September, 2008

Fruits of Thought

Sustainability Pull Back

Sustainability as a theory and political movement operates on a different level from sustainability as practiced by individual businesses. For businesses are, inherently, constrained in their choices by the necessity of profitable operation.

So mighty as the argument to reduce, say, carbon emissions might be, a business cannot just pay the vig and switch to alternative energy vehicles or install photovoltaic cells unless market forces and government regulation have conspired to make it economical to do so. If a business does otherwise, it will make its cost structure uncompetitive in what is always, in the produce industry, a very competitive marketplace.

By the same token, a company cannot long resist being green if markets and governments have set the incentives such that green companies will have a competitive edge.

Indeed much of the motivation by top corporate executives to move on sustainability has been driven by the conviction of these executives that energy will become more expensive and that some governmental scheme — either a carbon tax or a “cap-and-trade” mechanism for carbon — will soon be imposed.

It has been this conviction that justifies actions which otherwise might not be fully justified by current market conditions.

Yet just as sustainability had started to permeate the industry, one senses a pull-back. Part of it is consumer-driven, with the real estate crash and fear of a recession leading to a dive in consumer confidence. In such a situation, sustainability starts to be seen as a luxury good — and one we maybe cannot afford right now.

On the public policy front, politicians pay tribute to the idea of producing new high-tech “green” jobs. The only idea that seems to have gained traction, though, is the idea of spending less money overseas for oil and, although the idea may intersect with talk of windmills and solar power, it also is likely to involve drilling for oil and gas and use of coal and nuclear power. In any case, it is a thought driven by some mixture of patriotism and economics, and sustainability is only a coincidental factor.

In truth, political will on sustainability is weak. To start with, our system is not very strong at getting people to sacrifice now for long term benefits. Even substantial carbon output reduction is projected to have no benefit at all for decades. In addition, it is hard enough to get our own government to come to a consensus. With projects such as carbon reduction, it does little good for the United States — or even the Western nations — to act alone. So effective action deepens crucially on finding a program agreeable to countries at widely varying states of development and with different and often opposing interests. It is easy to imagine that any real action on this front may simply be deferred.

Instead, what sustainability has become in the public policy arena is a kind of front for other interests. So, for example, corn-based ethanol gets backed by corn interests and those looking to reduce dependence on foreign oil. Sustainability then becomes a flag of convenience that these interests can wave.

The industry is no different. There has always been a market for locally grown product. Sweet corn promotions and the like have been staples of summer merchandising in the Northeast and Midwest for generations, but the recent celebrations of “local” are unlikely to survive major decreases in transport costs.

For the most part, retailers are using the “local” banner to grab opportunities to save money. In fact, the way many do it, they are expecting their “strategic” suppliers to be ready with fill-in product if weather should make “local” product unavailable. Of course, this means that big national shippers have to grow extra product, which means a big chunk of the carbon footprint is already expended even if the product winds up being “disced” under.

It is easy to attack retailers, of course, but just as politicians know the voters, retailers know what consumers want and what consumers want right now is to feel virtuous about buying local while also getting the cheapest price and no interruption in supply. Retail policies, even when self-serving, tend to grow out of consumer demand.

Sustainability contains, as a kernel of meaning, a vision for a beautiful world. Isn’t it odd that the realization of such a vision should depend crucially on keeping gas prices high? Such is the case, however, and if fuel costs retreat, the local programs will retreat as well.

There is some low hanging fruit on every tree and, certainly, the sustainability movement has done us all real good by making us look at our procurement, packaging, logistics and resource use to find efficiencies and avoid waste.

Yet, just as sustainability began, one senses it has momentarily crested. Some of the reason is the short term issues of the economy and recently receding fuel prices, but, perhaps more significantly, sustainability has morphed from what Al Gore thought would be a great “generational mission” to a rather prudential business practice responding to high energy prices.

Instead of Gore’s “moral and spiritual challenge,” raising the prospect of sustainability leading us to live more elevated and meaningful lives, it turns out that sustainability means we better watch the tire pressure and check the light bulbs. Nothing wrong with that, but not as paradigm-busting and life-transforming as we were once were led to believe — or hope.  pb