Middelgrunden, Capitol Hill Housing, and our Energy Future

While reading the Carbon Efficient City I realized the nimbleness of regional and city governments. I work for the city of Seattle, and often I think that progress moves way to slow. But city governments are small enough to effect policy change that specifically targets the built environment. In Chapter 2 the Invisible Hand, while making a case for the carbon tax, it is pointed out that Solar energy is included in the “other” category of power sources for the united states.

This got me thinking of the new solar array project-taking place right in Seattle’s Capitol Hill Neighborhood. The housing advocacy group, Capitol Hill Housing (CHH), has partnered with Seattle City Light (SCL) to create a program allowing affordable housing residents to buy a share of a solar roofing project. Shareholders get reimbursed through credits to their electric bill.

This is a great example of how local government can provide environments to test new frameworks. This new way to collectively buy a reusable resource will teach SCL and CHH how to adapt this model throughout the city. It works similarly to the Danish system redistributing power from “producers” into the grid.

While it might be because of strong, progressive regulation and policy, the culture and societal views of wind and solar power are incredibly different in Denmark than they are here. Just off the coast of Copenhagen is an offshore wind farm called Middelgrunden. This project employed a similar framework to the Seattle solar array. Over 10,000 citizens bought a share of the farm and receive payment when the grid takes in the extra energy. Since the project is so large as well, it serves as a constant reminder to the Danes of their use of renewable resources. It seems to me like the Puget Sound could be an interesting place to develop a similar minded project?

wind-turbines-øresund-copenhagen

While the Danish model is more advanced and occurring on a national level, Washington State has a population larger than Denmark! Change implemented on even a state level can have immense promise in changing our future energy frame works; it should be our next step.

Choice Architecture for Energy Saving and How It Creates a Shared Value

Choice architecture can influence decision making in both micro and macro scales, from everyday objects to large skyscrapers. Therefore, it is important for designers and planners alike to come up with a sort of design default, an influence or movement that benefits users in a subtle, skillful way, while maintaining the intended functionality because we are all Humans after all. The following are two examples of how choice architecture comes into play and how it forms a shared value.

Water tab is one micro-scale example. Some people normally turn it on all the way up (or sideways depending on the design), and realize that sometimes, the flow is running too fast and too much for some certain washes. They intuitively do this because the design of the tab is “consistent” with their action that it doesn’t “violate a simple psychological principle” or the “stimulus response compatibility”. (Thaler, Sunstein, 2008, 2009, p. 84) They then adjust the tab to the desired speed of flow that is best for the job.

It would be ideal, as another alternative to the traditional faucet designs, to design tabs that have “steps”, indicated either by the numbers 1 (slowest), 2 and 3 (fastest) or by a simple graphic e.g. the number of drops of water. Each step would have a mechanism that gently prevents the user from going all the way unless s/he needs the largest amount of water in the first place—and the (least resistant) default option would be the number 1 by making it the easiest, or closest to the hand to operate.

Had this kind of design already been on the market, it could have made its way to being a mainstream product. It can potentially take up a portion of the market share, competing with the traditional tab design even within the same manufacturer offering a wide range of products. This idea is not totally new, but we can make it more common just like the dual-flush toilet that is becoming more ubiquitous and at the same time, making consumers aware that there is also this choice. One may argue that we have automatic faucets. True, but it would be great to also design a product that can perform on its own without relying on any additional kind of energy—electricity.

The choice architecture for another example is however, determined by the consumers; the people themselves are the choice architects. The example is Earth Hour. Earth Hour is a global movement aimed at raising awareness of climate change which is organized by the World Wide Fund for Nature (WWF). It originally began in Sydney, Australia in 2007. Using media as a powerful tool to spread the word and broadcast, it later attracted a lot of countries around the world to join, simply by switching off lights, particularly the non-essential, ornamental ones. It takes place every year on the last Saturday in March from 8:30-9:30 p.m. local time at renowned landmarks, buildings as well as households. Earth Hour 2015 will be on March 28, so let us be informed.

Earth Hour is an example of macro-level choice architecture because of the willingness to participate. The willingness itself is actually an “incentive” as one of the principles for effective choice architecture. I am thrilled every time and curious to know how much we have saved after the electricity in metropolises across the globe was shut down altogether in the period of an hour.

We may not see clearly how much energy we save on the household level and/or the community level, but when the scale is larger, the result is dramatic. This is a huge influence urging people to realize and save more. People are willing to “follow the herd” since everyone is doing it. It would be even better if we were to have this activity more often (not necessarily officially). Instead of one hour once a year, how about we do it twice, or more, or extend it a little over an hour each time? Of course, some people continue on after the official 60 minutes have passed. Again, it may not be so visible in a smaller household scale, but frequency and a little bigger scale can also help. Residents can do the same within their villages and communities. This would then become a tradition and a standard practice from generation to generation.

Shared value doesn’t necessarily occur in the productivity/market-driven context alone, but also in the Earth Hour kind of event, because everybody benefits from conserving energy. Shared value is quintessentially created as it brings communal gains, not only financially, but also socially (the willingness to join among the non-profit/for-profit organizations), and environmentally (less carbon emissions into the atmosphere).

Let me introduce TAYO bus, the unexpected ‘nudge’

       In this era of complexity, most global metropolises are suffering from heavy traffic. In order to mitigate this problem, we have been encouraged to take public transportation. Although public transportation systems are becoming more developed, still they are not competitive with driving an own car, even if bus fees are decreased. Thus far, many actions bus companies or local governments have been taken, have not worked well. What actions could be suggested in terms of making more people to take buses? I would like to introduce a good example of nudging people to take buses without a sort of direct actions, such as reducing bus fees a lot or ameliorating bus facilities.

       Last year, Seoul Metropolitan Government (SMG) painted an animation character, named ‘TAYO’, on buses for celebrating Children’s Day on May 5th. TAYO is one of most popular kid animation in Korea and originally SMG was supposed to set to run them for a few weeks as a temporary event. It is because the event was not for solving a kind of transportation problems but just for giving ‘presents’ for kids. But unexpectedly, the reactions of people were plainly explosive. I don’t know why the animation TAYO is popular to children, but as you can figure out from the picture below, the event draws a plethora of people (according to the SMG, it was over 40,000.) Surely, most of the adults were drawn by their children.

       This unexpected response led another unexpected phenomenon. Parents whose children stuck to TAYO began to taking buses when going out with them instead of riding their own car. Consequently, the TAYO event caused an increase in the number of bus users.

     Still the most of TAYO buses remain and are running with the ardent backing of children and their parents. I cannot say the event totally solve the Seoul’s transportation problem, but I can say this could be an exemplar of ‘nudge’ or ‘unexpected nudge.’

tayo

Can the Fed Save the World?

Trust in government, on the whole, is historically low in the U.S.  Among these low levels, trust diminishes as you move higher in the governmental hierarchy (ex. lowest in Congress, highest in city/county government).  Did government become less trustworthy over time?  More incompetent?  There’s a chicken/egg problem with whether public distrust/disengagement came from government incompetence or government incompetence resulted from public distrust/disengagement.

Keeping this in mind, a quote from The Carbon Efficient City caught my attention:

“These grassroots efforts are important but the Federal Government has the ability to generalize these goals across the whole country, avoiding first-mover disadvantages to regions that choose to act. Equally importantly, they can create a framework that aggregates the contributions of different regions and improves understanding of how the country as a whole is meeting broader global targets.”

These two sentences, in a vacuum, are spot on.  The Fed is where the big resources are, the big regulating and rule-making power are, and where you can bring it all together on as close to a global scale as possible (with apologies to the U.N.).  Outside the vacuum, however, our nation’s government has been shown to be fickle, unproductive, divisive, and unreliable in the last 5-10 years.

I’m an eternal optimist.  I’m a big fan of the potential of government to do good.  However, I don’t know if we want to put our full faith and credit in the Fed to address climate change and carbon emissions.  States rights activists say we need to shrink the Fed down and let the states innovate, compete, and lead on big policy issues.  While their rhetoric is often antiquated and disturbing, they may be right when it comes to climate.

Those in the anti-environmental policy camp say that regulations will cause job loses.  It will stifle they economy.  It will hurt more than it will help.  Yet, states like Washington, Vermont, and California are successfully implementing state-level regulatory solutions and are just now starting to collect data on the results.  In this case, it might be better to let their work play out and disprove the doubters before we buy plane tickets to D.C. to bother our Congresspersons while they try to survive the partisan gauntlet our nation’s capital has become.

Regulating Wastewater Treatment Systems to Promote Shared Value

In the Harvard Business Review piece “Creating Shared Value” a secondary section really caught my attention. The section titled “Government Regulation and Shared Value” on page 14 discusses how government regulation can promote innovation and shared value or inhibit it. I have seen both regulatory methods in action during my time at the Washington Department of Health and would like to point out some inconsistency in how wastewater treatment systems are regulated based on size.

Wastewater regulation is fairly straight forward. All systems, big and small, are told where they can discharge, how much they can discharge, and what the allowable limits are for a variety of constituents. The difference between big and small systems is that big systems (>14,500 GPD) don’t necessarily have specifically prescribed methods of treatment whereas small systems (<14,500 GPD) are required to choose a treatment method from an approved treatment method list.

Large systems across the state are furthering wastewater treatment technologies. New and updated systems (i.e. Brightwater and Chambers Bay) are using membrane filtration, focusing on nutrient removal, and utilizing various resource recovery systems. (Solids, energy, water reclamation, etc.) Although these ideas may not be new, their implementation has recently become more common.

The same innovations are lagging behind in smaller systems. In order for a new system to make the approved treatment method list it must first go through a fairly extensive testing regiment. Obviously, systems installed in big treatment plants must also undergo extensive testing, but they can look at data from a multitude of sources to determine the systems viability whereas small systems must undergo a very prescribed and in my opinion cost prohibitive testing procedure. This has resulted in mainly proprietary systems being added to the list.  Now proprietary systems can be innovative as well, but with very little competition, and the prohibitively rigorous testing requirement for new systems, they have very little incentive to further develop their products.

One may argue that the size difference in treatment plants is what leads to the differences in regulations. Large and extremely expensive systems should look to new technologies to increase efficiency and lower footprint because doing so can save millions of dollars. I would like to think that if smaller systems were allowed the same leeway, we might see more of the big system ideas like resource recovery trickle down to the smaller systems.

Micro-Housing: Nudging Ourselves to a New Shared Value

Part of the American dream has been telling us to choose big over small. This notion holds its ground well among many people to this day. However, a new form of housing, which contradicts this notion, has been thriving noticeably in recent years, especially in prosperous cities like Seattle. I am talking about micro-housing. While reading Richard H. Thaler and Cass R. Sunstein’s Nudge: Improving Decisions about Health, Wealth, and Happiness, I could not help but to relate their discussion of bases of bias and “People are nudge-able” with the micro-housing trend.

Here is how I think their discussion of bases of bias fit into the conversation and feed the micro-housing trend. First, the representativeness heuristic caused misconceptions of then the robust housing market patterns while the unrealistic optimism and overconfidence heuristic among home purchasers (Well, not to forget the malpractices of financing industry) led to risk-taking mortgages that caused the recent meltdown of the economy. Then the availability heuristic reminds us how much we have lost from this recent experience. Along with the gain and loss heuristic telling us how much we hate losing more than we like gaining, more people, in the fear of losing their investment, began to favor renting smaller housing forms over owning a big house. That is true even when some really do have to ability to afford living in bigger units and the economy has been seemingly improving. While some may ask why, I would argue that renting and living in smaller units have become a default for many, where the status quo heuristic is in effect. Furthermore, as framing heuristic shows its wonder, the description of living experience in cities has been gradually transformed from being dangerous to adventurous.

The discussion above might be too linear and somewhat oversimplified. However, it does show us that while people are nudge-able, so can biases. Given enough time, they might collectively become a new culture, or even a new value. This idea ties into the idea of creating shared value discussed by Michael E. Porter and Mark R. Kramer. With the real estate developers exploring the micro-housing market, increasing number of people choosing to live in smaller units, and the governments regulating this relatively new form of housing, a positive feedback loop can be observed. First, people looking for smaller housing units create a demand of micro-housing. Then real estate developers provide such units that will meet the people’s needs and the government’s requirements. As the governments overseeing the progress, the quality of micro-housing units will improve, which may lead to more people willing to live in those smaller units. Other positive results include reducing automobile dependency and sprawl, and increasing building material efficiency, cities’ residential capacity and housing options for various social classes that lead to a more sustainable future.

In the end, I would like to share a video by Kristen Dirksen which shows some examples of how smaller living units can be stylish, innovative, and comfortable.

The story of Las Vegas

As a former resident of Las Vegas, I found the idea presented by Akerlof and Shilling that “stories” are exceedingly consequential in both human life, in general, and the functioning of our economy, in particular, to be very useful in assessing why the city was so affected by the economic downturn. The “story” of possibility and continuing growth was incredibly powerful there, and it was one that is wrapped up in the history of our state.

Nevada’s nickname, “The Silver State,” derives from the silver rush that occurred in the mid-1800s. People were drawn by the possibility of a quick fortune…ignoring the odds of success and physical manifestations of failure (Google “Nevada ghost towns”). While mining persists, the center of gravity shifted from mineral wealth to gaming. And as a result of this “gaming-rush,” the population of Las Vegas expanded by 41.8% from 2000 to 2010 (US Census).

These “pioneers” were driven by the story of cheap real estate that would continue to increase in value at larger and larger rates each year. This meant continual upward mobility. My two-bedroom home would become a McMansion in a few years time. Meanwhile, I could invest in additional properties, refinance those homes, and use that money as my personal piggy bank.

In 2008, we found out that this story was fundamentally flawed, and many of those who invested heavily in it lost everything. But stories are powerful. People do not give them up easily. One might think that the economic downturn would force the city to reassess the basis of its economy (i.e., growth) and forge a new path. But this does not seem to be the case. A logical question might be: should 2+ million people live in a desert valley that is almost wholly reliant on a water source (the Colorado river) that is being quickly depleted? If not, what does that mean for our city and for the economic drivers of our economy?

Unfortunately, the old story still seem to carry much weight. Short of a cataclysmic event (which seems to become more and more probable, see: http://slate.me/1umudLh), what must happen for that story to change?