Posted by Rahul Chitrapu on Wed, Jan 20, 2010
There is an interesting debate going on amongst economists regarding environmental evaluations. The idea is simple: government/farmers/land owners should take a very long term view on environmental resources and try to put a price on it. This approach will help in the preservation of crucial natural resources that when depleted can have severe economic consequences. Such an approach to ecology and environment is being called
Ecological Economics, according to a recent article in The Economist.
For example, extracting wood from trees through deforestation can be helpful in creating jobs and wealth in a country like Tanzania. But, this leads to loss of river flows that ultimately leaves the people of the region with less drinking water and hydroelectricity. As a way around this, it is suggested that the government should estimate the cost of reduced drinking water and electricity, charge the companies that are causing deforestation a fee and use those funds to pay people of the region to plant trees in areas other than where the deforestation is taking place.
I think carbon offsets result in the same net effect. There are companies that will pay a price for increasing CO2 emissions and causing pollution. They pay the price by purchasing carbon offsets from individuals or companies that are involved in reducing CO2 by setting up wind turbines or solar farms or planting trees.
So what is so new about the idea of putting a price on nature? I guess there is some novelty to Ecological Economics because it tries to capture the value of environmental resources in a way that economists can come to grip with. GDP, it is being proposed, is not an accurate measure of progress because it does not take the value of a country's environmental resources into consideration.
Posted by Rahul Chitrapu on Wed, Jan 13, 2010
BYD, short for Build Your Dreams, is planning to launch Chinese-built electric cars in the U.S in the later part of 2010.
BYD has a very interesting story. Its founder, Wang Chuan-Fu, was described as a combination of Thomas Edison and Jack Welch by Charlie Munger around the time when Berkshire Hathaway, Warren Buffett's legendary company, made an investment in BYD. Wang started BYD in 1995 with $300,000 and set out to manufacture cellphone batteries to compete with Sony and Sanyo. Within 5 years, BYD was the world leader in cellphone batteries. Having known the automotive business very little, Wang entered it in 2003 and started churning out cars that became best sellers in China.
BYD plans to introduce an electric plug-in called e6 into the US this year. A large part of the plug-in's success will depend on BYD's lithium-ion ferrous phosphate battery technology. e6 is a five passenger car that can travel upwards of 200 miles on a single charge.
But how helpful will electric cars be in reducing carbon emissions if the electricity required to charge them comes from fossil fuels? Instead of burning gasoline in a car engine, coal or natural gas is burnt in a power plant. The emissions, though less in magnitude, will still be released. But, what if the electricity required to charge the car came from green energy sources instead? Now, that would make a much bigger difference.
Posted by Rahul Chitrapu on Mon, Jan 11, 2010
I have talked with numerous people who are passionate about the environment and who do their best to protect the environment. One of the activities they are most proud of is recycling. When I tell them about how green power is another great way to protect the environment, they simply give me a nod and say that it is true but not so much as recycling. (Disclaimer: EcoElectrons sells green power, but only to corporations and not households). This frustrates me to a great extent. So here is a post that quantifies the environmental impacts that each activity can have. If you feel that I have overlooked anything or if you do not quite agree with the analysis, feel free to leave a comment and we can continue the conversation.
Recycling in a household
There are different types of wastes produced in a household. Metallic (think aluminum cans), glass, plastic (like Coke bottles) and paper are some examples. About 130 billion cans of aluminum are produced in United States each year. This would amount to 1100 cans per household per year. Recycling one can saves about 0.6 lbs of CO2. If a household recycled all the cans it used, about 700 lbs of CO2 would have been avoided from entering the atmosphere.
There is another kind of waste called Municipal Solid Waste or MSW. MSW is composed of all types of solid waste – paper, metal, plastic, glass, foodwaste and so on. Check out the national average composition of MSW on Environmental Protection Agency's (EPA) website. Around 4,250 pounds of MSW are produced by each household each year and since recycling 1 pound of MSW saves 2.5 pounds of CO2 from entering the atmosphere, 11,000 pounds of CO2 would be saved if all MSW produced in a household is recycled. There you have it. If a household recycled all the waste it produced, 11,000 pounds of CO2 would have been avoided from entering the atmosphere each year. This is of course wishful thinking. Only a third to a half of all MSW can be recycled with today's technology.
Green Power in a household
An average household consumes 10,000 KWh of electricity each year. Greening 1 KWh avoid 1.6 pounds of CO2 as per the EPA. And greening 10,000 KWh would avoid 16,000 pounds of CO2 from entering the atmosphere each year.
Recycling and Green Power together make the biggest difference
I am not suggesting that you switch to green power and stop recycling since green power is at least twice as effective as recycling in terms of CO2 emissions. Recycling has other great benefits in addition to emissions reduction like reduction of landfills and conservation of natural resources that cannot be easily quantified. But, please recognize that green power also makes a significant difference.