Eco-Development©R. B. Swenson
There is an awakening realization in the energy field that the handwriting is on the wall. Petroleum fossil fuel reserves are expected to last only a few decades. Prospects for natural gas reserves are considered to be somewhat longer, but this is largely because it is not being used as widely as petroleum. Atmospheric pollution and CO2 buildup are widely recognized issues. In the next few years, public and social investments will grow very rapidly. So little is being done that may be able to make a real and significant impact with a modest investment. There may soon be enough political encouragement that the scientific community will investigate and determine with reasonable certainty that the recent impacts of major flooding and tropical storms are being caused by the greenhouse effect. The implications of this knowledge would profoundly affect development decisions around the world.
With or without these realizations about the future, there are profitable opportunities for environmental solutions, here and now, for those who have the expertise to understand that good environment means good business.
In the form of a proposal, this document characterizes those opportunities for business or institutional groups and suggests ways that groups can capitalize upon them. Benefits far outweigh the costs when environmental solutions have a sound technological base.
EcoSystems proposes to introduce various mechanisms to encourage renewable ("sustainable") energy systems and resource conservation measures. These would be incorporated into the group's programs, including both internal operations and clients of the group. These clients could include architects, government planners, private developers, builders and industrialists.
To this end, EcoSystems proposes that the group initiate several programs:
EcoSystems has prepared a brief executive presentation which outlines these programs and illustrates some of the opportunities available to be developed.
The above programs (as well as the rest of this preliminary proposal) are at this point subject to further definition. EcoSystems suggests a short, 3-4 month preliminary effort, in conjunction with group personnel, for the careful definition of several pilot programs of the types described above, and for a preliminary energy audit of some of the group's facilities. EcoSystems will be happy to prepare a formal proposal for this work.
TABLE OF CONTENTS
There is a growing awareness of the urgency of developing new standards for industrial and urban development, to achieve an ecologically sound, truly sustainable world for humanity. This makes it possible for a financial institution to take the lead in providing financing and in setting examples, in the process gaining much market visibility and a solid financial market share in a developing field.
The best way to achieve these new standards is by way of example. To illustrate, ecological development projects can be identified which are more economical than conventional projects and are more comfortable for living. Such projects will naturally result in better returns for the group. Furthermore, they will draw clientele and they will improve the ecological image of the group.
|Stages of Eco-Development|
Within the group there are many opportunities for developing cost-saving measures which are also ecologically sound. In some cases, these may entail higher initial costs, but there will be long term savings. In other cases, savings can be immediate. As was suggested, the programs worthwhile to explore would include:
In this area of internal operations, EcoSystems can assist the group's internal organization with preliminary assessments, engineering design consultations, training sessions, and other programs that would facilitate the group's objectives.
In the context of the above opportunities, there are many activities which could be started to create an attractive image for the group, and to draw customers who have businesses that are producing products and services for a better, more ecological future. As a result of the group's efforts, the group's clientele will be learning about ecological principles.
The group could become involved in external educational activities which could yield significant public relations benefits. As an example, an English language secondary school energy saving training program was developed recently in Santa Cruz (California, USA) with US$20,000 in PG&E (Pacific Gas & Electric utility company) sponsorship. The students receive training in illumination technology, which enables them to visit and to audit private companies, so as to guide these companies in replacing their lighting with new lights which will significantly save energy and energy costs. This can typically involve 20%, 30% or more of savings in direct lighting costs, plus additional savings in the air conditioning needed to remove waste heat from the building. It also provides the students with a fascinating and educational experience. The group could sponsor the translation of this training program, and it could sponsor the application of this program in one or more local secondary schools. Subsequently the group could help transfer this training program to a government agency, so as to make it possible for the program to be used nationwide (with due credit given for the group's efforts in adapting the program to the language and social needs of the country).
Promotions based on internal group activities could include:
EcoSystems has been active in the promotion of ecological programs. In Mexico we initiated the Tonatiuh solar race car project. We have staff fluent in Spanish, experienced in engineering and public relations. Therefore, EcoSystems has the necessary combination of talents to assist with promotions which are technically sound and sophisticated.
Specifically, here is a preliminary analysis of solar-powered illumination for a company logo at the headquarters building.
Solar panels produce about 100 watts per square meter of surface area. Based on a nominal 10 hours per day of sunlight (more in summer, less in winter), and if you were to run the lights for 10 hours each night, then the watts of solar panel capacity would roughly match the lighting requirement in watts. Then, for every 1,000 watts of lighting required, the group would need approximately 10 square meters of solar panel.
An appropriate location would be to install a set of solar panels at the top of the group's headquarters building:
/ /<------- Solar panels / |--- |<------- Perimeter wall | | | |<------- New logo | | |---------------------- Existing rooftop |
|Solar-Powered Rooftop Logo Display|
If the total requirement were 2000 watts, this would imply a set of panels 15 meters feet wide by 1.2 meters high. If the requirement were substantially higher, additional rows of panels could be situated behind the first.
There are many opportunities for providing financing for advanced environmental projects. There are several ways to approach this developing market:
In this aspect of external opportunities, EcoSystems could assist the group with financing criteria development, active development and/or evaluation of potential financing programs, and interaction with governmental and private groups which can contribute to the program. We can draw upon our extensive network of technical professionals in solar energy and related environmental fields to assist the group in this area.
Examples of potential projects abound -- Eco-tourism hotel development, wind generator farms, fields of photovoltaic arrays, industrial air pollution equipment, etc. Such projects can be viewed as resource management projects (such as recycling), energy conservation projects (such as installing more efficient refrigerators), and sustainable energy projects (such as wind generator "farms"). These will be examined in greater detail in the section of this document entitled "Aspects of Eco-Development." The key to success is to build corporate expertise so that loan officers can be equipped to review prospective "ecological" projects, so that they are able to evaluate which ones represent technically sound investments.
The group could also create new financial instruments. A series of "Ecological Bonds" might fulfill several useful purposes:
It might well be possible to trademark a name such as "Ecological Bonds."
If the group took a leading role in ecologically sound financing ventures, this would make it possible to work in joint funding ventures with international financing groups which have an ecological charter but who lack the necessary insight into local ventures.
When considering or evaluating design and planning for all types of buildings and facilities (residential, commercial, industrial or infrastructure such a bridges and roads), there are guiding principles for environmental effectiveness. The following illustration shows these elements in a progressive formation, with most basic techniques shown at the bottom and more sophisticated measures shown as higher steps.
|HIGH TECH OPTIONS|
|HIGHER FIRST COST OPTIONS|
|ZERO COST OPTIONS|
|COST SAVING OPTIONS|
|Prioritized Options for Ecological Development|
One of the primary concepts of ecological design is dynamics. For example, a static house with no moving parts is destined to be uncomfortable. A comfortable "EcoHouse" has a combination of passively activated controls (e.g., SkyLids, which operate on the principle of the thermosiphon), personal controls (e.g., closing the drapes at night), and electronic controls (e.g., thermostat).
Following is a list of design elements for ecological design prioritized according to cost and benefit. It may be noted that there are ambiguous distinctions (gray lines) between various options. Some circumstances may result in either greater savings or higher expenses than indicated here.
There are energy and resource conservation measures which will result in direct and immediate cost savings. A simple example: if provision for just one car is eliminated in a housing development, there is no need to pay for the cost of a garage space (or other parking space). If streets can be narrowed and traffic slowed, safety can be improved and paving costs can be reduced.
These simple measures just require the expertise of the designer and will not create increased initial costs:
These measures are low cost, with the primary benefit of comfort:
As a result of lower maintenance costs, these measures will create a long term economic payback:
These may have a questionable economic payback but definite social benefits -- they will be profitable in the future but may not yet be so because of omissions inherent in our present accounting methods, which do not consider the social costs of waste:
These have a questionable direct economic payback, but, like insurance, they offer definite personal benefits, especially security against external supply shortages of water, food, and electricity:
"CoHousing" -- these are economic options which require sharing and cooperation between families:
These solutions are not yet economic in most situations, but are likely to become economic in the future. These are the high tech solutions:
In a given situation, these ecological options can be evaluated for the best possible cost/benefit, based on the circumstances of the individuals and organizations involved. Exploring possible roles for the group in this context, many interesting possibilities come to mind. Defining these roles, and defining the criteria which will be needed to ensure financial viability is not a trivial exercise. In a particular large industrial or commercial venture (i.e., a windfarm), an independent analysis might be essential, perhaps involving a major engineering firm. For financing small products (say energy efficient and/or solar water heaters), it may be necessary to insist upon certification for both the equipment and the installers.
Once group personnel have received adequate training, and products or processes have been certified, it can be straightforward to provide an extraordinary service to the marketplace, and to serve the needs of future generations at the same time.
There are several important technical aspects of Eco-Development:
|Domains of Eco-Development|
|Sustainable Production of Energy|
The most basic element in a plan for eco-development is resource management. This begins with simply looking carefully for ways to do more with less (making it possible for resources to become useful for more people), and follows with conservation of resources through recycling.
Many natural resources have been over-exploited, and as a consequence, the quality of remaining reserves has been greatly reduced. For example, at one time it was common for the mining industry to exploit copper ore that contained about 3% copper. Now such finds are rare, and ore containing 1% copper is being mined. This has the consequence of greater cost and higher energy consumption -- to extract the desired resource from the earth, more refining (more consumption of energy) is necessary. Any new method to reduce the need for copper (for example, fiber optics replacing telephone wires) is welcomed.
The most critical resources of industrialized society are the energy resources -- notably in our time, fossil fuels. Any measures which conserve energy are advantageous to the user and to society in general.
EXAMPLE: ENERGY-EFFICIENT REFRIGERATORS
For many years manufacturers have kept down the cost of energy- intensive consumer goods, on the premise that lower initial cost will attract buyers. For example, one of the most energy intensive electrical devices in the home is the ordinary household refrigerator. Obviously, it is cheaper for manufacturers to put in minimal insulation, even though that causes the electric motor to run more often, resulting in higher overall costs to the consumer.
But the impact is also felt by the public utilities. For many years, public utilities in the USA have been faced with the high cost of installing additional generation capacity. After many futile attempts to convince manufacturers to fabricate more efficient refrigerators, a consortium of utility partners created a prize of $30,000,000 to the manufacturer who would produce the best energy efficient refrigerator. This may seem like an enormous investment, but the costs will be recovered in a very short time by the utilities. After only 300,000 energy-efficient units are produced with an average savings of less than 100 watts, they will be able to avoid having to build power plants which would cost $30,000,000. The consumers will also benefit, because the higher initial cost will be quickly recovered by significant savings in their electricity bills.
The utilities have also arranged commercial financing for consumers to purchase these energy-saving refrigerators. The lenders are happy too -- they make an attractive return and have loans with very low maintenance costs, because the utilities manage loan payments through the consumer's utility bills.
Finally, the manufacturers win along with everyone else. In addition to winning the $30,000,000, when the more efficient appliance is produced, they will simply pass on the slightly higher costs to the consumers, with the blessings of the utilities' powerful marketing assistance. When technology is properly understood, energy efficiency is an all-win strategy!
Such programs are possible, making two opportunities available for a business or institution:
While energy conservation is critical to an efficient, well- managed economy, nonetheless energy conservation does not produce any energy per se. In order to function, the "wheels of commerce" still require sources of energy.
As global supplies of fossil fuels are being depleted (especially petroleum, with higher energy "quality" than coal), alternatives must begin to be put in place. This is well-stated by a leading economist at the world bank:
"Nonrenewable resources should be exploited, but at a rate equal to the creation of renewable substitutes. Receipts from the exploitation of a nonrenewable resource should be divided into an income component and a capital component. The division is made such that by the end of the life expectancy of the nonrenewable a renewable asset will have been built up by the annual investment of the capital component. The annual sustainable yield from that renewable asset must be equal to the income component of the nonrenewable that was being consumed annually from the beginning." [Herman Daly, World Bank Economist, in Ecological Economics, 1991]
EXAMPLE: ZACATECAS WIND FARMS
Recently a large field of wind generators has been installed in Zacatecas, Mexico, in an area where very high winds exist. In recent years, wind generator technology has become mature and reliable, yielding prices for electricity very competitive with oil, coal and other forms of electric power production. Details of the Zacatecas project are being sought, to illustrate the magnitude and profitability of well-designed renewable energy projects.
There are many areas suitable for large- scale wind energy systems. The group's participation in a wind energy project in such areas could have significant investment and public relations benefits.
By channeling financial resources into renewable energy systems, another effect also occurs. Just as leverage is so critical in financing, so likewise energy leveraging is important and possible. In effect, when we use the energy in a barrel of oil to produce electricity for fabricating a renewable energy device, such as a wind generator or a solar panel, in essence we are converting that barrel of oil into many barrels of oil, because over the useful life of that equipment it will generate several times more electrical energy than the barrel of oil "invested" in the equipment. The oil-producing nations which "invest" their oil in renewable energy equipment can effectively sell several times more oil than the nations which sell oil simply for combustion, consumed once and gone forever in a puff of smoke.
There is a bright future for those who bank on sustainability. EcoSystems is equipped to assist business groups to become leaders in the development of ecological business.
original copyright 1994
revised 1997 August 20