Tag Archives: Environment

Climate Change Threatens US Troops

The NY Times recently reported that the Pentagon has started incorporating global warming into its strategic planning, because the impacts of climate change – drought, rising sea levels, mass migration, new pandemics – will likely pose threats to the United States. Although the Defense Department has long considered energy costs in its planning (sadly, fighter jets don’t come in hybrid versions), the recognition of climate change as threatening US security is relatively new.

When US security is threatened, the military has to plan, and sometimes act. Thus, the Pentagon has some interest in seeing whether global warming can be mitigated. According to retired Marine Corps General Anthony Zinni, “We will pay for this one way or another. We will pay to reduce greenhouse gas emissions today, and we’ll have to take an economic hit of some kind. Or we will pay the price later in military terms. And that will involve human lives.”

But it’s not just the liberal Times reporting this. Last year National Defense Magazine, which is the publication of the defense industry lobbying association (not exactly cuddly liberals: their motto is “Promoting national security since 1919”), reported the exact same thing last year. Army General Gordon Sullivan called climate change a “threat multiplier,” and Navy Admiral Joe Lopez, foreshadowed General Zinni, saying “National security and the threat of climate change [are] real, and we can pay for it now, or pay even more dearly for it later.”

I agree that fixing climate change will cost us. In fact, as I noted here, that is exactly what cap & trade, or a carbon tax, will do: make energy more expensive and thus incent us to be more efficient. What the Pentagon is saying is that if we don’t pay some dollars now, we’ll end up paying in soldier’s lives later. So maybe some of those Republican politicians who claim to “support our troops” but are against any efforts to stop global warming (I’m talking to you, John Boehner, Mitch McConnell and James Inhofe, you hypocrites) ought to revisit their positions.

Even better, maybe the corporate executives who are against any carbon legislation that will hurt their profits, but tend to be Republican and thus pro-troop, will also rethink their position. I’m talking about the National Association of Manufacturers, who use bogus data to claim that cap and trade won’t help the environment, or the energy executives who make up 7 of the top 10 best-paid CEOs in 2008. But those guys don’t really care about the troops, since their sons never join the military. No, those corporate executives care more about profits, so that they can pay their sons’ tuition at Princeton and Harvard Business School. When Admiral Lopez says that we have to pay now in money or pay later in soldiers’ lives, I guess we all know which one the corporate executives are going to choose.


Greed: It’s Not Just For Wall Street

After my last post, full of invective against greed by Wall Street bankers and corporate chiefs, it’s only fair that I mention that we are all guilty of some greed. When President Obama said in his inaugural address that the current financial crisis is a result of “our collective failure to make hard choices and prepare the nation for a new age,” he wasn’t just talking about Wall Street. “Collective” means all of us, and we all share some blame. Or if not actually “all,” at least most of us.

Most of us were on a consumption binge of one sort or another. Some were buying things they didn’t need, others were buying things they couldn’t afford. The most obvious, and painful, example, is in the housing market. Folks bought more house than they could afford, and often more than they needed, seduced by low teaser rates, or by the chance to get a big win by selling it later. Others bought houses purely as investments, planning to flip them, only to be squeezed by rising mortgage payments and falling housing prices. Some refinanced with foolish mortgages, so they could “take money out of the house” and use the tax-subsidized proceeds to buy consumer products.

But it wasn’t just houses. We bought giant flat screen TVs, charging them to our credit cards. We drove around in monstrous Ford Excursions (financed by the geniuses on Wall Street), burning a gallon of gas every 15 miles. We drank bottled water instead of tap, we carried Coach purses, we stayed at 4 Seasons hotels when our income was purely Hamptons Inn.

While the Wall Street big shots may have taken huge bonuses with our tax dollars, they weren’t the only ones looking for the big score. We all wanted some goodies, whatever our income level. Those days are over. The goodies are nice, if they haven’t been repossessed, but we can’t afford them anymore. We couldn’t afford them then, which is the whole point. The days of living beyond our means are over. That doesn’t mean we’re going to be in yurts, heated only by burning cow manure. It just means that maybe we don’t need to have the biggest and newest, all the time.

Saving the Environment – We All Need to Give

President Obama’s inaugural address has gotten me thinking about responsibility and sacrifice. The President said what we have all known for a long time: that Americans are too profligate – spending money we don’t have, burning energy we can’t afford – and that a day of reckoning would come. In fact, the President made clear that the day of reckoning is here: “our time of standing pat, of protecting narrow interests and putting off unpleasant decisions — that time has surely passed.” As a result, I am planning a series of entries on this topic, on the theme of sacrifice. Today’s item: the environment.

A recent article in the Wall Street Journal (regular readers know I love my WSJ) discussed Cape Wind, which aims to put 130 windmills off the coast of Cape Cod, reducing greenhouse gas emissions an amount equivalent to taking 175,000 cars off the road. A no brainer project, right? Wrong, because the wealthy folks who have their weekend houses on that part of the Cape don’t want their views marred by windmills out on the horizon. They have been protesting the project and putting up legal barriers, enlisting the help of their most powerful neighbor, Teddy Kennedy, whose family has a fabled compound in Hyannisport.

Massachusetts is famously liberal, and based on my two years in Boston, the people who weekend on the Cape would consider themselves environmentalists. They recycle, they install solar power, they drive their Prius to Whole Foods to buy local produce. But when it comes to windmills in their expensive view, suddenly they aren’t so green. This is where they need to listen to our new president and stop protecting their narrow interests. They need to sacrifice a little for the good of the environment.

Broadening the scope of this discussion, if we are going to defeat global warming, everyone is going to have to chip in. The NIMBY (not in my back yard) protests that stall projects like new power lines, or wind farms, are going to have to stop. Of course, nobody wants a giant tower in their back yard, or a windmill right off their front porch. But nobody wants temperatures to go up several degrees either, or ocean levels to rise to a point where Cape Cod weekend houses are under water. Global warming is a major problem that affects everybody, and we are all going to have to sacrifice a little – give up our SUV, or allow windmills near our weekend house – if we are going to solve it. As theologian Sallie McFague put in her new book regarding climate change, “either we will all make it together or none of us will.”

A New American Sense of Responsibility?

Over the past few months I have seen more and more data indicating that Americans are cutting back their consumption in the face of the deteriorating economic situation. Retailers, restaurants, car companies, airlines – it seems as if everybody is feeling the pain. Just last week the Wall Street Journal called the trend “U.S. Retools Economy, Curbing Its Thirst for Oil.”

I am wondering if maybe this trend will last beyond the current economy and represent a new, or renewed, sense of responsibility in America. The past few decades have been an orgy of consumerism in America (and much of the developed world, but I’ll focus on America simply because I know it best), as people lived beyond their means, purchasing things they didn’t need and couldn’t afford. Possibly the best quote I have heard on this trend came from Art Wong, a worker at the port of Long Beach, who was on NPR’s Marketplace:

You know, we’re being stretched, and I turn to my kids every so often and I ask them, how many more pairs of jeans do they need? How many more handbags can they buy? And how much room do they have in their closets? And they keep going, and they keep buying, and the port keeps seeing more and more cargo coming through here.

This consumption frenzy brought with it a number of problems. There were environmental considerations, both from the production of consumer goods and from the gasoline sucked down by the SUVs that were a major outlet of purchasemania. There were price dislocations from people purchasing items (homes, Tiffany bracelets, fancy meals) that they couldn’t afford. There were macroeconomic impacts as we financed our purchases with overseas capital. Finally, I think there were moral and psychological consequences (not surprising to regular readers of this blog) from an entire population giving up on any sort of self-restraint or thought for the future.

With gas prices above $4 per gallon and economic growth stagnating, our reduced consumption is not surprising. But maybe, just maybe, this decline in purchasing represents a broader change, a sense that untrammeled consumerism is simply unsustainable. Perhaps people were jolted awake by the impact on the environment, or the national security ramifications of our addiction to oil, or the deflation of the housing bubble. Are Americans now looking beyond their own material wants?

Maybe, and maybe not. Perhaps there is no broader sense of responsibility, but rather the inexorable force of economics. Maybe people still don’t care about the environment or national security, and all they really want is a bigger Jet Ski, but they simply no longer have the money to satisfy their wants. That is certainly what the economists think. “We’re going back to the good old days of living within our means,” said David Rosenberg, chief North American economist for Merrill Lynch. Adds another:

We’re seeing the birth pangs of a new economic structure,” said Neal Soss, chief economist for Credit Suisse First Boston. “The next year or two or three will be about the transition to a new equilibrium. Consumption by households will grow more slowly than their incomes, which is the exact opposite of the last 25 years when consumption grew faster than incomes.”

Although I would prefer to think that we are getting more responsible, and that issues larger than our checkbook are driving these new spending patterns, I suspect that A) the economists are right; and B) it may not really matter. Even if economics are behind the change, those economic conditions show no signs of changing in the near future, or possibly the medium future. There is even a theory that this shift is permanent, and that America’s days of being an economic powerhouse are over. “The world has become multipolar,” according to UC Berkeley economist Barry Eichengreen. “Our dominance will decline.” Jared Diamond, of Guns, Germs & Steel fame, even says that the developed world only has 30-50 years of first world living before we outstrip our own resources.

Either way, this change in spending, this “retooling of the economy,” looks like it will be with us for a while. This has tremendous implications for companies that sell to consumers. Think about:

  • Utilities dealing with decreased demand for energy
  • Car companies finally forced to produce smaller cars
  • Construction with a focus on energy efficiency and green materials
  • Appliances that are cheaper, smaller and use fewer resources
  • Consumers actually turning down credit card offers because they aren’t buying things
  • Retailers changing their product assortment
  • Discounters (Wal-Mart) gaining market share at the expense of stores that catered to the overreachers (Neiman-Marcus)

Convenience Consumption

Many people are familiar with conspicuous consumption, Thorstein Veblen’s brilliant term from Theory of the Leisure Class for describing how upper classes consume as a way of displaying wealth.

But it seems like now we are seeing a new form of consumption where people are consuming for convenience instead of conspicuousness. Of course, people have always paid for convenience – that’s why last minute plane flights are so much more expensive than advance fares – but the convenience consumption I’m seeing has certain differentiators:

  • there is a cost to society
  • the gain in convenience is marginal
  • the consuming seems driven by appearances as much as convenience.

Bottled water started me on the path to this theory, like a spring feeding a Fiji bottling plant. The growth in bottled water consumption in the U.S. has been dramatic, growing to 9.4 billion gallons and $12.6 billion in 2008 from 4.7 billion gallons and $6.1 billion in 2000. On a per capita basis, this represents growth to 29 gallons per year from 13. That’s a lot of water. Everywhere you go, people are swigging from plastic bottles of water: in the car, on the bus, walking down the street.

The cost of all those plastic bottles, however, transcends the $1.50 that the consumer paid. Only two out of ten water bottles consumed in the U.S. are recycled, with the rest going to the dump. That adds up to 38 billion bottles tossed into landfill every year. In addition, it takes 17 million barrels of oil to produce the water bottles consumed in the US every year. Finally, it takes thrice the clean water put in every bottle just to produce that bottle. Combine the garbage generation with the natural resource consumption, and drinking bottled water clearly has a cost to society.

Carrying your drinking water in a bottle is convenient, but not significantly more convenient than getting water at your destination. This is America, where virtually all tap water is safe to drink, and virtually all houses and offices have sinks with taps. It is challenging to imagine a circumstance where an urban or suburban American is more than 30 minutes from a source of clean drinking water.

So why the billions of bottles of water? Proper hydration has clear health benefits but I question that as the root cause. It feels more like people want to show – to themselves and to others – how busy they are. Realistically, nobody is so thirsty on their bus ride to work that they have to drink water from a bottle. We can all wait until we arrive at our office and fill our water glass then. But drinking from a bottle demonstrates to our busmates how busy we are, and how hip to hydration.

If nobody is so thirsty that they have to drink on the bus, much like nobody has such an important phone call that they can’t delay it while waiting in line at Starbucks, why are we doing both? By paying for unnecessary convenience, we can demonstrate to the world how much we NEED that convenience, how important we are. The parallel to Veblen is clear. But in a green world, conspicuous is out, convenience is in. In the modern world, you prove your worth not by owning a mansion in Newport, RI, but by being so busy that you need to drink, talk and eat on the run.

If I’m right about convenience consumption, what are the implications for the future? I predict that food will continue to be conveniencized. There is already Go-Gurt and Lunchables for kids, but I think that package food for adults on the go will continue to expand. Because lord knows, when people are hungry they have to eat…NOW! And if it’s gourmet, that’s all the better, since after all, we live in Veblenland.

Eventually We’ll All Be Environmentalists

Environmentalism is generally represented as some version of dichotomy: conservative v. liberal or business v. environmentalists or republican v. democrat. Probably the most common characterization is that corporate executives don’t want to spend money to clean up while liberals want businesses to be clean and green: in other words, profit v. the environment

This dichotomous presentation has historically made sense, and if you look at environmental battles in the past, this is how the lines have often been drawn. For examples, see loggers v. the spotted owl or coal mines v. health advocates.

Health advocates, however, are the crux of a coming change. As the environment degrades and as science discovers more links between pollution and health, environmentalism will be seen less as an earth and animal issue and more as a human health issue. Many companies are perfectly happy to prioritize profits above trees or animals or scenic views, but they are much less likely to put profits ahead of human lives.

As the science become clearer and activists get better at using that science, the link between corporate actions and human health will become more explicit. This will cause corporate chieftains to look at things differently: they are, for the most part, decent people, and they don’t want to kill or injure other humans. And even those chieftains who might choose profit over the lives of others (they’re the ones who make great movie villains) certainly don’t want to get caught valuing money over human lives – that would be bad for business.

To use a concrete example, coal mining creates pools of toxic sludge. In West Virginia, some of these pools sit near schools. One mine, owned by Massey Energy, has a 2.8 billion gallon sludge pool sitting 400 yards above an elementary school. If science were to demonstrate that the fumes from this pool are damaging to the health of the school kids, I reckon that Massey CEO Don Blankenship would look into doing something about it. Mr. Blankenship probably doesn’t want to kill kids, and he definitely doesn’t want the world to know if he does kill kids.

Moreover, as global warming become more widely accepted as fact, this problem will hit closer and closer to home for corporate chieftains. Because if the climate starts to change, it won’t be random kids being hurt; it will be the chieftains’ kids, or grandkids. And NOBODY wants to hurt their own grandkids.