Green Consumers Need to Do their Homework

Posted on June 9, 2011. Filed under: Gary's Blog | Tags: , , , , , , , , |

We’ve won the initial battle of the market revolution to bring “green” to the mainstream consumer. But the campaign to dramatically change corporate culture and the American business paradigm has just begun. Far from resting on their laurels, green consumers need to do additional work now to ensure the initial gains are not lost in a flood of green washing. 

Green products are everywhere you look. It’s hard to find a major corporation that does not either sell a green product or at least have a sustainability statement. Organic products are sold at corporate super markets, green power is sold by the biggest utilities, and I wouldn’t be surprised if even Exxon-Mobil rolled out a green product. As a green consumer, you now have a myriad of choices at prices that are competitive with non-green products. But before you go to McDonald’s to buy that organic hamburger, think about the real reason you are shopping for green products.

There are generally a few prime motivators in green purchasing. Primarily, these motivators range around the desire of the consumer to reduce his/her direct environmental impact. It is the primary motivation for the widest range of green consumers. If this is your primary motivating factor, the company you buy the product from matters less than the product itself. However, as green consumer sophistication increases, the company who makes or delivers the product plays a larger role in the decision process.

The sophisticated green consumer understands that voluntary purchases on their own will not make enough of a difference to solve the environmental problems we face, especially climate change. Buying a green product from Exxon, for example, may help to reduce your personal carbon footprint, but it could actually be argued that it harms the overall effort to reduce carbon.

When you give your business to non-green companies for a green product, they take the earnings and they invest it into all the activities they do, including lobbying to kill any progressive environmental or consumer protection bill at the state or national level. This is important because we know that in order to solve climate change and other major environmental issues, we need to change the laws of our states and our nation, and to have a strong international agreement. Individual actions alone, while extremely important, cannot solve the problem.

Green consumers who bought green energy from Clean Currents know that their dollars went to reduce their personal carbon footprint, and that the impact of their dollars was magnified by our company’s actions on behalf of the planet. These actions include being the only energy company in Maryland to advocate for Governor O’Malley’s offshore wind bill, and for a consumer protection bill. They include reducing our company’s environmental impact through our sustainability policies. And the actions include the example we are setting for a new business paradigm, the Benefit Company. Clean Currents is the only energy company in the area that is certified by B-Corp for our sustainable operations, and that has our commitment to sustainability and the “public good” actually baked into our legal corporate DNA. Finally, green consumers know that any investment we make in the company with their money is for more green products. We are exclusively green. It’s all we do.

Unfortunately, if consumers purchased from some of the other companies that sell green energy in our region, they perhaps inadvertently gave their money to kill offshore wind, to kill more aggressive solar standards, to kill consumer protection, and to operate a business in the old paradigm. Some of their money may have gone to support development of more polluting sources of energy.

Thus, it’s more important than ever for green consumers to do their homework. Reducing your personal carbon footprint is important, and I am a strong advocate for that. It shows leadership in your community, it makes a difference, and it’s the right thing to do. But now we need to take it to the next level. Before buying from a company, see what their stance is on legislation vital to the environment. See if they mainly sell polluting energy and only do a little green. See if they have an independent third party verification of their sustainability practices. And please do not simply take the company’s word for it! “We’re sustainable, trust us!” is not good enough. Trust but verify, as a former President once said. Take the extra few minutes required to get a good idea of what the company actually does, not what it says.  We can discredit green washing if consumers learn to make well-informed choices.

 

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China’s Water Crisis

Posted on June 6, 2011. Filed under: News | Tags: , , , |

Chinese worker cleaning polluted river

Chinese history is filled with environmental disasters. This stems from a myriad of sources, one being that the country maximized its usage of arable land as early as 1800. Environmental problems have been such a major issue in China that one of the key indicators of the fall of a dynasty was the inability of the emperor and his dynasty to prevent famine. Once famine became rampant, an emperor was said to be losing the “mandate of heaven,” social unrest would ensue, and a revolution would most likely oust the existing from power. The leader of the revolution would assume the roll of the Emperor and obtain the “mandate of heaven” by making sure his people did not starve. To this day, uprisings have been the key method of regime change in China. For example, after the Tiananmen Square protests in 1989, the Chinese Communist Party (CCP) was completely  reshuffled. For this reason, there is nothing that those in power in the CCP fear more than social unrest.

Linfen, China

Astonishing economic growth has helped China become a leading player on the global level, but there has been dire consequences. Rampant pollution as a result of immense foreign direct investment has caused serious environmental problems. The most pressing environmental issue for the CCP at the moment is the Yellow River. The Yellow River is called the birthplace of Chinese Civilization, but it has become so polluted because of poor regulation of industrial standards that the water is no longer safe for drinking. The river also happens to be the main source of water for most of northern China. The Chinese Government, however,has come up with a solution. It plans to redirect one third of the water from China’s largest river, the Yangtze river, 800 miles to connect with the Yellow river to essentially save the 440 million people living in northern China from dying of thirst.

From Nytimes.com

The plan is elaborate, lucrative, and insanely expensive. However, the $62 billion dollar price tag (twice that of the Three Gorges Dam) does not come with a guarantee. The 800 mile canal that would have to be built would run through several industrial zones and some Beijing officials have voiced skepticism as to whether the water redirected from the Yangtze would be safe for drinking when it reached northern China anyway.

Along with these problems, several hundreds of thousands of people have begun to be displaced by the Government to build the canal. This has caused several protest and uprisings since the compensation received for the requisition of land by the CCP has been, more often than not, inadequate. However, the Chinese government hopes that these protests will be less severe than the millions that would most likely rise against the government if northern China does not find a rapid solution to its water crisis.

There are several things to be taken away from this situation. Most importantly, almost everything in life is based on incentives. Local officials have a motive to bring in foreign companies and allow them to pollute, even though there are strict standards set by the central government. This happens for several reasons; 1) local officials are not paid directly by the central government, 2) local officials are rarely ousted from power, and 3) up to 70% of a local officials income can comes from selling foreign companies land. To attract more foreign companies, a official will provide more slack in terms of pollution so the companies can cut more costs. China will have to change this incentive structure if they ever want to combat pollution that continues to be unregulated.

This system has allowed for incredible amounts of foreign direct investment and bolstered China to become an economic power that may soon rival the U.S., but the Chinese governments shortsightedness in terms of the environmental impact of its economic policies may very well be the CCP’s downfall. The short term economic value of something may, in the long term, be much more expensive as a social cost. As the Chinese government is finding out very quickly, social costs do add up, and they can become very expensive. Unfortunately the impact of some policies are measured not only in dollars or RMB, but also in lives.

Doing the right thing and paying more for something that adds social value can be much less expensive in the long term. Clean wind power is and example of a product that does not harm the environment through practices such as mountain top removal. To not end up like the Chinese in terms of pollution, we have to remember that the incentive to purchase a product or run a business a certain way has to have more than monetary value, it also has to take into account the social good.

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