FW: Why Location is Critical to Understanding Sustainability | Renewable Energy News Article

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-critical-to-understanding-sustainability?cmpid=SolarNL-Thursday-May3-2012

Why Location is Critical to Understanding Sustainability By Dr. Ory Zik,
CEO, Energy Points Inc.
May 2, 2012   |   2 Comments

 
According to the Environmental Protection Agency, sustainability is based on
one simple principle: "Everything that we need for our survival and
well-being depends, either directly or indirectly, on our natural
environment. Sustainability creates and maintains the conditions under which
humans and nature can exist in productive harmony that permits fulfilling
the social, economic and other requirements of present and future
generations."

Although the EPA definition does provide a sense of what the term actually
means, it doesn't deliver a quantitative, mathematical understanding of what
sustainability is and how it's related to business. The definition also
doesn't include an important word: location.  Business is financially
impacted by where it's located — the same is true for sustainability. 
Location is critical in measuring the true environmental impact of
sustainability initiatives.

Sustainability has become the new Holy Grail for businesses.  According to
the 2011 Sustainability & Innovation Global Executive Study and Research
Project by MIT Sloan Management Review and Boston Consulting Group, 68
percent of companies said their focus on sustainability increased in the
past year, with 66 percent of respondents stating that sustainability was
necessary for their business to be competitive.

Executives realize that demonstrating sustainability can be a big
competitive differentiator in a crowded marketplace, and can also generate
significant cost savings for a business.  Despite this, there's no universal
agreement on just what sustainability is — and more importantly, how it's
measured.  The result is that each business focuses on different metrics
that count individual "environmental domains."  Some businesses focus on C02
reductions.  Others, like Coca-Cola, focus mostly on reducing the amount of
water it uses.  Still others demonstrate sustainability through reduced
electricity usage. 

These reductions are usually further translated into cost reductions. While
cost is important, it does not reflect sustainability. For example, for $10
in Massachusetts you could purchase about 3 gallons of gasoline, 100 kWh of
electricity, or a few thousand gallons of water.  These three items have a
completely different sustainability value, but they cost the same.  These
costs change based on location and the discrepancy is based on the
availability and abundance of the resources being used.  If we can factor
these changes into the cost structure, we need to factor these same things
into the measure of sustainability. 

Why Location Matters 

For any available resource, different regions have different generation
efficiencies.  The efficiency of a resource is based on the resource mix,
abundance or scarcity, etc. Take electricity for example — the efficiency of
electricity in any region is dependent on the resource mix (renewable, coal,
nuclear, etc.), generation, transmission and similar factors.  The map below
is a demonstration of the electricity "efficiency" across the U.S.  Areas
with an energy mix that includes more renewables, like California and
Massachusetts, have higher electricity efficiency than areas where
electricity is based off of coal, oil or other fossil fuels.



When you look at the efficiency of a resource in a specific location, you
start to get a clearer picture of why location is important when measuring
sustainability. 

To further highlight the impact of location, let's look at the example of a
water footprint.  There are a lot of businesses, including sustainability
leaders such as Coca Cola, who are doing tremendous work in reducing water
usage across the entire business.

That being said, is reducing water usage in a bottling factory located in
Atlanta the same as reducing water usage at a plant in Albuquerque?  In
Atlanta, water is abundant, but expensive, while in Albuquerque, water is
scarce, yet cheap.  So is measuring the water amount reduced and the
ancillary costs saved an accurate reflection of the true sustainability
impact of these initiatives in the different locales?

Reducing water usage is a laudable goal — but simply looking at the
reductions and the savings generated from these reductions doesn't provide
the true environmental impact of these initiatives.  To accurately
communicate the environmental value of these initiatives, location and water
scarcity must be factored in and accounted for.

The same is true for energy (and every other sustainability domain).  If
your energy source is renewable as opposed to fossil fuel based, energy
saving measures have differing sustainability impacts, even though the cost
reductions may be equal, or even inversed.

During my time at HelioFocus, a solar thermal company, I realized that
companies were making a serious attempt at becoming more sustainable, but
the efforts were hindered by lack of substantial evidence as to how
successful they were.  I thought about the renewable energy we were
generating, but wondered if that was offset by the pathway we took to
generate the energy in the first place. There was no universal standard that
we could measure ourselves against.

For too long, the industry has discussed sustainability either through
domain-specific measurements (kWh, H20 reduced, CO2 abated, etc.) or by
simply what sounds and feels good.  Reductions of energy, waste and water
are admirable goals and ultimately what we want to achieve — but all
reductions are not equal when it comes to sustainability.  The true impact
varies based on location and the efficiency of the resource.

In order to get a factual understanding of the impact of our sustainability
initiatives, and to accurately communicate the impact to customers,
consumers and the world at large, we need to create a universal
sustainability measurement that accounts for the vagaries of location, fuel
mix, and other variances that influence the environmental impact of our
sustainability measures. 

Image: Anneka via Shutterstock

Bioenergy, Geothermal Energy, Hydropower, Solar Energy, Wind Power
 
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PE
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