Cost-benefit analysis of riparian protection in an eastern Canadian watershed

http://dx.doi.org/10.1016/j.jenvman.2012.11.039

Abstract: Forested riparian buffers have proved to be an effective management practice that helps maintain ecological goods and services in watersheds. In this study, we assessed the non-market benefits and opportunity costs associated with implementing these buffers in an eastern Canadian watershed using contingent valuation and wood supply modeling methods, respectively. A number of buffer scenarios were considered, including 30 and 60 m buffers on woodlots and on all land (including woodlots, agricultural, and residential lands) in the watershed. Household annual WTP estimates ranged from −$6.80 to $42.85, and total present value benefits ranged from −$11.7 to $121.7 million (CDN 2007), depending on the buffer scenario, affected population, time horizon, and econometric modeling assumptions considered. Opportunity cost estimates range from $1.3 to $10.4 million in present value terms, depending on silvicultural and agriculture land rental rate assumptions. Overall, we found that the net present value of riparian buffers was positive for the majority of scenarios and assumptions. Some exceptions were found under more conservative benefit, and higher unit cost, assumptions. These results provide decision makers with data on stated benefits and opportunity costs of riparian buffers, as well as insight into the importance of modeling assumptions when using this framework of analysis.

Highlights

► We estimate net present values of restoring and enhancing riparian buffers.
► We examine different buffer programs, household populations, and time horizons.
► Net present values are positive under most programs considered.
► Net present values depend on household population and time horizon assumptions.
Fig. 1. Map of the Canaan-Washademoak watershed located in New Brunswick, Canada.

by Ryan Trenholm^a, , Van Lantz^{b, c,} , Roberto Martínez-Espiñeira^d, and Shawn Little^b,  

^a School of Resource and Environmental Management, Simon Fraser University, Burnaby, BC, Canada 

^b Faculty of Forestry & Environmental Management, University of New Brunswick, Fredericton, NB, Canada Tel.: +1 506 458 7775.

^c Department of Economics, University of New Brunswick, Fredericton, NB, Canada 

^d Department of Economics, Memorial University of Newfoundland, St. John's, NFLD, Canada

Journal of Environmental Management via Elsevier Science Direct www.ScienceDirect.com

Volume 116, 15 February 2013, Pages 81–94

Keywords: Contingent valuation; Wood supply model; Willingness to pay; Opportunity cost; Riparian buffer

Energy optimization software reduces industrial power consumption

http://www.youris.com/Energy/Ecodesign/The_Ecologic_Badminton_Robot.kl
Thanks to the EU funded research project ESTOMAD, a new computer program is now capable of  detecting the energy guzzlers in so-called mechatronic systems, that are controlled by both software and electronics. ... Following an energy efficiency analysis of a badminton robot with the new software, the team made some small changes in segments in the robotic where energy wastage was greatest. “We were able to cut down the energy consumption of the badminton robot by 50%!” claims Wim Symens.

Industry has already expressed interest in performing this type of energy efficiency analysis. For example, PICANOL, a [major producer] of weaving machines, was able to cut energy consumption of existing machines by 10-15% with the software.

In the future, engineers could use this software for machines even before they are built. Performing a virtual analysis at an early stage, could provide a [significant] competitive advantage to industry. “A virtual approach is always a preferred one. They can even simulate unusual conditions: high speeds or very high temperatures. In real life those tests are very expensive!” explains Tom Boermans of engineering solution consultancy LMS International, who is based in Leuven, Belgium and one of the partners in the project....

European Research Media Center www.youris.com
January 29, 2013
via www.gizmag.com

The Distributive Effect and Food Security Implications of Biofuels Investment in Ethiopia: A CGE Analysis

http://www.rff.org/Publications/Pages/PublicationDetails.aspx?PublicationID=22122

Abstract:

In response to global opportunities and domestic challenges, Ethiopia is revising its energy policy to switch from high-cost imported fossil fuel to domestically produced biofuels. Currently, there are biofuel investment activities in different parts of the country to produce ethanol and biodiesel. However, there is no rigorous empirical study to assess impacts of such investments. This paper assesses the distributive effect and food security implications of biofuels investment in Ethiopia, using data from 15 biofuels firms and 2 NGOs in a CGE (Computable General Equilibrium) analysis. Findings suggest that biofuels investments in the context of Ethiopia might have a ‘win-win’ outcome that can improve smallholder productivity (food security) and increase household welfare. In particular, the spillover effects of certain biofuels can increase the production of food cereals (with the effect being variable across regions) without increasing cereal prices. When spillover effects are considered, biofuel investment tends to improve the welfare of most rural poor households. Urban households benefit from returns to labor under some scenarios. These findings assume that continued government investment in roads allows biofuels production to expand on land that is currently unutilized, so that smallholders do not lose land. Investment in infrastructure such as roads can thus maximize the benefits of biofuels investment.

...

Banse et al. (2008) analyze the trade impacts of an EU Biofuels Directive using a global CGE model, i.e., a modified version of the GTAP model. They find that cereal prices actually decline in the long-run, though less than theywo uld without the directive. Using IFPRI’s partial equilibrium model, Rosegrant finds that biofuels demand accounted for 39% of the increase in corn price from 2000 to 2007. Rajagopal et al. (2007) analyze the effect of the ethanol production tax credit on corn price, using a stylized partial equilibrium model. They find a 21% increase in corn price attributable to a $0.51 ethanol production tax credit in the US in 2006. The US Congressional Budget Office (CBO) estimates also suggest that about 10 to 15 percent of the rise in food prices between April 2007 and April 2008 is attributable to the increased use of ethanol (CBO, 2009). However, Chakravorty et al. (2011) show that about two-thirds of the increase in food prices can be attributed to changes in consumption patterns and only one-third to biofuels mandates. 

...

Cereals (food) benefited most from biofuel expansion in Ethiopia, especially in zones where biofuel investment is located. In particular, the jatropha and castor bean scenarios that involved spillover effects affected cereal production, with the effect being variable across regions. For example, under the jatropha with spillover scenario, cereal production in z3 and z4 (AEZ 3 & 4) increased by 4.3 percent; it decreased by 1.6 percent in z1 and z2 and by 1.5 percent in z5. Similarly, under the castor bean with spillover scenario, cereal production in z4 and z5 respectively increased by 4.6 and 4.7 percent but decreased by 1.2 percent elsewhere.

...

by Zenebe Gebreegziabher, Alemu Mekonnen, Tadele Ferede, Fantu Guta, Jorgen Levin, Gunnar Kohlin, Tekie Alemu, Lars Bohlin
Resources For the Futures (RFF) www.RFF.org

RFF Discussion Paper EfD DP 13-02; January, 2013

To Help Light Up Africa, Many Drops in the Bucket

http://green.blogs.nytimes.com/2013/02/14/to-help-light-up-africa-many-drops-in-the-bucket

By visiting Web sites like Kickstarter and Indiegogo, you can give money to any number of causes. These Web sites collect small amounts from many individuals in what is known as crowdfunding to finance everything from business start-ups to charitable causes to art projects.

While online crowdfunding is still relatively new, it has already demonstrated that many small contributions can add up. Deloitte, the accounting and consulting firm, estimates that the largest 30 crowdfunding sites raised more than $1.5 billion over the last five years, and expects that in 2013 alone the number could be $3 billion.

...Since its crowdfunding site made its debut last July, SunFunder has raised $50,000 from about 300 investors to finance four business ventures that sell solar-powered products in these areas, according to ... founder, Ryan Levinson. Anyone is eligible to join the site - so far investors have come from 18 different countries - and the minimum investment is $10.

Unlike some other crowdfunding operations, SunFunder does not contribute the money to these small businesses; it lends the money and charges interest. As the loan is paid back, SunFunder returns the principal to its investors. Two of the four projects are already starting to pay the money back, Mr. Levinson said.

... Demand is booming for small-scale solar-powered systems that provide light and charge cellphones. The alternative for many people in those regions is to rely on kerosene lamps to light homes and shops, which exposes them to potential harmful problems and the risk of starting a fire if a lamp is knocked over.

With the price of solar-powered technologies coming down, a solar-powered light can pay for itself in seven weeks with the money saved on kerosene, Richard Turner marketing director at at SunnyMoney, said. Since its founding, SunnyMoney has sold almost 300,000 solar-powered lights, which charge during the day and provide several hours of light at night. It hopes to hit the million mark before the end of this year.
...
Within a month of being listed on the SunFunder Web site, SunnyMoney's latest project, providing solar lights in the Chadiza district in Zambia, had attracted 86 investors contributing a total of $10,000.

Not only was crowdfunding quicker than negotiating a loan with a bank, it also helped SunnyMoney get its message out ....
...

By JIM WITKIN

The New York Times www.NYTimes.com Green Blog http://green.blogs.nytimes.com

FOR FULL STORY GO TO:

http://green.blogs.nytimes.com/2013/02/14/to-help-light-up-africa-many-drops-in-the-bucket

February 14, 2013

Attention investors: Climate policy could knock off half the value of fossil fuel companies

http://tinyurl.com/cheevzh

A recent (subscriber-only) report from HSBC Global Research helps shed some light on what’s at stake in the fight over climate policy....

The International Energy Agency says that, to have a 50 percent chance of limiting global average temperature rise to 2 degrees Celsius, we can only afford to burn about a third of known fossil-fuel reserves between now and 2050. That means leaving around $20 trillion worth of assets in the ground. That is global warming’s “terrifying new math.”

The analysts at HSBC tried to figure out what would happen to the value of European oil and gas companies if governments put in place policies to achieve this goal. Not surprisingly, the effects would be dire.

First HSBC assumes that, with policies to hit 2 degrees in place, any projects at a cost of more than $50/barrel for oil or $9/mmBtu for natural gas would be abandoned. That would whack fully 25 percent off the reserves of an oil-focused company like BP, though gas-focused companies like the BG Group would take a smaller hit (just 1 percent). State-owned giant Statoil would see its market cap fall by 17 percent.

But the secondary effects would be even worse. If demand for fossil fuels were cut by two-thirds, prices would plunge. That, HSBC estimates, would take 40 to 60 percent off the oil and gas sector’s total market capitalization.

...

Now, it’s unlikely that the governments of the world are going to get that serious any time soon. But it’s even more unlikely that they’re going to sit on their hands as catastrophe unfolds. There’s going to be some kind of climate policy and that will mean some hit to the valuation of fossil fuel companies. 

This is known as “carbon risk” and it’s not priced into markets adequately, or at all. It varies with carbon content, which is to say, unconventional fuels (“heavy oil,” tar sands, etc.) are at greatest risk, followed by coal, then oil, then natural gas....

The Middle East, Latin America (predominantly Venezuelan heavy oil), Canada (predominantly tar sands) and Africa (predominantly Nigeria and Angola) face the greatest risks.

...

By David Roberts

GRIST www.GRIST.org

8 Feb 2013

FOR FULL STORY GO TO:

http://tinyurl.com/cheevzh

RGGI States Propose Lowering Regional CO2 Emissions Cap 45%, Implementing a More Flexible Cost-Control Mechanism

http://www.rggi.org/docs/PressReleases/PR130207_ModelRule.pdf

After a comprehensive two-year program review, the nine Northeastern and Mid-Atlantic states participating in the Regional Greenhouse Gas Initiative (RGGI), the nation’s first market-based regulatory program to reduce greenhouse gas emissions, today released an updated RGGI Model Rule and Program Review Recommendations Summary. The Updated Model Rule will guide the RGGI states as they follow state-specific statutory and regulatory processes to propose updates to their CO2 Budget Trading Programs.

RGGI Program Improvements

Five years ago the RGGI states demonstrated leadership in addressing CO2 pollution and accelerating the region’s transition to a clean energy economy by conducting the first ever regional auction for CO2 allowances in the nation. The changes outlined in today’s Updated Model Rule and Program Review Recommendations Summary build upon RGGI’s success and strengthen the program moving forward.

Improvements include:

• A reduction of the 2014 regional CO2 budget, “RGGI cap”, from 165 million to 91 million tons – a reduction of 45 percent. The cap would decline 2.5 percent each year from 2015 to 2020.
• Additional adjustments to the RGGI cap from 2014-2020. This will account for the private bank of allowances held by market participants before the new cap is implemented in 2014. From 2014-2020 compliance with the applicable cap will be achieved by use of “new” auctioned allowances and “old” allowances from the private bank.
• Cost containment reserve (CCR) of allowances that creates a fixed additional supply of allowances that are only available for sale if CO2 allowance prices exceed certain price levels ($4 in 2014, $6 in 2015, $8 in 2016, and $10 in 2017, rising by 2.5 percent, to account for inflation, each year thereafter.)
• Updates to the RGGI offsets program, including a new forestry protocol.
• Not reoffering unsold 2012 and 2013 CO2 allowances.
• Requiring regulated entities to acquire and hold allowances equal to at least 50 percent of their emissions in each of the first 2 years of the 3 year compliance period, in addition to demonstrating full compliance at the end of each 3 year compliance period.
• Commitment to identifying and evaluating potential tracking tools for emissions associated with electricity imported into the RGGI region, leading to a workable, practicable, and legal mechanism to address such emissions.

With the release of the Updated Model Rule, the RGGI states now plan to revise their CO2 Budget Trading Programs through their individual state-specific statutory and regulatory processes. Each RGGI state seeks to complete their state specific processes such that the proposed changes to the program would take effect on January 1, 2014.

Delivering Cleaner Air and Smarter Energy Use

The program review has sought to ensure RGGI’s continued success – effectively reducing CO2 emissions while providing benefits to consumers and the region. An independent report by the Analysis Group found that the investment of RGGI proceeds from the first three years:

• Generates $1.6 billion in net economic benefit region-wide through the end of the decade;
• Puts $1.1 billion in electricity bill savings back into the pockets of consumers in the region over the next decade;
• Creates 16,000 job-years in the region; and
• Keeps $765 million in the local economy due to reduced fossil fuel demand.

Analyses indicate that today’s proposed changes would:

• Reduce projected 2020 power sector CO2 pollution more than 45 percent below 2005 levels.
• Preserve the significant reductions that have already occurred in power sector CO2 emissions, and drive further reductions. The new cap is projected to generate approximately 80 - 90 million tons of cumulative emission reductions by 2020, when compared to the current RGGI program, and annual emissions in 2020 are projected to be approximately 14 - 20 million tons lower than they would be otherwise.
• Result in a modest increase in allowance prices, with allowances expected to be priced at approximately $4 ($2010) per allowance in 2014 and rising to approximately $10 ($2010) per allowance in 2020.
• Have minimal net impact to consumer’s electricity bills. Overall, the average electricity bill for residential, commercial and industrial customers is projected to increase by less than 1 percent.
• Generate an additional $2.2 billion ($2010) for reinvestment. These investments in energy efficiency and renewable energy save consumers money, create jobs and enhance energy security, and drive further emission reductions.