Category Archives: conservation

Eco-capitalism

Excellent post by Richard T. Stuebi at Cleantech Blog on reconciling capitalism with environmentalism. Nut:

It is because energy prices do not currently include their full environmental costs that Aspen Skiing (and other companies) can’t increase their profitability by pursuing as many green initiatives as they would philosophically like to do. If energy prices were to fully reflect all environmental costs, then the capitalist system would be freed to work its magic in motivating capital and behavioral shifts in the economy to significantly reduce emissions.

Alas, here’s the dilemma: many environmentalists have qualms about letting markets work to reduce emissions, and most free-marketer capitalists are leery of policymakers adding environmental externality factors (a euphemism for “taxes”) to energy prices. Unless this bridge can be gapped, we’ve got trouble.

I do have some reservations about what follows, though:

Oh, yes, customers in Denmark and Finland face much higher energy prices (especially for transportation fuels), including much higher energy taxes, than we do here in the U.S. While Danes and Finns don’t perhaps live la vida loca like Americans do, neither do they seem to be collapsing in existential angst or economic depression. The question for us Americans is: do we have the courage to elect leaders that would put us on a deliberate/planned march towards higher energy prices?

I don’t think this is a winner. For one thing, the Finns do collapse in existential angst, committing suicide at the highest rates in the world (or close to it, depending on your source). For another — no, we probably don’t have that courage, to elect leaders who promise higher energy prices in isolation. Paired with cuts to taxes on productivity, though, as advocates of green-oriented tax-shifting propose, though, higher energy prices might sell.

The NDP’s green problem

Check out this coverage of the spat between NDP leader Howard Hampton and Green leader Frank de Jong (for non-Canadians, the 46-year-old “New Democratic Party” is the leftmost mainstream party) over whether charging people to use natural resources and roads means “privatizing” them:

Mr. Hampton denied twisting the Green party’s positions.

“I have not mischaracterized their platform one bit,” he said during an early-morning campaign stop in Sudbury. “I encourage people to read their platform and think about the implications of private water, private electricity and private roads and think about what that would mean for average working people.”

Mr. de Jong said he has no interest in privatizing public services. He admitted the Green platform does call for new water taxes, but said that is vastly different from privatization. And while the Greens back the construction of private renewable energy projects, their platform makes no mention of private roads.

“Howard is fishing for something, but he’s in the wrong pond,” Mr. de Jong said.

For his part, Mr. Hampton attacked the Green party’s call for electricity rates to be increased in the next three years to reflect the true cost of power generation.

“They are all in favour of letting rates go through the roof and laying off tens of thousands of workers,” he said.

It’s hard to grasp how both propositions in that last quote could be true — if electricity rates went through the roof and the generation system that’s now almost all in public hands became a profit-making venture, why would they have to lay off tens of thousands of people? And if they could lay off tens of thousands of people while making more money … why does the power system need them now?

The NDP’s caught. It’s been the default party of sandal-wearing granola-crunchers for a long time, but it’s also the party of big labour, and those two constituencies are increasingly mutually exclusive. Voters have realized that you can’t be in favour of making stuff free, like water, while simultaneously being in favour of limiting its use — unless you also favour extremely heavy regulation. That’s how the NDP would solve most problems, but it’s sure not a vote-getter.

Resources aren’t infinite

Traffic jamAn exchange I had with commenter “George in Toronto” about the price of municipal water has been playing in my head. George argues:

[In Toronto,] the water course is Lake Ontario. Any water that Toronto does not use simply continues East until it reaches the Atlantic. And any water that is used, in most cases returns to the lake through the sewer system. In Toronto, water is truly free. You can walk down to the beach and take a bucketful at any time.

You can, I argue, but only if seven million other residents of greater Toronto didn’t get there first. If they did, there’d better be a system that limited them to one bucket each. Otherwise, you’re going home with an empty bucket.

Meanwhile, Eamonn Butler of Britain’s Adam Smith Institute argues at the institute’s blog today that, if I read him right, essentially all roads should be toll roads. Certainly that all crowded roads should be.

If charging does not deter traffic, the charge is not high enough. There is some price at which the traffic will flow. If the charge makes people avoid the morning peak, all the better…

The market is the best way of allocating most resources, roads included. Of course, you have to cut the other taxes on motoring, and provide realistic alternatives for those priced out by the charge. But without some such solution, congestion will inevitably get worse: and that costs businesses and the public dear.

Which puts him in practical agreement with Steven Cohen and Jacob Victor of Columbia University’s Earth Institute, who are at Grist Mill today arguing for New York Mayor Michael Bloomberg’s congestion charge plans:

Some critics erroneously view congestion pricing as yet another expensive environmental protection program that would operate at the expense of economic productivity. But the success of the plan reflects the fact that many business and political leaders, like Bloomberg, finally realize that environmental sustainability and economic efficiency go hand in hand.

(I had trouble deciding what to quote from Cohen and Victor’s short essay; the whole thing is very much worth reading.)

What the water and road-capacity issue have in common is this: We have a lot of water and we have a lot of roads, but these things are not infinite. When we think of any resource — a watershed, space in a highway system — as infinite, we eventually run into problems, and adapting to solve those problems is a shock.

  • We thought the atmosphere’s capacity to absorb waste gases was infinite. It isn’t.
  • We thought the seas’ capacity to absorb waste liquids was infinite. It isn’t.
  • We thought our lakes’ and rivers’ and aquifers’ capacity to provide fresh water was infinite. It isn’t.
  • We thought when roads got clogged, we could widen them and solve the problem. Doesn’t work like that.
  • We thought when we started to run low on spare electrical power, we could just build more power stations. Not quite.
  • With water, there’s a more immediate concern than the natural supply: the treatment plants reach their limit and the pipes reach their capacities long before the lake runs out.

The challenge is that with all these resources, we’ve built systems that assumed that there would always be more fuel, more water, more room for waste in the air. The limits on these things are very high, but limits there are. And as soon as there’s any degree of scarcity at all, the rules have to be different. Suddenly, we need to ask who has the most right to these things. We can try to set up systems to make sure everybody gets what they need, but we cannot let everybody have what they want.

Now we have to adjust — to a reality that has always been there, we just haven’t realized it — and that hurts.

(Photo credit: “.“, Flickr/fffriendly.)

Environmentalism as business proposition

In an excellent piece from the New York Times on the costs of retrofitting large buildings to be greener, there’s this peculiar passage:

Some residential buildings might also consider installing solar panels on the roof, to provide a nonpolluting source of electricity to light the hallways and run the elevators. Experts recommend doing this only after more glaring energy inefficiencies have been addressed, because in a large apartment house, solar panels are not going to produce enough energy to replace Con Edison.

Solar requires patience. It could take up to 15 years to break even on $19,000 spent on solar panels, and that is after subsidies and tax breaks offered by the state and federal governments. Mayor Bloomberg has proposed an additional subsidy for installing solar panels on buildings in New York City.

[Ashok] Gupta of the Natural Resources Defense Council contends that environmentalists often sell themselves short by focusing too much on payback periods. “Nobody asks what the payback period is for a marble lobby,” he said. But if a lot of large commercial and residential buildings installed solar panels, he said, that could go a long way toward reducing the city’s overall impact on global warming.

“From a societal perspective, the benefits are huge,” Mr. Gupta said.

True, but that misses the point in exactly the way too many environmentalists have for too long: convincing people to sacrifice for the common good is often a losing strategy, or at least not one that wins often enough to make enough of a difference. Talk of payback periods is a way of getting people’s attention. Even if the period is long, it conveys the important fact that there is one, that going green is an investment with, ultimately, direct benefit to the investor.

A marble lobby makes people feel good because they live in luxury and can show it off to their guests. What’s the payback period? It’s unquantifiable, but assuming you’re aiming at the right market niche, you know you’re going to make your money back.

The assumption with green retrofits is that they’re costs, undertaken out of the goodness of the landlord’s heart. Solar panels invisible on the roof of an apartment building, especially when the measurable proceeds flow to the owner rather than the tenants, are nearly worthless to those tenants, and aren’t likely to boost desirability (and therefore rents) very much. Emphasizing payback periods for those solar panels, though — that’ll get a business-minded landlord’s attention.

Flush this ban

Another case of sending a ban to do work that price signals ought to. From the Toronto Star, which quite enjoys banning things:

In a remarkable display of environmental consciousness, the leaders of 29 municipalities around the Great Lakes have adopted the worthwhile goal of cutting their water consumption by at least 15 per cent.

That action is an encouraging sign that many cities are now committed to the principles of “reduce, reuse and recycle.” When it comes to water consumption, the key is to reduce the amount being drained from our lakes. The province could play an increased role by banning the sale of wasteful traditional toilets in favour of low-flow models.

Toronto Mayor David Miller called for such a ban at a recent meeting of officials from Great Lakes cities. Low-flow, quite simply, is the way to go. Some toilet models use as little as six litres of water per flush compared to more than 20 litres for some wasteful older brands. That is a lot of liquid. Low-flow toilets do a good job of removing waste and save consumers money by lowering their water costs. And they help the environment because cities don’t have to purify as much water.

If it’s so difficult for cities to purify water, charge more. In Ontario at least, cities are required to charge the full cost of water treatment — the real problem is that cities, like any other mass consumer of Great Lakes water, don’t pay to take water out, so the price is artificially low. Rather than deal with that problem, cities are going to police toilet capacities.

When you ride alone, you ride with 30 million flooded-out Bangladeshis

Via Andrew Sullivan and Bradford Plumer I find this great essay in the Sierra Club’s magazine by Mike Davis, on how the United States adapted to a war-production economy in the 1940s. A taste:

The war also temporarily dethroned the automobile as the icon of the American standard of living. Detroit assembly lines were retooled to build Sherman tanks and B-24 Liberators. Gasoline was rationed and, following the Japanese conquest of Malaya, so was rubber. (The U.S. Office of the Rubber Director was charged with getting used tires to factories, where they became parts for tanks and trucks.) When shortages and congestion brought streetcar and bus systems across the country near the breaking point, it became critical to induce workers to share rides or adopt alternative means of transportation. While overcrowded defense hubs like Detroit, San Diego, and Washington, D.C., never achieved the national goal of 3.5 riders per car, they did double their average occupancy through extensive networks of neighborhood, factory, and office carpools. Car sharing was reinforced by gas-ration incentives, stiff fines for solo recreational driving, and stark slogans: “When you ride ALONE,” warned one poster, “you ride with Hitler!”

 

Even hitchhiking became an officially sanctioned form of ride sharing. Drivers were encouraged to pick up war workers stranded at bus stops and soldiers heading home for furloughs. In Colorado, the Republican Party vowed to save rubber by having all of its candidates in the 1944 elections hitchhike to campaign rallies.

America did this before, Sullivan and Plumer both say — so why not again?

Well…

Jimmy Carter called for “the moral equivalent of war” on energy waste back in 1977, in a speech he could pretty much give today. The U.S.’s national security was threatened by its energy insecurity, and things went on to get worse, not better. Yes, fuel-efficiency standards for vehicles got better, but the country was just as much a hostage to unfriendly Persian Gulf states’ oil production when Carter lost his job in 1980 as it was during the first OPEC crisis in 1973. Carter was an ineffectual president in other areas, but he and his message of personal austerity didn’t stand a chance against a genial actor who promised a country sick of national malaise that he’d make it “morning in America.”

The point: to make people act as though they’re at war, they have to be at war.

America does not believe it’s a war. Today the HSBC bank released the results of surveys it conducted in nine countries on attitudes toward climate change (HSBC is billing itself as a green champion). Here’s the PDF of the United States’s country profile. The gist is this:

  • Americans are less concerned about climate change than average;
  • They are less confident than average that enough is being done about the problem;
  • They are much less personally committed than average to making a significant effort to reduce climate change themselves;
  • They are less optimistic than average that climate change can be averted (though given the inevitability of some change, that could theoretically be explained by greater awareness of the issue).

These are not people prepared to accept the rationing of gasoline and requisitioning of metal and rubber that made possible the dramatic change in attitudes toward the automobile Davis describes. (Nor, for that matter, was the car remotely as closely entwined with the average person’s lifestyle in 1942 as it is today.) People did it during the Second World War because London was being bombed by Nazi fanatics and half the Pacific Fleet had been sunk at Pearl Harbor; they did it because they had sons and husbands risking their lives abroad and one more spare jeep tire or plane ready for a bombing run might make the difference.

Today, a call for energy independence is just about as likely to result in calls for greenhouse-gas-billowing liquid-coal technology as it is for carpooling.

Besides, although I’m supportive of the goal of having people plant victory gardens and stop driving everywhere all the time, I’m not sure even a problem as significant as climate change justifies measures as intrusive as rationing — certainly not of rationing supply. You can justify that in a free country when the country faces an existential threat, a literal war, and the goods being rationed are critical to the effort to win that war. You don’t do it because you think the ends would be desirable. That’s not up to you, or to me, or to the government.

What about carbon-emissions caps? you ask. Sure, they seem like rationing, but in fact it’s just an acknowledgment that there’s a resource that’s scarce already: the capacity of the earth and its atmosphere to absorb and re-fix greenhouse gases in any given year. It’s not obviously visibly limited in the same way a bushel of apples or the quantity of gasoline in a refinery tank is, but it’s limited all the same, and emissions caps just acknowledge that fact and provide a distribution mechanism. The distinction is fine, but I think it’s important.

Paper offsets

Here’s an example of environmentalism-as-show-offy activity: this outfit called Eco-Libris will sell you paper offsets for the books you buy. For $1, they’ll arrange to have someone plant a tree on your behalf; they suggest buying a tree for each book you own.

They sent me this flattering e-mail asking me to feature them on my site, and I thought I’d oblige.

Reading a lot is part of my job. I have a lot of books, and I’ve divested myself of plenty more when I’ve moved house a couple of times in the last five years. But even so, all told, I’d guesstimate I’ve taken down maybe 10 trees in my entire book-reading career. Call it 20, just to be on the safe side. (Newspapers are a different story, although newsprint is highly recyclable and anyway newspaper offsets aren’t what Eco-Libris is selling.) There’s no way you make a profit selling $20 worth of offsets to somebody like me, though — you have to take it up a notch, and invite people to buy a $1 whole-tree offset for every single book they buy, which would take my paper bill into the thousands of dollars.

How do you disengage the cost of paper offsets from the amount of paper prospective customers actually own? By offering something a bit different from a promise to replace the paper consumed by one book. To buy a whole tree to balance off the paper in one book, I need it to make me feel green, to believe I’m doing something super-good for the planet, and it’s even better if you give me a way to show off that I’m doing so.

That opportunity to show off comes in the form of a sticker. From Eco-Libris’s Blogspot blog:

As the ex-libris was an elegant way to show the identity of the book owner and her (or his) appreciation of the book, we hope to see Eco-Libris stickers become the new way book owners present their identity, saying: hey, i love this book, but i also care about the environment. i am trying to live more sustainably. That’s who i am!

Eco-Libris appears to me to be mostly a marketing organization: their key function is to convince you that books are environmentally harmful and that you need to do something about it. You give them money, they give some of the money to actual tree-planters, and you get mailed a sticker to put in a book or wear on your face or otherwise place wherever you think it’ll do the most good:

The Eco-Libris sticker, which is made from recycled paper, is designed for you to put on the cover of the books you balance out, to show your commitment to sustainability and responsible use of natural resources. We hope you show off these books and inspire your family, friends and colleagues to take responsibility for their books as well.

Presumably by making a secure online purchase from Eco-Libris’s extremely convenient website.

For an extra warm green feeling, Eco-Libris’s “planting partners” work in deforested parts of Africa and Central America. Mind you, there most of the tree-cutting is to clear land for agriculture — not particularly to feed the North American and European publishing industry’s hunger for wood pulp. Albeit some of the stuff does end up on the market, but that’s not why the trees get cut down.

The UN’s Food and Agriculture Organization’s astonishingly detailed statistics database reveals that Latin America and the Caribbean, where two of Eco-Libris’s three planting partners work, exported about 7.7 million tonnes of pulp for paper in 2005 (having produced about 17 million tonnes). Meanwhile, Canada produced about 25 million tonnes and the United States 53 million tonnes, most of it for domestic consumption. If we’re really trying to offset the paper used in books, it’s not Malawi and Guatemala where the work needs to get done.

“There are two motives for reading a book: one, that you can enjoy it; the other, that you can boast about it,” the company quotes Bertrand Russell in one of many loosely book-related lines across the tops of the pages on its website. Boasting is definitely key here, for all concerned.

In the end, I’m certainly not saying not to buy in. More trees in deforested placed? Good thing. Stickers advertising care for the environment? Can’t really be bad. But for my taste and wallet, there’s too much room between the intrinsic value of what Eco-Libris sells and the price it’s asking.