>THE NATION
>July 26, 1999
>Corporate Greenhouse
>by MARK HERTSGAARD
>
> This book is aimed at business executives, but
> political reporters may have to read it too,
> now that Republican front-runner George W.
> Bush has decided that global warming is real
> after all. After years of endorsing the oil
> industry's view that mankind's greenhouse-gas
> emissions have no effect on the world's
> climate, the Texas governor and former oil
> executive told a press conference on May 13,
> "I believe there is global warming."
>
>Bush's statement amounts to an about-face on Al Gore's signature
>issue, and it shows that his advisers recognize how much the
>environmental vote matters in presidential politics. When a
>majority of even Republican voters tell pollsters they oppose
>their party's attempts to gut environmental laws, the
>environment has clearly become a Mom-and-apple-pie issue. A
>presidential candidate simply cannot be credible unless he or
>she leaves behind the Flat Earth Society nonsense about global
>warming being a mere theory. At a time when almost all climate
>scientists of stature agree that global warming has already
>begun and even corporate giants like British Petroleum and Royal
>Dutch/Shell have stopped denying the truth, a candidate cannot
>continue asserting that "the science is still out" on global
>warming, as Bush did just a few weeks before his mid-May press
>conference, without sounding anti-environmental.
>
>But a gloom-and-doom environmentalism isn't the answer either.
>The fact is, the environment can be a winner for any candidate
>with the wit to link it to the issue that decides most
>presidential elections, the economy. Americans tell pollsters
>they want environmental protection even if it means less
>economic growth, but the happy truth is that they needn't choose
>between the two. As companies, workers and governments around
>the world are proving every day, restoring our planet's ailing
>ecosystems could become the biggest economic enterprise of the
>twenty-first century, a bountiful source of jobs, profits and
>competitiveness.
>
>Global warming is a perfect example of the opportunities
>available. Corporate propaganda has been remarkably successful
>over the past decade in convincing people, first, that global
>warming is merely a distant possibility rather than an
>observable fact and, second, that any attempt to stop it would
>sow economic disaster. The first claim is now widely recognized
>as bogus, and the second--which has done so much to delay
>progress on meeting the emissions targets the world's nations
>agreed to in Kyoto in 1997--may soon be as well, especially if
>books like this one reach a wide enough audience.
>
>In Cool Companies, Joseph Romm documents in convincing detail
>how such big-name firms as Toyota, Royal Dutch/ Shell, Du Pont,
>3M, Xerox and Compaq are fattening their bottom lines while
>dramatically reducing the amount of carbon dioxide their
>factories and office buildings are unleashing into the
>atmosphere. The corporations are not motivated by altruism; they
>simply recognize that environmentally friendly innovations can
>make money for their stockholders. Of course, capitalists with
>a conscience have long contended that they could do good while
>doing well. Cool Companies, in effect, shows how to apply that
>self-serving maxim to the urgent task of reducing greenhouse-gas
>emissions.
>
>The heroes of this book are the "cool" companies of its title,
>defined as any firm that "cuts its [greenhouse gas] emissions
>by 50 percent or more while reducing its energy bill and
>increasing productivity." The author served as an Assistant
>Secretary of Energy during the Clinton Administration, directing
>the DOE's Office of Energy Efficiency and Renewable Energy, and
>in that capacity he was able to study and work closely with many
>of the companies profiled in this book (which may explain why
>he passes so lightly over certain aspects of global warming
>policy, including the potential for an increase in US automobile
>fuel efficiency--the single most powerful step against global
>warming the federal government could take). In any case, Romm's
>hands-on experience with innovative firms enables him to provide
>the specific cost and investment data craved by the business
>executives who are his target audience, while also anticipating
>their skepticism toward his recommendations. Some caution about
>the accuracy of the data is warranted, since much of it was
>self-reported by the firms profiled. But as success story
>follows success story in Cool Companies, the accumulation of
>evidence should be enough to persuade all but the most
>determined polluter to change his ways, and for his own
>financial benefit.
>
>Cool Companies begins with the story of Aaron Feuerstein, the
>Massachusetts business executive who attracted national media
>attention when his Malden Mills textile factory burned down in
>1995. Feuerstein famously refused to seize on the blaze as an
>excuse to relocate to a low-wage zone overseas; even more
>remarkable, he also continued to pay all 3,000 of his workers
>while rebuilding the plant. Impressed by Feuerstein's decency,
>Romm asked his DOE colleagues to see how they might assist the
>company. Two years after the fire, Romm was pleased to attend
>the groundbreaking ceremony for the rebuilt Malden Mills
>factory, complete with a new, super-efficient natural-gas
>turbine that would provide the plant with both electricity and
>steam, a process known as co-generation. When Romm asked
>Feuerstein why he had focused on making environmental
>improvements at the very time he was trying to save his company
>from bankruptcy, the executive replied, "Over the long-term, it
>is more profitable to do the right thing for the environment
>than to pollute it."
>
>That philosophy is the central message of Cool Companies, and
>for most of the firms the book describes, the extra profits come
>from improving energy efficiency. The point of energy efficiency
>is not to do without, but to do more with less. Toyota Auto Body
>of California, for example, a facility in Long Beach that
>manufactures and paints the rear deck of Toyota pickup trucks,
>was consuming 2.5 million kilowatt-hours (kWh) of electricity
>in 1991. By 1996 the plant had doubled its production volume
>while cutting its electricity consumption by one-third, to 1.7
>million kWh, thanks to a comprehensive set of efficiency
>improvements, including better motors, lighting and air
>compressors. Toyota implemented these changes to improve product
>quality, not the environment, but Romm maintains that such
>"lean" initiatives tend to have green consequences: Reducing
>energy inefficiency reduces waste of all kinds, from defectively
>painted trucks to unnecessarily high electricity bills.
>Greenhouse-gas emissions and other forms of pollution, Romm
>suggests, are but physical manifestations of inefficient
>production processes and should be as abhorrent to corporate
>managers as they are to Greenpeace militants.
>
>Of course, the single biggest cost facing most corporations is
>the wages, salaries and other expenses associated with
>maintaining a competent, productive work force. But here too,
>writes Romm, it pays to do the right thing environmentally.
>Designing buildings so that sunshine rather than electric light
>provides most of the illumination obviously reduces energy use,
>but its real value lies in how much labor productivity
>increases. "In a typical building, energy costs average
>$1.50-$2.50 per square foot, while salaries exceed $200 per
>square foot," writes Romm. "That's why productivity savings
>dwarf energy savings."
>
>Consider the case of VeriFone, a Hewlett-Packard subsidiary that
>manufactures credit-card-verification machines. When VeriFone
>renovated a 76,000-square-foot facility in Costa Mesa,
>California, it chose a natural-light design that helped reduce
>energy consumption 60 percent. But the natural light made the
>plant's workers feel so much better--no more end-of-the-day
>headaches and drowsiness--that productivity also climbed 5
>percent and the absentee rate dropped an astonishing 45 percent.
>As a result, an investment that the company expected to pay for
>itself in seven years was recouped in less than twelve months.
>
>Energy efficiency may not sound like much of a rallying cry for
>the environmental revolution, but there is no denying that it
>packs an impressive financial punch. On the basis of the more
>than fifty real-world examples assembled in Cool Companies, Romm
>contends that most individual firms can cut their greenhouse-gas
>emissions in half while enjoying "a return on investment that
>can exceed 50 percent and in many cases 100 percent."
>
>Romm argues that inadequate information is the main reason that
>relatively few US companies have so far embraced a "cool"
>strategy; most corporate managers are simply unaware of how much
>money they could be saving. But if "any significant fraction of
>U.S. companies became cool," he suggests, the United States
>"would be able to meet the Kyoto [emissions] targets while
>lowering the nation's annual energy bill by tens of billions of
>dollars and accelerating economic growth through productivity
>gains."
>
>Sounds pretty good, doesn't it? But if the great value of Romm's
>book lies in its can-do message, its weakness lies in his
>reluctance to acknowledge the limits of the strategy he
>propounds. Promising to meet the Kyoto targets is all very well,
>but it is woefully inadequate to the real challenge facing us.
>The Kyoto treaty calls for industrialized nations to reduce
>their greenhouse-gas emissions by 2012 by approximately 6
>percent compared with 1990 levels; but the Intergovernmental
>Panel on Climate Change of the UN has concluded that emissions
>must decline by 50 to 70 percent if humanity is to avoid the
>most severe effects of climate change, including a one-meter
>rise in global sea levels by 2100, which would leave large parts
>of New York, Amsterdam, Bombay and Shanghai underwater.
>
>Like it or not, there is more to fighting global warming than
>increasing corporate efficiency; what a given corporation
>produces in the first place matters profoundly. Romm heaps page
>after page of praise on Toyota and Royal Dutch/Shell for
>dramatically reducing the amount of greenhouse gases released
>from their factories and office buildings, but he says barely
>a word about the incomparably larger amount of greenhouse gases
>released when the cars Toyota so efficiently produces are filled
>with Shell's gasoline and driven back and forth across the
>American landscape.
>
>Motor vehicles currently account for nearly 40 percent of
>America's greenhouse-gas emissions. As long as those vehicles
>continue to be powered by gasoline and driven increasing numbers
>of passenger miles every year, it matters little how
>energy-efficient the factories that manufacture them are. Yes,
>it is welcome news that Shell has promised to invest $500
>million in renewable energy over the next five years and that
>it has left the Global Climate Coalition, an industry front
>group that has long delayed progress by claiming that global
>warming is little more than environmental propaganda. It's also
>nice to know that Ford is working with DaimlerChrysler to
>produce a fuel-cell-powered car whose only exhaust will be
>climate-friendly water vapor. But the bulk of Shell's immensely
>profitable global operations remain dedicated to maximizing the
>production and eventual combustion of fossil fuels, just as Ford
>continues to make most of its profits by selling egregiously
>fuel-inefficient sport utility vehicles.
>
>Until we as a society break decisively from our addiction to
>fossil fuels and the motor vehicles that consume them in such
>vast quantities, our chances of avoiding severe climate change
>are slim. To be sure, a cool-companies strategy of increasing
>individual firms' energy and resource efficiency is a step
>forward. Such a strategy can dissolve current corporate
>prejudices by showing that environmental investments can indeed
>be profitable; it can also help buy time necessary to navigate
>the tricky transition to a truly environmentally sustainable
>society. But if companies like Toyota and Royal Dutch/Shell are
>left in charge of that transition, it's hard to imagine that
>we'll make the shift in time.
>
>
>Mark Hertsgaard, a longtime contributor to The Nation, is the
>author of four books, including, most recently, Earth Odyssey:
>Around the World in Search of Our Environmental Future
>(Broadway).
>
>
>Send your letter to the editor to letters@thenation.com.
>
>Copyright 1999 The Nation Company, L.P. All rights reserved.
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Burton Hamner
President, Hamner and Associates LLC
Adjunct Professor, Asian Institute of Management
4343 4th Avenue NW, Seattle Washington USA 91807
Tel/fax: 206-789-5499 (call before sending a fax)
Email: bhamner@mindspring.com
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