I am just beginning to delve into the economics associated with sustainability, and my knowledge of this area is admittedly limited. That said, I have come across several interesting economic theories and practices, one of which I have outlined below.

Amory Lovins, co-founder and CEO of the Rocky Mountain Institute, coined the term negawatt as a measure of energy efficiency. Objects such as light-bulbs generate electricity (negawatts) by not using electricity (i.e.: by being more efficient). At a 1989 conference in Montreal, Lovins presented The Negawatt Revolution -- Solving the CO2 Problem, in which he proposed creating a market for negawatts.

Negawatts are not a technological trick, but rather constitute a shift in economic perspective. Consumers save money through efficiency, while power generators can "re-sell" this "generated" electricity, making money through margin rather than volume (The Culture Revolution, Electric Efficiency and Asian Development). An overall increase in efficiency across the electrical system (supply and demand) has the effect of reducing resource consumption and emissions.

However, Lovins recognizes that efficiency alone is not enough, and in this same keynote presentation proposes sustainable farming and forestry as necessary in the overall scheme of reducing CO2 emissions.

Dave Chiu

CATEGORY: ENERGY PROJECT