previous

Table of Contents | Landscape Clinic | Environmental Studies

next

7. Economic Analysis

The primary objective of the Economic team was to produce a cost-benefit analysis that contrasted the current Harvey Mudd College landscape with our proposed alternatives. To begin this process, we have broken down the overall costs into two separate categories--evident costs and hidden costs. Evident costs are those that can be easily be quantified with bills or other records of expenses paid directly by the school, whereas hidden costs are those in which modeling must be used to determine the actual or potential costs. Hidden costs that cannot be directly linked to Harvey Mudd at this time are addressed qualitatively. Despite the fact that they are not paid for directly by Harvey Mudd, these costs are felt by everyone, and it is important that they be included in the decision making process. Furthermore, their increasing impact in the future could result in tangible monetary costs to the college.

7.1. Preliminary Economic Analysis for HMC Campus Landscaping

To provide a basis on which we can compare the economic costs and benefits of alternative landscapes for the college campus, we have analyzed current landscaping costs at Harvey Mudd College (Table 7.1.1). Not all costs associated with the landscape will change with an alteration in design, so our analysis only includes those areas that would be affected by a new landscape, namely, irrigation, chemicals, machinery, plants, and some aspects of maintenance.

The dominant cost represented in our analysis is water, which represents over 2/3 of the annual landscaping budget. The cost of water for Harvey Mudd averages about $2.23 per 1000 gallons. This is only an average, however; the actual water rate that HMC pays decreases with increasing water usage--a disincentive to conserve that may change as the water crisis in California grows. Another important note about water usage on Harvey Mudd campus is that lawns are watered the same amount, per unit area, as are the planting beds; an important observation because it demonstrates that the planting bed areas and the lawn areas are equally important to address when attempting to conserve water on campus.

Chemicals and lawn maintenance make up the second largest annual cost, and also represent two areas of potentially large reductions given alternative landscaping. The grounds crew has begun to do some of the chemical work, like fertilization and pesticide spraying, themselves, which should result in lower costs for the current landscape in this area. Most of the maintenance costs that would be expected to change under a new landscaping scheme would result from having less lawn area to maintain. Furthermore, a reduction in lawn area would decrease our reliance on fossil fuel consuming maintenance equipment like lawnmowers and decrease machinery repair costs. The benefits captured from these reductions go beyond direct economic costs to Harvey Mudd in that they relate to larger issues like greenhouse gas emissions.

Currently, water use represents 2/3 of the resource use, economically, of the college landscape. Since water is distributed equally on grass areas and planting bed areas, both of these current landscapes need to be considered in our alternative landscape planning. This preliminary analysis shows us that we should focus on water and chemical usage when seeking the greatest economic savings in potential alternative landscapes. Finally, our analysis of the costs associated with current landscaping practices will not be complete until we factor in the hidden and potential costs of continuing these practices.

7.2. Alternative Scenario for Landscaping at Harvey Mudd College

Based on the preliminary findings of our economic, environmental, and social study of the campus, we have put together an example of a practical possible alternative for the college landscape, and identified its economic costs and benefits as compared to the current landscape. Based on our campus usage survey (Section 6.1) in which we evaluated student, faculty, and staff use of different areas of the college landscape, we have chosen an alternative scenario in which perimeter, unused, and seldom-used areas of the campus are landscaped using California native and adapted plants as in our experimental garden (Section 4). The alternative plan calls for re-landscaping 90% of the existing planting beds and 33% of campus lawn area, increasing total planting bed area from 4.5 to about 8.3 acres, and decreasing lawn area from 11 to 7.2 acres. The map shown in Figure 7.2.1 displays the Harvey Mudd Campus with the proposed changes needed to implement the alternative scenario.

Figure 7.2.1. Harvey Mudd Campus Map for Alternate Scenario.

There are many important aspects of the alternative plan that account for the savings in resources and money. First, the new plan calls for xeriscaping about 90% of the total planting beds proposed. Using the landscape coefficient method (Section 5.1), we found that xeriscaped planting beds should require 5% of the water being applied to lawns and beds currently (less when precipitation is considered). Furthermore, these beds should require no fertilizer and very little other chemical input (Section 5.2).

The second important part of the plan is the installation of a new irrigation system that can respond dynamically to daily weather information from a central computer. A modern irrigation system provides the greatest potential water savings for any area that uses large amounts of water, such as HMC. A system controlled by a computer that can respond to the dynamic environment will reduce the amount of water consumed annually for three reasons. The modern system would drastically reduce water waste by allowing the customized irrigation schedules that take into account the current climactic conditions, provide an optimal amount of water based on the calculated water requirements of the specific vegetation, and allow for separate watering schedules for drought-tolerant species and turf areas (Prasifka). For the planting beds, a drip irrigation system is recommended. Drip systems waste less water by applying it directly to the plant and not the areas around the plant and it uses less energy than sprinkler irrigation. Sprinkler systems use 30-50% more water and $400-500 per acre more in electricity to irrigate the same area (Wu). Furthermore, a careful analysis of the lawns shows that too much fertilizer is currently being applied (Section 5.2). Thus, the alternative plan calls for a reduction of fertilizer application on remaining lawn areas.

Maintenance costs were reduced in the alternative scenario, specifically in the areas of lawn maintenance and replanting of annual plants each year. Overall, however, we don't expect that the implementation of the proposed alternative landscape would significantly alter the yearly maintenance that would be required. Changing to an automated irrigation system would still require monitoring of the system to make sure it is performing correctly. The new planting xeriscaped planting beds will still require weeding and other upkeep maintenance like pruning to retain a manicured look to the landscape. Furthermore, routine plant replacement would still be required. In sum, the new landscape is likely to require just as much attention and time as the existing one. One consequence of the change is that some of the grounds crew may need to be retrained, or supplemented in their existing knowledge. This provides a good opportunity for them to learn about these issues and keep them in mind as they maintain the new landscape. The yearly landscaping costs associated with this alternate scenario are tabulated next to the current landscaping costs in Table 7.1.1

The proposed alternative scenario results in a reduction of water use from about 71,880,000 ft³ water yr^-1 currently to 18,190,000 ft³ water yr^-1 with the new landscape. This represents a 75% reduction in water use and a savings of $102,000 annually on water alone. Furthermore, the new scenario reduces fertilizer and chemical use by about 2/3, saving over $6,000 per year. Annually, the alternative scenario provides a direct cost savings of around $125,000 to Harvey Mudd College. Although the reduction in cost alone is great incentive to consider seriously this alternative landscape, the decreased resource use could have other cost saving benefits that are not immediately and directly apparent to Harvey Mudd College (Section 7.3).

The cost of implementing the proposed alternative landscape was also calculated (Table 7.2.1). This estimation was made based on averaging of some bids made for this kind of work by outside contractors for a landscape architecture business (Kirkby), although it is important to note that Harvey Mudd Facilities and Maintenance may be able to carry out some portion of the work. Because bids for landscape and irrigation installation can vary widely depending on site specific conditions, this estimation is a rough estimate that should be followed up by a bid specific to Harvey Mudd Campus. Based on these estimates, the total, one-time installation cost for the proposed alternative landscape would be approximately $792,000 if done by an outside contractor. In addition to this installation cost, the design fee for the work would probably be around $20,000 - $30,000 (Kirkby). The new irrigation system, proposed for the lawns, is estimated to cost about $254,000, almost 1/3 of the total installation cost. This estimate was based on an average of irrigation installations, and the range of estimates would put the cost at anywhere between $144,000 and $576,000 depending on the difficulty of the installation. One other factor that hasn't been considered in this cost is the reuse of parts of the existing system, which could significantly cut the overall costs. Because the scenario results in a cost savings of $125,000 per year, the installation would pay for itself within about 7 years. If the initial cost was too great, the re-landscaping could be broken down into yearly goals. For instance, if the first implementation of the plan was the new irrigation system, immediate cost savings in watering efficiency could help pay for further steps toward the finished landscape.

Since one of the largest single costs in the re-landscaping operation would be the installation of a new irrigation system for the lawn areas of campus (Table 7.2.1), it is important to recognize that alternatives to this part of the plan exist that still reduce maintenance costs substantially. For example, Harvey Mudd could implement the new watering scheme designed to operate under the constraints of the current system suggested in Section 5.1. By combining the more efficient watering practice for lawn areas using the existing irrigation system, and replanting beds and some grass areas with native and adapted plants, as originally proposed in the alternative scenario, the college could still save $84,000 per year on landscape maintenance. However, this does not mean that the team advocates following this plan rather than the plan that includes the new sprinkler system. We believe that a new system is an integral part of reducing resource use on campus and would demonstrate Harvey Mudd's role as a leader in using socially responsible technology. Therefore, the new lawn irrigation system could be installed after cost savings from carrying out part of the alternative plan (as outlined above) result in sufficient capital to purchase a new system. Another important factor is the possibility of subsidization or financial incentives for the installation of a new irrigation system from the Southern California Municipal Water District or other regional water providers. In any case, after the re-landscaping costs have been paid for, each year with the new landscape in place, including the new irrigation system for the lawns, represents a net cost benefit to the college totaling around $120,000.

7.3. Hidden Costs of Landscaping at Harvey Mudd College

Beyond the immediately tangible costs such as water and chemical use, the Harvey Mudd campus is incurring other economic impacts as a result of its high levels of resource consumption. These impacts and consequences are more far-reaching than the physical and economic bounds of the college; however they are, or should be, a concern to all residents in this region. Furthermore, some of the consequences of Harvey Mudd's actions are global in scope. Whether the consequences are local, regional, or even global, the costs of the consequences will be shared by everyone who is part of the Harvey Mudd community as well as everyone else who is adversely affected. The incentive for change in response to some of these hidden costs is not only a matter of protecting bottom line economic interests of the college, it is a chance to claim a position of leadership in global environmental problems with potentially severe socioeconomic consequences. In the following sections some of these problems will be visited with a focus on their economic outcomes which are a direct result of the environmental problems discussed earlier (Section 5).

7.3.1. Socioeconomic Costs

One source of concern about changing the current landscape was the possibly negative impact it may have upon attracting prospective students, employees, and donations. The aesthetic survey conducted revealed that there would be no negative economic impact in these areas (Section 6.4). More staff and faculty stated that they would be more likely to come to work at HMC, more parents said that they would approve of their child's choice to attend HMC, and more trustees and alumni revealed that they would donate more to HMC if the landscape were more native than those that said it would have a negative effect. Based on these indications, it is not expected that the school would loose any money, have a lower caliber applicant pool, or receive fewer donations if the proposed alternatives were implemented.

An additional hidden cost of the current HMC landscape is the negative influence it may have upon the students' future landscaping practices. By learning from their environment that it is acceptable to waste water and other resources on maintaining an inappropriate landscape, students may go on to do the same in their homes. Implementing a more regionally appropriate landscape at HMC will teach students that resource conservation matters, economically and socially, and reinforce their understanding of the impact of their actions on society.

7.3.2. Global Climate Change -- Campus Energy Usage

Greenhouse gases are thought to be the largest contemporary source of increased warming of the earth's atmosphere (IPCC). This warming is referred to as positive radiative forcing, since it is caused by an imbalance in the incoming and outgoing energy on earth. Currently, carbon dioxide is causing about 1.46 Watts m^-2 of positive radiative forcing, which is 60% of all the greenhouse gas caused forcing, and 50% of the total positive anthropogenic forcing (IPCC). Carbon dioxide has risen in atmospheric concentration by about 30%, from 280 to 365 ppmv, since 1750 (IPCC).

Anthropogenic carbon emissions, mostly from fossil fuel burning, are predicted to increase in the next century, leading to a rise in atmospheric CO₂ concentration from 365 ppmv currently to anywhere from 540 - 970 ppmv, a rise of 50 - 170 % (IPCC). The dominant source of the rising carbon emissions will continue to be fossil fuel, and the contribution of CO₂ to total radiative forcing is expected to rise from 50% to about 75% by 2100 (IPCC). The potential impacts of global climate change include increased drought risk and storm frequency in addition to rising temperatures. These factors could certainly influence Harvey Mudd economically in a number of ways. For instance, because of all the socioeconomic risks posed by global climate change, fossil fuel-based energy prices could rise to reflect their increasing cost in damages. Furthermore, fossil fuel prices themselves could rise. Both of these consequences equate to rising energy costs, which would impact Harvey Mudd's landscape practice by increasing cost of fueling maintenance vehicles, increasing costs of energy hungry products like fertilizer and pesticides, and increasing water transportation costs.

Harvey Mudd's landscape is clearly contributing to the problem of fossil fuel emissions because of its high use of energy intensive water, fuel, fertilizer, and pesticides. This is evident when comparing the energy budgets of our experimental garden and Harvey Mudd's current landscape (Section 5.3). That analysis shows that the current energy use, and thus the current indirect contribution to climate change, is much higher than it would be given an alternative resource conserving landscape. Although clear economic costs of global climate change can not yet be predicted specifically for this area, Harvey Mudd clearly has a commitment to act on the accepted scientific data and predictions that demand action in order to avert future damages, in California and around the world.

7.3.3. Chemical Pollution by Fertilizer and Biocides

One of the most important potential environmental consequences of our current landscaping practices is pollution of groundwater with fertilizer (Nitrogen and Potassium). As has been shown by our work thus far, there is evidence for nitrogen pollution of the groundwater below campus lawn areas (Section 5.2), raising nitrate levels in the water close to the legal limits for drinking water supply. If nitrate in the drinking water supply exceeds the Maximum Contaminant Level, the water must be purified to reduce nitrate concentration. This results in higher costs of water treatment that can lead to higher water rates. The immense cost of removing nitrates from water represents a realistic hidden cost to the college, especially if water rates are raised as a result. For example, when peak nitrate concentrations at Lake Decatur, in Illinois, exceeded the maximum allowable limit, treatment capability had to be added to the existing water processing facility that had an initial capital cost of $12 million and had an annual operating cost of $400,000 (John et al.). If this kind of processing capability has to be added to southern California water treatment facilities, the cost would most likely be reflected in increased water prices for consumers, including Harvey Mudd.

Another affect of nitrogen pollution occurs when groundwater with high nitrate concentration reaches other bodies of water such as lakes, rivers, and bays. When this occurs, the increased nitrogen content in these bodies of water can cause blooms of harmful algae that consume oxygen in the water, killing or driving out other life from the area (Tilman et al.). The economic consequences of this are falling fishery catches, decline in biodiversity, and degradation of the land's ability to provide flood protection and pollution abatement (Tilman et al.). Worldwide, this same phenomenon has resulted in over 40 "dead zones" where algal blooms have destroyed or driven away other life (Tilman et al.). Some examples of this in the United States include the Chesapeake Bay, where one third of the bay area is lifeless during the summers, and the Gulf of Mexico where prime fisheries have been degraded (Tilman et al.). In the Gulf of Mexico alone, potential costs to reverse and discontinue the damages are upwards of $2 billion dollars (Tilman et al.). In California, Lake Tahoe, noted for its exceptional clarity due to low nutrient levels, has lost 1.5 feet of transparency each year since the 1960's due to the introduction of nitrogen and phosphorous (WWPRAC, 2-16). Although this particular threat poses less economic consequence to Harvey Mudd specifically, it is one of the most urgent global environmental problems to address because of the severity of the damage it is causing. The failure of Harvey Mudd College to actively involve itself in the solution to this issue, and other environmental problems, represents a lost benefit to the college; the unclaimed chance to assume the leadership position that HMC purports to have.

Other chemical pollution by herbicides, pesticides, and other biocides can also have adverse consequences on the environment that lead to economic concerns. Pesticide control measures in the United States currently cost approximately $4.1 billion per year, not including the in-direct environmental and public health costs (Pimentel et al. [1991]). One of the primary concerns of pesticide pollution is the direct adverse affect on human health. The public health costs include pesticide induced poisoning, resulting in 600 hospitalized cases and 50 fatalities per year (Pimentel et al. [1991]). Furthermore, pesticide induced cancer and sterility is of growing concern both from a standpoint of human health and economic cost consequences (Pimentel et al. [1991]). In addition to direct human health affects, pesticide use increases groundwater contamination, food contamination, fish, wildlife, and livestock destruction, loss of natural vegetation and crops, destruction of pest predators, and increasing pesticide resistance in pests (Pimentel et al. [1991]). The estimated annual cost of these problems stands at around $4 billion dollars, a number that can only grow with increased usage of chemical pesticides (Pimentel et al. [1991]). One way to analyze the cost of using biocides at Harvey Mudd College is to calculate the cost to remove biocide pollution. On campus, this would mean cleaning the biocide-polluted groundwater that is a primary route for biocide pollution to spread and damage surrounding areas. On average, the needed water purification would cost somewhere on the order of $1.43 per 1000 gallons of water treated (Pimentel et al. [1991]). Based on Harvey Mudd's current water use, the cost of purifying all water used on the landscape would be about $86,000 dollars per year, increasing the yearly cost of landscape-associated costs to the college by about 50%. Even if Harvey Mudd itself were not forced to clean the water it is polluting, the costs of treatment would eventually be reflected in increased water costs. In addition, the most cost effective way to deal with biocide pollution is not to treat it after it has got into the water system, but to prevent its spread in the first place by limiting its use. The increasing indirect costs of biocide use are clearly beginning to outweigh the benefits, as evidenced by a decline in agricultural biocide use (Figure 7.3.1). Here again is a chance for Harvey Mudd to take a progressive stance on an important issue that is already nearing a turning point in many sectors of the economy.

Figure 7.3.1. Total Biocide use in different sectors. Blue line represents summation of biocide use among all sectors (Aspelin).

7.3.4. Increasing Cost of Water

The price of water has been increasing over the last century for many reasons, including increasing cost of removing water from the source, transporting water longer distances, increasing drinking water standards, droughts, and changing pricing policies. The past trend in water pricing was decreasing block rates, as there was enough water to meet demand. But now there is a shift towards increasing block rates to use the price of water to regulate demand and encourage conservation (Gleick). This will most certainly impact Harvey Mudd in the years to come, since the campus consumes large amounts of water and would be a target for these increasing block rates.

Future changes in drinking water standards are likely to increase the cost of water substantially. President Bush is considering changing the standard for arsenic levels in drinking water from 50 ppb to possibly around 20 ppb (Heilprin). The state of California is currently reviewing a change in chromium 6 levels in drinking water to 2.5 ppb from 50 ppb. When standards are changed, it requires states to develop new methods of testing the lower levels and treating the water to the appropriate level, in some cases constructing new facilities, all increasing the cost to the consumer. In one model it is projected that a new chromium 6 standard would increase the cost of local water in Burbank to $580 per acre foot, much more than the $529 for imported water from Northern California (Guccione and Blankstein). While chromium 6 is an industrial byproduct that Harvey Mudd does not produce, the school may still end up paying for the cost to remove it from the water.

While many factors influence the price of water, one of the major factors is the price of energy. Energy is consumed to pump the water out of the ground and transport it to where it is needed. On average it takes 1140 kcal to deliver 1 m³ of water to its destination in the United States (Pimentel et al. [1997]). An increase in the cost of fossil fuels directly impacts the cost of electricity and water, as from 1973 to 1983 U.S. irrigation costs increased from $551 million to $2.5 billion per year (Pimentel et al. [1997]). With the current energy situation in California, the future price of electricity is unknown, but if it rises, which is likely, water costs will also increase. Water conservation has the twofold benefit of reducing water and electricity bills. In many studies the monetary savings from reducing water use were greater than those from reducing electricity use (Prasifka). Whether this applies at Harvey Mudd depends on whether we have any pumps for water pressure in the irrigation system. This needs to be investigated still.

All of these hidden costs may not be directly felt by Harvey Mudd, but they will contribute to a rise in the cost of water that Harvey Mudd will have to pay for, as more nutrients must be removed from the water, fossil fuels contribute to a change in climate, energy costs increase, and alumni waste water resources on their sometimes regionally inappropriate landscapes.

7.3.5. Conclusion to Hidden Costs Section

The ultimate goal of analyzing the current impacts of campus resource use in landscaping that do not yet have direct costs to Harvey Mudd College is to show that these problems have a potentially large economic consequence in the future. Furthermore, these are issues with major socioeconomic implications and consequences that cannot be ignored by tomorrow's leaders in industry and science. These hidden environmental and social costs, associated with large economic costs, are an important opportunity for Harvey Mudd to earn the position of leadership that it reports to pursue. These are pressing issues that require careful economic, scientific, and social analysis, for the college's future as an institution producing leaders, and for the benefit of all those affected on the local, regional, and global scales of these problems.

previous

Table of Contents | Landscape Clinic | Environmental Studies

next