Friday, August 29, 2008

Energy Costs, Transportation, Georgia, and Globalization


Of the slew of articles appearing in all sorts of media outlets around the country related to energy, some recent articles in the NY Times caught my attention. The first, entitled Shipping Costs Start to Crimp Globalization, started me thinking about the role of transportation in the global economy, especially about the need to recreate local and regional economies to reduce the economic and environmental impact of said transportation (image from www.indmedica.com). The very first paragraph of the article highlights the taken-for-granted complexity of global supply chains that deliver goods to global consumers at their whim. Tesla Motors (receiving their share of press as they build and sell a $100,000 electric sports car), planning to ship subassemblies around the world (chasing low costs with acceptable quality) found out that, with the rise in fuel prices, it was more economical to complete the subassembly work near their HQ in California. Good news for people in manufacturing in the locale and for CO2 emissions. According to the article, nearly 5000 miles were removed from this assembly's shipping. Now, if there were a price on carbon, how much more would they have saved, and what other innovative production methods would they come up with?

I am not suggesting that high fuel prices are the best thing ever, though I like the fact that the higher prices start to internalize many of the externalities that come with burning fossil fuels. I am suggesting that, as we learn in Econ 101, prices provide a strong market signal to players in the market to take action. High fuel prices mean that many individuals, companies, governments, etc. are looking at their energy bills and thinking about what they can do to reduce them.

Paul Krugman (full disclosure, I read the Conscience of a Liberal recently) chimes in a few weeks later with an op-ed piece titled The Great Illusion, looking at the Russia/Georgia conflict. The connection to energy; Georgia is a major corridor for oil shipments (please pardon the fact that I do not have exact numbers) and provides established access to additional oil and natural gas fields. The article hearkens back to the last great "pause" in the march of globalization; WWI and WWII. Mr. Krugman takes a look at the state of the economy, global instability, energy concerns, food price spikes, etc., and posits that perhaps globalization will be slowing. What does that mean? Who benefits and who loses? Taking the examples from the first article one could argue that American manufacturers with plants located domestically could benefit. Do the large multinationals that have been chasing the least costs locations stand to lose? If so, how much and where/how will they apply their considerable power to reduce their risks?

Warning, personal musings to follow!

Both these articles are a bit dated; I decided to stay away from the computer for some time to reflect upon the past few weeks and the upcoming second year of my graduate studies at BGI. It's funny, in the time that I have been away from school, as welcome as the time off has been, I have found that my cynicism about the ability of business and society to change the profligate ways we live (I am a perfect example of this) growing deeper. I believe it has something to do with a lack of contact with people that share some of my visions around regenerative business. This is something I can remedy rather quickly. It also relates to my own lack of commitment to a simpler, less energy intensive lifestyle.

What's keeping me from buying the composter I have been talking about for months and engaging my neighbors in its use? What "invisible barrier" keeps me from visiting more farm stands to support local agriculture (there will be more commentary on the "Omnivore's Dilemma" & "In Defense of Food" coming)? Is it the fear of non-conformity? Am I that caught up in what other people think of me that it gives me pause? Perhaps it's just the opposite, perhaps I am caught up in the cynicism I mentioned before, convinced that my actions will be useless and inconsequential.

I suppose that's not the best way to view one's actions, especially if one believes in the threat of (insert threat here; liberals, conservatives, climate change, gangs, economic collapse, obesity, elder care, education, war, government & consumer debt, etc.) _______.

Thursday, August 07, 2008

"New" or "Old" Green Focus for MBA Students

Polls. We hear results from them nearly all the time. Given that we are in an election year, we will no doubt be bombarded with poll results. Some of them may be useful, some (most) of them will merely provide additional inane and irrelevant data to an already overloaded and distracted populace. Wait a second…where was I? (image from andrewblum.net)
Two recent items focused on the future focus of MBA students caught my attention. One was provided by a fellow BGI classmate (of course) that happens to live in the very cool province of British Columbia, Canada. The other I found on good ol’ Greenbiz. One is a poll, the other is an article. Clearly different items, and revealing in their own ways. I find it fascinating that both of these items target the roll of business in society, focusing on MBA students. It is unclear to me if the poll or the article is keyed toward environmental issues (which, as far as I can tell, certainly falls under the "societal" umbrella). The GreenBiz piece, New Green Focus of Future MBAs, is an article written by a reporter for a website that is dedicated to sustainable business. There will more than likely be some skewing there, especially in the selection of the schools, questions asked, etc.
The Aspen Institute report is a straight up survey, touching some of the major business schools nationally and internationally (well, mostly nationally) including Schulich School of Business at York University in Ontario, Fuqua at Duke University, and Ross School of Business at the University of Michigan (among many others).
The main points I took from looking at the two items? The Greenbiz article reinforces the greening of business while the Aspen Institute survey leads me to believe that the social responsibility of business is to increase its profits.

Some interesting blurbs from the Aspen Institute's report...
  • Despite recent public discussion of the environment—global warming, alternative energy sources, and the like—students rank the importance of companies having progressive environmental policies near the bottom of the list.
  • Responsible environmental practices also are more important for women than men when considering a potential employer (38% of women vs. 28% of men report these practices are very important.). [I believe the makeup of BGI's student body reflects this observation.]
...and the summary from the Greenbiz article
As more business schools respond to this movement, beefing up their curricula and providing learning opportunities for their students, prospective MBA students will have a bigger pool of programs to choose from and apply to and more career choices as well.

But as Gerde put it, "'What job can I get in sustainability' is a false question. The opportunities are wide-ranging, from sourcing and logistics to renewable energy."

According to a report from Net Impact, the number of CSR jobs that are publicly advertised has gone up by 37 percent since 2004. This reflects a genuine need in the market for managers and senior executives knowledgeable about the environment, who can lead green initiatives and create new profit centers.

In response to this market demand as well as the student mandate to merge their interest in management with their concern for the environment, integrating sustainability concepts into the mainstream courses and adding more green electives will be a major trend focus for these and other schools.
So, I suppose it depends upon who you talk to.

Tuesday, August 05, 2008

Vote for BigBelly Solar!

See here...and vote for the renewable energy based company. Jim Poss is a friend and member of the BGI community. He started a company (BigBelly Solar) seeking to reduce fuel use and beautify city streets. Check it out and vote for the green entrepreneur.

The following is from the Forbes sight:
Picture a loud, smoke-belching garbage truck. You are behind it in traffic. It gets only 2.8 miles per gallon and drives over 25,000 miles per year collecting trash. It is the most polluting vehicle on the road. It costs over $100 per hour to operate. This is the "old way," our competition. Now picture a mailbox with a solar panel on top. You hear birds chirping in the background. This new waste collection system has begun to change the world.
BigBelly Solar (BBS) makes the "BigBelly," the world's first and only solar-powered trash compactor, which reduces collection frequency by up to 75% by enabling "compaction anywhere." The patented machine uniquely brings the benefits of compaction to points of disposal, making it useful anywhere outdoors. Some of these benefits are:
  • Reducing collections by a factor of four or more
  • Eliminating variability in timing of collections
  • Keeping animals out of the trash
  • Preventing overflows and resulting litter
Parks, cities, corporations and entertainment venues in 32 U.S. States and 15 countries are saving money and fuel by using these machines. For this achievement, the World Economic Forum named the company a "Technology Pioneer" in 2007. The U.S. currently spends $45 billion and burns 1 billion gallons of fuel annually to collect trash. BBS has begun to make an impact not only to budgets, but the environment.
BBS invents, designs and oversees manufacturing and sales of the BigBelly. BBS also sells subscriptions to a wireless management system that automatically coordinates collections according to real time demand. The company recently launched its Solar Recycling Kiosks, which bring similar efficiencies to public recycling. (plastic bottles can be compacted 15:1).
The company is five years old; it was funded by Angel investors with a social agenda. Its management brings decades of experience in renewable energy and manufacturing.
BBS has been growing 400% annually since its inception; it is poised for continued growth with its wireless system (for all types of dumpsters and trash bins) and its recycling offerings. Future company growth will stem from BigBelly technology. BBS recently pitched to an international package delivery company that its "smartest drop boxes in the world" could save time and fuel used to visit their 40,000 drop boxes in the U.S. When BBS proposed that a text message could eliminate trips to empty bins "for only $0.04," the company was intrigued and wanted to test a prototype.
If we are honored with this prestigious award, we would first use it as a marketing tool to continue to build credibility and broader awareness of our technologies. The award money would help evaluate and develop a product that has significant demand and environmental impact. BigBelly Solar will continue to challenge the status quo with more cost-effective environmental solutions. The cheapest gallon of fuel is the one you don't buy; and we prove that every day. The BigBelly is almost completely made of recycled materials. It is ROHS compliant and made in America.