Friday Five: May 30, 2014

Those of us who advocate for the adoption of green living strategies recognize that the end goal is improved quality of life for all.  That cannot happen unless we simultaneously solve the problems of systemic inequality.
Before repairing the climate, we'll have to repair the impacts of racism
"If you wonder why more black people aren’t so quick to fight against the Keystone XL pipeline, it’s because we’re too busy fighting the school-to-prison pipeline — or in places like California, the pollution-to-school-to-prison pipeline. Not to mention all of the other racial ills making our lives hectic, before we can even think about something like climate. As Anthony Giancatarino of the Center for Social Inclusion recently wrote, 'to truly address climate change, we need to understand how our past and current policies have reinforced climate change and inequity and the implications for our work.'"

The most under-reported financial story is the "carbon bubble"...the overvaluation of fossil fuel resources and the correction that will follow when those resources prove less valuable than expected.  This is yet another reason to manage a transition away from an economy dependent on extraction and pollution.
California's Monterey Shale: Bonanza or bust? Nobody really knows
"Just to clarify: these numbers don’t reflect how much oil is underground in California. Most geologists agree that there’s still plenty down there. The EIA is attempting to estimate how much could be pumped out with current technology. As with other oil and gas reserves around the country, this number fluctuates quite a bit based on assumptions about the geology and what oil companies can accomplish."

At some point we will have to come to terms with the fact that some things that are cheaper are not better, and actually hurt us.  Freedom does not mean the ability to choose things that damage us because we save money, and it certainly does not mean that we limit a healthy life only to those who can afford it.
School cafeteria food fight becomes an all-out war
"First Lady Michelle Obama came out swinging against the waiver idea on Tuesday. In a rare display of public opposition to a legislative proposal, Mrs. Obama said that the plan, authored by congressional Republicans, 'is unacceptable to me not just as first lady but also as a mother.'"

...especially when the economics of "things that are good for us" have shifted so rapidly.
US Solar Power Rises 79% as home panels beat warehouses
"Total installations may reach 6.6 gigawatts this year, driven by residential rooftop systems and more than 12 gigawatts of utility projects under development, said Shayle Kann, vice president of research at Boston-based GTM Research, which publishes the quarterly market reports with SEIA. This was the first quarter when residential systems exceeded commercial and government solar."

Only too words can describe this:

So cool.
Forget roofs, are solar roads the next big thing?
"A less obvious benefit, as pointed out by Jan Kleissl, an environmental engineering professor at University of California-San Diego, is how carbon footprints can be reduced simply swapping out asphalt altogether. 'The problem with asphalt is that it’s a dark surface that absorbs energy in potentially harmful way,' he explains. 'Energy is turned into heat and thus increases the temperature of the air, which causes the urban heat island effect where people end up using more air conditioning.'"

Enjoy the journey

Flashes: May 28, 2014...National Lab Update

Americans using more energy according to Lawrence Livermore analysis

Berkeley Lab climate scientist: More extreme heat and drought in coming decades

Flexible, transparent thin film transistors raise hopes for flexible screens

NREL Assembles Industry Group to Explore Solar Lending Potential

Enjoy the journey!

How should you Divvy it up?

Recently, Divvy - Chicago's bike-share program - set records for usage and signed on Blue Cross Blue Shield of Illinois as a new corporate sponsor.  The program, which launched last year, seems to have hit all of its milestones for roll-out, so hopefully we will see even more stations and bikes crop up across the city this coming summer.  Two months ago, as the weather finally showed some relief from our brutal winter, I signed up for an annual membership in order to both test out the system and hopefully reduce the cost of my commute.  Here are some of the lessons I have learned in this short amount of time.

1.  At my current pace, by the time winter rolls around (and assuming I do not use the service over the winter), the service will have cost me about $0.35 per ride compared with $2.25 per ride for CTA or $4.25 per ride for Metra.

2.  In the central loop and near north area, you can't swing a dead cat without hitting a Divvy station.

Roosevelt to North/
Halsted to the Lakefront

North to Peterson/
Western to the Lakefront

The station density remains high as you go north of North Avenue up to Peterson and west to Western Avenue, but drops off as you go south of Roosevelt toward Hyde Park.

South of Cermak

West of Western/
North of Cermak

If you want to find one south of Cermak, or west of Western (except for the aforementioned Hyde Park) you are out of luck.

3.  The station works intuitively for a member with the key fob, and takes only a bit more doing for a one-time rider who have to pay by credit card then enter a code at the dock for the bike they want. (This is based upon my survey of people taking one-time rides, and my one-time use of the similar stations in the Toronto bike-share program.)  The bikes, however, have significant weight and require the user to lift them out of the dock.  I do not have enough sample size to determine if there is a size of person that this would restrict from safely using them, but it is not easy.

4.  Do NOT use Divvy if you have a time-sensitive appointment.  If you return a bike to a station that has no open docks, then you have to go to a nearby station, which depending on the location could be two blocks, a half-mile, or a mile.  If you do this, get on the phone with Divvy immediately so that you stop the clock on your ride to avoid overages.  Also, the map at each station tells you which stations are close, but not which stations have openings, which leads to....

5.  Effective use of the system for more than just casual recreation almost requires a smartphone with station app.  When I get off the Metra train at LaSalle Street Station, I have only two stations within reasonable walking distance, and one of them regularly has no bikes at it after a certain time in the morning.  As the train pulls in, I look to see which one has bikes, and then I can plan accordingly.  Without that, I would be scrambling to find bikes.  At the end of my commute, I need to do the same to see which of the two stations near my office have spaces available.  Supposedly, if you cannot find spaces at the stations nearest your office, you can leave the bike in a secure location of your building and Divvy will pick it up (the only secure location in my building is on the 5th floor, so I have not tested it), but it's a hassle to have to visit multiple stations before finding that out.  Without the app, you need to get on the phone with Divvy to find out that information.  That leads me to...

6.  The station information is often inaccurate.  This inaccuracy comes almost exclusively from repair issues: docked bikes that do not work but show up as available, and docks that show as open but cannot accept bikes due to a failure.  Even the phone support staff cannot always see the difference between a failed dock or bike and a functioning one.  I ran into the unfortunate circumstance where I showed up at a station with a failed dock, but was told there was space available by phone support.  When I travelled to the next closest station, I ended up in the same circumstance, and all that they could do was point me toward the next closest station to that one.  I ultimately ended up a half-mile from my destination, which was right next to the original station (and the primary reason I chose to use Divvy over another mode of transport).

7.  With regard to phone support, they have the ability to immediately stop the clock and help you avoid overages, but they can do little else.  When I got caught in the pickle above, and asked if they could do the workplace pickup for me at the client meeting I had, they said the best they could offer was to get a truck to me in "a couple of hours" and that I could not leave the bike even in a secure location.  The only help they could provide was to keep pushing me further and further from my destination until we found a station with space.

All in all, Divvy provides an adequate commuting option, and probably a more-than-adequate leisure cruise for the tourist.  The bikes will win no land-speed races, but I have had 100% success with finding a functioning bike, and about 85% success in finding my first choice of station (with the help of the app).  I would not recommend the bike for middle of the day rides to time sensitive events (like doctor's appointments or client meetings).  The bikes tend to flow with the north side commuter, and so they end up largely in the city center, leaving few spaces to park them.  You are better off on the CTA, walking, or even cabbing if time is of the essence.  If you have time to spare, or if you are following normal commuting patterns (especially those of the north side or west-suburban commuter), then you can reliably make it to your destination on time, even during peak travel periods.  I highly recommend the app to make that easier, but for that purpose, you can get by without it.

I look forward to Divvy expanding into more neighborhoods to make it a true citywide service.  I also expect that they will get better with managing the information within the system to avoid some of the empty and full station issues.  As a Chicagoan, I take a little pride in the fact that we have started off so well, but much work remains.

Friday Five: May 23, 2014

We not only have to worry about declining yields on some crops in a changing climate, but now we must consider the possibility that food will have lower nutritional value.
Climate change producing less nutritious food, report says
"Climate change initially will produce both winners and losers when it comes to food production, the report said, but research has indicated that growing regions everywhere will eventually suffer from global warming. The report calls on the U.S. government to integrate climate change adaptation into its global food security strategy."

This creates even greater pressures on local quality of life in areas that experience the combined impacts of drought and increased water use due to fracking.
California's thirst shapes debate over fracking
"The drought, combined with a recent set of powerful earthquakes, has provided the momentum for about a dozen local governments across California, the third-largest oil producing state, to vote to restrict or prohibit fracking in their jurisdictions, as concerns over environmental effects and water usage have grown."

Meanwhile, as we continue to debate the "ifs" of climate change impacts instead of moving onto the more important debate about what to do and where, those paying attention see the significant challenge to our food system and overall quality of life posed by the impact increased carbon in the atmosphere has on our oceans.
Oyster farmers and ocean acidification
"This 'ocean acidification' is one planetary response to humans’ burning of fossil fuels, which releases carbon dioxide that is absorbed by the oceans. According to the National Climate Assessment, oceans currently absorb about a quarter of human-caused carbon dioxide emissions to the atmosphere, leading to ocean acidification that will alter marine ecosystems in dramatic yet uncertain ways."

Even ideas such as "local food" have their pitfalls as they sometimes lead to inefficient practices or the promotion of resource intensive crops.
'Third Plate' reimagines farm-to-table eating to nourish the land
"In his new book, The Third Plate: Field Notes on the Future of Food, Barber proposes rotating the most desirable and valuable foods, like tomatoes, with more humble offerings like buckwheat or barley or mustard greens — which are often overlooked when it comes to dining. Farm-to-table should include different foods and different portions that support the land, Barber says."

If we can make local food reflect all human health benefits, then the question remains as to how to build a system to feed billions of people in this way.
14 pointers toward a better food system: Connecting the (local, sustainable) dots
"My purpose here has not been to make an argument about the value of local food. (That’s been done.) Instead, I started with the assumption that fostering regional food systems was worthwhile, and tried to take the next step by asking, how do we scale this up?"

Happy Friday!

End the Green Economy

For the better part of the last fifteen years of my career, I have spent much time among advocates of the "green economy": one where we consider the triple bottom line of economic, environmental, and social performance.  This has spawned a whole new language of economic development around the word green including "green jobs",  "green materials", "green practices", etc.  For the most part, the industry has applied these labels in an attempt to convey that certain products or services have more value to a consumer, and therefore, can justify higher costs.  In some cases, these higher costs come from small implementation that has not yet reached scale to create economic advantages, and in some cases, the new strategy or technology avoids producing harms that conventional approaches do which means higher costs.  On the other hand, sometimes, people just want to charge more, and hope that labeling something "green" will motivate people to spend more than they might.  Regardless of the motivation, there is one thing that now becomes clear to me.

We must end the green economy.

By advocating for a green economy, we automatically set up a conflict between the current economy and another one that challenges it.  This sets up a debate where those succeeding in the current economy control the conversation by constantly challenging the new economy (or subset of the economy) and proposing all types of calamitous consequences if we follow this new path.  People naturally resist change and cling to the comfortable, so this line of reasoning has great traction and creates roadblocks to achieving the goals of better quality of life.  Instead of presenting this new economy - rife with unanswered questions about the true implications of full implementation - with its "green" moniker and advocating for wholesale revolution, we should consider a better path.

Those who advocate for a "green economy" out of altruistic reasons seek better quality of life for all.  This means that in making one person's life better by providing access to reliable energy, we cannot reduce the quality of life for another by polluting their community.  For those that advocate on this level, the more desirable plan should focus more on challenging the failings of the current economy rather than presenting a wholesale collapse and rebuild.  The current economy is supposed to distribute resources adequately and fairly.  When it does not, we need to challenge that.  The current economy is supposed to assign all of the costs and consequences associated with a product or service to that product or service.  When it does not, we need to challenge that.  The current economy is supposed to provide clear information to all parties in a transaction so that each may make a rational decision.  When it does not, we need to challenge that.

One of the failings of the discussion of the green economy comes from the instant association that many have with "green" meaning increased regulation.  Although any time we discuss asking more of industry, we often devolve to regulation because of a combination of industry resistance and political posturing, the changes in the economy can come in many forms.  For every significant benefit realized by improving CAFE standards through regulation, we have equal benefit through Energy Star labeling that allows industry to determine the method of performance.  Whereas intense scrutiny of power plant and refinery emissions for toxins has protected waterway and airstreams effectively over the past generations, we have achieved equal successes through market-based forces like cap-and-trade (specifically for sulfur and nitrous-oxide emissions from power plants).  In all of these cases, the most important part of the discussion was not the IF but the HOW.  The current debate on implementing a "green economy" still centers on the IF...we need to move it to the HOW.

How do we do that?  It starts by demanding more of the current economy.  We should pepper our leaders - both industrial and political - with questions about performance.  Why do people in West Virginia have to suffer the negative effects of coal ash dumping in order for people in DC to get power?  Why can companies spend millions of dollars lobbying against technologies such as rooftop solar that compete in the marketplace, while avoiding making required changes in their power plants to reduce emissions?  Why do industries not have the requirement to maintain the atmosphere, waterways, and earth at the same level of natural state as it was before their operations?  Why should an employee accept endangering their life for reasons unrelated to the job they do?

The time has come to turn the debate from one about "why a green economy?" to "why the current economy?".  Over the past several decades, we have seen quality of life gains plateau or even recede. While other countries continue to grow across classes, we see the large portion of our population less well off now than they were twenty years ago.  Those of us who advocate for the results of the green economy know that it will not only improve our quality of life, but produce a more stable economy.  In order to get there, though, we need to drop the conversation that puts us on the defensive, and instead make the advocates of the current way of doing things defend their system.

Friday Five: May 16, 2014

Locally, we have heard much about a proposed "super-agency" that would handle public transit issues across the entire Chicago metro region. The article notes a prime reason why that would make sense: suburban and urban communities have differing value systems related to transit, often resulting in bad decisions.
Cities to suburbs: Where's the transit love? Suburbs to cities: Where's the bus?
"Like a lot of other cities in this country, Seattle’s public transportation story is a sad tale of post-recession budget shortfalls, outdated urban planning, and a not-so-efficient bus system with a PR problem. And like a lot of other cities, its problems run deeper than just figuring out how to keep the buses running."

We continue to pay for two generations worth of those bad decisions. The concentration of emissions represented by freeways creates pollution issues that extend beyond the vehicles traveling along the route. These areas typically house those of more limited means, increasing the social inequity associated with fossil fuel usage.
Air quality monitor near I-5 Anaheim finds higher pollution level
"Monitoring instruments have typically been placed away from major roads and pollution sources because they are intended to gauge regional air quality. Now, the EPA is ordering local regulators to measure and factor in the dirtier air being breathed by tens of millions of people across the country who live within a few hundred feet of a major road.
The data will be valuable to local planning officials, who must consider the environmental impacts of siting developments near traffic, and give more leverage to clean air advocates."

An increasingly disturbing trend is that those who can least afford to drive their own vehicle, must now do so because of the push to gentrify urban areas and displace local inhabitants instead of building with them. As the poor get forced to suburbs with less availability for public transit, this will only get worse.
The demographic paradox of who bikes and walks to work
"The report, based on some of the ACS questions that critics want the Census to drop, identifies some other expected patterns: The South has particularly miniscule numbers for both biking and walking to work (likely a product of both climate and sprawl). Men are more likely to bike to work than women. And those who do bike tend to leave for work later than other commuters, and they need less time to get there (19.3 minutes on average, compared with the typical 26-minute commute for most of the rest of us)."

Thankfully, in addition to requiring the monitoring of roadways, the EPA has received legal reinforcement of its plans to regulate emissions as a path to improving public health. There is hope that sanity may yet prevail.
Another big EPA court victory - this time on soot pollution
"The U.S. Court of Appeals for the D.C. Circuit ruled that the EPA acted properly in 2012 when it further restricted allowable soot emissions. It was the Obama administration’s third big environmental legal victory in a month. And experts say that bodes well for the administration’s efforts to clamp down on climate-changing emissions from power plants."

I find it heartening that although embroiled in a bitter re-election campaign, the governor of Illinois continues to move on greening and local food movements, even drawing attention to the issues through the governor's mansion.
Chickens winging it at Illinois governor's mansion
"The chickens, which peck at flowers, recycle plant waste and provide manure for the gardens, live in a donated coop that's inside a fenced-in enclosure. The poultry's part of an ongoing sustainability effort."

Happy Friday!

The only story worth telling is the net-zero story

In taking my annual look at my home energy and water bills to see where we can improve, I turn my attention to my natural gas bills.  Natural gas bills comprise around 75-85% of our total annual utility expense, so of all, it poses the greatest opportunity for improvement in terms of finances.  Understanding that, last year we took part in the utility program managed by Energy Impact Illinois that allowed homeowners to receive home assessments that identify opportunities for energy improvement, then incentivize the resident to pursue as many of the recommended improvements as possible.  The hope was that we could lower our $2,000 per year natural gas bill by as much as $300-500.

Without going into too much detail about the assessment and the work, we chose to insulate our attic, seal around a whole-house exhaust fan, and fix seals around bathroom and kitchen exhaust fans.  Immediately after completing the projects, we noticed the reduced leakage (accompanied by a new odor from the spray insulation).  The new cap on the whole-house exhaust reduced its effectiveness , but did not eliminate its usefulness.  The hope was that the trade-off for our energy bills the next winter would make up for our discomfort.  Given the winter we had this past year, that should have been easy.

The results:  from April 2012 through March 2013, we spent $1,783 in natural gas bills, but from April 2013 through March 2014 we spent $2,712.

Yes, you read right.  After the work, we increased our bill by 52%.

And that provides an example of why the energy efficiency conversation proves so difficult to have.  After performing efficiency work, I should see an immediate lowering of my bill, but from 2012-2014 the cost per unit of natural gas (a therm, or 100,000 Btu in Northern Illinois) went up by around 30%.  The increase in price means that unless a homeowner sees a reduction in usage larger than the cost increase, they will see an increase in the bill which has to be explained.  Once you get into the conversation that starts, "But you would have spent more if you did not do the work...", we lose the audience.

If you are paying attention, you have noticed that our bill went up 52%, but the cost went up only 30%.  Now we have to explain that away.  From March 2012 through April 2013, Chicago experienced 5675 heating degree days (a measure of heating need calculated daily that assumes we need no heat at 65 degrees...on a day with the average temperature of 30 degrees, we would experience 35 heating degree days...65 - 30 = 35).  In that same time period in 2013 to 2014, we experienced 6916, or an increase of about 22% from year to year.  That means that from one year to the next, I should have expected a need for heating that was about 22% more than the previous year.

Now the real explaining begins.  If I had done nothing, I should have expected that my natural gas used in 2013 through 2014 would have been 22% higher than the year previous.  My usage from 2012-13 was 2,133 therms, which would have meant I should expect around 2,600 therms in 2013-14.  I also should have expected that instead of spending $0.84 per therm for that 2,600 therms, I would spend $1.08 per therm...meaning my total expected cost would be around $2,808.

After all that explanation, I saved around $100 for the year.  Given the $3,500 we spent on the work (even after a $1,750 rebate), that means that after 35 years, I will have recouped the investment.  Since I financed that work over a 30 year mortgage refinance, that means I spent about $216 last year in principal and interest payments for that work.  I have to save at least $216 to break even on the work (and remember that is even after the incentive).

Although a failed attempt, the only failure really comes in not learning from mistakes.  What could have caused this shortfall?  First, the quality of the work could have played a role.  Three years earlier when we replaced single-pane with double-pane windows, we saw a reduction.  This should have delivered one as well, so maybe the contractor who did the work bears some responsibility.  Another explanation comes from the potential that my house has so many issues that fixing only some of them did not fully address the issue.  If we leaked air into one part of the house, fixing that leak may have forced more air through another leak that was less active prior to the work.  In either case, more study and planning is needed.

The ultimate lesson to learn is that this kind of incremental work has significant drawback, especially with so many moving parts.  If the project had focused on eliminating the heating bill instead of lowering it, then regardless of the price fluctuations or the increase in heating degree days, the results would have been realized and we would have a more powerful story to tell - without all the explaining.  We need to refocus our efforts, and think bigger if we are going to succeed.

Friday Five: May 9, 2014

The recent National Climate Assessment contains warnings not of impending issues, but rather concerns that some of the major causes of climate change are already upon us.
Climate change is already causing asthma. Cancer too.
"The National Climate Assessment, which hundreds of scientists helped put together, warns that the effects of global warming aren’t some far-off possibility. They are happening right now, here in the U.S. Those effects include all the familiar problems: drought, wildfires, extreme weather, and sea level rise. But they include something else: Threats to public health."

In addition to the direct health concerns, we will have to adjust the way and location in which we grow the crops that underpin our sustenance and our economy.
Our alarming food future explained in 7 charts
"Richard Cruse, an agronomist and the director of Iowa State University’s Iowa Water Center, has found Iowa’s soils are currently disappearing at a rate as much as 16 times faster than the natural regeneration. According to the National Assessment, days of heavy rain have increased steadily in Iowa over the past two decades, and will continue doing so."

We continue to learn that nuclear and natural gas are not the "bridging fuels" we once thought them to be, and that we would find a more cost-effective plan would focus only on efficiency and renewables.
The rising cost of decommissioning a nuclear power plant
"The Yankee Nuclear Power Station in Rowe, Massachusetts, took 15 years to decommission—or five times longer than was needed to build it. And decommissioning the plant—constructed early in the 1960s for $39 million—cost $608 million. The plant’s spent fuel rods are still stored in a facility on-site, because there is no permanent disposal repository to put them in. To monitor them and make sure the material does not fall into the hands of terrorists or spill into the nearby river costs $8 million per year. That cost will continue for an unknown number of years. David Lochbaum of the Union of Concerned Scientists estimates that even without the ongoing costs of monitoring and security, the average reactor now costs about $500 million to deactivate."

New technology can offer a potential way to mitigate some of the water issues we face due both to climate change and to inherent challenges due to consumption.
UCLA researchers unveil a better way to treat brackish water
"The system treats water at a cost of about $1.50 per 1,000 liters, said Cohen, who has installed desalination technology on U.S. military vessels. By way of comparison, bottled water costs about $1 to $3 per liter."

In the information economy, we no longer need to hold onto outdated and extractive business models, but can use information to link local businesses in a way that taps into the power of aggregated risk management while preserving the personal relationships that truly define a society.
The socio-economic power of renewable energy production cooperatives in Germany
"Energy cooperatives have turned into important supporters of renewable and decentralised energy structures, due to their strong growth since the year 2006, their participation in local renewable energy projects and their democratic awareness. The cooperative form of coordinating local renewable energy projects applies to a decentralised energy system that is managed by many smaller firms - a system concept that is preferred by the majority of German citizens. However, there is not enough knowledge to understand to what extent this organisational form is able to unify a broad group of actors in promoting a renewable energy system (societal power) and to gather capital for elaborating renewable energy supply structures (economic power)."

Happy Friday!

We the People: Our Constitution and our quality of life (Part 1: Establish Justice)

The Preamble to the Constitution of the United States does not hold any legal authority, so we cannot turn to it for redress.  However, it gives us great insight into the intention of those who founded this country, and the goals they hoped to achieve through the alliance of states that they wished to form one nation.  The Constitution and its Preamble predate the major impacts of the industrial revolution. In light of what we now know about those impacts, and looking back on both the last forty years worth of remedies to those ills and the last decade's attempts to reverse these remedies, I want to examine each of the major tenants of the Preamble to see what it might say to us about what obligations we have as a nation to each other through our utilization of natural resources.

"Establish Justice"

Most everyone in my generation can recite the Preamble almost word for word thanks to Schoolhouse Rock.  (They left out one phrase in order to fit the rhythm, so many of us miss that in recitation.)  Politically speaking, the first words: "We the people of the United States of America, in order to form a more perfect union" speak volumes about the writing of the Constitution; namely, that the document would join the people of the country together as one, and not just the states as previous attempts had done.  Although interesting, I will start with what that unified people purported to do with this new alliance.

The people of these new United States first sought to establish justice.  Although we know that in preserving slavery, this goal had only limited meaning, within that limited meaning, it meant that full citizens had a right to fair treatment before the law, and most importantly consistent treatment.  This implied that whether you lived in Massachusettes or Georgia, that you would reasonably have some consistency before the law.  It did not require equal or similar laws, that still remained the prerogative of the state.  It did, however, seek to place a check on the states to ensure that they provide a just foundation to society.  It also recognized that prior to independence, we lived in an unjust society - at least according to the founders.  The political-economic system that extracted wealth from the colonies without fair representation drove the otherwise loyal and content to join forces with those wishing religious freedom to create the groundswell that fed our fledgling nation.

In addition to this reigning-in of the heretofore inconsistent justice provided by the states under the Articles of Confederation and prior to that the colonies under English rule, the concept of establishing justice also suggested the idea that where activities (mostly commercial) crossed state lines, that a federal government would provide clear guidance that gave business a foundation on which to operate.  This manifests itself in the commerce clause of the Constitution that gave Congress the power to regulate interstate commercial activities.  The first "free trade" agreement of our country...in fact, in combination with the "general defense" (to be discussed later), the primary drivers of our union...this necessity to pool disparate strengths and resources for greater commercial benefit was a stroke of foresight because it laid the groundwork for the development of infrastructure (rail and eventually telegraphs and roads) that would define the economy for most of the second half of our country's existence.

These primary interpretations of "establishing justice" have great impact when analyzing the mechanisms we employ to maintain society in the industrial age.  As part of the "deal with the devil" we make to power our economy with dirty fuels, we marginalize those who cannot afford to move away from industrial production sites (power plants, mines and wells, and chemical facilities) providing them less of a quality of life than those who can afford to choose areas far from these hazards.  Our economy does not reflect the true cost of the damage caused by these operations, but instead externalizes them from the price that customers pay for the end product (whether it be plastics, energy, or processed materials).  We see these costs only marginally through taxes paid for government cleanup or healthcare programs that pay to treat the diseases brought on by the pollution. More importantly, we as consumers do not see these costs in the prices we pay so that we might make the choice both economically and morally.  If we truly want to realize this goal of establishing justice, we must fix our economy and ensure that we include all of the costs - human and economic - in the prices paid for goods.  A good or service that increases one person's quality of life does not have value if it degrades the life of another in the process of production.

Another area of import, and one just recently reaffirmed by our Supreme Court, covers the idea of regulation of the combined atmosphere and waterways we share.  Weather patterns and natural water flows mean that air and water in one state will likely flow to another.  Anything that industrial production does to pollute one state will result in damage to another.  If a "downstream" state chose to make environmental improvements, but could not reap the improved quality of life that would result because an "upstream" state continued to pollute, then that would violate the precept of justice. In the 1970s, we enacted the Clean Air and Clean Water Acts precisely for this purpose: so that we as a nation could recognize the importance of both to our continued existence and success.  We have cleaner air and cleaner water because of them, and this smart regulation has provided a clear and common foundation from which businesses can sprout and thrive.  The founders never considered a country where localized anarchy ruled, and where one community or state had no redress against another.

Establishing justice requires us to both seek out and eliminate environmental degradation that harms the life of another.  Whether that person lives near us, or simply downstream of an industrial operation on which we rely, we cannot ignore the suffering our actions cause regardless of how remote to our lives.  Our Constitution created a civilization based on "laws not men" so that we might have the freedom to better ourselves as a nation.  We have reached the point where that bettering has to apply to all, and not just to some.  We finally have the ability to deliver justice, and now we have the obligation.

Thanks to the Heritage Guide to the Constitution for some of the historical context.

Flashes: May 7, 2014

Stanford's divestment of coal seems like a groundbreaking environmental moment until you realize Goldman Sachs' long-term outlook for coal is bleak.

Mitch McConnell says carbon hypocrites should stop using climate change as a political tool.  By that logic, does that mean rich politicians will stop pretending they know about poverty?

Originally, we couldn't switch to renewables because they cost more.  Now they cost the same.
But now we can't switch because they are intermittent.  Except, this past winter proved conventionals are intermittent.
Now we have to make whole those who have invested in sunk, fossil fuel technologies before we can move forward?
When did the energy field move from capitalism to socialism?

I love the Jon Stewart commentary on government picking winners and losers:  (paraphrase)
"You say the government should not be in the business of picking winners and losers, they should be focusing on building roads, rails and bridges....except that's the government picking winners and losers!  That's the government picking cars, trucks and trains over other modes of transportation."

Enjoy the journey!

Where are the "creative financial instruments" to reduce resource consumption

The financial tools of our economy are supposed to find the most efficient way possible to deliver the priorities of our society.  In that sense, they can provide one of the most democratic tools to improving our quality of life.  All to often, however, the financial industry seeks only to creat wealth for the sake of increasing wealth and not to promote the furtherance of societal good.  As we saw in the financial collapse of 2008, the financial sector - free from the constraints of Glass-Stegall - found more and more complex ways to manipulate the economy in ways that increased risk instead of lessening it.  The time has come for us to put the creativity of the financial sector to use in promoting increased quality of life across all economic classes, while minimizing the need for commodity resources to attain that high quality of life.

For the past several years, Elevate Energy (formerly CNT Energy) has worked across disciplines to promote conversations that will lead to financial instruments readily available to all consumers that will allow them to reduce energy consumption cost effectively.  As summarized in a recent post, the challenges still remain, most notably in the areas of scale and delivery.  To address this we need creative risk-takers and willing communities to blaze the trail. Some opportunities include:

1.  Extending the utility energy efficiency portfolio requirements to include on-bill financing of any improvements that deliver a positive return on investment within five years.

2.  Utilizing property-assessed clean energy (PACE) financing whereby municipalities and other units of government can leverage future property taxes to make improvements to a property that deliver energy savings that provide a net positive ROI within ten years.

3.  Provide financial stability through loan guarantees to neighborhood building & loan-type entities that fund energy efficiency efforts.

4.  Utilize the existing network of home-improvement retail outlets and service professionals to aggregate a customer base, then fund the work through service contracts.

Any of these alone or in combination minimize risk and create opportunity.  As the Elevate Energy piece notes, demand has to lead supply, so options like the third and fourth allow for a gradual building of the marketplace to a point where the first and second can accelerate to scale.

This list only scratches the surface.  We need more people working on this effort, and finding opportunities to ease the lives of middle-class and lower-class renters and owners.  This will improve not only our national economy, but our quality of life.

An exercise in utility: real-time electricity

Over the past two years, our family has taken some steps to reduce the impact that utility bills have on our bottom line.  This partly came out of necessity, and partly to lay the groundwork for future finances.  In the next couple of weeks, I will review how these performed, and hopefully give you some idea as to whether they might make sense for you as a consumer.

About two years ago, we changed our electricity service from ComEd's flat-rate program to a program called Residential Real-Time Pricing.  We did this for two reason.  First, at the time, the City of Chicago had moved to aggregate all residential customers under a single, flat-rate managed through the City, and second, a local community member had just a year previous mentioned that she worked for the program and gave me some details on how it worked.  This combination of opportunity and familiarity made the decision simple for us.

From my point of view as a consumer, the straightforward program looks no different when paying my bill.  Like either the ComEd flat-rate program or the City's flat-rate program, I receive only the one bill from ComEd that I pay each month.  The difference comes from how ComEd computes the supply portion of the bill.

Taking a quick step backward, each bill you receive as a utility customer has charges for the electrical energy you use (supply) and for the maintenance of the cables and infrastructure that bring the energy to your home or business (delivery).  Except for a few municipalities, ComEd delivers all the electricity to the residents in Northeast Illinois, and that delivery charge only changes when ComEd gets approval from the Illinois Commerce Commission to change it; otherwise, the consumer has no way of changing it.  The supply portion of the bill has changed greatly in the last decade or so.  Prior to 2000, residents paid for the supply of energy the same as delivery - through a rate set by the utility and approved by the ICC.  When the state deregulated the electricity market, that changed, and the utilities no longer produced electricity, they merely provided the infrastructure.  For a long time, they entered into contracts on behalf of their customers, but still did not own the assets.  In recent years, energy suppliers have marketed directly to residents, or to cities through aggregation, to completely sever the utility from all supply issues except for billing.  It is this supply portion that consumers can affect.

Back to my bill, on a flat-rate bill, the total energy used for the month gets multiplied by a flat-rate (or sometimes two rates...one for "peak" times and one for "off-peak" times) to determine the supply portion of the bill.  In the Real-Time program, the usage for each half-hour gets multiplied by rate for that specific half-hour in order to determine how much we pay.  This means that for some half-hours, we pay much more than the flat rate, but that for many, we pay much less.  It also means that if we have information on when rates most likely will top out over the flat rate, we can decide whether or not to use certain energy-consuming equipment like dishwashers and washing machines.  Instead of paying 5 cents (the flat rate) or 14 cents (a high-demand peak rate), we can pay as little as 2 or 3 cents per kilowatt-hour for the electricity.

So how did we do with this volatility of pricing?  All in all, pretty well.  For calendar year 2013, we spent about $500 for the year on electricity....or about $0.015 per square foot per month.  If we had remained in the ComEd flat-rate program, we would have spent $580 for the year (or $0.017 per square foot per month), meaning we saved about 14% on our annual bill.  [Side note, since we started the program in May of 2012, we have saved about 35%, but that comes from higher prices from old ComEd contracts in 2012 that changed in 2013.]  We have been happy with that savings, but the average ComEd RTP customer has done even better.  Over the same time period, the average customer has saved about 28% on their electricity supply through the program or about $240 per year.

Our performance relative to the average does not affect our satisfaction with the program.  First, the lowest aggregation rate saves somewhere between 2 and 8% relative to the ComEd flat rate, so we have not missed any opportunity.  Second, the average usage by a resident in the program sits around 12,000 kWh per year; on average, we use 3,500 kWh per year, so although they save more, they also spend more.  Given that the average sized home in the City sits somewhere between 1,400 and 2,000 square feet, they pay approximately $0.03 per square foot for the year.  Because much of this comes from equipment we do not generally use - air conditioners and second/third televisions - we have fewer items to shift, and therefore realize less savings.

I will talk more about home efficiency (which leads to why our usage sits far lower than average), but even at our low usage, real-time pricing makes sense.  The program sends us text messages when prices will exceed our threshold so we can take action, and provides us with a web portal to view our usage and day-ahead predictions of price.  I have used it only as an occasional check on our lifestyle, so it has not added any real work to achieve the savings.  If one has a larger bill, they can realize significant savings, even without significant effort; if one wanted to put more time in, they could far exceed the average savings of 28%.  An additional $240 to $500 a year can be an additional .5% to 1% increase in available cash for a median family.  In a tight economy, that makes a difference.

Next up:  Energy efficiency and our natural gas bill

Friday Five: May 2, 2014

This week we learned a great lesson of economics: it is not a predictive field of study, only a reactive one.  As much as we like to think we can foretell the future, when it comes to basing our quality of life on the availability of limited commodities, we build our houses on sand instead of rock.
Factbox: Energy Future Holdings' road to bankruptcy
"Energy Future Holdings filed for Chapter 11 protection on Tuesday, seven years after it was taken private in the largest-ever leveraged buyout. Over the last five years, the company used a number of financial maneuvers to manage a significant debt load, but ultimately could not convince its many and disparate creditors to restructure its balance sheet outside of bankruptcy court."

Case in point...six years ago when several of us were talking about the looming horizon of grid-parity for solar, the vast majority did not believe. Now, it is a reality. Next up: buildings that need no outside energy source other than what's available on site. They will be so widely available that they will be a code requirement within 10 years.
When it comes to solar power, the market is finally making environmentalism easy
"Little Sun is a good example of how the market and environmentalism don’t have to compete: Both the company and its evangelists are motivated to propagate an affordable form of non-polluting energy. The economics are working in concert with solar’s advantages of sustainability and independence over traditional power sources. And, suddenly, that intersection of efficacy and impact is making solar power as a whole more desirable than it’s ever been before."

One of the greatest challenges to a clean energy economy has come from unchecked conservatism. Conservatism that demands proof before implementation provides great value to society; conservatism that in the face of science, economics, and law holds onto a harmful status quo has no place in our society.
WSJ overruled by Supreme Court on clean air laws
"The regulations of smog and soot pollution will yield up to $280 billion in health benefits nationwide by preventing hospital visits and avoiding lost work days, according to the EPA's cost-benefit analysis. The human benefits are just as stark, with The American Thoracic Society estimating the new transfer rule could prevent upwards of 40,000 premature deaths annually."

I believe this in large part because of the bad business decisions that such extreme conservatism begets. Utilities can play a strong and stabilizing role in the transition to a clean energy future. However, as long as their leaders cling to the entitlement that they deserve guaranteed return on bad investments, we will continue to threaten the quality of our existence.
What future role for today's utilities
"Maybe our current utilities will provide enabling infrastructure, or maybe they will become insignificantly small players – or disappear. After all, the grid as enabling infrastructure might get smaller, and communities can own the grid and provide other enabling services – storage comes to mind. In the end, what is at stake in the energy transition is not just a choice between various low-carbon sources of electricity. It is also a choice between 1) corporations promising consumers low energy prices (and you can go to hell if you don’t want the giant project near your home) and 2) local renewables that may look more expensive, but you pay those higher prices back to you and your neighbors – and you have input into what gets built in your community."

Sound business thinking not only recognizes and accepts, but fully embraces, the limitations of the natural systems that underpin our entire existence. Requiring business leaders to act responsibly when it comes to protecting our quality of life does not place unreasonable obstacles in the way of progress any more than requiring a credit check places an unreasonable restriction on borrowing money. We need to mandate a minimum amount of protection to continue our existence, and not allow irresponsible behavior to jeopardize our future.
The one thing every business dies without
"So take a day this week to think hard about how the planet underpins the business, and how your company and sector should deal with that reality. Consider three steps. First, ask some leading questions: What do climate change and extreme weather mean for your business, your customers, and your supply chain? How do growing resource constraints like water shortages, or rising commodity prices, affect your value chain and your margins?"

Happy Friday!

(Photo: raulbaenacasado/Shutterstock)