Notes on David Smukowski’s Speech on 10/12/2010
· The reason why China has such pollution issues is because we outsourced our issues when things became to expensive here.
o Single child law causes Chinese people to be very concerned about their environmental future.
· You need to look at the environmental impact of the entire life cycle of your product or service.
· If you abandon profitability there is very little chance of success. You will lose support if you come at things from an idealistic perspective and don't take financials into account.
· Read “Collapse” by Jared Diamond.
o The Mayan civilization was the most complex and sophisticated of its time.
§ It collapsed in 9 months.
§ The anology is that our world leaders most likely do not think that the world will collapse in “9 months,” but we need to be aware that it can happen
o Past societies collapsed for the following reasons:
§ Deforestation and habitat destruction
§ Soil problems
§ Water management problems
§ Non-native species
o Today we also face:
§ Climate change
§ Buildup of toxic chemicals
§ Energy shortages
§ Full utilization of earths photosynthetic capacity.
· What is sustainability to business:
o A pro-active approach to ensure the long-term viability and integrity of the business by optimizing resource needs, reducing environmental….
· Types of capital
o Natural-resources, biological systems and ecosystems
o Social-social resources
· We need to be careful what we measure and how we talk about it.
o University of Washington is ranked very high in sustainability, but they did nothing through policy to achieve this
· Life Cycle Assessment
o Also knows as life cycle analysis, eco-balance, and cradle-to-grave analysis
§ The investigation and evaluation of the environmental impacts of a given product over its life.
o 4 Phases of LCA
§ Goal and scope
· Cradle to grave
o From manufacture cradle to use phase and disposal phase
· Cradle to gate
o An assessment of a partial product life cycle from manufacture cradle to the factory gate
· Cradle to cradle
o End of life disposal step for the product is a recycling process
· Gate to gate
o Is a partial LCA looking at only one value-added process in the entire production chain.
· Well to wheel
o The efficiency of fuels used for transportation. Oil well (or corn field) to vehicle.
§ Life cycle inventory
§ Life cycle impact assessment
o Economic metrics
§ Working with cost as a unit provides designer and companies a good guidline.
§ Major disadvantage-lack of hard data concerning environmental costs and profits, difficult to convert environmental impact in dollars.
· There was an example included that demonstrated that the formula only takes product retirement into account and no environmental cost incurred during the product’s operational life….or before…or after.
o Economic assessments
§ Key element of product development process
· Referred to around here as a “business plan”
§ Since environmental impacts occur pre=product and over an entire product life-cycle, and well after the product is useful…
§ Thus: economic implications of the environmental impacts should also be assessed.
§ Four methods for economic assessments are:
· Total cost accounting
· Life cycle costing
· Full cost
o Life-cycle costing
§ Product’s entire value chane from a cost perspective.
· Research and development phase through conclusion of a product’s life.
· Other types of costing generally look only at the production process with focus on cost control.
§ Product’s costs are committed before the product is in the production phase.
· The majority of control management can exert over production and other costs is during the design phase of the product’s life-cycle.
§ Product costs post-sale.
· Life-cycle costing focuses on reducing costs throughout a product’s life. (such as capital, labor, material, energy, warranties, customer service, marketing , and distribution costs)
o Total cost accounting
§ Total cost accounting
· Introduced in the late 1980’s with the introduction of CAA, CWA, RCRA, CERCLA
§ The method typically focuses on in-company assessments of cleaner production investments.
§ Special attention to hidden, lss tangible and liability costs.
· Liability costs are fines due to liability for things as future clean-up, health care and property damage.
· Less tangible costs are e.g. consumer acceptance, corporate image and external relations.
§ Risks and hidden costs associated with a product or activity. (READ LIABILITY)
o Environmental life-cycle costs
§ Environmental life-cycle costs
· Costs caused by the environmental impact of the product
§ The most common method is to use standard costs factors, e.g., the costs a company has to incur to clean waste water, dispose of waste
§ Environmental life-cycle cost accounting is much narrower than the preceding approaches.
· It only looks at the cost related to environmental aspects-a subset of total costs.
o Full cost accounting
§ Additional category of costs
· The social costs related to production, use, and disposal which are not accounted for by any of the life-cycle actors or participants.
§ Societal cost accounting or full cost accounting could be used to treat topics such as ozone layer depletion.
· Because nobody is directly responsible for such issues, they are typically not taken into account in TCA and LCC. (Water, Air, Landfill)
§ The monetarization of waste streams and emissions
· “willingness to pay” to avoid negative environmental effects.
· Policy and liability
§ Difficult to estimate the current and future social costs associated with specific products.
§ To do costing
· Four steps as in lca, except that the outcome is a single numberical monetary value
§ Life cycle costing
· For example, a mercury thermostat……
o Very important issue: cost versus value
§ Cost does not equal Value
§ Focusing on “costs” only will limit…..
o Boeing-Infrastructure designed to move waste-1995
§ 3.6 billion pounds of waste
· Cardboard and wood
· Air emissions
§ 61 mission pounds of product
· 206 airplanes
§ Waste to product 65:1
§ 16 month cycle to build a/p
§ 3 million sq. ft. final assembly
§ Market Cap 17B
o Boeing-Infrastructure eliminated (Lean and Green) -2006
· Recycled or rotable
§ 75 million pounds delivered
· 398 Airplanes
§ Waste to product-minimal
§ Cut light energy 90%
§ 6 week cycle to build a/p
§ 2 million sq. ft. final assembly
§ Market Cap $76B
o Environmental waster=economic waster
§ Both green
§ Both good for the bottom line
§ Borrowing from physics Mv=mV; eW=Ew
· ING Headquarters Building Case
o 538,000 Square foot bank
o All plants fed with roof rainwater
o Every Office natural air and light
o HVAC totally passive
o Within 5km of employes homes
o Minimal parking
o 92% less energy than comparable
o Absenteeism dropped 15%
o When 1% of a buildings upfront cost spent, 70% of its lifecycle costs are committed- Joseph Romm
o Absorb or evaporate 1500GPD in rain to avoid runoff and flooding
o Paper=2% of world trade
§ 2.5% of industrial production
§ US=$132 B Industry
§ 10% filed, remainder discarded or recycled
§ Offices discard 200 pounds/employee/year
§ Use increasing 5X faster than population
o Asia growth in paper 3X US
o Trees-Closing the loop
§ 400M wooden pallets/year
· NYC recovered 50,000/month saved $500k/disposal
· Germany: reusable pallets, barcodes and cooperage
§ Paper recycling fiber
· US47%, Holland 96%, Japan 52%
· Wisconsin ban paper to landfill; GB packaging designed zero discharge paper mill… became lowest cost producer.
o It saved money by using recycled paper and not building it in the traditional place or way.
· Ink soluble at 130F, reused in ink cartridges
§ Hemp and grasses have higher fiber content than wood
o Changes can be used as an economic advantage if you can figure it out before your competitors.
§ 97 Quadrillion BTU’s flowed through the US in 2002
· 27% Transportatoin
· 23% Residential
· 33% Industrial
· 17% Commercial
o System Losses
§ Power Plant losses up to 70%
§ Transmission and distribution loss up to 9%
§ Motor, drive train and pump loss up to 37%
§ Pipe and throttle loss up to 53%
o Optimize systems
o Use gravity
o Localize power
o Alter energy
· Denmark Wind
o Denmark ahs 3115 MW wind power/5m people
§ 600Watts per person (home use 2000W)
o Government promotes wind turbine cooperatives
§ Members/owers live within a certain distance of the site
§ 100,000 danish families owned wind turbines or shares in wind cooperatives……
o Agriculture methods have lots of wastes and inefficiencies
§ 20% of products unusable before end consumer
§ Distribution, handling over longer distances
o In 30 years nitrogen use increased 645% yields decreased (this is a lie)
o 1/3 of grain fed to livestock,
o Hothouses replacing once a season/stocked harvests
o Farmers markets and co-ops flatten the supply chain
o Solardryers save energy, reduce bugs
o Crop waste to ethanol for oil substitute
o Organic farming and eliminating slash burns replenishes soil carbon and …..
· Its not easy-Example-Global warming
o Major greenhouse gases are:
§ Water vapor…..
· Methane is really bad stuff and he has a big slide about a bunch of gasses that can lead to global warming.
· Rice is really bad and California is guilty of this in a big way.