Where My Electricity Comes From—An Exploration

Each month, I buy about 200 kW (kilowatts) of wind energy. PECO Wind is my electricity utility’s wind power arm. I figure at the very least I am helping to create a demand for wind power—and all things being equal, I would rather my electricity come from wind, or some other renewable source, than something like coal or oil, which are the current main sources for the electricity we use. So I did a little research to see where my electricity comes from before it gets to PECO. I was also a little curious as to where my electricity would come from in the future. Is there any prospect for me to reduce my dependence upon coal and oil.

Let’s call PECO my electric retailer. PECO in turn owns some electric generation facilities; they also can buy electricity from the regional power grid to resell to consumers like me. For PECO, the regional grid is the one operated by PJM Interconnection. PJM Interconnection is the organization that oversees the wholesale electricity markets in 13 states, including Pennsylvania, Maryland, Delaware, New Jersey, etc. If anyone would know the answer to my question (where does my power come from), they would.

They did. They had a chart that shows the percentage of the grid coming from various sources (coal, oil, wind, nuclear, hydro, etc.). I was pleased to find out that this includes renewable energy as a viable source of energy—not necessarily prominent, but viable. As of the end of 2008, renewables (including my PECO Wind purchase) accounted for a 1%-2% of the electricity grid. The important item for me is not so much the actual percentage that renewables are of the grid. The important thing is the fact that they are a recognized part of the electricity market in the first place. (Yes, I know that coal and oil based are the most dominant players, and will be for quite a while).

However, the percentage of renewable sources will increase in the future. This is because of several factors. One is that numerous states are implementing “renewable portfolio standards”. As a general rule, these require that utilities in a state procure a target percentage of their electric supply from renewable sources (wind, solar, biomass, etc). For example, the Pennsylvania standard is about 20% by 2020. Across PJM’s service territory, this equates to an eight-fold increase in renewables demand over the next 15 years. Another factor is that a significant percentage of new proposed power generation capacity is wind, solar and other renewables vs. coal and oil based.

Hopefully, these trends continue, which will bode well from a sustainability perspective. If the percentage of renewables in the grid goes up, then the percentage of non-renewables in the same electric grid has to go down. This means that if I use the same amount of electricity, my utilization of coal and oil can only decrease. I hope this is true—and if I can reduce my own usage of electricity, my dependence on coal, oil and other power sources I do not particularly like will go down even further. Now that is something to be hopeful for.

http://www.pjm.com/Home/faqs/renewables.asp

http://www.pjm.com/~/media/about-pjm/newsroom/downloads/20091028-renewables-dashboard.ashx

The Rewards of Being Green

I recently received a mailer from American Express, pitching their ZYNC charge card. It is basically an a la carte version of their Membership Rewards program. The base fee is less than the usual membership rewards programs; however, a cardmember can gain extra rewards by signing up for “packs”. These are merchant groups where s/he will gain extra rewards (2% vs. 1%). The packs are “social”, “go”, “connect”, and “Eco”. Essentially, the cardmember can customize the overall rewards package.

I found the Eco pack particularly interesting. First, it exists in the first place. I am more used to credit offers for double points at grocery stores and gas stations—not for being eco-friendly. Second, of the four “packs” available with the ZYNC card, only the Eco pack comes without an extra fee (The others are around $20-$25.) The no extra fee is definitely an encouragement to add the Eco-Pack. Third, all of the qualifying ECO-Pack merchants have been rated by an independent third party. The idea is to prove their, well, “eco-cred”.

The rewards network as screened by Amex’s certification vendor Greenopia is impressive. It covers many cities across the country, and also contains numerous categories. In fact, there over nearly 20 main categories (baby food, coffeehouses, grocery stores, airlines) with many more subcategories spread over almost 100 cities. For example, the newest listing in the Philadelphia area (as of this writing) is a compressed natural gas fueling station (operated by PECO).

American Express has identified a group of prospective “green” customers who would be attracted to a collection of eco-friendly merchants. I think it is kind of neat that American Express judged “eco-friendly” to be as potentially important to the ZYNC target market as travel, socializing, and communicating with friends. Hopefully, the eco-friendly aspect will be as prominent in other market segments. I am actually waiting to receive the next credit card offer from an AMEX competitor that includes its own “eco-rewards” product.

Soups On

Winter is a season for hot soup. And in my house, winter and hot soup are great partners. This year, I am curious not only about the taste of the soup, but the ingredients within the soup and the process by which the soup is made. I was curious specifically about how “sustainable” my soups are. The first stage in my investigation was to look in the cupboard. I quickly discovered three major brands: Trader Joe’s, Health Valley, and Campbell’s. (It is pretty hard to imagine a soup cupboard without anything from Campbell’s, but that is another issue). The labels told me that all of the soups and stocks were low sodium, and the Trader Joe’s and Health Valley ones were also organic. This was good, but I was curious about whether “soups and stocks” and “sustainability” could actually go together.

The result of this exploration became a case study in the intersection and divergences between “organic” and “sustainable”’. “Organic” on a label actually means that the ingredients comply with specific US Department of Agriculture regulations. The general idea is that the food used is raised without the toxins and pesticides that poison the land and water. “Sustainable” is a broader concept, and can go beyond the ingredients of a specific product and include other aspects of the production chain.

For the soup consumer who cares about environmental impacts, it is easy to assume that buying organic is the extent of what they can do. A fairly quick perusal of the Health Valley website reinforces the organic aspect. This site also includes references to “sustainable agriculture”, without too much detail. The Trader Joe’s site had almost no information on any sustainable production practices. At least the soups and stocks I buy at Trader Joes happen to be organic.

Somewhat to my surprise, however, the Campbell’s site had an entire section on what sustainable agriculture actually is. This is very fortunate, because Campbell’s soup, is well…mmm—mmm—good! And the mushroom soup goes so well with so many recipes. To Campbell’s credit, they give numerous concrete examples from supply, to manufacturing, to packaging and distribution of how they have adopted sustainable production practices. One example concerning ingredients is a sustainable agriculture practice known as integrated pest management. This basically means that most of the bad pests are eaten by their natural predators. (Call these predators the good bugs). The good bugs eliminate the need for most of the chemical pesticides. Another example is local sourcing, whereby the manufacturing plants buy as much of their ingredients as they can from within a 100-mile radius. I also like the fact that many of the cans for the product are made very close to the factory, so they oftentimes do not need to be trucked in. And, of course, the soup cans are themselves recyclable.

Comparing the soup brands in my cupboard has taught me a lesson or two about what being a customer of sustainability is all about. It is really easy to automatically buy the product (soup, in this case), labeled “organic”. But it is certainly possible that a competing brand may not be labeled organic, but have lots of other sustainable elements in its production process that I am supporting via my purchase—in this case, Campbell’s.

I think the overall lesson is to decide which products are worth buying as if sustainability is not a concern. My initial criteria for soup are low sodium, taste, and availability in the stores where I shop. After this screen, 3 brands qualify—Health Valley, Campbell’s and Trader Joe’s. (Not of these brands’ soups have low sodium or taste good, but enough of them do). Then I need to take the small amount of time to do a little research to look at the provider’s perspective on sustainability. A simple visit to their websites did the trick. In this case, I am happy to find out that I am on solid “sustainable” ground with all three of these choices.

Time to go make some soup—there is a blizzard outside.

Net Impact–MBAs and More

There have been numerous changes to MBA programs over the past several years. One of the more refreshing ones is the increasing prominence of an organization called Net Impact. Net Impact is an organization of business students (and interested graduates and others involved in the business community) who believe that the “power of business can be used to improve the world”. From its beginnings as the Students for Responsible Business in 1993 with 6 chapters (in 1994 I started the Penn State chapter of that organization), Net Impact has evolved to over 200 chapters, including over 120 at leading graduate schools across the world.

Net Impact’s reach is very impressive. The core of the organization is the chapters. All of the top MBA programs have a student chapter. Many U.S. cities including Boston, Philadelphia, San Francisco, New Haven, and several abroad (Seoul, Tokyo, London, etc.) have professional chapters also.

In addition to the chapters, Net Impact also has national and international conferences. The 2009 conference featured the CEO of GE, Jeffrey Immelt as well as Cornell’s president David Skorton, speaking on innovation in a green economy. The European conference a couple of years ago featured the theme: Sustainable Prosperity—Taking on the Global Challenge.” Additionally, numerous organizations use Net Impact as a recruiting vehicle to help with various sustainability efforts.

Of equal interest are the ‘Issues In Depth Calls”. These are conference calls with representatives of companies implementing various types of social engagement—including but not limited to sustainability per se. Upcoming topics for these calls include “Driving Sustainable Growth (Dupont) and “The Holy Grail of Sustainable Culture” (FMYI). Other events have covered very diverse topics, including: “Writing a Sustainability Report”, “Green Jobs”, “How to Develop an Eco-Purchasing System”, and “Green Benefits”, etc.

When I found out about the organization, I eagerly joined my local professional chapter (Philadelphia). I was very happy to find out that it was a very active chapter—with lots of events and programs. The programming schedule has included monthly book clubs, periodic volunteer days, occasional happy hours, panel discussions, research projects, and more. Most important to me, it is local, so I can actually participate in the programs.

Meeting other like-minded people (such as those in the Philly chapter) is a great way to help me incorporate sustainability into my own life. For example, my wife and I love fish. Via Net Impact, I have heard about a seafood store in Philadelphia that specializes in sustainable seafood (Otolith Seafood). I am looking forward to enrolling in their Community Supported Seafood program in the spring. Without Net Impact, I would have had no idea that this program even existed.

The Big Mac Has Left the Country

The era of Big Macs has passed in the small country of Iceland. This is due mostly to the aftereffects of the fiscal crisis that gripped Iceland last year. As a result, the local McDonald’s saw its costs double. In order to make the Big Mac profitable, the local McDonalds franchise owner would have had to charge over $6 for it. Compare that to the price in the United States (about $3.50). The competing Icelandic offerings using locally sourced produce (and other ingredients) now cost noticeably less than the Big Mac.

In other words, the locally sourced products not controlled by the global corporation have become the cheaper option. We usually hear that the “sustainable” or “ecologically friendly” way actually makes the product economically uncompetitive. In this case, the exact opposite happened. Admittedly, the increasing expense of the Big Mac ingredients is the result of a perfect storm of a national financial meltdown and corporate dictates. But the end result is that the Big Mac became economically unsustainable, and the business that it supported did not survive—at least in Iceland.

Put another way, in times of severe economic stress, the Big Mac business in Iceland turned out to not be very secure after all. Meanwhile, the competing businesses based on locally produced foods turned out to be secure enough to survive the economic storm that engulfed Iceland last year. In fact, they are so secure that they have a new entrant—the old McDonald’s franchisee.

The coda to the story is a classic entrepreneurial story. Since the McDonald’s business is no longer viable—the franchisee looked around for one that was. The answer turns out to be one also based on local (Icelandic) produced foods. Even better, he hopes to be able to keep all 90 of his employees in his new venture.

Interesting websites:

http://www.wacotrib.com/money/content/shared-gen/ap/Finance_General/EU_Iceland_McDonalds.html

Parenting and Sustainability

There is nothing like the birth on one’s first child to command one’s attention—as in my first child, (David Joshua), a couple of weeks ago. The demands of being a parent can be rather overwhelming; sustainability has somehow become slightly less important than 2 am diaper changes. Hopefully I can incorporate my values of sustainability into my parenting. This is both a short term and long term issue (as is parenting, for that matter).

The most obvious environmental issue for new parents is diapers—specifically cloth or disposables. However, since I firmly believe that there is more to parenting than diapers, I will for now not discuss cloth vs disposable diapers (I will in a future post). Babies have other needs beyond being diapered—like clothes, food, and myriad other “stuff”. If I did not know this before my wife got pregnant, I certainly discovered it when filling out the registry at the baby store.

This was not a happy experience for me. I wanted to be as sustainable as possible, but we needed so much stuff. I was now part of the demand for more baby “stuff”. I had one general success in that I did manage to find some sheets, mattress pad, nursing pads, etc. made from organic cotton vs regular cotton. I figured that by buying organic cotton when possible I was doing less damage to the environment. I highly recommend Confessions of an Eco-Sinner, by Fred Pearce. Pearce examines the sources of many items of Western consumerism, including cotton clothes (and other items), Suffice it to say that conventional cotton production has devastated many areas where the cotton is produced. Also, we have found the organic cotton to be softer—it must be the lack of hard chemicals in the production.

For other purchases, sustainability was not the operative factor. For example, we found a double sided mattress that had a harder infant side and softer toddler side. The mattress with the organic cotton could not compete. And being able to lift the mattress in the middle of the night to change a sheet was a key consideration. So this is one of those times when sustainability was nudged out as a basis for purchase of a particular product. This also applied to the stroller—the operative criteria were light weight and ease of collapsing. I do not know what specific materials are in it, but I know that it is really easy to work with.

Another critical question new parents face is whether to breastfeed or to use formula. Breastfeeding is clearly better for everyone involved—if it works. While both Mommy and Baby are set up for breastfeeding, success is by no means guaranteed. We are very lucky; for us breastfeeding is working, and we can avoid the chemicals and expense of formula. But feeding the baby is by far the paramount concern; if breastfeeding did not work, we would have gone to formula with no questions asked. (After breastfeeding, we will continue to buy as much organic and/or relatively locally sourced food as possible).

The above is only a very small part of the stuff needed to raise a baby, toddler, and child. From a sustainability perspective, parental demand for stuff increases as the baby becomes a toddler, then a child, then a teenager, and then a young adult. Parents with siblings or friends who have had children have an advantage when it comes to sustainability. This is because these siblings or friends give them the clothes, toys, etc that their own kids have outgrown. So they do not need to buy a new item, thereby demanding less stuff. Another alternative is consignment shops and buying used, but this may not always be feasible.

We were told that parenting will completely change our lives. On one level, it has; but on many others, it has not. We still have the same values this month as we had last month before David was born. I still want to incorporate sustainability into my life as much as possible. How much I can do so while being a parent at the same time is an open question.

On the Road Again

The automobile, with its gas engine, is perhaps the strongest symbol of an economy powered (and driven) by fossil fuels. It may surprise the reader to learn that at one time, the gasoline engine was only one of numerous competing technologies. In the early 20th Century, the gasoline engine won. In the early 21st Century, there is another competition for engine technology. The incumbent is the standard gas engine, while some of the challengers are gas-electric hybrid, electric only, diesel, diesel-electric hybrids, etc. From a sustainability perspective, none of the challengers have to dethrone the incumbent; they just need enough people to buy them to keep them in business. If these technologies are commercially successful at all, then the amount of petroleum needed for transportation will go down, even if only incrementally.

Model years 2010 and 2011 (and to a lesser extent, 2012) are shaping up to be critical years for automobile engine technology. The most well known challengers are gas-electric hybrids like the Toyota Prius, Honda Insight, Ford Escape, etc. In 2010, for the first time in recent memory, a primarily electric car will be on the market, courtesy of the GM Chevy Volt—40 mile range, around $40,000. Nissan is promising a 100- mile range vehicle (the Leaf), available in the US by the end of 2010. Renault’s all electric entry, announced at the recent Frankfurt Auto Show, will follow in 2011. (If you are a lucky New Yorker, you are road testing an all-electric BMW Mini Cooper slated for launch in 2012). All of these electric cars feature rechargeable batteries.

At the same time, other “greener car” technologies are in various stages of development. Companies like Toyota and Ford are expanding and improving their hybrid product line. Volkswagen is testing diesel-electric models. Diesel is also gaining more attention as a fuel-efficient alternative to the conventional gas engine. Subaru is one company (along with Volkswagen) working on this kind of technology. And, other companies are trying to make the conventional gas engine more efficient with better gas mileage.

All of this activity implies that the manufacturers feel that a market exists to buy some kind of electric or hybrid car. Does it? That is open question. Some elements of the auto industry are rather dubious. The head of Audi North America has been quoted as saying that no one will pay $40,000 for a Chevy Volt (electric) when there are numerous competitive gas engine options for $25,000. And there have many comments to the effect that buying a Toyota Prius does not make sense because you cannot save enough in gas money to make up for the hybrid price differential. So therefore, the argument goes, only a few people will buy these cars. This flies in the face of the success of the Prius and other hybrids, especially during last year’s spike in gas prices.

Even if the “green car” buyers are only a segment—so what? There are many segments of the auto market. There are SUV buyers, truck buyers, muscle car aficionados, family minivans, cruisers, etc. Those segments thrive. The evidence is anecdotal, but I do think that there are enough people to make a segment of buyers for some version of electric or hybrid cars. After all, almost all of the world’s carmakers are developing some sort of non-gas engine technology.

The skeptics are also forgetting that new technologies in many fields tend to come down in price as they get introduced into the market place. Also, if something becomes fashionable, cost becomes a whole lot less important if it is even remotely competitive. If enough people buy these cars, then “electrics” or “hybrids” will become a sustainable segment in the auto market. When it comes time for me to buy another car, hopefully I can join one of these segments.

http://www.businessweek.com/globalbiz/content/sep2009/gb20090917_962378.htm

http://www.nytimes.com/2009/09/16/business/energy-environment/16electric.html?sq=electric%20cars&st=cse&adxnnl=1&scp=2&adxnnlx=1253667664-lNOjX6nAZ5dETLpEXnIFpA

A Good Night’s Sleep

My wife and I went mattress shopping a couple of days ago. We ended up buying a Sealy Posturepedic—-mostly because it was comfortable for both of us. Additionally, I felt a lot better when I saw it had “Organic Cotton” imprinted all over the top. So I figured I was at least being somewhat sustainable by having organic cotton in my mattress. I really did not think about the other materials involved in any given mattress.

Post purchase, I was happy to see that Sealy, the largest mattress manufacturer, had lots of information about their materials and processes on their site. The steel in the innerspring, for example, comes from recycled steel. The steel was also designed to fit on fewer truckloads while shipping (better for the environment and cheaper). The excess scrap (unfortunately, polyurethane) foam is recycled into other products, like carpet. Sealy also says that its fire retardant material is environmentally friendly (details not provided). Also, the top cotton layer is organic cotton.

Another of the big 3, Simmons, has taken another tack on the sustainability front. They created a separate product line called “Natural Care”, and partnered with a “green lifestyle” guru to design and promote it. The mattress is part of this. Relevant mattress features include base foam derived from soy, another foam layer derived from rubber tree latex, and a biodegradable fabric for the top.

Essentia, a Canadian company, has developed a mattress that is made from 100% natural materials (like rubber latex, organic cotton, natural oils, etc.). Their mattresses also do not include petro-chemical based adhesives. They do not use innersprings; they use specially designed memory foam instead. However, their products are only available on-line.

I like concept of the Essentia mattresses, but I cannot imagine buying a mattress without laying on it first. So that brings me back to the differing approaches of Sealy and Simmons. From the perspective of integrating sustainability across the business, I prefer the Sealy approach. This is because they are integrating sustainable practices across the entire product line and enterprise. Examples include coordinating product components with logistics to maximize environmental performance and verifying the environmental practices of their lumber supplier. However, if I were a consumer doing a whole bedroom remodel in most sustainable way possible, I would go with Simmons because the Natural Care line was developed specifically for the eco-friendly consumer. However, the most “sustainable” mattress may or may not be the most comfortable one.

Shoe Leather and Shoe Laces

I recently bought a new pair of sneakers, after an agonizing search. My feet are very hard to fit, so I am generally completely focused on finding sneakers that do fit. I was so excited that I actually found sneakers that fit I bought 2 pairs. In the course of trying on multiple ill-fitting pairs, I had never put “sustainability” and “shoes” or “sneakers” in the same sentence. Until now. In recent weeks, 2 major shoe companies (Nike and Timberland) have both announced new policies regarding the sourcing of leather for their products (some of them, anyways).

This particular story really begins with a report from Greenpeace, called “Slaughtering the Amazon”. The report connects the leather bought by global shoe companies such as Nike, Timberland, Reebok, and Adidas to the deforestation of the Amazon rain forest. The ultimate source for too much of this raw material is cattle raised from farms on recently deforested (cleared) land. The report also mentioned furniture upholstering and leather accents used in some car interiors, in addition to the shoe industry.

Part of the report was a call to action, attempting to persuade the companies to stop buying leather from the Amazon. In recent weeks, both Nike and Timberland have announced policies to do just that. Nike’s policy states: “Nike will not use leather in its products produced from cattle raised in the Amazon Biome. Nike will require suppliers of Brazilian leather to certify, in writing, that they are supplying leather for Nike Inc. products from cattle raised outside of the Amazon Biome” (The Amazon Biome is what most people think of when they think of the Amazon—the actual rainforest). Nike also commits to Greenpeace’s Commit or Cancel program, which basically says non-compliant suppliers will be cut off from Nike’s purchasing. Nike also has clauses about the farms not being on the lands belonging to indigenous peoples and not allowing slave labor in its supply chain.

For its part, Timberland is requiring its Brazilian leather suppliers to “commit to support an immediate moratorium on any further cattle expansion into the Amazon by August 15, 2009. Additionally this commitment will include implementation of a traceability policy and monitoring to ensure adherence to these principles and a timeline to phase out of sourcing from farms which have deforested land since July 2006. We will similarly work with all other Brazilian companies that provide leather for Timberland products, including products made by third parties under license from Timberland.” This is in addition to procurement policies similar to Nike’s.

Beyond the environmental benefits, these policies are highly significant and educational. Both Timberland and Nike are very large companies, with global distribution networks and global impact. Both companies are very well known consumer brands. The mere existence of these policies will educate some percentage of their market about where their shoes and sneakers do and do not come from. Some percentage of these people might just decide to try on the Nike and/or Timberlands first because of this.

Maybe the Nikes are indeed worth checking out before I try on another pair of Pumas or Adidas….

Websites:

www.greenpeace.org

http://www.nikebiz.com/responsibility

http://earthkeeper.com/blog/corporate-social-responsibility/issues-in-earthkeeping-part-ii/

Its a Zip Line, not a Zip Code

High in the treetops above the New River Gorge in southern West Virginia is an unusual example of sustainability at work. The newly opened (May, 2009) Adventure West Virginia Treetops Canopy Tour provides its riders with a 3 hour tour of the forest’s canopy over its mile long series of zip lines and skybridges. The tour brings the rider into and over the forest. It also helps support saving the forest from potential long-term extinction. This is because $1 of each ticket goes to fund treatments to protect over 3,000 hemlock trees in the forest from the dangerous hemlock woolly adelgid.

The Canopy Tour is a partnership between Class VI Mountain River, a rafting company on the New River and Bonsai Design, who designs canopy tours. Class VI was hoping to expand their rafting and resort business with a complementary experience. Bonsai Design specializes in zip line courses and incorporates various sustainable practices into their designs and operations. Some general examples are listed on their www.bonsai-design.com website.

The attraction’s design incorporates numerous sustainable elements. The average New River tour zipliner would certainly notice the platforms they are standing on. They might not notice that the platforms are actually 2 halves connected by growth clamps to accommodate future growth of the tree. In 40 years, a hemlock tree might grow 8 inches in girth—so the platforms need to be expandable. Other types of trees might grow more. Only a very small minority of the same zipliners would see that the support cables are not digging into the tree trunks. Rather, they encircle wood blocks against the trees. This allows the nutrients to continue to flow up and down the tree’s trunk. The pressure of the cables keeps the blocks in place. The flowing nutrients keep the trees alive and the Canopy Tour in business.

Quoted in the August 2009 issue of Popular Mechanics, Bonsai Design’s founder John Walker said, “We have to think about the here and now and the years to come.” This perfectly illustrates the long-term perspective that sustainability implies. The sustainable design decisions made now help ensure the long-term viability of Class VI’s Mountain River’s Canopy Tour asset.

Popular Mechanics article

http://www.popularmechanics.com/outdoors/adventures/4325427.html