Cracks in the Foundation: Green Business Encounters its Paradoxes

By Adam Brock

The last decade has seen the environmental movement shift from pointing fingers at the Man to seducing him instead. After thirty long years of trying to guilt-trip companies into improving their environmental performance, it’s now considered much more effective to meet business on its own terms by showing that cutting down on energy and other resources can be profitable.

But despite all the hubris, the alliance of business and environmentalism remains an uneasy one: for every unexploited opportunity for increasing efficiency through resource savings, there’s another instance where rescuing the planet and quarterly earnings just don’t jive. After all, there’s a pretty serious divergence in their fundamental assumptions; corporations need to grow or die, while environmentalists maintain that unchecked growth is what’s killing us.

Last week’s BusinessWeek took aim at this conflict of interest with a profile of Auden Schendler, the disgruntled sustainability advocate at Aspen Skiing Co. The story relates struggle after struggle between Schendler and his higher-ups to make improvements that, all told, barely made a dent in the company’s environmental impact. When he tried to install CFLs in one of the resort buildings, he was told that the quality of light put out by fluorescents would detract from the hotel’s five-star ambience; after a long hard struggle, he managed to get approval for a $1 million solar array to provide a fraction of a percent of Aspen’s energy needs.

One of Schendler’s most vocal criticisms is of renewable energy credits, a system currently used by hundreds of institutions (including Aspen and NYU) that purports to offset electricity emissions by paying to support development of renewables. After doing some digging, Schendler couldn’t find any renewable energy that had come online as a result of Aspen’s RECs, and was forced to conclude that, much like personal carbon credits, the whole setup was too dubious to support. The BusinessWeek article seems to agree, explaining that the current price of RECs offers little incentive for renewable producers to ramp up:

Even many wind-power developers that stand to profit from RECs concede that producers making $91 a megawatt hour aren’t going to expand production for another $2. “At this price, they’re not very meaningful for the developer,” says John Calaway, chief development officer for U.S. wind power at Babcock and Brown, an investment bank that funds new wind projects. “It doesn’t support building something that wouldn’t otherwise be built.”

The dubious economics of energy credits aside, Schendler faces a more serious challenge: trying to green a company whose very basis is an environmentally destructive luxury activity. No matter how much Aspen reduces its carbon emissions, its clients will release thousands of tons of greenhouse gases just in getting themselves there. No matter how many LEED points Aspen’s new buildings achieve, they’ll still be sitting vacant for much of the year.

If Aspen Skiing Co. is serious about sustainability, it needs to completely redefine its mission, figuring out how to profit from actively regenerating the Rocky Mountain ecosystem. Anything less is a profitable hyporcrisy. If Auden Schendler’s experience thus far is any indication, it doesn’t sound like the “natural capitalism” approach is cutting it – so how can the message get through before it’s too late? Legislation? Consumer rebellion? What are your thoughts?

Shrink the Footprint of Your Shopping Spree!

by Nelson Harvey
Whether or not you think the rise of green consumerism is enough to solve our environmental problems, there’s little doubt about one thing: it’s getting pretty sophisticated. The organization Climate Counts is a case in point. Using a scorecard of 22 performance indicators, the group grades companies on their response to climate change, asking whether they’ve inventoried their own emissions, made reductions, or taken a positive stance on climate legislation. These conclusions are drawn based on publicly available information.

But that’s only the half of it. Recently, Climate Counts partnered up with the activist telecommunications company Working Assets Wireless to design a service where customers can receive instantaneous information about a company’s climate performance over the phone. Thus, a customer considering a purchase of Dannon yogurt could send a quick text message and learn that the company had earned 50 out of a possible 100 points on the Climate Counts scale, and was “striding” compared to its competitors. (Climate Counts likes the running metaphor; the other two broad categories to describe a company’s performance are “stopped” and “starting).”

This tool rests comfortably within the framework of consumerism, since it doesn’t encourage people to ask “do I really need this product?” but rather, “which of these products is less harmful?” Its also unlikely to be the most effective method of consumer education, since it requires some effort on the part of the consumer. Product labeling efforts, like those currently being pursued by companies like Timberland or Tesco Supermarkets in Britain, are a more convenient way to get information across.

But the Climate Counts project is unique in allowing consumers to send a message (quite literally) back to companies that they’ve investigated to express their views on company policy and urge improvement. Once messages like these reach a certain volume, it becomes economic suicide for a company not to consider them. The list of brands that the organization evaluates is long and growing. Check ‘em out before your next shopping trip.

Green’s all over the shoes these days

By Adam Brock

The Times put up a great interview today with Jeffrey Swartz, Timberland’s CEO. For the past few years, Timberland has been pursuing sustainability more aggressively than nearly any other American company its size, incorporating recycled materials whenever possible and voluntarily putting labels on their packaging detailing the environmental footprint of their products.

In the interview, Swartz gives a candid assessment of the lack of green leadership in the footwear industry. He explains why environmental sustainability is a lot harder for shoe companies to tackle than social responsibility, and makes a plea for industry-wide collaboration to make the greenest shoes desirable.

We haven’t positioned environmental attributes as aspirational, as qualities that will make people who buy our shoes feel good about themselves. The result is that people may think of green shoes as things that they should buy, but not necessarily as things that they want to buy.

And how will companies compete environmentally without resorting to greenwashing? With standardized, industry-wide environmental impact labels:

If we all make the tags bold and colorful, shoppers will notice them. And if they are on all the shoe boxes, it will become automatic for shoppers to compare green tags among brands, just like they compare price and color… When that happens, we’ll all be fighting to have the best tag. No car company wants to be known for the worst gas mileage, and no shoe company will want to be known for the least environmentally friendly shoes.

Sounds like a promising plan to me. Now if Swartz could just get Nike on the phone…

Energyville

By Adam Brock 

First, there was BP’s carbon footprint calculator. Then came Shell’s “Real Energy,” a collection of games, stories and videos about human ingenuity. Now my roomate Dave has alerted me to the latest and greatest Big Oil web PR stunt: Energyville, a Sim City-esque flash game put out by Chevron and the Economist Group.

The premise of the game is simple: you decide how to balance the pressures of economics, sustainability and security in crafting the energy mix for your city. What that amounts to is clicking on buttons representing different energy sources, reading factoids about the benefits and downsides of each, and deciding which ones you want to use. In the interests of being fair and balanced, you’re not allowed to power your city entirely with renewables (at least in the first level), and you’re required to use a certain amount of oil to run vehicles.

Chevron, with the best web designers (oil-stained) money can buy, has done what the scientists keep refusing to do: make our energy future fun and easy to understand. And as a means of educating the public about the most basic pros and cons of currently available energy sources, I gotta admit that the game is well designed.

But, like the old-school Sim City graphics it rips off, Energyville’s about ten years too late. At this stage in the game, most people already know that nuclear is dangerous, coal is dirty and solar’s expensive. What we’re getting into now is the down and dirty phase, where we work out all those overlooked details that are gonna make or break our 21st-century economy.

Maybe one reason we’re not seeing something like Energyville coming from the James Hansen posse is that scientists, unlike oil corporations, are after the pursuit of truth. And the truth of the matter is, our energy future isn’t simple. In fact, as Nelson discussed yesterday, it’s actually enormously complex, and not even the experts can agree on much. A game that considered the dozens of essential variables that are at play – from the actual size of known oil reserves to climate tipping points to society-wide value shifts – would be a programmer’s nightmare, and a waste of valuable talent. It’s a good thing that our society is becoming energy literate so quickly… otherwise, we might be forced to endure a Second Life tutorial on biogas from ExxonMobil.

Powering Consumerism With Renewables…A Contradiction in Terms?

by Nelson Harvey

Even if we exploited all of our renewable energy options completely, they could not entirely support our growth-based and industrialized society, according to a recent book by Australian professor Ted Trainer. Trainer, a part-time professor at the University of New South Wales, argues that between intermittent wind and solar supply, power plant siting issues, and lack of arable land for biofuels, renewables are not up to the task of meeting all of our energy needs.

Since I haven’t read the book, I won’t pass judgement on whether Trainer’s calculations are correct. Certainly, I approach any projections about the future of complex energy systems with a high degree of skepticism, since one faulty assumption can gravely skew the results. For example, a few months ago scientist Jesse Ausubel published a paper claiming that using renewables to meet all of our power demand require so much space that it would “rape” much of our current arable and wild land. As it turned out, he made the colossal error of not considering dual-use wind and solar, the idea (already widely employed) of siting turbines and panels on top of existing buildings.

But Trainer’s argument goes deeper than the simple number-crunching of energy supply. His larger point, which evidently he spends the second half of the book on, is essentially this: so long as our economic system accepts unlimited consumption and growth as natural and desirable, it would be an exercise in futility to try to power it with renewable and sustainable resources. Bringing our energy demand down to meet the supply that renewables can provide will require shifting the orientation of our values toward consuming less.

Having just begun a course in introductory economics, I was drawn to Trainer’s view that we must re-define “acceptable economic behavior” if we are to rely exclusively on renewable power. Like all systems, our economy is based on a certain set of critical assumptions, that is, assumptions that have an important impact on what we consider to be “good,” and thus how we act economically. For example, one assumption built into many economic models is that business firms will always try to earn the highest possible profit for their owners. Clearly, this is overly simplistic and ignores many types of enterprises, like businesses that shut down for part of the year while the owners are on vacation, or that operate for other, social purposes. If you build a school of thought on assumptions like these, you might end up with a structure that looks remakably similar to the one we have now.

Since Adam Smith penned his seminal work “The Wealth of Nations” in 1776, economics has worked its way into every aspect of society. We worship at the altar of efficiency in planning our daily lives, and we conduct cost-benefit analyses of our relationships. In an increasingly diverse nation, it could almost be said that economics has become the true first language of the United States.

On the first day of my economics class, we heard the subject defined as the social science “which examines the part of individual and social action most closely connected to the material requisites for well-being.” I think part of the reason that economics has become our language of choice is because the economists have done their jobs so well. In rich nations, they have provided us with far more than the material requisites for well being. Capitalizing on the limitless nature of human desires, the market now over-produces millions of luxury goods.

The problem, as I see it, is that the economic theories which brought us here are out of date in light of our current situation. Take the term “material requisites,” the things which economists try to make as cheap and plentiful as possible. To address our environmental problems, we need to redefine both of these words, radically de-materializing our goods while thinking hard about which ones are “requisites” and which are luxuries.

I’ll be posting much more on reforming economics in the future, but Trainer’s book on renewable energy provides an interesting jumping-off point. Unlimited consumption is not “renewable,” so why would we want to fuel it with power that is?

Photo credit: flickr/harshadsharma