Going Green Makes Green
Green: Money And Sustainability Working Together Part 1 of 10
tl;dr: Yes, sustainability is good for green practices, but it can also make and save you a ton of money.
If we were to play a word association game, I'm fairly confident that when we mention words like sustainability, conservation, climate, and responsibility the emotional reaction is one of boredom, dread, or annoyance. "Here we go again, making me feel like a piece of crap for not doing enough, or not caring enough, or just being alive." Sadly, many of us in sustainability aren't that great at marketing or crafting messages that really hit the right emotional tone. Because of this, when the majority of people think of sustainability topics, they only think of one kind of green: environmental. Hopefully, after this post, you will start to think of another type of green. Dollar bills, cabbage, cash, bread, bucks, I think you're getting the idea without me stretching my descriptive abilities for money.
Why don't we associate profitability with climate change efforts or sustainability? The reason why is because most people have not had a positive exposure to the wide range of issues and fall back to what is familiar to them. For many, no matter what the term, the topic really boils down to carbon emissions. For a long period of time, the cost of renewable forms of energy (except hydroelectric) was WAY higher than fossil fuels. This meant that being "green" was going to put you in the red. The chart below measures LCE, or the Levelized Cost of Electricity/Energy. As you can see, not too long ago, solar and wind options were far more expensive than coal or natural gas. This is no longer the case. Renewable energies are far more affordable than coal and have fallen below natural gas. In 2014, coal generated 42% of the electricity used in the US because it was plentiful and cheap. Many power companies are now shutting down coal-fired plants, and coal generates just 19% . Some of you might think that these energy suppliers are finally seeing the light about fossil fuels, and while their commercials might encourage you to keep on thinking that, please do not be fooled. The reality is that they are shutting down fossil fuel plants because they cost them too much money to operate. While I hate that mentality, it is exactly that approach that I want all of us to emulate. They are changing because it makes financial sense to do so. Why aren't we?
When people ask me what we do at Greenheart Partners, one of the things I share is that we are working towards large scale reduction of two things: carbon emissions and consumption. If we consume less, we spend less. Spending less saves money. That is irrefutable. Something is often forgotten is that sustainability is the preservation of all resources, including financial resources. Sending less trash to landfills extends their lifespan. Consuming less water preserves fixed water resources that are becoming scarcer and scarcer. As you may remember from your first econmics class, scarcity is literally the foundation and unquestionably the most important concept there is. Putting less stress on a overextended, fragile, and dilapidated energy grid means fewer power outages, repair crews being sent out less frequently, and extending the time before the whole thing needs to be replaced. All of these things save municipalities millions of dollars per year. Since we pay taxes to municipalities, that means we save money each year as well, without taking any action within our own household. This might sound somewhat familiar, because that is literally what trickle-down economics advocates. In this case, sustainability efforts become a potent tool of fiscal responsibility and not pipe-dream money holes.
Here are some examples of municipalities that are making sustainability initiatives work for them. The city of Sacramento saved $302,800 with their LED replacement program. That's right, just by switching the kind of light bulbs used in their municipal buildings, they saved that much money. Rancho Cucamonga continues to save at least $11,000 a year by going paperless. Santa Ana saves $2,600 per year with their shared vehicle pool. Going "green" no longer costs municipalities more money. In some ways, it never did. The perception was that it did. Because local government is notoriously conservative and slow to adapt, the wholesale rejection of sustainability initiatives
meant that they mistakenly continued to spend in what they thought was a sustainable financial manner, when the opposite was the case. Adding up all of the potential accumulated savings could result in budgets that actually aren't stretched to the max, but have space to offer more essential services.
Over the next ten blog posts, we'll discuss several areas where sustainability efforts could lead to large financial gains and result in better communities for everyone. While some of these you can adopt in your own household, others provide value on a larger scale. For example, reducing your MSW (Municipal Solid Waste) won't reduce your garbage bill. You pay a fixed amount each month, and even if you halved the amount of trash that you put on the curb, your bill wouldn't be cut in half. However, your town negotiates trash services and if everyone in the town reduced their MSW, the cost goes down or at the very least, doesn't go up. Finding new land for landfill use is expensive and the longer towns and cities can use their existing facilities, the more money they save. We'll cover this and other areas of savings in more detail in upcoming weeks.
Why is there so much resistance to connecting these dots? Perhaps it is because far too often, any action that is perceived to be green requires people to either purchase something or radically change their behavior. Is it any surprise why people aren't clamoring to do their part? Think of going solar. Sure it sounds great, but there is actually quite a bit of effort to achieve this. People have to buy the installations, which means shopping around, looking for subsidies or coming with thousands of dollars, etc. Yes, the long-term savings makes it all worth it, but the short term pain is just too much for many to endure. Good sustainable practices need better messaging, because if the poster child for green initiatives is arduous processes like going solar, we're screwed. Perhaps we need to highlight the cost savings and the financial benefits of initiatives that are far less complicated. It is estimated that if we shift to sustainability, we save $26 trillion. If you are looking for a motivating factor to go green, I just gave you 26 trillion greenbacks. Going green never seemed so lucrative.