1. CO 2 Emission of Water Bottles The Economics of Sustainability and the Environment Fall 2013 Wonjoon (Michael) Choi

2.  Learned from the course, ‘Introduction to Sustainability’, in the last spring semester  We the US consume about 1,500 water bottles every second; at least, 50 million water bottles are thrown each day. Why particular topic?

3.  1. Comparing the data on how much water bottles are used in different parts of the world  2. Hypothetically, relate those data with the data on GDP per Capital or Population Growth Rate or Energy (oil production) (any correlation?)  3. Some other approaches in regard to figuring out how much CO 2 emission water bottles generate  4. Few ways to reduce overdose CO 2 emission of water bottles My Intention

4.  North America (e.g. United States) – 8,454.0 millions of gallons. (rank 1)  (e.g. Mexico) – 6,887.1 millions of gallons. (rank 2)  South America (e.g. Brazil) – 4,252.5 millions of gallons. (rank 4)  Europe (e.g. Italy) - 2,947.2 millions of gallons. (rank 5)  (e.g. Spain) - 1,272.4 millions of gallons. (rank 10)  Middle East (e.g. Saudi Arabia) – 28 gallons per capita: 28 * 27M ~ 756 millions of gallons.  North Africa (e.g. Egypt) – 3.8 liters per capita (1 gallon per capita): 1 * 80M ~ 80 millions of gallons.  Sub-Saharan Africa (60% have access to somewhat qualifying water)  East Asia (e.g. China) - 5,688.6 millions of gallons. (rank 3)  South East Asia (e.g. Indonesia) - 2,938.6 millions of gallons. (rank 6)  * 0.15 pounds of CO 2 emission per 12 ounces (0.094 gallons) of water bottle (1.596pounds per gallon) #1. Comparing the data on how much water bottles are used in different parts of the world

5. GDP per Capita (Based on year 2009)  North America (e.g. United States) – 8,454.0 millions of gallons. (rank 1) GDP per Capita: 40,577.  (e.g. Mexico) – 6,887.1 millions of gallons. (rank 2) GDP per Capita: 10,980.  South America (e.g. Brazil) – 4,252.5 millions of gallons. (rank 4) GDP per Capita: 9,565.  Europe (e.g. Italy) - 2,947.2 millions of gallons. (rank 5) GDP per Capita: 26,228.  (e.g. Spain) - 1,272.4 millions of gallons. (rank 10) GDP per Capita: 26,950.  Middle East (e.g. Saudi Arabia) – 28 gallons per capita: 28 * 27M ~ 756 millions of gallons. GDP per Capita: 22,943.  North Africa (e.g. Egypt) – 3.8 liters per capita (1 gallon per capita): 1 * 80M ~ 80 millions of gallons. GDP per Capita: 5,898.  Sub-Saharan Africa (60% have access to somewhat qualifying water) GDP per Capita (e.g. Nigeria): 2,186.  East Asia (e.g. China) - 5,688.6 millions of gallons. (rank 3) GDP per Capita: 7,409.  South East Asia (e.g. Indonesia) - 2,938.6 millions of gallons. (rank 6) GDP per Capita: 3,803.  * No correlation of CO 2 emission of water bottles with GDP per Capita. # 2. Hypothetically, relate those data with the data on GDP per Capita or Population Growth Rate or Energy (oil production) (any correlation?)

6. Population Growth Rate (Based on year 2009)  North America (e.g. United States) – 0.88%.  (e.g. Mexico) – 1.30%.  South America (e.g. Brazil) – 0.89%.  Europe (e.g. Italy) – 0.60%.  (e.g. Spain) – 0.77%.  Middle East (e.g. Saudi Arabia) – 2.40%.  North Africa (e.g. Egypt) – 1.80%.  Sub-Saharan Africa (e.g. Nigeria) – 2.50%.  East Asia (e.g. China) – 0.51%.  South East Asia (e.g. Indonesia) – 1.00%.  * As more GDP per capita does not mean more population growth rate, no correlation with population growth rate.

7. Oil Production (Tones Based on year 2009)  North America (e.g. United States) – 328,622,275.  (e.g. Mexico) – 147,440,072.  South America (e.g. Brazil) – 106,040,480.  Europe (e.g. Italy) – 4,572,270.  Middle East (e.g. Saudi Arabia) – 462,737,293.  North Africa (e.g. Egypt) – 35,260,000.  Sub-Saharan Africa (e.g. Nigeria) – 101,535,900.  East Asia (e.g. China) – 189,490,000.  South East Asia (e.g. Indonesia) – 47,941,705.  * Total crude oil production shows no clear correlation with CO 2 emission of water bottles.

8. Analysis (Calculating Cost of Capital)  CO 2 cost of equity = CO 2 risk-free Rate (3%) + Beta (1) * CO 2 Risk Premium (3%) = 6%.  After-tax CO 2 cost of debt = Pre-tax CO 2 cost of debt * (1 – CO 2 tax rate) = 58% (new 2020 forecast of CO2 cost of debt but biannual so divide by 2 = 29%)^2(number of times a year) * (1 - 15% (tax rate addressed from Rio+20)) = 0.0715, or 7.15%.  Market value estimate of debt ratio: D/(D+E) = 0.37/1.37 = 0.27. (CO 2 Solutions Inc.)  Market value estimate of equity ratio: E/(D+E) = 0.63/1.37 = 0.46. (CO 2 Solutions Inc.) #3. Other approaches in regard to the correlation with CO 2 emission water bottles generate

9.  Cost of Capital = Cost of Equity (E/(D+E)) + After-tax Cost of Debt (D/(D+E))  = 6%(0.46) + 7.15%(0.27) = 0.047, or 4.7%. (CO 2 cost of capital)  Cost of Capital for beverage firms in overall = 6.34% (Beverage cost of capital) (from NYU-Stern)  Cost of Capital for water utility industries in overall = 3.46% (Water utility cost of capital) (from NYU-Stern)  Cost of Capital for both beverage and water utility industries in overall = (6.34% * 3.46%) = 0.22% (Beverage & Water utility cost of capital)  Comparison between CO 2 cost of capital and Beverage & Water utility cost of capital:  4.7% / 0.22% = 21.36 times more cost for running CO 2.

10. I. Using Reusable Water Bottle and Drink from Tap Water  If you are someone who drinks more than 2 liters of water per day (me), then use reusable water bottle and drink from tap water. (You are saving more than 350 gallons of water annually) Note: one plastic water bottle = 3 times the same amount of water contained in the water bottle + 1/4 times of oil. II. Drink from Tap Water  If you are someone who drinks less than 2 liters of water per day and do not want to fill the water bottles, then just drink from tap water when you have access.  Benefits: Environment Health; More minerals (more conservation of water itself) III. We should be aware of our next generations  Global warming needs to be slowed down. I personally do not believe that we can go back to 1990s. Time to be satisfied with our current level of technology and initiate protection or growth of green nature. 4. Few ways to reduce rampant CO 2 emission of water bottles