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HomeMy WebLinkAboutBroadband and Telecommuting, 2011, 2, 41-47 Low Carbon Economy 41 doi:10.4236/lce.2011.21007 Published Online March 2011 (http://www.SciRP. org/journal/lce) Broadband and Telecommuting: Helping the U.S. Environment and the Economy 1,2 2 Joseph P. Fuhr , Stephen Pociask 1 2 Economics Widener University Chester, PA, USA; The American Consumer Institute, Washington, D.C., USA. jpfuhr@widener.edu Email: rd th th Received December 3 , 2010; revised December 20 , 2010; accepted December 29 , 2010. ABSTRACT This study examines how to reduce greenhouse gas emissions in the U.S. through the widespread delivery of broadband services and the expansion of telecommuting . Telecommuting can reduce greenhouse gas emissions over the next 10 years by approximately 588.2 tons of which 247.7 million tons is due to less driving , 28.1 million tons is due to reduced office construction , and 312.4 million tons because of less energy usage by businesses . This paper explores these broadband services and their effects on the environment , specifically as a means to ac hieve better and cleaner energy use , while enhancing economic output , worker productivity and the standard of living of American consumers . : Keywords Broadband , Economy , Environment , Telecommuting 1. Introduction source, the use of personal vehicles accounts for 30% to 50% of greenhouse gas emissions, as well as similar ef- The world is becoming more and more aware of and fects on toxic water and air pollutants [4]. The typical concerned about changes in the atmosphere due to ex- personal vehicle produces 5.0 tons of carbon dioxide treme weather events, melting glaciers, and changing annually [5], as well as methane, nitrous oxide and vari- ecosystems. As the Washington Post noted in a special ous man-made gases. The roads needed to move vehicles report about global warming and climate change, “broad are also a threat to the envi ronment, as they replace for- scientific evidence suggests that carbon dioxide and other ests and affect animal hab itats. These roads are usually greenhouse gas emissions have already triggered changes constructed with petroleum components, their mainte- in the Earth’s climate and th at more disruptive changes nance expends energy and resources, and they produce lie ahead” [1]. The story disc ussed a range of costly and hazardous runoff into nearby streams. daunting measures to address the problem by reducing A number of legislative proposals have called for re- emissions. quiring more energy efficient automobiles and encour- This paper adds to the discussion of how to reduce aging the production of alternative fuels [6,7]. While pro- greenhouse gas emissions by documenting the reductions viding benefits, however, th ese proposals are likely to that can be realized by the widespread delivery of produce more expensive automobiles and significantly broadband services in the U.S. Current carbon dioxide higher fuel costs. The most popular alternative fuel, emissions in the U.S. hover around 5.8 billion tons and ethanol, is typically produced from corn and is more ex- are growing [2]. In this st udy we examine only one as- pensive than gasoline. Since corn prices have increased pect of broadband’s ability to decrease carbon emissions, faster than other goods and services, the outlook for etha- that of telecommuting. Broadband can not only decrease nol as an alternative source of energy will mean that corn pollution but also contribute to economic growth and job prices are likely to continue to increase faster than the creation. price of other goods and services. Since corn is used as feedstock, as well as for cereals and other foods, higher 2. Present Situation prices will mean higher food prices for consumers, in In 2008, there were 256 million motor vehicles registered addition to higher energy prices [8]. Moreover, the use of in the U.S., with automobiles and trucks accounting for many of these alternative fu els, like ethanol and other 54% and 39% of these vehicles, respectively [3]. By one bio-based energies, still result in carbon emissions. One LCE Copyright © 2011 SciRes. 42 Broadband and Telecommuting: Helping th e U.S. Environment and the Economy 4. Potential Benefits of Telecommuting advantage is that domesti cally-produced ethanol re- lieves some pressure on oil-imports. Alternate fuels still Balaker adeptly describes telecommuting as “the most leave policymakers w ith difficult choices that pose high cost-effective way to reduce rush-hour traffic and it can costs for consumers, at least in the short run, but the cost improve how a weary nation copes with disasters, from of oil is likely to rise as reserves are depleted. hurricanes to terrorist a ttacks” [17]. He states: It helps improve air quality , highway safety , and even 3. Telecommuting and Telework health care as new technologies allow top-notch physi- Broadband services help provide seamless data, video cians to be ( virtually ) anywhere . Telecommuting expands and voice communications, permitting workers to use opportunities for the handicapped , conserves energy , and their home in the same manner as a businesses’ office in – when used as a substitute for offshore outsourcing – it what is described as telecommuting and telework . Tele- can help allay globalization fears and save American commuting is the use of telecommunications technology jobs. It can even make companies more profitable , which to allow employees to work from their homes and avoid is good news for our nation ’ s managers , many of whom the use of transportation to commute to and from work have long been suspicious of telecommuting [17]. [9]. Telework is the use of telecommunications to work The major gain to the en vironment from telecommut- anywhere other than the home office, such as telework ing is the decrease in the number of automobile trips. A sites satellite offices, and remote locations [10]. Another recent survey found that 91% of workers commute by car, 4% by ride sharing, 3% by public transit and 3% by other group not covered by either term is home-based workers , means [13]. Telecommuting is zero emission transporta- who consist of self-employed workers who work at home tion. Studies show that telecommuters reduce daily trips instead of renting office space. Of the 25.4 million firms on days that they telecomm ute by up to 51% and auto- in the U.S., nearly 20 milli on (77%) are non-employer mobile travel by up to 77% [17]. firms [11]. Of these, nearly 85% are in service industries, Since people are staying hom e instead of driving to many of which are very conducive to home-based work- work, telecommuting reduces fuel consumption and im- ing arrangements [11]. However, the amount of tele- proves air quality. There is less traffic congestion, oil commuting in the U.S. is constrained by the fact that consumption, and noise and air pollution as a result of only about one-half of U.S. households have a high- telecommuting. Since fewer cars are needed, telecom- speed connection to the Inte rnet [12]. These statistics muting will also save emissions and pollution associated suggest that there is potential for growth in telecommut- with automobile production. With fewer cars needed for ing. commuting, car production can be reduced. Another Based on data through early 2006, only 2% of workers benefit is that less infrastructure will be needed, avoiding telecommute full time and 8% operate businesses from construction and road maintenance costs, as well as re- home, suggesting that 10% regularly work at home [13]. ducing hazardous runoff into nearby streams. However, 25% had the potential to regularly work from On the other hand, those who telecommute may not home [13]. Similarly, a survey by Dieringer Research save the entire trip-miles to and from work. They may found 14.7 million individuals working almost every day still use their car to drop off a child at daycare or pick up from home during 2006 [14]. Given that there are 146 groceries, as they formerly did on route to and from an million persons employed in the U.S [15], the percent of office. They may move further from an urban area to take full time home workers is (again) about 10%. However, advantage of a rural setting, increasing the commute dis- 28.7% of workers work at least one day per month from tance when they actually go to an office. These offsets home, and 44.8% report having done some work from have been referred to as the “rebound effect” and more home [14]. Therefore, the potential for expanding tele- study is needed to determine how they impact the overall commuting could be significant, providing that workers savings which telecommuting can potentially deliver. and employers see the benefits of working remotely from 5. Stakeholders that Benefit from the office. Telecommuting In addition, the potential for increased telecommuting for government workers is high. According to the Office Who benefits from telecommuting? In general, telecom- of Personal Management 41% of federal workers are muting can benefit various stakeholders such as consum- eligible for telecommuting but only 19% do [16], which ers, employees, employers a nd society especially the constitutes 7.7% of total federal workforce [16]. Senators elderly and disabled. Landrieu (D-La.) and Stevens (R-Ak.) have introduced a 5.1. Benefits to Employees bill that will make more federal government employees eligible for telecommuting [16]. Employees can benefit in various ways from telecom- LCE Cop yright © 2011 SciRes. Broadband and Telecommuting: Helping th e U.S. Environment and the Economy 43 muting. Telecommuting can provide job flexibility, which around US$2 000 per teleworker annually in reduced can i mprove the balance between work and personal time. absenteeism [20]. Telecommuters have increased job satisfaction, a distrac- Bad weather and emergencies, like terrorism, fires or tion free environment, better time management, are less natural disasters, are less likely to affect employees’ abil- involved in office politics and generally have less stress. ity to get to work. For example, JetBlue uses at-home Pitney Bowes offers telecommuting “to enhance employee agents for its reservation ce nter which greatly increases effectiveness and positively impact the quality of life of the flexibility of the firm, as well as reducing the cost of workers by minimizing the stress, fatigue, time and cost booking a flight by 20% [20]. A company spokesperson associated with commuting to and from work” [18]. stated: Also, by eliminating the commute to work people have When things get busy , like during a weather event , we more time for work or leisure. According to US Depart- can send an e-mail to all agents asking them to log in to ment of Census data, the average commute is 26.4 min- help . The response is immediate – we don’t have to wait utes each way or 53 minutes daily [19]. Telecommuting for them to come in [21] . allows workers to find more time savings by reorganiz- Studies have shown that telecommuting decreases the ing their lives to take advantage of many different kinds turnover rate which can significantly decrease the cost of of low congestion periods. Those who shop during off- training and recruiting. Best Buy has instituted a program peak find parking easier and they also spend less time at for telecommuters called ROWE . This program has a the checkout line [17]. Qualit y of life increases as they 3.2% lower voluntary turnover rate than non-ROWE workout in a less crowded health club which saves time. teams. Best Buy has estimated the per-employee cost of During breaks from work, they can do household chores. turnover is US$102 000 and productivity is 35% higher They can take their children to and from school, and be for ROWE team members [22] . Also employees are more home when the children leave or arrive. loyal, focused and energized. Telecommuting allows There is also gas savings as well as lower maintenance employees who otherwise would not be able to commute costs as usage of the vehicle decreases. By one estimate, such as mothers, the elderl y and the disabled the oppor- the typical worker pays US$688 annually for work-re- tunity to be gainfully employed. Since telecommuting lated gasoline, and represents a direct savings for tele- increases the pool of applicants and thus the quality of commuters [13,19]. This decr ease in usage from tele- employees it can give a firm a competitive advantage by commuting means that fewe r cars are needed. Telecom- being the employer of choice. A senior Director at Sun muters save money by eating out less, decreasing daycare Microsystems states “We found that our remote employ- needs, and spending less on work-wardrobes and dry ees were among our most excellent performers” [23]. cleaning. There is also the potential for a tax deduction As a result of telecommuting, firms will need less for a home office. equipment, office space, parking spaces, office equip- ment, supplies and other amenities. IBM claims it saves 5.2. Benefits to Employers almost US$1 billion a year in avoided real estate costs, Employers have also gained from telecommuting. There thanks to telecommuting [20]. Sun Microsystems esti- are various estimates of the gain in productivity as a re- mated that it saved US$69 million in real estate cost in sult of telecommuting. Allenby reports that Siemens, 2005, as a result of its telecommuting program [23], and Compaq, Cisco, Merrill Lynch, Nortel and American it was able to decrease office space use by 30% after im- Express have reported increases in productivity as a re- plementing its “iWork” program [24]. Nortel and AT&T sult of telework programs of between 10% and 50%, and estimate telecommuting saves US$20 million and US$25 a five-year Smart Valley study found an average of 25% million in real-estate costs, respectively, while Unisys cut increase in productivity for participating companies [20]. office space 90% [17]. In one study, AT&T found that Another advantage is that performance is measured by employee productivity improved by US$65 million, in- results rather than hours in the office. While absenteeism creased labor retention saved US$15 million [20], and increases when employees are sick or have a sick child, teleworkers avoided commuting 100 million miles, which telecommuting may allow the worker to be somewhat reduced carbon dioxide emissions by 45 000 tons less of productive. Also if an employee has a contagious illness, emissions, or around 1.8 tons per teleworker [20]. In CO 2 telecommuting will reduce the spread of illnesses to that study, broadband access to the Internet was found to other workers, thereby increasing productivity. Thus both be a critical success factor [20]. Studies also found en- absenteeism and presenteeism decreases. It is estimated ergy savings because constr uction was avoided and be- that presenteeism costs US companies about US$150 cause the energy required in a home office was substan- billion a year [17] and that the increased flexibility in tially less than in a commerci al office. For instance, one scheduling as a result of telework saves companies study found a reduction in energy use and a savings in LCE Copyright © 2011 SciRes. 44 Broadband and Telecommuting: Helping th e U.S. Environment and the Economy 5.3.2. Homeshoring real estate costs of US$25 million [20]. Another estimate found that home offices use less energy than a commer- Reports suggest that millions of jobs have been out- cial office – a difference between 3 000 to 4 400 kWh sourced to overseas companies, a phenomena referred to per year [25]. Romm estimated that 3.5 billion square as offshoring . One report cites that half of the Fortune feet of saved commercial space would result in the 500 companies have offshored jobs [28], and Forester avoidance of 35 million metric tons of greenhouse gases Research predicts 3 million jobs will be moved overseas [25]. Also, the avoidance of construction of these build- by 2015 [29,30]. Concerns over these lost domestic jobs ings would save another 36.4 million metric tons of have led to lawmakers crafting over 200 bills designed to greenhouse pollution [25]. impede offshoring [17]. The alternative, homeshoring , can be the domestic answer to this exodus, and broad- 5.3. Other Benefits to Society band technology can play an important role in this rever- sal. Homeshoring is the use of home-based agents to Besides the environmental benefits of telecommuting, field various types of custom er care inquirers. “Virtual” there are various other benefits to society. With less call centers employ home based agents which takes away commuting, the number of automobile accidents and the need for the brick-and-mortar. Early adopters of deaths will decrease as well as maintenance and infra- homeshoring include JetBlue Airways, Alpine Access, structure cost for roads, there will be less of a strain on PHH Arval and LiveOps [21]. Homeshoring encourages public transit. Ther e are also benefits to rural economies, a diverse workforce that could include mothers, retirees, since people can live where th ey work. Workers can also students, and people with disabilities and people who supplement their earnings by using technology to earn want maximum flexibility [21]. Technology has the po- money by working at home as a second job. Decreasing tential to change the landscap e of customer care services. the amount of pollution will also decrease health-related Growth in broadband services to the home, including problems especially respirat ory ailments which are exac- voice-over-Internet telecommunications and softswitch erbated by particulate pollution. Two groups that find it technologies, has decreased labor and facility costs. One particularly difficult to commute to work and could par- study estimated that in a traditional call center in the ticularly benefit from the ability to work from home are United States costs are aroun d US$31 per employee hour, the disabled and elderly. The ability to telecommute including overhead and training, whereas home based could result in increased opportunities for gainful em- agents can decrease cost by up to US$10 an hour. Home- ployment. Also, telecommuting can lead to homeshoring based retention rates are ar ound 85%, whereas conven- which “is the transfer of service industry employment tional call centers have a retention rate of between 10% from offices to home-based employees with appropriate and 20% [31]. The higher productivity and lower cost telephone and Internet faciliti es” [26]. This will decrease have made homeshoring a competitive alternative to off- the flight of jobs overseas. shore outsourcing, which has had a negative impact on 5.3.1. Benefits to Elderly and Disabled domestic employment opportu nities. The presence of Broadband can greatly increas e the quality of life and broadband infrastructure in rural communities can serve potential job opportunities for the elderly and disabled. to develop a pool of online workers, which may attract Litan found that broadband deployment and use lowered information-based businesses, such as IT development, medical costs and institutionalized living, while increas- software and IT service businesses, as well as back-office ing labor force participation for seniors and individuals telecommunications centers. By increasing broadband with disabilities [27]. All told, Litan estimated the cumu- development and use, as well as encouraging telework lative benefit to be at least US$927 billion over a 25-year participation, a pool of flexible workers can be drawn period (with future benefits discounted in 2005 US$s) upon that can stem, and possibl y reverse, the loss of do- [27]. mestic jobs. Litan states that “the broader use of the Internet, and As worker productivity and morale increases, a firm’s specifically ‘broadband’ technologies, to deliver health per unit costs decrease. Given competitive markets, de- care services and information to senior citizens and indi- creases in per unit costs result in lower prices and in- viduals with disabilities, and to make it easier for mem- creased quality for consumers. In addition, the quality of bers of both populations to work, if they are willing to do the customer service experience will improve, since do- so” [27]. Given that many elderly and disabled are un- mestic-based telecommuters can more easily and quickly able to travel to work, telecommuting offers expanded be called upon to deal with peak periods of demand, work opportunities. The potential for increased employ- thereby reducing long hold times in customer service call ment is especially important to disabled Americans centers and help hotlines. whose unemployment rate is 75% [17]. LCE Cop yright © 2011 SciRes. Broadband and Telecommuting: Helping th e U.S. Environment and the Economy 45 6. Estimation of Environmental Benefits of half of U.S. households have broadband services, which Telecommuting suggests (again) that telecommuting could well double in the U.S [12]. Using the economic and environmental 6.1. Direct Benefits costs discussed earlier in this paper, a doubling of the On an average work day, millions of Americans com- current level of telecommuti ng, to say 20%, would mean mute between home and work by way of their personal that one-fifth of the envir onmental cost of commuting vehicle. According the Bureau of Labor Statistics, there could be eliminated. are 146 million persons employed in the U.S [15], and To highlight the future (potential) benefit of telecom- transportation statistics show that 91% of workers (or muting, this study estimates the effect of an increase in 132.9 million workers) use personal cars to commute to telecommuting equal to an additional 10% of the work- work [32]. Assuming that that the average number of force over the next ten years. Based on this incremental people in a carpool is 3, approximately 127.5 million increase and using the same calculations as before, the personal vehicles are regularly used to commute 132.9 total economic savings direct time and expense would be million workers. This activity expends time, creates con- US$96.5 billion, including the cost of 4.4 billion gallons gestion, costs lives in car accidents, and it wastes motor of gasoline each year. In terms of the environmental vehicles, maintenance, fuel and public resources. benefits, if 10% more of the workforce could telecom- The average U.S. worker commutes 15 miles and 26.4 mute fulltime, emissions of greenhouse gases into the minutes one-way to their job [19], which means that 918 atmosphere would be reduced by an additional 42.4 mil- billion miles are traveled and 1.7 trillion minutes are lost lion tons of carbon dioxide, as well as 2.6 million tons of in the course of a 240 day commuting year. To put this other pollutants, which results in 45.0 million fewer tons into context, the travel time wasted is equivalent to the of greenhouse gases each year . Over the next ten years, annual paid hours of 17.2 million production workers. the cumulative incremental savings would be equal to The lost wages and cost of the vehicle (including gas, 247.7 million tons of greenhouse gases. Keep in mind depreciation, insurance and maintenance) would be nearly that these benefits include onl y those associated with the US$1 trillion or, incredibly, 7.2% of the total gross do- use of a personal car, and not with public transportation. mestic product of the U.S. In other words, for every 6.2. Indirect Benefits US$14 produced in the economy; US$1 is wasted just getting employees to work using their personal vehicle. While these are potential dir ect benefits, there are many indirect benefits, some of which can be approximated, The effect on the environment is equally stunning. such as the benefits from redu ced traffic. While there are Assuming fuel efficiency of 21 miles per gallon, com- benefits to drivers who telecommute, the reduction in muting to work using personal vehicles consumes 44 traffic bestows a benefit on all other drivers. In other billion gallons of gasoline per year. In terms of green- words, as road congestion is reduced, there are benefits house gasses, private vehicles used during commuting for those who continue to use the roads, and these bene- release 424 million tons of carbon dioxide into the at- fits could be significant. In 2003, according to the Texas mosphere each year [33]. In addition, other emissions Transportation Institute, US$63.1 billion worth of time include 23 million tons of carbon monoxide, 1.8 million and fuel was wasted due to traffic congestion during rush tons of volatile organic carbons and 1.5 million tons of hour in 85 metropolitan areas. This resulted in 3.7 billion oxides of nitrogen each year [34]. All of these statistics hours per year, which is an average of 47 hours per ignore the fuel expended for public transportation, gov- commuter and 2.3 billion gallons of gas [35]. As previ- ernment vehicles and other vehicles, most notably those ously estimated there are 127 .5 million work commuter used for construction, material transportation, shipping vehicles. According to 2000 U.S. Census of those com- and commercial sales fleets. muters, 66.9 million or 52.5 percent leave for work be- As the literature presented in this study shows, tele- tween 6:30 and 8:29 in the morning which will be con- commuting can reduce pollutants without sacrificing, and sidered peak time. John Edwards, chairman and founder likely augmenting, economic productivity. As previously of the Telework Coalition notes that “for every 1% re- noted, around 10% of workers telecommute full time, duction in the number of cars on the road there is a 3% approximately one-tenth of these economic and envi- reduction in traffic congestio n” [36]. If the average num- ronmental costs are already being saved, which approxi- ber of vehicles on the road during rush is 100 million, a mates an annual reduction of 45 million tons of green- 10% increase in telecommuting would result in 6.7 (6.7%) house gases. million less private vehicles commuting to work during According to a survey conducted by Rockbridge the potential for telecommuting could reach 25% participa- rush hour, or 20.1% decrease in congestion. In this sce- tion. One holdback on telecommuting is the fact that only nario, the savings in wasted time and fuel would be LCE Copyright © 2011 SciRes. 46 Broadband and Telecommuting: Helping th e U.S. Environment and the Economy US$12.7 billon and 744 million hours would be saved as Table 1. The environmental benefits of telecommuting. well as 462 million gallons of gasoline, which is equiva- Forecast lent to 4.8 million tons of greenhouse gas not being Telecommuting Green Annual Savings Incremental 10 emitted into the atmosphere. This study makes no attempt Effects Million Tons years to forecast future benefits of decreased congestion. Million Tons Since telecommuting reduces the need for office space, Direct Effects from Driving 45.0 247.7 there is reduced energy use for a home office versus a commercial office, as well as energy savings that results Indirect Effects from 4.8 N.A. Congestion from avoiding office building construction. What would the savings be, if each full time telecommuter resulted in Office Space Not Built 28.1 28.1 one less office? Based on this study’s prediction of the Saved Office Space Energy 56.8 312.4 number of telecommuters that could be added to the ex- isting base and assuming that the average office worker for society, as well as lower prices and better quality of utilizes 250 square feet of commercial office space, the life. Encouraging the development of technology such as total reduction in office space would equal 3.3 billion broadband services, which will facilitate the use of more square feet. telecommuting, could become one of the most important Since less corporate office space would be needed, economic public policy initia tives, because it helps the there is an additional environmental savings because less environment while augmenting economic growth. energy will be expended constructing additional office While this study provides a number of simple esti- space. We assume that for every 1 billion redu ction in sq. mates of the environmental e ffects of info rmation tech- ft of construction 8.5 million tons of greenhouse gas is nologies, further research is needed to develop a more not produced [37]. Thus by avoiding 3.3 billion sq. ft. of comprehensive analysis. Future studies should consider construction, 28.1 billion greenhouse gases would not be the increased jobs that could be eligible for telecommut- emitted [37]. These estimates do not take into account the ing once high-speed “telepresen ce”, the ability to feel as reduction in power plant construction averted as the de- though you are actually present, video conferencing tools mand for electricity decreases which is a one-time benefit. become common. These tools could open up telecom- With less office space and because a home office uses muting to those employees whose jobs require face-to- less energy than a commercial office, there would be less face contact with peers or clie nts. This may substantially electrical power used, whic h would produce additional increase the potential benefits beyond what has been al- environmental benefits. Assuming an average savings of ready noted in this study. In addition, there are environ- 3500 kWh per home office and 13.3 million telecom- mental and economic benefits from telecommuting that muters, we estimate that the total energy savings would would result in reduced public transit use, which have be 46.6 billion kWh per year [25]. According to federal not been measured in this study. In summary, while this government statistics from the Oak Ridge National study attempts to quantify many of the benefits of tele- are produced from using Laboratory 2.3 pounds of CO 2 commuting, more work is needed. one kWh of electricity [38]. Converting this into tons of CO and including other greenhouse gases, the energy 2 REFERENCES savings from reduced office space would be 56.8 million tons of greenhouse gases. 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