carbon-optimal supply chains, and other topics

7/31/2019 Carbon-Optimal Supply Chains, And Other Topics

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Charles Corbett

Carbon-optimal supply chains, and othertopics

Charles J. CorbettProfessor of Operations Management and Environmental ManagementJoseph J. Jacobs Term Chair in Entrepreneurial StudiesDeputy Dean for Academic Affairs

UCLA Anderson School of Management


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Charles Corbett

Outline

Carbon footprints in the motion picture industry

Carbon-optimal supply chains

Water footprinting vs. carbon footprinting


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Charles Corbett

Page 1

HomeEntertain-

ment

Marketing andDistribution

MOTION PICTURE INDUSTRY (MPI) SUSTAINABILITY PROJECT

The MPI Supply Chain and Players

The MPI Supply Chain

PostProduction

ProductionPre-

ProductionBusiness &Investment

Activities

Movie ideas arecreated

Movie ideas arepitched

Developmentteam views ideas

Scripts arerewritten andapproved

Movie is financed Movie is

budgeted and

caste

Movie is Green-

lighted Locations chosen

Talent is hired Producer, Director,

line producer hired

Permits are

obtained fromEIDC

Set materials arepurchased

Set is designedand constructed

Costumes and setare created

Support crew is

hired

Studio

Directors

Producers Art Director Talent agencies Talent

Studio MPAA, AMPA, EIDC

Guilds, Unions Producer, director,

assistant director,actors, writers

Trades, support

crew (grips,transportation,gaffers, etc)

illustrators, scenicdesigners, model

makers, carpenters,painters,electricians,

laborers, setdecorators,

costume designers,and makeup andhairstyling artists,

food service

Film crew travels

to site Movies is shot

Movie set iscleaned-up (setmaterials disposed

of)

Film is edited andformed

Studio Film, video,

sound, & dubbingeditors

Film librarians Production

company

Trash company,recyclingcompanies

Studio

Screenwriters

Producer Production

company Independent

productioncompany

DevelopmentTeam

DVDs, VHSproducts are

manufactured Home Ent is

marketed andpromoted (printsand advertising

created) Trade

relationships/agre

ements arenegotiated

Product is sold toretailers

Distribution of

DVDs, and VHS

Studio (HomeEntertainment

Department) Retailers Transportation

companies Manufacturers

PR firm Advertising firm

Scripts are

written Scriptwriters

work with

producers anddirectors and

revise

Writing

Trailer is created

Marketing strategydetermined

Movie is promoted

& advertised (PRfirm hired)

Prints and

advertising arecreated

Film is sold totheatres (picked-

up) Film reels are

distributed to

theatres Films are disposed

of by theatres?

Studio

Production

company PR firm Advertising firm

(unit publicists)

Salesrepresentatives

Transportationcompanies

Limo companies

Print and displaymanufacturers

Screenwriters

Agents

Producer Director

KeyPlayers


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Motion Picture Industry Sustainability study:UCLA / CIWMB

Principal investigators: Professor Charles Corbett

Professor Rich Turco

Research team (UCLA):

Joanna Hankamer Shannon Clements

Jeannie Olander

Penny Naud

and many others

CIWMB contract management:

Brenda Smyth

Christy Chew

Judith Friedman


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Background and organization of study

Spring 2003: contact between CIWMB and UCLA Instituteof the Environment

Objective:

The purpose of this contract is to provide the means by which theMotion Picture Industry (MPI) can assume a leadership role indeveloping sustainable practices within the Entertainment Industry.Funding offered by the California Integrated Waste ManagementBoard (CIWMB) will be used to develop information and

instruments through which sustainable practices can be assessed,and new practices implemented, within the MPI in the future.

Additionally: learn from practices within MPI that can be applied toother industries, building on visibility of MPI


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Interviews, cases

Conducted interviews with: directors, producers, executive producers, assistant directors,

writer, line producers, location managers, grip, assistantcameraman, costume designer, assistant editor, union rep

studio, business: VPs and senior VPs of finance, production,

physical production, digital production, distribution studio environmental managers: Lewotsky, Billik, Nix

others: owner of recyling company, set reconstruction company,environmental consultant, City of Santa Monica (sustainable cityprogram, green building program), California Film Commission,

UCLA School of Theatre, Film and Television

(Also background reading on motion picture industry)


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Findings from interviews

Richer understanding of business side of film and TVindustry

Similarities and differences between film and TV

Power structure; complex interactions between many

parties Strong environmental awareness in some areas .....

leave no footprint when shooting on location

some very progressive environmental managers at studios

..... but room for improvement in others we are a clean industry but many ignore invisible impacts of

industry: air pollution, greenhouse gas emissions

strong throwaway mentality


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Environmental articles in The Hollywood Reporter and

Variety, 1991-2004

0

2

4

6

8

10

12

14

1990 1992 1994 1996 1998 2000 2002 2004


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Motion Picture Industry Solid Waste Diversion

0

10

20

30

40

50

60

70

80

90

100

1990 1992 1994 1996 1998 2000 2002

Per

centofSolidWas

teDiverted


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Measuring environmental impacts: industry-level


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Measuring environmental impacts: includingsuppliers


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Measuring environmental impacts:life-cycle view


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EIOLCA

Economic Input-Output Life Cycle Assessment (EIOLCA)method (developed by the Green Design Initiative atCarnegie-Mellon University); www.eiolca.net

establish economic flows between sectors, using input-output model of US economy, matrix with 465 sectors

get life-cycle economic inputs needed to generate $1 final output

establish environmental impacts per sector per dollar

output, using various databases (EPA and other sources) get life-cycle environmental impacts associated with $1 final output

multiple by size of the sector in US$ get total life-cycle environmental impacts associated with the sector


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economic SO2 CO NO2 VOC

Target: $mill mt mt mt mt

MPI #760101

Total for all sectors 2.168203 1.40342 2.919783 1.182493 0.897596

Motion picture services and theaters 1.494154 0.012407 1.799594 0 0.622056

Advertising 0.110935 0.000092 0.00102 0 0.000002Real estate agents, managers, operators, and lessors 0.078514 0.000039 0.035003 0.000381 0.000009

Wholesale trade 0.054775 0.000594 0.141186 0.114782 0.025517

Magnetic and optical recording media 0.024613 0.001639 0.0134 0.000059 0.009195

Banking 0.017925 0.000493 0.003144 0 0.001061

Electric services (utilities) 0.016153 1.108101 0.03552 0.542325 0.004432

Telephone, telgraph communications, and communic 0.015877 0.000051 0.006265 0 0.002249

Legal services 0.015146 0.00005 0.001776 0 0.000591

Other repair and maintenance construction 0.014633 0.00001 0.017421 0.021833 0.00009

Accounting, auditing and bookkeeping, and miscellan 0.013916 0.000208 0.000103 0.000278 0.000045

Computer and data processing services 0.013242 0.000048 0.002682 0 0.000936

Theatrical producers (except motion picture), bands, 0.012859 0.000072 0.012059 0 0.004215

Paper and paperboard mills 0.011599 0.080957 0.083641 0.049445 0.02145

Noncomparable imports 0.010318 0 0 0 0

Environmental burden of the MPI per million $


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Environmental burden by regional scope

GHG (metric tons CO2e)multiplier: 1.494154

motion picture industry size of industry final salesUS-wide emissions per $1M output 408LA metropolitan area 29,184 19,532 7,977,841California 30,837 20,638 8,429,619US 55,926 37,430 15,287,885


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GHG emissions per $1M output (metric tons CO2 equivalents)

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GHG associated with US output (metric tons CO2 eq.)

0

50,000,000

100,000,000

150,000,000

200,000,000

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GHG associated with California output (metric tons CO2 eq.)

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GHG associated with LA metro output (metric tons CO2 eq.)

01,000,0002,000,0003,000,000

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Measuring environmental impacts:life-cycle view


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conventional pollutants per $1M output (metric tons)

0

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Conventional pollutants


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Hazardous waste hazardous waste generated per $1M output (RCRA, metric tons)

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Fatalities fatalities per $1M output

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Conclusion so far:

The motion picture industry is relatively clean and has

already made good progress in reducing waste .....

..... but due to its size, still has significant impacts ....

.... and these impacts are very different from those intraditional industries, as theyre much more dispersed


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What is the motion picture industry doing?

Very strong personal commitment from many ...

Several valuable organizations (ECO, EMA, others)

Examples of best practices

Some guidelines for green production

AIPC 1991 Environmental Guide

EMA Green Seal checklist

EIDC Environmental Production Guide


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Examples of environmental best practices (III)

Roland Emmerich (director) purchased carbon offsets to makeproduction entirely Carbon Neutral

budget: $125M

Future Forests estimates: 10,000 tons of CO2e

approx. $20 / ton to offset, total $200,000 Emmerich, Mark Gordon (producer) and Jeffrey Nachmanoff

(scriptwriter) are becoming CarbonNeutral citizens

Two principles at work:

leadership by example

what you measure is what you get Recently: Syrianaalso carbon-neutral

NativeEnergy estimates: 2040 tons CO2e

$24,500 to offset, i.e. $12 / ton


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Our dream...

Every production starts to measure its environmentalimpacts ..... there are many ways to do this

there are many resources to help do this

see the research report (Spring 2005) for more information

This will automatically reduce those impacts .....

..... and every production needs a green certification


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Now more movies going green

Our goal [was] always to be a green film, [director

Tom] Shadyac said. We recycled during filming.Every piece of material - lumber, windows, doorand window treatments, flooring, hardware, etc.-that was salvageable was recycled, repurposedand donated somewhere, as opposed to justthrowing it into a landfill. We melted down the steel(from the arks steel infrastructure), sold it and then

donated the money to Habitat for Humanity. Producers worked closely with The Conservation

Fund, an American non-profit environmental group,to calculate the films carbon emissions. They thenplanted enough trees (2,050 to be precise) toeffectively zero-out the movies carbon footprint.

Shadyac, who founded the bottled water company

HtoO (Hope to Others) which donates all profits tocharity, made sure all the trees and shrubbery usedin the film also went to Habitat for Humanity. Thefilms scripts were printed on both sides of recycledpaper.


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Charles CorbettSource: http://greencodeproject.org/en/node/9, last accessed April 1, 2008


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Outline



joint work with Felipe Caro, Tarkan Tan, Rob Zuidwijk


C b ti l b t l l


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Carbon-optimal vs. carbon-neutral supplychains

Inspired by Natura Cosmeticos

Supply chain, arbitrary structure

Each firm chooses its own emissions abatement effort levels

Emissions often caused by multiple firms jointly eg, glass bottles for cosmetics firm: emissions to make and ship the

glass bottles depend on thickness which in turn depends onmanufacturers skill and customers specifications

eg, air shipment for rush orders caused by poor planning by customerfirm: emissions for air shipments depend on transportation providersefficiency and on customer planning practices

GHG emissions cause societal cost

Total supply chain footprint is allocated to firms

Each firm chooses optimal abatement effort depending onfootprint allocation and whether or not offsetting is required


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Ways for a firm to green their supply chain

no offsetting offsetting

no coordination status quo carbon neutral

coordination carbon optimal socially optimal


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Ways for a firm to green their supply chain

no offsetting offsetting

no coordination status quo carbon neutralNatura

coordination carbon optimalWalmart

socially optimal


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Findings

Under fairly general conditions, achieving carbon-optimalityrequires over-allocatingthe total footprint

(Under some conditions, if there are Nfirms in the supplychain, all emissions have to be allocated Ntimes)

Implication: the focus in the LCA literature on avoiding

double-counting does not provide desirable incentives

Logic: as in Holmstrom (1982, moral hazard in teams): allplayers need to internalize full consequences of theirabatement decisions, which means allocating fullemissions to each player


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Outline




From: http://www.waterfootprint.org/?page=files/Presentations, last accessed October 14, 2010
http://www.waterfootprint.org/?page=files/Presentationshttp://www.waterfootprint.org/?page=files/Presentations


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A Comprehensive Introductionto Water Footprints

2009 Arjen Y. Hoekstra

Professor in Water Management University of Twente the Netherlands

Scientific Director Water Footprint Network

www.waterfootprint.org

This is a global average and aggregate number. Policy decisions should be taken on the basis of:From: http://www.waterfootprint.org/?page=files/Presentations, last accessed October 14, 2010


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[Hoekstra & Chapagain, 2008]

g g gg g y

1. Actual water footprint of certain coffee at the precise production location.

2. Ratio green/blue/grey water footprint.

3. Local impacts of the water footprint based on local vulnerability and scarcity.



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C t f t f t i tFrom: http://www.waterfootprint.org/?page=files/Presentations, last accessed October 14, 2010


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Direct water footprint Indirect water footprint

Green water footprint Green water footprint

Blue water footprint Blue water footprint

Grey water footprint Grey water footprint

Water

c

onsumption

Water

pollution

[Hoekstra, 2008]

Non-consumptive wateruse (return flow)

Water withdrawal

The traditionalstatistics

on water use

Components of a water footprint

Source: Hoekstra et al., Water Footprint Manual: State of the Art 2009, p.8


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Water footprint

The water footprint of a product is the volume of freshwaterused to produce the product, measured over the full supplychain.

It is a multi-dimensional indicator, showing waterconsumption volumes by source and polluted volumes bytype of pollution; all components of a total water footprintare specified geographically and temporally.



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Blue, green and gray

The blue water footprint refers to consumption of bluewater resources (surface and ground water) along thesupply chain of a product. Consumption refers to loss of water from the available ground-

surface water body in a catchment area, which happens when

water evaporates, returns to another catchment area or the sea oris incorporated into a product.

The green water footprint refers to consumption of greenwater resources (rainwater stored in the soil as soilmoisture).

The grey water footprint refers to pollution and is definedas the volume of freshwater that is required to assimilatethe load of pollutants based on existing ambient waterquality standards.



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From: http://www.thecoca-colacompany.com/presscenter/TCCC_TNC_WaterFootprintAssessments.pdf,last accessed October 14, 2010


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Water footprint Carbon footprintFrom: http://www.waterfootprint.org/?page=files/Presentations, last accessed October 14, 2010


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[Hoekstra, 2009]

Water footprint

spatial and temporal

dimension

actual, locally specific values

always referring to full supply-

chain

focus on reducing own water

footprint (water use units are

not interchangeable)

Water footprint Carbon footprint

Carbon footprint

no spatial / temporal

dimension

global average values

supply-chain included only in

scope 3 carbon accounting

many efforts focused on

offsetting (carbon emission

units are interchangeable)

Water footprint and carbon footprint are complementary tools.

Water footprint Life cycle assessmentFrom: http://www.waterfootprint.org/?page=files/Presentations, last accessed October 14, 2010


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[Hoekstra, 2009]

Water footprint Life cycle assessment

Water footprint

measuring freshwater

appropriation

multi-dimensional (type of

water use, location, timing)

actual water volumes, no

weighing

WF accounts offer basis for

impact assessment and

formulation of sustainable

water use strategy

LCA

measuring overall

environmental impact

no spatial dimension

weighing water volumes based

on impacts

LCA offers basis for comparing

products with respect to

overall environmental impact

Q ti f


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Questions for us

Will water footprinting become big?

Are there synergies between studying carbon footprintsand water footprints?

is methodology similar enough?

are there economies of scope in doing multiple footprints with thesame company?

is the water footprint (with its spatio-temporal detail) comparable tothe carbon footprint?

are water footprints and carbon footprints likely to be correlated?

After water, what next?

O tli


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Outline




carbon-optimal supply chains, and other topics

Documents