Perspectives on Various Issues of Interest

Carbon-footprint labels: Considering products' environmental impact

Accounting for a product's carbon footprint is a costly endeavor since it requires tracing the ingredients all the way back in the supply chain. According to 3M that makes over 55,000 products, this can cost $30,000 for a single product. Carbon labels have yet to receive a wide-spread recognition by consumers. Based on a survey conducted by Which?, a British consumer group, just a fifth of British shoppers recognized the carbon footprint label, compared with recognition rates of 82% for Fairtrade and 54% for organic labelling. Furthermore, the issue of carbon-footprint labelling has become confusing due to different carbon footprinting and labelling standards that have emerged in different countries.

Although carbon labels are expensive, lack standardization across countries, and are not yet well recognized by consumers, there are some encouraging signs of progress in this direction.In Britain, the sale of carbon labelled products exceeded 2 billion pounds, which was more than the sale of organic products (1.5 billion pounds) and Fairtrade products (800 million pounds). This trend is due to Tesco's initiative of carbon labelling more than 100 of its own brand products, including pasta, milk, orange juice and toilet paper. (In 2007 Tesco had said that it will carbon label all of its 70,000 products. So far they have managed to label 500 products).

Historical evolution of carbon-footprinting:

Among the first products to have carbon labels applied were the cheese-and-onion potato crisps made by Walkers (a brand owned by PepsiCo). Carbon Trust estimated the footprint to be 75 grams per packet. It is important to note that carbon labels are not restricted to carbon dioxide emissions, but also considers other greenhouse gases. These gases are converted into "carbon-dioxide equivalent" (for example, 1g of methane is expected to have the same global-warming potential as 21g of carbon dioxide. The process of quantifying the carbon footprint helped Walkers to identify opportunities for saving money and energy by switching to buying potatoes by dry weight. Walkers was able to reduce frying time by 10% and farmers were able to avoid the cost of humidification.

For many products carbon labels should include not only manufacturing footprint but also "use phase emissions" (e.g. shampoos, flat screen LCD television, jeans). In such situations, consumer behavior can make a big difference to the use phase emissions. For instance, washing Levis Strauss 501 jeans in cold water and drying them on a line can reduce the use phase emissions by 90% (the use phase emissions associated with washing 501 jeans with warm water and maching drying them constitute 57% of its carbon footprint).

Towards comparability between carbon labels on similar products:

There has been a call for standardizing product-category rules between countries to ensure compatibility between carbon-labelling schemes. In Japan the Ministry of Economy, Trade and Industry (METI) launched a program in 2008, which has signed up more than 300 retailers and has established product-category rules for 53 products. South Korea's environment ministry has introduced a "Cool label," for over 220 products. Similar initiatives have been undertaken in other countries. France is leading this effort and the initiatives by French retailers are being backed by government action. In June 2011, France embarked on a year long experiment, involving 168 firms in a range of industries to apply carbon labels to products. This is expected to be the basis for the compulsory carbon labellng rules to be introduced as early as 2012. The rules will apply to both imported as well as for goods made in France. Dependeing on the products, the label is expected to include information about water footprint as wll as impact on biodiversity. The project is an outcome of Grenelle 2 law passed in 2010 which marks the first time a government has tried to make environmental labelling mandatory. Other European countries are closely watching the French project to formalize their own carbon labelling approaches.

The British Standard PAS 2050, which was established in 2008, has also been very influential in harmonizing carbon footprinting and labelling at a global level. The standard has also helped shape ISO 14067 and GHG Protocol (a project backed by two environmental lobby groups, the World Resources Institute and the World Business Council for Sustainable Development. The ISO Standard is expected to be finalized in 2012 and the GHG Protocol standards were released in 2011. Cooperation between the two bodies should ensure that their standards are highly compatible.

One of the key unresolved issue relates to considering the carbon footprint in the entire supply network. For many firms a large portion of carbon footprint resides upstream in the supply chain. For example, Gold'n Plump Poultry, a large American chicken producer, found that its own operations accounted for only 22% of the footprint of each chicken and 50% of the footprint came from the production of corn- and soya-based chicken feed. Tesco, a retailer, reckons that is supply chain produces ten times the emissions of its direct operations (heating and lighting stores and offices) and that consumer emissions may be ten times as big again. Wal-Mart estimates that 90% of its emissions emanate from its supply chain of over 120,000 companies. It would thus be necessary to work closely with suppliers and encourage them to collaborate and pool expertise to streamline the footprinting process.

Source: Following the footprints. The Economist Technology Quarterly, June 4th 2011.

Food Supply Chains - Key Considerations

Akkerman et al. (2010) present an excellent review of research in the area of food distribution management. Some of the key points mentioned in the review are presented here - 

There are three key considerations in managing food supply chains: (i) Distribution Network Design; (ii) Distribution Network Planning; (iii) Transportation Planning

Distribution Network Design

In food industry profit margins can be quite low and distribution operations constitute a significant portion of total supply chain costs. Hence, it is important to make appropriate levels of investment of time and money on network design decisions. Design food supply chains for products that have good quality, are not expensive and are environmentally friendly can be challenging. The network design significantly affects the eventual safety of the food product, as the design determines the number of actors, and the extent to which products are dispersed through the network. For instance, the design of the network influences the time a product is subject to quality degradation during distribution. The design of distribution networks also has a strong impact on sustainability since the distance products have to travel to reach the final consumer as well as the transportant method used impact the carbon footprint of the product. For food service chains, the aim is often to pursue a low stock level or a no-stock overnight policy in distribution centres, and to frequently ship in smaller amounts with high variations in demand. This will often also affect the length of the chain: direct delivery from the producer to the caterer is, for instance common for these products. Another typical aspect found in foodservice systems is that production activities are not always confined to the initial food manufacturing stage, as it is often the case that additional production steps take place at the caterer (e.g., final meal assembly and preparation).

Distribution Network Planning

Distribution network planning concerns mid-term decisions related to fulfilling demand (or forecasts) on an aggregated level. Here, the distribution network is a given, but the focus is on achieving efficiencies in managing distribution as an integrated system. In comparison with distribution network design, distribution network planning requires more detailed modelling of production and distribution. Most importantly, a time dimension is added. In optimization models, the time horizon is discretized into periods which are linked through inventory, i.e. food is produced in one period and distributed and consumed in a later period. This may be an efficient way to, for instance, cover a peak in seasonal demand or achieve efficiencies in distribution. This also means that most of the decision-making on distribution is integrated with decision making on production and inventory. An examination of distribution network planning can be categorized into three kinds: Aggregate Flow Planning, Distribution Frequency Determination, Miscellaneous. 

Modelling approaches in aggregate flow planning differs from the network design problems in that it is important to incorporate the time dimension and the possibility of keeping product in inventory between periods. A general model for distribution network planning uses continuous decision variables to decide on the product flows in the distribution network for each time period and the inventory levels at the various locations are taken into account. Typical other model constituents include inventory balances and demand coverage constraints. In terms of objectives, typically the focus is on financial aspects, occasionally combined with customer-related aspects such as service levels or flexibility. An interesting aspect in relation to modelling food production systems is the distinction between processing a certain quantity of a food product and packaging a certain SKU. Processing and packaging activities need to be treated separately. This means that next to inventory balance constraints, there are also constraints necessary to balance processing and packaging. It might be important to plan for return shipments (e.g. in soft drink bottles) and to consider not only the improved efficiency production and distribution, but also to facilitate rescheduling during the season to account for changing production rates which may be due to varying harvesting volumes or qualities (e.g. in sugar production and distribution). Setup time considerations also play an important role in food network planning (e.g. set up required to produce different types of sugar). It is important to include product quality degradation in the network planning models as well, both in terms of a limited storage time and in terms of a decreasing value of the product over time (based on a linear decrease during the shelf life). Using an index to keep track of the harvest period, it is possible to track the shelf life. In a typical aggregate flow planning model this leads to the revision of the demand coverage constraint to only include products that have been harvested in the most recent periods (depending on the maximum number of periods the product can be stored). Perishability can also be modelled by a maximum number of periods the product can be stored by adding a constraint to make sure that product inventory in distribution centres is not used to cover the demand after having been stored beyond the specified maximum number of periods.

Delivery frequencies refer to a fixed pattern of deliveries to customers. Often, such recurring patterns are fixed for a reasonable time period, as that facilitates retailers/caterers to plan their activities around that. Therefore, the decisions on how often and when exactly customers will get deliveries are made on a tactical level. In the determination of delivery frequencies, one need to consider whether customers get deliveries once or twice a week, and on which day(s), taking into account that the workload of weekdays should be reasonably balanced. Different types of products - for instance, products that require chilled, frozen or ambient distribution - require their own vehicle type. This also need to be explicitly considered to focus on cost minimization, while making sure the shelf life of the different product classes is considered in the resulting time between deliveries.

Miscellaneous planning approaches could involve considering optimal procurement plans for a distribution system of temperature-sensitive products, which have a distinct seasonal demand pattern, but are supplied throughout the year. Further, the plan should consider uncertainty in the actual receipt quantity after ordering. Planning approaches also can consider minimizing the quality loss of the storage assignment plan developed by assigning products to the different temperature zones in the warehouse. Further, assignment planning could consider interaction between products in terms of their quality degradation. Planning can consider refrigeration power used and processing time before distribution so that the product temperature can be adjusted in combination with distribution decisions, with the objective to deliver the product at a certain time and a certain temperature. The main focus is on the impact of use-by-dates, customer selection behaviour in stores (steering the customer towards buying the older products) and lead time reduction in the distributionchain.

Transportation Planning

Transportation planning concerns the short-term planning of the distribution operations and mostly deals with the planning of deliveries to different customers. Transportation plays a key role in today’s economies, accounting for up to two-thirds of the total logistics cost. Moreover, it also has a major impact on the level of customer service. Transportation planning takes place in a highly dynamic environment requiring frequent re-considerations of previously made decisions.Typical decisions on this decision level are the details of delivery routes: at what exact times, by which vehicle, and in what sequence customers will get their products delivered. In addition, also warehousing decisions may have to be made on the operational level, such as the assignment of inbound and outbound trucks to dock doors. For certain food products, international agreements have been made to regulate the transportation of chilled and frozen foods. the transportation of food products requires different temperature levels. A vehicle may be divided up into multiple compartments with different temperature control.

Transportation planning level mainly encompasses contributions related to extending the Vehicle Route Planning applications to the food industry. For instance, one could include time windows since in many food related situations the shipments need to reach early in the morning. One could consider the distinction between different types of vehicles, such as vehicle capacities, the potential use of a trailer, and different refrigeration capabilities. Time-dependent travel times, which are becoming more and more relevant to today’s busy road networks, could be part of the transportation planning. The difference in travel times between rush hours and non-rush hours can be significant and often needs to be taken into account. In order to explicitly model product quality, Transportation planning could consider the quality of products by considering a linear relationship between quality and transportation time. An interesting factor that can be considered in transportation planning is how often the temperature-controlled cargo hold has to be opened since these temperature disruptions negatively affect the food product. Another interesting characteristic, that can be considered is the use of compartmentalized trucks to distribute different products at different temperatures. Transportation planning could also deal with the operational scheduling of trucks at a cross-docking terminal. At times the frozen foods cannot be stored since it would lead to defrosting and product degradation. This means that the inbound and outbound operations are strongly connected and should be synchronized.

Keeping quality during transportation of foods is a challenge for food distributors. Often, a product would be considered completely perished at a certain quality level. Because initial quality status might not be easily detectable, it can be hard to estimate the remaining shelf life in some cases. Related to this is an effort to improve coordination between production and transportation planning, allowing for better quality control. Transportation planning need to identify efficient ways to improve safety measures and to reduce the impacts of safety problems. Several approaches try to utilize driver knowledge by assigning certain groups of customers to the same driver. Indirectly, this is a way to increase food safety, as the driver’s knowledge would also include information of food control systems used by the customer (e.g., temperature checks and sampling forquality control). Also, the development of methods that use or improve the traceability of foods in the chain could be one way to improve the safety of foods. Transportation planning could consider the dispersion of raw materials in the production and distribution systems. 

In transportation planning oftern involves reverse flow, ranging from empty containers or boxes in the retail industry to bowls and plates in the food service industry. Including these flows can be very useful in relation to sustainability and could,for instance be used to evaluate the impact of using recyclable packaging material. 

Source: Akkerman, R., Farahani, P., Grunow, M. 2010. Quality, safety and sustainability in food distribution: a review of quantitative operations management approaches and challenges. OR Spectrum, 32: 863–904

Food Distribution Management

The challenges of food distribution management include:

- Limited shelf lives of food products
- Requirements with regard to temperature and humidity
- Possible interaction effects between products
- Time windows for delivering the products
- High customer expectations
- Low profit margins

Temperature control is an important characteristic of many food distribution systems. It ensures a control on food quality and food safety. However, since temperature control requires high energy consumption, the sustainability objective also requires adequate attention in food distribution systems. . Temperature control can basically be categorized into: frozen, chilled and ambient. For the frozen and chilled chain, a number of different temperatures are used. The frozen chain mainly operates at −18 degrees Celsius, although a product like ice cream requires a frozen chain with an even lower temperature of −25 degrees Celsius. For the chilled chain, temperatures range from 0 degree Celsius for fresh fish to 15 degrees Celsius for, e.g., potatoes and bananas.

Food Safety

Food safety requires careful attention since any failure of food safety requirement has both legal and economic consequences. Food safety requirements have been enforced by means of several legislations. The economic implications of food safety failure could include product recalls, damage to reputation and punitive liability damages.A well-known example of such a food safety crisis is the recent recall of peanutbutter in the USA due to the presence of salmonella. It was the largest product recallever in the history of the country, involving more than 200 food manufacturers downstreamin the supply chain—in total recalling more than 2100 products. In addition to such well-known large recalls, it has been shown that there are also avery large number of recalls of smaller scale, which in some cases still lead to seriousillness or death.

Various systems and standards have been developedover the past decades to ensure food safety. The best-known are the hazard analysis critical control point (HACCP) system, the ISO 22000 standard and the British Retail Consortium (BRC) standards. Systems like HACCP are developedto manage food safety, based on risk management principles and cover a rangeof biological, chemical and physical hazards. The basic idea behind a HACCP systemis to provide a structured way to identify food safety risks and reduce or eliminatethese. Standards like ISO 22000 and BRC normally include HACCP aspects, but alsoprovide a management system to incorporate food safety in an organization.Although HACCP development is currently quite widespread in large food manufacturers,its use is limited within smaller businesses, especially in the foodservicesector. It should, however, be noted that there have recently been activitiesto improve this situation by developing (and validating) an alternative food safetymanagement system that is tailored to the foodservice sector. In addition, governments are imposing legislations that enforce traceability of foodproducts during all stages of production, processing and distribution. Despite the importance of traceability, the reality isthat in complex, interconnected food supply chains, complete traceability is more theexception than the rule.

Food Quality

Food quality refers to the physical properties of food products as well as the quality of the food as perceived by consumers. Hence, it covers the microbial aspects as well as the texture or flavor. Quality assurance by means of certification and auditingis increasingly becoming important in the process of production and distribution. This is leading the way for technological innovations in terms of time-temperature integrators or indicators to improve temperature monitoring throughout the distribution system and tie enhance shelf life estimation with a chain perspective.

Sustainability

Sustainability in food supply chains include cost-based performance measures, environmental aspects as well as a social dimension. This entails, for instance employees’ health and safety, ethical trading in procurement of rawmaterials, and animal welfare. For example, fair trade initiatives have been developedto improve the position of food producers in developing countries.The business practices of retailers and caterers have a direct impact on sustainability, mainly in terms of temperature control and distribution. Sourcing sustainable products from food manufacturers is also an important requirement and it relatesto waste and refrigeration related to storage, and foodservice operations during preparation and service. Another well-known concept in relation to the sourcing and the sustainability of food chains is that of labeling, for example in the form of food miles, which relate to the distance a food product has travelled to get to the consumer. Although this only partially reflects the carbon footprint or even total environmental impact of the production and distribution system, the concept has become relatively popular. It should be noted that any assessment of sustainability must be made for the supply chain as a whole. Benefits of local products in terms of food miles may be lost through a production and or storage stage with a higher environmental burden. This evaluation may also depend on whether a product is ‘in season’ or not, as this may have a large impact on the energy usage during storage.

The environmental dimension of sustainability has probably received the most attention. One of the best-known examples is Life Cycle Assessment, an analytical tool that helps in assessing a product’s environmental impact from product development to consumption. Although these assessments can be and are used to decrease the environmental load of products, further standardization is still needed to improve comparative studies and to broaden practical applications in the food sector.

The social dimension has received less attention.Numerous companies have started to work on these issues under the label ‘Corporate Social Responsibility’ (CSR). In many cases they also communicate their CSR performance to stakeholders like employees or customers. For instance, all ten major retailers in the UK have stated that they see CSR as an integral element of theirbusiness environment, although there are substantial variations in the nature and extent of the CSR information they provide. Recent work has, however,provided some guidelines on how to approach this with a combination of methodologiesto eventually be able to combine all three dimensions. Also, there are several developments towards a ‘social LCA’, which is supposed to supplement the existing LCA methodologies and as such work towards a methodology that would address all dimensions of sustainability.

Promoting social and environmental awareness can also be beneficial for a corporate image, and in some occasions it might lead to cost savings at the same time, for instance while reducing food waste.

Interdependence between quality, safety, and sustainability

The fact that food distribution deals with products that are eventually meant for human consumption results in a strong focus on food quality and food safety. This is especially true for products that do not undergo extensive shelf-life-extending treatments and remain ‘fresh products’ with short shelf lives. Both quality and safety are based on changes in the food product. The main difference being that food quality is based on a more continuous process of degradation, whereas safety is mostly assessed in terms of either a product fulfills safety requirements or it does not. However, underlying is often a continuous process related to, e.g., the growth of a certain bacteria.

Product changes are often reduced by temperature-controlled storage and distribution, which, however, normally require a significant amount of energy, thereby negatively affecting the environmental impact of the products. Cold storage and distribution sector is facing challenges pertaining to environmental concerns and increasing electricity costs. Not only new technological solutions should be developed, but also theuse of existing machinery and processes should be optimized.

Nowadays, systems that are originally designed to control food safety (like HACCP) are also used to increase the product quality throughout the supply chain. This also concerns nutritional quality, as can for instance be seen in the recent development of the nutritional control points (NCP) concept. This is based on the HACCP system, and can be used to identify the critical points in production and distribution systems related to nutritional product changes and eventually help to increase nutritional quality. Extending these quality and safety control systems into transparent food chains that are able to supply affordable food with high quality and diversity are some of the challenges related to the sustainability of the food industry.

The challenge for the industry is to extend responsibility for product quality into social and environmental performance of food supply chains. Existing technology can be designed for enhancing thetransparency of food supply chains such as the safety focused traceability systems can be expanded to also help to improve sustainability.

Furthermore, food distribution is rapidly moving towards globally inter-connected systems with a variety of relationships. This means that products are sourced from markets all over the world, leading to a focus on quality preservation, and at the same time cost-effectiveness.

In light of sustainability, wasted product is also an important performance measure. In general, food products that are not ending up being consumed have had a significant environmental impact without adding value. Partly, this is due to food products deteriorating and having to be thrown away. Inmost countries, around 30% of food products is said to be wasted throughout the supply chain (Chapman 2010). Even though a large part of this waste occurs at the final consumer, retail and foodservice also contributesignificantly.

All in all, the aforementioned aspects illustrate the strong interdependence between sustainability on the one hand and the control of food quality and food safety on the other hand and demonstrate why food quality and safety are often included in wider definitions of sustainability and can even be seen asfundamentalfor a sustainable food supply, especially with regards to global sourcing and its environmental impact.

Source: Akkerman, R., Farahani, P., Grunow, M. 2010. Quality, safety and sustainability in food distribution: a review of quantitative operations management approaches and challenges. OR Spectrum, 32: 863-904.

Sustainability Evaluation Models

Some of the sustainability evaluation models include:

1) The Global 100's Value Assessment Model: Based on 120 performance factors divided into four key focus areas - 

a) Strategic governance

b) Human capital

c) Stakeholder capital

d) Environment

2) The Ethibel's Sustainability Index evaluation scheme: Based on scientific insight and social discussion analysis about sustainable entrepreneurship - 

a) Internal social policy

b) Environmental policy

c) External social policy

d) Ethical economic policy

3) The Dow Jones Sustainability Indexes assessment criteria: Linked to a company's value drivers - 

a) Codes of conduct/compliance

b) Corporate governance

c) Investor relations

d) Risk and crisis management

e) Customer relationship management

f) Corruption and bribery

g) Environmental performance

h) Environmental policy

i) Environmental reporting

j) Labor practices indicators

k) Human capital development

l) Talent attraction and retention

m) Stakeholder engagement

n) Corporate citizenship/philanthropy

o) Social reporting

4) Fisher's corporate sustainability planning assessment guide: Seven assessment categories -

a) Leadership

b) Strategic planning

c) Customer focus

d) Measurement, analysis and knowledge management

e) Workforce focus

f) Process management

g) Results

Source: Scriabina, N. and Cort, G. 2010. ISO 9004: 2009 sets the stage for long-term success. Quality Progress, 29-34

Myths and Realities About Green

1.     Myth: Bottled water is safer than tap water.

    Reality: Tap water is subject to stricter government standards. In United States, the EPA requires large municipalities to test water for bacteria in an independent lab a dozen times a day. On the other hand, the FDA mandates that water used for bottling be analyzed only once a week for bacteria. Water that's packaged and sold in the same state - about 70% of the bottled water sold in the U.S. - is exempt from federal regulation because it doesn't cross state lines. Americans gulp down 28.5 gallons of bottled water per capital each year, discarding billions of plastic containers. 

2.    Myth: Buying local food is good for the government.

    Reality: It depends on how your food was produced and delivered. According to a report titled, "Fair mile - Recharting the Food Miles Map," a tomato trucked from Spain to Britain may be more environmentally friendly than a tomato grown in a greenhouse in Britain because that process needs energy intense farming techniques and more fertilizer and could degrade the soil.

3.    Myth: Organic foods are produced without pesticides.

    Reality: Organic guidelines need to be tightened up. Great many pesticides are permitted in organic farming, and some of them are considered lethal to humans in very small quantities - like nicotine sulfate and lime sulfur, both of which carry a "danger" warning from the FDA but are permissible under organic-farming guidelines.

4.    Myth: Cars are one of the biggest emitters of greenhouse gas.

    Reality: Yes, but those hamburgers you like to gobble down are actually much worse. According to a report by the UN's Food and Agriculture, meat accounts for 18% of the greenhouse gases the world produces every year, compared with 13% for vehicles. Other studies put that percentage  even higher. 

5.    Myth: It's okay to put plastic containers in microwaves.

    Reality: Stick to ceramic ware. Even though something is labeled as safe for use in the microwave, it may not be so. A substance used to make polycarbonate plastic - bisphenol A, more commonly known as BPA - could leach into your food and disrupt your hormonal system.

6.    Myth: Fluorescent bulbs are bad since they contain mercury.

    Reality: Yes, but not using them will pour even more mercury into ecosystem. Compact fluoroscent light bulbs (CFLs) consume 75% less electricity than traditional light bulbs. Incidentally, although CFLs contain mercury, using them reduces mercury in the atmosphere since it helps in cutting down the consumption of electricity generated in majority of cases by coal-fired power plants (the leading source of mercury emission in the U.S.). According to Energy Star, a 60-watt incandescent bulb adds 5.8 milligrams of mercury into the environment over its lifetime vs. 1.8 milligrams for a comparable CFL.

7.    Myth: I should wait for all my incandescent bulbs to burn out before replacing them with low-energy fluoresents.

    Reality: You'd be wasting a lot of money and energy. According to scientists at Sandia National Laboratories, you'd save money by tossing a new 60-watt incandescent and replacing it with a fluorescent since the money you'd save on your electric bill with the CFL would more than make up for the cost of both bulbs. Over the CFL's 12,000-hour lifetime, you would save some $51.

8.    Myth: It's better to buy an artificial christmas tree than cut down an evergreen every year.

    Reality: Get out your ax. It is important to think about of renewable and nonrenewable resources in this case. Once a tree is cut, it can be grown again and the trees once used in the home can be turned into mulch. 350 million Christmas trees are growing in U.S. farms and 30 million trees are sold each each. The trees growing in the farms store carbon, thereby, favorably impacting the environment. Most artificial Christman trees are made of nonrenewable plastics, and furthermore, according to U.S. Census Bureau, last year 92% of these plastic trees made their trip from China.

9.    Myth: Paper grocery bags are better than plastic ones.

    Reality: Plastics, young man, plastics. According to Franklin Associates, a waste management firm, it takes four times more energy to produce a paper bag than a plastic one.

10.    Myth: My jeans are made of organic cotton so it's okay to buy as many pairs as I want.

    Reality: When it comes to wasting water, organic jeans are as bad as regular ones. It takes as much as 2,100 gallons of water to grow enough cotton – organic or otherwise – to produce just one pair of jeans, not including the water used to dye and finish the fabric.

11.    Myth: I'll save energy if I keep my appliances turned off.

    Reality: Yes, but not as much as you think. According to Lawrence Berkeley National Laboratory, 5% to 10% of residential electricity use can be attributed to standby power.

12.    Myth: Soon jets will run on biofuels, enabling us to fly guilt-free.

    Reality: Time to come down to earth. Ethanol provides roughly a third less energy per gallon than jet fuel. This will necessitate a bigger fuel tank, which means a bigger, stronger plane will need to be designed. This in turn will need more fuel, resulting in a vicious cycle making ethanol impractical. Airlines have been testing fuels made from jatropha and palm oils, but those fuels remain expensive and lack the hydrocarbon rings that interact with the seals in current engines.

13.    Myth: We can meet our energy needs and global - warming targets with wind and solar power.

    Reality:While the solar and wind industries have been growing rapidly over the past decade, those two sources of power together account for less than 2% of all the electricity American use. Solar typically is still two to three times more expensive than coal, and while wind in many places can compete with fossil fuel, it isn't a dependable source of power. 

14.    Myth: It doesn't pay to turn down your thermostat when you're not home.

    Reality: The energy needed to reheat a home is pretty much equal to the energy saved when it cools down. 

15.    Myth: For your home to be green, you need a high-efficiency furnace, not to mention high-efficiency appliances and windows.

    Reality: It doesn't matter how efficient your furnace is if it's heating the outside of your house. According to experts from Natural Resource Defense Council, it is more useful to hire a professional to plug all the leaks in the home since it makes the old furnace operate better.

16.    Myth: Plant more trees in the city because they absorb carbon.

    Reality: The maintenance of urban trees makes it unlikely they are net stores of carbon.

17.    Myth: Climate change critics like to point out that the weather has gotten cooler over the past decade, so how can there be global warming?

    Reality: According to a new study by NASA, the past decade was the warmest on record since the 1880s.

18.    Myth: Offsets are the answer to climate change.

    Reality: It is difficult to ensure that carbon is actually reduced by means of the carbon offsets bought by companies to compensate their carbon dioxide emissions.

19.    Myth: Snowy winters equal no global warming.

    Reality: Weather is not the same thing as climate. Climate scientists argue that bigger snowfalls are consistent with climate change because warmer temperature mean more moisture evaporating into the atmosphere and hence more rain and snow. 

20.    Myth: You need to warm up your car before driving it.

    Reality: Idling the car for a few minutes in winter just wastes gasoline. According to an EDF report published last year, unnecessary idling will waste between $44 and $392 on fuel annually (depending on fuel prices, idling habits, and vehicle type). Two extra restarts each day will average about $10 a year in repairs since shutting the car on and off wear down the starter and battery.

21.    Myth: I'd never buy an electric car because I'd run out of power and be stranded.

    Reality: A study by Chrysler found that 80% of American drivers travel 40 miles or less each day (the distance being even shorter in Europe), and hence the probability of power running out is low.

22.    Myth: Electric cars rated to go 100 miles will make it that far.

    Reality: Electric-car batteries are rated when the car is being driven in temperatures of around 70 degrees and on flat terrain.

23.    Myth: Car air conditioning wastes energy.

    Reality: According to Consumer Reports running the AC will decrease performance by two to four miles per gallon. However, Consumer Reports tested a Toyota Camry at 65 mph and found that AC use burned only slightly more energy than with windows open.

24.    Myth: Hybrids are much better for the environment than regular cars.

    Reality: Not all hybrids are created equal.

25.    Myth: Driving fewer miles is good for the environment.

    Reality: The shortest distance between two points is not always the greenest.

Source: "25 truths about green" Fortune, April 12, 2010.

Nike and Wal-Mart's Leadership in Sustainability

Nike has developed a closed-loop business model to achieve zero waste throughout the supply chain with a goal of no pre- or post-customer waste. According to a study "MapChange 2010," Nike received the highest score in the apparel sector based on climate-count methodology, accounting for environmental footprint, reduced impact on global warming, support for climate legislation, and disclosure of climate actions. In a recent survey taken by Angus Reid Public Opinion, Nike was rated as one of the top two companies in the world in addressing climate change. 

Wal-Mart has taken aggressive initiatives towards sustainability since 2005 as is now widely recognized as global sustainability leader. They are also requiring their suppliers to conform to exacting sustainability standards. The company is committed to developing a sustainability index, so that customer would know the environmental impact of the product that they buy. Wal-Mart aims to cut 20 million metric tons of greenhouse gas emissions from its supply chain by 2015 (roughly equivalent to taking 3.8 million cars off the road).

Source: Galvao, A. "Industry giants embrace sustainability." APICS Magazine, May/June 2010.

Changes in Power Adaptor Technology is Saving $2 billion Worth of Electricity

Until recently the power adaptors were made using copper wires. About half the power they drew from the wall, and sometimes as much as 80 percent would be lost in conversion. As a result, electricity bills and carbon emissions were both higher that necessary. Making the conversion of high-voltage alternating current to low-voltage direct current using integrated circuits is much more efficient, with as little as 20 percent of the power being lost. The technology, although available for several years, cost around 30 percent more making it less attractive for manufacturers to switch. Further, power adaptors cost very less (about $2 or less) and most the production contracts to manufacturers in Taiwan and China were negotiated and determined on the basis of the manufacturer's ability to reduce the selling price by a few cents a piece. Consumers also do not give as much attention to power adaptors in their phone or laptop purchase decisions. All these factors limited manufacturers' incentives to switch to energy efficient technologies.  

Around seven years ago, the Natural Resources Defense Council and Ecos Consulting, an energy consultancy, got manufacturers, power utilities and the state and federal governments together to talk about shifting to integrated circuits. It took two years to get regulations in place in America. With the biggest market adopting to the new technology, integrated circuit adaptors spread swiftly everywhere. For consumers the switch has meant lower power bills and smaller, lighter power adaptors. For the world as a whole it has meant a drop in global power consumption worth around $ 2 billion a years - saving $13 million tonnes of carbon dioxide annually worldwide, the equivalent of closing down eight coal-fired power stations.

Source: Vampires on a diet: How a boring gadget saved $2 billion-worth electricity. The Economist, A Special Report on the Carbon Economy, December 5th 2009

Global Perspective on Emission Reduction Targets

In 2009, the G8 group of nations agreed (in Italy) that the increase in global temperatures should be no more than 2 degrees Celcius above pre-industrial levels. To accomplish this, global emissions have to be cut to 50 percent of the 1990 levels by 2050. For rich countries, that is equivalent to a cut of 80 percent of their emissions by 2050. Currently, the emission levels in America and Europe are 24 tonnes and 10 tonnes per head.

The Intergovernmental Panel on Climate Change (IPCC) figures suggest that the developed nations should aim to reduce the emissions by 25-40 percent below 1990 levels by 2020. So far the targets put by developed countries on the table are around 15 percent below 1990. The European Union is committed to 20 percent cut, rising to 30 percent if the rest of the world promises significant cuts. Details plans are developed by EU to achieve this target. Japan's new government has promised a reduction of 25 percent on 1990 levels, although the approach to achieve this is not revealed. Before the Copenhagen conference, the U.S. announced that it would offer a 17 percent cut on 2005 emissions by 2020 - the figure in the Waxman-Markey bill. This amounts to around 4 percent below 1990 levels - well below the 25-40 percent expected of developed nations. It is still possible that other nations might accept it, since the prior administration's policies have delayed the emission reduction actions and further the world is aware of the constraint on America's negotiators due to the precarious position of the legislation. The Senate reacts badly if it senses that America is being pushed around by foreigners. It voted 95-0 to reject the Kyoto deal that the Clinton administration had negotiated. China has offered a 40-45 percent cut in the carbon intensity of its economy by 2020. Even though it is less than the 50 percent target that America was hoping that China would accept, it is a good start.

Although, in theory Kyoto is a legally binding agreement with a compliance mechanism, it is difficult to implement it in practice since there is no effective way of holding non-compliant countries accountable. Some countries such as France have called for a toothier compliance mechanism involving trade sanctions, also referred to as "border-tax agreements." In fact, the Waxman-Markey bill also includes a provision for border-tax adjustments. For most developing countries, such compliance mechanisms are detrimental to their economic progress. An alternative approach is to provide monetary incentives to the developing nations to honor their emission commitments. There are two reasons for the rich nations to offer monetary incentives. One, it is widely accepted that the developed nations are responsible for pumping 200 years-worth of carbon dioxide into the atmosphere. Thus, it is reasonable to expect the developed world to help the developing world adapt to climate change. Second, the monetary incentives present a pragmatic way to get the developing world on-board with emission reductions. Except for China, most developing nations lack the capital required to invest in cleaning up their economies.

China suggests that the developed world should provide 1 percent of its GDP (about $400 billion) a year to the developing nations to implement emission reduction programs. The African Union wants $67 billion a year for Africa alone. Britain has suggested that the developed world should pay $100 billion in total. The European commission is proposing 100 billion Euros a year in 2020. The gap evident in these numbers is even higher when the approach for handing over money from developed world to developing world is taken into account. China and the African Union suggest government-to-government transfers only, whereas Britain and European Commission are talking about a combination of government-to-government transfers and private capital. According to International Energy Agency, the 2 degrees Celcius target will require around $ 1 trillion a year in investment. According to the World Bank, around $475 billion of the $1 trillion need to be spent in developing countries.

Some constructive ways to come up with the cash has been proposed. Mexico wants a $10 billion Green Fund to which countries should contribute on the basis of their emissions and their GDP. Norway is suggesting an auction of 2 percent of carbon-market emissions allowances which could raise $15-25 billion. The poorest nations have proposed a tax on air travel which could raise $8-25 billion. The World Bank has a $5 billion target for its climate investment funds. Altogether these proposals only amount to $60 billion, still way below the target numbers. To address this gap, there are suggestions for mobilizing private capital investments in developing-world clean-energy infrastructure. These long term energy infrastructure investments should suit pension and sovereign-wealth funds who have assets of $12 trillion and $3.75 trillion, respectively.

Source: "Closing the Gap: How the world divides on a global deal." The Economist, A Special Report on the Carbon Economy, December 5th 2009.