Environmentally Profitable

lemmingEffect writes: "Came across this NYT article about how many companies are finding unexpected cost-savings for using more environmentally-friendly manufacturing processes and materials. Kinda like getting paid to clean your room--sure would have made me happier as a kid. =)"

Comments

Well, duh

[YIAAL]

As long as you don't go beyond what technology can reasonably accomplish, environmentally friendly processes are usually going to be more efficient. And more efficient processes are usually going to be cheaper, at least over the long term.

The problem is when you try to get too far ahead of existing technology. Then you wind up with kludged-together stuff that doesn't work right. A good example is the too-early adoption of electronic engine controls by Detroit in the 1970s. In principle, it was a great idea. In practice, the technology wasn't robust enough yet, and U.S. cars suffered reliability problems for years as a result.

(They're still behind Japanese and German cars, but not by much -- in fact, a crappy Chevy today is considerably more reliable than the "bulletproof" Toyotas of the late '80s.)

Well...

[Sarcasmooo!]

Too bad that, in most cases, companies don't clean themselves up; they convince local government to establish c o r p o r a t e 'wealthfare' programs that force the public's tax money to foot the bill for whatever maintenance and equipment is needed to reach standards set by environmental regulations.

What people ought to realize...

[rneches]

Pollution is waste. Waste is inefficency. Inefficency is lost profit. Ergo, it is cheaper to be cleaner. This applies to everything from engines to PCB manufacturing.

In the late 60's and early 70's, the auto industry tried to prevent or forstall the imposition of pollution controlls by insisting that cleaner engines would be less efficent, and that it would be impossible to actually improve their engine technology. The same year that GM and Ford vehigles took a huge penalty in gas milage and performace because the companies were forced to install catalytic converters, Honda introduced a car that met the pollution restrictions without a converter and with excellent gas mileage and reasonable performace for its displacement. But despite the facts, the result of this public relations temper-tantrum is that ever since, enviornmentalism has been linked with sacrifices in prosperity. This is evident in Bush's energy plan, and the US reluctance to cut CO2 emissions.

It has everything to do with corporate (and occasionally individual) resentment at being told what to do. It has nothing to do with the realities of the industries in question. The association of concervation with decreased prosperity is classic FUD.

It's really sad that this realization is news, but I'm glad a few people are finally waking up to it.

Re:What people ought to realize...

[FFFish]

Keeping in mind, of course, that there are short-term cost efficiencies, and long-term cost efficiencies.

Throwing away your corn cobs may be short-term cost effective. In the long term, though (and especially if you're a big corn-cobbing industry) it's going to become costly as landfills become glutted, transport costs rise, etc.

Installing a power plant that runs on cob fuel might be short-term expensive, but perhaps over the long term it would pay for itself several times over.

Short-term pain for long-term gain? Long-term pain for short-term gain?

It's a balancing act. Pros and cons on every issue.

That all expounded on, I'll conclude with my opinion: in the past, and particularly in the recent past, the emphasis has been on very-short-term gain.

Executives are being paid extravagantly for short-term performance, and are thus making the most immediately-profitable, shortest-term, biggest-payback decisions.

This needs to change. Instead of paying them ten million dollars in bonuses for their performance in the immediate past year, delay it until they've proven for a decade or two that their earlier decisions were the best decisions.

We'll end up with financially healthy companies that have high-quality long-term planning, that don't take the easy way out because it's cheapest *right now*, and that will provide jobs for the next generation.

Plus, my portfolio will probably be happier. :)