Often times we find ourselves using words simply in (or rather out of) context: the green economy, resource efficiency, hybrid environmentally friendly cars and free range poultry. At the 2012 European Resources Forum, I got a chance to catch up with Mr. Schmid-Bleek, the founding president of the Factor 10 Institute – a group of academics who study global resource productivity and sustainability. We discussed the issue of resource use in today’s world. Unfortunately for us, he stated that “We live in a civilization that forces us to destroy nature to further our own ends.” This creates a market which values “efficiency” of resources rather than the actual intensity of resources used.
At first I didn’t understand the difference between efficiency and intensity. This difference is highlighted especially when observing price markets. They’re a little skewed. Corporations strive for the cheapest resource to produce a given product or service rather than the least environmentally intense resource. This is a major reason for the persistent use of fossil fuels. They are the cheaper alternatives. But in labeling them cheaper we seem to have confused them with being more efficient.
The reason that these carbon belching options appear cheaper is because the externalities they generate are not internalized properly into cost functions. This means that the cost of pollution and climatic damage that is generated from their usage in the long-run is not taken into account the day the cost function is performed. On the rare occasion they are taken into account, the effects have to be discounted because a dollar today is worth more than a dollar in two weeks.
To put it simply, it’s not the amount of resources used in a product that makes it ‘efficient’, it’s the cost. This prevailing attitude tends to skew our views on the whole concept of going green. I’d like to expand on this by talking about the hybrid car, a green sensation that’s expanding in many countries.
A representative of the country of Estonia was up on stage during one of the panel sessions and raved about how friendly her country was towards the idea of sustainable development. How friendly? So much so that the government gives 18,000 (euros) to anyone who would purchase a hybrid or electric car.
The problem, however, is the energy intensity of mining for the rare earths and minerals that are used in building this car (primarily in the battery). Batteries used in hybrid cars are usually of the nickel-metal hydride or lithium-ion variety. These batteries require raw materials known as rare-earths. The mining of these elements results in significant environmental damage and production of the batteries result in a large amount of pollutant gases. To illustrate, the production of a hybrid battery generates over 10 kilograms of sulfur oxide, while a conventional one only generates one kilogram.
Another pressing fact often ignored by proponents of hybrids is that the fuel source of these cars is electricity, which can be generated in polluting ways. In the U.S., for example, over 50% of which is generated using coal.
At the same time, the case for the hybrid car needs to be made. The real return on a hybrid car depends on the type of usage. Given that the car’s engine does not run when idle, unlike a regular petroleum one, its efficiency is highlighted in the stop and go nature of the daily commute. Motors, batteries and break-pads on hybrids generally tend to last longer and need less replacing. Additionally the gasoline motor charges the hybrid battery, saving the user from constantly having to look for a plug-point.
In financial terms, it’s good to keep in mind that many countries offer tax incentives for purchasing hybrid and electric cars. That being said, it can take anywhere between one and a half to 12 years to recoup the initial cost on your hybrid car – based on factors such as distance driven, make of car and fuel costs.
The hybrid isn’t a complete waste of time. In fact innovations in the field are making it more viable and shifting the focus away from cost efficiency to resource intensity. Recently, Ford managed to halve the amount of dysprosium (a rare-earth) it requires to produce its hybrid vehicles.
The hybrid may prove to be the push we need into a greener planet. However, it isn’t the messiah that it’s claimed to be. Like everything in life, it comes with its pitfalls which need to be recognized. Clouding such concepts in a flurry of buzzwords and soothing statements tends to shift focus away from reality into sensationalism.
The fact that much of what we discuss is done by employing words and phrases that many of us barely comprehend is slightly distressing. What does it truly mean to be an environmentally friendly car? Or for that matter what does a green economy imply? What do we mean when we discuss the Gross Domestic Product? My colleague Andreas Slotte wrote an excellent piece on this last statement which you can read here.
There tends to be a lot of information and misinformation floating around. People are turning vegan, driving hybrids, while insisting that you purchase only free trade coffee. While all this is good, and does in some way or the other aid the cause of environmentalism, there is much which is sensational hype.
To truly differentiate the fact from the hype, and to understand how your actions truly affect the environment around you, you need to be informed. Do not simply buy into the fad of sustainability and going green. Be critical and question what you see and more importantly, what you do.
Or else, you may find yourself part of the crowd running the risk of a sudden attack of foot-in-mouth-itis. I quote a professor I met at the same conference:
“So there’s this board member of one of the environmental agencies in Austria. She comes up to me and asks what the big deal is with the GDP, when all it really is, is the difference in inflation between any two years.”
At best case this illustrates a poor hiring system. At worst it proves my previous point.
At times, we have no idea what we’re talking about.