The State of Environment & Business

Energy

By the end of 1999, almost a quarter of U.S. citizens will be able to purchase "green power." People are signing up in record numbers for renewable electricity blends offered by early mover companies like Green Mountain Inc. Eight states have instated 'portfolio energy standards' that require suppliers to use a minimum percentage of renewable energy and disclose their energy sources to customers.

In less than a year, 100,000 customers in both Pennsylvania and California have opted for clean energy and power marketers are already shifting their strategy from selling the cheapest electricity to the greenest blend possible. Commonwealth Energy Corporation, California's largest supplier and one of its cheapest energy providers, is converting its 38,000 residential and small business customers to its GreenSmart program using local, renewable energy sources. Unlike most green power programs, which require people to pay a premium, Commonwealth will provide green energy at a discounted rate. Patagonia, Toyota, the City of Santa Monica, New Belgium Brewing and about nine churches are fueling the green power bandwagon, enabling the installation of new solar, wind, geothermal, biomass and landfill gas capacity.

20 years from now, the Energy Information Administration predicts renewable energy will account for 10 percent of energy use in the U.S.[1] Coal and oil use creeps along increasing at about 1 percent annually, while solar cell sales expand by 15 percent per year, jumping 40 percent in 1997. Solar shingles, a new development, integrate solar cells into a building's roof and have the potential to revolutionize electricity generation worldwide.

Wind energy, racking up 26 percent annual increases over the last eight years, now competes with fossil fuel prices. Experts predict it will be cheaper than fossil fuel within 10 years thanks to lower turbine prices, higher efficiency and availability. The U.S. Department of Energy's Wind Resource Inventory shows that North Dakota, South Dakota, and Texas alone can meet U.S. electricity needs with wind energy. Hundreds of new high-tech windmills dot the Midwest landscape, dubbed the Saudia Arabia of wind.

Meanwhile, EU country wind investments are growing even more rapidly at 40 percent annually in Germany, Denmark, Spain, and UK. EU power sector emissions can be reduced by over 11 percent by 2040 using wind power. Costa Rica is committed to generating 100 percent of its electricity from renewable sources by 2010. Denmark no longer allows new coal power plant construction.

Forest Products 

In only two years since the first forest certification body was accredited, more than 10 million hectares of forest are certified to meet the Forest Stewardship Council's (FSC) criteria, equal to 115 forests in 25 countries. The World Wildlife Fund's new target is for 25 million hectares to be certified by 2001. In the U.S., the certifier Scientific Certification Systems reports that requests for chain-of-custody certification have tripled in the last year. Two years ago, according to Debbie Hammel, program director, there was more supply than demand for certified products. "Now the situation is reversed and demand is easily outstripping supply."

Due to deforestation and protection efforts, the area available for timber production is shrinking. China banned timber production in its forests in 1998 acknowledging that deforestation greatly exacerbated its recent record-breaking floods. The country is employing some state timber firms for tree-planting instead. Beijing's official stand is that standing trees are worth three times more than cut trees, because of the water storage and flood retention services forests provide. Many countries, including Brazil, Cambodia, U.S., New Zealand, Sri Lanka and Thailand, banned or imposed strict logging restrictions in primary forests during the last year.

PricewaterhouseCoopers, an accounting firm, predicts after-tax losses of C$1 billion (US $1.5 billion) for the British Columbia forestry industry. Their advice to the industry is to implement sustainable certification or lose markets. As a result of an intensive Greenpeace campaign, MacMillan Bloedel, the largest British Columbia timber company, agreed to cease clear-cutting and apply for certification, and withdrew from the BC forest industry association. Home Depot, the largest purchaser of forest products, is under similar pressure to redirect its purchases to sustainable harvested timber.

Svetogorsk, a major pulp and paper mill in Russia, is completely phasing out ancient forest wood in its production. Meyer International, the UK's largest timber trader pledged that 80 percent of its timber would be FSC-certified within five years. Meyer sources timber from 40 countries. According to Amanda Burton of Meyer, the firm has "always kept a close eye on the development of certification and now, as FSC is entering the mainstream we can see it presents an exciting commercial opportunity."

27 large U.S. corporations, accounting for over one billion dollars of the annual U.S. market for paper, pulp, and packaging have made a commitment to stop selling products or use packaging made from old-growth trees, and to influence their suppliers to do the same. They also committed to reduce overall wood-related product consumption and to increase use of recycled and tree-free alternatives (See Figure 3). To meet this demand there are over 3000 products fashioned from certified wood available.

• Companies will be able to produce one report for all stakeholders around the world.
  
• By conforming to a format all stakeholders agree on, the information will be much more usable and valuable.
  
• Governments can track progress on implementing national commitments to international conventions, such as the Kyoto Protocol.
  
• Corporate leaders will be able to tangibly distinguish themselves from under-performing competitors.
  
• Companies will have a useful system to track performance internally.
  
• Investors will be able to analyze corporate environmental performance.