Money is Green, Too

From the Game Theory in Management Blog
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Modelling Business Decisions and their Consequences

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As I wrap up my month-long eye-roll on the subject of “green” project management, I must admit that the people at Gantthead have been very good sports about my playing the role of curmudgeon. But, since they have given me this amount of latitude, I’ll go ahead and test their patience just a bit further:  virtually all projects that result in an advance in technology or improvement in people’s lives are automatically green.

Of course, that assertion flies in the face of the enviro-wacko crowd, who insist that anytime “nature” is encountered by man, “nature” comes out on the losing end.  Incidents such as my previously-blogged-about saving of the whales by Rockefeller and Standard Oil, or even little things like spotted owls building nests in K-Mart signs, somehow escape them.  Early in my career I worked at the Trestle EMP Test Site at Kirtland Air Force Base in New Mexico. The Trestle was (and perhaps still is) the world’s largest all-wood structure. It was designed to provide a platform for testing the effects of Electro-Magnetic Pulse on aircraft while the planes were in-flight. Since a potential effect of an EMP on an aircraft was to render it un-flyable, the Trestle was constructed so that planes could taxi from a nearby runway and onto the “hot pad,” which was about five stories above the floor of Tijeras Canyon. There it could be bombarded by simulated EMPs without the ground interfering with the collected test data, and without any aircraft actually tumbling out of the sky.

Naturally (get it?), local environmentalists hated the whole project, dealing, as it did, with radiation research. Nevermind that the radiation involved was radio-frequency, and the site didn’t introduce any more radiation into the environment than a radio transmitting tower – this was radiation, and it therefore had to be detrimental to “the environment.”  Only problem was – “the environment” didn’t agree. A family of great horned owls set up a nest beneath the hot pad, and proceeded to raise a few generations of great horned owl chicks. Those had to be the most closely monitored non-endangered birds in history. Trestle project opponents just knew that the birds’ health was endangered. But the data never supported that supposition.

Consider the progression of the fuels mankind has used over the ages. Tribal through feudal civilizations burned wood for heat and cooking. Of course, wood comes from trees, so as the demand for energy increased, more and more trees had to be harvested. Also, wood produces far more smoke for far less realized energy than…

Coal came into widespread use at the advent of the Industrial Revolution. It was already supplanting wood as a heater of homes in London in the 1800s, but it was also preferred over wood for the running of steam locomotives.  A given quantity of coal has twice the BTUs of the same amount of wood, while emitting less ash into the atmosphere when it’s burned. Of course, coal is more difficult to extract than trees are to harvest, but the overall pattern was clearly pointed towards supplying greater energy demands with a smaller impact to “the environment,” which brings us to…

Fuel oil contains 115,000 BTUs per gallon. There are 365.5 gallons per ton of the stuff, meaning that fuel oil has almost twice the energy of coal by weight while, again, releasing fewer contaminants into the air when it’s burned. By now even the senior executives at Greenpeace should be able to pick up a pattern, a pattern which continues to manifest as we move from oil to natural gas to nuclear energy. The fuel becomes more difficult to extract, but it produces much, much more energy for fewer quantities of waste products. Note that none of these transitions happened because protecting “the environment” was a universal goal. They all came about as mankind advanced technology and searched for more efficient ways of meeting escalating energy demands – “the environment” benefitted every single time such a transition took place. In fact, the only way that the argument that mankind’s energy use is harmful to the environment can be supported is if we look to history, when energy technology wasn’t as advanced as it is now, and compare those circumstances to today’s. We may find the descriptions of a coal smog enfolding cold Londoners of the 1890s to be distasteful, but London of 1890 was a far better place to live than London of 1590, and for reasons that go far beyond preferred energy usage.

And what drives this search for advanced technology? What Edward Bulwer-Lytton, First Baron Lytton coined as “the almighty dollar.” History’s energy barons weren’t trying to improve the environment – they were trying to get rich supplying a population’s energy needs, and the natural world around them improved as a side benefit. It appears Adam Smith was more right than he realized: each person pursuing their unique economic interests not only benefits the macro economy – he also improves the environment. The (US) dollar is green, too.

Posted on: August 26, 2012 06:27 PM | Permalink

Comments (3)

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So enjoyed (and look forward to) reading your posts of late. My sense is that most people share your point of view, just not the ability to express it with the skill, precision, and humor that you do. If this is what a curmudgeon does, then please keep curmudgeoning!

Whilst I have a different point of view to you on green in general, you''re angle here is very valid. There are parts of the world which have continued to use wood to the present day, and now suffer from problems associated with deforestation. On the other hand, an over-enthusiastic endorsement of solar on household rooftops by some Australian governments in the form of generous subsidies (subsequently withdrawn), has contributed to an overall increase in power costs (to pay for the subsidies) and very lumpy demand for the solar industry. The ideals of green need to be connected to reality, both at the micro level and also in the big picture. After all, the only way to have zero human impact on the planet is to remove the humans, except that to do so means the extinction of the humans species, and species extinction is also bad because of its impact on the ecosystem...

Nice article. From your argument,

Motivation: as technology advances->energy barons get richer (more dollars earned).
Side benefit: as technology advances->natural environment improves (greener environment).

Conclusion: Dollar is green.

Beware, this could be a potential association fallacy.

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