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The ABC of cost-cutting
Better lighting, heating and refrigeration systems can raise output and lower costs by up to four times
visualise a farm in the Rockies in western Colorado, where temperatures above the snow line drop to 44 c in winters. But even below the permafrost line, the growing season can be as short as 52 days. Think of growing a tropical plant like the banana in such a climate. Impossible? But fruits are ripening in this climate on banana trees at a farm - in passive solar heated greenhouses. The farm has 'super windows' that can capture half the solar energy available, absorb heat even on cloudy days, and let in three-quarters of sunlight. 'Foam insulation' inside the 40-cm-thick walls and the roof is twice as effective as conventional insulation, and only a minimal amount of heat is lost. And there is plenty of fresh air coming in, preheated by 'heat exchangers' that recover almost 75 per cent of the heat lost in stale air escaping from the houses.
And, what is more, the expenditure on this fancy equipment was less than the alternative cost of constructing a furnace and ducts.
This farm has received coverage in a number of international magazines from Geo to Newsweek and featured in television shows. Over 40,000 people have visited it. The operating principle behind this farm is that wealth can be doubled while halving resource use, increasing efficiency by a factor of four. Or, simply, 'Factor Four'.
In a world where resources are scarce and wastage is common, the most important challenge is proper use of resources without compromising on development goals or reducing profit. Factor Four is a concept which shows that output can be quadrupled while meeting these objectives. It means that we can live as well using only half the resources we are currently using. Expressed differently, we can live 'twice as well' on the same resources.The concept, pioneered by Ernst von Weizsacker, and developed in a recent book by Weizsacker and Amory and Hunter Lovings, has been hailed across Europe and in the us as a novel one that will go a long way in supporting the idea that sustainability and profit making go hand in hand. Its implications for the developing world are perhaps even more significant. The passive solar banana farm in Colorado is just one example of how application of Factor Four can raise productivity in a technically feasible manner, benefiting individuals, industries, business and society as a whole.
Conventional lighting, heating and refrigeration systems are known to have a low efficiency. These areas, therefore, have to be tackled. Application of Factor Four shows how this can be done. The solar farm in the Rockies, for instance, allows natural light to flood in from all directions on days when the sky is clear. At other times, super-efficient electric lamps, which have one-fourth the energy requirements of conventional systems, are used. The refrigerator uses only 8 per cent of the electricity required in regular systems. It has super-insulated interiors and is cooled by a specially designed passive 'heat pipe' connected to the radiator. The freezer has the same design. Outside the farm is a 'crittery' that, once again, uses super-insulation, passive solar and photovoltaic energy. It allows pigs to conserve energy in keeping warm and they gain weight faster. The hens, on the other hand, lay more eggs.
Factor Four explains how scientific and technological principles, and sheer common sense, can help double efficiency in resource use. In the past, progress meant increasing productivity of labour. But the new efficiency revolution places the highest priority on resource productivity. Its proponents insist that it costs less than the conventional. Factor Four is thus about 'doing more with less' which is not the same as 'doing less, doing worse or doing with-out'. Countries adopting these principles will become internationally competitive.
Progress must meet the criterion of sustainability. This new theory has recipes for sustainability as well. It will improve the quality of life. As Wiezsacker and his group say, "We can see better with efficient lighting systems, keep food fresher in efficient refrigerators, produce better goods in efficient factories, travel more safely and comfortably in efficient vehicles, feel better in efficient buildings and be better nourished by efficiently grown crops."
Resource efficiency can greatly contribute towards solving such huge problems as acid rain, climate change, deforestation, loss of soil fertility and congested, noisy streets and that too at a profit.
The principle is not only applicable to industrialised countries but also developing countries like China, India, Mexico and Egypt. These countries, with a lower capital investment in inefficient infrastructure, are in an excellent position to raise productivity.
As the proponents of Factor Four say, "If a country invests in equipment to make very efficient lamps and windows, it can provide energy services with less than a tenth of the investment that would be required to buy more power stations instead."
In 1972, the Club of Rome published Limits to Growth, which argued that the world was rapidly running out of essential resources. This came as a shock to many. The Club's new report, Factor Four , again highlights that resources are scarce and will become scarcer, and offers a way to put the world back into balance. The authors say that human productivity has increased a great deal since the days of the industrial revolution. "We have increased our productive capacities by substituting resources for human labour. But the substitution has gone too far, with gross overuse of energy, water, land and air resources."
Idealistic solutions - like conserving resources by using less or 'rational use' of energy - are out. Technological solutions that allow a four-fold increase in productivity are in.
Lightening the burden
Adoption of new devices for lighting can help lighten the burden of work and raise human productivity
THOMAS ALVA EDISON would have cause to smile. Lighting is one crucial area which touches our everyday lives. Yet, ever since the electric lamp was invented, there has been very little change in the technology employed. A few techniques can save a great deal of lighting energy cost effectively, enabling people to see much better and consequently work much better.
One-fifth of the electricity used in the US goes directly into lighting. The proportion is much more in Russia, China and India. More than half of this energy is used by ordinary incandescent light-bulbs that have undergone little change since the 1930s. These bulbs emit only 10 per cent of the energy used as light. If they are replaced by compact fluorescent lamps, a great deal of energy can be saved.
A compact fluorescent lamp is not such a new device. It was developed in the Netherlands and Germany in the early 1980s and is now becoming popular in the US, Europe and even China, selling 200 million units a year. An 18-watt fluorescent lamp gives as much light as a 75-watt incandescent lamp.
However, it has a much longer life and lasts about 10 times longer than a conventional lamp. According to some estimates, the compact fluorescent lamps sold in 1994 alone would save at least US $5,000 million worth of electricity over their lifetimes. Besides saving electricity, compact fluorescent lamps also reduce pollution — at no cost— since it is cheaper to save energy than to produce it. In India, such lamps could cut the peak load by half, reducing the pressure on meagre electricity supply. Not bad for a small device that you can install yourself!
The new office
Offices with durable and modular furniture can reduce the cost of maintenance and repair, and boost productivity
ANOTHER simple illustration of Factor Four is in the realm of office furniture — a head on which most offices, corporations and businesses spend without thinking twice, or invest in every two years or so.
“Durability is one of the most obvious strategies for reducing waste and increasing material productivity. As far as office furniture is concerned, some parts will wear out faster than others or lose their aesthetic appeal for reasons of wear, fashion or a change in corporate identity. If these parts are made interchangeable, much can be gained in increasing durability,” says Weizsacker.
Citing the example of an office chair, Weizsacker and colleagues suggest that by separating ‘structural elements’ from ‘visible elements’ in office furniture and combining it with the marketing approach of availability of upgrades for the visible elements will make the dream of an ‘eternal office chair’ come true. The visible and structural elements are clipped together and easily unclipped again when it is time to exchange the worn out elements.
The structural elements of an office chair like its foot, its legs and the mechanics of its seat can be optimised for top ergonomic quality, comfort, durability and easy repair. The visible elements like the cushion and the upholstery, however, can be changed at a minor cost, both financially and ecologically. This concept is gaining ground. Herman Miller — the second largest manufacturer of office furniture in the US — has opened a plant specifically designed to remake indefinitely every kind of furniture it has ever made. This is proving highly successful.
Green transport
Low-pollution cars which use less gasoline are the need of the hour
CONSIDERING the growing dependence of urban populations on motor vehicles and given the bleak scenario of fast depleting and increasingly expensive oil, the world is desperate for less fuel consuming, more efficient and less polluting cars. From 1973 to 1986, the average American car became twice as efficient, from consuming 17.8 litres per 100 km to 8.71 litres for the same distance. Since then, however, fuel efficiency has risen by only 10 per cent or so.
Why is this happening? It seems the best automobile engineers of the world became so specialised that none of them could design an entire car by himself. Crucial integration between design elements has been lost. Too much thinking is going into each little piece and too little on the car as a whole. So, if a simple alteration in wheel design could place a lesser demand on the engine, the wheel designer cannot do it because engine design is not his area. Simple modifications like front-wheel drive, four valves per cylinder, overhead cams, five-speed overdrive transmission and retracting brake callipers that can save 35 per cent fuel have not been integrated by many car manufacturers.
There have been exceptions though. A number of Japanese auto manufacturers and some leading American and European ones have improved car designs, increasing fuel efficiency and making the car components recyclable. In 1992, Honda released a model that used only 4.62 litres of fuel per 100 km. Companies like Toyota and Ford have come up with electric or hybrid electric/gasoline driven models that double fuel efficiency and have low emissions.
New designs and technologies are gradually doing away with the basic concept that cars have to be made of steel and other metal alloys. Steel is heavy. Accelerating a heavy vehicle needs a big engine and wastes energy. Using ultrastrong crash-resistant materials like advanced composites or carbon — for example, the General Motors four-passenger ‘ultralite’ car introduced in 1991 — can make a car about three times lighter but still capable of seating four to five passengers. Better designing of car moulds can make the vehicles two to six times more aerodynamic. Better tyres, carrying less weight, can cut tyre costs three to five times.
However, if the ultralite car concept is combined with hybrid-electric drive concept, even more magical improvements in efficiency (almost five-fold) can be achieved. Experiments in Europe have shown that a hybrid electric propulsion system can boost performance by 30 to 50 per cent. This is done partly by electronically recovering up to 70 per cent of the energy lost in braking, which is temporarily stored and reused for acceleration. Alternative fuels have also been tried where the car gets its energy by burning any convenient liquid or gaseous fuel.
These developments can result in cars that run 100 km on just two litres of fuel. Leading US car expert Paul MacCready opines that by 2005 most cars in showrooms will have electric propulsion systems and will be hybrid vehicles.
there are several hurdles in the way of the efficiency revolution. Individuals are not easily convinced and governments even less so. The Factor Four concept may also attract many critics. The world of business is governed by the profit motive. These examples may, at face value, run counter to market expansion. Shrinking turnover may repel rather than attract capital. So why should anybody invest in research and development?
The efficiency proponents counter that the gains lie in doing away with the nonsensical concept of turnover. World over, business has veered away from a preoccupation with turnover. The concept of the lean and profitable firm recognises that what matters in the end is not total revenue but the bottom line (net profit).
Better lighting, more efficient refrigerators and vehicles, and office furniture are all profitable. Investments in them will pay off after a certain period of time.They will have to compete for scarce capital with other established and hence more acceptable investments, which might not be easy initially. As the report says, "Capital typically has found and will continue to find it much more profitable to invest in the expansion of resource use and to increase labour productivity".
Moreover, one of the biggest impediments in creating resource efficiency is the mind set of the proponents of the free market economy. Most free market economists feel that the existing markets are so close to perfection that any change in direction is not worth examining. The market economy, they consider, is driven by consumer preference as expressed through purchasing decisions. If a thing is worth doing, the market has already done it, and conversely, if the market has not done it, then it must not be worth doing. If people use less insulated and hence less efficient refrigerators then it is so because after careful consideration, they have decided that better insulation is not worthwhile.
Going by this logic, if a factory pollutes a river, it is because the factory's output benefits society more than the harm caused by pollution and that pollution abatement would cost more than the damage to environment and human health. This fatalistic dogma is false and causes immeasurable wastage of resources every year. It is possible for a device that uses energy more efficiently to cost less than the one which doesn't. Clever combinations of technologies can make big savings cheaper than small savings - contrary to the theoretical assumption that the more we save, the more each increment of savings must cost. Efficiency need not cost more.
To support this claim the authors of Factor Four use an illustrative example. A comparison of the market price of all household refrigerators on the Swedish market with their energy (electricity) consumption (both measured as per litre of interior space) shows that, amazingly, efficiency is unrelated to price. The most efficient model - ler 200 manufactured by Danish firm Gram - costs less per litre than some other models that use six times as much electricity.
Similar comparisons for other household appliances like freezers, washing machines and televisions, give the same result. Wiezsacker's team, however, adds that their intention is not to prove the economic theory useless but to warn that it must be used with caution, discrimination and healthy scepticism. Economic methods can be applied to overcome market failures and achieve worthwhile social outcomes.
A multi-pronged approach is needed to do this. First, it is vital that perverse incentive schemes be done away with, specially if they reward inefficiency and penalise efficiency. This specifically refers to the payment structure to professionals like architects, industrial designers, engineers and many others whose fee is based on or negotiated from the cost of the project. The higher the cost of the project, the fatter will be their fee so they have no incentive to introduce efficiency and cost-cutting into their work. If installing super windows in a house can considerably cut its cost, the architect might not be interested in doing so as his 'percentage' fees will also go down. The incentives, thus, should be governed by efficiency.
Another simple way to get better results is to introduce competition between solutions. To give an example, 96 per cent of employed people in the us drive to work in their own vehicles and are provided toll-free parking space by their offices. Now let us suppose the employer was to charge fair market value for the parking facility (which tends to be rather high in the us) and instead pay every employee a commuting allowance of equal value.
Then the employee can continue to drive to work, pay the parking fees and incur no net loss or gain. But many employees may eventually consider cheaper ways to reach office like car sharing or using public transport and pocket the commuting allowance paid by the employer. This would allow the public transport system to compete with private vehicles on a level playing field, there would be less cars on the roads, meaning less traffic and lesser pollution. As demand for parking declines, the employer can make a profit by leasing or selling the now excess parking space.
Residents of a typically water-wasteful household in the us consume around 303 litres of water per person per day. Water being a scarce commodity, specially in overpopulated urban areas, there is an immediate need to conserve it. If old plumbing is replaced by a new one which uses 6.8 litres per flush toilet and 11.3 litres per minute showerheads and taps, this consumption can be reduced as much as 35 per cent, the proponents of Factor Four claim.
These new technologies work well and need not cost the earth. An Australian dual flush toilet represents an 80 per cent reduction in water consumption over the traditional 22-litre flush toilet but retains clearing efficiency as its discharge of water is concentrated into a precisely aimed swirling pulse.
Besides better designed appliances, alternative water supplies can be used for efficient use of water. Using rainwater for all fixtures apart from taps would lessen pressure on public supply and even save soap as rainwater is very soft and very little soap is required for cleaning. In many parts of Hawaii, the Caribbean, Australia and some parts of Texas, even some new office buildings in Tokyo and the Tokyo Dome Baseball Stadium have rainwater collection systems.
Ultimately it boils down to a matter of common sense. If you pay your electricity, water or telephone bills before the due date you do not have to pay the late fee or surcharge. You can shell peas and watch milk boil at the same time in the kitchen. That way the milk will never boil over. You can also ensure that all doors are shut when an air conditioner is switched on and do not run a washing machine with only four clothes in it. There is no need to live an ascetic life. It is possible to use natural resources, technologies and human intelligence more productively.
Written by Sharmila Chandra .