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