Sunday, July 25, 2010

More on Costs

I've refined the carbon footprint calculations and cost estimates for our previous carbon reduction measures and for the post 2011 projection after the system remodel and electric car. My previous cost calculations have been based on the cost per kg. carbon reduced over the next year. That isn't quite a fair comparison, since if we had continued to use fossil fuel, we would have generated carbon every year and payed the cost of the fossil fuel every year. So in these calculations, I've calculated the cost per kg. carbon  reduction over the projected lifetime of the reduction measure. As a rough estimate, I've used 10 years for the electric cars since the battery life is probably that long, though it might be longer or shorter, and 30 years for the measures on the house. For the new refrigerator, I've estimated 15 years and for the solar hot water system, 20 years. Also, I've ascribed the cost of the reduction measure for making an electric car into a zero carbon emitter to the solar PV, since the lifetimes of the solar PV and the car are so different (10 years for the car, 30 years for the solar PV).

First, the refined carbon footprint calculations:

The most effective reduction measure in our current plans is the solar PV. It results in a 17% reduction, causing the total reduction from the estimated 2002 base line to increase from 54% to 71%. The next most effective reduction is the electric car, at 13%, followed by the insulation and on-demand hot water heater, at 6%. It seems that natural gas usage is the most difficult carbon emission to offset.

Here's what the evolution of our carbon footprint looks like:

As discussed in my previous post, the solar PV contributes more zero carbon energy to the grid than the house uses, making the electricity footprint negative and offsetting the natural gas and gasoline footprints from heating/cooking and transportation.

Finally, the per kg. cost of the reduction measures calculated over the projected lifetimes:

The most cost-effective reduction measures here tend to be the hybrid/electric car, followed  closely by the solar hot water and the new solar PV. The old solar PV and the pluggable hybrid are next, followed by the measures taken to reduce gas consumption from heating, including the double pane windows and reinsulating the house. Finally, the refrigerator is last.

The refrigerator was the most expensive because we bought a high end fridge in order to avoid having to reconfigure the kitchen for something else. The kitchen has a Subzero sized hole exactly where the fridge would fit, anything else would have involved some cabinetry work to reconfigure the hole. I can't say I am a big fan of high-end fridges, but the kitchen looks pretty nice the way it is, so we just decided to go for it. The cost of the measures taken to reduce the heating are also no surprise. We are basically ripping out the walls and putting in new insulation. It's a big, dirty job and it involves a lot of hand labor, hence the expense. But, as a practical matter, we need to put some steel in the hallway ceiling anyway to prevent the drywall from cracking, so we would have had to pay for the scaffolding, etc. for that anyway.

The cost of the plug-in hybrid is higher than the hybrid and electric cars because we got no subsidy for it. Neither the state of California nor the Federal government was giving out subsidies for plug-in hybrid conversions in 2008 (they since have changed policy and it is now eligible). The subsidies make all the difference, the Nissan Leaf would be around $10K more expensive without the subsidy. Hopefully the need for the subsidy will diminish over time as battery costs decline.

Surprisingly, the solar PV and solar thermal systems are close to the most cost effective. Most commentators rate them as expensive, and rate efficiency measures as more cost effective, but what such commentators are talking about is maybe putting weather stripping around your windows, not removing the walls and putting in more insulation. In reality, you need both. Reducing electricity demand by plugging power vamping appliances into power strips and turning off the appliances on the strip, replacing frequently used lights with CFLs, and buying new, power-efficient Energy Star appliances is necessary to reduce the electricity demand to the point where solar PV can completely offset the demand. Otherwise, the cost of solar PV is too high.

Natural gas use for heating and cooking remains the most difficult carbon generation source to remove. The work we're planning to reduce natural gas use for heating involves quite a disruptive change in our house, essentially replacing the insulation in the thermal envelope, but it will not reduce carbon emissions from that source to zero. We will still need some heat. If we had gone through with our plans to install a geothermal heat pump, the cost would have been even higher, much higher in fact. These considerations point up the carbon cost of our preferred built environment style for family residences in the US: single family housing with all four walls and roof open to the elements. With more multiple family housing, the cost of heating can be reduced substantially, though, of course, at a much higher expense due to the replacement of the existing built environment infrastructure.

The 10% carbon emissions that we can't reduce is about equally split between transportation and heating/cooking:  887 kg for transportation and 1300 kg. for heating/cooking. For now, it seems like we are at the limit of what we can do with current technology and our pocketbook. We need a car to get out of town. We could get a Chevy Volt which has much better gas mileage than the plug-in Prius, but our plug-in Prius works fine so it seems there is no need to buy something new (besides, I have a fondness for Toyota products). And,  as mentioned, the cost of removing the heating/cooking carbon emissions from natural gas is simply too high. So, our only choice is to offset our carbon emissions by buying carbon offsets. The graph also shows the cost of buying carbon offsets from and PG&E's Climate Smart program. In each case, the cost is pennies or fractions of pennies per kg. carbon offset. Carbon offsets are, by far, the most cost effective way to reduce carbon emissions.

Which brings up the interesting question: why not simply buy carbon credits and forget about taking the reduction measures? The reduction measures are from 10x to 100x more expensive. Many commentators are skeptical to negative about carbon offsets, because in the early days of carbon offsetting some projects were scams or would have proceeded anyway even without the offset. But both and PG&E seem to have credible programs where the projects are solid and specifically designed as offsets, and PG&E's is even tax deductible (tax deduction was not included in the per kg. cost of the figure). If everybody bought offsets and nobody took any real, concrete measures to reduce carbon, we would be left with a built environment and transportation infrastructure that generated exactly as much carbon pollution as today. In reality, as with efficiency and solar PV, you need both concrete reduction measures and offsets. Implement the highest degree of reduction measures you can afford and use carbon offsets to take care of the rest.


  1. Do you consider the carbon cost of making the car and the solar panels etc? Always seems to me a difficult proposition to determine these carbon cost things - where do you stop? For example, you might also have to consider the cost of making the things that you are not using because you are using the low carbon emission technologies. Regardless, I like your second chart though - very impressive reductions!

  2. Hi CM,

    Most studies I've seen have shown that the carbon footprint of making solar panels, for example, is quickly amortized by the zero carbon electricity generated. That said, I am not a big fan of trying to calculate carbon footprints of the materials and activity of making carbon footprint improvements, unless they are truly egregious, like for example with corn ethanol where the carbon footprint reduction is really minor (around 30% better than for gasoline). The reason is that I view this kind of calculation as an excuse for inaction. Nobody calculated the carbon cost of our current high carbon energy infrastructure when it was put into place. And stuff gets bought and built anyway: every so often one needs or wants a new car, wants to do home improvement, etc. But I generally do try to go for low carbon footprint improvements, for example, renovating an existing building as we are is more carbon efficient than tearing it down and completely replacing it, in addition to generating less waste, etc.

    It would be interesting to do the calculation on our current effort though, maybe I will try that when I get some time. And, once we are done with the current effort, we may need to look at other areas, such as consumer purchases (we are already pretty vigilant about avoiding unnecessary air travel).


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