“In a case echoing the landmark litigation against tobacco and fast food companies, California is suing the car giants for damages flowing from climate change.” — The Age

The lawsuit claims “damages related to such issues as melting snow, rising sea levels, increased ozone depletion and bushfires.” Interestingly, there is no compensation amount listed, which in itself will be a difficult task to assess: how do you calculate the cost of melting snow, rising sea levels, increased ozone depletion, and bushfires?

I’m very curious to see how this plays out.

As I’ve mentioned before, I presented a concept during the review before Christmas which involved composting. The idea was to close the loop between consumers and farmers (consumers and producers), with supermarkets as intermediaries. (I cover this concept in greater detail in my thesis report.)

Sydney just sent me an article from Treehugger which describes a service currently running in San Francisco which takes food waste (primarily from restaurants) and turns it into compost which is resold to farmers.

My concept looked more at the individual’s contribution, and at the time I wasn’t looking at regulation or involving other parties…my focus was perhaps too narrowly aimed at supermarkets and only supermarkets. I’ve since opened things up in terms of stakeholders—while it may be hard to justify a supermarket’s incentives for collecting compost, a city can certainly benefit from such practices, and private companies would definitely be willing participants.

Another difference is that the actual composting in San Francisco occurs in Vacaville, whereas in my concept each individual was composting in their home. I think there would need to be an intense look at whether centralized methods of composting are better than individual composting, both in terms of convenience and in terms of material usage, and such things as transportation costs and emissions.

I think in the end, however, I wasn’t really interested in composting per se as I was the motivations for the individual to participate within such a system. It’s one thing if you have a recycling container which you dump things into: that’s easy enough to accommodate in your life. What’s harder is to get a sense of contribution and the role you play within the larger system and community. For those of us who get personal satisfaction from doing good, it’s enough to know you’re doing the right thing. But for others, a little more incentive and visibility is perhaps warranted.

Citing impacts to “water supply, public health, agriculture, the coastline, and forestry,” Executive Order S-3-05 mandates meeting the following Greenhouse Gas (GHG) emission reduction targets for California:

...by 2010, reduce GHG emissions to 2000 levels; by 2020, reduce GHG emissions to 1990 levels; by 2050, reduce GHG emissions to 80 percent below 1990 levels.

This executive order was signed into law in June 2005, and I suppose it’s no coincidence that the California Climate Change Center and Center for Clean Air Policy reports just came out.

What I find interesting about this executive order is that Governor Schwarzenegger has effectively declared climate change a threat to the state’s economy and future well-being. Which is a roundabout way of saying climate change is a huge opportunity. As I tend to think (and as others have said), as California goes, so goes the nation. Or as Warren Buffet has said: “If California has trouble, the country has troubles. If California prospers, the country prospers.”

As the LA Times says:

California is one of the 10 largest economies in the world and the 12th-largest producer of greenhouse gases such as carbon dioxide, methane and nitrous oxide, which are byproducts of industry, agriculture and motor vehicle use.

One benefit of working on this thesis has been my shift in mindset: threats are now opportunities. Silicon Valley tech might be big, but innovation related to climate change action will be even bigger and certainly more diverse.

Previously, the corps of engineers in Sacramento has said that it doesn’t declare an emergency to speed deferred maintenance. Emergencies are called to “prevent or reduce imminent risk of life, health, property or severe economic loss.”

The question is when to declare an emergency over infrastructure, or more broadly, long-term concerns. In the short-term-focused world of politics, it’s quite natural to defer and defer and defer decisions, especially ones which carry political heat. Yet at some point these issues must be dealt with. And the above quote reveals quite clearly how the government would deal with most problems.

Perhaps it would be helpful to more clearly define “emergency”—obviously “severe economic loss” can occur over a period of time, not just from a flood or fire. California is in a unique position because it needs to discover a new cash cow to drive its economy. Silicon Valley has been a reliable economic powerhouse over the years, but at some point national and international competition, and the high costs associated with the Bay Area, will drive business to more profitable locales. But to comprehend this takes long-term vision.

If you see an economically bumpy road far in the future, does it constitute an emergency? Not according to the above criteria, but it’s worth thinking about. Once again, it’s all about time-scales.

...this study finds that carbon reductions sufficient to meet the Governor’s targets can be achieved at no net cost to consumers and likely at a net benefit in both 2010 and 2020. my emphasis

What I find interesting is that while CCAP originally used $30 per metric ton as a cutoff for determining the most attractive measures, they ultimately arrived at figures way below $30: $5.25 per ton and $5.77 per ton in 2010 and 2020, respectively. The reason is even more interesting:

A significant portion of the measures have a negative cost (e.g., the economic benefits of implementing the measure exceed the economic costs.). ... An even larger portion of the measures identified have a cost between zero and $10 per metric ton CO₂e.

While I’m not going to exclaim how wonderful these results are and jump on the bandwagon without thinking twice, I do think these results constitute a significant response to Bush’s excuse for not signing the Kyoto Protocol: “For America, complying with those mandates would have a negative economic impact, with layoffs of workers and price increases.”

NRDC estimates the expected savings to consumers from energy efficiency the State of California are expected to result in aggregate savings of nearly $527 million in 2010.

I was curious about what $527 million can get you these days. Turns out that it’ll get you a little less than three days in Iraq at $122,820 per minute.

I’m going to crib directly from the executive summary because the following points are incredibly relevant for my thesis:

Climate action in California can yield net gains for the state economy, increasing growth and creating jobs. Preliminary modeling indicates that just eight policies that were analyzed in detail can achieve almost half of the Governor’s 2020 targets while increasing Gross State Product by about $60 billion and creating over 20,000 new jobs.

While $60 billion is a lot, the model isn’t complete: “We also know that there are many more low-cost options for the 2020 goals that are not included in the scenarios evaluated here by the BEAR model.” In fact, the model factored in only eight policies—if the economic gains outweigh the costs of the other twenty-two policies which weren’t included in the study, then that $60 billion gain would likely be much higher.

There are numerous additional climate action initiatives beyond those that have been modeled, many of which will also improve California’s economy. The analysis thus far indicates that California can likely reach the Governor’s 2020 targets with a net gain for the state economy.

I’m not as interested in the part about reaching the governor’s targets as I am in the part about “net gain for the state economy.” My feeling is that the more this point is hammered home, the more people will jump on the energy efficiency bandwagon. Positioning the issue of climate change as an issue only environmentalists care about is, in the end, not a very smart strategy. Nobody likes to be called an enemy of the environment.

However, everyone likes to make money—this was something Aram and Alejandro made clear in their service design presentation last year when they said that McDonalds never saw itself as selling burgers forever. It will sell whatever makes money. It’s a business. And in my opinion, smart environmentalists will use this tendency to their advantage by aligning and positioning their goals with those of big business. It’s not about selling out: it’s about communication.

Voluntary measures, while helpful, are insufficient to yield the required reductions. Designing an effective combination of regulatory standards, market-based approaches (such as a well-designed cap-and-trade program) and innovation policies is the best way to cost-effectively manage greenhouse gas emissions in California.

This is the approach I’m taking with my thesis. I know I keep talking about it and not showing it, but until now things have been very fluid and I’m somewhat reluctant to draw a line in the sand until I’m willing to step across it. I’ve got that momentum now, and my energies are focused on honing this thing for my review in about a week.

Anyways, back to the point: I was originally reluctant to talk about regulation (and I’m still holding out on regulation for some other ideas I have outside of this thesis), but in the end I think it makes sense for my thesis direction.

Technology innovation, spurred by a combination of regulations and incentives, will be needed to shift the economy over the long term away from carbon-based fuels and meet the 2050 targets. By acting now, California can gain a competitive advantage by becoming a leader in the new technologies and industries that will come into existence worldwide due to the common goal of reducing GHG emissions.

This is self-explanatory. Reading further into the Executive Summary reveals some more detail:

Globally, increasing GHG emissions are assumed to be essential to a growing economy. This is not true in California. The state can take an historic step by demonstrating that reducing emissions of GHG can accelerate economic growth and bring new jobs. Moreover, exercising leadership in this area plays to California’s comparative economic advantage in the US and world economies as a first-tier innovation economy. California can gain a competitive advantage by acting early in the new technologies and industries that will come into existence worldwide around the common goal of reducing GHG emissions.

Really, this is nothing new. Paul Hawken and others have been banging this drum for a long, long time. The difference here is context. Where Hawken and others have spoken in generalities to great effect, I’ve always felt that in the end this approach left me with very little to grasp. I haven’t been able to ground anything, which is exactly what this report accomplishes in some respects: it grounds these ideas in a real time and place, and thereby gives traction to some of these theories. What this report does through analysis, I’m attempting to do using a synthesis of present-day trends and extrapolations to project into the future. By proposing a future scenario, I hope to stimulate discussion and forward movement on these important issues which face us.

(Report originally found via Treehugger)

LEMs also provide a variety of side-benefits:

• Increase home purchases in a variety of location efficient communities;
• Boost public transit ridership;
• Support neighborhood consumer services and cultural amenities;
• Reduce energy consumption; and
• Improve local and regional air quality.

What I find interesting about LEMs is the idea that you can encourage certain behavior in one area of society (driving less) by providing incentives in another area of society (home ownership), with the net result providing ancillary benefits. Of course it makes sense when you think about it, but I haven’t seen too many examples of such thinking.

That said, one example does come to mind: ShoreBank, which I ran across while reading GreenMoney Journal. What’s interesting about ShoreBank is that they promote energy efficiency among their customers. The bottom line, again, is money. An energy efficient home reduces heating and cooling costs, which frees up money to pay back the bank.

I think the important point from both of these examples is that we can find common areas of interest between seemingly disparate topics.

Anyone know of similar examples?

My thesis is gravitating towards this area. Specifically, I’m looking at combining the idea of storytelling with information streams. Naturally, as Salon.com points out:

More information won’t necessarily lead to a more perfect world, of course—when one doesn’t have a whole lot of dollars in one’s pocket, the lowest price makes a compelling argument. But it’s an essential part of any comprehensive solution, a place where government and the media both bear a clear civic responsibility.

The question of civic responsibility brings to mind the City of Berkeley in California, which has a ban on polystyrene foam. Many of the reasons for imposing the ban cover civic issues such as urban blight and solid waste management:

A. Solid waste that is non-degradable or non-recyclable poses an acute problem for any environmentally and financially responsible program of solid waste management. Such waste covers the City’s streets, parks, public places, and open spaces.

G. The City of Berkeley has the duty to responsibly dispose of its solid waste, yet existing landfill sites are rapidly approaching capacity, and additional sites are increasingly unavailable.

The question of stakeholders popped up during the last thesis review in December, specifically around the compost economy concept. This subject is related to regulation, and I think it’s more productive for me to talk about them in my thesis report.

Whatever the motivation, the lesson learned is simple but elegant: get to the right person inside the retailer’s world and the right things begin to happen. The big question of course is how you find this virtuous insider? Sometimes it’s sheer luck. Sometimes, in the course of doing research on a potential tenant, you discover that they’ve done projects elsewhere that don’t fit the retailer’s typical prototype – and you look for the particular team members responsible for these atypical projects. And in a few cases, the retailer is actually on record as promoting eco-friendly practices. Whatever the case, once you find alignment between your team and that of the tenant’s, instead of a vicious cycle of ongoing resistance to green, you find a virtuous cycle of collaboration.

And since I’ve been looking at supermarkets, I was also interested to see the following:

Under the partnership, Safeway has agreed to purchase 78 million kilowatt hours in the form of wind energy. By doing so, the company not only becomes one of the nation’s largest buyers of green energy in the U.S. but also becomes California’s largest buyer of renewable energy. Safeway is now the only retailer to purchase enough renewable energy to power 100% of its U.S. fuel stations.

“Protecting the environment and conserving our nation’s valuable energy resources is something that Safeway and our customers care deeply about,” said executive vice president Larree Renda. “By powering our fuel stations, stores and corporate offices with wind energy, we are taking a leadership role in using cleaner sources of electricity.”

While I might be inclined to think that Safeway is defending itself in the marketplace against the likes of Whole Foods—Safeway can’t claim the same organic/healthy focus that Whole Foods controls, so it has to address the market in different terms—nonetheless, it is heartening to see this kind of change. Regardless of Safeway’s motivation, their purchasing wind power helps increase demand in general within the alternative energy market.

Again, at some point a discerning market will begin to separate the talkers from the walkers, so to speak. But until that point, any motion towards sustainable business practices will help push the overall market in that direction. And those companies which truly mean what they say will be rewarded, and those who are merely making the motions will be punished.