Paper or plastic grocery bags - which are better for the environment?

You probably think you know the answer. And you’re probably wrong.

Paper bags are not necessarily better for the environment than plastic - despite many consumers’ long-standing assumption that paper beats out plastic hands down when it comes to eco-friendliness.

“There definitely was a period of time when the message was, ‘Choose paper over plastic,’ ” said Jenny Powers, a spokeswoman for the Natural Resources Defense Council. “That’s not the way to view it.”

Powers and other environmental experts now say the best choice is neither paper nor plastic - it’s reusable shopping bags made of substances like cotton, hemp, nylon or durable mesh-like plastic.

“The ideal option is bring your own bag,” Powers said. “Second choice is to ask for the type of bag that you know will be reused - plastic if you’ll use it for holding trash, or paper if you will recycle it.”

The question of the relative merits of various kinds of grocery bags sounds simple.

But in fact, scientists spend large amounts of time trying to nail down the environmental impacts of creating, transporting and disposing of products such as grocery bags - a process known as life cycle analysis.

The final answer depends on numerous details, including:

– Whether the bags are made from recycled or virgin materials.

– How far the raw ingredients and finished bags must travel before reaching consumers.

– How much energy and water are used in the manufacturing process.

– Whether bags that are labeled “recyclable” or “compostable” actually end up being recycled and composted, or just get dumped in the trash.

The stakes are high. Ninety percent of today’s grocery bags are plastic. Californians alone use 19 billion plastic bags each year - 600 bags every second - according to the California Integrated Waste Management Board.

And fewer than 5 percent of plastic bags historically have been recycled, compared with 21 percent of paper bags.

Plastic bags are a particular problem in coastal regions like the Bay Area, where they often end up in rivers and oceans - poisoning or strangling marine life. Sixty to 80 percent of ocean debris is plastic, according to the Algalita Marine Research Foundation. And while plastic may gradually shred into smaller pieces, those fragments will persist and threaten sea life for up to 1,000 years.

But paper bags have other negative effects on the environment.

“If you’re comparing a paper bag made from virgin timber with a plastic bag made with natural gas, the paper bag causes more global warming pollution, more biodiversity impacts and more water impacts,” said Allen Hershkowitz, a senior scientist with NRDC who has worked on life cycle analyses for two decades. “If the paper bag is not recycled, it will generate greater carbon emissions during incineration than plastic would, or greater methane emissions if it is landfilled.”

One thing is clear in every study that has been done: Reusable bags beat both paper and plastic on virtually all environmental criteria.

For instance, a 2002 Australian study concluded that someone using plastic grocery bags for a year would go through 520 bags and generate 6.08 kilograms of greenhouse gases, which contribute to global warming. Someone using paper bags would also go through 520 bags to generate 11.8 kilograms of greenhouse gases.

But a year’s worth of reusable polypropylene bags - estimated at four bags, used twice a week - would generate less than 2 kilograms of greenhouse gases.

“The best thing is for people to be encouraged to take reusable bags,” said Hershkowitz. “That’s a truism everyone can agree upon.” Learn more about the environmental impacts

– A Web site called Use Less Stuff, use-less-stuff.com, offers an easy-to-read summary of several European analyses of grocery bags.

A 2007 report by Los Angeles County summarizes some of the research on paper-versus-plastic at links.sfgate.com/ZBWC.

– San Francisco’s Department of the Environment offers another summary of bag analyses from Sweden and the United States at links.sfgate.com/ZBWB.

– The 2002 Australian report can be found at links.sfgate.com/ZBWD.

E-mail Ilana DeBare at idebare@sfchronicle.com.

Trouble in the economy and turmoil in the markets in 2007 rocked a lot of investment portfolios. But many people took advantage of new tools that made it easier to hedge against losses—and profit from predictions of pain ahead.

Inverse funds, either in the form of mutual funds or exchange-traded funds (ETFs), allow investors to place bets that the pain will continue. The funds use financial engineering techniques to move in the opposite direction of a particular index. A 1% drop in a financial sector index, for example, translates into a 1% gain for an inverse financial fund. Some of these vehicles are built to double up, giving you a 2% gain for a 1% loss in the index. Among the outcomes inverse investors can bet on are more losses in the financial sector, a collapse in the supercharged Chinese stock market, and falling share prices in the U.S.

Inverse funds are a 21st century wrinkle on a very old practice—selling short. With short-selling, investors borrow a stock from their broker, sell it, and then (with luck) buy it back later at a lower price. That practice still flourishes, but it’s a stock-by-stock transaction. With the inverse funds, investors can effectively short a whole basket of stocks. Unlike the setup with a traditional short sale, if you bet wrong, you can’t lose more than your original investment.

There has been tremendous interest in such instruments, says Michael Sapir, CEO of ProShares, the leading inverse ETF manager with 35 funds betting against a host of indexes, sectors, and international markets. Since its inverse ETFs first appeared in June, 2006, investors have plowed $7.6 billion into the funds. Thanks to 2007’s financial turmoil, ProShares’ UltraShort Financials ETF («www.businessweek.com») has been a big hit, attracting more than $1 billion in assets, racking up a 37% gain, in its first 11 months. UltraShort FTSE Xinhua China 25 («www.businessweek.com»), a fund that aims to gain 2% for every 1% drop in the index, attracted $305 million in the first two weeks after its November debut. The firm’s total lineup of short funds contains $9 billion in assets. Its smaller ETF competitor, Rydex («www.businessweek.com»), has $1.6 billion in inverse funds.

Many individuals use inverse funds to hedge. Let’s say you have an investment in China, which you see as a great long-term growth opportunity, but you’re worried about a market drop in the coming months. You can invest a small part of your portfolio in the China inverse fund. Although not a perfect hedge, the fund will tend to move in the opposite direction from your regular Chinese investments and limit your losses if China’s market crashes.

Used like this, inverse funds are a far better strategy than taking “the sledgehammer approach” of dumping stocks outright—especially when selling can trigger unwanted taxes, says Chris Guarino, a financial adviser at Smith Barney («www.businessweek.com»).

For investors interested in taking more risk for more potential return, inverse funds can also be used to put money behind a hunch. Think 2008 will be tough for U.S. stocks? Buy a fund that shorts the Standard & Poor’s («www.businessweek.com») 500-stock index. Think consumers will slow their spending in 2008? Buy an inverse retail-sector ETF.

Because most inverse bets will be for limited periods, they do tend to trigger higher, short-term capital-gains taxes. And the fees are high, a 0.95% expense ratio for most of ProShares’ inverse ETFs, compared with 0.1% or lower for many long-only ETFs matched to broad indexes such as the S&P 500.

And keep in mind that when you put money into one of these inverse vehicles, you need to think about when to exit. These are not buy-and-hold investments. After all, over the long term, stocks tend to go up.

SAN JOSE, Calif., July 3 (UPI) — SunPower Corp.’s chief executive has won Ernst & Young’s Entrepreneur Award in the Engineering and Manufacturing category for northern California.

Tom Werner, chief executive officer of Sunpower, a Silicon Valley-based manufacturer of solar cells, solar panels and solar systems, was honored for his achievements and savvy in the solar power business.

The award, selected by an independent panel of judges, recognizes outstanding entrepreneurs who are building and leading growth-oriented businesses.

“I am proud to accept this award on behalf of our entire team at SunPower Corporation,” said Werner. “SunPower is delivering industry-leading, high-efficiency solar systems to homes and businesses around the world. Our Silicon Valley technology and innovation culture has been central to our advances in solar system performance, affordability and aesthetics.”

The Ernst & Young Entrepreneur of the Year awards program celebrates its 21st anniversary this year, honoring entrepreneurs who have demonstrated excellence in such areas as innovation, financial performance, and personal commitment to their businesses and communities.

As a northern California award winner, Werner is now eligible for consideration for the Ernst & Young Entrepreneur of the Year 2007 national program. Award recipients in several national categories, as well as the overall national Ernst & Young Entrepreneur of the Year award recipient, will be announced at the annual awards gala in Palm Springs, Calif., on Nov. 17.