As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that may or may not be sustainable in the future. Care must be taken to ensure that cities and roads, factories and farms are designed, managed, and regulated as efficiently as possible to wisely use natural resources while supporting the robust growth developing countries still need. Economic development during the next two decades cannot mirror the previous two: poverty reduction remains urgent but growth and equity can be pursued without relying on policies and practices that foul the air, water, and land. Inclusive Green Growth: The Pathway to Sustainable Development makes the case that greening growth is necessary, efficient, and affordable. Yet spurring growth without ensuring equity will thwart efforts to reduce poverty and improve access to health, education, and infrastructure services. Countries must make strategic investments and farsighted policy changes that acknowledge natural resource constraints and enable the world's poorest and most vulnerable to benefit from efficient, clean, and resilient growth. Like other forms of capital, natural assets are limited and require accounting, investment, and maintenance in order to be properly harnessed and deployed. By maximizing co-benefits and avoiding lock-in, by promoting smarter decisions in industry and society, and by developing innovative financing tools for green investment, we can afford to do the things we must.| The poor health of today's roads--a subject close to the hearts of motorists, taxpayers, and government treasurers around the world--has resulted from faulty incentives that misdirect government decision-makers, according to the contributors to Street Smart . During the 1990s, bad government decision-making resulted in the U.S. Interstate Highway System growing by only one seventh the rate of traffic growth. The poor maintenance of existing roads is another concern. In cities around the world, highly political and wasteful government decision-making has led to excessive traffic congestion that has created long commutes, reduced safety, and caused loss of leisure time. Street Smart examines the privatization of roads in theory and in practice. The authors see at least four possible roles for private companies, beyond the well-known one of working under contract to design, build, or maintain governmentally provided roads. These include testing and licensing vehicles and drivers; management of government-owned facilities; franchising; and outright private ownership. Two chapters describe the history of private roads in the United Kingdom and the United States. Contemporary examples are provided of pricing, privatizing, and contracting out are evident in environs as diverse as Singapore, Southern California, and Scandinavia, and cities as different as Bergen, Norway, and London, England. Finally, several chapters examine strategies for implementing privatization. The principles governing providing scarce resources in free societies are well known. We apply them to such necessities as energy, food, and water so why not to road space? The main obstacle to private, or semi-private, ownership of roads is likely to remain the reluctance of the political class to give up a lucrative source of power and influence. Those who want decisions about services to be controlled by the interplay of consumers and suppliers in free markets, rather than by politicians, will have to explain the need for change. Street Smart makes a powerful case for the need for change and sheds light on the complex issues involved. Gabriel Roth is a transport and privatization consultant and a research fellow at the Independent Institute in Oakland, California.
Books, and the libraries that house them, for all their staid reputation, stand as major players in the plots of a substantial number of science fiction works. Books burn in the fires of Fahrenheit 451 and teach apocalypse survivors essential skills in Dies the Fire. In Earth Abides, Ish, a survivor of the Great Disaster and now an old man, sits on the steps of the long-abandoned university library, pondering its useless legacy for a population that lives by the bow and arrow. Global catastrophe and apocalypse are surely the stuff of fiction and where lesser cataclysmic events such as earthquakes and severe storms interrupt the lives of contemporary, industrialized populations, they have been on a scale for which the rest of the infrastructure compensates. But catastrophe can build in subtle, slow trickles that presage a torrent, a cumulative event with implications fully as severe as the sudden tsunami. Those trickles are running now, and their names are energy and digital information. The energy element has several tributaries, the two most significant being climate change and peak oil. They share the factor of being mildly controversial, in that the scientific and expert communities regard them as givens (with a range of potential future scenarios), while numerous doubters give voice in the governmental, business and general populations. Climate change is most evident in an accelerating global warming trend, with its significant and deleterious effects on water and resource availability. Peak oil, perhaps less well known, is the premise – well established in geochemical science – that the world's petroleum and natural gas reserves are in the process of depletion. Decline of yields mirrors a corresponding world oil discovery peak (discovery peaked in the 1960s), and while the debate rages over the precise year of peak oil (estimated to be somewhere between 2005 and 2020), the concern should be with the realities of the slide down the other side of the peak [1], [2]. It is not the place of this essay to deal with the pros and cons of substitutes for oil. Suffice it to say that alternative energy sources come nowhere near providing the cheap, safe, uncomplicated and overwhelmingly available benefits of oil. And the unfortunate factor that intrudes on any discussion of new fuels and new technologies is that of the zero sum game. The natural and economic resources are finite. Those diverted to one form of substitution steal from something else. So why should the digital information industry care about water and tar sands? Electricity. Remember the electricity aliens from old science fiction movies? The Internet is an electricity being. It was born, lives and dies with electricity. It eats electricity and, like any good alien, eats it exponentially. Item – Feb. 2010: Severe drought in Venezuela causes an electricity shortage that is expected to lead to higher oil prices. The worst drought in 10 years has dried up the water that generates hydroelectric power. In an effort to stem the hours-long blackouts that have gripped the nation for months, President Hugo Chavez has indicated that he may divert electricity from oil-producing and -refining operations. Venezuela owns 3.5% of the world's known oil supplies [3]. Item: The western states of California, Arizona, Colorado and Nevada have had their eye on Washington's mighty Columbia River for years. Giant waterworks projects were proposed as long ago as 1968; one of the more current plans is for an undersea pipeline that would carry water to Southern California from the Columbia [4]. Item – January 2010: Google Energy LLC, subsidiary of Google, Inc., has requested permission from the U.S. Federal Energy Regulatory Commission to buy and sell energy [5]. Electricity is provided by hydroelectric power, the burning of oil or coal and nuclear power plants. Worldwide water and oil resources are compromised by current supply and increasing global demand. Climate change restricts the availability of water and limits the ramping up of coal use. Nuclear power plants need abundant supplies of cheap water, and cheap oil underpins the construction of all these plants and the infrastructure that delivers it to homes and businesses. Google knows that its energy alien, housed in an estimated 24 or more data centers, consumes hundreds of megawatts of energy a day – day in and day out. Internet companies are fully aware of the current and projected energy needs of their burgeoning businesses. A smaller data center might consume as much as a large university, about 31 megawatts, including everything from stadium lights to its medical school. A larger complex −180 megawatts – would be enough to provide energy for a city of 900,000 inhabitants. Data centers on average use about as much electricity as large oil refineries. Data centers, or server farms, are a billion dollar business. They are composed of buildings and entire warehouse-sized complexes crammed with computer servers, and for every dollar spent on power, an additional dollar goes for temperature control. According to Department of Energy estimates, data center power requirements will increase from 1.2 percent to 4 percent of all power consumption in the United States in the next few years [6]. As the software industry moves increasingly to a web environment, Internet companies are building their own data centers. Initially concentrated in California and suburban Washington DC, Google, Yahoo and Microsoft are all headed for the hills – the hills in this case being those of Washington State and the generators of the Columbia River [8]. Local utilities are hard-pressed to handle current demand in the context of existing exigencies such as infrastructure failures and weather-related outages (storms or air-conditioning draws). Add the double whammy of realistic, projected shortages and/or soaring costs for oil and water. Then consider that the rivers that provide the water for agriculture and hydroelectric power and for filling all the reservoirs and Sigg bottles have their genesis in the mountain snow packs, and that global warming is quietly working on the mountains. The disappearance of more than 80% of Mount Kilimanjaro's fabled snows is predicted to have worldwide implications for drought. And in the Yakima basin in Washington, this winter's reduced snow pack spells problems for irrigation [9]. The Yakima River is a tributary of the Columbia River. The first premise of this construction is that the Internet, those massive layers of data and code residing in increasingly energy-hungry warehouses around the economically beleaguered United States (and elsewhere) is going to reach a point where growth will be constrained by energy limits. “With the possible exclusion of nuclear fusion energy, there are no rational expectations that significant unknown sources of energy can be unlocked through advances in science and technology. Depletion of fossil fuel resources can only be mitigated by a combination of efficiency gains, conservation and substitution of renewable and nuclear fission energy” [10]. The second premise is that the success of the effort to divert, conserve and find substitutes for fossil fuel resources will be severely impacted by the already demonstrable effects of climate change, particularly with respect to water. Is it wise for the information world to dedicate itself unreservedly to the digital format? (And we haven't even mentioned sunspots; a new 11-year cycle of heightened solar activity brings increased risks for power grids, cyber warfare or sharks, which gnaw underwater cables.) The publishing industry, willingly or not, has committed itself irreversibly to digitization [11]. It can neither sustain a physical inventory of backlists nor withstand the storm surge of the worldwide digital marketplace. Libraries are constrained by materials supply, linked as they inextricably are to the publishing industry and also by the access and format preferences of their patrons. Academic libraries subscribe to indexing products that are overwhelmingly digital, to associated digital text, to independent digital serials titles and to an increasing array of electronic books, archives and other full-text products. The legacy that was once restricted to paper stored in physical buildings, on the steps of which our fictional hero sat, is flowing ever faster to the hard drives in the servers in the data centers. Hard drives were not intended to be long-term storage devices in the event of prolonged power outages [12]. How they might perform in that capacity remains to be seen. Can we really delude ourselves that the electricity and the water and the oil will be sufficient to sustain indefinitely the infrastructure of the digital medium? There is an ever more visible thread running through the writings of those concerned with the fragility of the information universe – a thread that is at once both more rational and thus more worrisome than the alarmist prophecies of fiction and doomsayers. From the ruminations of thoughtful and articulate workers in the industry to feature articles in New Scientist, the question is being asked – what happens to our stored knowledge “if something goes wrong?” Or, as is the theme of this essay, what happens when the something that goes wrong is the simple projection of prohibitive parameters of energy and climate factors? There is an analog for knowledge and concern for its fate in an uncertain future. Deep inside a sandstone mountain lined with permafrost on the Norwegian Arctic island of Spitsbergen is a vault designed to hold and preserve around 2 million seeds. The three million dollar project was initiated by the Norwegian government to safeguard the world's seed heritage (the world's food supply) from nuclear war, climate change, terrorism, rising sea levels, earthquakes and the collapse of electricity supplies. It has meter-thick reinforced concrete walls, airlocks and blast-proof doors. It is a seed depository, not a seed bank, and it is not an apocalypse film set. It is real – designed and constructed by a government that was willing to do something more than whine and fret about uncertainty. Museums hold a publicly accepted mandate to preserve the artifacts of cultural heritage, and libraries follow a similar conservation mandate, albeit for a lesser galaxy of objects. It would be silly and pointless to envision a second doomsday vault on Spitsbergen housing copies of the world's literary and scientific heritage. But it is not silly to be realistic about the vicissitudes of the path we tread as we purchase, utilize and store for future use the hard-won body of knowledge on which civilization as we know it depends. Libraries need to hold to that stewardship mandate, to preserve and celebrate the integrity of print formats. They should preserve in print form the world's literary canon and seminal philosophical and scientific works. They should keep in book form the kind of functional information people take so easily now from the web: basic tenets of health and education, instructional literature for building and maintaining essential services, for the raising of plants and animals – a body of print back-up tapes so that when the lights flicker and the blackouts roll, there will be some place to go, and something to hold onto – so that the human heritage of both the practical and the esoteric will not go also into the blackness.
Synopsis: Concern over emissions and climate change has led over half of the states to enact portfolio (RPS) legislation requiring regulated electric utilities to obtain some fraction of their power requirements from sources defined as Legislation to institute a federal RPS may follow. In reality, RPS is a policy in search of a rationale, at odds with principles of efficient environmental regulation and poorly suited to promote other policies favored by its supporters. The actual record of state implementations has been largely symbolic. Very few states with binding RPS requirements are currently in compliance with their own programs, and a federal RPS will be subject to the same forces that have led to state-level failure. The recent history of renewables leads to a conclusion that existing and proposed mandates are better viewed as special interest legislation than as rational responses to climate change and fossil-fuel power plant emissions. I. INTRODUCTION Electricity from renewable sources is fast becoming a multipurpose remedy that will alleviate energy scarcities, abate air pollution, and mitigate climate change. As of July 2007, over half of the states had enacted portfolio standards (RPS) requiring electric utilities to obtain portions of their power from sources legislatively defined as renewable. ' On August 4, 2007, the U.S. House of Representatives voted in favor of a national RPS, but the Senate failed to pass a comparable provision.2 Supporters of a national RPS have long viewed it as an environmental measure that can also slow the accumulation of greenhouse gases (GHG).3 They have more recently argued that it is, among others, an industrial policy to manufacturing jobs and declining regions, a market intervention that could lower energy prices, a stimulus to development of new technologies, an instrument for risk management, a trade policy initiative, and a weapon in the war on terrorism.4 In reality, a national RPS is singularly ill-suited for any of these tasks. It will be an inefficient and inequitable environmental policy that reduces emissions at higher cost than necessary and is largely incompatible with existing air quality regulations. Some of the non-environmental rationales are elementary economic fallacies and others are at best conjectures. Worse yet, the record of state-level RPS compliance and enforcement strongly suggests that the effects of a federal program will be either minimal or perverse. Psychologically and politically satisfying, a national RPS is likely to obstruct the development of efficient policies. The range of public figures and distinguished commissions favoring a national RPS may indicate no more than an expectation that it will provide a new forum for interest-group politics.5 We begin with data on renewables which suggests that a federal RPS will bring little diversity in generation resources and few environmental benefits. The next sections examine advocates' claims for it, finding them inadequate at best. As environmental policy, an RPS is inefficient by every economic standard. It is a costly measure whose effects on emissions are uncertain, difficult to integrate with existing environmental regulation, and needlessly disruptive of generation investments intended to comply with anticipated emissions rules. Other purported consequences are also questionable. As macroeconomic or industrial policy, a national RPS cannot possibly create net increases in employment and rural areas that it will revitalize seldom need the help. Claims that it is necessary to stimulate reductions in production cost lose their force in a global economy, as do expectations that it will position the U.S. to dominate the world renewables market. Rather than facilitating risk management, standard renewables contracts only transfer it from utilities to captive customers. National security is better advanced through direct policies instead of compulsory investment in renewables. …
The required Third National Energy Plan NEP-III offers the Reagan administration an opportunity to assess cogeneration. The Public Utilities Regulatory Policies Act, increasing energy prices, capital-intensive industrial investments in energy efficiency, utility financing problems, opportunities for decentralized energy systems, stabilizing gas supplies, and the economics of energy efficiency combined to make cogeneration attractive to a wide range of energy producers and users. US energy policy will be reassessing several issues, among them the roles of utilities, states, and the Federal government in cogeneration and the appropriate financial and legal incentives to ensure certainty for those developing cogeneration facilities. (DCK)
Abstract As the petroleum industry has embraced the concept of rate of return as an investment criterion, numerous papers on the subject have appeared in the literature. The purpose of this paper is to clarify the significance of these methods and extend their application. Because of space limitations, no attempt has been made to duplicate these previous efforts. Instead, the emphasis has been placed on proper utilization of the results. Discussed are:the problem of multiple rates of return on acceleration projects;effect of time on comparative results;development of realistic mathematical model; andformal consideration of probability in the economic evaluation. Several reasonable solutions to these problems are presented. Introduction The rate-of-return concepts embraced by the petroleum industry in the last few years represent techniques that have been widely employed by other groups in the fields of finance and banking for the past century. In the process of attempting to utilize these "new" methods in the industry, many modifications of the basic compound-interest equations have appeared. Refs. 1 through 11 out-line the more popular approaches used. In their preoccupation with obtaining numbers, many have lost sight of the inherent characteristics of many equations used, as well as the real goals of investment. Put another way-rate of return as found by any equation, no matter how good, is not in itself a satisfactory investment criterion. Any economic decision involves either formal or informal consideration of the following:risk factors, includingprediction of future events. and economic climate andprobability of success or failure;rate of return on investment;effect that failure(s) would have on an organization's economic future;tax ramifications;current investment needs and opportunities;cash generation needs in future years to remain in a sound and dynamic position (might involve deferral of revenue for economic reasons);romance factors; andan organization's financial structure. The detailed discussion here will be limited to Items 1 and 2. Usually, these are the ones formally considered by the practicing engineer, while the remainder are usually management prerogatives. Some understanding, though, of Items 3 through 8 is essential for intelligent engineering appraisal. Space does not permit a complete discussion of those latter factors, but a few comments are essential. In theory there is always an infinite number of investment opportunities available for the investment dollar. In practice this is never really true. There are always limitations imposed by organizational policy, personnel capabilities and governmental interference in economic affairs. A decentralized region, area or division, for example, has certain geographic limitations that restrict investment potential. An oil-company management is not likely to seriously consider a project to manufacture television seas unless they have an insufficient number of attractive oil investments. If they do consider it, they must include in their cost considerations the acquisition of new qualified personnel. Most managements inherently limit the largest portion Of their investments to areas where they have experience and are in a position to make qualified judgment decisions. This is one reason why diversification is necessarily slow. No comment should be necessary about the limitation imposed by governmental regulation. It must also be recognized that not all investments are profit motivated. Some are made for strategic reasons. Strategic here means that said investment is necessary to achieve long-range company goals. This class of investment must necessarily strengthen the organization so that it enhances the probability of success of profit-motivated investments. One example of this is represented by funds expended for laboratory research and field tests (pilot floods, special tests, etc.). These cannot be compared with profit-motivated investments by means of a single yardstick, such as rate of return, because strategic investments yield a return that is impossible to measure in dollars and cents. Can anyone cite the cash flowback resulting from research, public relations, college aid programs and similar efforts? No! Yet, any enlightened executive recognizes their value. The eight factors previously listed are primarily important in profit-motivated investments, which comprise the bulk of all investments made. No finite discussion is possible on such things as the romance factors. JPT P. 708^