austerity empowering your bottomline shane williams, m.s. candidate

Austerity: Empowering Your Bottomline

Shane Randel Williams, International Studies: International Business and Economic Relations, M.S. Candidate

1 Introduction: What is Austerity?

2 Green Movement Translates into Business Strategy

3 Current Environment of Economics, Austerity and Energy

4 Trends

5 Comprehensive Energy Planning Application

6 Is Energy Planning a Solution?

Austerity : Empowering Your Bottomline

Austerity

Service Cuts

Benefit Cuts

Budget Cuts


Austerity is a measure that invokes extreme economic

situations, as in significant cuts to budgets, benefits

and services.

Many governments often trim down to

essential services and reduce other

services to a bare minimumService Cuts

Budget Cuts

Pay Cuts

Bailout Money

Often times across the board budget cuts

are put in place for governments and

other times more precise cuts are made

Many public sector employees often face

significant pay cuts (5-15%) and

furloughs

Entities such as the IMF, UN and other

international organizations often have

financial assistance for countries in

economic distress.


Austerity Examples

Significant Historical Austerity Measures

Argentina 1952

Brazil 1953, 1983, 1998-1999

Canada 1997, 1984, 2011

Chile 1968-1986

China 1989, 1993

Cuba 1991

Czech Republic 2010

Egypt 1949-1958, 1985

France 1968-1970, 1983, 1993

Germany 2011

Greece 2010-2011

India 1992, 2008-2009

Ireland 2010

Israel 1949-1959

Italy 2010

Japan 2010

Latvia 2009

Mexico 1985

Netherlands 1982-1990, 2003-2006, 2011

Nicaragua 1997

Nigeria 1993-1998

Palestinian Authority 2006

Portugal 2010-2011

Romania 2010

Saudi Arabia 1988, 1991, 1999

South Africa 1948, 1983-1985

Spain 1979 2010

United Kingdom 1939-1954





4 Trends





Overview of Green/Environmental Movement Timeline

March 1872 Yellow Stone National Park

May 1892 Foundation of the Sierra Club

March 1954 Lucky Dragon 5

September 1962 Silent Spring is published

March 1967 Torrey Canyon runs aground in England

January 1969 Union Oil Co. platform blows out

September 1969 Sen. Gaylord Announces Earth Day

April 1970 First Earth Day Celebrated

1971 Minamata Mercury Poisoning Case

October 1972 Clean Water Act is Passed

October 1978 US Bans CFCs

March 1979 Three Mile Island accident

September 1979 Jane Fonda & Ralph Nader speak at demonstration in NYC

May 1980 President Carter announces Love Canal toxic waste exposure

November 1980 Superfund legislation passed in reaction to Love Canal

1983 Triana, Alabama residents win lawsuit over DDT

April 1986 Chernobyl Nuclear Reactor explodes

November 1988 Ocean Dumping Ban

March 1989 Exxon Valdez Spill

November 1990 Pollution Prevention Act

June 1992 Earth Summit in Rio de Janeiro

June 1994 Brownfields Program

October 2006 Clean Diesel

2009 Chernobyl: Consequences of the catastrophe for people and the Environment published

April 2010 40th Anniversary of Earth Day

Decreased

Energy

Costs

Deregulation of Energy Markets

Energy Management

Efficiency


Deregulation Technology Best Practices

Increased competition Cheaper versions Impact Awareness

Hold utilties accountable New technology Lean and Green

Improvements demanded Applications changed Timing

Advanced modeling Environmental Awareness

Changes in Energy Brought about by the Green Movement & Environmentalism

Increased awareness of energy being finite

Increased awareness that there are negative impacts of unregulated energy use

Alternative sources and uses of energy

Efficiency became an achievement



Energy Cost is not fixed


Energy Cost is not fixed

ENERGY

SAVINGS

1. Once one energy measure has taken place,

savings from the measure can pay for the

next measure, and so on.

2. Initial capital is not needed when the low-

hanging fruit are taken care of and those

savings are used to fund the next set of

energy measures.


2(2011). Navigating Energy Management: a Roadmap for Business. The Conference Board and U.S. Environmental Protection

Agency. Washington, D.C. http://www.energystar.gov/index.cfm?c=guidelines.roadmap




4 Trends





Size of Current Debt (USD$) Size of Current GDP (USD$)

United States $9,131,809,400,000 $14,660,000,000,000

Canada $1,322,202,840,000 $1,538,000,000,000

Brazil $1,270,910,912,000 $2,090,000,000,000

Chile $1,113,200,000 $203,300,000,000

Egypt $2,157,300,000 $218,500,000,000

Saudi Arabia $75,871,161,000 $443,700,000,000

Nigeria $154,700,000 $216,800,000,000

South Africa $115,394,657,000 $357,300,000,000

Greece $436,132,620,000 $305,400,000,000

Germany $2,758,614,976,000 $3,316,000,000,000

France $2,128,002,248,000 $2,583,000,000,000

United Kingdom $1,710,313,255,000 $2,247,000,000,000

Russia $131,857,110,000 $1,465,000,000,000

Japan $10,781,272,200,000 $5,459,000,000,000

China $1,110,990,573,000 $5,878,000,000,000

India $798,204,354,000 $1,574,000,000,000

1(2010) Country Comparison: Public debt. The World Factbook. United States Central Intelligence Agency. Washington, D.C.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

2(2010) Country Comparison: GDP. The World Factbook, United States Central Intelligence Agency. Washington, D.C.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html


GDPSize of Processed and Potential

Austerity Measures

United States $14,660,000,000,000 $1,200,000,000,000*

Canada $1,538,000,000,000 $4,000,000,000

Egypt $218,500,000,000 $4,370,000,000

Greece $305,400,000,000 $25,399,500,000

Germany $3,316,000,000,000 $79,827,000,000

France $2,583,000,000,000 $36,285,000,000

United Kingdom $2,247,000,000,000 $82,004,100,000

Japan $5,459,000,000,000 $243,900,000,000

India $1,574,000,000,000 $1,124,100,719


https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html2(2010) Compare Recovery Measures Across Europe. BBC. United Kingdom. http://www.bbc.co.uk/news/103885763(2010) Japan unveils budget austerity guidelines. AFP.

http://www.google.com/hostednews/afp/article/ALeqM5htWaDnzsgJUIJMMFraXwJX33QV8A4(2011) Gov’t unveils austerity measures to meet deficit target. Reuters. http://in.reuters.com/article/2011/07/11/idINIndia-58200720110711

*If super-committee fails to come to an agreement by the deadline

Received €219billion loan in conjunction with the EU and the International

Monetary Fund

These bailouts are contingent on

Greece privatizing many of its

governmental assets to raise

€50billion by 2015.

Retirees face 40% cut in pensions

Some 30,000 civil servants will be suspended on

partial pay by the end of the year


Greece

Received an EU and IMF

supported bailout of €85billion

Received lowered interest rates on loans to between 3.5% and 4% and

an extended payback period to

fifteen years

Had to bail out its banks that may

cost up to €70billion

Cut its governmental

budget by €6billion, with

spending being reduced by an

additional €4billion


Ireland

Received an EU and IMF

supported bailout of €75billion

5% pay cut for some public sector

employees

Income tax hikes for the wealthy, in

addition to a value-added tax of

1%

Military budget and transportation projects were cut


Portugal


1(2011) Electric Power Consumption (kWh per capita). World Bank, World Development Indicators (WDI).

http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=eg_use_pcap_kg_oe&idim=country:USA&dl=en&hl=en&q=energy+use+in+u

s#ctype=l&strail=false&bcs=d&nselm=h&met_y=eg_use_elec_kh_pc&scale_y=lin&ind_y=false&rdim=country&idim=country:USA:CHN:IND:JPN:RU

S&ifdim=country&tstart=655797600000&tend=1286949600000&hl=en&dl=en

Electric power consumption (kWh per capita)




4 Trends





Major events can affect global economy


1(2011) MSCI Index Performance - AC World Index. MSCI Berra.

http://www.msci.com/products/indices/country_and_regional/all_country/performance.html



1(2011) Provost, Claire. The rising cost of food - get the data. The Guardian. United Kingdom. http://www.guardian.co.uk/global-

development/datablog/2011/jun/07/rising-cost-of-food



1(2011) International Energy Outlook 2011. U.S. Energy Information Administration. Washington, D.C.

http://www.eia.gov/forecasts/ieo/more_highlights.cfm#world

International Energy Outlook – Usage Going Up




4 Trends and Energy Planning Potential




ISO 50001

LEED & Green Globes

Energy StarEnergy Star

Twelve year building program

benchmarked 200,000 buildings.

Reports of experienced savings

between 10-35%

LEED & Green GlobesProvide standards for efficiency

in new and existing facilities

(12.5% to 75% savings)

ISO 50001New ISO standard that focuses

on best practices as international

effort to reduce energy usage


Energy Efficiency

Optimization

Modeling

Methodologies


National Renewable Energy Laboratory

Technical Reports Report 50% in Savings




4 Trends





Potential Energy(Electricity)

Savings (USD$)

Potential Energy

Efficiency Business

Stimulus

Potential Savings for Business &

Governmental Budgets

United States $13,455,612,698,733.30 $403,668,380,962.00 $13,051,944,317,771.30

Canada $1,892,651,759,722.78 $56,779,552,791.68 $1,835,872,206,931.10

Brazil $1,446,541,660,900.46 $43,396,249,827.01 $1,403,145,411,073.44

Chile $194,109,473,875.87 $5,823,284,216.28 $188,286,189,659.59

Egypt $375,746,533,993.99 $11,272,396,019.82 $364,474,137,974.17

Saudi Arabia $600,976,764,097.78 $18,029,302,922.93 $582,947,461,174.85

Nigeria $62,486,069,588.36 $1,874,582,087.65 $60,611,487,500.70

South Africa $731,060,491,790.51 $21,931,814,753.72 $709,128,677,036.80

Greece $205,042,211,038.84 $6,151,266,331.17 $198,890,944,707.68

Germany $1,875,398,426,247.88 $56,261,952,787.44 $1,819,136,473,460.45

France $1,587,706,237,822.32 $47,631,187,134.67 $1,540,075,050,687.65

United Kingdom $1,187,200,877,512.19 $35,616,026,325.37 $1,151,584,851,186.83

Russia $2,954,033,159,261.13 $88,620,994,777.83 $2,865,412,164,483.30

Japan $3,319,956,074,355.06 $99,598,682,230.65 $3,220,357,392,124.41

China $10,390,405,888,140.20 $311,712,176,644.21 $10,078,693,711,496.00

India $2,068,915,451,859.09 $62,067,463,555.77 $2,006,847,988,303.32

1Based on EPA study of savings of 10-35% with buildings in Energy Star program and using 35% as the maximum realized savings -

(2009) Celebrating A Decade of Energy Star

Buildings 1999-2009. U.S. Environmental Protection Agency. Washington, D.C.2(2008) International Energy Statistics. US Energy Information Administration. Washington, D.C.

http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=2&aid=2&cid=AS,CA,CH,FR,GM,IN,JA,RS,UK,US,ww,&syid=2004&eyi

d=2008&unit=BKWH3Calculated based of personal experience from common estimated savings from comprehensive energy management in the energy

efficiency industry


GDP

Size of Processed and

Potential Austerity

Measures

Potential Savings for Energy

(Electricity) Efficiency for

Business & Governmental

Budgets

Difference in Savings and

Austerity Measures

United States $14,660,000,000,000 $1,200,000,000,000* $13,051,944,317,771 $11,851,944,317,771

Canada $1,538,000,000,000 $4,000,000,000 $1,835,872,206,931 $1,831,872,206,931

Egypt $218,500,000,000 $4,370,000,000 $364,474,137,974 $360,104,137,974

Greece $305,400,000,000 $25,399,500,000 $198,890,944,708 $173,491,444,708

Germany $3,316,000,000,000 $79,827,000,000 $1,819,136,473,460 $1,739,309,473,460

France $2,583,000,000,000 $36,285,000,000 $1,540,075,050,688 $1,503,790,050,688

United Kingdom $2,247,000,000,000 $82,004,100,000 $1,151,584,851,187 $1,069,580,751,187

Japan $5,459,000,000,000 $243,900,000,000 $3,220,357,392,124 $2,976,457,392,124

India $1,574,000,000,000 $1,124,100,719 $2,006,847,988,303 $2,005,723,887,584


https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html2(2010) Compare Recovery Measures Across Europe. BBC. United Kingdom. http://www.bbc.co.uk/news/103885763(2010) Japan unveils budget austerity guidelines. AFP.

http://www.google.com/hostednews/afp/article/ALeqM5htWaDnzsgJUIJMMFraXwJX33QV8A4(2011) Gov’t unveils austerity measures to meet deficit target. Reuters. http://in.reuters.com/article/2011/07/11/idINIndia-

58200720110711

*If super-committee fails to come to an agreement by the deadline


Is Energy Planning a Solution to Austerity?


Thank you for your time!

austerity empowering your bottomline shane williams, m.s. candidate

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