In Search of a Green Middle Ground

The author of the book “The Skeptical Environmentalist” made headlines recently when he declared global warming “one of the chief concerns facing the world today.”   Bjorn Lomborg is often viewed as a global warming “denier” so his statement was considered a reversal of his position by some. 

Lomborg gained notoriety for his innovative approach to analyzing the costs and benefits of various investments in solving world problems.   His analysis showed that one dollar spent on fighting malnutrition yields $20 in benefits.  Every dollar spent cutting carbon produces much less than a dollar of reduction in global warming damage.   As a result, cutting carbon was near the bottom of the list of investments. 

Seeking alternatives, in 2009 he convened a group to analyze potential solutions to climate change beyond reducing carbon emissions.   The group found that R&D expenditures in green energy technologies and geo-engineering were the most economically feasible in reducing climate change damage. 

Lomborg explains the difficulty of this rational approach:

The fact that I’ve always asserted the reality of man-made climate change never seemed to make an impression on my critics. What mattered was that I had the temerity to question two key tenets of the received wisdom about global warming: …the idea that we were facing the apocalypse, and …that the only solution was to mandate drastic cuts in carbon emissions.

That’s the way it is with heresy—there is no middle ground. Either you believe global warming is the worst problem mankind has ever faced and that cutting carbon is the only solution, or you are an antiscientific ignoramus who probably thinks the Earth is flat. 

His advice to those seeking a middle ground on climate change: “make green energy so cheap everyone wants it.”

Fuel cell installation at the 100% energy self-sufficient Sierra Nevada Brewery in Chico.

One person who would agree is T.J. Rodgers, CEO of Cypress Semiconductor Corp. and chairman of SunPower Corp. in San Jose.  Using a combination of solar panels and fuel cells, his company is saving $75,000 a year in energy bills with the goal to be 100% energy self-sufficient by 2015.   Rodgers’ motivation is return on investment:

“I’m not into green for its own sake,” he explains. “I’m an engineer looking for solutions, and looking to do what’s best for shareholders. As an investor, I’m also an early adopter.”

 As an investor in green energy projects, Rodgers welcomes Federal subsidies but only for start up costs:

 ”They allow alternative energy enterprises to ramp up. But they have to go away. These companies have to be economically independent.” 

The problem with Uncle Sam’s take on venture capitalism is its unwillingness to cut funding of flawed energy business models.  (Think ethanol subsidies.)  It is much easier to laud successful green investments than to unwind poor ones.   This investment inefficiency drives up the cost of green energy.

Supporters of Proposition 23 who believe a carbon tax is an inefficient means to transition to clean energy are often treated like Bjorn Lomborg.   Passing 23 will allow California to adopt his goal to lower clean energy costs through disciplined R&D investments and a streamlined project approval process.

Hopefully California will lead the way by finding the green middle ground in the global warming debate.

Top 5 green job killers

Opponents of Proposition 23 tout the California carbon emission law’s ability to generate green energy jobs in the future while admitting it will cost jobs in the process.
 
Some of California’s labor unions have joined the concern about the loss of these traditional energy sector jobs.  They do not see the loss of their members’ jobs as being offset by the long term gains from the clean energy industry that may emerge. Union rep James Kellog explains:

While the new “green” industries that opponents tout might headquarter in California to take advantage of AB32′s subsidies and artificially created markets, they’ll mostly build their plants and create their manufacturing jobs in places where labor is cheaper, taxes are lower and environmental regulations more realistic.

Most Californians share the desire to leave the state a cleaner place for our children.  How we reach that cleaner place is subject to debate.  When assessing the potential effect of laws like AB 32, one must consider the business climate in California that green energy will operate within.

While it is easy to believe that clean energy projects will just blossom all over the state, the reality is that that they will be subject to the same environmental scrutiny that a new oil refinery would endure.  

These are the top 5 “Green Tape” threats to clean energy:   

5. Birds – Wind energy technology is a promising way to harvest energy from abundant wind sources.  
Problem: Unfortunately, birds like to fly around the same blustery areas.  Since it was discovered that about a bird an hour dies in the Altamont Pass wind farm in northern California, new wind projects must not kill birds. Instead, the financial feasibility of these projects are killed.

4. Safety Regulations – The Nissan Leaf is an all-electric car which requires 24 hours to recharge on a typical residential voltage.  In order to reduce the charging period to 8 hours, owners must install a high voltage charging system which most city building codes do not allow in residential neighborhoods.
Problem: City officials around the country must now be convinced that all that high voltage around homes is not that dangerous. The bigger problem for Nissan is projecting sales for the car. As one car writer describes the gamble:

If he wins, Renault-Nissan wins huge. If he loses, Mr. Ghosn will go down in history as the biggest CEO goat since Tony Hayward

3. Wireless transmissions – The “Smart Grid” is the future in micro managing reductions in energy usage.  An essential part of the grid are the smart meters which constantly transmit data to power companies.
Problem: Unfounded fears of health issues related to the devices have slowed their rollout in California.  One problem region is around environmentally conscious San Francisco. 4,169 people complained about smart meters in the Bay Area versus 78 in the greater San Diego area during the same period. 

2. Fragile Desert Habitats – California’s large uninhabited desert expanses are prime locations for solar farms.
Problem: Many of the best solar project sites are home to delicate ecosystems that will be impacted by the construction of solar panels. Environmental groups forced Washington lawmakers to designate only limited portions of Federal desert for solar development. The recently approved Beacon Solar project won environmentalist support because it was located on private property next to existing electrical infrastructure and will use municipal water supplies, qualities most desert solar projects do not possess.

1. NIMBYs – New infrastructure must be constructed to connect remote renewable energy sources to city users.
Problem: Many Californians are supporters of clean energy until the infrastructure is built in their backyard. The state is littered with clean energy projects stalled or killed due to objections from local residents. Some have objected to the installation of unsightly solar panels in residential neighborhoods.  A related threat comes from BANANA’s (Build Absolutely Nothing Anywhere Near Anything).

Mr. Kellog frames the issue and his union’s support of Prop 23 in closing:

We need to do something about global warming. But we don’t need to kick California workers while they’re down to do it. With more than 2.2 million Californians out of work, we can’t afford AB32′s excessive costs, at least not now.

Part of those excessive costs is green energy’s questionable ability to generate enough long-term job growth in California to cover losses.

Thinking Outside the Books

The debate over the future of public libraries has made area news with the cities of Camarillo and Santa Clarita electing to withdraw from their respective county library systems.  Financial efficiency is the motive behind these moves as these cities believe they can provide better service with resident’s tax money.

Camarillo and Santa Clarita have a track record of providing excellent service to their residents.  While their county was cutting library service and closing branches, these cities built new libraries and maintained healthy balance sheets.  

Both cities are considering maximizing library efficiency by outsourcing operations to a private library management company.  Replacing unionized public employee jobs with private sector employment rarely occurs quietly.  In Santa Clarita, the issue was demogogued with claims of “putting a price on literacy”, “emphasizing profits over readers”, “privatizing public assets” and other various “evils” of profit making companies.  

Of course, city contracts with private firms to provide services are nothing new.  Santa Clarita’s public transit system is operated by a private firm.  The city still owns the busses and other assets of the system.  

The Future of Libraries

Ventura County’s library system has suffered from steep budget cuts which forced the unpopular closure of Ventura’s Wright Library.  In response to the diminished service in his city, Ventura city manager Rick Cole is rethinking the role of the public library.  In a recent blog post, he concludes:

As we navigate the current crisis in funding our existing Library system, it makes sense to keep one eye on the kind of libraries we want for the future.

In his post, Cole refers to a column written by Neil Pierce which presents examples of how libraries are serving larger swathes of their community by providing non-traditional library services.  This transition aligns with the DaVinci Institute’s vision outlined in a 2007 paper entitled “The Future of Libraries: Beginning the Great Transformation”.  The paper predicts “libraries will transition from a center of information to a center of culture”:

 A culture-based library is one that taps into the spirit of the community, assessing priorities and providing resources to support the things deemed most important. Modern day cultural centers include museums, theaters, parks, and educational institutions. The library of the future could include all of these, but individual communities will be charged with developing an overall strategy that reflects the identity and personality of its own constituency.

Libraries adopting this cultural approach maintain collections of seeds and garden tools, host local groups in meeting rooms, show films, exhibit local artists and provide podcast and video recording studios for their patrons.

In a previous post, I wrote about how coffeehouses can become business “hives” which are collaborative combinations of coffeehouse, business center, and start-up incubator space.   Some academic libraries have adopted a similar model.   Anthony Townsend writes about the success of NYU in revamping its library:

These spaces are buzzing around the clock, bringing together the three catalysts of creative, collaborative knowledge work – snacks and coffee, computers and networks, and deeply motivated men and women.

Since the majority of the country’s public libraries are operated by municipalities, local control of libraries is not a new concept.  What is new is the rethinking of how these facilities should be operated to better serve their communities.   County library systems burdened with large overhead costs are forced to provide a traditional “one size fits all” approach to service.  

Cities like Camarillo and Santa Clarita are leading the way in rethinking how libraries are built and operated and the services they provide to their communities.

No Toy for You

The San Francisco Board of Supervisors is considering a proposal to ban restaurants from giving away a toy with a meal than contains too much fat, sugar or salt. Supervisor Eric Mar, chief sponsor of the proposal, explains his goal:

“Our legislation will encourage restaurants that offer unhealthy meals marketed toward children and youth to offer healthier food options with incentive items and toys.”

Restaurants would not be such an economic force if they continually failed their customers.

A few years ago, restaurants started being accused of misleading their customers into making bad food choices and fueling the increase in obesity rates.   So lawmakers forced restaurants to disclose nutritional information and lawsuits forced restaurants to add healthier items to their menus.   However, customer buying habits remained the same and healthier new menu items have generally flopped.

Researchers from NYU and Yale found the New York City its 2008 menu disclosure law is having the opposite effect:

“While many people claimed to be paying attention to the new information in New York, the researchers found there was no change in the amount of calories consumed.  In fact, there was a slight gain.

Convinced parents are still being duped at the menu, elitist lawmakers are now targeting toy giveaways.   The underlying theory is that children are mesmerized by the offer of free toys and parents are either powerless to fight off their demands or unaware of the nutritional dangers.    Without the undue influence of free Spiderman figurines, children will now crave carrot sticks and apple slices.

Although public health concerns are often cited as the primary reason for these laws targeting restaurants, fast food restaurants are often blamed for contributing to global warming since most of their food is transported from outside local markets.  

 As I have written before, storing and cooking food consumes significantly more energy than transportation.   Restaurant kitchens use heat much more efficiently and waste less food in preparing meals than home kitchens.

Much like the fasting and food consumption rules imposed by religions, lawmakers are seeking new rules that impose secular values on society.  Menu labeling laws are included in the new healthcare reform.

Robert Paarlberg writes about the motivation of these new food rules in his book Food Politics: What Everyone Needs to Know:

The goal is to find and express through the diets we adopt a solidarity with others who share our identity, our values, or our particular life circumstances.   The scientific foundation for these modern food values may be weak, but the social value can nonetheless be strong.   

So restaurant operators in San Francisco will have the unenviable task of denying toys to children so that “proper” social values can be imposed on their customers.   Chalk it up to the cost of doing business in California.

Hot Ideas come from Cool Places

Which is the better business plan  for a coffeehouse: old school hangout or incubator for technology start-ups?

According to a recent LA Times article, there is an emerging trend among independent coffeehouses to eliminate wifi internet access to patrons.   These coffeehouses, like restaurants, want to turn seats over quicker during their busy dayparts.  Internet users tend to stay longer and thus displace other customers.   

Like most things coffee, the trend began in Seattle.  However, Victrola Coffee & Art took out their wifi as a means to restore a gathering place culture:

“the owners noticed that friends were no longer talking and strangers were no longer meeting.”  

Some coffeehouses believe reading anything digital ruins the community meeting place vibe.  So iPads and Kindles are banned while dead tree reading material is allowed.  

Other stores have embraced the emerging demand for places for business people to meet, surf the internet and yes, network.   Seattle Coffee Works takes a wider view of their customer interaction:

Co-owner Sebastian Simsch said the Internet is far from a buzz kill. It’s a business opportunity. Wi-Fi in coffeehouses helps people make connections in the broader world. They may not make friends with someone at the next table, but they check in with friends all over through e-mail or on popular Internet sites such as Facebook.

As the Times article notes, while insurer Lloyd’s of London was once housed in a coffeehouse so were beatniks Jack Kerouac and Lawrence Ferlinghetti.   So why do coffeehouses attract both commerce and art?  They are cool places.

The title for this post came from a presentation by Doug Henton, CEO of Collaborative Economics, to the Ventura Economic Summit in June.    His theory is that cities who foster lively and vibrant urban environments produce innovative and creative businesses.    

One of the exciting ideas that came out the creative economy breakout session was the development of a 24-hour “hive” space in downtown Ventura.    This public/private partnership would be a combination of coffeehouse, business center, and start-up incubator space.    This is smart economic development and I hope the concept is further developed.

The restaurant business is all about developing niches.  Coffeehouses could be a analog haven away from a world where everyone from McDonald’s to Sam’s Club is offering free wifi.   However I doubt many cities other than Seattle or San Francisco have enough latte drinkers that want to read poetry from a paper book and meet new people in a coffeehouse.  

Unfortunately the downfall to most these businesses is that demand for 5 buck coffees is based on disposable income which is in short supply these days.   The demand for cool places to meet, collaborate and hangout is recession proof.

Are E-Paper Tax Bills in our Future?

Cost to deliver to taxpayer: $0. Mailing a paper tax bill runs around $2.

One of the most passionate issues of my campaign for Treasurer-Tax Collector was transitioning our county to a paperless based property tax collection system.   My new Kindle  shows the possibilities of delivering and reading property tax bills electronically.   The Kindle uses e-paper technology that produces images that look like real paper and require no power to display.   (The process reminds me of a computerized Etch-A-Sketch).

Of course this bill could be sent as an email pdf attachment and easily displayed on a computer screen.   The Kindle inspires new ways we will receive, review and store books and documents.   I’ve only had mine for a few days and it’s transformed how often, what and how I read.

Depends on the next Treasurer-Tax Collector

One of my last duties as a candidate was to consider endorsing one of the two remaining campaigns for Ventura County Treasurer-Tax Collector.     In evaluating the candidates, one of the factors I considered was the ability to efficiently transition our county to paperless system.   The next Treasurer-Tax Collector will be adapting to an evolving technology environment in the next four years.

Of the two candidates, I believe Steven Hintz has the better understanding of the technology issues affecting our transition to an e-paper world.    He is a tenacious candidate and will bring that energy as well as stability to the office.   I also see an entrepreneurial streak in him which I identify with.

More blog posts are definitely in my future.  Although the issues broadened to tax collecting during my campaign, Coastal Plain will continue to discuss my unvarnished views of the issues affecting the Ventura County economy.

The Blueprint for Economic Recovery in Ventura County.

 

Howard Wall from the St Louis Fed speaking at the USCB Economic Forecast Project this morning.

 UCSB presented its annual Ventura County Economic Outlook this morning at the Padre Serra Center in Camarillo. Speakers included Dan Walters of the Sacramento Bee, representatives from Beacon Economics and Howard Wall from the St. Louis Fed.
The next Treasurer/Tax Collector will be facing a challenging environment of rising interest rates, potential municipal bond defaults and declining commercial property values. I believe understanding the state of our local economy is an important part of the office.
National, state and local economic and demographic issues were covered in the presentation. Our county suffered greater job loss than other areas of the country but fared better in the housing market than most. We also have a good manufacturing base exporting goods out of the country. Ventura County started losing jobs before other counties in the region so it will likely recover sooner but gradually.
The economic recovery in Ventura County will be affected by demographic shifts in the area. Growth in the Hispanic population and retirees must be considered when plotting the course for recovery. Age related businesses, healthcare and education will emerge as job creators.
A crucial component for our local economy is improving educational attainment, particularly among the emerging Hispanic population. We must do a better job of targeting our educational investment particularly at the community college level.
An educated workforce and stable housing market will provide the base for economic growth in manufacturing, exports and healthcare and the capital investment spending and job creation that will follow.

More Tangerines Per Gallon

When considering the environmental impact of our food choices, the distance the meal traveled to the plate is not the best metric.  A “life cycle” analysis of the food process is far more relevant.

At a 2007 press conference for John Edwards campaign for the Democratic presidential nomination, his wife Elizabeth Edwards declared, “I live in North Carolina. I’ll probably never eat a tangerine again.”  While locavores were thrilled with this comment, economists were quick to point out tangerines the farmer trucked from 60 miles away consumed more energy than those sent by rail from California.   The issue is not the distance but how many tangerines traveled that distance.

I had a “tangerine” moment at the restaurant when a guest declared she wouldn’t eat our Kobe burger because it  had traveled more than 1,500 miles.   We use local suppliers and much of our food, especially our produce, is sourced locally.   However several of our menu items travel great distances to the plate and I personally drive to local breweries to pickup beer for the restaurant. 

The book Just Food by James McWilliams presents an economist’s view of the locavore movement and ways to eat responsibly.   His approach considers the entire life cycle of the food from harvesting to production to consumption.   The quick conclusion is that transportation has the smallest impact on the carbon footprint. 

In the case of our Kobe Burger, baking the bun and storing the meat consume far more energy than getting them here.   Since restaurants use energy more efficiently and waste less food than home kitchens, eating a Kobe Burger at JJ Brewsky’s could reduce that reluctant guest’s carbon footprint.

Life cycle analyses have revealed energy inefficiencies in the food production process.  A study on the Danish flatfish industry revealed that switching from trawls dragged along the ocean floor to seine nets would dramatically reduce energy consumption.   New energy-efficient cultivation methods and production techniques have a far greater impact on the overall carbon footprint of our food than how far it was shipped.

Using this approach, McWilliams posits that we should be more concerned with our food after we buy it.  Wasting less food, using energy-efficient kitchen appliances, composting all organic matter not eaten, eating less in general and developing menus that do not require extensive applications of heat are better tactics to lower one’s carbon footprint than insisting on locally sourced food.  He also realizes the problems with this approach:

But of course it’s hard to turn a variety of small, energy-saving domestic tactics into a token symbol of an eco-correct food philosophy. “Cook efficiently” just doesn’t have the same rousing ring as “eat local.”

As with Edwards press conference, the rousing ring is often followed with rants against globalism and capitalism.   This book makes a strong case that globalism and capitalism are reducing more fossil fuel usage in the food chain than locavores.

Best Place to Start a Small Business? Look for a Walmart.

When CNN released their top 50 places to launch a new business for 2009, my first reaction was that there were no cities west of the Rockies on the list.  No surprise to those who run small businesses on the west coast.  My eyebrows really lifted when I realized most of these cities have Walmarts, the supposed slayer of all small business.  Many of the cities on the list have more than one Walmart serving their town.  El Paso, TX, number 17 on the midsize city list, has 10.

Cities that fight a Walmart are just demonstrating their difficult climate to start and run a small business.   No surprise that California is full of these cities.   There still might be hope for Ventura.  We need to start creating jobs and stop protecting special interests.