| "There is a 90 percent chance the planet's | | | | Will environmental costing continue to |
| average temperatures will rise 3 to 9 F (1.7 | | | | spread? Environmental costing is an estimated |
| to 4.9 C) by 2100." This simple statement in | | | | cost for resource depletion and environmental |
| the June 2001 report released by National | | | | deterioration. One can only guess. It is |
| Center for Atmospheric Research in Boulder, | | | | intuitively attractive to tax something bad, |
| Colorado leaves little doubt of the magnitude | | | | i.e. environmental damage rather than |
| of the threat from global warming. The UN | | | | something good such as one's salary or |
| Environment Program estimates that the extra | | | | company's profits. |
| economic costs of disasters attributable to | | | | |
| global warming are running at more than $300 | | | | As a building owner, facility engineer or |
| billion annually. | | | | factory manager the implications are |
| | | | enormous. Just how much could energy prices |
| The global community is responding with | | | | change? According to European Research |
| actions lead by the Kyoto Protocol, which | | | | Commission Report released in July of this |
| aims to reduce emissions of global warming | | | | year "The cost of producing electricity from |
| gases. Nearly 90% of global warming gas | | | | coal or oil would double if costs such as |
| emissions are CO2, which are primarily from | | | | damage to the environment and health were |
| the use of fossil fuels for energy. The focus | | | | taken into account". |
| on energy will undoubtedly continue to | | | | |
| increase. Throughout the world different | | | | Coal subsidies in China have been more than |
| methods are being used to encourage reduced | | | | halved since 1984, and nearly 1 million |
| energy use. Japan has enacted the Energy | | | | coal-mining jobs have been eliminated over |
| Conservation Law in 1999. The U.S. has | | | | the past five years as a result of |
| revised ASHRAE Standard 90.1 to raise the | | | | far-reaching coal reduction initiatives. In |
| minimum COP level for centrifugal chillers | | | | 1999 alone, total coal use in China dropped |
| from the current value of 5.2 to 6.1 | | | | 4.4%. Petroleum subsidies fell from 55% in |
| effective in October of this year. A growing | | | | 1990 to 2% in 1995. Source: EIA April 2001. |
| number of countries are using environmental | | | | |
| costing which includes an estimated cost for | | | | Any significant change in the price of energy |
| resource depletion and environmental | | | | can have a major impact on the profitability |
| deterioration. | | | | and value of a building or factory. One can |
| | | | protect their interests by investing in the |
| Although such fees to discourage pollution | | | | highest possible efficiency that is |
| were first proposed in 1920 they did not see | | | | economically justifiable. |
| widespread application until 1990 when | | | | |
| Finland implemented the first carbon tax. | | | | In the past energy efficiency improvements in |
| | | | the U.S. have had a median payback of only |
| At present there are more than 30 countries | | | | 1.9 years meaning that IRR's of up to 70% |
| that have some type of carbon tax in effect. | | | | were not being selected. This is now |
| | | | changing. In addition to the economic |
| Environmental accounting (or costing) is a | | | | attractiveness of high efficiency there are |
| broader term than just a carbon tax on | | | | environmental gains through reduced emissions |
| energy. For example, subsidies being provided | | | | of carbon dioxide and other power plant |
| to energy producing industries are a form of | | | | emissions that are harmful to the |
| negative tax. Removal of such subsidies has | | | | environment. |
| the same effect as a carbon tax, which is to | | | | |
| raise the price of energy to the user. Such | | | | The move to high efficiency equipment is |
| methods make more energy efficient | | | | accelerating. And at the same time, there is |
| alternatives more financially attractive. | | | | increasing emphasis in system design and |
| | | | optimization. Low flow/high delta T systems |
| In the recently released "OECD Environmental | | | | are offering energy savings in operating |
| Strategy for the First Decade of the 21st | | | | costs and first cost through smaller pipe |
| Century" the goal is to include "cuts to | | | | diameters and pump sizes. |
| energy, farm and other subsidies so prices | | | | |
| more accurately reflect environmental | | | | The focus on high efficiency HVAC equipment |
| impacts". China, the U.K., India, Indonesia | | | | and systems will continue to increase as |
| and Thailand are countries that have recently | | | | additional emphasis is being placed on the |
| eliminated subsidies to parts of their energy | | | | environmental costs associated with energy |
| industries. | | | | use. |
| | | | |