Costing a Green Future

After hearing about the damage caused by plastic waste on the beaches and in the oceans, the news that environmental organizations encouraged winemakers to store their wine in plastic bottles was a big surprise. Many cities assess extra fees on plastic bags to discourage shoppers from using plastic, and conduct anti-plastic informational campaigns. Nevertheless, winemakers in the United Kingdom received support from government supported environmental organizations for their plastic bottle initiative, reported Wine Anorak.

Although glass does not create floating islands of trash, it does have one major environmental disadvantage in comparison with plastic. Winemakers frequently ship their wines to markets in distant nations, and glass is heavy. Because plastic bottles weigh less than glass bottles, the trucks that carry the plastic wine bottles release fewer carbon emissions during transport. Wine Anorak states that the British government has calculated that switching to plastic wine bottles reduces annual carbon dioxide emissions by 90,000 tons.

Consumers who know about the issues that plastic waste creates may need some additional convincing before they purchase plastic wine bottles. Lesley Gevirtz, for the Globe and Mail, gives a more detailed argument, explaining that glass wine bottles weigh almost ten times more than plastic wine bottles, and PET can be recycled.
Of course, responsible parties need to make sure that consumers drop off PET in recycling bins and local facilities are available for PET recycling.

Glass manufacturers could reduce transportation costs by selling thinner bottles to winemakers. According to Modern Wine Magazine, British winemakers did make this request, but it irritated the glass manufacturers, as they did not want to produce thinner glass bottles. Transportation costs for the thinner glass bottles would still be higher than the costs of transporting plastic bottles, as reducing glass thickness by 90 percent would make wine bottles much more fragile.

The Daily Mail brings up a major issue with plastic wine bottles, mentioning a study that claims that white wine degrades in six months when stored in plastic bottles, although red wine suffered fewer effects. This is not a major problem for a consumer who plans to drink her wine soon after she buys it, but a consumer who plans to store the wine in her cellar for a longer period should be aware of this issue.

Of course, the switch to plastic bottles also affects costs. Winemakers pay less money to ship their lighter plastic bottles to far off foreign markets. Many beverage makers prefer plastic containers because of their durability, as glass bottles shatter easily. Wine makers do face a tradeoff here, as plastic bottles do make their wines look cheaper. For a budget wine this isn’t as important, but customers may not be willing to buy a high end wine in a plastic bottle.

Calculating the payback period of a wind turbine requires accurate information about the average winds in an area, the lifespan of the turbine, and any additional setup and permit costs. Some wind turbines produce enough power to repay their setup costs within a few years, while other turbines may take decades to earn a profit for their owners. In some cases, a wind turbine has an infinite payback period, as it never returns its setup costs.

An article from the Medill School gives some examples of turbines in the last category. One homeowner set up a $5000 turbine, but because of the small amount of wind power it collects, he does not expect it to earn him $5000 before its expected life span ends.

Another article gives an example of a wind turbine that requires a more dedicated investment. Instead of a small, $5000 turbine that sits on the roof, the homeowner can build a $50,000 turbine that sits on its own tower. NYSERDA estimates that the $50,000 turbine requires another $12,500 in setup costs, and potentially adds $50-$150 per year in maintenance expenses. The maintenance expenses do have some impact on the payback period when it is relatively long. If the wind turbine provides $2500 worth of power each year, $62500/$2450 is 25.5 years, while $62500/2350 is 26.6 years. The extra $100 per year in maintenance adds about a year to the payback period.

Wind collection is much more important. If the homeowner selects a location that offers stronger wind, raising the value of the power the wind turbine provides to $5000 per year, the payback period drops significantly. Maintenance costs become drastically less important. $62500/$3950 is 15.8 years, while $62500/$3850 is 16.2 years, and the higher maintenance expense estimate now only adds about a third of a year to the payback period. According to NYSERDA, a wind speed increase of only 2 mph per hour, from 12 mph to 14 mph, can generate enough additional power to cut the wind turbine payback period by 10 years.

Unfortunately, many locations around the United States do not offer 14 mph winds. Wind Powering America provides a map of the United States that gives detailed information on average wind speeds in every state.
Some states, such as Wyoming and Colorado, include many locations with plentiful wind power, but the West and the Southeast tend to provide lower wind speeds. Many islands also report high average wind speeds. This map reports winds at a height of 80 meters, a typical height for large turbines on wind farms, although a homeowner typically installs a smaller and cheaper 30 meter tall turbine instead. Tower height makes a drastic difference in the amount of wind power a turbine can collect. Compare the Missouri average wind speed maps at 30 and 100 meters.

Appliance subsidies, discounts, and tax credits provide cash benefits to consumers who purchase products which consume fewer resources and cause less environmental damage. The government agencies and nonprofits that fund these programs believe that consumers consider cost more important than environmental benefits, so reducing the cost of green products should lead to more sales. A study by Daniel Schwartz and George Loewenstein shows that sometimes, these discounts create the opposite effect, and discourage the purchase of green products.

The study measures two main strategies, adding a green label that proclaims the product’s environmental benefits and offering a price discount. The label increases sales, while the discount actually reduces sales if it appears without the label. The study does not explain why this behavior occurs. One answer may be that environmental advocates commonly promote the green lifestyle as a virtuous effort that hinges on a follower’s self sacrifice, like enrolling in a monastic order.

Altruistic appeal can convince a customer to spend more money for a product that provides few benefits, which may be necessary to market a product such as a bleach free cleaner that performs worse and costs more than a cleaner that contains bleach. The removal of the altruistic theme eliminates the main selling point for the product. This marketing approach also affects the perception of a brand by a customer who does not care about the environment. This customer believes that the product is not a good deal without considering the environmental factor.

These results also suggest that environmentally friendly products, such as compact fluorescent light bulbs, are effectively luxury goods. When customers demand more of a product at a higher price, the product is called a Veblen good. Veblen goods include fine artwork, luxury cars, yachts, and other status symbols that show off a buyer’s wealth, so they are more useful to the buyer when they cost more. The buyer may also believe that the product costs more because it includes better components, so it is a higher quality product.

Discounts may still have some effect on environmentally friendly products. If the discount reduces the environmentally friendly light bulb’s price enough so that a customer gains comparable performance at a lower price than a standard light bulb, a customer who primarily cares about cost still has an incentive to buy it.

The subsidy provider should consider the price of the non-green product when setting the size of the discount. If the green product is $10 and the subsidy reduces its price to $8, but a non-green product costs $5, the subsidy may be a bad idea. If the subsidy reduces the green product’s price to $4, it now has a cost advantage over every other product on the market. The subsidy will greatly improve sales, although the organization that provides the subsidy will incur high costs for that product. Eliminating subsidies for products in the first category may free up more funds to provide subsidies for products in the second category. For a product that does not receive a subsidy, this effect may help the manufacturer determine the proper price for the product.

Have you ever decided to grow herbs? Fresh tomatoes? Setting up a garden can seem simple, just buy a plant, put it in a pot, and add water and fertilizer occasionally, and that’s all you need, right? Some plants are harder to grow than others are, and you might find out that some additional research is necessary. Ensuring that you have the appropriate levels of water and fertilizer at all times can also be challenging. Now there is a flowerpot for bad gardeners, or gardeners who just lack the time to care for their plants.

Click and Grow has developed an automated gardening pot that works with several types of plants. This is not a simple automated dispenser, such as the fish food release tools that feed your fish while you are on vacation. A basic fish food dispenser will keep dispensing fish food even if the fish are not hungry, polluting the water in the tank. The automated gardening pot includes sensors that can detect water and chemicals. The gardening pot sensor system both prevents waste and protects the plant from the effects of excess fertilizer.

The original design concept, reported by Wired in 2010, also allowed the pot to be connected by a USB cable to a personal computer, so it could receive additional software updates and perform additional monitoring tasks. The first model of the plant pot that was offered to consumers in 2011 did not include this USB connection, but Click and Grow was considering including it in future models, reported FastCo. Obviously, the USB connection is not necessary and including it would make it more complex to manage a product that is designed to make a task easier, and might also increase the cost of manufacturing the plant pots, so leaving it out seems like a good decision.

This is not the cheapest way to grow plants. The pot itself is reusable, but you also need a disposable seed cartridge for each plant. The pot is 59 euro and comes with a cartridge for Busy Lizzy decorative flowers, a type of Impatiens. Other seed cartridges start at 6.67 euro, so getting set up could cost around $100 if you want to try out several types of plants. TechCrunch reports that you will also have to replace the batteries that power the pot after 8 months. It does use 4 basic AA batteries, so you do not need to reorder special batteries from the company, and the company does state that the pot can operate on rechargeable batteries.

Appliance sharing is an old concept, as plenty of people have gone next door to borrow the neighbor’s lawnmower, or borrowed a saw or another tool for the day. The limitation on traditional appliance sharing was that it usually involved your direct neighbors, or your close friends. Searching out people who would be willing to loan out appliances and tools was a challenge, and lenders needed to have some confidence that they would get their machinery back.

The traditional sharing model for a larger community is the library. Libraries are willing to lend out items to their members, some of which they may lose, because they can charge fines, and often receive government support or private donations. A tool library uses a similar subscription model, and uses the money it collects to purchase the tools. In 2011, appliance sharing organizations were helping consumers share their own home goods. With collaborative consumption, everyone can operate their own library.

Treehugger reported the introduction of a kitchen appliance library in Portland. Sharing kitchen appliances can be very useful because a cook may only need an appliance to prepare one type of special meal, so the appliance would sit around unused most of the time. A popcorn cooker is nice for home movie night, but most people don’t eat popcorn every day.

If your city does not want to fund a library, you can still share appliances without a central depot. Web applications can help you find other people who are willing to share their kitchen tools. Brain Pickings lists two of these organizations, Neighborgoods and Snapgoods. Neighborgoods displays a Google map on its website that shows where the people who are offering to share their consumer goods live, and about 10 tags showed up in Ventura and another 20 or so showed up in Santa Barbara.. Snapgoods adds social network integration, expanding the reach of the service.

Neighborgoods and Snapgoods allow their users to rent appliances, in addition to lending them out for free. Both libraries and rental services accomplish some of the same goals, as they reduce costs and reduce waste. Neighborgoods even keeps a running total of the money that you and your neighbors are saving. One issue with a sharing service is that a lender on the service may ask for a deposit, which could be as high as the cost of buying a replacement appliance.

Appliance rentals will probably not be as lucrative as some of the other peer to peer rental services, such as apartment rental and car rental sites. Shareable reports that renting out your car through a sharing service can potentially earn you as much as $9,000 per year, and room rental can get you $15,000 in a high cost of living area such as New York. Nevertheless, you can still earn a small amount of money by renting out your appliances, without taking on the risks of renting out a car or an apartment.

Replacing a city’s streetlights can save it a huge amount of money on its energy bills. LEDs can reduce streetlight power consumption by around 40 percent, according to the City of Palo Alto. USA Today reports that San Jose and Pittsburgh spend around $4 million a year on their streetlights, which means that another large city could potentially save $1.6 million in annual electricity costs. The Department of Energy reported even higher efficiency gains, as much as 70 percent power savings, in a study it performed.

The main issue for a city, especially in bad economic conditions, is paying to replace the old sodium streetlights with the new LED lights. LED lights cost 4 times as much as sodium streetlights, although they can last 10 times longer. The 2009 ARRA bill made $3.2 billion dollars available to local governments for environmental projects, including streetlight replacement. Most cities did not receive large enough cash grants to replace all of their streetlights from the stimulus program, although replacing several of the lights could demonstrate the effectiveness of streetlight replacement to a city government. LED Magazine reports that San Jose allocated $2 million of its stimulus grant to streetlight replacement, but this would fund the replacement of less than 3 percent of its lights.

A city has more control over the colors that a LED emits than it does over traditional gas lamps, which can also provide public safety benefits. The LED lights do not necessarily disrupt the atmosphere of an older town that has beautifully crafted iron lamps and poles either. Cooper, an LED street light manufacturer, worked with the city of Boise to make sure that the LED streetlights were installed properly on its antique lamp poles.

With traditional media, such as a television show, an advertiser has very few ways of convincing a consumer to help him advertise his product. Humor is typically one of the few effective methods, as a consumer who watches a dancing frog may call his friends over to see the commercial. It is much easier for a Web marketer to offer an incentive to a consumer, because he can give a consumer a cut of the revenue.

The main problem with this advertising method is that the Web marketer usually makes a very small amount of money when the consumer shares his ad, so he can only offer a small reward to the consumer. If the marketer offers the consumer ten cents to watch a minute long commercial and share it with his friends, this deal is not very attractive. This is effectively a pay rate of $6 an hour, and the consumer is giving up part of his free time to help the marketer, so a better incentive is necessary.

One type of incentive is to offer a reward that the consumer does not perceive as cash. Many online games that are free to play use this feature. If a consumer can watch a commercial to get a new dragon slaying sword, an in game sword can appear more attractive than an offline dime. This can be especially effective if other players have used their credit cards to purchase in game advantages, so a consumer who has less disposable income, such as a college student, cannot simply buy the sword with his own bank account.

Marketers have recognized the importance of this concept to green business. Many environmentally beneficial actions are relatively cheap, but they are difficult for a consumer to conveniently perform. For example, planting a tree is easy if you live in a rural area, but it is difficult if you live in a city, even if buying an individual seed costs almost nothing.

Clean Technica reports that this problem has been solved by the web site Click it For Good. Basically, if you help promote a green business, the green business will perform an action such as installing a wind turbine or planting a tree. Another benefit of this method is that a consumer can easily make a fractional contribution. A wind turbine costs more than a dime, of course, but if 100,000 people click on a link, the business now has $10,000 to pay for its turbine.

Plastic waste in the ocean is a significant problem. Many types of plastic which are used in common consumer products, such as soft drink containers, utensils, and water bottles, cannot be easily broken down by microorganisms. Because these products are frequently thrown away improperly by consumers, they often get into storm drains and enter the ocean, where they form huge clumps of plastic that pose a menace to marine life.

Consumer products companies know that many of their potential customers are aware of this issue, and refuse to buy drinks that are sold in plastic containers because of the risk they pose to the marine environment. These companies have attempted to solve the problem by designing plastic containers that can be consumed by microorganisms after a customer is done with them, but building biodegradability features into plastic products has remained a difficult engineering challenge.

One Bay Area company, Method, has decided to clean up the marine pollution that its competitors have caused, and use its cleanup efforts to market its own products. High density polyethylene (HDPE), the plastic that is used in many plastic containers, is recyclable, so Method decided to use the HDPE that was floating in the ocean to make new bottles. This was also a difficult engineering task, as Method had to collect plastic waste that was located far offshore, which had been exposed to the sun and salt water for a long period of time. Treehugger reported that Method partnered with Envision Plastics, which had experience recycling HDPE, to design its plastic recovery process.

Tests of the recovery process were successful, and Method managed to make new plastic bottles that contained ocean plastic. These plastic bottles were made from completely recycled material, with one quarter of the material collected from Hawaii beaches. The experiment demonstrated that using ocean plastic to make new bottles was technically possible. Whether using ocean plastic was financially lucrative, or at least cost neutral, was Method’s other concern, as Method is a private company. Envision explained the details of the collection process. Method collected plastic trash from Hawaii beaches to perform the tests. Method would gain some goodwill from environmentally conscious consumers, but it still had to deal with logistics and recycling costs.

Green Biz explained that Method had two main financial concerns: finding a cost effective way to collect the plastic and deliver it to San Francisco, and using the plastic to design bottles that had an attractive appearance. As much of the plastic waste washes up on the shores of islands such as Hawaii, Method could partner with organizations that already performed beach cleanup to collect the waste, and pay for it to be delivered to the Bay Area. Pure Branding does bring up a marketing ethics issue here. Technically, the bottles had been floating in the ocean, but the proposed collection process involved picking up plastic bottles off a Hawaii beach, which did not actually reduce the amount of plastic in the ocean, although it did reduce the amount of plastic on the beach, which was also a major environmental problem. As for design concerns, the ocean plastic bottles were dark gray, as Envision demonstrated on its blog, compared to the brilliant colors of the company’s other plastic bottles, but this gray color could still offer marketing advantages, since a consumer could easily see that the bottles were recycled products.

The consumer energy efficiency tax credit program was established under the Energy Policy Act in 2005, and credits became available to taxpayers starting in 2006. HR 4853 extended this tax credit program into 2011, but it also established stricter qualification standards for the tax credit. According to the Energy Star page, you can now claim a maximum of $500 in efficiency credits for appliances, which includes credits you received in previous years, going back to 2006. In 2010, you could claim up to $1500.

The bigger ticket items, which are classified as building property by the IRS, make you eligible for the largest credits, and an energy efficient water heater can get you a $300 credit by itself. An energy efficient water heater is also a good buy because water heating costs are responsible for a significant fraction of your energy bill. Energy Star claims that this fraction is usually around 15 percent, and you may be able to cut your costs in half with a new water heater. If your gas bill averages $100 a month, this means that the new water heater would save you an additional $7.50 each month, in addition to the $300 tax credit.

You receive a percentage of the cost of a new appliance back as a tax credit. In 2010, this percentage was 30 percent for many items. In 2011, you can only claim a 10 percent credit for insulation, roofs, and doors, states Energy Star. A 30 percent credit is still available until 2016 for several types of clean home power generators, such as wind turbines and geothermal pumps, and these generators are not subject to the maximum credit limit, according to Recovery.gov. These energy efficiency tax credits are only available for items that you buy at their full retail price. The IRS states that if you receive any financing assistance from a government agency for an energy efficient product, you are not allowed to claim a credit for that product.

One early productivity study measured the effect of lighting on the productivity of factory workers. Because this factory’s name was the Hawthorne Works, the productivity improvements are known as the Hawthorne Effect. More recent studies have shown that natural light is most effective for improving employees’ productivity, whether the employees work in a factory or in an office.

Natural light produces different colors than artificial light. Although employees can still see under artificial light, their bodies may respond differently. According to the University of California, Davis, studies suggest that a human needs natural light to properly calibrate his body’s circadian cycle. If this cycle is off balance, workers may become fatigued or stressed because their sleep schedule does not match their work schedule.

Some studies suggest that natural light is more important during winter. The sun is much weaker in the far north during the winter, and it is up in the sky for less time, so a worker will not be exposed to much sun outside of standard work hours. This can lead to seasonal depression. Placing workers in sunlight during winter did get them to focus more on their work, according to a Rochester Polytechnic Institute study.

Natural light does not just improve the performance of employees. Providing natural light helps students pay attention in school, so the students perform better on achievement tests. Using natural light in a retail store improves customers’ mood, so the store sells more products.

Because employees don’t feel as good under artificial light, they may unconsciously take more breaks so that they can stand outside underneath the sun. When employees are exposed to the sun during work, they take fewer breaks.

The design of a new building can incorporate daylight, but many companies can’t afford to build a new building. As an alternative, some companies have installed daylight guidance systems. A daylight guidance system uses mirrors, tubes, or fiber optics to direct light from outside the building to offices inside the building which are far from the building’s windows. According to the University of Rochester, a daylight harvesting system usually costs about $600 to install, and improves productivity by 5.5 percent on average.