Wal-Mart’s big incentive

First, via Greenthinkers, Wal-Mart saves money by going green:

Some of the biggest savings come from reclaiming so-called waste heat from the refrigeration equipment that keeps groceries cold. The stores also have a new system for keeping refrigerated food cold that lowers the use of refrigerant by 90 percent and in turn reduces greenhouse gas emissions.

Other whistles and bells include motion-sensitive light-emitting diodes (LED) in refrigerator and freezer cases that turn on only when a shopper walks by, doors in the meat and dairy refrigerated sections instead of open refrigerator shelves, a white roof that keeps the building cool in summer and roughly 200 skylights that allow electric lights to go down when the sun comes out.

In all, this design is supposed to save 25 per cent on a store’s energy consumption.

Wal-Mart may be the single company with the most invested in the existing — dying — system of acquiring, moving and selling merchandise. It sources things manufactured inexpensively abroad, hauls them enormous distances, sells them in very large stores often located in box-store complexes pretty far removed from residential areas.  Expensive energy, in any form, hits Wal-Mart hard. So naturally the company has the most incentive to cut waste as much as possible as quickly as possible.

Whether the business model is sustainable with $100-a-barrel oil, even in heavily modified form, we’ll have to see.

Latest column, on the NRDC campaign against the tarsands

(Photo credit: “Air Canada Airbus A319-114 C-GBHN“, Flickr/Cubbie_n_Vegas)

 

My latest column for the Ottawa Citizen is here. It’s on this Natural Resources Defense Council campaign to get North American airlines to swear off fuel that comes from Alberta’s tarsands and from liquefied coal.

In Canada, we still have generous federal tax treatment for new oilsands projects, which amounts to a subsidy. Alberta’s Premier Ed Stelmach has decided to increase his province’s share of the profits from projects that extract publicly owned oil, but his province is still an impressively easy place to make oil money, for companies with the capital to put up to get started. Alberta is the only province to put a real price on greenhouse-gas emissions, although the price is low — $15 per tonne of carbon dioxide beyond a set limit, far below the $50 or so for every tonne that’s at the low end of expert estimates of what we should have to rein in climate change.

In the United States, politicians from coal-mining states are delirious over the prospect of a massive new market for their dusty black gold, and they’re pushing subsidy programs to develop coal-liquefication technology like there’s no tomorrow.

So we do make environmental degradation more appealing than it needs to be, and the Natural Resources Defense Council is doing its job by pointing that out. Asking airlines to join in the fight, however, is a bit like asking golf-course operators to fight for more restrictions on water use, or for high-rise dwellers to call for an elevator tax. It’s not just difficult, it’s diametrically opposed to their interests. At heart, flying planes is a fuel-burning business and jet fuel is the airlines’ lifeblood.

A point I already wish I’d made more strongly is that airlines already have every economic incentive in the world to make their planes as efficient as possible, even if there are limits to how far that can go. It’s also spawned me an interesting e-mail debate on whether flying or driving is a more efficient way to cover a moderate distance.

The value of efficiency

UPS is, basically, in the driving business. Driving costs money — more and more all the time, given the cost of fuel these days. So UPS decided to get smart, and plan its routes better. Reports the New York Times:

The company employs what it calls a “package flow” software program, which among other hyperefficient practices involving the packing and sorting of its cargo, maps out routes for every one of its drivers, drastically reducing the number of left-hand turns they make (taking into consideration, of course, those instances where not to make the left-hand turn would result in a ridiculously circuitous route).

Last year, according to Heather Robinson, a U.P.S. spokeswoman, the software helped the company shave 28.5 million miles off its delivery routes, which has resulted in savings of roughly three million gallons of gas and has reduced CO2 emissions by 31,000 metric tons.

The business with the left-hand turns is about reducing the amount of fuel wasted running engines while waiting for breaks in oncoming traffic. It’s not realistic for the average person — calculating which left turns are worth the wait and which ones are better achieved with three rights is no doubt stupendously complex — but when this much fuel and money can be saved thanks to economies of scale, I’m glad to hear UPS is doing it.

This sort of thing gives me hope. The biggest companies — consider Wal-Mart, which, like the military, is mostly in the business of transporting large amounts of stuff over large distances — take a lot of heat for wasteful practices, but they also have the most direct incentive to clean up their acts.

Assuming that price signals work, of course.

Guilt is an ineffective tool

This is a touch depressing, or would be if it were strictly true. Reports the CBC:

Canadians have gotten a little bit greener over the past 12 years, especially where governments passed laws to force behaviour changes, a newly released survey suggests.

But in other areas, consumers are acting just as they did in 1994, says a Statistics Canada report released Wednesday.

…

In two areas where there were big changes — garden pesticide use in Quebec and composting in the Atlantic region — governments compelled greener behaviour.

Nationally, chemical pesticide use fell an insignificant two percentage points between the two surveys. But in Quebec, “where strict regulations on pesticide use were imposed in recent years, the proportion [using pesticides] plunged from 30 per cent to 15 per cent,” the survey said.

As for composting, while there was a slight national increase, the gain was “especially large” in the Atlantic provinces, “some of which prohibit the disposal of organic materials in landfills or incinerators.”

What the CBC appears to miss is that consumers also responded strongly to price signals where they’ve been visible, mainly in household energy use. From Statistics Canada’s survey:

Households are taking advantage of new power-saving devices, the survey showed. Between 1994 and 2006, the proportion using at least one compact fluorescent light bulb more than tripled from 19% to 59%.

Households in all provinces contributed to this rise. In 2006, British Columbia and Ontario had the highest percentage of households using compact fluorescent light bulbs, nearly two-thirds in each province. In contrast, only one-half of all households in Quebec used them.

Programmable thermostats, which automatically adjust the temperature setting, have become increasingly popular. In 1994, 16% of households with a thermostat had one that was programmable. By 2006, this proportion had more than doubled to 42%. On the other hand, among households that had such a device, about 16% had not programmed it.

In Ontario, 52% of households had a programmable thermostat, more than double the proportion of 24% in 1994. Households in the Atlantic Provinces were the least likely to have one.

Quebec has very cheap power as a matter of government policy and provincial pride; Ontario’s gone to something more closely resembling market prices, albeit with very deep government involvement still in the electricity sector. Quebecers also disproportionately use their inexpensive electricity for heat while Ontarians use oil and natural gas, whose prices have been even less cushioned as a matter of public policy.

Astoundingly, the agency also found three in 10 Canadian households mainly use bottled water (you have to dig into the survey questions [PDF] to find that tidbit) for drinking.

What’s very clear from these results is that guilting and pleading with people don’t work.

Poll finds complaining is the No. 1 response to “high” gas prices

A Washington Post–ABC poll confirms that consumers expect the only change in their habits caused by higher gas prices is an increase in complaining at the pump:

The average price that drivers said would compel them to significantly cut back on their driving was $4.38 a gallon. In the western United States, where gasoline prices are typically higher than in the rest of the country, the average respondent said the price would have to hit $5.12 a gallon.

In fact, the federal Energy Information Administration (EIA) yesterday reported that gasoline consumption last week was up 2.6 percent from the same week a year earlier, slightly higher than the trend so far this year.

Jeez.

B.C. business group calls for road tolls

The B.C. Chamber of Commerce — “The voice of B.C. business” — endorses road tolls as a way of making users pay for consuming a public service and, incidentally, keeping traffic from getting any more out of control than it already is.

The proposal is, as I read the Vancouver Sun‘s story, subject to approval by the chamber’s members at an annual general meeting.

“The chamber realizes that while this may be unpopular for many we cannot fool ourselves any longer, there is a need to look to the greater good and that greater good is ensuring that the road network facilitates the movement of goods and people,” John Winter, chamber president, said in a statement.

And it’d help make public and shared transportation more competitive with driving single-occupant vehicles on massively subsidized roads and discourage sprawl by imposing some of the public costs of distant development on the people who choose to live in it.

This actually might be less controversial in British Columbia than elsewhere, for two reasons. One is the abysmal state of traffic in the Lower Mainland, particularly along Highway 1 running up the Fraser Valley (one long road serving essentially all of Vancouver’s suburbs). Trains and HOV lanes help, but not enough.

The second is that B.C., being crisscrossed with rivers and canyons, is already heavily laden with toll bridges and fee-charging ferries. Drivers are accustomed to paying to use expensive public infrastructure, since levying these charges was the only way a lot of it would ever have been built.

Road tolls for major stretches of highway — already charged on the Coquihalla in the mountains — are just applying this thinking to the next level of infrastructure down.

Obama proposes $10-billion subsidy for U.S.-based automakers

Democratic presidential candidate and Illinois senator Barack Obama wants America’s Big Three automakers to crank up their fuel efficiency standards … and he’s willing to pay them $10 billion in taxpayers’ dollars to do it. The money would be handed over in subsidies to retool plants ($3 billion) and in federal help for the companies’ troubled health-care plans for retirees (up to $7 billion).

The health-plan help is probably partly a ploy to get these three enormous employers to support federally-funded health care for all Americans.

America’s Big Three — Ford, General Motors and Chrysler, though it’s still German-owned at least for now — gambled huge on a strategy of producing big, high-margin vehicles like SUVs and pickups, and they lost huge as the price of gasoline climbed starting a few years ago. No informed consumer would buy one of these now without a good and specific reason (working in construction or agriculture, say) or a million dollars in the bank. The era of big-truck-as-declaration-of-manhood might not be over, but it’s no longer within reach of most customers, even with generous financing plans. Even if the price of gasoline dips again, the writing’s on the wall.

Asian and European automakers make small cars and lots of them, so they’re perfectly placed to take advantage of a consumer trend toward such vehicles. And, indeed, they make a fair number of their vehicles in North America. (Here’s a summary of Toyota’s operations, for instance.) But now a major presidential candidate wants to subsidize their competitors’ recovery from what was, simply, a lousy business decision.

These are like agriculture subsidies: they distort the market and force other governments (such as Ontario’s; the undated story is from 2004) to match the subsidies just to keep the playing field level.

Does anyone seriously believe there won’t be enough cars to buy if governments don’t spend tax money to keep three failing manufacturers from suffering too badly from their mistake?

(Via the Wall Street Journal’s Energy Blog.)

Dongtan, China’s green concept city

Everything else about China (official corruption, repression of fundamental human rights and freedoms, bloody-minded selfishness in international affairs) aside, it’s often an interesting laboratory for massive-scale technological and social experiments.

Consider the planned city of Dongtan, written about in the March Architectural Record. China’s government has decreed that a zero-carbon-emissions city will be built near Shanghai, with the intention of eventually housing 500,000 people in a city powered by renewable energy; where waste is aggressively recycled and composted; where wastewater is treated and used for hydroponic farms that feed the inhabitants; where vehicles all run on batteries or hydrogen.

Dongtan only exists on paper, but China intends to have a prototype village available for public display by the 2010 Shanghai Expo. Echoes of Montreal’s Habitat ’67, a model community-of-the-future built to show off at Expo ’67, a civic and national coming-out party before Canada’s first Olympics a few years later. The parallel’s not perfect (Beijing’s Olympics are in 2008), but it’s strong.

The drawings of Dongtan sure do look nice, and doubtless the Chinese and the London firm overseeing the project will learn a lot about large-scale green development, which they will perhaps share with the rest of us. Dongtan is a welcome indication that China doesn’t think that building a hundred coal plants a month is a permanently sustainable industrial strategy. Less delightfully, it’s an important reminder that China doesn’t just do cheap manufacturing anymore — it’s gaining ground in design and engineering, too, and if its government ever decides to be the world’s supplier of cut-rate solar panels and fuel cells and earth-friendly home water-filtration systems, that’s one more industry in which the West is ill-prepared to compete.

The most discouraging element, however, is that China can’t quite think of any really productive commercial operations to plant in Dongtan. From the Architectural Record:

There are, of course, questions about what kind of sustainable industries will provide jobs for Dongtan residents. City officials and their consultants anticipate jobs in education, including an Institute for Sustainable Cities. They expect to attract companies pursuing new technologies, food research and production, and health care. Of course, ecotourism will become a significant industry.

Britain’s Independent recently reported:

The project won’t be cheap. The initial phase will cost around £1.5bn, but the figures are expected to rise into the double-digit billions. But it’s an optimistic signal from China that the world’s factory is serious about doing something on global warming and sustainability.

And worst of all, while the island on which Dongtan is to be built is three-quarters the size of Manhattan, its population at build-out will only be about one-third of Manhattan’s 1.5 million or so. Not everyone in China could live this way, even theoretically.

So we’re mostly talking about a sort of Chinese version of Epcot Centre, the urbanological equivalent of a concept car or a campus, self-sustaining environmentally but not economically. Only in a controlled economy like China’s would such a thing be possible even as an experiment.

(Via GreenOptions.)

A sticker wicket for California

Dave at Rattling the Kettle, via the magic of WordPress’s tag-surfer feature, points out a story from USA Today last month about how the state of California has essentially handed the owners of certain hybrid cars several thousand dollars by giving the vehicles access to the state’s carpool lanes even if the driver is the only occupant.

The catch is that California has given out 85,000 access stickers and stopped, because that’s all that legislation allows, and now the stickered cars are tradeable. Hybrids with stickers are worth more than hybrids without.

Now that no new permits are available for hybrids, asking prices average $4,000 more for used Priuses with stickers than without, the survey by car-price tracker Kelley shows.

“It appears people buying Prius vehicles had a different angle” than just saving fuel or polluting less, says Eric Ibara, Kelley’s market valuation director. Kelley sampled prices of 30 2004-06 Priuses offered at used car websites. That’s sufficient to confirm the price difference, Ibara says. He says not enough used Civic hybrids were for sale to include them.

Technically, the Kelley Blue Book survey just found that asking prices for the stickered Priuses (“Prii”?) were $4,000 higher than for the non-stickered, but it certainly makes intuitive sense that drivers would be willing to pay more for cars that are allowed to travel in less-clogged lanes.

Now California is in an interesting bind, in which it’s forced to confront the question of what exactly its highways’ carpool lanes are for. If the primary value of carpooling is supposed to be that it leads to less pollution per commuter, the state needs to start issuing more stickers to environmentally friendlier cars, and stat. Not only that, but the benefit shouldn’t just attach to the drivers of hybrids, but to any car that gets great mileage and meets stringent emissions standards, whether it’s a hybrid or a Smart Car or powered by a battery plugged into solar panels at the owner’s house. The program ought to be interested in results, not the technology used to achieve them.

But if the carpool lanes are supposed to be about reducing traffic and dampening demand for more lanes on busy roads, well, this whole thing is a big step in the wrong direction, encouraging more single-occupancy vehicles, more congestion, more nightmares for California’s traffic engineers.

Don’t expect state legislators to have an easy time with that one.

Photo credit: Flickr/Beige Alert.

Would you buy the first fax machine?

The New York Times‘s David Pogue wrote today about an extremely cool-sounding purely electric car, the Tesla Motors roadster. Silent, fast, a seven-hour recharge on household current, and unpleasantly expensive at $100,000 each if you pre-order.

And then there’s this:

Nobody can service or repair this car except Tesla, and at the outset, there will be only five service centers are planned (two in California, and one each in New York, Chicago and Florida; if all goes well, Tesla plans 15 more in a few years). If the car breaks down, or if you run out of electricity (which happens after 250 miles), the company cheerfully suggests that you call a flatbed truck to deliver your car to one of those five stations.

You also have to replace the battery after about 500 charges, they say. So if Tesla doesn’t pan out (and here’s a skeptical review), you could very well buy the thing and end up with the automotive equivalent of a Betamax VCR, a nifty device that doesn’t quite take off and becomes, over time, useless. This is a nasty problem that besets most potentially revolutionary technologies — what if it doesn’t catch on, and you end up owning just about the only one? And it’s a Catch-22, too. Nobody’ll sell hydrogen fuel till there are hydrogen cars, and nobody’ll buy hydrogen cars till there are hydrogen fuel pumps most places they want to go.

Some see this as a proper use of government subsidies: give the system a kickstart before letting it run on its own. That’s the thinking behind the B.C. (and California) government’s “Hydrogen Highway” program, at any rate. The trouble with that is that if you can make hydrogen fuel efficiently, you might as well just fill up batteries like the Tesla’s, as Pogue points out. The government tendency, when faced with a choice of VCR formats to support, is not to pick VHS (the market’s choice), nor even Beta, but to choose audio CDs because they’re made in the finance minister’s riding.

(See Tory Finance Minister Jim Flaherty’s inclusion of ethanol-fuelled vehicles, which you can’t actually buy fuel for, in his new rebate program, for a concrete example.)

The truth is, a Tesla-like product probably offers the best chance of success. Not this car specifically, but a product with a healthy company prepared to stand behind it and say, at a minimum, “We’re going to be here for the life of the product we’re selling you. Maybe not beyond that, but we promise not to screw you.” Then decide whether you believe them or not before putting your $100,000 down. That will tend to limit early adoption to people who can afford to lose the money, but what the hell — let them take the risk.

One other note: Pogue’s commenter Jim Thompson notes that Tesla’s people are Silicon Valley types.

Contrast that with Detriot where they give some lip service to the environment, but fight against any proposal for even slightly better fuel mileage. Their promised green designs are best seen as delaying tactics. The ever shrinking big 3 are so trapped in their bureaucracy and limited thinking that all we can do is watch them die a slow and agonizing corporate death.

Silicon Valley might try to sell a lot of vapour, but at least entrepreneurs there don’t have an established business model to defend. Nothing to lose and everything to gain from doing things differently.

Photo credit: Flickr/jurvetson