GREEN BUSINESS VIEWS

Posts Tagged ‘carbon emissions’

Environmentalism

I’d like to correct a common misconception, although I do not imagine that these comments will actually have far reaching impact.  The well-entrenched concerns for global warming have designated greenhouse gases as the culprit for this global climate change issue.  In particular, the anthropogenic (man made) contribution of Carbon Dioxide (CO2) to the atmosphere due to the use of fossil fuels must be reduced according to the Kyoto Protocol.  At the start, it should be stated that the issues of global warming or global cooling are not debatable issues.   Both of these phenomenons have occurred before and will happen again.  Neither is the impact of greenhouse gases under question.  The greenhouse affect keeps us from experiencing incredible temperature changes between night and day.  So, just in case you didn’t already know this, the greenhouse effect is our good friend.  The greenhouse effect is the fundamental reason that we have a habitable planet that retains a proper amount of heat in our atmosphere.  It is the concerns about an out-of-balance atmospheric condition that promotes global warming or global cooling.

It is the imbalance of the greenhouse effect in the atmosphere that is of concern right now, and the debate that rages is whether mankind can make the difference in how it operates.  That issue is not the debate of this article.  The point of this offering is the question of the application of “Green” when it comes to a “Carbon Neutral” status of a business.  Is is fair or correct to apply the term Green to a carbon neutral business?  Well, it all depends on how the terms are defined.

If Green means “anything environmental” no matter how extended the connection, then it is probably allowed to call a carbon neutral company Green.  I debate the core of this issue because Green is not a synonym for environmentalism.  It is a part of the environmental issue with a more specific meaning.  Green is best defined as the “health impact” of what we do.  If this definition is correct, then Green is misapplied to carbon neutral applications.  As seen in the chart above, I believe that Green refers to the health impact of a process.  I also believe that sustainable issues are what should be called a Blue issue.  Pollution is a Red issue, and Conservation is a Yellow designation.

Given these definitions, carbon-neutral may well be a pollution issue and obviously a sustainability issue.  In the proper sense, being carbon neutral does not make a company Green.  And, I am not referring to a long extrapolation of reduced carbon emissions that will help the global health.   This allows the morphing of any “carbon neutral” designation that frankly deserves to stand on its own right as a positive environmental contribution.  It need not be relabeled as Green.  It complements the Blue sustainable issues, the Red pollution concerns, and even the Yellow conservation issues since we are concerned about the atmosphere (a natural resource).  Good definitions help us build a better debate on the subject, and loose definitions will keep us wandering in the mists of confusion.

Buying carbon credits to offset the calculated CO2 output is both somewhat trendy and helpful.  These carbon credits are ostensibly a method of funding the capital needs of environmental projects like windmills, solar installation, hydro power, methane energy production, and reforestation.  All worthy causes as long as the underlying cause it legitimate and verified.  The carbon neutral status shows a consciousness of the CO2 problem and a willingness to make a contribution to the better solutions that are yet to make it to the profitable status.

So, there is no criticism on our part concerning the carbon neutral status nor the need to be better environmental citizens.  The reduction of our dependency on oil is yet another problem that needs our collective support. There is merit in the carbon offset strategy that is clearly good for pollution reduction and sustainability concerns.  The present voluntary program of carbon offsetting is directing billions of dollars into the alternative energy and reforestation programs.  This is substantial and commendable.

The mislabeling of everything environmental demonstrates the unfortunate lack of definition in this cause.  The fact is that there are four great areas that compose the environmental topic, and each deserve our attention.  The blurring of these subjects leave the public in disarray and confusion as to what needs to be done and the associated impact on the greater environmental challenge.  I would argue, in the kindest of terms, that carbon offsetting is a good idea, a meritorious idea, and helpful to the cause.  But, let me explain why carbon offsetting is not Green.

A company outputting carbon dioxide may well buy offsetting carbon credits and call itself “carbon neutral,” but did they change anything by this action?  No, they are still outputting CO2, although they may wish to reduce their output later.  Has their carbon neutrality changed their daily operations so that workers are healthier?  No, the company wears the badge of carbon neutrality even if it has poor indoor air quality, neglected energy consumption, and pours pollution out the back of the plant every day.  It is far too easy to allow your hand to block what is really in front of you.  One brick does not make a building.  One star does not compose the heavens, regardless of its beauty.   Neither does the environmental option applied to the company by a carbon neutral status make the company an environmentally-friendly operation.

A Certified Green Consultant can assist your business in its pursuit of an environmentally-friendly status.  There are many things that a company may do to become a Green company, and carbon credits are a helpful part of the larger project.  Many companies now proudly display their Certified Green Business status, having earned 100 points in the Green Business League program.   Several points are added for being carbon neutral, but there is more that can and should be done.  Working with a Certified Green Consultant makes this complex and involved process simple.  Never accept a one-sided solution as the full solution.  The Green Business League is the best Green business certification in the industry.

Well, it’s started and the Congress is now in the throes of debate and accusations about the real meaning of the next energy bill put forward by Waxman and Markey.  It is obvious that the Obama administration and democrats favor this legislation.  Republicans see this law as a way to chase American jobs out of the country by further hamstringing U.S. businesses while other countries eagerly wait to replace our offerings with less regulated competition.  The question of real cost of these new regulation on a massively injured economy is yet another reason that many will oppose the proposed legislation.

The U.S. Chamber of Commerce has come out against the Waxman/Markey bill as well, saying:

Unfortunately, the debate in Congress has left the nation with two terrible options: (1) expensive, complicated, regulation-heavy, domestic-only legislation like ACES, or (2) an “even worse” set of mandatory CO2 controls on everyone and everything through existing Clean Air Act programs. The rigid ideology exhibited over the last twenty years of the climate change debate has not only clearly divided the nation but it has failed miserably to produce any results. Congress should stop, take a breath, and consider sensible policy alternatives that increase our energy security, promotes a strong economy, and contributes to a global reduction in emissions.

Democrats aren’t winning all the hearts and minds, though. Indiana’s governor sees dark plans afoot, in the WSJ: “It looks like imperialism. This bill would impose enormous taxes and restrictions on free commerce by wealthy but faltering powers — California, Massachusetts and New York — seeking to exploit politically weaker colonies in order to prop up their own decaying economies.”   House Democrats secured the support of Virginia Democrat Rick Boucher for the energy and climate bill—thanks to generous support for “clean coal”—bringing the bill one step closer to victory in committee.

The concern for global warming and energy independence is the driving force.  These concerns are real and need solutions.  That is not the heart of the debate, however.  It is the wisdom of heavy-handed, revenue-rich, government-controlled bills that further expands the Big Brother concerns of those who see their freedoms under attack once again.  Hard line environmentalist celebrate this bill, while struggling business and financially-crunch families fear it.

The 1000 page bill is likely to grow into a monster bill by the time it is done.  The revenue to the treasury is the prize at the end of the bureaucratic maze.  And though the promise is that there will be tax relief given to the average citizen, I am still waiting for the toll roads (promised to be freeways in ten years) to remove the tool booths.  This bill is destine to become a Frankenstein that the villagers will wish to kill before it ravages the villagers once again.  I am lost on the logic that more regulation, taxation, and complication will help a problem that really calls for leadership that leads instead of dominates.

The environmental dichotomy is the position of supporting environmental causes, but resisting government intrusions that penalize society into conformity.  This is a return to the classic B. F. Skinner “Behavior Modification” that uses punishment and reward in uneven proportions.  Behavior modification always ends up punishment heavy and reward light.  The enlightened view is encouraging by leadership, and incentivizing through tax credits and increased opportunity those that you wish to change.

The Waxman/Markey bill should be killed at birth, and a more reasoned and simplistic solution may arise in the second round of bipartisan revision.

The planning is already underway to impose a sweeping “Green Tax” for any business putting out more than its fair share of carbon dioxide (Co2), and this is going to drive up the cost of everything. Of course, there are those who feel that higher prices will force greater conservation of our resources. Unfortunately, this proposed legislation refuses to recognize free-market ability to address and resolve nearly any commercial issue. By the way, I favor reduced Co2 emission as well, but not with this program.

This Green Tax and Cap-and-Trade program is the big secret debate where “Super Environmentalist Only” get to attend and input. The results will be new country wide tax will be imposed for the emission of carbon dioxide:

“Under a tax, policymakers would levy a fee for each ton of Co2 emitted or for each ton of carbon contained in fossil fuels. The tax would motivate entities to cut back on their emissions if the cost of doping so was less than the cost of paying the tax.” Policy Options for Reducing Co2 Emissions by the Congress of the United States – Congressional Budget Office

The CBO report considers only two options. One is the Green Tax mentioned above, and the second is a cap-and-trade program. You undoubtedly have heard Obama, Palozzi (Senate), and Smith (House) mentioning these ideas with great anticipation. You may also remember that the presidential candidate Obama used the phrase “Cap and Trade” in several of his speeches. President Obama still want a “Cap and Trade” bill out of congress, but he has met some stiff resistance to the concpet. The CBO report, dated February 2008 made this statement.

“In contrast, under a cap-and-trade program, policy-makers would set a limit on total emissions during some period and would require regulated entities to hold rights, or allowances, to the emissions permitted under that cap.” Ibid

The CBO proposal is more than impressive. It is a powerful tool to collect fees, fines, and penalties much like the power of the EPA over pollution violators. This would apply to all types of businesses in a kind of rationing like those seen during war times. The goal is ostensibly to reduce the use of fossil fuels by making the price of energy from these source too painful to endure. Everyone should know that energy is the life’s blood of business, and this will ripple through to every consumer as well.

We now have a voluntary system of carbon credit trading going on where businesses calculate their carbon output and then buy carbon offsets. The challenge of setting caps for all the types of businesses across America would be as confusing as the present tax code. It would also create another exchange of trading Co2 credits to those who use more than their share with those who use less.

“Cap and Trade” is certainly a regressive tax forcing American businesses to shackle themselves with more regulations, more intrusion, and more costs of operation. Why not incentivize this issue? Tax credits for Co2 reduction would be a far more enlightened position on the subject. There must be a free-market solution that creates a business coalition to answer this need. Of course, this is all being presented as an emergency and crises, which moves things through Congress with lightning speed and minimizes the opportunity for public notice and discussion.

Global warming is the battle cry. Carbon dioxide has been declared the public enemy causing global warming although there is dissent on this subject as well. Onerous taxes and intrusive regulation should not be the only answer to the challenges we face. Open the doors wide to innovation, incentivize with tax credits, and kill the poisonous snake called Cap and Trade before it sinks its teeth into the ailing taxpayer. We need encouragement, not punishment.