My Bike Is In A Sticky Spot

While driving back from class last night, I noticed  a great setup for bikes in the lobby of a new housing development on Capitol Hill.  Took a picture to share:

Jefferson

It is worth noting I was DRIVING by The Jefferson, on 12th and Jefferson on Capitol Hill.  Not biking by The Jefferson.  My bike is all setup with lights, reflective gear and the ever critical fenders. I could have biked to class, but my bike is in the garage and, somehow, that extra few feet and pushing the button to raise the door made it just TOO difficult to deal with. So I drove instead.

But what if we lived in Capitol Hill Housing’s new development, The Jefferson? In The Jefferson’s front lobby they put in extra space for bikes and gave them nice wall hooks.  They look like art hanging on the wall. With all that space inside, residents can smugly get dressed in the warm lobby and shoot out the door onto bike lanes heading in all four directions.

Thought this was a GREAT example of good design lowering the frictional transaction cost of getting on your bike. Not sure how you could make it any easier to choose to ride your bike to work or school?  It is embarrassing to think how just a few extra steps may keep you from making better choices, but they do.  I’m not sure the answer, but I’m going to think about how to make it easier to decide to bike to class.  Right now my bike is a little “stuck” in the garage…

Jeff B.

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Subsidize Diet Coke and CO2? Not anymore.

The current conversation regarding how best to reduce climate emissions has generally been reduced to two ideas – a carbon tax and cap-and-trade. While it has been widely determined that most countries prefer the cap-and-trade option, economists agree that without the political ramifications of uttering the word “tax,” the latter would be simpler to enact, more effective and provide the most equality. Moreover, it also would allow information about the product to be embedded into its cost, thereby allowing consumers to make more informed decisions about their global impact. Too good to be true? This method has been used for the past several years in British Columbia and has already resulted in dramatic decreases in carbon emissions.

While taxes have typically been placed on items that people enjoy (ex: income), the idea of taxing undesirable elements of our economy is nothing new. For years Americans have accepted its use on items such as alcohol and cigarettes, due to their negative impacts on both individuals and the public. More recently, noted journalist and author, Mark Bittman, extended the taxation discussion to our cuisine. His argument is shockingly similar to the one regarding climate change. While many Americans would like to eat healthier (and decrease their carbon footprint) change is not happening fast enough, and in some cases, is practically infeasible. Bittman offers the example that Froot Loops are less expensive than fruit (per serving), and similarly a Hybrid vehicle is not likely to be purchased by a family with less than average means. For many low-income Americans, the current economic climate does not permit them to adjust their habits without government intervention. Even those Americans with the means to change are still left relatively uninformed about their daily decisions. Without honest pricing mechanisms, how can we expect consumers to make good decisions?

In the case of food subsidies and carbon emissions, unsustainable and unhealthy options have prevailed due to the stagnancy of the business models behind them. While carbon emissions are not officially granted a subsidy, the blind eye that has been turned on its environmental and financial impact has essentially had the same effect. The time has come to implement frameworks that acknowledge our limited resources and produce real value to customers.

0724Bittman-graphic-popup

Graphic Credit: The New York Times

Positively Efficient

The intense fear of change revealed in the carbon efficiency discussion has been astounding.  In response to the Wall Street Journal’s “Can Countries Cut Carbon Without Hurting Economic Growth?”, the answer is a resounding yes.  The reactionary language changes in the short satirical letter “From Alpha to Smart Beta” showed the sheepish response of being too bullish to respond to a changing market and economy.  Entire countries have industrialized in mere decades (Japan), and to implement serious legislation that institutes a ‘Cap and Trade’ system or a carbon use tax that pushes slowly toward whole-country system changes is forward progress in the post-industrial era.  Of course some companies will be unable to change quickly enough, and they will fail.  Other companies will be able to take advantage of new green technology and thrive.  This is ok.

 

What concerns me is the implication that negative reinforcement is what it takes to enact positive change.  Heavy fines, taxes, raising the cost work well for individual consumers as a small incentive to make a better choice, against smoking, against drinking and etc as pointed out in The Carbon Efficient City.  Many companies have gone green by choice and have reaped the benefits of better employee health, better public reputation, and often, it seems, better products and financial returns. 

 

Nike Inc., for example, was uncovered in the 1990s to practice bad ethics across the board.  Started by an athlete and a coach, Nike projected All-American values, a perception that was destroyed when the company was found to employ children in its Asian factories.  Financially hit hard by public backlash, the company worked to turn around the impact it was making into a positive one.  Nike today is more successful than ever.  Levi Strauss recently announced a plan to create jeans using an entirely sustainable process.  From factories to retailers, dyes, materials, and farms, Levis plans to do all that they can to ensure a sustainable process in the creation of their process. 

 

If companies like these can go sustainable with such positive media feedback and results, choosing to funnel profits into a systems overhaul for a period of time in a way that will generate public interest, positive returns, and a better overall ‘life’ for their products in, where are the deep losses and negative impacts?  Are there any way that regulations and countries could play on these positives to encourage carbon-efficient change and growth? 

 

http://www.businessweek.com/articles/2012-10-18/levis-goes-green-with-waste-less-jeans

http://www.nikeresponsibility.com/report/content/chapter/materials

-Mary Fialko

Bloomberg B School?

In recent news, NYC Mayor Michael Bloomberg gave $350 million to John Hopkins for a “Transformative Initiative”.  The news coverage is mainly focused on his total lifetime contributions to John Hopkins of over $1 billion.  Buried in the story is how he wants the bulk of his new contribution spent.  Mayor Bloomberg wants most of the $350 million to go toward interdisciplinary research to solve global problems.

Interesting. Maybe he is on to something.

Contrast his contribution earmarks to the NY Time’s article, “Multicultural Critical Theory, At B-School?” (January 10, 2010).  In this article, Mr. Wallace, argues we need to develop better problem solvers, who use design thinking to find creative solutions.  Mr. Wallace’s article explores ways to improve critical thinking at our top business schools.

I’ve been mulling over Mr. Wallace’s article for a couple of weeks now.  After hearing about the Bloomberg endowment this morning, I realized what the article seems may be missing. The whole premise of teaching MBAs to be better at problem solving seems to be more person-centric, not team-centric.  The article seems to suggest a cutting edge MBA program should produce problem solvers who have the expertise and experience needed to generate amazing ideas. Sure, we need more critical thinkers, but do we expect MBAs will have enough subject matter experience to solve challenging global problems by themselves?  Where do the other disciplines fit in? What other degrees and work experience will they need? Who should they rely on to gain technical understanding of the problems we are trying to solve?

In defense of the article, pulling in expertise and a variety of cross-disciplinary viewpoints would be a natural part of any good problem solving done by a graduate of the next version of B school.  However, there seemed to be much more of a focus on individual MBAs saving the day through critical thinking, and less talk about the importance of pulling in expertise from different disciplines.

Going back to the news this morning, it is interesting that Mayor Bloomberg, with his lengthy experience tackling problems, is putting his money into interdisciplinary research.  Maybe he has been frustrated in the past about silos within his departments? Or maybe he feels different experts need to collaborate together in order to solve our looming global problems? I do know he made a practice of rotating his department heads so they gained experience in different departments. Seem Mayor Bloomberg is willing to put some serious cash toward supporting cross-disciplinary teams working together to solve global problems. Perhaps the next iteration of business school curriculum should be a focus on reaching out to other disciplines and creating teams with a broader depth of experience?  Mayor Bloomberg, at least, is putting money toward this approach.

Jeff B.

More about this energy-water nexus

You could describe my job as an environmental engineer as getting clean water to people and dirty water away from people. As mentioned in Chapter 2 of “The Carbon Efficient City,” this takes some energy, and so it can be expensive. We try to take advantage of the fact that water goes downhill – especially on the Columbia and Snake rivers, from which the Pacific Northwesterners get the majority of our energy (followed by coal and natural gas).

Wikipedia defines the water-energy nexus as “the relationship between how much water is evaporated to generate and transmit energy, and how much energy it takes to collect, clean, move, store, and dispose of water.” Some quick Google searching turns up some cool emerging technologies to extract energy from water, such as ocean thermal energy conversion.

“The Carbon Efficient City,” the Water Efficiency online journal and others that are for aligning water resource management with climate change action cite strategies such as: public and private investments in water conservation and recycling; increasing the value of a gallon of water in the market; and providing consumer choices that reduce our individual water footprints.

It seems like most of what we hear about increasing water efficiency relates to domestic supply and use. But what about agriculture? Agriculture makes up a much larger portion of our total freshwater use – 70 percent is often the number cited. Running irrigation equipment, creating and transporting fertilizers and pesticides all require water, as well as energy. High-pressure jet sprinklers can be replaced with low-pressure and microirrigation systems, which reduce the amount of water lost to evaporation and use less energy. Sometimes wastewater can be recycled (reclaimed) and used for irrigation –which increases water efficiency, but costs more energy for treatment and distribution.

Agriculture’s efficient water and energy use directly impacts food security, especially with the uncertainty of climate change and the price of fuel. So it seems reasonable to prioritize water use efficiency in agriculture, as well as in domestic water, particularly in developing nations. The Huffington Post Water Blog recently explored this global issue, and calls on the U.S. to take a leading role in the solutions, which could include growing specific crops to make the best use of water and energy resources to meet global and local food needs.

irrigation

Photo credit: U.S. Geological Survey

 

Global Salvation–There’s an App for That?

Photo Credit - Gizmodo

Photo Credit – Gizmodo

Undoubtedly, one of the best ways to combat global climate change would be to implement some kind of a carbon tax at a federal or global level so that the climate “cost” of various goods and services would be reflected in their respective consumer pricing.  Considering that the U.S. Congress has regularly failed to pass a standard budget for the last few years, I’m not holding my breath for the establishment of such a carbon taxation system to happen any time soon.

While it’s a less perfect solution, the following social entrepreneurship concept might be effective as an interim strategy to help consumers better understand what they’re consuming.

An organization could create an app that shows users the CO2 impact of various consumer products—information pulled from a database in the cloud after a user selects the product from an index or scans a bar code or receipt with their phone.  The carbon calculation would be enhanced by the geographic data available on a smartphone, and records of cumulative carbon impacts could be recorded for future reference, by the user and/or organization.  While the carbon calculation data available for use by the app will be limited at first, app sale proceeds could fund further research and expansion of the carbon accounting database, and the overall enterprise.  Social media integration might be the only advertising required.

Of course, carbon accounting standards need to be established and adopted, preferably on as large of a scale as possible.  The organization pursuing this initiative would be well-positioned to influence those standards, as well as to educate the public and encourage proliferation of an established standard.

Bringing this information to the consumer level, rather than keeping it an aggregated regional level, could have an important impact on individual behavior.  The last hotel I stayed at had a shower timer that calculated water consumption–my wife and I ended up competing for shortest shower, something we haven’t done since freezing our butts off during the winter in Albania.

I have no desire to execute this concept myself, but someone else should.  Seems like a project for Google or Microsoft or Apple employee, or maybe a coalition of UW grad students 🙂  What do you think–could this concept fly?

Public Housing and Carbon Tax

The articles Can Countries Cut Carbon Emissions Without Hurting Economic Growth? and The Most sensible Tax of All both dealt with the ever-popular issue of carbon emission reduction. One dealt with the economic impacts to countries with cutting carbon emission, while the other lauded the use of taxation to increase cost of pollution. While both articles made great points regarding the problem with controlling carbon emission, the idea of increasing taxation on business seems like an impossible goal given the current political climate. With the House of Representatives unable to come to an agreement even on increase taxation of households with income higher than $250,000 to increase government revenue, it is highly unlikely that both Senate and the House will agree on changing the tax code to include taxation on carbon emission.

Perhaps we are simply too used to thinking carbon emission as a negative externality. Given that we perceive prices in competitive market do not reflect the full cost of carbon emission within the goods that are produced, our first instinct is to adjust the price of the good and let the “invisible hand” guide the demand and supply of goods. While this is one solution to the current problem, it will take time and effort to lobby for major changes to the tax code to achieve the desired result. Given the political gamesmanship and gridlock in the current US congress, it may take decades to achieve that goal.

Maybe a simpler short-term solution is to treat clean air as a public good, just like education and public housing. Since we know a competitive market driven by self-interest parties will be unlikely to provide these goods, government can step in and produce them for public benefit. Similar to HOPE VI program by US Department of Housing and Urban Development and the Section 8 Housing Program, the Federal government can appoint an agency to “provide” certain quantities of clean air per year. Legislation can be made to “encourage” private sector to limit carbon emission and/or subsidize green projects. Instead of increasing taxation, it may be possible to offer a small reduction in corporate tax rates in exchange for carbon reduction.

HOPE VI: http://en.wikipedia.org/wiki/HOPE_VI

Section 8: http://en.wikipedia.org/wiki/Section_8_(housing), http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/hcv