I've always been 'Green'. Not "I recycle and you should stop driving an SUV and if you don't you're evil" Green. I'm more of a constructive 'green'. In my youth I did ecological projects with the Boy Scouts, planting trees, cleaning parks, learning about nature by hiking the Appalachian Trail. I figure it's better to improve than scold, and you should start at home anyway. It's better to be concerned about how you do things and let other people worry about how they choose to live. If people want to be 'green' because they fear Carbon Dioxide, that's their choice and I'm OK with it. I don't agree with them, and I really don't appreciate when they decide their way is better and want to force me to do things their way.
My teen years were marked by two contrived events now known as "The Energy Crisis". Political situations had led to a belief that oil prices would rise forever and we'd run out of fossil fuels by 2000 (technically, we were supposed to hit Hubbert's Peak in 1979 - but Hubbert didn't count on various factors which extended his timeline). All kinds of crazy stories in the 1970's drove many to the point of hysteria. Not dissimilar to what we're being told today, except back then the world was cooling, not warming. It doesn't matter which way the temperature was going, because ecological consciousness was, and is, part of the 'correct' cultural identity. As I matured, I learned it's not just about ecology. It's about efficiency.
As a result of my formative years, I've always had an interest in alternative energy. I've never feared running out of fuel, or worried about Carbon Dioxide run amok. Instead, I was interested in the economic concept of substitute goods. Substitutes and complements are what make markets work. It's the concept that coffee gets expensive so coffee drinkers switch to tea, which is less expensive. I've never known a coffee drinker to switch, but while the example isn't precise, it is accurate.
Prices are a message the market sends to let businesses consumers know when something is in high or low demand, or if inventory is tight or slack. There are a host of other reasons why prices move. Those are interesting, but for this post, they aren't important.
What do prices have to do with being 'green'? Quite a bit, really. Because if 'going green' is to be meaningful at all, there has to be a good reason, a solid economic reason, to do so. It can't just be a political mandate or fear of a fictitious link to otherwise normal human behavior. If we react to non-market based reasoning, we typically have bad outcomes and/or unintended consequences that wind up costing more than we hoped.
When it comes to oil, there really aren't many substitutes. The primary option to send a price signal is to limit how much I use. As a result, the United States has effectively utilized conservation as the primary tool of fighting oil prices. In the 1970's, we were promised that by now there should be other alternatives. There are other options today, but they are generally expensive. Ed Begley, Jr. had a whole show about energy substitutes. But he's relatively wealthy, made money from the show, and the average guy can't make a capital expenditure the way Ed can.
Alternatives aren't bad ideas, they just don't make sense economically because they are capital investments, not operating expenses. Capital investments require huge upfront payments, designed to reduce annual operating expenses and achieve a payout over time from improved overall performance. How many people can afford to pay $36,000 to save $1,800 annually in electricity? How many people want to pay that much upfront to save this over fifteen to twenty years? Not many.
I saw one place which was willing to spend the money recently, a large liquor retail warehouse near my father's. They added solar panels to their roof, covered their parking area (a nice touch when it rains or is very hot) and put solar panels over the parking area. They expect to have a return on investment in 7 years and make money for the estimated 8+ remaining years on the panel lifespan. 15 years is a short lifespan, and the average homeowner can't expect to realize the same kind of return on a much smaller physical footprint. In my neighborhood (and I've looked into this), it would take 15 years for me to break even on a series of solar panels on my roof. Solar panels others may find cosmetically repulsive.
Every now and then some ideas crop up that make sense. I saw one recently when I was on a college tour with my son. It was called "Big Belly Solar Compactor".
All across the campus, trash cans had been removed and replaced with machines. I took a look at the product, made a few calls, and found them quite interesting.
Big Belly allowed the university to make substantial savings on its garbage collection. There had been a five times a week collection schedule which Big Belly altered to a maximum of two days a week. In reality, the cans can communicate with a base, letting them know how full they are, and if they need to be emptied. As a result, a large truck making regularly scheduled routes was no longer necessary. Smaller trucks could do irregular pick ups, on an as needed basis. This meant savings to the budget of the physical plant in fuel. In addition, it allowed the university to manage its manpower expectations, lowering overall wage and pension growth. In speaking with Big Belly they mentioned they usually don't try to sell the headcount savings, given the state of the economy. However, if an organization is expecting to grow its physical plant staff, Big Belly offered the opportunity to limit that growth - a fact which clearly was not lost on the university.
The school knew what it was doing. They had the perfect sale for their books: "Save $900,000 over the next 5 years. After the cost of purchase." Not to mention, as it was a university, they had the ability to sell through the "we're using solar power to reduce emissions" concept to what is likely an overwhelmingly pro-AGW crowd. Big Belly, as a business entity, has had many large wins of this nature. They aren't just successful at universities, but with the Park Service, and cities.
It pleases me that some alternatives make sense and have an easy sale. Not because I'm so happy the planet is going to be saved, but because it shows the market does work when people think strategically and logically about their needs. It shows that it pays to consider any alternative when it makes sense.
We don't have to be motivated to save the world in order to be 'green'. We just have to be motivated to save money. Providing government subsidies and tax breaks for projects like this isn't the right way to go about it. Credits and subsidies alter motivations and lead to the kind of moral hazard which created the Banking Crisis, or Solyndra. No, the goal is to let individuals discover the way themselves, either through a sense of karmic duty like Ed Begley, Jr., or a sense of economic efficiency that most normal folk seek. This will allow entrepreneurs to do their job properly and develop viable products which people will want, allowing them to profit the normal way - by selling quality and value.
It's not up to the government or groups to mandate behavior. It's up to the market to produce price signals which 'explain' the value of doing something simply because it makes economic sense to do it.
