bioethanol. But maybe we are approaching the point when it makes more sense to single out the products that are "not green" rather than those which are green, which will over time become the vast majority.

When "green" becomes main stream, maybe it only makes sense to single out products that are "even greener". At one time compact fluorescent light bulbs were considered "green", in spite of their heavy metal content. But today how can they be considered green when LED bulbs are much more energy efficient and have no mercury? CFLs went from green to gray.

This is a good argument for a green rating or score. The problem with such ratings is that they must be able to compare apples and oranges. (It is easy to compare apples and oranges of course, but here I am using the figure of speech in which the fruits play a metaphorical role. But you knew that, didn't you?) Which is greener, a Prius, an organic apple, a second-hand dress, permeable paving on a parking lot, or a solar hot water heater?

"Green" has many dimensions. Something can be considered "greener" if it

Emits less greenhouse gases when it is being manufactured, transported, used, or disposed of than other similar products
Causes the release of less toxic or environmentally harmful chemicals in its manufacture, transportation, use, or disposal
Causes less ecological damage or negative land use changes in its production or disposal
Causes less negative changes in biodiversity in its production, use, or disposal
Uses less water in its production, use, or disposal
There must be other dimensions. Tell me about them in the comments.
Of course if we are considering "sustainability" more broadly then questions of effects on people, their rights, and equity must be considered.

It is possible to measure or calculate the emission of greenhouse gases or use of water, but the weights to assign to these factors when trying to construct a one-dimensional score will be subjective.

In any event, we are rapidly arriving (at least in developed countries) at the point where "green" is the rule, rather than the exception.

Rapid Change in the Arctic

noreply@blogger.com (David) — Tue, 10 May 2011 15:16:00 +0000

The Arctic Monitoring and Assessment Program (AMAP) has issued its latest Snow, Water, Ice and Permafrost in the Arctic report (SWIPA), with recent data on changes in the arctic and how they will affect us all. [Crossposted from A Very Different Earth.]

The major finding is that changes the Arctic is changing faster than previously projected. The report calls attention to the social and economic implications of these changes. But most of us don't live in the Arctic, so why should we care what happens up there?

Sea Level

Many news reports (see two examples below) have focused on the statement that sea levels will rise up to 1.6 meters above 1990 levels by 2100. This is not strictly a finding of the SWIPA study. In fact it just quotes other model results, saying:

High uncertainty surrounds estimates of future global sea level. Latest models predict a rise of 0.9 to 1.6 m above the 1990 level by 2100, with Arctic ice making a significant contribution.

SWIPA itself doesn't say why this warming is happening, but agrees with the IPCC:

In attributing the cause of warming in the Arctic, SWIPA refers to the findings of the Fourth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC). This states that "Most of the observed increase in global average temperatures since the mid-20th century is very likely [> 90% probability] due to the observed increase in anthropogenic GHG [greenhouse gas] concentrations".

It does conclude, however, that "melting glaciers and ice sheets worldwide have become the biggest contributor to global sea level rise," and that "These contributions from the Arctic to global sea level rise are much greater than
previously measured."

Key Findings

The English executive summary is in PDF here. The key findings it lists are:

"The past six years (2005–2010) have been the warmest period ever recorded in the Arctic."
"Snow and sea ice are interacting with the climate system to accelerate warming" (positive feedbacks--see finding 12 below).
"The extent and duration of snow cover and sea ice have decreased across the Arctic. Temperatures in the permafrost have risen by up to 2 °C. The southern limit of permafrost has moved northward in Russia and Canada."
"Multiyear sea ice, mountain glaciers, ice caps and the Greenland Ice Sheet have all been declining faster since 2000 than they did in the previous decade."
"Model projections reported by the Intergovernmental Panel on Climate Change (IPCC) in 2007 underestimated the rates of change now observed in sea ice."
"Average snow cover duration is projected to decline by up to 20% by 2050."
"The Arctic Ocean is projected to become nearly ice-free in summer within this century, likely within the next thirty to forty years."
These and other changes are altering "the characteristics of Arctic ecosystems and in some cases loss of entire habitats. This has
consequences for people who receive benefits from Arctic ecosystems."
"The observed and expected future changes to the Arctic cryosphere
impact Arctic society on many levels," creating both threats and opportunities.
"Transport options and access to resources are radically changed by differences in the distribution and seasonal occurrence of snow, water, ice and permafrost."
"Arctic infrastructure faces increased risks of damage."
"Loss of ice and snow in the Arctic enhances climate warming by increasing
absorption of the sun’s energy at the surface of the planet. It could also dramatically increase emissions of carbon dioxide and methane and change large-scale ocean currents."
"Arctic glaciers, ice caps and the Greenland Ice Sheet contributed over 40% of the global sea level rise of around 3 mm per year observed between 2003
and 2008. In the future, global sea level is projected to rise by 0.9–1.6 m by 2100 and Arctic ice loss will make a substantial contribution to this."
"Everyone who lives, works or does business in the Arctic will need to adapt to changes in the cryosphere", and this will require significant investment.
Considerable uncertainty remains and more research is needed. (The traditional coda to any scientific report.)

About AMAP

The Arctic Monitoring and Assessment Programme is a leading, authoritative, scientific program to understand what is going on in the arctic:

AMAP is an international organization established in 1991 to implement components of the Arctic Environmental Protection Strategy (AEPS).

Now a programme group of the Arctic Council, AMAP's current objective is "providing reliable and sufficient information on the status of, and threats to, the Arctic environment, and providing scientific advice on actions to be taken in order to support Arctic governments in their efforts to take remedial and preventive actions relating to contaminants".

So its findings carry considerable weight.

Reuters story

Huffington Post story

Osama bin Laden and Green Business

noreply@blogger.com (David) — Mon, 02 May 2011 23:52:00 +0000

Will the death of Osama bin Laden have any impact on clean tech, green and sustainability trends and businesses? It might, via a potential boost to President Obama.

Many comentators immediately suggested that the successful elimination of bin Laden, a goal which eluded former President George W. Bush, could boost President Obama's chances of re-election. If it does, that will affect the policies that will be followed in the future. It might mean more federal support for clean technology, more aggressive enforcement on the part of the EPA, and other policies that would encourage the development and adoption of low-carbon energy sources.

Spike in Obama's Re-election Chances on Intrade Prediction Market

The Intrade® reading on Obama's chances jumped to 69%, though it dropped back to 62% on Monday, after the market had digested the news. That's still significantly above the trend during April. Check the latest market action here.

Intrade is a "prediction market" [Wikipedia article here], an exchange where traders can buy or sell contracts the ultimate values of which depend on whether the a particular future event occurs. They are a way of aggregating the opinions of thousands of traders, each of whom thinks he or she knows more than the rest of the market, and hopes to profit if he or she correctly predicts how the market will settle. Sort of a "wisdom of crowds" system.

Here are the immediate reactions of some ~~commentators~~* observers who suggest President Obama will benefit from success in liquidating Mr. bin Laden:

The "Democracy in America" blog at The Economist says, "It means Barack Obama is probably getting re-elected."
Jeff Mason says in commentary at Reuters, "His dramatic announcement about bin Laden's death will switch the U.S. public's attention to his success as commander-in-chief, creating an image of strength."
Gary Langer blogs at ABC News that "While some bump for the president is entirely possible, how big it is and how long it lasts is an open question," and interprets some past poll results.
Nate Silver's New York Times blog says, "To state the obvious, this is good news for Barack Obama’s re-election campaign."

It would appear that the President may have gained some political capital that will help him keep the EPA moving forward on greenhouse gas issues, will help him maintain support for clean tech innovation, and will otherwise enable him to stand firm on sustainability issues. At least a little firmer than he could have stood a few days ago.

Obama may not be as green a president as Al Gore would have been, but he's certainly greener than most, if not all, of the Republican field. Bin Laden's demise is a little bit of good news for clean tech.

The graph is from https://data.intrade.com/graphing/jsp/closingPricesForm.jsp?contractId=743474&tradeURL=https://www.intrade.com.

* Shouldn't that be "commentors" or "commenters" Is "commentate" really a word? Maybe it comes from "commentary" rather than "comment", but darned if I can see how. "Commentate" is defined as "to serve as commentator". No further commentation.

Where's The "Fukushima Response Fund"?

noreply@blogger.com (David) — Wed, 06 Apr 2011 17:43:00 +0000

A prominent feature of the U.S. government's response to the Deepwater Horizon / Macondo blowout disaster was the creation of the "Spill Response Fund", a $20 billion escrow account set up by BP to cover anticipated damage claims, clean-up and mitigation expenses, and other costs. Why has the Japanese government not negotiate a similar fund to cover claims arising from the Fukushima nuclear power plant disaster?

The establishment of this fund was a key political response of the Obama administration to show the nation that it was going to hold BP responsible for the damage the blowout would cause, including reimbursing the government for many of its costs. The fund was announced less than four weeks after the initial explosion at the Deepwater Horizon. The Government of Japan seems much less astute about the need to show that it is going to hold Tokyo Electric Power Company to account.

According to this Reuters story TEPCO is already in negotiations with the government on what share of damages the taxpayers will cover. TEPCO "said it must first assess the extent of damage before paying actual compensation. 'We are still in discussion as to what extent we will pay on our own and to what extent we will have assistance from the government,' TEPCO executive vice-president Takashi Fujimotohe told a news conference." As far as I know the government has not denied this. What a contrast with the U.S. response to Macondo.

[Update 19 April 2011 2320 GMT: This MSNBC story quotes Japanese Economy, Trade and Industry Minister Banri Kaieda: "While TEPCO will be primarily responsible for damages payments, the government may have to support the firm, we are considering taxation, the electricity charge and other measures to enable the government to shoulder some of the burden." Imagine if Obama had said that.]

[Update 9 May 2012 1400 GMT: BBC reports that Japanese government will effectively take over TEPCO, owning more than half its voting shares "in return for a one trillion yen ($12.5bn; £7.8bn) taxpayer bailout". Actually the cost to taxpayers and electricity ratepayers is much higher than that. And who says the Japanese government will be wiser managers of TEPCO than its own incompetent former management?]

Since the anticipated costs of the Fukushima disaster run to $40 billion or more (see estimates in this earlier post), and this amount may exceed TEPCO's resources of cash, credit and salable assets, the company and the government are in a difficult position.

How Would a "Nuclear Disaster Response Fund" Work?

One of the key features of the Deepwater Horizon Spill Response Fund was that BP didn't have to come up with the cash all at once. It was required to pay $3 billion into the fund in third quarter of 2010 and $2 billion in fourth quarter, followed by payments of $1.25 billion per quarter until it had set aside the full $20 billion. This means that as of now, one year after the disaster, it has only actually paid in about $7-8 billion. The fund is supposed to cover claims under "the claims process required under the Oil Pollution Act of 1990 . . . and certain other claims, including natural resource damages and state and local response costs." [Source BP press release]

At the time the fund was announced BP said it would post its U.S. assets as bond to assure that the fund contributions would be made. (Later this was modified to back the fund with BP's future U.S. production revenues.) This bond is perhaps moot, since it now looks like the fund will only have to cover about $10 billion in payouts (see this Bloomberg article), and that amount will have been deposited in the fund within a few months.

The Japanese government could make a similar deal with TEPCO. The size of the fund would have to be about $20 billion. (This would cover estimated damage claims and costs related to releases of radioactivity form the plant, and much of the cost of containment, clean-up and mothballing of the damaged facility.)

Since TEPCO is a much smaller company than BP (about one-fifth in terms of revenues) such a commitment would be much more difficult for it to meet. But TEPCO still has billions of dollars in annual cash flow from ongoing electricity sales even without the output of Fukushima Number One. This revenue stream could be pledged to guarantee the fund would be completed. Alternatively, the assets that generate this revenue stream are worth about $20 billion. They could be put up as collateral, and if necessary sold to generate the cash to complete the fund.

I don't know what remaining borrowing capacity TEPCO has, and its existing bondholders are already justifiably nervous. But the government could make guaranteed or otherwise subsidized loans to TEPCO to enable it to build the fund. This would be another way for the government to shift some of the costs of the disaster to taxpayers without obviously paying costs directly.

And of course as a regulated utility monopoly its rates are set in consultation with government regulators. Those regulators could raise rates to account for higher costs due to the disaster, essentially getting electricity consumers to subsidize some of the anticipated expenses. We have not heard about this yet, but I am sure it will be part of the government's response to rescue TEPCO.

The Japanese government does have some ways to minimize TEPCO's exposure and costs without actually taking on those costs itself. This Reuters story indicates the government may impose energy conservation measures to prevent the need for blackouts, which might otherwise be needed this summer when electricity demand in eastern Japan is expected to exceed supply by about 10% due to the loss of Fukushima Number One's generating capacity. This could effectively shield TEPCO from liability claims for harm business would have suffered due to such blackouts. This would reduce its potential liability by many billions of dollars without the government having to pay out anything.

Eventually TEPCO may have to be broken up and its remaining generating and distribution assets sold. Indeed this might be a fair result. It reaped profits for years operating in a certain way, and now that that mode of operation has resulted in huge losses it is only fair that the shareholders bear the burden. Their company is now worth next to nothing (market capitalization is down to about 10% of what it was before the recent events).

So here is a scenario:

The Japanese government and TEPCO agree to the establishment of a $20 billion fund to pay claims for economic losses associated with the Fukushima Number One incident, especially losses associated with release of radioactive material from the plant. The fund could also be used for environmental cleanup, acquisition of contaminated land, and other such costs.
TEPCO pledges its assets as collateral for completion of the fund.
TEPCO makes an initial $3 billion contribution to the fund, and undertakes to contribute another $1.5 billion quarterly until the facility is fully funded.
The government guarantees special disaster loans to TEPCO, enabling it to make the contributions to the fund. (The government may already effectively be doing this, since major banks have continued to make loans to TEPCO. I doubt they would do so for a company with such an uncertain future unless they had assurance that the government would back the loans if needed.)
Electricity regulators increase rates to TEPCO customers to assure an adequate revenue stream to pay back the loans.
Optional: TEPCO is forced into bankruptcy and a reorganized "New TEPCO" emerges with significant government ownership (similar to the way the U.S. government took stakes in Chrysler and General Motors to support their bankruptcies and reorganization). "New TEPCO" leaves behind its major liabilities such as the damaged Fukushima Number One plant (perhaps in government hands) and eventually the government can sell its shares and re-privatize the company. Current bondholders take a haircut.
Optional: Eventually the mothballed Fukushima Number One site is transferred to the Japanese government, together with any nearby contaminated land that has been acquired. The government is responsible for monitoring the site for some decades and then decommissioning it. Maybe TEPCO or its successors can be required to post a bond or create a fund to cover the eventual cost of decommissioning.
If the experience of the Spill Response Fund is a guide, the total of claims paid and remediation costs may be less than $20 billion. Any funds remaining can be used to pay down the loans made to create the fund.
In order for the government to get paid back for its loans, or to eventually sell its shares if it has become part-owner of "New TEPCO", the company will have to be allowed to rebuild and increase its revenues, through construction of new generating capacity and rate increases. Obviously the entire top management has to go, and better management practices must be adopted.

This approach essentially combines the "response fund" concept developed to reassure the public after the Macondo blowout, and aspects of the U.S. government's financing of the bankruptcies and reorganizations of Chrysler and General Motors.

Fukushima vs. Deepwater Horizon

noreply@blogger.com (David) — Tue, 05 Apr 2011 19:16:00 +0000

There are many parallels between the impacts of the nuclear power plant disaster at Fukushima Number One and the Deepwater Horizon oil spill disaster. But there are also significant differences based on

A nuclear facility on land compared to a hole in the bottom of the Gulf of Mexico
A monopoly supplier of electricity compared to a supplier of a oil, a fungible commodity
The much more substantial resources of BP compared to TEPCO, and its early assurance that it would cover all reasonable claims and costs.

The five million barrels of crude oil released from the Macondo blowout after the Deepwater Horizon rig failure disrupted fisheries and contaminated coastline, affecting many businesses. The radioactive contamination being released into coastal waters at Fukushima is causing economic losses to fisheries and other businesses in a similar fashion. How are the costs of these events similar, and how do they differ?

BP's Costs

BP, a "responsible party" for the Macondo blowout, early agreed with the U.S. government to establish a $20 billion "Spill Response Fund". So far BP has paid about $6 or $7 billion into that fund. The fund is intended to cover the liabilities of the responsible parties, and presumably BP will try to get the other responsible parties to contribute part of the fund or reimburse it for part of its contribution. Lawyers will be arguing about this for years.

Kenneth Feinberg was put in charge of managing the compensation payments from the fund. The fund is supposed to cover claims under "the claims process required under the Oil Pollution Act of 1990 . . . and certain other claims, including natural resource damages and state and local response costs." [Source BP press release]

According to this Bloomberg article, Feinberg estimates that only half of the $20 billion will be needed to cover such claims, and the rest will be returned to BP. So BP's cost for economic damages, some ecological damages and some cleanup will total around $10 billion.

BP also incurred substantial costs to contain and plug the blowout, and to carry out various cleanup activities during the spill. It took a $32.2 billion pretax charge against its second quarter 2010 earnings reported 27 July 2010. The charge was "to reflect the impact of the Gulf of Mexico oil spill, including costs to date of $2.9 billion for the response and a charge of $29.3 billion for future costs, including the funding of the $20 billion escrow fund." [Source BP press release]

Thus BP spent about $3 billion on the immediate response and plugging the blowout, and anticipated another $9.3 billion in future costs that would not be covered by the Spill Response Fund. These future costs will probably include various fines and penalties, damage claims (for instance from the families of the men killed), litigation costs and so on.

The U.S. Oil Pollution Act of 1990 created the Oil Spill Liability Trust Fund, funded by an five-cent-per-barrel tax on domestically produced and imported oil. (Thus the cost is borne by oil consumers.) The fund is allowed to grow to a maximum of $2.7 billion. The fund can pay for certain oil spill cleanup costs and damages, but only up to a limit of $1 billion per incident. Responsible parties are supposed to reimburse the fund, and presumably part of the $20 billion Spill Response Fund will go toward such reimbursements. According to this GAO analysis, because of the way the Liability Trust Fund was structured it may not be able to pay out, nor recover from the Spill Response Fund, more than $1 billion for this incident. Government expenditures beyond that will have to be recovered from the responsible parties by other means.

Summary of Macondo Blowout Costs

Response and containment	$3-4 billion
Economic claims and state and local response costs (from Spill Response Fund)	$10 billion
Fines, penalties, other damage claims and other anticipated costs	$9 billion
Uncompensated economic losses and other damage borne by the public, corporations and individuals, and unreimbursed government costs	unknown, but probably billions of dollars
Estimated total	About $25 billion

[Update 2012-08-01: According to this piece in The Guardian, BP's costs are now estimated at around $38 billion. "The $38bn already includes $14bn in costs to restore 4,375 miles of shoreline and $8.8bn in compensation payments, although it has been reduced by $4bn following settlements with partners in the ill-fated Macondo well."]

Compare these costs with the estimate of the costs of the Fukushima disaster.

The response costs are similar.
The nuclear accident has substantial clean-up and mothballing costs at the reactor--about $10-15 billion--that weren't seen at Macondo.
The environmental clean-up and remediation costs may be similar--several billion dollars.
The liability for economic loss and other compensation to individuals and businesses hurt by the event may be similar--around $10 billion.
The liability for harm to businesses caused by the blackouts resulting form the loss of generating capacity at Fukushima is potentially substantial--a rough guess is $10 billion.

Thus many of the costs of the two events are rather similar. The differences are related to the complexity of decontamination and mothballing a ruined nuclear plant and the economic damaged caused by blacking out utility customers.

1. Tokyo Electric Power Company, the owners of Fukushima Number One, is exposed to the huge costs of cleaning up radioactive contamination of the facility and entombing the damaged reactors, even after the initial response is over and the reactor are stabilized and cooled down. These are costs inherent in risks associated with nuclear power generation, and quite different from the clean-up costs of other kinds of industrial accidents.

2. Electricity is a monopoly, while oil is a fungible commodity. BP didn't need to disappoint any customers. The Macondo Prospect well hadn't started to produce yet, so there are no direct lost sales. And any contractual supply obligations BP had could be met by oil from other sources.

But TEPCO dominated electricity supply in Japan's eastern grid area (power can't be transferred from the western to the eastern grid areas in any substantial quantities). The loss of generating capacity due to the earthquake and tsunami has meant significant shortages and rolling blackouts. Eventually most of that capacity will come back on line. And customers may not have recourse for lost business due to blackouts that were due only to those "acts of God". If there was ever a force majeure, that was it.

However if customers suffer blackouts, and consequent harm to their businesses, just because of the failure at Fukujima Number One, which is arguably due to design and operational failures on the part of TEPCO, some liability may exist. This could be minimized if electricity users in eastern Japan can conserve a little. Less than 10% conservation would make such blackouts due just to the loss of Fukushima Number One capacity unnecessary. The Japanese government will have to get involved in encouraging such conservation, and thus saving TEPCO (or the taxpayers) many billions of dollars.

The effect of these costs and liabilities is vastly different between BP and TEPCO, mainly because BP is five times large. BP had the financial strength to take a $3.7 billion loss in 2010, sell some assets to cover the costs of the Macondo disaster, and continue as a going concern. TEPCO will require the Japanese government and taxpayers to accept a substantial share of its liabilities if it is to emerge as a going concern.

TEPCO is already in negotiations with the government. According to this Reuters story, "'We are still in discussion as to what extent we will pay on our own and to what extent we will have assistance from the government,' TEPCO executive vice-president Takashi Fujimotohe told a news conference." So far TEPCO has only made about $2 million in token payments to towns evacuated around the plant.

Less than four weeks after the Deepwater Horizon explosion BP and the U.S. government had already agreed on the $20 trust for the Spill Response Fund. [Source BP press release] The Japanese government doesn't appear to operate in the same way at all.