According to the Environmental Protection Agency (EPA), every month in the United States some 100,000 pounds of CDs become outdated, useless or unwanted. Every year, more than 5.5 million software packages go to landfills and incinerators.

CDs and DVDs are made from materials including polycarbonate plastic, petroleum-based lacquer and paints, aluminum and other metals. These materials release chemicals that contribute to environmental and health problems as well as global warming, both when they are produced and when they are destroyed.

The chemical used in jewel cases, polyvinyl chloride (PVC), is especially damaging to the environment. It often contains a variety of additives, including lead, making it is the least recyclable, and least recycled, of the major plastics. The EPA estimates that less than one percent of post-consumer PVC is recovered or reprocessed. That means the remaining 99% either ends up in landfills or is incinerated, a process that releases damaging dioxins into the air.

Eliminating the physical distribution of digital goods is an excellent way for companies in many industries to reduce their impact on the environment. The impact is twofold; locally (smog, landfill, etc.) and globally (green house gas emissions).

The Numbers

It is difficult to place an exact estimate on the total environmental impact of an individual CD. In relation to just greenhouse gases, one study estimates an impact of 1 kilogram of carbon dioxide equivalents for each music CD produced, packaged and delivered. About half of this comes from the production of the CD and half from transportation. Another study, which focused on alternative approaches to music reproduction and distribution, estimated a net difference of approximately one 1 kilogram of greenhouse emissions between physical and electronic distribution (assuming that the electronic media isn’t simply burned onto a CD by the recipient).

Another approach, used by Carnegie Mellon, estimates the environmental impact of physical software reproduction based on economic output. According to this method, every $100,000 spent on commercial software reproduction creates the global warming potential of approximately 29 metric tons of carbon dioxide equivalents as well as 38 kilograms of toxic waste. This estimate does not include related materials such as printed manuals, nor does it include the impact of shipping, etc. required for distribution. There is no reason to assume that in-house software reproduction would have a lower environmental impact, and in fact, would likely be higher due to less efficiency in shipping, batch processing, etc.

Although manuals and other printed materials are more readily recycled than CDs and DVDs, they also cause significant environmental impact. In its Higher Education Supplement, the Times of London reported that an average paperback book has used “4.5kWh of energy by the time it gets to a reader. In terms of climate impact, this is equivalent to about 3kg of carbon dioxide emissions.” Software manuals can be expected to have a similar impact.

Alternatives

Simply put, delivering the same digital goods electronically rather than physically dramatically lowers the environmental impact. For example, even a study by an organization that manufactures over 400 million music CDs a year found that digital distribution would save over 0.9 kilograms in abiotic emissions per CD, net of the impact of the computer and telecommunication resources to deliver it.

For software companies the effect can be even more dramatic. Typically, the majority of software distribution relates to ongoing product updates, rather than new orders. Historically, this distribution is delivered in a “push” mode rather than an “on request” scenario. In order to fulfill the maintenance agreements in place with their customers, software companies are required to ship an upgrade when it becomes available.

With the introduction of electronic delivery and management, however, the software is now always available. The consumer only downloads the product updates or other releases when needed, making the savings over shipping a physical CD/DVD even greater. When you add the impact of the associated documentation and that many software titles span multiple CD’s, it is not unreasonable to assume a net reduction of several kilograms of greenhouse gas emissions for each shipment that is diverted from physical to electronic delivery.

Conclusion

CD’s and DVD’s are used to deliver a wide range of electronic content. While not all segments of the economy may yet be ready for electronic delivery, both the business to business and the software markets are. Publishers and vendors in these markets can and should lessen their impact on the environment by moving to “green” electronic distribution.

A midsized software company that ships 100,000 CDs and their associated documentation a year could eliminate several hundred metric tons of green house gas emissions by switching from physical to electronic delivery. That’s good for the environment and good for peace of mind. There is an ever increasing awareness by government and large organizations of the need to reduce polluting practices. It may be that electronic software delivery becomes a key requirement that helps drive software product selection in the future.

No matter where you go or who you talk to nowadays, the conversation always seems to circle back to the environment, carbon footprints and greenhouse gases. The emergence of this topic feels sudden, and perhaps fleeting, as though it was spurred by a former Vice President’s Oscar run and will fade with the walk offstage. The journey, however, has been a long one, and the conversation is unlikely to change anytime soon. In order to see where we’re going next, it’s important to first look back over the past thirty years and figure out how we got here.

Energy Crisis Spurs Action—The 70s

The Arab oil embargoes of the 1970s introduced energy security as a major policy issue of the modern era. The U.S. response was, among other things, to impose Corporate Average Fuel Economy Standards, create a Strategic Petroleum Reserve, and launch the Solar Energy Research Institute (SERI, later renamed the National Renewable Energy Laboratory).

The oil supply disruptions — and subsequent price swings — pushed various industries to seek protection by investing in energy efficiency. Policy makers, meanwhile, looked to solar power.

The Environment Enters the Equation—The 80s and 90s

The newfound efficiency and increased production, combined with fresh supply from non-OPEC countries, caused oil prices to fall and the interest in energy security to wane during the 1980s. Natural gas markets were also de-regulated by the Reagan Administration, spawning a host of new players in the private sector.

It was during the 1980s that the environment really became part of a national conversation. What began with concerns over urban and regional air quality – smog and acid rain – quickly morphed into a broader discussion about global warming. Scientists and think tanks began producing reports and analyses about this new, emerging problem that was being caused by the buildup of greenhouse gases (GHG) in the earth’s lower atmosphere.

At a 1988 Senate hearing, as the country was in the grips of not only a heat wave and subsequent drought but a Presidential election campaign, NASA’s Dr. James Hansen declared that we were beginning to see the impact of global warming. Then-candidate George Bush stated that those who were concerned about the greenhouse effect should be confident that a solution would be found in the “White House effect” – and that, as President, he intended to do something about it.

The result was U.S. participation in the Earth Summit, the United Nations’ conference on environment and development that was first held in 1992 and where numerous global environmental treaties were negotiated and finalized. It was also the birthplace of the framework under which the Kyoto Protocol would, during the Clinton Administration, later be negotiated.

At the 1992 summit, and during later Kyoto negotiations, the U.S. insisted that “flexible mechanisms” — emissions trading and joint implementation — be allowed under the treaty for compliance purposes. (The U.S. had introduced emissions trading as a compliance tool in the Clean Air Act Amendments of 1990 as an efficient means of controlling SOx- and NOx-related air pollution; a decade later, Europe has embraced these mechanisms in creating the world’s largest emissions trading market, the EU’s Emissions Trading Scheme (ETS).)

Trends Converge/The Future is Bright?—Today

The attacks of 9/11 returned energy security concerns back to the public consciousness, highlighting the dangerous nature of linking oil reserves and national security. Today, energy security and environmental drivers have converged as never before, and will significantly impact the future of the global energy economy.

Governments are starting to pay attention, encouraging alternatives such as biofuels. Today biofuels are mostly derived from traditional feedstocks such as corn, but one day soon could be derived from cellulosic materials, an advancement that would fundamentally alter the geopolitics of energy. At the same time capital investment, has emerged simultaneously, creating a powerful combination of forces currently driving the clean energy market.

According to The Economist, venture capital and private equity investments in clean energy technology has quadrupled over the last two years, to $2 billion in 2006 from $500 million in 2004. In total, 21 states have portfolio standards in place requiring electric power generators to increasingly rely on renewable energy, and analysts predict the clean energy business will grow by 20 to 30 percent a year over the next decade.

All told, 49 countries have policies in place to promote clean energy, including China, Brazil, and India. Former Prime Minister Blair told a group at the most recent Davos gathering that the global community is “on the verge of a breakthrough” on climate change cooperation, adding that “the mood in the U.S. is in the process of a quantum shift.” Blair’s assessment was supported by Senator John McCain, who expects Congress to soon undertake take some tangible measures to deal with climate change.

Today, 30 years after the initial oil embargoes, the convergence of security and environmental drivers, along with the strong participation of capital markets, has created more economic activity in the clean energy sector than ever before. Our ability to understand how we got to this point is critical as we make decisions that will impact us all for several lifetimes.