Thursday, December 23, 2010

Humbug?!


Or, considering our future

One of the things that forms part of our holiday routine is watching the Alastair Sim's version of Dicken's classic "Christmas Story" (see You Tube). Scrooge (the character Sims plays) is visited by three spirits on Christmas Eve (in his dreams) who show him the errors of his past, present and potential errors of his future if he doesn't "wise up" to the value of looking out for others. Scrooge, as you may recall, is a wealthy self-centered business man who was representative of some folks in Dicken's time in London in the 1850's. As a result of his spirit interactions Scrooge comes around to the betterment of all he comes into contact with (specially his clerk Bob Cratchit and his lame little boy 'Tiny Tim') and doesn't really lose much as the cost is not large compared to the benefits in his generosity and kindness.

I've often thought about how this movie might be remade with the concept of a sustainable world and the impacts individuals and companies make on all around them and their environment. Corporate sustainability reports are one way in which companies try to show, as Scrooge did, that they "get it" and it is not too late to embrace this bigger view of the world.

Lester Brown compares the change in thinking needed to that akin to the notion that the earth revolves around the sun and not the other way around - he is called "an environmental Paul Revere" (see Wikipedia). He notes that we used to consider the environment as part of the economy but it is really that the economy is part of the environment. Wikipedia quotes him from a speech in 2008 stating ' "indirect costs are shaping our future,' and by ignoring these, "we're doing exactly the same thing as Enron- leaving costs off the books. Consuming today with no concern for tomorrow is not a winning philosophy."

He could very well be one of the spirits of the future to visit our modern day Scrooge.

Other "spirits" include Paul Hawken (and his book The Ecology of Commerce, Collins, 1993 - a book I assign for reading in my sustainable manufacturing class). He gives (p. 139 of that book) as a definition of sustainability "an economic state where the demands placed upon the environment  by people and commerce can be met without reducing the capacity of the environment to provide for future generations...your business must deliver clothing, objects, food or services to the customer in a way that reduces consumption, energy use, distribution costs, economic concentration,soil erosion, atmospheric pollution, and other forms of environmental damage. Leave the world better than you found it."

Our modern day Scrooge wakes up to realize that if you are NOT presently at a sustainable state … then you need to meet the demands  of today without compromising our ability to meet the demands of the future by reducing the environmental load/unit of commerce to offset any increase in unit production so as to achieve a sustainable state over time.

If you are presently at a sustainable state…then you can meet the demands  of today without compromising our ability to meet the demands of the future. This is a net zero impact.

That is, in the words of Hawken, your business must deliver clothing, objects, food or services to the customer in a way that reduces consumption, energy use, distribution costs, economic concentration, soil erosion, atmospheric pollution, and other forms of environmental damage at a rate greater than the normal growth in consumption would require. Business must have a “net positive impact.”

That is a challenge to do while staying profitable but, as we've seen in postings in the past, not impossible and the tools to help do this, specially with respect to manufacturing, are growing in number and capability. Our so-called technology wedges are one set of tools.

Hawken and Lovins, in Natural Capitalism (Little Brown, 1999, another book I assign for class reading) state in the preface p x-xi. “The best solutions are based not on tradeoffs or “balance” between these objectives [economic, environmental and social policy] but on design integration achieving all of them together - at every level, from technical devices to production systems to companies to economic sectors to entire cities and societies.”

They go on to state that, ala Scrooge and his spirit visitors, “Without a fundamental rethinking of the structure and the reward system of commerce, narrowly focused eco-efficiency could be a disaster for the environment by overwhelming resource savings with even larger growth in production of the wrong materials, in the wrong place, at the wrong scale, and delivered using the wrong business models.”

That's what we've been talking about.

One way to "rethink the structure and reward system of commerce" to bring the external costs firmly into play is cap and trade.

As I heard on NPR the other morning while going to my office on campus "the whole world is watching California."

This is part of the 2006 Climate Law, called AB32, designed to give companies who generate large volumes of green house gases the "incentive" to emit fewer of those. And, interestingly, this is designed to move from impacting the big emitter, like oil refineries and some factories, "downstream" to the consumers of the products of those industries. Like me driving my car if it uses gasoline from a refinery that emits green house gas in this fuel production.

Which means I'll pay for this. Which means, I expect, I'll have even more incentive to look for vehicles that have improved performance in fuel economy or use none at all (but power companies are also on the list so be careful - who is most efficient in creating energy with least impact will be the question?! Remember the "impact equation"? Impact/GDP - this is it in practice!). This will impact automakers and many others in the supply chain as well.

And, although some take issue with this, the impact on the economy of California (eighth largest in the world if California was considered an independent country) is expected to encourage job growth and technology development.

More to come on this next time.

For now, my best to you for the holidays and a happy new year to all or, as Tiny Tim says, "God bless us every one!"

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