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The economic feasibility of green technology

Team: Institute:

Envisage Loyola institute of business administration, Chennai

Today the world is progressing towards high innovation and technology. Countries are participating in the race to join the list of developed country. Each country is exploring its natural resources for development. The Growth of countries initiates development of industries and this development increase consumption of resources. New optional resources can be used to stand the industry in the long term to sustain in the competitive environment. These optional energy sources are bio fuels, solar energy, wind and hydro power. These resources can help the industries to reduce the cost and increase the productivity as well as Industry can help the environment by adopting a green technology.

Ever since the Industrial Revolution, world demand for power and raw materials has grown at a fantastic rate. One respected observer estimates that human kind has consumed more aluminum, copper, iron and steel, phosphate rock, diamonds, sulfur, coal, oil, natural gas, and even sand and gravel over the past century than over all earlier centuries put together, and goes on to write that the pace continues to accelerate, so that today the world annually produces and consumes nearly all mineral commodities at record rates. Countries are participating and conducting campaign to reduce GHG (green house gas) emission and to increase use of renewable energy resources and recycle the product. Kyoto protocol and Copenhagen was linked to this effort but could not implemented. The goals of Kyoto were to see participants collectively reducing emissions of greenhouse gases by 5.2% below the emission levels of 1990 by 2012. 169 countries have ratified the agreement. Of the signatories, only 2 refused to ratify Kyoto up until December of 2007 - Australia and the USA. Australia refused to ratify the agreement. The excuse - it will be bad for Australia's economy, the same reasoning the USA uses. So the adoption of green technology is feasible for economy?

Indian consumption scenario

In Indian prospects, country has second largest population in the world. Indias GDP is increasing continuously and expected 10% up to 2012. India is a significant consumer of energy resources. India is the fourth largest oil consumer in the world, after the United States, China, and Japan. Indias energy demand continues to rise. In terms of end-use, energy demand in the transport sector is expected to be particularly high, as vehicle ownership, particularly of four-wheel vehicles, is forecast to increase rapidly in the years ahead. According to Oil & Gas Journal (OGJ), India had approximately 5.6 billion barrels of proven oil reserves as of January 2010; India produced roughly 880 thousand barrels per day (bbl/d) of total oil in 2009 from over 3,600 operating oil wells. In 2011, crude oil rates increased drastically. Crude oil rate in international market is $99.25 per barrel so there is an opportunity to develop technology that can be sustained without need of oil, and the possible options are solar and biofuels.

In electricity sector in India is world's 6th largest energy consumer; about 70% of the electricity consumed in India is generated by thermal power plant, 21% by hydroelectric power plant and 4% by nuclear power plant. More than 50% of India's commercial energy demand is met through the country's vast coal reserves. In the current context when each natural energy sources are rapidly approaching catastrophic and irreversible tipping points. There is need to work towards green technology. 80% of Indias infrastructure is yet to be built. It would be an opportunity to build our economy on the basis of clean and green energy. Industries and business are extremely dependent upon natural resources wood, water, coal, iron ores etc. If industries and business will move steps toward green world then they will find a huge opportunity to reduce costs, enhance brand image and reputation, increase customer loyalty, simulating growth and strengthening with communities. Corporations across the world are increasingly joining green world and technology; they are implementing green process and technology. Going green helps them to bring down their operating costs, increase profits and save money and they are saving environment so that they are getting government subsidies. Most companies must realize that environment regulation and their enforcement will become tighter over time. People today understand the value of environment and how it affects them and how things we do affect the environment. So today the conscientious consumer prefers to buy products that do not harm the environment and also they like to deal with the company who values the environment. This sensitive consumer is willing to pay the premium price for a green product. According to a survey in 2010, 60% to 70% consumers prefer to purchase from environmentally responsible companies.

Opportunities in green world

In India, there is lot of opportunities are waiting to go green. Renewable energy has become a popular mantra, solar energy and bio fuels are becoming popular in rural area and there is huge opportunity in urban area to construct a green world by using of bio fuels, solar energy and recycle process.

Green building is a new concept, organization can build a structure based on green technology, or real states can build green residential buildings. This structure will be based on solar panel for electricity, solar water heater, bio gas digester that converts human and animal waste to clean gas for cooking, lighting and heating and recycling can reduce the waste and increase the productivity so that a Green building can help to reduce cost and to increase productivity. This green building will also provide a healthy environment and this will increase the efficiency of the person. Power generation is another factor where there is huge opportunity. As we know that Indian maximum power generation 70% is from thermal plant with limited coal fields and we have some other options like nuclear power generation but the problem is nuclear dust. So there is a possible option to grow that is solar energy, wind energy and hydro energy. Industry can use solar energy or wind energy to fulfill their power needs. This will help an industry to reduce electricity charges and can go green. Some more steps that industries have already taken to go green. Nokia reduced the size of packaging and uses more recycle material for packaging. This helped Nokia to reduce paper material by 100000 tones. This saved its packaging cost and reduced transportation volume and enabled the company to reduce 12000 trucks costs. Infosys implemented solar photovoltaic in few of campuses up to about 400 kilowatts. Company also installed solar water heater to reduce electricity consumption and this way Infosys reduced its per capita energy consumption by 18% to 20%. In a company whose electricity bill is about $25 million for India operations alone, a 20% saving is about $5 million per year has been achieved. Arcelor Mittal india limited used recycling method to develop the crude steel. ACC-HUL partnership is flowering. It is in keeping with the tenets of industrial ecology, where one industrys waste becomes anothers raw material. Co-processing is basically the use of waste materials in industrial processes as alternative fuels and raw materials (AFR) to recover energy and material value from them. Its of critical import to the cement sector because energy costs

account for 40% of its cost of production, which involves heating and blending of raw meal at temperatures as high as 1,400 degrees Celsius. In a globalization, the market for green products and technologies should be major attraction for Indian companies to invest in. if they do not they would find opportunity for them shrinking in the global market which would inevitably become green. Environment is a biggest opportunity and Industries should identify this opportunity and this green world will the industry to become a economically log term sustainable from the crisis situation.