It's Not Easy Being Green

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In consulting we have a phrase, you get what you measure. When I wrote my Master’s thesis, I looked at how to measure the effectiveness of private sector services for the homeless (you measure recidivism, the rate in which people leave and return to homeless shelters and programs). In our world of metals cost reduction, we measure COGS or EBITDA. And when you measure how green something is, well, that’s a matter of interpretation, which has sort of bothered me about what we, society and government considers green. And to clarify, that is not to say that green initiatives should not be measured (of course they should) but before we start passing new laws mandating that business in the United States should be completely revamped, let’s agree on what we’ll measure and how we’ll measure it.

It all goes back to the Prius vs. Hummer debate which by the way, has been won by the greens (even when you include the total cost of ownership e.g. the production costs for both), or at least I think so.   The calculation for green good deeds goes like this: SUV bad (poor gas mileage, big, heavy), small car good. GE regular light bulbs bad, compact fluorescent light bulbs good; fair trade coffee good, Nescafe bad; bamboo all natural fiber shirt good, imported shirt from China, bad. You get the idea.   And voila, suddenly you are green and good if you follow the right choices.

But I’d argue it ain’t necessarily so. It depends on what’s included in your green measurement. Yesterday, a report came out calculating the real carbon footprint of vehicles, and I had to chuckle. The findings will surprise you. By considering the full life-cycle of a car (that would mean from cradle to grave) alongside energy requirements and greenhouse gas emissions, we get a different view of carbon emissions. These new values show that cars and buses have 63% more emissions then they did before. Rail goes up by 155% and air travel/use (in the case of freight) increases by 31%.

Here’s the part that got me ” Chester [Ed. Note: the study’s author] says that it is all too common to evaluate transport emissions based simply on the amount of fuel that vehicles consume. Often we see rankings based on these numbers, and global-warming mitigation schemes are subsequently based on such figures. But we need to analyze a vehicle’s life-cycle components to evaluate properly how much energy it consumes and thus the amount of emissions that it produces, he explained.   Hallelujah! So, there is more to measure than what comes out of a tailpipe? You betcha.

This article that references the same study, gives some examples of how less energy efficient San Francisco local rail is greener than Boston’s high energy efficient metro system. Why? Because Boston relies on dirty fossil fuels for 82% of its energy whereas, San Francisco only relies on dirty fossil fuels for 49% of its energy. But my favorite example involves SUV’s. And this ties to seat occupancy, something policy makers in DC don’t consider. A SUV can actually create less greenhouse gas emissions than a metro rider on a local train that is three quarters empty. Does this mean we don’t have to give up our SUV’s? I doubt it, but it makes for an interesting discussion.

What does this remind you of? For me, an analogy would be sourcing machined parts (or anything for that matter) from China. You might get a lower piece price but when you do the total landed cost calculation you realize you could be losing your shirt on duties, freight, inventory and quality issues.

Measurement matters! And you get what you measure. Let’s hope our policy makers figure this out before they work themselves into a sustainability frenzy that is anything but.

–Lisa Reisman

Comment (1)

  1. LP says:

    “Let’s hope our policy makers figure this out before they work themselves into a sustainability frenzy that is anything but.”

    I’ll short your hope with Forex style 400 to 1 leverage…

    Sorry 🙂

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