Post related to the book, “Environmental Debt”

Why Brazil’s megadrought is a Wall Street failure

April 14th, 2015|

First published in the Guardian on April 10th, 2015

It’s hard to overestimate the appalling environmental and economic crisis that’s brewing in Brazil right now. The country is in the grip of a crippling megadrought – the result of pollution, deforestation and climate change – that deeply threatens its economy, society and environment. And the damage may be permanent: São Paulo, Brazil’s largest city and industrial center, has begun rationing water and is discussing whether or not it will need to depopulate in the near future.

But if Brazil’s drought is shocking, Wall Street’s shortsighted approach to the country is appalling. Institutional investors’ reports on the country – the seventh largest economy in the world – cite worries about inflation, government cutbacks and low consumer confidence. But I could not find a single analysis that mentioned the existential threat facing the country: the megadrought that is expected to last decades and could destroy the Brazilian economy. Not a single analysis cited the brutal global impact that this will cause.

In other words, a host of institutional investors have found worrisome things to say about Brazil, but none seem to be aware of – or, at least, willing to face – the country’s greatest threat.

Attempting to separate economies from environment – as many of these analysts seem to do – is like trying to separate mind and body. It simply doesn’t work.

We will never repair our business models and government policies to conform to the real environmental constraints of the 21st century until we repair this fundamental flaw in our economic system. Investors and analysts regularly review a host of factors – including national debt, inflation, currency devaluation and other financial considerations – when they formulate their economic predictions. Their decision to omit the environment as a fundamental economic consideration is willfully ignorant and negligent.

Economies are cyclical, with periods of boom and bust. But a lack of water can cause permanent damage. São Paolo, which is one of the richest cities in the world, serves as the financial center for most of South America. The consequences of this drought are hard to calculate, but one can get an idea by imagining how water rationing in New York City – and the attendant population drop, public outcry and social instability – would affect the world’s economy.

This lack of foresight on the part of financial analysts is nothing new. They are overlooking this high risk situation, just as they did with the dotcom boom and bust, the subprime global meltdown, and a host of other financial crises. This willful delusion is also cyclical, and also a significant threat to the world’s economy.

I have worked with dozens of multinational corporations on transformative projects and initiatives that cut or eliminate waste, water usage, emissions and energy consumption. Every single company has had the same complaint: they do something spectacularly difficult and smart that enhances their company’s long-term financial security. But, when it comes time for the quarterly earnings calls with Wall Street, no one ever asks about it.

Executives are responsible for maintaining a stable supply chain, a predictable P&L, a respectable brand image, and a keen awareness of competition and regulations. Sustainable business innovation connects with all of these, and is one of the pillars needed to keep a modern financial house in order. Unfortunately, Wall Street doesn’t seem to notice.

This is as egregious as ignoring subprime debt in 2007. In India – the world’s fastest-growing economy and the darling of Wall Street – one out of six deaths each year is caused by air pollution. Factor in water and pesticide issues, and the death toll creeps higher. (I guess all that economic growth will help pay for all those health care costs.)

Just as in China, India’s wealthy people are moving their kids away from the big cities and centers of pollution. But clean air and water ought to be human rights, not luxuries reserved for the rich.

There are so many parables about the cost of money, from Midas who died of starvation and killed his beloved daughter when he valued nothing more than gold, to the New Testament, where Jesus teaches about the price of a rich man’s soul. But we don’t have to get religious to agree that without clean air, land and water, and a stable climate, we all suffer. And of course, as with everything else, the least privileged among us suffer most.

Wall Street investors: please put your money where your mouth is.

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    From antibiotics to fossil fuels: the inconvenient truth about sustainability

From antibiotics to fossil fuels: the inconvenient truth about sustainability

April 10th, 2015|

First published in the Guardian on April 6th, 2015

Humans are predictable. We routinely create extraordinary things and then disregard their impact and consequences because of our desire for convenience, comfort or profit. It’s easy to see why we’d want to take the shortsighted view: these pleasures and conveniences are compelling, at least until we realize they’re inflicting death by a thousand cuts on the world that we inhabit.

What do these extraordinary things look like? Well, antibiotics is a prime example. As someone who survived a dozen cases of childhood strep throat – not to mention surgery several months ago – I am eternally grateful for these drugs. Then again, while antibiotics saved my life after my surgery, the fear of an antibiotic-resistant infection propelled me to get out of the hospital as quickly as possible. These all-too-common infections, which are caused by our overuse of antibiotics, plague health care facilities around the world, driving up costs and mortality rates.

The problem extends well beyond hospitals: 80% of antibiotics in the US are used to induce rapid growth in healthy animals, and 95% of our meat is full of them. Meanwhile, unnecessary antibiotic use for common colds and respiratory infections also helps spur antibiotic-resistant infections.

The companies that produce and sell antibiotics are ignoring their collateral damage, dangers that they have known about for decades.

It’s time to sharpen our wits and use our intellect to overcome our basest instincts and reinvigorate our survival instinct. The only way companies will stop overselling these products is if we stop over-buying them.

Health-conscious consumers are already pressuring producers and retailers to eliminate antibiotics in their meat, and some of the biggest companies are listening. Tyson and Perdue are moving away from routine antibiotic use, Chik-Fil-A is cutting antibiotic-laden chicken from its menu, and Target stopped sourcing farmed salmon in 2010.

After McDonald’s committed last month to phasing out antibiotics in its chicken, it is likely that the whole industry will follow. These changes will increase the price of fish and chicken a bit, but they will also increase the effectiveness of antibiotics and decrease the scourge of antibiotic-resistant diseases.

Consumers are also pushing for changes in medical protocols – and some doctors are listening and refusing to prescribe antibiotics as a default.

Antibiotics aren’t the only seemingly miraculous technology that has inflicted untold damage on the environment: since the 1940s, the pesticide and fertilizer industry has followed a similar trajectory. The original impulse to use vanguard science to help feed the world was a noble impulse, a phenomenal business strategy, and a seemingly brilliant solution to global hunger. Within 20 years, however, scientific evidence began to reveal the environmental implications of this agricultural revolution.

The rampant overuse of pesticides and fertilizers has endangered whole ecosystems, as evidenced in the dead zones in the world’s seas. Pesticides definitively contribute to cancer, developmental disabilities, and reproductive and hormone disruption.

Unfortunately, by the time we began to understand the impact of artificial pesticides and fertilizers, we had become accustomed to cheap, plentiful food, and our agricultural system had begun its transformation from small farms to industrial agribusiness. Today, although we know better, we continue to follow the current, dangerous business model, wherein businesses and consumers do not pay the real cost of the comfort, convenience, and profit of conventional agriculture.

Again, health-conscious consumers and pioneer businesses have led the way to a solution, pushing for organic agriculture, which is a rapidly growing sector of the food market. Meanwhile, small farmers are improving traditional technologies such as crop cover, crop rotation, and integrated pest management; in the process, they’re also revolutionizing yields and price models.

Organic products still cost more than conventional foods, but market growth has made the price differencefar less severe than it was a decade ago. The premium price is worth it: by dramatically reducing pesticides and fertilizers, we are using our brains to save our skins – partly because we understand that the socialized costs of these chemicals hits tax payers and families hard.

Fossil fuels are perhaps our deadliest addiction. When the oil industry began over a century ago, it was populated by determined, courageous, creative wildcatters, dreamers, businessmen and world-builders. They laid the foundation for the industrial revolution that fundamentally altered – and in many, unimaginable ways, benefitted – our lives.

But somewhere around 50 years into this historical odyssey, the consequences of this fossil fuel addiction began to dawn. Vast land areas and numerous bodies of water became filthy. Across the globe, climate change began to rear its ugly head. However, instead of recognizing their products’ shadow, this industry has been ignoring, obfuscating, repudiating and dis-informing about their products for half a century, just like the pharmaceutical and pesticide industries.

Consumers haven’t helped. In love with the convenience, comfort, and pleasures of cheap energy, we have largely objected to any increase in price or any attempt at rationing or rational usage. We have voted out of office the courageous politician who offered truthful and difficult solutions.

Clearly, breaking an addiction is not for wimps. So, today, even as the world flirts with climate chaos, the oil industry continues to pursue its new territories, from the Arctic to the Canadian tar sands, as if it were 1900 and we didn’t know better. And, while this industry still has its share of tenacious dreamers, its lobbying groups are ignoring its biggest opportunities for leading the 21st century’s inevitable energy revolution.

We need to harness the fossil fuel industry’s brilliance and grit to create the low-carbon energy revolution. This change of course is not for the faint of heart – over $20trn dollars of oil and gas reserves are already on the industry’s balance sheets, and most cannot be safely burned if we are to remain within climate limits. With today’s oil prices pegged at $50 per barrel, much of these reserves are already devalued because the cost of extraction exceeds the market price.

Again, there are consumers and businesses leading the way. Solar and wind power are no longer oddities and they both now compete with coal on price. Some businesses like NRG, the nation’s second largest electricity provider, are embracing their role in bringing renewables to their customers. But in the US, many utilities are fighting the explosion of rooftop solar because it threatens their current profits.

Instead of cleaving to this completely unsustainable business model, governments, utilities and coal companies need to map out a transition agenda that ensures the explosion of rooftop solar and protects only those businesses that advance a low-carbon and distributed energy future.

Progress doesn’t come easily. Albert Schweitzer once wrote, “Man can hardly even recognize the devils of his own creation”. The question is, having recognized these devils, will we find the will to exorcise them?

Annoying and persistent activists – consumers, businesses, patients, farmers, fishermen, scientists, and environmentalists – stand firm on unpopular beliefs and inconvenient truths. But, rather than following the current path of killing the messengers and ignoring the dire state of our environment and climate, we can chart a new course.

We can redefine comfort, convenience and profit. We can find respect for the riches and limitations of nature. We can use our intellect, overcome our baser instincts, and launch a sea change in the right direction.

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    The cost of cancer: why health impacts belong on company balance sheets

The cost of cancer: why health impacts belong on company balance sheets

August 19th, 2014|

First published in the Guardian, August 18th, 2014

Like so many of us, I have personal experience with cancer. I’ve had it twice, and so have both of my parents, six aunts and numerous friends. Just last month, someone very close to me was diagnosed with invasive breast cancer. These illnesses are more than just statistics. They require the patient, as well as their families and friends, to journey through a pretty broken medical system, and their emotional price is exorbitant.

My own cancer odyssey started about eight years ago and lasted two years. (I’ve been cancer-free for six years now and I’m doing fine, thanks). When I started feeling physically better, I felt the release of an emotional bottleneck. I went to a support group and each of the six people there told the same story: “I’m sure I got cancer for a reason and I just don’t know what it is yet.”

I responded, perhaps inappropriately: “You got cancer because a variety of companies, governments and shareholders decided that clean air, water and food were less important than their money.”

I’m sure everyone in that group was happy I never returned, but it was a great catharsis for me. At that moment, as an environmentalist working with business, my emotional self met my professional self on very clear terms. I realized we must begin including the environmental costs – including environment-related health costs – in every financial transaction.

Consider this: last year, the US spent $37bn on cancer drugs and over $100bn on cancer treatment alone. Those numbers don’t include the unreported and uncovered costs, such as nurses, acupuncture, psychotherapy, personal travel, supplements and caregivers’ expenses. I spent many thousands of dollars in such costs for each of my cancers, and that’s far from unusual. Of course, those numbers also don’t include the personal costs borne by families and individuals, nor the follow-on effects of cancer treatment in the form of future weaknesses, illnesses, lost wages and lower productivity.

I have grieved and tended too many friends who had cancer in their 30s and 40s, and feel absolutely certain that chemicals, drugs and hormones in the air, water and food play a role in causing this scourge. Reading about the cancer cluster of kids in Toms River, New Jersey, illustrates the difficulty of proving these connections, but for anyone reading the news or sitting by a sick bed, these connections are palpable – and science is getting closer to proving it.

Air pollution kills as many people every year as smoking does, according to Brigham Young University economist C Arden Pope III. Meanwhile, the World Health Organization’s International Agency for Research on Cancer lists 113 agents that are carcinogenic and 66 that likely cause cancer. These chemicals range from the familiar villains – such as tobacco, asbestos and formaldehyde – to the lesser-known fuchsine for magenta production and vinyl chloride used to make the ubiquitous PVC found in industrial pipes, plumbing, packaging and credit cards.

But external environmental and social costs – including health impacts – of these chemicals aren’t often considered in the financial equations that result in their use in many products today. The costs of cancer simply don’t show up in the balance sheets of the businesses that contribute to its prevalence.

GDP, for example, is one of the most important economic indicators in use. All the health care spending I mentioned earlier actually contributes to the GDP, showing up as a positive sign in the profit-and-loss-only model of economic health. When economic growth causes increased illness and healthcare costs, our measurements are missing some basics. It’s not always so great when the GDP goes up. A thriving economy needs a healthy society, not more cancer spending.

We need to construct a new financial ledger. To calculate true profit and loss, broader societal and environmental causes and effects need to be added into the equations. In other words, we need integrated reporting that includes the external environmental and social costs – including health impacts – currently not on the books.

There are signs that some businesses are starting to think about these costs, whether or not they’re including them in their financial statements. Take CVS Caremark, which earlier this year unilaterally decided to forgo $2bn in annual tobacco sales because of the negative health impacts. In a recent column in the Guardian, Eileen Howard Boone, senior vice president of corporate social responsibility at CVS Caremark, wrote: “What we saw was a health epidemic with 480,000 tobacco-related deaths each year, and a $300bn annual economic wallop attributed to smoking.” The company simply looked at the toll tobacco takes on society and – in a courageous move – decided cigarettes didn’t fit into the mission of a healthcare company.

But more needs to be done. Ounces of prevention, in this case, are worth thousands of pounds of cure. Reducing the environmental factors that contribute to cancer could have benefits that ripple across all business – transferring costs from a stressed and broken healthcare system to bolstering the quality of our food, water, clothing, indoor and outdoor air. That seems like a smarter use of our money.

Imagine if profit statements included the costs of illness attributable to the profits. The use of pesticides might be restricted to emergency circumstances and PVC piping would be replaced with nontoxic, greener alternatives.

This truer accounting system would lead to investment in cleaner agriculture and manufacturing, and end the taxes of carbon and pollution that we already pay for our current lifestyles.

Even if the overall costs end up being the same, I’d rather spend our money on cleaner industry and infrastructure instead of on chemotherapy and asthma inhalers. Wouldn’t you?

Radical cooperation is the only antidote to climate chaos

June 20th, 2014|

First published in the Guardian on June 20th, 2014

Throughout the 20th century, millions of people banded together in nonviolent revolutions across the globe to secure their freedom. From India to Czechoslovakia, South Africa to Poland, they declared their right to self-determination. Why, in the 21st century, are so few of us ready to fight together to secure our right to clean air and water?

To wake us from our fossil-fueled dreams, we need nothing less than radical cooperation.

Given the scope and importance of the conflict, it’s notable that many of the most poignant voices calling for a more holistic view of climate change are in fact battle-tested veterans of war. In a new report,National Security and the Accelerating Risks of Climate Change, an all-star array of retired US military brass weighs in, writing that “The potential security ramifications of global climate change should be serving as catalysts for cooperation and change. Instead, climate change impacts are already accelerating instability in vulnerable areas of the world and are serving as catalysts for conflict.”

What moves people to cooperative action? Environmental activists and scientists often ask how they can get Americans to care about climate change. And, on the other end of the spectrum, many business people are trying to encourage both their customers and Wall Street to work with them on solutions.

Meanwhile, those of us fighting to stave off climate chaos are working to send a palatable message, telling one another that we cannot scare people to death and that alarmism is ineffective. But watch The Weather Channel. Read the business news. Follow the agricultural commodity markets or your region’s farming news. Climate change’s high impact traumas and costs on people, planet and profits are already alarming. Scratch below the surface of anyone of any political stripe and the feeling is the same – something is not right.

Change is clearly called for, but our passive acceptance of extreme weather as the new normal has discouraged far too many of us from behaving outside of cultural norms. I recently spoke at a conference on National Security and Climate Change where government, military, academia, and civil society representatives explained the horrifying effects of climate change on global food, water and energy supplies. When I asked several presenters what they were doing to change the direction of their formidable institutions, the reply came, “Oh I can’t do anything radical”. But you just said “It’s an emergency”, I found myself thinking. Unfortunately, emergency or no, the cultures in these entrenched institutions accept inertia over action.

Instead of facing the music, most politicians and business people threaten consumers and citizens with dangerous economic repercussions unless we accelerate the extraction and exploitation of cheap American fossil fuels. Republican representative Bill Johnson of Ohio (Energy and Commerce Committee) pushes for the Keystone Pipeline and argues that the freedom to frack and drill anywhere in the US is the cornerstone of smart energy and economic policy. Meanwhile, even though it has an extremely low earthquake profile, his district had a recent quake linked by state geologists to oil and gas drilling. This connection between drilling and earthquakes is now beingmapped by the US Geological Survey.

Domestic oil and gas sound cheap until we add up the bills. Oil and gas extraction, transportation and combustion drive up the cost of maintaining emergency services, healthcare, infrastructure, insurance, water systems, habitats and agriculture. They drive up mortality and drive regional economies into the ground. These costs comprise the carbon tax that we are already paying. Those who resist a radical change in our energy infrastructure are willfully and wittingly leaving more of these bills to their kids.

There is no way to sugarcoat this story. It will cost real money to build a 21st century safe energy infrastructure. It will cost exponentially more money and devastation if we do not.

David Crane, CEO of NRG (one of the nations’ largest energy companies), recently wrote a shareholder letter that addresses his personal and corporate responsibility:

The day is coming when our children sit us down in our dotage, look us straight in the eye, with an acute sense of betrayal and disappointment in theirs, and whisper to us, “You knew… and you didn’t do anything about it. Why?” And for a long time, our string of excuses has run something like this: “We didn’t have the technology … it would have been ruinously expensive … the government didn’t make us do it …”

But now we have the technology – actually, the suite of technologies – and they are safe, reliable and affordable as well as sustainable … The time for action is now; we have run out of time for more excuses.

If the US president were to ask Americans to lower our energy usage by 20% in the next year, I am certain we could do it. Courageous cooperators are legion. They come in pin-striped suits, overalls, lab coats, nurse’s uniforms, skinny jeans, and aprons. They are found in classrooms, garage labs, farms, and even occasionally government offices. They are everywhere.

The world’s largest cities have already banded together through theC40 Cities Climate Leadership Group. But in the US, our leaders have not asked us to step up, nor is there federal coordination of wide-ranging efforts.

In 1989, 46 countries brought the Montreal Protocol into force (now ratified by 197 nations), pledging to eliminate CFCs that were burning a hole in the ozone. At the time, industry fought against that radical cooperation with much the same language that is being used today. The CEO of chemical giant Pennwalt talked of “economic chaos” if CFCs were phased out, and DuPont warned that “entire industries could fold”. None of this ensued. And if there were no Montreal Protocol, CFCs would have caused utter devastation.

Climate change is a similarly dire threat and the clock is ticking. Our last chance for a global deal – the UN Framework on Climate Change’s meeting in Paris in 2015 – is drawing near. The world’s scientists have weighed in clearly, stating that greenhouse gas emissions need to peak this decade, otherwise the stability of our climate and weather systems are in dire jeopardy.

Only a global treaty on climate that incentivizes a decarbonized economy can chart this course. Voluntary and good corporate actions will simply not suffice to reach the fundamental changes necessary. This climate treaty will only pass if the peoples and businesses of the world assure their governments that they support it. This is the radical cooperation needed to transition the world’s economy to a low-carbon future.

Fossil fuels and peace don’t mix

June 5th, 2014|

First published in the Guardian on June 4th, 2014.

Why doesn’t anyone do anything about the situation in Ukraine?

One reason is that Russia supplies one third of the European Union’s oil and gas. The EU, in turn, represents 20% of the world’s economy, and any precipitous rise in the energy prices they pay is a very scary proposition.

In other words, oil and gas are both the fueling impetus for Vladimir Putin’s current forays and the reason for subsequent global inaction.

Russia is hardly alone. On the other side of Asia, China is risking a hot war with Vietnam in order to plant an oil rig in disputed waters. No nations have come to Vietnam’s side. Meanwhile, Russia and China have just signed a $400bn deal for 30 years of natural gas supply and demand. This alliance creates an economic and defensive bloc that could limit the rest of the world’s move towards safe energy development.

China’s $400bn bet on natural gas added to its central role as the world’s top manufacturer and primary emerging market, create a conflict. If the world chooses to place a price on carbon, which is desperately needed, China and Russia now have an alliance against other economies that might want to incentivize safer renewable energies.

Some of the world’s great oil reserves are on land governed by repressive regimes and dictators, including the House of Saud, Vladimir Putin, Sudanese warlords and Mahmoud Ahmadinejad. The pipelines and ports to transport this oil go through lands of every geo-political leaning, from Canada, whose tar sands aim to serve the US, to Kazakhstan, whose pipeline to China is now being expanded.

Oil and gas wars (hot, cold and economic) will only intensify as at least six different nations, including Russia, lay claim to the Arctic oil reserves. Now that climate change is creating traversable Arctic waters and oil companies are negotiating for deep water drilling there, the likelihood of armed conflict has caused US Defense Secretary Hagel to create an Arctic Defense Strategy.

The companies that profit from extracting and selling fossil fuels have terrible environmental and safety records, with a long record of disasters that include Chevron, fined billions of dollars by an Ecuador court for pollution of the Amazon, the Tennessee Valley Authority’s coal ash spill in Tennessee, natural gas companies found to have contaminated the waters around the Marcellus Shale in Pennsylvania, BP’s negligence in the Gulf of Mexico and more.

Some energy companies, especially in the US, have financed a global disinformation campaign regarding climate change and greenhouse gases that has slowed the wheels of real progress towards energy independence. Energy businesses that refuse to acknowledge their direct and indirect impact on climate change are compromising national – actually, global – security.

But we are full accomplices in this conspiracy of fools. Energy companies and their geo-political sponsors are only as powerful as we, their customers, allow them to be. We demand cheap natural resources and presume that we are entitled to cheap energy. Despite knowing better, we believe that we deserve to live with the convenience of kings (instant food, instant transport, instant delivery, instant stuff) at insanely cheap prices. And every day, advertisements confirm our sense of entitlement.

This notion of our own entitlement to cheap consumption is the fundamental fallacy of 21st century commerce. It has given too much power to tyrants, too much power to corrupt politicians, and too much power to business people of bad faith. It is robbing our children of a livable world, politically and environmentally.

It’s far too high a price.

It’s hard to overestimate the impact of our fossil fuel consumption on the environment. Oil runoff from our consumption represents a greater percentage of marine pollution than transport and extraction combined, and energy from our buildings causes about 35% of North American greenhouse gas emissions.

Just as families might skip movies and dinners out to save for college, each of us can change our habits for the sake of those we love most. We can use less energy and fewer private cars, eat less meat, choose products that use dramatically less – or better, no – plastic (an oil derivative), demand that politicians and business people account for the costs of environmental damage, and accept the limitations of the carbon-constrained world we will live in for the foreseeable future.

If we do not make this transition, global instability, food and water shortages, mass migrations, hot wars and energy disruptions are certain. But despite what will surely be some extremely hard transitions, a new economic framework will yield resilient businesses, healthier citizens and safer nations.

Most importantly, we must incentivize every extant and future energy company, including today’s behemoths, to spend their extraordinary technological prowess, marketing genius, deep understanding of impossibly complex systems and money on finding our way out of this mess. I have met with senior executives in the oil industry who genuinely desire radical change. We must help them come out of the closet and lead their companies in a new direction.

When we talk about energy independence bolstering national security, here’s what it looks like: much more decentralized, clean energy sources – like solar and wind power – connected by a network of microgrids; fast, frequent and convenient mass transit and private transportation fueled by clean electricity; disposable goods replaced by well-made, well-sourced and well-manufactured goods that last; diets and agricultural practices that respect nature’s limitations as well as its bounty; an economy that reflects the environmental impact of every financial transaction; and cleaner air and water as a result of all of the above.

This is what it will take to achieve real national security. It’s the moonshot for the next decade and the Marshall Plan for restructuring the world and its economy.

  • Permalink Several high-volume roadways cut through Central Park. Photograph: Murdo Macleod/Murdo MacleodGallery

    Addicted to cars: why can’t New York City break its bad transit habit?

Addicted to cars: why can’t New York City break its bad transit habit?

October 9th, 2013|

First published in The Guardian, October 7th, 2013

Photo: Several high-volume roadways cut through Central Park. Photograph: Murdo Macleod/Murdo Macleod

Last week, on my way to Newark Airport from Manhattan, I looked across the highway to view the traffic entering New York’s most densely populated borough. The dedicated bus lane was moving steadily and swiftly toward the Lincoln Tunnel. The rest of the inbound highway was a parking lot, mostly filled with cars occupied by one person each. It was 7.45am and these cars would spend the next hour – or more – driving the last five miles into Manhattan. Meanwhile, the buses would get there in 15 minutes max.

Why do these people drive? I dunno.

On buses, trains and ferries, passengers can read, text, talk on the phone, rest, sleep, write, do a puzzle, check email and do anything else that’s not inconsiderate toward their neighbors; they have far more options than when they’re driving. And most modes of public transportation are faster, cheaper and easier than driving and parking in Manhattan.

So it confounds me why people choose to drive when they could take public transportation.

But fuggedaboutem. Let’s talk about the rest of us. This folly doesn’t just affect the drivers, but also hurts everyone else.

When private cars enter Manhattan by the hundreds of thousands every day, they create air pollution that adds huge extra healthcare costs for the city. New studies actually show that air pollution costs more than tobacco. Drivers also create unsafe streets when they ignore crosswalks, traffic signals and cellphone restrictions. And they make ungodly noise, which, for me, is almost unbearable. I am certain that there are huge uncounted costs in cellular stress and overall anxiety caused by the sensory assault of noisy cars.

This is how cars transgress our common senses. They make my city unpleasant, dirty and noisy while also costing many taxpayer dollars.

Private cars in New York City make no sense.

At the end of last month, Manhattan had a Gridlock Alert Day because the UN general assembly was in session. This means you can get stuck (even while walking) for 20 minutes when one of hundreds of global leaders whizzes by in motorcades. It’s a mess.

It was also a beautiful day and I took a walk along the Hudson in lovely Riverside Park. Bazillions of cars, almost all occupied by one person, entered the city on the West Side Highway. And my beautiful walk along the river was accompanied by the noise and pollution of these unwanted cars.

The same happens in Central Park. This great oasis in the city center is open to cars during morning and evening rush hours, heavily disrupting the park’s calming pleasures and speeding past everyone walking, biking, jogging or meandering through. This is crazy.

Don’t get me wrong: I get that occasional car trip is necessary. And taxis are needed to augment mass transit in any city. But the intractable problem is not occasional trips, but a bad habit – daily driving – that costs the rest of us a lot of money.

Would you rather pay for an upgraded, more convenient and frequent transit system or the health, welfare, safety and aesthetic costs of automobile-based travel? As taxpayers, we’re already paying, and we’re paying for the wrong thing.

As a frequent bus, ferry and subway rider, I have plenty of complaints about public transportation, namely that schedules almost never match actual arrival times. Real-time signs that show when the next bus, ferry or subway is really arriving would allow riders to make informed decisions about the best way to travel. We have the technology – it’s GPS – and it’s already ubiquitous and relatively cheap.

In a city that offers at least three routes to get most anywhere, this simple addition to the transit authority’s stations and mobile apps would change transit riders’ entire experience, enabling them to travel with confidence. And for lower-density cities, van pools – tricked out with smart apps and GPS – could provide a huge boon.

Here’s the choice: pay for the consequences of cars or the upgrade of mass transit. This is a macro policy question. But right now, no one really accounts for the true costs of the driving, so we can’t make an informed policy choice.

Those who continue to use cars when mass transit is viable and available should pay through the nose for befouling the city. Imagine what we could accomplish if NYC ticketed every driver who honked a horn for no reason and every driver who texted behind the wheel – and applied all of those funds to public transportation.

We have surrendered too many of our rights to the automobile, allowing it to impact our air, land and water in inacceptable ways. We allow extraordinary vehicle noise throughout the city and have given away the ability to walk in a vibrant urban environment with pleasure – even in our parks.

I don’t want to pay for the harm these drivers are causing. I want my common senses back.

New Business Alternatives for Obama’s Climate Change Program

September 9th, 2013|

First published in the Huffington Post, September 9, 2013

President Obama’s emphatic stances on climate change during his inaugural address were indeed welcome words. Most analysts are focusing on the administration’s ability to use new regulatory powers, largely through the EPA. But there are two other options that are currently underused and under-imagined.

First, patent pooling has been used since the 19th century to spur innovation in industry to support either a wartime emergency or a financial debacle. I believe that climate change qualifies on both counts. And the Securities and Exchange Commission has new rules that require public corporations to disclose their climate change risk. These rules are new (2010) and currently vague, but have the potential to begin the incorporation of external costs as well as long-term impacts into corporate P&Ls and balance sheets.

Farmers, most businesses, victims of recent extreme weather events (drought, heat wave, fire, flood), and the taxpaying citizens forced to cover the costs of these weather events all understand viscerally that something’s gotta change. And quickly. President Obama appears to concur.

It is time to change intellectual property rules so that competitors can cooperate and also retain financial protection. When President Franklin Roosevelt took America into WWII, he set tremendously audacious goals for industry and also called for national sacrifice to support the military effort. Many Americans and car companies especially bristled at this. However in hindsight, it is clear that this wartime effort not only enabled the Allied defeat of fascism but laid the foundation for America’s post-war technological and industrial dominance. If current government policy (all governments, not just American) prioritized renewable energy as the U.S. government prioritized military manufacturing in 1941, the world would quickly see a revolution in renewable energy technologies. And it’s exactly this revolution in storage and dissemination we need in order to more easily transition out of fossil fuel dependence. (We could do it without today’s technology, but it would be harder than it needs to be.)

Many iconic American corporations have invested billions of dollars and hired many of the world’s best scientists to work on renewable energy breakthroughs. But these scientists, from IBM, General Electric, Cisco and many others are sworn to secrecy in order to protect their companies’ investments. Why shouldn’t they? That’s the current business framework. Patent-pooling, an agreement between two or more companies to cross license patents, has been around since the 19th century, and has spawned numerous technological breakthroughs since then. For example, ten companies share the patent rights for the DVD — Hitachi, JVC, Matsushita,  Mitsubishi, Philips, Pioneer, Sony, Thomson, Time Warner, and Toshiba.

And without much fanfare, there is a revolution brewing in the world of accounting. Puma, the sportswear company, released the first-ever Environmental P&L in 2011 and showed that if it actually paid the true costs of its environmental impact it would have reduced its profit by 75 percent. (Currently, this money is paid by taxpayers and unwitting victims of this pollution.) PricewaterhouseCoopers with environmental data experts TruCost  led this effort and many other corporations are beginning to incorporate Lifecycle Analysis into their annual reports in anticipation of the SEC’s next move. All of the large financial service firms are ramping up their climate change divisions and the Global Reporting Initiative and many other financial groups are designing a new accounting paradigm that includes environmental and social costs into plain vanilla financial reporting.

The SEC and the IRS can catalyze this work to give it both bite as well as incentives. Accelerated depreciation or a price on carbon could be levers that move an investment decision from dirty manufacturing and fossil fuels to clean technology or renewable energy. New SEC rules would protect senior management at many corporations from Wall Street’s short-term purview and instead reward smart long-term technological change.

These are just two options. If President Obama is serious about averting the worst effects of climate change, it is time to think big. Nothing except for nature can transform the world as swiftly as can business — for better or for worse.

 

What’s Going On. Business and History

September 1st, 2013|

First published in The Guardian, September 9, 2013

Stevie Wonder and Marvin Gaye at a Motown recording studio in Detroit in 1965. What other businesses have changed the world? Photograph: Gilles Petard/Redferns

I recently had the pleasure of seeing Motown, The Musical on Broadway. Besides marveling at how great the music (still) is, I realized anew the importance of business to the continuum of history.

As a black-owned business featuring mostly black music, Motown dominated large swaths of the cultural agenda in the late 1960s and 1970s with hundreds of hit records. Although some white people joined blacks on the front lines of the civil rights movement in the early 1960s, the first time non-activist whites socialized with blacks as peers was to Motown soundtracks – on the radio and on the dance floor.

The earlier jazz bands of Duke EllingtonCount Basie and Louis Armstrong were obviously extraordinary and influential too. But these great musicians mostly played to segregated clubs and concert halls, whether legally separate in the South or de facto separated in the North.

Motown’s crossover success was one of the cornerstones of massive changes in politics and society carved by the civil rights movement. Smokey Robinson, a Motown star and vice president, described this transformation to The Times-Picayune reporter Maria C. Montoya in 2009:

“Into the ’60s, I was still not of a frame of mind that we were not only making music, we were making history. But I did recognize the impact because acts were going all over the world at that time. I recognized the bridges that we crossed, the racial problems and the barriers that we broke down with music. I recognized that because I lived it. I would come to the South in the early days of Motown and the audiences would be segregated. Then they started to get the Motown music and we would go back and the audiences were integrated and the kids were dancing together and holding hands.”

From my perspective, Berry Gordy‘s brilliant business was largely responsible for most of my white generation’s exposure to black culture – and it began the process of tearing down some of our parents’ racism. Without his breakthrough music empire, Barack Obama arguably wouldn’t have been elected as president because, without the integration that resulted from the music, too many white people wouldn’t have voted for a black man.

Motown, the company, popularized and delivered black music into the center of white popular culture – globally. In addition to its music, this is Motown’s legacy.

What does all this have to do with sustainable business and history? Plenty.

Motown is not only a delight (of course, it’s playing now to inspire me), but also showcases the power of business to change culture. And it’s not alone. Other businesses also altered the zeitgeist and, in turn, history.

When Apple introduced its first iPhone, it revolutionized our communications patterns, technologies and access, as well as the business model for both the computer and communications industries. And speaking of history: no smart phones, no Arab Spring.

When Searle offered the first birth-control pill for sale in the US in 1960, the company paved the way for the revolution in women’s rights of the second half of the 20th century. The business of medical contraception, worth $5 billion in 2011 just in the US, made childbearing a choice. That’s definitely a key milestone in history.

And sometimes, a business’ influence is more cultural than financial. How many of us know the actual dealings of the Medici political and banking dynasty? Some of us might know that it controlled the papacy and several regions of what is now Italy and France for several centuries. But more of us know it sponsored art, architecture and science by way of Michelangelo, Brunelleschi, Galileo and other great Renaissance artists and scientists.

The power of businesses to change the world extends beyond supply chains, beyond working conditions, beyond their carbon footprints. Cultural impact is just as important and the long reach of this impact can be heard when you listen to your favorite Motown music later today.

What other businesses that have affected the world so potently and distinctly, for better and for worse? What other businesses have fundamentally altered history? I’d love to hear your ideas.

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    How West’s throwaway culture destroys basic freedoms in China

How West’s throwaway culture destroys basic freedoms in China

August 23rd, 2013|

First published in The Guardian, August 23rd, 2013

Photo: People walk on Tiananmen Square as heavy pollution lingers in the air. Photograph: Diego Azubel/EPA

I recently had the good fortune to meet a Chinese student, Wei Qing, who grew up in Luoyang, an ancient Chinese city famous as the capital city for thirteen dynasties.

Luoyang is nowhere near the largest pollution zones of China and Qing is proud of the culture she learned as a child and student. She’s a well-educated young woman, getting her masters degree in Environmental Education at an American university. She has the energy and enthusiasm of those ready to roll up their sleeves and do great work in the world.

As we enjoyed and admired the Nova Scotia skies together, Qing noted, “There are never blue skies in most of China.” I demurred, “Never?” She said, “Well, perhaps one or two days a year, but basically, the sky is never blue where I grew up.”

Again, I was taken aback as Qing explained that a blue sky was a great luxury for her. (I was only able to find anecdotal data to quantify the actual days of blue skies over Chinese cities.) The acceptance of the unacceptable remains: Qing does not expect to see what we count as a core part of our basic wellbeing.

The natural next step in my mind was to recognise that it is the production of our cheap goods that is the largest cause of this horrifying condition. We must urgently reconsider the true costs of our everyday behaviour.

It is one thing to read statistics such as 3.5% of China’s GDP is caused by environmental degradation, almost certainly a low estimate, or see pictures on the worst air pollution days in Beijing, or hear about devastating health problems, especially for children, throughout China.

It is quite another to hear, “the sky is never blue” and try to grok the intensity of that statement. Somehow, I figured that sometimes the wind moves pollution this way or that, sometimes the factories slow down.

Qing continued, and told me that she had never seen stars in China. Same drill, “Really? Never?” “Never,” she replied. I live in Manhattan and we don’t see many stars, but one can travel less than an hour and see some stars (even in the Northeast megalopolis), and a few hours away in the Catskill and Berkshire Mountains, the skies are lit up most nights.

As we all know, there is information and then there is a moment of understanding when one grasps the impact and import of life’s events. My dear friend is really dying. I really have cancer. My true love is really leaving me. Oh, deep pain. That’s how I felt when Qing told me about never seeing blue skies or stars over China.

This seemed like an assault on the body of our collective home and felt like a poison arrow in my very fibre. No cheap t-shirt, computer or food product is worth the destruction of our nest. What happens in China does not stay in China.

China obviously must step up and claim its air, land and water as sacred—more sacred than its booming economy. Its legacy of great civilizations demands no less. In 2012, the US overtook Europe as the largestimporter of Chinese goods.

As the western consumers of these goods, we are responsible for a sizable percentage of China’s devastating pollution – that caused by round the clock factories and the coal-fired energy plants running them – sometimes fueled by coal exported to China by US companies. Our role is to demand that all of our goods be produced cleanly, not to mention with decent wages and working conditions. This means that we will pay more for our goods. This will obviously be a very tough transition. But, goods that are more expensive in the short term will be less expensive over annual budget cycles.

The era of cheap goods is over. And sustainable business demands sustainable consumers.

This may sound like heresy to big business as well as to people on a budget, but it is the only way forward to a business model that does not destroy our very survival. That doesn’t mean business shouldn’t have plenty to sell and those who cannot afford higher prices must be crushed. We just can’t continue to buy and sell junk that is so cheap and so poorly made that disposability is built into the product’s business strategy.

Imagine if your coffee pot today was as well made as the espresso machine I inherited from a US army wife—which she purchased in Germany in 1965. I still use it every day and it still makes perfectly delicious coffee. Imagine if your printer or phone functioned for more than two years. Imagine if the toys you bought were destined for friends and family after two years instead of the landfill after 2 days. Imagine if the material on your new trousers didn’t shred and discolour after a dozen wearings and instead lasted like the expensive Italian-made coat I purchased 30 years ago that has warmed me at least 2,000 times and is only now beginning to show its age.

As Americans and Europeans, we have a role as both business people and consumers in protecting China’s environment, as well as our own. We are completely intertwined with China’s success, and the country’s environmental failures are partially our own. Blue skies, clean air and water are not luxuries. They are essential for survival. Individuals, businesses and governments must claim our respective and complementary roles in a revolution of values to restore the blue skies we all wish for the future.

No nature, no business.

  • This article was amended on 26 August to remove an erroneous statement that 81.9% of US private consumption expenditure in 2010 came from goods produced in China. The correct percentage is 2.7%.

While the Hills Are Still Alive

May 1st, 2013|

First published in the Huffington Post, May 16, 2013 

Sorry if I put this ear-tickling Rogers and Hammerstein song into your head today, but as you’re now stuck singing it all day, you might as well listen to the lyrics. The alpine mountains that go so well with the song’s swelling orchestrations are in retreat. In Glacier National Park in the United States, there were 150 glaciers at the turn of the 20th century. Now, there are only 26, and those are shrinking rapidly. The same is happening for Maria von Trapp’s beloved Austrian Alps. This was almost unimaginable a generation ago and would have sounded preposterous in 1959. Now, when we can well imagine, no — witness, the impacts of climate change, we still act as though our actions have no impact.

I spent a beautiful day in the Delaware Water Gap area last week. It’s amazing how close this breathtaking region is to NYC. But when I saw the sign above about polluted fish my delight was truly deflated. This park and sanctuary does not protect the nature within its boundaries. No national park classification prevents pollution from spoiling its air, land and sea.

You can’t eat the fish in an area famous for great fishing spots and if this fish is not good for us to eat, imagine the experience for the fish themselves, as well as the effects this contamination has on the rest of the critters that need the fish for their diets, and the rest of the ecosystem of which the fish is a central part. In 1959, when The Sound of Music hit Broadway and three years before Rachel Carson published Silent Spring, it would have been astounding to imagine that one couldn’t eat fish in rural streams because of pollution — except perhaps in coal or manufacturing country where the pollution was visible and palpable. Because we didn’t quite understand then that pollution has no boundaries — neither in time nor in space. But now we know.

These signals should put us into Defcon 2. If we do not re-calibrate our economic system with wartime urgency, we will surrender the fate of our ecosystem to our own hubris. More like Götterdämmerung, the apocalyptic Wagnerian opera, than a Broadway musical.

Three principles should guide 21st century commerce:

  1. Pollution can no longer be free.
  2. The long term must govern all business and accounting rules and standards.
  3. Government must incentivize clean technology and penalize destructive practices.

Right now, while the hills are still alive, we must create the common sense economy for the 21st century. Several groups, like the Global Reporting Initiative, are looking to change business rules and they will need political will to move this mountain. Despite most people’s aversion, fluency in business and government accounting will be one of the most potent movement-building skills for the next generation — connecting the return on investment of business with the survival of the natural world.