Practical Environmentalism

I have long suspected that the only way to accomplish environmental goals was to compromise with business interests rather than fight them. A previous post, Compromise and Win, explored this hypothesis.

Now in an article in the July 29, 2008 edition of USA Today, Environmentalists, businesses reach compromise, there is evidence that some significant progress is being made in that direction. The two sides are working together to create win-win projects.

Governmental inaction is prompting environmental groups and big business to cut unprecedented deals to promote energy exploration and other development in return for major conservation initiatives.

The agreements preserve large amounts of undeveloped land, impose stricter environmental practices than required by law and generate big investments in alternative energy. The deals also clear the way for oil drilling, new power plants and large residential developments.

The article points out that not all environmentalists, nor all business interests, think that compromise is a good thing. But as more deals are being struck which offer real benefits for the environment without shutting down business, I believe that non-belivers will be converted.

Progress comes in small increments and thank goodness we have some trail-blazers willing to try a new approach! The increments will aggregate to the benefit of all.

Lasting change is a series of compromises. And compromise is all right, as long your values don't change. -- Jane Goodall

A New Twist on Ethanol

The USA Today had an interesting article about sorghum being used as a feedstock for a new ethanol plant in Florida in the July 30, 2008 edition. This bodes well for the environment. Although ethanol is not a panacea for eliminating the usage of fossil fuels, it does help remediate the situation.

Ethanol from any source still has issues with water consumption and a very low energy payback (it takes a sizeable amount of energy to produce). But by using alternate sources like sorghum, silage, kudzu, or sawmill waste as is being proposed for a new East Texas ethanol plant, the competition for food products such as corn will be mitigated.

In a previous post I chronicled some of the research being done to eliminate corn as a source for ethanol production. There is little reason why corn should be used for ethanol since there are a variety of alternatives. Sorghum is a step in the right direction.

Never discourage anyone...who continually makes progress, no matter how slow. -- Plato

Burying CO2... What?!

From the Kiplinger Letter, July 18,2008...

Greenhouse gas tombs will open by 2015, courtesy of new EPA rules due out next year. Likely candidate locations: W.Va., Colo., Utah and Wyo.

Burying carbon dioxide thousands of feet underground will help power companies, steelmakers and heavy industry meet coming CO2 limits. By 2025...200 repositories.

Burying CO2 will be less costly than having to buy carbon credits.

Sometimes I am embarassed to be part of the human race. Can anyone truly believe that burying CO2 does anything but postpone a serious problem? Mankind has proven to be very, very good at mortgaging the future (and the planet our children will inherit) for present rewards.

This idea is insane! The buried CO2 will find its way to the earth's surface. The only question is "when?"

The future ain't what it used to be. -- Yogi Berra

Thinking Is Required

If you are following the crowd and going green, good for you... but you might want to utilize your grey matter before proceeding blindly toward the light. Yes we want to replace bad environmental habits with ecologically sensitive ones. But this can be accomplished without needless sacrifice.

One of the things that makes it hard to overcome our non-green inertia is the sacrifices that must be made. Don't shoot yourself in the foot by making it more difficult and expensive than it needs to be. Come to grips with the wasteful habits of the past, decide not to continue them, and move on greenly. But do it smartly. Gradual immersion into the cold, green water is much easier to take than jumping in with abandon.

If you have decided that you need to start conserving energy and you must replace your incandescent light bulbs with energy-efficient compact flourescent bulbs (CFLs), you might want to wait until your current supply of incandescents is used up. The environment needs you to make the switch, but it can wait until the proper time. Don't waste your money by throwing away perfectly good light bulbs in order to jump on the green bandwagon. Your investment in incandescents represents a sunk cost and you might as well utilize them. On the other hand, the CFLs will save you a lot of money in the long run, so factor this into your decision.

Another way to help save the planet is to avoid the purchase of paper products when permanent, reusable ones will suffice. But don't throw out all of your paper plates in a misguided effort to promote using china or other permanent dishware. Don't throw out your paper towels so that you can start using cloth ones instead. Those paper products that you have in your pantry are a liability for our forests and our landfills, but sending them to the landfill prematurely does no one any good. Resign yourself to the fact that they will eventually end up in the city dump, but go ahead and get your money's worth out of them first.

The less painful it is to go green, the more sustainable it will be. The more thoughtful you are about new choices, the more likely they will become new habits.

Thinking in its lower grades is comparable to paper money, and in its higher forms it is a kind of poetry. -Havelock Ellis, The Dance of Life, 1923

Looking for Bogeymen

Have you noticed how, when there is a crisis (social, economic, political) that congress goes looking for the bogeyman responsible? When trying to understand something that has profound implications, but over which we have little or no control, many of us are lured into believing a conspiracy theory - and congress is quick to oblige that tendency.

It's a ploy that sadly works all too often. Rather than address the issue at hand, our nation's fine politicians employ the classic red herring to refocus public attention on a decoy so that we overlook the fact that poor political judgment and imprudent public policies are responsible for the catastrophe du jour.

A couple of recent, high-profile situations serve as perfect examples of this type of political fraud: the high price of oil, and the meltdown of the two GSEs known as Fannie Mae and Freddie Mac.

High-Priced Oil

In the oil situation it is worth noting that the rapid increase in price, as evidenced by what consumers have to pay at the gasoline pump, has caught everyone off guard. Automobile manufacturers, airlines, trucking, and the typical family have all suffered immensely and are weighing their options. It has had widespread and deleterious effects. But is there a bogeyman responsible, or is it simply the result of market forces at work?

Congress, because it allows them a chance to say "we're working on it," believes in the former. If you listen to the pomposity and bluster coming out of Washington, you would quickly come to realize that you are paying upwards of $4.00 for a gallon of gas because of those evil futures market traders.

Never mind the fact the futures trading is absolutely necessary to keep the spot markets functioning effectively and efficiently. Never mind the fact that world-wide demand for petroleum is at an all-time high, and that the huge emerging economies in India and China have insatiable appetites for energy. The futures traders are a convenient scapegoat which we're going to blame and investigate!

Fannie and Freddie

If you have a pulse you have no doubt heard about the housing crisis and the disruptions it has caused in the mortgage lending business. Fannie Mae (FMN) and Freddie Mac (FRE) are GSEs that were created to help provide liquidity and safety to the mortgage lenders. Their charter is summarized in this excerpt from the Fannie Mae web site:

"Fannie Mae provides stability, liquidity, and affordability to the nation's housing finance system under all economic conditions. We are a shareholder-owned company with a public mission. We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market."

"Fannie Mae has a federal charter and operates in America's secondary mortgage market to ensure that mortgage bankers and other lenders have enough funds to lend to home buyers at low rates. Our job is to help those who house America."

It has become apparent in recent days that both of these entities are having a hard time delivering on this charter due to the effects that the sub-prime mortgage debacle has had on the mortgage markets. Their struggles have made investors in these two quasi-public entities very nervous, and those investors have been fleeing in droves causing a precipitous drop in the stock prices.

Congress, in its infinite wisdom, is, again, looking for demons in all the wrong places. They are convinced that if they look hard enough they will surely find a tail wagging this dog.

Rather than address the causes of the financial industry crisis, they chose to focus on a minor consequence of that crisis - the dramatic drop in the price of Fannie Mae and Freddie Mac stock prices. Yes, both entities were in trouble, but the falling stock price was a symptom of that trouble, not a cause! Nevertheless, congress, with great fanfare announced that they have found the culprit: a type of stock trade known as naked short selling.

To say that naked short selling is responsible for the dramatic loss of value in the shares of these two GSEs is just plain wrong. This is tantamount to saying that it rained today because I washed my car yesterday. Naked short selling may have had a collateral effect on the stock prices, but the main reason that investors are fleeing those equities is because the entities behind them are in deep financial trouble! To identify the falling stock prices as a cause and not an effect of the GSE crisis is ludicrous!

As long as there are politicians, there will be bogeymen. Since any politician's number one priority is, and always has been, getting reelected, issues that may cast a bad light on their performance or spotlight their ineptitude are guaranteed to bring quick and decisive action: obfuscation of, and diversion from, the real issue.

Perhaps the most obvious place for politicians to seek root causes and bogeymen might be the mirror.

Ninety-eight percent of the adults in this country are decent, hard-working, honest Americans. It's the other lousy two percent that get all the publicity. But then--we elected them. -- Lily Tomlin