World Environment Day June 6 //
Industries Cashing In On Americans' Poor Environmental
Habits
June 3, 2008
Los Angeles, CA - While households are slow to turn out the lights and
separate perishables from plastics, some industry sectors are posting
impressive profits from America's poor environmental progress, including
waste collection and management companies, recycling facilities, and
environmental consultants, according to industry analysts IBISWorld,Inc., (www.ibisworld.com),
recognized as one of the nation's most respected independent publishers of
business intelligence research.
Municipal Solid Waste
"On the backdrop of World Environment Day on June 5, environmental habits
and recycling efforts in the U.S. lag far behind European nations," said Mr.
George Van Horn, a senior analyst with IBISWorld. "Our latest reports reveal
that as a nation, Americans generate more waste than any other nation in the
world an astounding 4.5 pounds of municipal solid waste (MSW) per person
per day, 55 percent of which is contributed as residential garbage." He
added, "The remaining 45 percent of waste in the U.S.'s waste stream' comes
from manufacturing, retailing, and commercial trade in the U.S. economy."
And of the 245,700M tons (up from 88M tons in 1960) of the MSW that
Americans produce each year, only 32 percent is recycled or composted. By
comparison, around 70 percent of the MSW in Germany and Norway is recycled
or composted world-leaders in the "Green Movement."
Carbon Dioxide Emissions Add To Global Warming Concerns
The U.S. accounts for only 4.6 percent of the world's population, yet the
U.S. produces nearly a quarter of all carbon dioxide emissions, compared
with China, a nation with approximately oneB people, or 21 percent of the
global population but only 13 percent of the world's carbon dioxide
emissions. This will soon change as carbon dioxide emissions in China and
India are expected to soar in the next few years as both nations' economies
grow, producing a larger middle class, rapid increases in consumption, and
more carbon dioxide emissions. European Union countries, which make up 6.3
percent of the world's population, produces 14 percent of global carbon
dioxide emissions, still a far better record than the U.S.
Power Consumption Continues Upward Trend
Despite headlines about global warming and campaigns urging consumers to
consider conservation, Americans continue to devour resources at an alarming
rate. For example, over the past four years, electricity consumption in the
U.S. has risen 1.46 percent between 2004 and 2008 (figures inMs of kilowatt
hours a year). IBISWorld estimates that regardless of current "go green"
talk, power consumption will hit 4,333,631M kilowatt hours by 2013 resulting
in a growth rate of 1.93 percent over the next five years:
* 2004 3,715,949
* 2005 3,815,668
* 2006 3,816,846
* 2007 3,904,362
* 2008 3,937,879
* 2009 4,012,900
* 2010 4,090,093
* 2011 4,171,770
* 2012 4,250,949
* 2013 4,333,631
Water Supply And Consumption Concerns We are a thirsty nation too. IBISWorld
estimates that the typical single family home consumes 69.3 gallons of water
per day. These figures are alarming in some parts of the country where water
supplies are dangerously low due to drought, particularly in the West and
the South East region of the U.S. Consumption of residential water breaks
down into five areas according to the American Water Works Association (www.awwa.org)
and (www.DrinkTap.org):
* Toilet use 26.7 percent
* Washing machines 21.7 percent
* Showers and baths 16.8 percent
* Faucet use 15.7 percent; and,
* Leaks 13.7 percent
If consumers install efficient water fixtures and check for leaks regularly,
daily per capita water use would reduce by 35 percent, or 45.2 gallons per
day. If every U.S. household installed water-saving technology, about 5.4B
gallons of water would be saved each day, which translates into
dollar-volume savings of $11.3M per day, or more than $4B per year.
Good News For Garbage Collection, Recycling And Disposal Services And while
copious consumption in the U.S. points to our poor performance on the
environmental frontline, the country's excessive waste production is good
news for the business of garbage collection with many communities
demanding expanded collection, recycling and disposal services, and large
companies jumping at the chance to boost revenues.
"This year, the waste collection industry's revenue rose 4.5 percent to
$39.87B, following several strong years in terms of increased demand for
waste management services," said Mr. Van Horn. "Opportunities have arisen
for industrial waste specialists as a result local government agencies
outsourcing waste collection and management to private operators, heightened
public environmental concern, enhanced demand for the collection, and
processing of recyclable materials."
"Major players making the most out of our wasteful ways include larger
companies that are vertically integrating their waste management services to
include collection, recycling, transfer, and disposal services, which boost
their advantage when tendering for collection contracts," said Mr. Van Horn.
"Waste Management is on example. We predict the trend toward privatizing
collection services will continue, as they are on the whole 'more
efficient', use more effective pickup crews, have lower absenteeism, and
higher productivity, because they serve more households per hour and often
acquire standardized trucks with increased capacity."
And while the past few decades have seen rubbish production rise rapidly in
the U.S., there has been somewhat of a turnaround in recent years with the
amount of MSW produced decreasing marginally as the "go green" message has
started to get through. Unfortunately, IBISWorld believes the U.S. will
return to rising waste volumes over the next five years, albeit at a slow
rate of around 0.5 percent a year. At the same time, revenues for waste
collectors will grow by 3.48 percent per year.
New Initiatives On The Horizon
Although it may seem that community and government pressure to reduce waste
at its source would be bad news for the wider waste industry, new
initiatives, such as those in California, and New York move to raise their
requirements for a set amount of waste to be diverted from the waste stream
from 50 percent to 75 percent a change that can produce a healthy profits
for companies that collect and process recyclables. Recycling facilities
currently generate estimated revenues of $2,981M a year, and times have been
good. Growth has exceeded 7 percent per year for the past five years due to
rising waste volumes and increasing recyclable commodity prices.
Mr. Van Horn warns of the danger of pushing recycling rates to unprecedented
levels in the face of weak recycled material markets, saying operators may
experience diminishing returns and extremely high marginal costs. He added,
"Revenue growth for the next few years would be at a more modest rate of
around 2.1 percent per year as a result of rising household waste volumes
stemming from higher per capita consumption of take-away and
highly-processed, and packaged, foods; together with strong community and
government pressure to boost recycling rates.
"Firms engaged in environmental consulting have done particularly well in
recent years," said Mr. Van Horn. In fact, industry revenue is expected to
hit $12.6B in 2008 up 9.7 percent from 2007. Next year will be even better
with industry revenue forecast to rise another 11.3 percent to $14.07B. And
with 2008 being an election year, Mr. Van Horn said the push, and press,
toward environmentally friendly practices is stronger, and more highly
publicised than ever before as businesses and politicians, strive to appear
"green" in a bid to gain favor, and eventually political office."
"Developing these policies, and then later implementing them, all require
the services of environmental consultants, and as firms become increasingly
aware of their environmental impact and as a marketing tool
environmental consultants can look forward to not just a bumper year, but a
bumper decade," said Mr. Van Horn.
"Advisory services will also do well by servicing private businesses keen to
change their policies and practices to promote the go green' message,
either for the benefit of the environment, for positive publicity, or to
attract or placate staff," said Mr. Van Horn. "Other industries set to do
well out of the focus on global warming and climate change include
construction companies focusing on building "green" buildings, and
environmental engineers.
New Innovation On The Way
And interestingly, IBISWorld reports that while the energy industry is
central to the problem of climate change, with fossil fuel burning lying at
the heart of the issue, it may also end up a major financial winner from the
environmental debate, by focusing on producing energy through geothermal
sources, windmill farms, solar energy, and other developing technologies.
"Ethanol production will continue to expand as biofuels attract increasing
attention as an alternative energy source, and we may see investment tax
credits for the construction of bio-refineries to convert cellulose to
transportation and other bio-based products," said Mr. Van Horn.
"While nations around the world are investing in boosting the production of
bio-based fuels at competitive prices to replace petroleum-based products,"
Mr. Van Horn added, "biotechnology corporations are rubbing their hands at
the prospect of big breakthroughs and the funds that will pour through in
future years if they are able to develop cost-effective,
environmentally-friendly alternatives to petroleum."
"Across the board, entrepreneurial companies are working frantically to
drive innovations which may result in new product development, products with
higher profit margins, or competitive advantage, as the climate change issue
is only going to gather momentum," said Mr. Van Horn. "These problems are
certainly not going away, and any industry which can go green'
cost-effectively will benefit from an improved public image and the
perception at least of being well ahead competitors."
SOURCE: IBISWorld
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