Clean Energy Subsidies: A Necessary Step

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On January 8th, Jeffery Ball had an interesting post in the Wall Street Journal discussing clean energy subsidies. I feel he did a reasonably good job of highlighting both sides of the renewables debate, but I am concerned about a crucial piece of information that was missing from his blog: the entire reason for subsidizing new forms of energy is to decrease our use of fossil fuels which generate CO2 and are causing the temperatures of our planet to rise. A discussion of wind and solar energy subsidies outside of this context is akin to a discussion about what to have for breakfast when it is already time for lunch. The fact is that we have to switch to renewable energy sources because oil will not be around forever. The growing problems we are facing from burning fossil fuel make it necessary to hasten this transition and subsidies and feed-in tariffs are an important step in the process.

Anyone who has traveled outside of the United States knows that in most of the world gas prices are four to five times higher than they are in our country. I remember first learning about this disparity during a trip my family took to visit my relatives in Switzerland when I was a teenager. When I asked why gas prices were so much cheaper back home I was probably told about subsidies, but all I can recall now is learning about farmers. Yes, farmers. These folks would not be able to drive their tractors across their fields or drive their pickup trucks into town if they had to pay the high gas prices. America is just too large a place and people have to move themselves and their products great distances to make a living. Allowing us to pay the real price of gas would be impossible, so the government kept the prices low. This reasoning made sense to me at the time, but I now believe the money that has kept gasoline cheap needs to go toward bolstering the renewable energy market and that new taxes should be levied on polluting energy sources such as coal and oil.

It is certainly not only subsidies that create the difference in gasoline costs. Then just as now, Europe has far higher and more numerous taxes on petrol. This would be unheard in the US, for it would cripple the farmer and the construction worker who drives to job sites all over the county and the nurse who commutes one hour each way to the hospital. It would be un-American to burden these hard working souls with more taxes so instead cheap gas has led to urban sprawl, a lack of walking cities, and an increased dependence on our automobiles.

Our friends across the Atlantic implement taxes on gas to support public transportation and encourage small cars. They also offer feed-in tariffs, which pay those who install new a energy technology a rate that is well above the market cost in an attempt to help the new technology gain a market share in an industry dominated by fossil fuels. Mr. Ball’s article states that New Energy Finance estimates in Germany that “renewable energy from projects that qualified for feed-in tariffs between 2004 and 2008 will cost consumers [euro ]122.3 billion (about $175 billion) between 2008 and 2030 — 46% more than the same amount conventional energy would cost.” I do not question the validity of this statement. There will absolutely be an increased cost to renewable energy, but this cost is far less than the costs of not combating climate change. The Natural Resources Defense Council states that “Four global warming impacts alone — hurricane damage, real estate losses, energy costs, and water costs — will come with a price tag of 1.8 percent of U.S. GDP, or almost $1.9 trillion annually (in today’s dollars) by 2100.” (NRDC) Mr. Ball chose not to include this type of information about the future costs of “conventional energy” and why would he? This other half of the story turns the shockingly high 46% cost of solar over oil into a moot point.

It is not only the damage and destruction of property that needs to be considered. An often overlooked advantage that clean energy has over oil is that wars will most likely not be fought to control it. This can certainly not be said about the history of fossil fuel. In fact, in 2007, Alan Greenspan broke his silence and wrote in his memoir, ““I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” It was clear to him through the lens of time that we had moved into Iraq to secure oil for our county’s future needs. Fortunatly, there are other ways to secure a nation’s future.

There are examples across the globe of countries who have successfully introduced clean energy into their economies. In 1975,  Brazil focused on producing ethanol to reduce its dependence on foreign oil. In 2008, ethanol was accounted for 50% of the fuel used in its vehicles and the country is now exporting 20% of its sugar cane based fuel abroad. Sweden has been moving toward an oil free economy for several years and its goal of breaking dependence on fossil fuel by 2020 is coming true with the help of subsidies and feed-in-tariffs. Despite Germany’s often overcast skies, it has the most solar installations in the world and has become the leader of solar manufacturing, followed closely by India and China. All of these nations are now exporting solar hardware and finding that being green is profitable.

The United States has an incredible opportunity to create a green economy in part by focusing on becoming a leader in renewable energy technologies. With so many other countries already on a path to reduce their green house gases and increase their GDP, I am saddened that, by the time the US is able to look back and realize that 2010 was the time to transition to clean fuels, it may be too late.

Is LEED Really Leading?

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Until recently, when I talked with people about LEED certification, I typically needed to follow the acronym up with the term “green building”. Although the standard has been around since 1998, it remained mostly unknown to a large segment of the population. This has been changing recently as following LEED guidelines has become increasingly popular with new construction projects across the country. My company’s building is pursing accreditation and our town library was awarded LEED certification two years ago. LEED is in the news more often but unfortunately, the press it is receiving is not always positive.

LEED stands for Leadership in Energy and Environmental Design and contains several different standards, including one for new construction and major renovations of corporate and public buildings as well as one for the operation and maintenance of existing buildings. New construction is focused on five areas: sustainable site development, materials selection, energy efficiency, water savings, and indoor environmental quality. Buildings are ranked on a 100 point scale in which 40 – 49 points earns a Certified ranking, 50 – 59 brings Silver, 60 – 79 equals Gold, and projects over 80 points are rewarded with Platinum LEED certification. The 14,000 buildings across the US that have received LEED accreditation or are in the process of pursing certification must certainly be state of the art, environmentally efficient, and cutting edge, right? Not always. I believe that LEED has been a fantastic stepping stone toward sustainable building design and construction but is not always leading the way to a “green” future. Others agree.

The United States Green Building Council (USGBC), which developed LEED, was the focus of a recent New York Times article on its previous standards. Evidently, the Federal Building in Youngstown, OH is Certified LEED but failed to be energy efficient enough to earn the Environmental Protection Agency’s (EPA) Energy Star label. After reviewing last year’s energy bills, the cooling system seems to have contributed to the building’s inability to become an Energy Star Partner. It has become obvious to the USGBC that annual performance needs to be tracked and they announced last week that existing LEED buildings will be asked to voluntarily send in their energy bills. They also have plans to require new projects to submit five years of energy use data as part of their certification process. This is certainly great news and shows that the developers of LEED are willing to analyze their program and adapt their credentials for the betterment of all. But they seem to have a fair amount of work to do. Their recent standard came out in April of this year and as my story below illustrates, the criteria can still guide participants into questionable practices while constructing their buildings.

This week I worked at a new convention center on the East Coast. I was happy to learn that it was applying to be a Certified LEED building. Good for them, I thought. It appears that most new large construction projects today are pursuing some level of LEED certification. When I walked into the south hall, I was surprised to see most of the carpet was stained and deeply discolored. I assumed that something had happened during its installation but was later told that in order to gain LEED points, the carpet was being reused from an old exposition center on the property that was being converted into offices. This fits into the “refuse, reduce, reuse, and recycle” mantra but I felt odd about what I saw. This must be a good idea, I told myself, despite the stains and the general “something is not quite right here” feeling I got when I saw the old, worn carpet next to the new, bright carpet.

Yesterday I entered the center at 7:30am and saw a crew of four people cleaning the carpet. When I left for lunch, I saw the same people continuing to clean the carpet. And when I called it a day at 6:30pm, guess what? They were still cleaning the carpet. All that work and the stains seemed just as noticeable as ever. And I thought, all of this for some LEED points?

The carpet cleaning was not working and I assume pressure from management will make them use less benign cleaning agents to remove the stains before the sales office begins giving tours to potential clients. If this happens, then everyone involved in the project may feel that LEED points do not make sense. Put in old carpet and clean it with toxic agents? That just doesn’t add up.

What if I am wrong and the stains are left as I saw them today? Management will certainly feel they need to explain the stains to visitors and will educate everyone who steps into the building as to why the carpets of a brand new convention center look twenty years old. I can hear the comments now. “This is LEED? I don’t like it. I’ll think twice about looking into it when my company is ready for a new building.” “Can’t those tree huggers allow our town to have a new, clean center we can be proud of? These stains are horrible.” And so, with either path the center chooses, cleaning with un-natural products or leaving the rugs stained, LEED’s reputation will suffer.

I am left thinking that the USGBC needs to revamp their LEED criteria so it guides those seeking certification toward pragmatic solutions rather than suggesting confusing strategies. Maybe it is time for them to pull into a rest area, review a road map, and make sure they are truly leading us in the right direction.

Local Food: Another Piece in the Sustainability Puzzle

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August is New Hampshire Eat Local Month and a great example of the growing push to reorganize our society and economy around environmentally sustainable and socially responsible practices. Eating local foods not only helps combat global warming by reducing the transportation required to get food to our tables, it provides a major boost to the Granite State economy. Increasing the production and consumption of locally grown food and moving away from super-sized supermarkets is an important step in creating a truly sustainable society.

The development of the modern day grocery store did not happen over night; however, more has changed in the way we grow and purchase food during the past 50 years than during any other time in human history. The current model favors rapidly produced items made from ingredients that are increasingly devoid of nutritional value. Food is a multi-billion dollar business in the US and much of what we find in our Hannaford, Shaw’s, and Market Basket stores comes from monstrous manufacturing facilities completely detached from the reality that their products are intended to nourish people.

Instead of providing healthy food choices at honest prices, most of the over 45,000 items found in a typical supermarket reflect the attitude of their makers. Primarily, that food is just another product to sell. Our consumer driven society has let them be successful in marketing this food because we like the promises of fat free ice cream and the sound of exotic spring water. When the marketing efforts are more important than product itself, we have a problem. The recently released movie Food, Inc. likens today’s food industry to the giant cigarette companies that once stood proud and tall as model corporate citizens. Both, it claims, mis-led the public about the effects of their products and both fought vigorously to continue their charade while the health of our country suffered. Phillip- Morris had to change its name, it now goes by Altria,  and its strategy, such as focusing on reducing under age smoking, because of the dubious nature of its business. I wonder if Kraft, and its horrible products like lunchables which have 17 grams of fat and 1100 mg of sodium in a single serving, will one day be forced to do the same.

The wonderful truth about local food in New England is that it can supply most of what we want as consumers. Our farmers’ markets abound with fresh vegetables, ripe fruit, and many locally produced jams, breads, meats, and dairy products. The food tastes better because it was picked recently when it was ripe, not weeks beforehand and then shipped to us from 3000 miles away.  Producing and consuming foods within a local geographical region is a model that thrived for several thousand years. It is time to focus on local food grown within a few hundred miles of our homes and businesses and restoring our communities to fully functioning organisms.

The transition to a new food economy is both incredibly simple and extraordinarily complex. What could be more natural than buying food from your local farmer, to say nothing of growing some yourself. California and Mexico provide examples of where the process becomes more difficult. The San Joaquin Valley produces more than ten percent of our county’s food. Turning off their pipeline of lettuce, raisins, beef, and asparagus may help the farmers in NH but many of those in CA would have to shift into new industries as their national markets are reduced by a growing demand for regional food.

Which brings me back to August being NH Eat Local Month. Initiatives like this start the discussion. Many of us have been speaking about the benefits of local food for years. The Community Supported Agriculture (CSA) program to which my family and I belong is an example of what happens when local food becomes important to many residents of the same locale. Together with about 30 other members, we pay the farmers at Brookford Farm in Rollingsford, NH for a share of their harvest. In return we recieve twenty pounds of fresh produce every week as well as milk, yogurt, eggs, a chicken, and some beef. What could be better? Fresh food from local people.

As we close in on 2010, I often find myself excited thinking about the changes taking place here in NH. The University Office of Sustainability (USO) at UNH is doing fantastic work with their Food & Society Initative, which promotes local agriculture and the concept of a Sustainable Food Community. The number of farmers’ markets across the state has risen from less than 20 to over 100 in the past decade. This equates to more local food available to more citizens and less manufactured food required by our population. As individuals, families, and businesses become increasingly involved, momentum is building and another piece in the sustainability puzzle is being put into place.

Kimpton Knows What It Takes to Be Sustainable

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The dawn of the green movement in the hospitality world goes back further than one might think. While many companies in the hotel industry have only recently embraced the environmental aspects of corporate social responsibility (CSR), Kimpton Hotels and Restaurants has over 25 years of experience caring for both the earth and its people. They provide several examples of how to do well by doing good. I believe it is time for the entire world to follow Kimpton’s example and reinvent the way we do business by re-prioritizing what really matters. I am talking about incorporating profits, people, and the planet into ones organization and using Kimpton as an example of how to make this happen.

I do not think anyone would be surprised to learn that it was Kimpton’s first hotel, the Bedford in San Francisco, that in 1981 began looking after its waste in a sustainable manner. Or that the “Eco Floor” at Hotel Triton, another SF establishment, set the bar for environmentally sustainable lodging in 1994, literally helping California write their Green Lodging Program standards. The West Coast just seems to have a knack for combining their social and environmental causes with their business ethics. But after the initial excitement has faded, how does a company sustain its commitment to the environment for over a quarter of a century?

According to a speech at last year’s EcoCity 2008 conference, Steve Pinetti, Senior Vice President of Sales and Marketing at Kimpton, said being green requires two things: weekly meetings and a dedication to reach ones goals knowing the road will always be rocky. “Adults are like college students. Give them a month between meetings and they will wait until two day before and try to cram.” Mandating weekly meetings is absolutely an important step because it allows people to maintain their focus on the end goal. After talking about frequent meetings, Mr. Pinetti then gave an outstanding example of the dedication his company displayed while trying to grow its sustainability program.

When Kimpton decided to switch to earth-friendly cleaning products at all of their hotels, they ran into obstacles again and again. Unable to find a national supplier, they had to deal with six regional suppliers, which naturally increased the complexity of the entire project. Then when experienced cleaning personnel said, “I don’t see any foam. These products don’t work,” Kimpton embarked on a company wide campaign designed to educate their housekeeping staff on the differences between traditional and sustainable cleaning products and how to effectively use the new, green cleaning agents. After training, the hotels complained that these products still did not work, so Kimpton continued to find a solution that would make their goal of using earth-friendly products a reality. They hired a water engineer to test the water at each of their properties and guess what they found. There were nine distinct waters, all with their own pH, across their organization and each water required the cleaning solution to be fine-tuned so it would work effectively.

What began as a relatively simple project took one year but in the end Kimpton had a sustainable cleaning solution. It also had first hand experience about what it takes to truly commit an organization to walking a green path. Today, Kimpton’s dedication is as strong as ever. Here are several examples of what they do to protect the planet and its people.

EarthCare, Kimpton’s flagship environmental program, is as much a philosophy as it is a standard. Employees are empowered to make the choices they believe will make a difference. Every hotel has two EarthCare Champions, employees who lead the initiatives at their own properties and meet with champions from other hotels on a weekly basis to discuss their latest triumphs and work through their most recent setbacks. Since 2005, all hotels and restaurants in the Kimpton family have been required follow the EarthCare program. Now they each adhere to a 50 point list which includes using recycled paper, removing phone books from guestrooms (they remain available upon request), and conducting efficiency audits on their water reducing technologies.

Providing guests with a green meeting option is now common place in the industry. Events at Kimpton properties are always eco-friendly because they were the first company to roll out twelve sustainable practices to all of their meetings at all of their hotels nationally. With Kimpton, every meeting is a green meeting and another opportunity for the company to showcase its true commitment to sustainable hospitality.

During the summer months, Kimpton actively educates its guests and the public-at-large about The Trust for Public Land (TPL), a non-profit focused on preserving community land for people to enjoy. TLP’s Parks for People program is a key focus of Kimpton’s fund raising efforts and hotels will donate $10 per room night when guests request the “TPL Rate”.

Rounding out its social responsibility initiatives, Kimpton donates 100% of its profits from many of the products on its on-line shopping site, Kimpton Style. The Live accessories fund Kimpton’s Red Ribbon Campaign to fight HIV while all proceeds from the Eco line go to Parks for People and money from the Travel & Gifts page are donated to Dress for Success, a organization helping low-income women move into the workforce.

The successes, as well as the stumbling blocks, Kimpton has achieved showcase that they know what it takes to effectively implement a triple bottom line strategy into their business model. I find it very telling that Steve Pinetti’s email is available if people want to share their green travel tips with Kimpton. In many other companies, sustainability is handled by someone in operations, not the Vice President of Sales and Marketing. To be sure, Mr. Pinetti is not alone in developing Kimpton’s eco-strategy, but he appears to be intimately involved. To me it says that being sustainable is such an important aspect within Kimpton that the responsibility to manage the company’s green efforts is linked with the responsibility to manage the entire business. That is impressive as well as encouraging, and a piece of wisdom any organization can use when they begin to focus on people and our planet as well as profits.

Green Engage – IHG’s Answer to Global Warming

In early 2009, InterContinental Hotels Group (IHG) launched its own on-line sustainability program. Designed to aid hotel managers in reducing the waste, water, and energy consumption of their properties, Green Engage is revolutionary within the hospitality industry. Never before has a hotel company developed their own tool to measure, assess, and reduce the resources they use and the garbage they create.

Green Engage was conceived after IHG completed an extensive consumer research project in 2008. In addition to the standard guest wishes of ‘nice location’ and ‘good price’, they noticed that more people were interested in hotel sustainability practices than ever before. Combining this new data with their own interest in reducing the green house gases of their properties, the concept of a single, on-line application that would allow all IHG hotels to document, manage, and report their sustainability efforts was born and Green Engage was rolled out in January 2009.

Green Engage lives up to its name, providing data and suggestions for every department a of  hotel beginning with the site selection process for new properties.  During the construction, guidelines for sustainable materials are provided and information on IHG specific concerns, such as creating an effective and efficient building envelope to “maintain the desired indoor conditions and … permit the use of natural ventilation, passive heating, and day-lighting” are available.

Super efficient HVAC, lighting, and mechanical systems are suggested as a good way to reduce the hotel’s consumption and publicly showcase the efforts each IHG hotel is making toward becoming a more sustainable operation. The progress of all hotels is available to all lIHG properties so managers are able to research which green initiatives best suit their property and which programs will provide the best ROI.

IHG created the Green Engage platform to be used at all 4,100 of their properties and last year began training its Americas Region on what sustainability means to a hotel. Green Aware (About, Water, Air, Recycling and Energy) courses were provided to managers at approximately 500 hotels. And it does not stop there.

In September 2008, IHG moved its corporate headquarters into a new, green building in Denhem, England. This state of the art, sustainable building includes the Green Room, a mock up of their “room of the future,” that will allow them to test new sustainability products and systems before rolling them out to some of their 620,000 guestrooms world wide. For the rest of the building, not only were local, sustainable suppliers given preferential treatment, 400 tonnes was construction debris was spared from a life underground in landfills. Instead, 90% of the project’s waste was reused or recycled, reducing green house gases, bringing new life to previously used materials, and in the end, sustaining life for us all.

IHG provides another example of a company that “gets it”. Bringing sustainability into an organization does more than protect the earth. Being green provides cost savings from increased efficiency and conservation. These efforts can be rolled into new marketing opportunities focused on the rapidly growing eco-consumer. Sustainability programs can also make sure a business is ahead of the inevitable regulation that will stop those who lag begin in their tracks and reward those who stayed ahead of the curve. Like FairmontHotels and Resorts, IHG is leading the way in green hospitality, showing everyone that green business is good business.

The Four Ps of Green Advantage: Planning

The Boston Consulting Group (BCG) released a fantastic report, Capturing the Green Advantage For Consumer Companies, on January 20, 2009. They conducted a global survey in 2008, with smaller, follow up assessments in October 2008 and January 2009, that clearly show green consumerism remains strong even as the world deals with a continued economic downturn. The authors suggest that increasing sustainability should be an enterprise wide initiative rather than just focused on one product line or single item. They outline four steps that companies should take when preparing to roll out sustainably across their business.

BCG’s Four Ps of Green Advantage are: Planning, Processes, Products, and Promotion. This blog post will focus on Planning.

When I was growing up, my father made me keep a weekly schedule of things I needed to do and important dates I should not forget. I used it for sports,  school work, and chores.  At the time I thought it was torture to plan out my week and then review it each Sunday night with my dad. Now I thank him for showing me the value of planning ones course and how it greatly increases ones chances for success. The BCG report outlines two planning steps that I would like to discuss further.

Embedding Green Targets and Resources Into Corporate Strategy

The idea of including targets is incredibly important. Without something to strive for, direction is lost and momentum fades. The goals should be SMART, Specific, Measurable, Attainable, Realistic, and Timely. They should be transparent, documented and available to the general public, as well as followed up upon. Nothing is worse than the fanfare of an exciting “green” announcement followed by its slow decline into obscurity. A sustainability report is the ideal mechanism for announcing your targets and publishing your progress toward meeting them.

I recommend creating an environmental mission statement as a way to define your goals and help plan your next steps. When my company wondered what to do next after the low hanging fruit that initially moved us in a sustainable direction was gone, we went back to our guide, our main resource, our friend, and our ally, our environmental mission statement. For more on this wonderful tool, please check out my blog, A Green Road Map for Executives: Begin with an Environmental Mission.
Planning For and Capitalizing On Changes On The Horizon

We all know the saying that change is inevitable. The sustainability movement has been gaining steam for at least the past twenty years. Between 1990 and 2009, the organic food industry saw its sales rise from $1 billion to $30 billion. Green consumer studies like BCG’s show that in almost every sector of the economy, from socially responsible investing and LEED building to green travel and energy generation, consumers are looking for sustainable options.

The trend toward a sustainable future is clear and we are still in the infancy of the move toward a new, clean and green world wide economy. Almost everything we currently consume needs to be produced in a more sustainable manner. The possibilities for change seem limitless. During the Industrial Revolution change seemed to be taking place at a much more rapid pace that just before or after this time period. We now find ourselves at the beginning of what some have said will be the greatest wealth producing era in human history. I have faith that the change will touch all societies, regardless of ethnicity or class, and help the world rise to meet a new era.