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.)

Re:Well, duh

[mrseth]

I was a GM dealership automotive technician for many years and I worked my way through college in an independent garage for 4 years. I can tell you that the problems with cars manufacutered by the Big Three had nothing to do with technology and everything due to the fact that the bean counters seemed to be in control of the engineering department. The Japanese imports had to conform to the same emissions standards as their American counterparts yet suffered none of the reliability problems. For instance, the materials used in the American cars were absolutely inferior. After about 2-3 years the old barrel-type coolant sensor connector on a GM car would crumble in your hands. My wife's 1988 Celica's coolant sensor connector, and for that matter the vacuum hoses, radiator hoses, and many other platic parts that are subject to strain and engine heat are still original equipment and in seemingly good condition after 188,000 Mi. The American counterparts would all tend to be brittle and/or broken at this age and mileage. Another example is gasket design and material. The Japanese had gone to rubber/neoprene type gaskets for things like valve/cam covers where the US cars were still using cheap cork or RTV compound. For that matter the Japanese cam covers (of course the Japs had OHC engines that were also much more advanced than the rewarmed 1950's and 1960's OHV relics that GM was using) themselves were molded aluminum as opposed to the cheap American stamped steel valve covers that would bend as you tried to pry loose the leaking RTV (Actually, I got really good at sealing these things, but it is an art). These problems also were present in the fuel systems, the electronics, the ignition systems, etc. So really this has nothing to do with technology and everything to do with underengineering and putting profit above product quality.

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. :)

Environmental accounting

[sakusha]

This is all a byproduct of a new system called "environmental accounting." For years, corporations have been used to applying standard accounting techniques to manufacturing processes to maximize profits and process efficiency, but nobody ever thought of applying those accounting methods to environmental issues. The classic EA example is a company that uses mercury in manufacturing. The accountant measures the mercury the co. buys, and subtracts the amount that ends up in the product plus the amount reclaimed from waste. For example, they buy 20 tons a year, and 15 goes into the products, 3 are reclaimed from waste. 2 tons are unaccounted for and are presumed to go directly into the environment. To plug the mercury leak, you just go through the process and see where it's not accounted for.

This article just cites examples where the gov't has mandated environmental accounting and gives disincentives to inefficient processes. If only we could get people to use EA just because it's good for the environment!