Doc's Green Blog

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."

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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.
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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.).
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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.
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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.
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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.
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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 (Maanya) — 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.
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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.
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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.

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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.
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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.
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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.
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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.
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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.

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.

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

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.

Is Nuclear Power Too Risky?

noreply@blogger.com (David) — Mon, 04 Apr 2011 16:32:00 +0000

Are some energy investments so unpredictable and potentially unprofitable that governments should promise to cover the downside risk for private companies involved? The nuclear power generation industry seems to think so.

Many energy investments carry significant risks of expensive disaster. Examples:

The Buffalo Creek Flood (Pittston Coal Company dam failure) of 1972 cost 125 lives and destroyed hundreds of homes.
The Piper Alpha disaster in the North Sea in 1988 cost 167 lives.
The Three Mile Island accident of 1979 cost the plant's owners, General Public Utilities and Metropolitan Edison, more than a billion dollars in containment and clean-up costs, legal settlements and other costs, as well as loss of electricity sales from the destroyed reactor, which had only been on line for 13 months, and from the other reactor at the site which was shut down until 1985.
Two hundred thirty-four people died in the Chuandongbei natural gas field explosion in China in 2003 (see NYT article).
In 2006 12 coal miners were killed in the Sago mine disaster in the U.S.
Twenty-nine coal miners were killed at the Upper Big Branch disaster in the U.S. in 2010.
The Deepwater Horizon disaster and resulting Macondo blowout cost the lives of 11 rig workers and cost BP roughly $10 billion.
The ongoing nuclear power plant disaster at Fukushima Number One will probably cost around $50 billion, of which its owner will only be able to cover about half. (See this post.)

Existing Subsidies

In the United States the nuclear power industry is protected from much of the liability that would be associated with a disaster like that at Fukushima by the Price-Anderson Nuclear Industries Indemnity Act of 1957 and related legislation. Under the act, the industry is only required to have $375 million of liability insurance per plant. Industry liability from a nuclear incident is limited to $12.6 billion (from a fund generated by industry payments of $111.9 million per reactor, to be made in the event of an incident with liability exceeding insurance coverage). Beyond that the Federal government picks up the tab.

The offshore oil drilling industry receives similar limitation of liability through the Oil Spill Liability Trust Fund. A tax of eight cents per barrel of oil produced in or imported into the USA has built up a fund of some $1.6 billion. In return companies have their liability for damages limited to $75 million, paid from the fund. The fund also pays for some government operation on an annual basis. Costs beyond $75 million, or the resources of the fund, would be paid by the taxpayer. (Of course the eight cent tax is passed on to oil consumers.)

Because to the very large capital costs of nuclear power generating plants, the industry lobbies for and receives substantial loan guarantees, reduced rate loans, tax breaks and other subsidies. But similar subsidies are available to several other sectors of the energy industry, and to other industries. Likewise the favorable monopoly rates of many electric utilities enable them to pass on many costs and expenses to their ratepayers. This is not unique to the nuclear power generation industry.

The nuclear power industry claims it can only expand if it receives various government subsidies and guarantees.

"They cannot be built without government guarantees ... shifting risk from investors and lenders to taxpayers."--Peter Bradford, adjunct professor at Vermont Law School [Source Reuters article]

"We believe many new nuclear construction projects will have difficulty accessing the capital markets during construction and initial operation without the support of a federal government loan guarantee."--2007 letter from investment baking firms to Department of Energy [Source Christian Science Monitor article]

Distorted Investment Decisions

These subsidies, guarantees and liability limitations distort investment decisions. If someone else (the taxpayer) is going to cover some or all of the cost of default, accident, liability, cleanup, waste management or other potential expenses, that makes even a potentially risky investment look like an acceptable deal to private enterprise.

Of course the problem is even worse where nuclear power generation capacity is being built and operated by the government itself. There the taxpayers bear all the risk, and the detailed analysis of risk and reward that private enterprise uses to decide whether to allocate resources to a particular enterprise is skipped altogether.

Nuclear power generation will never be as safe as it can be unless the private firms that stand to profit from it accept all of the costs and liability associated with problems at their facilities.

Further reading:

List of accidents and disasters in this Wikipedia article.

Prominent energy accidents of the past 100 years listed in this article.

The Cost of Fukushima

noreply@blogger.com (David) — Thu, 31 Mar 2011 22:31:00 +0000

How much will the Fukushima nuclear power disaster cost the Tokyo Electric Power Company, the Japanese economy, and the Japanese taxpayer? A rough estimate based on current conditions is something around $50 billion. TEPCO's salable assets are only worth about half of that.

The costs of the problems at TEPCO's Fukushima Number One nuclear power plant fall into several areas:

The direct costs of trying to contain disaster and stabilize the damaged reactors. This includes costs to TEPCO as well as costs being borne by public agencies such as the Japan Self Defense Force, fire services, and so on.
The costs to TEPCO of lost sales of the electricity formerly generated at the facility.
The costs to individuals and businesses caused by the blackouts imposed by TEPCO due to its sudden loss of generating capacity. There will be secondary and tertiary effects--for example if power cuts prevent railways from running, perishable goods may be lost, or raw materials may not be available to keep manufacturing plants operating. The rolling blackouts are distributing this cost widely over much of eastern Japan, beyond the area where economic activity has been disrupted by the earthquake and tsunami. [Update 6 April 2011 1515 GMT: Government-imposed conservation measures may make blackouts unnecessary, minimizing this exposure for TEPCO. See note below.]
Compensation to people harmed by radiation at the plant or released from the plant, or by other direct effects such as fires and explosions. So far the only people directly harmed are some of the workers exposed to radiation or injured during the efforts to stabilize the facility. TEPCO will presumably owe compensation to those injured, sickened, or killed.
The eventual cost of cleaning up and entombing the damaged reactors, which will take ~~years~~ [update 28 March 2012: decades; Guardian story], and securing the contaminated areas of the site for many decades. Some land around the plants may need to be acquired due to contamination that is impossible to remove or remediate.
The economic losses due to radioactive contamination. Many farmers have already been ordered not to harvest crops, and other crops and other agricultural or fisheries products will not be able to be sold because of radioactive contamination or fear of contamination. All of these businesses will have a claim against TEPCO.
If this were in the United States there would be thousands of lawsuits, including class action lawsuits, seeking to recover damages due to disruption of peoples lives and businesses. Probably there would be suits seeking compensation for psychological impacts and loss of quality of life. I don't know how this will play out in the Japanese legal system.

To offset these costs TEPCO presumably will receive some insurance payments, but such payments will be much, much less than its total costs.

Costs of containment and control of the damaged reactors	Perhaps $500 million so far; estimated about $2 billion to stabilize the reactors
Lost sales of electricity	About $7 billion per year
Costs to businesses due to blackouts	~~About $10 billion~~ [update: may be minimized by conservation measures see note below]
Liability for direct radiation injury	Several hundred million dollars?
Clean-up and mothballing cost	$10 to $15 billion
Liability for economic harm due to radiation release	Maybe $10 billion, depending on amount and type of releases of radioactive materials
Other tort liability	Maybe another few billion
Total costs and liability	~~About $50 billion~~ [update: about $40 billion if blackout liability claims are avoided]

This estimate seems realistic when compared to BP's costs associated with the Macondo blowout. BP had to set aside $20 billion just for economic liability and environmental damage, not counting its costs to plug the blowout and the liability for 11 workers killed and others injured.

This Reuters article has some estimates of TEPCO's costs. "the company said on Wednesday that 2 trillion yen ($24 billion) in emergency loans from Japan's major banks would not cover its mounting costs." Bank of America-Merill Lynch is cited as estimating that compensation claims alone could be between $12 and $130 billion, depending on how long the situation at the plant "drags on".

[Update 5 April 2011 1530 GMT: According to this Reuters story TEPCO has made token payments to evacuated towns of about $2 million. It is 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."]

[Update 12 April 2011 0420 GMT: According to this BBC story JP Morgan has estimated compensation claims from the Fukushima disaster could total $24 billion.]

[Update 29 March 2012: BBC story says "to keep the company afloat" "Tepco now says it needs 2.55tn yen [$31 billion--DW] in compensation - up from its previous estimate of 1.7tn yen. Tepco is seeking the additional 1tn yen in financial support from the state-backed fund 'in order to prepare for necessary compensation payouts, the steady decommissioning of Unit 1 to 4 at Fukushima Daiichi Nuclear Power Plant, securement of sufficient capital for stable power supply, and early bond issuance to be able to raise funds independently'." TEPCO press release here.]

At least TEPCO or its successor should establish a compensation fund, as BP was required to do. I am surprised the discussion has leapt directly to nationalization of TEPCO, rather than holding the company to account.

TEPCO's likely costs and liabilities are so far in excess of its resources (cash, borrowing capacity and salable assets) that there has been talk of the Japanese government "nationalizing" the company, or otherwise taking on some of these costs in order to save it.

One might ask why the company is worth saving. Surely it could sell its intact assets (other power plants and distribution systems) to another electricity company to generate some cash to cover its liabilities. (TEPCO's net income from other assets, not including Fukushima Number 1, is still about $3-4 billion per year. These assets should be worth some $30 billion, if they were sold.)

Other remaining liabilities, and the long-term responsibility for the contaminated site, would be transferred to the Japanese taxpayer. The Tokyo Electric Power Company would cease to operate, like ENRON, Lehman Brothers Holdings and many other companies who found their liabilities vastly exceeding their assets.

The taxpayers will have to cover some costs, perhaps tens of billions of dollars worth. But there is no reason that they should bail out the shareholders of TEPCO.

Nuclear generation of electricity will never be as safe as it can be until the private companies that profit from it have to accept all the liability of problems that develop at their plants. Then they will design conservatively, include accurate provisions for costs and potential liability, and make investment decisions that are beneficial for both the owners and the taxpayers. (Note that this implies that no nuclear power industry that is owned and operated by the government will ever be as safe as it can be.)

Calculations:

Cost of control--Just a wild guess.

Lost sales--The capacity of Fukushima 1 was about 4696 MW, about 11% of TEPCO's total generating capacity. (Reactors 5 and 6 may eventually be able to return to service, but their production will probably be lost for at least a year.) Thus about 11% of TEPCO's annual revenues, which are roughly $65 billion, will be lost during the first year.

Business losses due to power cuts--The lost generating capacity at Fukushima Number 1 is about 3% of Japan's total electricity consumption of 1,075 TWh per year (2008). So the estimate is that some fraction of Japan's $5 trillion GDP is lost, say one tenth of that 3%. Conservation and other adjustments will mean that this loss will be temporary. [Update 6 April 2011 1515 GMT: This Reuters story indicates the Japanese government may impose energy conservation measures to prevent the need for blackouts. This could effectively shield TEPCO from liability claims for harm to business due to such blackouts.]

Injuries to workers--Estimating a few deaths or serious injuries, at $100 million per death. [Update 15 April 2011 1815 GMT: Reuters article says 28 workers at Fukushima have accumulated doses of more than 100 millisieverts. This includes the two who were exposed to 170-180 millisiverts by standing in contaminated water with improper footwear. Japan has raised the limit these workers may be exposed to to 250 millisieverts per year, and we haven't heard of any reaching that level. The 100 millisievert level is the lowest dose thought to be linked to increased cancer risk. See this post for more on doses and consequences.]

Economic losses due to contamination--A rough guess. Loss of crops will be temporary. Fisheries losses may be masked by losses due to the tsunami. If Caesium 137 is released in a form that contaminates local land surfaces, some areas might be closed to agriculture for many years, decreasing land values. The government or TEPCO might have to acquire such contaminated land. [Update 5 April 2011 1530 GMT: According to this Bloomberg article BP's payments for economic loss claims from Macondo blowout may total around $10 billion. Update 6 April 1515 GMT: See this post for comparison of Fukushima and Macondo costs.] [Update 12 April 2011 0420 GMT: BBC story reports JP Morgan estimates compensation claims could be around $24 billion.]

Cleanup--Three Mile Island cost about $1 billion to clean up and mothball. It was a much more limited problem with much less contamination of the facility. I estimate at least double the cost per reactor and four damaged reactors, so about $10-15 billion.

Fukushima vs. Chernobyl

noreply@blogger.com (David) — Mon, 28 Mar 2011 18:49:00 +0000

How does the Fukushima nuclear power station disaster compare with that at Chernobyl in 1986?

	Fukushima	Chernobyl
Cause	Natural disaster, design flaws	Human error, design flaws
Amount of radiation released	The amounts of radioactive iodine and caesium released have approached those at Chernobyl (reports here, here, and here) (and there has been much more released since then). Small amounts of radioactive plutonium have been found.	In addition to volatile iodine and cesium, many other radioactive materials were released, including strontium, plutonium, and ruthenium in particles in smoke and dust (overview in Science article) which caused long-lived contamination of surrounding areas.
Workers and responders killed	2 missing? (estimate as of 26 March 2011 see Reuters article, Telegraph article) (These 2 may have been killed by the tsunami not the nuclear accident see BBC story)	34
Public health impact	Few direct public health impacts currently anticipated [update Reuters quotes UN expert on minimal health impacts]	"more than 6,000 cases of thyroid cancer" (UNSCEAR) entailing up to 500 premature deaths (Other sources give much higher estimates of premature deaths)
Clean-up Cost	Perhaps around $10-15 billion for site cleanup and mothballing (Three Mile Island cost $1 billion to clean up and close--see NYT article) (For estimates of other costs--around ~~$50~~ $40 billion--see this post.	Tens to hundreds of billions of dollars, including maintenance of exclusion zones, relocation costs, ongoing work at the site (a multi-billion dollar project is currently under way to put a more permanent cover over the damaged reactor building)
Exclusion zone	None anticipated at this time, except perhaps the Fukushima #1 site itself.	Considerable areas around the plant, and in neighboring Ukraine, Belarus and Russia, are zones of restricted access where no people can live

The estimates of health effects and premature deaths due to the radiation released by the Chernobyl disaster vary widely, and may be influenced by ideology and political factors.

The Chernobyl disaster involved a catastrophic and sudden release of a large plume of airborne radioactive material, including smoke and dust, while releases from Fukushima have been gradual, mainly volatile elements, and a substantial fraction have been water-borne and released into the adjacent sea. Also much of the airborne contamination has blown out to sea, rather than over inhabited land. This has minimized population exposure and contamination around the plant.

Also, at Fukushima an area within 20 km of the facility was evacuated promptly, and an additional area between 20 km and 30 km from the plant is currently subject to voluntary evacuation. The disaster at Chernobyl was at first not announced publicly and evacuation was delayed. The city of Pripyat, about 2.5 km from the Chernobyl plant, was not evacuated until 36 hours after the explosion and fire. Thus many more people were exposed to airborne radioactive materials.

Even after the Chernobyl disaster became public many people continued to drink milk from cows which were consuming contaminated feed or forage. The authorities were slow to prevent this route of exposure.

More than 300,000 people were resettled from the contaminated areas around Chernobyl. It is not likely that many will have to be permanently relocated from around Fukushima, but much of the surrounding area will have to be rebuilt due to tsunami and earthquake damage.

In addition to the technical differences between these two disasters which affect the type and degree of radioactive material released and other impacts, there are very significant differences due to the contrasting political and information climates. In 1986 in the Soviet Union little information was conveyed to local populations, or anyone else. The Fukushima disaster is playing out in the glare of international media coverage, and in an age when information is circulating freely via the internet.

Because of this much greater information flow and reasonably effective government intervention, many of the pathways of harmful radiation doses have been blocked. In particular around Fukushima food, water and other potentially contaminated sources of exposure are being monitored, and efforts are being made to prevent exposure by warning consumers against various hazards.

It is not possible to compare the broader economic impacts of these two nuclear energy disasters. Chernobyl had its greatest effects in a primarily rural area, while substantial economic activity (farming, fisheries) may be affected by Fukushima. Also, it is impossible to disentangle many of the economic effects of the Fukushima disaster from the much more severe and widespread effects of the earthquake and tsunami. Contamination of fisheries may be irrelevant, for example, since the fishing industry in the area has been destroyed by the tsunami.

[Update 31 March 2011 1700 GMT]
A recent Reuters article says compensation claims against Tokyo Electric Power Company could be $12 to $36 billion (or even as high as $133 billion according to an analysis by Bank of America Merrill Lynch). This would put the total cost of the Fukushima disaster in the same range as that of Chernobyl, even accounting for the change in the value of the dollar over the intervening 20 years.

[Update 6 April 2011 1800 GMT]
Reuters quotes members of the United Nations Scientific Committee on the Effects of Atomic Radiation, saying that the public health effects of releases of radioactive material from Fukushima are expected to be very minor, based on current information.

Part of the reason that the cost of the Fukushima disaster is high even though its environmental, health and mortality effects are much more limited than Chernobyl is that Fukushima affects a relatively more wealthy and productive economy. The disruption of the Japanese economy due to the disaster at Fukushima creates costs and liabilities much greater than Chernobyl's impacts on the Soviet, Ukranian, Russian and Belorussian economies.

Updated 30 March 2011 0540 GMT
Updated 1 April 2011 0011 GMT with link to "Cost of Fukushima" post.
Updated 3 April 2011 1530 GMT regarding 2 bodies recovered
Updated 6 April 2011 1800 GMT with link to Reuters story on health effects.

Sources and further reading:
Wikipedia article

How Much Radiation Is Bad For You?

noreply@blogger.com (David) — Wed, 23 Mar 2011 23:32:00 +0000

Putting Fukushima In Perspective

This excellent chart puts in perspective the various amounts of radiation we might be exposed to. I know you can't read the reduced version shown here, so click on the image or go to the xkcd site to see the full-sized image. That site also has links to supporting information.

Yes, too much ionizing radiation can be very dangerous. But "too much" is a lot. We all tolerate minor amounts every day of our lives.

Smoking Sieverts

The chart doesn't include the very significant additional radiation exposure that tobacco smokers expose themselves to. (Info at this EPA site. The U.S. Army Corps of Engineers has a pdf here with some exposure examples.) This University of Iowa site says someone who smokes a pack and a half of cigarets a day exposes himself or herself to a dose of 1300 mrem/year, equivalent to a chest x-ray for each cigaret. That's one of the green boxes in the chart above per smoke. Second-hand smoke is similarly radioactive.

Nobody who smokes should complain about radiation. They expose themselves to more than anyone living around Fukushima is likely to receive. No tsunami required.

The Sievert Measures a Radiation Dose's Effect on Us

The sievert is the SI unit used to compare the effect of doses of ionizing radiation on the body. Different kinds of radiation have different effects, and different parts of the body are affected differently. The sievert takes this into account so we can compare, for example, the effect of the extra radiation received during an airplane flight with the extra radiation received by visiting Chernobyl. [Wikipedia article here.] Sieverts (Sv), and microsieverts (μSv), millisieverts (mSv) and so on are used in the chart above.

Fukushima, Nuclear Power, and Coal

noreply@blogger.com (David) — Wed, 16 Mar 2011 18:06:00 +0000

The simple message from the Fukushima nuclear plant disaster is that unlikely events can and do happen. So when representatives of the nuclear power industry and their regulators re-assure us that modern plants are designed to withstand all "likely" circumstances we should ask them, "Well, what about unlikely circumstances?"

In this article U.S. Nuclear Regulatory Commission Chairman Gregory Jaczko is quoted as saying, "We have a strong safety program in place to deal with seismic events that are likely to happen at any nuclear facility in this country." I'm sure Japanese regulators said the same before recent events.

We should also consider that earthquakes are not needed for crises to occur at nuclear power stations. Neither Three Mile Island nor Chernobyl involved an earthquake. Also, any earthquake strong enough to cause a nuclear emergency will probably have a death toll thousands of times larger from other effects such as building collapses or tsunami. The deaths associated with any problems at nuclear power plants will be very minor in comparison.

But just because nuclear power generation entails risks, does this mean that we should continue to burn coal?

It has been known for 40 years that reactors like those at Fukushima might release radioactive material if they suffered a loss-of-coolant accident. Yet such reactors have been approved and built. (See this Guardian article.) Society has been willing to roll those dice.

Regulators approved those reactors, hoping their faults would never be tested. A score of similar reactors are operating in the U.S. today. Probably they will never be subjected to an unfortunate sequence of events that will cause them to fail catastrophically. But when the industry and their regulators assure us that "nothing can go wrong" they are obviously exaggerating. Things can go wrong, and at Fukushima they have.

The Fukushima disaster illustrates once again how massively complex systems can be destroyed by an unanticipated combination of failures. (See "When Systems Fail It's No Accident" in sister blog Science In Action. Also consider the combination of failures that led to the BP Macondo blowout disaster, described in this post.) Failures of this kind are unavoidable, though fortunately they are rare. (See this Wikipedia list of civilian nuclear accidents--not all of which are disasters.) (Here is an interesting list of structural failures and collapses. Engineering failures are not that uncommon. Dozens of people die from such failures every year on average.)

We don't know yet how much radioactive material will be released from the Fukushima reactors, nor how much disease, death and economic harm may result. Probably the total economic and personal loss due to the reactor failures will be relatively minor--a few billion dollars to Tokyo Electric Power Company, and some tens or hundreds of premature deaths. (There have apparently already been some deaths among workers at the facility, mainly from the effects of the hydrogen explosions, if I interpret the cryptic information coming from TEPCO correctly. Japan has had previous deaths among nuclear industry workers. See Wikipedia article on the Tokaimura accident.)

The cost of coal

This should be balanced against the thousands of deaths annually caused by particulate emissions from coal-burning power plants. Particulates are poison, and cause morbidity and mortality among exposed populations. If you count plants in China the annual toll is probably in the tens of thousands at least. (Here are discussions of health effects of particulates from WRI, EDF and Wikipedia.)

We should also count the deaths among coal miners as a cost of coal-fired electric power. The annual number of coal mine deaths is probably far above the number of deaths that will eventually be attributed to the Fukushima disaster. Twenty-nine coal miners were killed at the Upper Big Branch disaster in the U.S. in 2010. Hundreds of coal miners die in China annually. Mining is dangerous business, probably more dangerous than working at a nuclear power plant. (Of course uranium mining is part of the nuclear fuel cycle, but it may be less dangerous than coal mining.)

(Interestingly the Willow Island construction disaster, the collapse of a cooling tower being built at a coal-fired power plant, killed 51 construction workers. This toll is far greater than that of all nuclear power accidents in U.S. history. Admittedly the coal-fired power industry is much larger than the nuclear power industry.)

The Fukushima disaster is serious, and will do no good to the prospects of the nuclear power industry. If we are going to have nuclear power generation we should figure on the costs of such events. But the risks associated with nuclear power generation, always well known and now sadly demonstrated, need to be balanced against the also-well-known risks associated with other power generation technologies. It is hard to find something worse than coal.