On the Environment
Innovation & Environment
Tuesday, February 28, 2012
By Guest Author, P.J. Simmons, Chairman, Corporate Eco Forum
Today’s global sovereign debt crisis is keeping a lot of government and business leaders up at night. But another global debt crisis is brewing that, while invisible to most CFOs and finance ministers, threatens to unleash long-term economic hardships that make today’s recessionary worries seem trivial.
I’m referring to the economic collision course we’re on because of systemic, global patterns of over-borrowing from planet’s “natural capital” and asset base—a remarkably productive network of land and water systems that annually produce a staggering $33-$72 trillion worth of “free” goods and services that we depend on for a well-functioning global economy. Because these non-man-made benefits aren’t bartered and sold in the human marketplace, their value is exceedingly hard to monetize on corporate or government financial statements. So we generally don’t. But that shortcoming in accounting doesn’t make the value of these assets—or the cost of losing them—any less real: As we’ve seen with debacles like Enron and the derivatives meltdown, our imperfect accounting practices can sometimes get it dangerously wrong.
At risk are critical life-support systems that are also the lifeblood of our global economy. These natural land and marine systems, thanks to more than four billion years of planetary R&D, far outcompete man-made technology in their capacity to churn out—at scale and affordably—vital goods and services we need for global economic stability and growth. Without charge, this living natural infrastructure works behind the scenes to purify massive amounts of precious drinking water and breathable air; generate abundant and stable supplies of raw materials and commodities integral to supply chains; replenish fertile soil and fish stocks needed to meet growing food demand; buffer people and businesses from the worst effects of floods, droughts, fires and extreme weather events; provide barriers to the spread of disease; maintain awe-inspiring destinations that fuel tourism; and house a treasure trove of biological information that propels scientific and medical breakthroughs.
In short, these assets are priceless. Literally. And that is the problem.
Having developed habits of taking “nature” for granted, we have collectively taken from it for free, drawing down Earth’s natural capital and mismanaging natural assets as if they were endlessly renewable. Yet even this planet’s remarkable natural systems—unique in the known universe and incredibly resilient—cannot sustain damage beyond certain thresholds. Eventually, they break down. Only then does the market begin to understand the full economic value of what we have lost, as what were once dismissed academically as “externalities” suddenly become real, costly burdens.
How much is our current mismanagement of natural assets costing the global economy today? The most recent U.N. estimates are around $6.6 trillion a year—the equivalent of 11% of global gross domestic product—through effects like contamination of water supplies, loss of fertile land through soil erosion and drought, and supply chain disruptions from deforestation and overfishing. The damage could skyrocket to $28 trillion by 2050 under business as usual, which would eclipse the economic damage expected from climate change. However sobering the numbers, in the abstract they are merely statistics affecting someone else and therefore still largely off of most government and business leaders’ valuation radar screens. But the costs hit home when ecosystem degradation translates into lost lives or illness, when scarcities bring supply chains to a grinding halt, when homes are destroyed or jobs lost, or when preventable damage from natural disasters overwhelms the budgets of insurers and governments.
Today’s more farsighted business leaders grasp what’s at stake. They know that investments in protecting and maintaining natural systems are mandatory to ensure continued opportunities and prosperity for businesses, communities, and even nations—not optional philanthropic acts. They understand that just as we invest in maintaining our critical human-built infrastructure, whether roads, bridges, power plants, or orbiting satellites, so too must we be vigilant in safeguarding natural infrastructure to avoid crippling costs down the road. They see the business logic in taking action today, to avert tomorrow’s balance sheet risks and even to seize new revenue opportunities as the demand for environmentally restorative solutions escalates.
Coca-Cola, for instance, is investing in preserving healthy watersheds to ensure the long-term availability of fresh water for its business and the communities in which it operates. Mars is investing tens of millions to advance sustainable cocoa farming practices to head off supply chain disruptions. Darden Restaurants (owner of Red Lobster) has made protecting healthy ocean systems a top business priority, acknowledging that “seafood sustainability is essential to the continued success of our business.” Weyerhaeuser now expressly manages forests for wood production but also for “the ecosystem services they provide.” In 2011, Puma became the first company to issue an “environmental P&L” statement, and Dow Chemical announced a $10 million collaboration with the Nature Conservancy to develop practical tools to help businesses better “assess the value of nature.”
These forward-thinking companies are among a growing list of those getting out ahead of governments in forging solutions to the accelerating “natural debt” crisis. To add to the momentum, the Corporate Eco Forum that I chair—a membership group of 80 large companies with combined revenues of over $3 trillion—announced a new initiative on the “Business Logic of Investing in Natural Infrastructure” at the Clinton Global Initiative in September. In the first half of 2012, we will work with our diverse membership to catalyze a new round of private sector-led commitments to safeguard natural assets, to be announced at the June 2012 Earth Summit, in Rio de Janeiro.
Turning around the brewing natural debt crisis will require broader participation from visionary business leaders, especially when the world’s governments are consumed by more urgent short-term economic challenges. But time and again, the private sector has shown its enormous capacity to innovate fast to solve big problems. Let’s hope this time is no exception.
A version of this article originally appeared on Forbes.com
Friday, September 02, 2011
By Guest Author, Jasmine Hyman, PhD candidate, Yale School of Forestry & Environmental Studies
Siem Reap, home of the Angkor Watt temples, is among Cambodia's poorest provinces . Four out of ten villages lack access to clean drinking water; literacy rates are among the lowest in the country; 53 percent of all children are malnourished, and average incomes hover just above $1.80 USD per day . The tourism industry here brings in over $640 million USD per year, yet foreign revenue streams do not ensure (and may indeed extract from) local development -- though the draw of external revenue streams is understandably attractive for Least Developed Countries such as Cambodia.
But a different form of foreign investment has dramatically changed Arun and Mlis Keo's  economic outlook. The couple, who farms just 20 kilometers from the Angkor Watt heritage site, acquired a biodigester through the National Biodigester Program (NBP) run by the Ministry of Agriculture, Forestry and Fisheries of the Cambodian Royal Kingdom (MAFF) and the Netherlands Development Organisation (SNV-Cambodia). The biodigester, which converts livestock dung to biogas, fuels their cooking and household lighting needs and has decreased their energy bill by $14.39 per month -- while saving them one and a half hours per day in fuelwood collection. The slurry waste from the biodigestion process substitutes for chemical fertilizer, generating an extra annual savings of $52 per year.
The Keo family represents just one of 8,000 Cambodian rural homes, spanning nine provinces, that have qualified for a flat $150 subsidy and soft private loans to invest an average of $472 into a household-scale biodigester. Considering that the average annual Khmer income is $412, the NBP's popularity (and zero loan-default rate) deserves investigating .
When talking about the biodigester, the Keos do not mention the environmental or health benefits of the project. The best part of owning a biodigester is the convenience, Mlis Keo said. She no longer needs to collect firewood or buy charcoal, and cooking rice on a gas stove is much easier than building and maintaining a fire.
But reductions in household soot and atmospheric methane from the livestock waste are certainly points of interest for NBP, which is trying to convert those benefits to carbon credits for international sale.
Carbon finance -- foreign investment in greenhouse-gas-reducing projects in developing countries that generate, in turn, carbon credits that developed countries may buy and use for their own climate commitments -- has been a source of controversy in international headlines and academic debate since the Kyoto Protocol launched a global carbon market in 2005. Proponents point to an estimated $141.9 billion market value in 2010  while critics underscore imbalanced regional investment patterns  and uncertainty regarding the final destination of the revenue streams.
While much has been said on the shortcomings of carbon finance, the market's local successes are poorly understood and may, in fact, be hindered by current market rules. Further, while the future of the Kyoto Protocol is uncertain, international enthusiasm for carbon-financed cookstove programs is on the rise with the launch of the Global Alliance for Clean Cookstoves. But how can carbon finance truly benefit the poor? And are current requirements for defining a carbon offset project relevant for development objectives?
These are just a few of the issues driving my research. Through funding by the Yale Center for Environmental Law and Policy and pilot support from the Yale Institute of Biospheric Studies, I am collaborating with the Nexus Alliance of small-scale project developers to trace benefit flows and to identify principles for success when designing pro-poor cookstove and kitchen interventions.
Jasmine Hyman, M.Sc. (LSE), B.A. (Columbia) is completing a doctorate at the Yale School of Forestry & Environmental Studies, where she holds a doctoral fellowship from the National Science Foundation. Her research seeks to identify design principles for global climate finance schemes that promote equitable development and social justice.
 Kosa, Chea and Mara, Yos (2006), "Children's Empowerment through Education Services (CHES) Project in Siem Reap Province," in Winrock International (ed.), (Phnom Penh).
 Doherty, Ben (2010), "Angkor Butterfly Hunters Tell of Poverty Amid Tourist Wealth," The Guardian.
 Names have been changed.
 van Mansvelt, Rogier (2011) "Biodigester User Survey 2009-2011," for NBP, Phnom Penh
 Capoor, Karan and Ambrosi, Philippe (2010), "State and Trends of the Carbon Market 2010," (Washington DC: The World Bank).
 UNEP RISOE, CDM in Charts, Accessed July 2011.
Thursday, August 18, 2011
British-based electricity firm Ecotricity will complete the world's first electric highway by September of this year by installing twelve electric charging stations between London and Edinburgh. The first of its kind, the aim is to bring the all-electric vehicle out of the city and make longer distance (not just commuter) traveling possible.
Though still a market in its infancy, it's estimated that the UK needs to have 1.7 million electric vehicles
on the road by 2020 in order to meet its carbon reduction targets. At today's roughly 2,000 electric vehicles
on the road, there's a long way to go to meet that target - but without eliminating the perpetual cycle of consumers not buying electric vehicles due to the lack of charging stations, and charging stations not being built due to lack of electric vehicles and demand – electric vehicle numbers will always remain low.
With top ranges of just 100 miles for newer electric vehicles, and an average charging time of 20 minutes to top up and a whole hour to fully charge the battery, critics argue that charging times are simply too long at this point to present a viable option for longer motorway journeys. Put in context, that would mean stopping just over three times, for an hour each time to complete the 400 mile journey from London to Edinburgh.
While it's critical to get a charging network in place, without faster charging time and improved battery range, electric vehicles may still be confined to city living.
Thursday, May 05, 2011
Sleek and simple new Life Cycle Assessment (LCA) calculator makes it simple for all levels of business to calculate their environmental impact – from cradle to grave.
By Guest Author, Jose Iglesias, Vice President of Education and Enablement Serviecs, Symantec Services Group (SSG), Symantec Corporation
In past years, green IT seemed to be more of a "wish list" item, something that companies might look into sometime in the future or when it became convenient. This is no longer the case. Companies are now actively pursuing green IT solutions for a multitude of reasons.
Ninety-seven percent of companies are at least discussing a green IT strategy. Fifty-two percent are in the discussion or trial stages, while forty-five percent have already implemented a strategy.
Additionally, 87 percent of companies said that it is somewhat/significantly important that their IT organization implement green IT initiatives. Only two percent said it was somewhat/significantly unimportant.
Companies are no longer seeking green IT merely to cut costs, either. True, reducing energy consumption (90 percent) and reducing cooling costs (87 percent) were the most important reasons companies listed for implementing green IT. However, a desire from corporate headquarters to qualify as "green" (86 percent) was nearly as important.
Finally, 81 percent of companies listed reducing energy and cooling consumption among goals included in their green policies, followed by reducing carbon emissions (74 percent) and improving the company’s reputation (67 percent).
As a result of its ongoing Green IT efforts, Symantec is achieving substantial business benefit. The Alchemy Solutions Group conducted a Total Operational and Economic Impact (T.O.E.I.)™ analysis and quantified realized and projected business value in the following areas between July 2007 and December 2011:
Remote Site Backup Productivity Gains: $692,743 in hardware and media cost avoidance and $443,328 in labor productivity gains through global remote site backup with Veritas NetBackup PureDisk from July 2007 through December 2011.
Hardware Maintenance Cost Savings: $12,358,000 in maintenance savings on retired server and storage hardware from August 2007 through December 2010.
Labor Productivity Gains: $1,341,130 in IT productivity gains related to server and storage reduction from January 2008 through December 2010.
Energy Cost Avoidance: $2,164,438 in utility cost avoidance through hardware device reduction and corresponding power consumption savings from August 2007 through December 2010.
The decommissioning of hardware from a major data center closure reduced Symantec’s overall device power utilization from approximately 500 kilowatt hours (kWh) to 168 kWh, a 67 percent reduction in energy consumption.
Further, by converting the cost of the kilowatts of electricity avoided to kilograms of carbon emissions, Symantec conservatively estimates a cumulative carbon footprint savings of 15.5 million kilograms of CO2 from 2007 through 2010.
Finally, in addition to the benefits realized within the IT data center environment, Symantec also realized significant cost savings by stemming energy use at the IT endpoint. By deploying an automated power management profile that places company laptops and desktops in standby mode after four hours of inactivity, the company expects annual savings of $800,000 and more than 6 million kWh of energy per year.
(Source: Symantec Data Center Survey 2010, 1052 World Wide Enterprise companies)
This post, by guest author Jose Iglesias, Vice President of Education and Enablement Serviecs, Symantec Services Group (SSG), Symantec Corporation, was originally published on the Green to Gold Business Playbook website.
Wednesday, May 04, 2011
By Guest Author, By Steve Walker, Manager of Environmental Sustainability, Burt’s Bees, and Bill Morrissey, VP of Environmental Sustainability, The Clorox Company
Companies are increasingly finding that striving for zero waste-to-landfill (ZWL) can be a powerful mobilizing sustainability initiative that can also deliver cost savings, provide a new revenue stream, and serve to reinforce an efficient operations mindset. Here is one company's story and some of their lessons learned - The Clorox Company's Burt's Bees division achieved ZWL across their administrative, manufacturing, and distribution operations in April 2010.
Zero waste-to-landfill (ZWL) is part of a larger zero waste aspiration whereby manufacturers that are exemplars in sustainability strive to eliminate waste throughout the full life cycle of their products. In 2006, the Burt’s Bees business unit set a goal to be zero waste by 2020. Achieving zero solid waste to landfill in its operations in 2010 was an important milestone in this larger journey to zero waste. Here are some of the learnings the Burt’s Bees team garnered from its recent ZWL effort:
Define zero – Surprisingly, a common ZWL standard does not exist so it is important to get very clear about how you define zero. The Zero Waste International Alliance (http://www.zerowaste.org), a non-profit focused on eliminating waste, has previously defined ZWL to be 90% or greater diversion. But companies claiming ZWL today are more typically reporting 100% absolute diversion from landfill rates. These companies, however, usually do not account for waste generated outside their facilities such as the resulting ash when sending waste to a waste-to-energy facility. The Burt’s Bees team decided on a strict definition of zero, which included this remnant ash that usually finds its way to landfills. As a result, they found a firm that turns its non-recyclable, non-compostable materials into an efficient fuel for cement processing, with that residual ash actually then incorporated into the cement itself.
Map out how you are going to get to zero – The Burt’s Bees team looked broadly at all their solid waste by using the term “by-product” which they defined as anything leaving their facility other than a person or saleable finished good. They then created a by-product hierarchy (right) that prioritized how materials should be diverted from landfill. Giving higher value to source reduction and reuse than to composting and recycling, and using waste-to-energy as a last resort provided strong guidance to their path to zero. As a result, today the Burt’s Bees division sends less than 10% of its waste to the more expensive and less eco friendly waste-to-energy destination.
Learning from the Burt’s Bees team’s experience, Clorox, has stipulated that a facility aiming for ZWL must not send more than 10% of its waste to waste-to-energy facilities. Clorox believes that in a ZWL facility, the “smell of the place” should be one of a highly efficient and responsible manager of its waste with low levels of waste and robust composting and recycling infrastructure.
Kick-start your ZWL journey with a high employee involvement dumpster dive – In order to make waste visible and real to all employees, the Burt’s Bees team organized “dumpster dives,” giving everyone the opportunity to get up close and personal with their trash. This exercise involves dumping your trash dumpster onto your parking lot and having your employees literally sort the resulting pile of trash. This eye opening educational exercise showed employees how the majority of this landfill bound trash was actually either compostable or recyclable and resulted in an immediate 50% reduction of trash to landfill volume.
Be firm with your goals but flexible in your tactics – Different facilities require different approaches. In a manufacturing operation, having conveniently placed trash and recycling gaylords where the waste is generated can facilitate higher sorting rates. On the other hand, removing individual under-the-desk trash bins from Burt’s Bees administrative offices and forcing a quick trip to central in-office by-product stations facilitated sorting by taking away a convenient way for employees to throw compostable and recyclable items into their nearby trash bins.
Educate your employees – Even eco-minded employees do not necessarily know how to accurately sort the many waste items one encounters into various recycling, compost and trash streams. Burt’s Bees posted bi-lingual signs with by-product bins showing acceptable materials along with photos. Colored bins were employed and by-product station locations were included in the company’s workplace organization program. It also helped to have a trained group of employee volunteers serving as “trash experts” so that employees could get quick answers to their inevitable sorting questions.
Continuously monitor and measure your progress - ZWL is typically a rather long journey. It took the Burt’s Bees business three years to achieve this at its three facilities, so it is important to provide regular feedback via robust monitoring and measurement in order to see and celebrate progress. A key enabler for the Burt’s Bees team was the “Green Derby” monthly audit of by-product bins which scored the accuracy of sorting waste into composting, recycling and residual trash. A progress report became a standing agenda item at monthly all-employee manufacturing and distribution meetings, and progress was tied to employees’ short-term incentive eligibility. Industrial floor scales were also deployed at each facility to weigh by-products before they were shipped off-site which allowed Burt’s Bees to ensure landfill waste was being reduced as well as diverted.
Leverage your waste diversion partner to achieve your ZWL goal – An important factor in the Burt’s Bees team’s success was enlisting a waste management expert, who intermediates all of its diversion needs with 17 actual service providers. The Burt’s Bees team is also able to leverage the larger waste volumes of this partner for more favorable national contract pricing. If working directly with a recycler, remember that recyclables are commodities and it’s in the recycling firm’s interest to take the high-value, high-volume materials. Don’t hold back in pushing your recycler(s) to “take the good with the bad”. For instance, using your valuable streams (such as cardboard) to incentivize a recycling outlet to take less desirable materials (such as mixed plastic films) can create a win / win for you and your recycler. Finally, keep up to date as non-landfill outlets for by-products are evolving rapidly so what was not possible yesterday may be tomorrow, or even today.
Choose one or a few ZWL pilot sites as a beacon for your entire organization – The Burt’s Bees business has served this function within The Clorox Company. Now, Clorox has the confidence to expand ZWL to other select manufacturing, distribution and administrative facilities. Also, without an internal exemplar like the Burt’s Bees business, it is likely that Clorox would have been satisfied with achieving its current overall goal of reducing solid waste to landfill by 20% by 2013. Today, Clorox is able to see how achieving zero waste is possible which works as an accelerant across the whole enterprise.
Institutionalize your ZWL achievement – Being a ZWL operation is now part of the Burt’s Bees division’s identity. And today, there is no choice but to divert as there are no longer trash compacters or dumpsters on any Burt’s Bees sites.
This post, by Steve Walker, Manager of Environmental Sustainability, Burt’s Bees, and Bill Morrissey, VP of Environmental Sustainability, The Clorox Company, was originally published on the Green to Gold Business Playbook website.
Wednesday, April 06, 2011
The Cleantech Group released preliminary results yesterday from their 2011 first quarter report. The major finding: a total of $2.57 billion in clean technology venture investment across 159 companies. While the total number of deals were down, actual dollar investments increased by 52% compared to the previous quarter. The top investment areas were:
SOLAR - $641 million in 26 deals
TRANSPORTATION - $311 million in 8 deals
MATERIALS - $296 million in 9 deals
BIOFUELS - $148 million in 13 deals
The report also found a huge increase in investment in North America, while the UK saw a sharp drop from the previous quarter. After the US, Canada raised the most clean tech investment dollars, followed by India.
Friday, April 01, 2011
By Josh Galperin, Associate Director
There are many valuable lessons to be drawn from the Regional Greenhouse Gas Initiative (RGGI), the nation's only operational, and mandatory, cap-and-trade program. One worth dwelling on is the effectiveness of RGGI's CO2 emissions cap. Recent analysis suggests this cap is much too forgiving -- not just now, but, more importantly, also over the next two decades.
The whole point of the RGGI emissions cap is to create a market for CO2 emissions from power plants that will ultimately drive down those emissions over time in the most economically efficient way possible. A relatively harder cap - one set below actual CO2 emissions, for example - should make RGGI's tradeable CO2 pollution allowances more scarce and thus more valuable to polluters, resulting in higher prices per allowance than a cap set above actual emissions would. The key idea here is that RGGI's cap on CO2 emissions from its regulated entities - electric utilities basically - creates a new market that has the potential to push those utilities towards low- or no-carbon generation. Where policy makers set the cap can therefore matter a great deal; a relatively tough one pushes harder than a relatively lenient one. This chart, produced on behalf of RGGI, strongly suggests the RGGI cap is not hard enough now, nor will it be hard enough in the future:
The important lines to look at for our purposes are the dashed one - that's the RGGI cap as set by agreement of the RGGI members - and the solid black line - that's both historical and projected total CO2 emissions from RGGI's regulated entities. You can see that presently, the cap is simply way too high (and to be fair, some of that is on purpose). The factors behind the recent massive drop in actual CO2 emissions are several (more on that later). The recession undoubtedly plays a huge part. Nevertheless, the cap just does not appear to be exerting real pressure on utilities right now. Maybe that's not a problem. There's an argument that a soft cap is just fine early on, as we refine and tweak RGGI. That argument might be even stronger in the current economic climate. No need to clamp down on utilities in the midst of the recession.
So perhaps the short-term performance issues of the cap are okay to put aside for the moment. That's not at all true for the long-term performance issues. Here's the major problem, and one policy makers should make an urgent focus of their thinking: According to these projections, the cap doesn't appear to really bite until maybe 2030 or later, and that's just too late in the scheme of things. Climate science tells us we need meaningful CO2 reductions much much sooner than that to avoid catastrophic harms. So what's the point of an emissions cap if it doesn't drive change when we need it? It's time to give serious thought to how best to tighten the RGGI cap to make it better correspond with the scientific reality we find ourselves in.
Tuesday, August 17, 2010
According to the report “Business Cleaning Sustainability Study,” conducted on behalf of Procter & Gamble Professional, businesses lack, or have a perceived lack of, credible data to meet sustainability goals. This is a longstanding problem, and one that the Yale Center for Environmental Law and Policy identified some time ago. For instance, in Professor Esty’s piece published by Oxford University Press in 2002, he states: “The data and analyses needed – by governments, companies, and individuals – for thoughtful and systematic action to minimize pollution harms and to optimize the use of natural resources are often unavailable or seem to costly to obtain. As a result, choices are made on the basis of generalized observations and best guesses, or worse yet, rhetoric and emotion. We stand, however, on the verge of an opportunity to transform our approach to pollution control and natural resource management through deployment of digital technologies in support of a more careful, quantitative, empirically grounded, and systematic environmentalism.” That old problems still linger means we need to redouble our efforts to advance sustainability measurements in all sectors of society, but especially in the corporate world. Along those lines, please stay tuned for Professor Esty’s new book, “Green to Gold Playbook: A Guide to Implementing Sustainable Business Practices,” co-authored with P.J. Simmons, which will be on shelves this spring.
Tuesday, November 24, 2009
By Josh Galperin, Associate Director
Established energy players - like utilities - have a lot to gain from cap-and-trade if they're willing to be innovative and forward-thinking. More industry advice like this
needs to be heard.
Monday, November 23, 2009
By Josh Galperin, Associate Director
Intriguing new policy brief argues that the "green innovation machine" will be less than optimal (read: will not curb climate change) if it relies only on a carbon price-setting mechanism like cap-and-trade. The authors recommend supplementing with an aggressive program of "directed technological change" through significantly ramped up clean energy R & D subsidies implemented immediately. And they believe they have the economic proof to back up their claims.