The Cost of Going Green

When it comes to polling consumers about their environmental beliefs, I admit to being a skeptic. People just don't tell the truth. They want to, but they just can’t help themselves.

Ask a consumer if he/she supports prohibiting air pollution from an industrial facility and you will get roughly the same response as if you asked them if the United States is the greatest country on earth. Sierra Club, Greenpeace and hundreds of other environmental groups have done an excellent job of making it “un-American” to be anything other than an unqualified supporter of everything green. The problem is that a large majority of consumers don’t really seem to mean it. What they mean is that so long as it does not cost them any money, they will be supportive. A recent study done by Grail Research entitled “The Green Revolution” provides some illuminating poll results along these lines.

In September of 2009, Grail Research polled 600 consumers about their purchases, or possible purchases, of green products.  There are many significant points made in the Report, but let me focus on a few of the more interesting findings:

1.  85% of those polled stated that they have bought green products.  However, only 8% of consumers buy green for a majority of their purchases (these 8% are referred to as "Dark Green" consumers);

2.  93% said that a company being perceived as green was important to their purchasing decision, yet about 80% were unable to identify green companies;

3.  15% of those polled were non-green consumers and, for 70% of them, their top reason for not going green was that the products were too expensive. Of the remaining 85%, a sizable majority will consider a green product only if it is superior or at least on par with its conventional counterpart;

4.  Of the various reasons given by consumers for not buying green (too expensive, the recession, don't feel a need, not easily available, green is a fad, and the product reviews aren't good), price and the economic recession are the main factors preventing consumers from buying green products in new categories.

I know there are a lot of ways to interpret polling results, but to me, these answers suggest that lip service is being paid to being green, with the pocketbook voting otherwise.  Put another way, consumers apparently want to buy green, but they need to know the cost of doing so.

Is it a bad thing that people are green primarily when it doesn't cost them anything? Not necessarily.  Especially in this economy, it's consumer nature.  But do we have to ignore that nature?  These findings indicate  that advancing an environmental agenda is likely to be a lot more successful if there is an economic advantage (which is often the case) rather than lamenting that the end of the world is near or that your puppy is going to die.   It's just a thought.

 
 

 

Environmental Legislation Won't Wait For China

 Mediation of legal disputes (as opposed to time-consuming and expensive trials) has been a great benefit to the justice system. In mediation, the parties voluntarily meet with a neutral third party who listens to both sides and then splits the parties up. The mediator shuttles between the parties and tries to broker a deal to end the dispute. The success rate is remarkably high.

I’ve had the opportunity to participate in many mediations and I have found that sometime early in the process, after the parties have been split up, you’ll inevitably hear the following finger-pointing exchange between one party and the mediator:

Party 1 (with a slight pout): “They are really bad people. They’re doing bad things and they need to be the first one to make an offer.”

Mediator: “Ok, I’ll go talk to them.” 

The mediator goes to the other party and hears: 

Party 2 (with an air of indignation): “These people are the real villains. Their demands are outrageous. We can’t possibly make any offer. Tell them to make a reasonable proposal.”

Mediator: “Ok, let me talk to them.”

This goes back and forth until one party finally realizes that making the first move isn’t the end of the world, and an offer is made, and then countered, and on it goes until a resolution is reached. That first offer can take five minutes or five hours. It doesn’t matter too much to the mediator – he/she is being paid by the hour. And the mediator knows something the other two parties don’t; that is, sooner or later, someone will make the first offer.

When it comes to international climate change action, China (and India) and the United States are at the beginning of the mediation. Everyone is finger pointing:

U.S.: “China is beginning to be a huge contributor to CO2 emissions. They must commit to a huge reduction."

China: “The U.S. has historically generated much more CO2 than China and has done nothing over the last eight years. The U.S. needs to make the commitment to change, and then we’ll see what we’ll do.”

U.S.: “We’re not going to pass climate change legislation until China does."

China: “ We won’t move.”

Let me shorten this mediation by about four hours by making a suggestion – United States, pass your legislation. Be the first to make the offer. Keep the pressure on China (consider trade policy, for example), but take the lead.  You're just wasting a lot of effort if you insist that China take action at the same time. 

Further, though it certainly has significant environmental problems, it isn’t as though China is just sitting on its 2.6 billion hands. Pop quiz: As between the U.S. and China, which country:

The correct answer to each question is China. I’ve graded the quiz. The West Coast did well and the Midwest was great but you people on the East Coast, particularly the D.C. area, failed miserably.

My point is that if the U.S. goes first, it won’t be the end of the world. (I won’t pull an Al Gore and say that if we don’t go first, it will be the end of the world. I wouldn’t do that.) Whether its cap and trade, nuclear, or something more creative, legislation is going to happen.  I'm not saying that that is good or bad, just that the genie is out of that bottle.  Insisting that China must act benefits no one – unless you’re being paid by the hour.

RELATED POST:  Tariffs and the Environment: Are We Ready For a Trade War?

How Did It Get Started: Politics and Environmental Law

I was recently asked why it is that the federal government has had such a love affair with environmental regulation over the past 40 or 50 years.  I think I know the answer -- deception

When Cleveland's Cuyahoga River caught on fire in 1969, things started to happen.  Since that time, environmental awareness has gone from relative obscurity to being one of the top ten issues of the day. Certainly some of this change was caused by environmental interest groups like Sierra Club and Greenpeace, but if the environment had depended only on these types of groups, people would still be dumping used oil in the backyard. The real push for environmental reform came on the political front—the dozens of federal and state statutes and the thousands of pages of regulation that were created between 1970 and today.

But why weren’t the interest groups enough? Why did we end up with environmental regulation that rivals the bankruptcy and tax codes in complexity and sheer volume? Isn’t the environment above politics? Why doesn’t everyone simply demand and support a clean environment? It’s because people don't always tell the truth.

Over several decades you have seen the opinion polls consistently report that 70% to 80% of the people support a clean environment. Only love for mom and apple pie poll higher.  When you compare the poll results, however, with the sales of environmentally friendly products and the willingness to pay more in taxes or fees to accomplish that goal, you quickly determine that someone has been . . . uh . . . fibbing. The poll question that was actually being answered was: “If someone other than you is required to pay for it, would you give your wholehearted support to a clean environment?”

Still, if you look around today, there are dozens of environmental statutes in place.   That was a result of a few political leaders in the 1970s being convinced that a need for a cleaner environment existed but that the private sector could not accomplish it because of the huge costs involved.  In short, it was an issue that they viewed to be perfectly suited to federal, and at a later stage state, regulation.

My point is that a clean environment is extremely expensive and most people want others to pay for it. If this wasn’t the case, we wouldn’t need to be told how and when and in what form we need to do something as obvious as keeping the planet clean. It is the huge costs of compliance coupled with the unwillingness of individuals to pay those costs that has made, and will continue to make, environmental regulation and politics great bedfellows.