ENRGYENV 626 - Modeling and Analysis for Environmental Sustainability
In 1987, the World Commission in the Environment and Development, also known as the “Brundtland Commission,” defined sustainable development as “…development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Although there are many ways in which this basic statement has been elaborated, it remains the fundamental concept underlying the entire sustainability movement among firms, governments, NGOs, and individuals today.
Many firms are looking for ways to do business in a more sustainable way, whether that means reducing their use of fossil fuels for energy, extracting resources in a way that does not threaten the future supply of those resources, or finding ways to manage their waste streams to reduce pollution and even to capture value from what is currently discarded. Governments are struggling with carbon policies, and firms are beginning to request regulation in an effort to resolve the current uncertainty about what those regulations will look like. NGOs are involved in sustainability efforts around the globe, partnering with governments and firms, and in many cases providing vehicles for stakeholders to get involved in the push toward sustainable economic development.
In this course, we will look at tools that businesses can use to measure, evaluate, and manage their sustainability. The course examines three aspects of firms’ sustainability issues:
“How bad is it?” When a business begins to look at itself through a sustainability lens, a natural first question is, “How big is our footprint?” We will take a look at the process of calculating a firm’s carbon footprint. We will also examine other footprint issues, such as resource use and toxic releases.
Defining the boundaries and scope for the greenhouse gas (GHG) inventory
What data to gather and how to manage it.
Life-Cycle Analysis (LCA) basics
General ecological footprints
“Are you sure?” Sustainability issues that face a firm suggest a number of uncertainties that firms face now that they did not face earlier. We will cover ways a firm can identify and quantify those uncertainties
A catalog of risks: Climate change, regulations and policy, future emissions, water, natural resources, technology, reputation, stakeholders
Risk assessment tools:
Emission and resource risk analysis
Enterprise Risk Assessment
Subjective probability assessment
Monte Carlo Simulation
“What do we do?” Given a firm’s sustainability footprint and risks, what should it do? We will work though the decision making issues that a 21st-century firm faces, the kinds of alternatives it has available, and methods for analyzing those alternatives.
Alternatives: Carbon reduction strategies, influencing environmental policy, voluntary offset programs, emission allowance trading, certification, strategic alliances with NGOs and other organizations.
Efficiency. Energy saving and waste reduction. Design for environment, take-back programs, cradle-to-cradle. Emission reduction: reduced fuel use or alternative fuels, pollution control.
Innovation. New technology (alternative energy or energy efficiency technology for customers). Certification and scorecard programs.
Analytical tools for evaluating alternatives
Throughout the course we will be looking at a variety of companies and organizations as examples in class and in case assignments. Examples may include Apple, Akso-Nobel, BP, Dell, Duke Energy, Duke University, Dupont, ExxonMobil, GE, Ikea, John Deere, SAS, Sony, Wal-Mart, and others.
Course Format and Deliverables:
Lectures, guest speakers, and class discussions on concepts and tools. Students will prepare by reading background material, analyzing business situations, and completing exercises. (Deliverables: 4 individual exercises)
Case analyses. Working in teams of 3-4, students will analyze two cases. For each case, a team may be asked to present its results to the class or may be called upon to answer specific questions. (Deliverables: 2 case analyses)