Environmental Valuation & Cost-Benefit News

Abstract: Because of China's extremely rapid economic growth, the scale and seriousness of environmental problems is no longer in doubt. Whether pollution abatement technologies are utilized more efficiently is crucial in the analysis of environmental management in China. This study analyzes how the performance of environmental management has changed over time using province level data for 1992–2003. Mixed results for environmental performance are shown using nonparametric estimation technique. Shunsuke Managi and Shinji Kaneko find that environmental performance index, abatement effort, and increasing returns to pollution abatement play important roles in determining the pollution level over the period of the study.

Keywords: China; Environmental efficiency Pollution abatement

by Shunsuke Managi 1 and Shinji Kaneko 2
1. Faculty of Business Administration, International Graduate School of Social Sciences, Yokohama National University, 79-4, Tokiwadai, Hodogaya-ku, Yokohama 240-8501 Japan
2. Graduate School for International Development and Cooperation, Hiroshima University, Higashi-Hiroshima 739-8529, Japan

Ecological Economics via Elsevier ScienceDirect www.ScienceDirect.com
Volume 68, Issue 6; April 15, 2009; Pages 1643-1651
Special Issue - Eco-efficiency: From technical optimisation to reflective sustainability analysis

Link: http://dx.doi.org/10.1016/j.ecolecon.2007.12.005

Abstract: As a life-supporting system, marine ecosystem provides various services for human being. Based on ecosystem services, Wei Zheng, Honghua Shi, Shang Chen and Mingyuan Zhu developed a Benefit and Cost Analysis model to balance the conflicts between economic income and environmental loss caused by mariculture activities. This model not only calculates market income of mariculture but also monetizes the positive and negative effects of mariculture activities on ecosystem services. In this model, three indices, the NPV (Net Present Value), BCR (Benefit to Cost Ratio) and RC (Relative Coefficent) with consideration of discount rate, are developed to assess and prioritize the candidate mariculture modes. This Benefit and Cost Analysis model was applied to Sanggou Bay, one typical mariculture bay in China, to identify sustainable mariculture mode. In this paper, the authors find that benefit and cost analysis based on ecosystem services value provides a convenient and effective tool to compare different exploitation modes of marine ecosystem.

by Wei Zheng 1 and 2, Honghua Shi 1 and 2, Shang Chen 2 and Mingyuan Zhu 2
1. College of Environmental Science and Engineering, Ocean University of China, Qingdao 266100, China
2. Key Lab for Science and Engineering of Marine Ecology and Environment, First Institute of Oceanography, SOA, Qingdao 266061, China

Keywords: Benefit and cost analysis; Marine ecosystem services; Mariculture mode; Sanggou Bay

Ecological Economics via Elsevier Science Direct www.ScienceDirect.com
Volume 68, Issue 6; April 15, 2009; Pages 1626-1632
Special Issue - Eco-efficiency: From technical optimisation to reflective sustainability analysis

Link: http://dx.doi.org/10.1016/j.enpol.2009.01.040

by James Brown and Chris Hendry; both of the Cass Business School, City University, 106 Bunhill Row, London EC1Y 8TZ, United Kingdom

Abstract:
The paper considers the role of government funded demonstration projects and field trials (DTs) in accelerating the commercialisation of new energy technologies that meet a public good but do not have immediate market appeal [Sagar, A.D., van der Zwaan, B., 2006. Technological innovation in the energy sector: R&D, deployment, and learning-by-doing. Energy Policy 34, 2601–2608]. Drawing on an original database of DTs in the EU, Japan and USA from 1973 to 2004, James Brown and Chris Hendry review the history of DTs in photovoltaic technology for electricity generation, and its subsequent take up as a commercial energy source.

The authors find that DTs that are aimed purely at discovering suitable market opportunities are less successful in achieving diffusion than projects that target a particular application and concentrate resources on it. The former nevertheless have a vital role to play in the learning process, while a targeted focus is often dependent on national industrial and institutional factors.

Keywords: Demonstration projects; Solar photovoltaics; Innovation

Energy Policy via Elsevier Science Direct www.ScienceDirect.com
Volume 37, Issue 7; July, 2009; Pages 2560-2573

Link: http://econ.appstate.edu/nepal/paper.pdf

Abstract: In this paper Subhrendu K. Pattanayak and John C. Whitehead demonstrate an approach to combining and jointly estimating revealed and stated preference data for drinking water quality and improved water supply. The application is to piped-water services in Kathmandu, Nepal. The revealed preference model uses averting behavior method data on the decision of whether to treat water. The stated preference model uses contingent valuation method data on the decision of whether to hook up to an improved water system. The bivariate probit model is used to jointly estimate the determinants of the decisions. The authors test for common coefficients across the revealed preference and stated preference data and find evidence that parameters related to the willingness to pay for health risk reductions are statistically equal while other coefficients vary. Households are willing to pay $3/month (US$) to reduce health risks. Averting behavior data suggests that water treatment generates an additional $3/month in joint production benefits (e.g., improved taste). The willingness to pay for the reduction in health risks, joint production and improved water supply is $18/month

by Subhrendu K. Pattanayak 1 and John C. Whitehead 2
Duke University Stanford Institute of Public Policy & Nicholas School of the Environment; Durham, NC 27708
Appalachian State University Department of Economics; Boone, NC 28607
April 21, 2009
from the Environmental Economics Blog www.env-econ.net http://www.env-econ.net/2009/04/in-case-you-were-wondering-why-i-didnt-flame-your-comment-last-thursday-.html

Link: http://www.nytimes.com/2009/04/16/science/earth/16degrees.html

As women in ragged saris of a thousand hues bake bread and stew lentils in the early evening over fires fueled by twigs and dung, children cough from the dense smoke that fills their homes. Black grime coats the undersides of thatched roofs. At dawn, a brown cloud stretches over the landscape like a diaphanous dirty blanket.

In Kohlua, in central India, with no cars and little electricity ... soot — also known as black carbon — from tens of thousands of villages like this one in developing countries is emerging as a major and previously unappreciated source of global climate change.

While carbon dioxide may be the No. 1 contributor to rising global temperatures, scientists say, black carbon has emerged as an important No. 2, with recent studies estimating that it is responsible for 18 percent of the planet’s warming, compared with 40 percent for carbon dioxide. Decreasing black carbon emissions would be a relatively cheap way to significantly rein in global warming — especially in the short term.... Replacing primitive cooking stoves with modern versions that emit far less soot could provide a much-needed stopgap....

Decreasing soot could have a rapid effect. Unlike carbon dioxide, which lingers in the atmosphere for years, soot stays there for a few weeks. Converting to low-soot cookstoves would remove the warming effects of black carbon quickly, while shutting a coal plant takes years to substantially reduce global CO2 concentrations.

...The awareness of black carbon’s role in climate change has come so recently that it was not even mentioned as a warming agent in the 2007 summary report by the Intergovernmental Panel on Climate Change...

In Asia and Africa, cookstoves produce the bulk of black carbon, although it also emanates from diesel engines and coal plants there. In the United States and Europe, black carbon emissions have already been reduced significantly by filters and scrubbers.
...
While the particles tend to settle over time and do not have the global reach of greenhouse gases, they do travel.... Soot from India has been found in the Maldive Islands and on the Tibetan Plateau; from the United States, it travels to the Arctic....

Doctors have long railed against black carbon for its devastating health effects in poor countries....

In March, a bill was introduced in Congress that would require the Environmental Protection Agency to specifically regulate black carbon and direct aid to black carbon reduction projects abroad, including introducing cookstoves in 20 million homes. The new stoves cost about $20 and use solar power or are more efficient. Soot is reduced by more than 90 percent. The solar stoves do not use wood or dung. Other new stoves simply burn fuel more cleanly, generally by pulverizing the fuel first and adding a small fan that improves combustion.
...
By Elisabeth Rosenthal
FOR FULL STORY GO TO:
http://www.nytimes.com/2009/04/16/science/earth/16degrees.html
The New York Times www.nytimes.com
Published: April 15, 2009
This was the first in a series of articles about stopgap measures that could limit global warming. Future articles will address appliance-efficiency standards, reducing global-warming gases other than carbon dioxide and other efforts.

Link: http://www.wri.org/press/2009/04/investment-potential-india-energy-efficiency-companies-ripe-wri-report-finds

With an investment of US$10 billion dollars in energy efficiency improvements, India’s economy would benefit from its potentially vast annual energy savings of 183.5 billion kilowatt hours.

“India’s energy demand is expected to more than double by 2030. There is a dramatic need for domestic and international energy efficiency technology providers, service providers, and equipment manufacturers to develop innovative ways to conserve energy,” said Robin Murphy, WRI vice president of external relations.

A key element in realizing this potential is the energy service company (or ESCO) sub-sector, conclude the authors of a new World Resources Institute report.

ESCOs operate on the basis of energy-performance contracts, wherein revenue is earned based on the amount of energy cost savings produced. In India, the ESCO industry had an annual growth rate of 96 percent from 2002 to 2007 and is estimated to have grown by an additional 62 percent in 2008, according to financial information provided by these companies to WRI.

WRI’s report is entitled Powering Up: The Investment Potential of Energy Service Companies in India and was re;eased on April 24, 2009 as part of the New Ventures India Investor Meet, a gathering of leading investors and other stakeholders interested in the intersection of environment and enterprise.

Chandan Singh, one of the authors of the WRI report, added, “Our cross-country comparison and market analysis show that the investment potential of the ESCO industry in India going forward is tremendous, especially for debt investors.”

The majority of ESCO efficiency projects have payback periods of less than two years, and ESCOs save clients an average of 20 to 25 percent of baseline energy costs.

For example, the large and energy-intensive Lilavati Hospital in Mumbai hired Sudnya Industrial Services, an ESCO, to undertake an analysis. The results showed that the air-conditioning system comprised 60 percent of the hospital’s energy usage and that an upgrade was necessary. The entire investment of the hospital to do this upgrade was US$12,000, the annual savings are US$17,000, and the payback time was nine months.

Peter A. D’souza, chief engineer of Lilavati Hospital and Research Centre, said, “We are extremely satisfied with the performance of the ESCO, and are now in the second phase of implementing energy-efficiency activities.”

Though the Indian ESCO industry has grown rapidly over the past five years, compared to similar industries in the U.S., Brazil, and China, it is relatively small. One of the factors holding back the Indian ESCO industry has been a lack of access to financing.

“With the growing demand for ESCO services from all sectors of the Indian market, financing solutions need to be developed and pursued for ESCO projects,” said Shashi Shekhar, director of PTC India Limited, the leading provider of power trading solutions in India, which is looking into investing around US$50 million into ESCO projects.

To reach their conclusions, the authors conducted an extensive survey of more than 90 percent of the ESCOs in India, as well as interviews of various investors, government officials, and clients of ESCOs. Using the findings from this study, WRI is currently working with various banks in India to develop a financial product that will help build investments in energy-efficiency projects performed by ESCOs.

“WRI has created a strong case for the Indian ESCO industry that shows the enormous potential for energy savings and the role the ESCOs can play in realizing this potential. There are clear win-win opportunities for banks, ESCO clients and India,” said Shri T.R. Bajalia, chief general manager of the Industrial Development Bank of India (IDBI).

World Resources Institute www.wri.org
Press release dated April 24, 2009