Environmentally Friendly Products and Cost Competitiveness

Sunday, January 8, 2012 Posted by
Comments closed

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.

Social Sharing and Renting Organizations

Monday, November 14, 2011 Posted by
Comments closed

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.

Incentive Based Advertising

Sunday, November 6, 2011 Posted by
Comments closed

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.

Method and its Ocean Plastic Bottles

Saturday, November 5, 2011 Posted by

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.

Natural Light and Productivity Improvements

Sunday, February 20, 2011 Posted by
Comments closed

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.

Smart Streetlight Systems

Sunday, February 20, 2011 Posted by
Comments closed

Cities install streetlights to improve their residents’ safety. Because the streetlights are usually on from dusk until dawn, they consume a lot of power. According to the energy company Echelon, streetlight power bills may be as much as 40 percent of a city’s total energy costs. Installing smart systems to control the streetlights can save a cash strapped city a lot of money.

The idea behind a smart streetlight system is that an operator can control the intensity of the streetlights. This can be done manually by a city employee, or an automated system that uses sensors can be installed, similar to traffic light sensors. The smart streetlight system can dim lights in areas where there is not much traffic. In many locations, if a city installs streetlights, they stay lit at the same intensity until morning. A road may see large amounts of traffic from employees leaving work in the early evening, but it may be completely deserted at 3 am. Dimming the lights is better than shutting them off completely, because turning on certain types of lights consumes more power than normal operation, and there may be a traveler passing down the road late at night.

Installing a smart streetlight system also makes city residents happier. Because each streetlight can be individually tracked and controlled, it is possible to create a customized configuration for every streetlight. Luther College explains that a homeowner can uniquely identify the streetlight in front of his own house, and tell the city manager when the streetlight should be brightly lit and when it should be dimmer.

Several types of bulbs are found in streetlights. One of the most common bulb types is low pressure sodium, which produces an orange color. Low pressure sodium streetlights are popular because they use less energy than other types of bulbs, such as incandescent or fluorescent bulbs. Metal halide bulbs are very bright but they may take several minutes to charge up if they are turned off, according to Jim Terry. Light emitting diode streetlights are another alternative. LED streetlights are very energy efficient. These lights keep their intensity throughout their lifetime, according to Kansas University. Metal halide bulbs gradually dim as they get older. Older sodium bulbs don’t dim, but they use more electricity as they age, so the city has to choose between higher energy bills or replacement costs.

According to the University of Alaska, Fairbanks, each LED streetlight costs about $2,000 for the streetlight itself, and another $500 to install the streetlight. Because LED streetlights normally last around 10,000 hours, the cost of the streetlights is higher than the energy bill savings at 2011 energy and LED prices.

Sustainable Air Travel

Saturday, February 19, 2011 Posted by
Comments closed

Airplanes produce greenhouse gas emissions and other pollutants when they burn fuel. Some pollutants such as nitrogen dioxides and sulfur dioxides are released over a wide area from high altitudes, harming people on the ground and possibly contributing to 8,000 deaths a year, according to the Massachusetts Institute of Technology. To solve these problems, several airlines are working to offset the carbon emissions that they produce, and reduce the environmental pollution from other compounds by researching cleaner airplane fuel.

Airplanes do not produce a majority of carbon emissions, but the amount of emissions they do produce is rising as more passengers can afford air travel. According to Boeing, in 2010 airplanes produced 2 percent of total carbon emissions from all sources, and this number will rise to 3 percent in 2030 unless airlines make fuel efficiency improvements.

A group of airlines has created an organization known as SAFUG, or the Sustainable Airline Fuel Users Group. The goal of this organization is to use renewable resources to produce fuel instead of petroleum based fuel. Because some types of fuels use food crops such as corn, contributing to higher food prices and food shortages, this organization also pledges not to use food crops to produce airline fuel or use excessive water to produce the biofuels.

Airplane engines are more efficient than they were in the past. According to SAFUG, a modern airliner uses 70 percent less fuel than the airliners that were in use 40 years ago. Some airliners are even more efficient, and there are some smaller commercial airliners that only use as much fuel as a car, such as the Boeing 787.

Logistics improvements can also reduce fuel costs and reduce pollution. Updating air traffic control systems allows airplanes to arrive at an airport without waiting in the air for several minutes for a runway to open up for landing.

Some airlines purchase their own carbon offsets, but they may also make offsets available as an option when a customer purchases tickets. According to Virgin Australia, about 10 percent of passengers who purchased tickets online also purchased carbon offsets, although only 1 percent of passengers were willing to purchase carbon offsets after buying tickets. Carbon offsets balance the emissions that the airplane produces by removing carbon emitted by other sources.

To eliminate carbon emissions without offsets, some car manufacturers are producing electric vehicles. Most electric car engines available for purchase are weaker than gasoline powered engines, and this also holds for airplanes. Some smaller airplane manufacturers have successfully produced electric airplanes. According to the University of Tennessee, smaller airplanes can run on electric power. An electric airplane can use a combination of fuel cells and solar panels, so that it can recharge some of its energy while flying. Like electric cars, electric airplanes usually have a shorter range because petroleum based fuel stores a large amount of energy in comparison with other power sources. Texas A&M University gives an example of an electric powered airplane prototype that has much larger wings than a standard airliner, but is also a lot lighter.

Low-VOC Commercial Design Goes Mainstream

Wednesday, February 16, 2011 Posted by
Comments closed

If you’re thinking about how to create a healthier workplace environment, consider going low-VOC.

Volatile organic compounds, or VOCs, are chemicals widely used as ingredients in products such as paint, building materials and furnishings, office equipment and cleaning supplies.  Elevated levels of VOCs have been linked to eye and respiratory irritation, headaches, fatigue and other symptoms associated with sick building syndrome.

When our company, ISC International, began to plan an office redesign, we made the reduction of VOCs a priority. At the time, some low- and no-VOC materials were just coming onto the market.  But today, with a growing emphasis on indoor air quality and environmentally-friendly business practices, the low-VOC market is going mainstream.  Manufacturers are responding to consumer demand, making low-VOC materials more accessible than ever.

Low-VOC paint: EPA standards for low-VOC paints took effect in 1999 and today, more than a decade later, durable low-VOC and zero-VOC paints and finishes are widely available to both professional designers and do-it-yourselfers. When talking with a designer or shopping for paint, ask for it. In our redesign, we used Sherwin-Williams and Benjamin Moore low- and no-VOC products.

Flooring: Environmentally-friendly flooring materials and adhesives help to minimize indoor air pollution. Today, formaldehyde-free bamboo, cork and hardwood can all be laid without the use of solvent-based adhesives.  In our office redesign, we used porcelain tile and natural fiber, wool-based  Karastan carpet which emits little to no VOCs  yet is still durable and strong.  To see a full listing of eco-friendly options, the Carpet and Rug Institute’s Green Label and Green Label Plus certification program rates low-VOC carpets.

Furnishings: Many furniture manufacturers today are minimizing the VOCs used in paints, adhesives, finishes and pressed wood products.  As part of our redesign, we purchased Knoll office chairs that are GREENGUARD certified.  GREENGUARD is one of several independent organizations that now certifies office furnishings that meet environmental criteria. We also incorporated faux leather couches and chairs into our design; they contain no tanning compounds yet look and feel as luxurious as the real thing.

By incorporating all of these elements into our company’s office redesign, we achieved two key objectives.  First, when the project was complete, our employees were able to move into their new surroundings without experiencing any of the irritation, headaches or nausea that might have accompanied a traditional remodel.  And secondly, we were able to build a healthy workplace without sacrificing aesthetics. High quality, low- and no-VOC products are becoming increasingly available, making it easier than ever for designers and building owners to reduce indoor air pollution and satisfy “green” corporate responsibility objectives in style.


David R. Meister is president of ISC International Ltd, a privately-held company that provides global messaging services such as OCR fax, text message broadcasting and telex services to businesses around the world including five of the top 10 businesses in the Fortune 500.

Vampire Appliances

Saturday, January 22, 2011 Posted by

Many appliances, including microwaves, televisions, computers, and gaming consoles, use power when they are turned off. The Department of Energy claims that vampire appliance costs contribute about 4 percent of the average home’s electricity bill. Phantom load is another term for this type of power use. Standby lights, which show that the system is not turned on, drain power, and battery chargers can use energy even after the battery is fully charged. According to the Energy Savers Blog, most devices that can be turned on with a remote control also drain power because of the remote control system.

To prevent a vampire appliance from using power, it needs to be completely disconnected from all power lines. With a charger, even if the charger itself is not connected to the laptop, phone, or other device that it recharges, the charger will still drain power. Power strips, which are commonly used with computers and electronics because they protect several devices from a power surge, can disconnect all connected devices at once. The power strip itself can still drain power if it has activator lights, a battery pack, or other features. Remember that disconnecting the devices with the power strip removes their remote activation features, such as scheduled operation to record a television show, according to Energy Star.

Lawrence Berkeley Labs measured the power consumption of many types of appliances when they are turned off, but still in standby mode. Audio equipment, including receivers and mini systems, used the most power. A laptop computer uses much more power than a desktop computer or other types of computer equipment, because of its battery charger. TVs use more standby power than other appliances, and rear projection TVs use the most standby power of any device that the lab studied.

Because some types of appliances need to use standby power, another solution is to reduce the amount of power that the appliances use. A typical goal is 1 watt or less standby power for each appliance, according to the National Institutes of Health. Newer appliances are often designed to use less standby power, although a customer may need to ask around to find the amount of standby power usage. It’s also possible to use a meter to measure an individual appliance’s power usage in the home, including standby power usage.

Zipcar and Partial Renting

Friday, January 21, 2011 Posted by
Comments closed

Zipcar is unique because it allows a customer to rent a car for a portion of a day, instead of requiring a full day’s access like other rental car firms. This is probably Zipcar’s best feature, because there are many other rental car firms. Zipcar rents hybrid cars, but so do many other rental car firms.

Another advantage of Zipcar is its insurance coverage. Unlike other firms, Zipcar itself directly pays for insurance, instead of offering it as a rider like most insurance companies do. This feature is very efficient when the driver is renting a car for part of the day, because insurance companies traditionally offer insurance coverage per day, not per hour. For a full day’s use it might not be the best deal though, because the driver might be able to get cheaper coverage somewhere else.

Renting a car for a portion of a day is a major benefit that can be expanded to other businesses.
For example, a video rental store usually offers a customer the option of renting a DVD for several days, although the DVD is not several days long. The customer would gain the greatest benefit if he could rent the DVD for a few hours and return it, which would allow the rental store to charge a lower price because it could rent the DVD to another customer.

Because of the reduced cost of partial usage, the customer can also afford additional luxury features. The customer can get extra options such as XM radio access and access to GPS navigation systems, because the cost of these features is shared among all users. Again, this feature is applicable to other industries. A customer can rent a more expensive bicycle with extra gears and other upgrades if she only plans to use it for a few hours.

Partial renting is also good for the environment. If someone rents an item for a week, he may use the item heavily for the entire week, so that he can get his money’s worth for the item. For a vehicle, this means a lot of mileage and a lot of emissions. If the driver only rents a car for a few hours, this incentive isn’t present.