According to Gallup, more than 45% of Americans think the threat of global warming has been seriously overblown. In a previous article, I explored three reasons why so many of our fellow citizens continue to deny climate change and why this should concern the business community. To recap, they were: 1) as a nation, we’re not adept at examining scientific research, so it’s difficult to prove the point with hard evidence; 2) our day-to-day experience makes it hard to comprehend the global scope of the problem; and 3) environmental messages often sound authoritarian, which doesn’t work in the U.S. because we don’t like being bossed around.
Being that I’m in the business of energy management and sustainability, I’m often asked if any of this worries me. People want to know if I’m concerned our national character will stand in the way of saving the environment. In a word, No. I’m not the least bit worried.
The global warming debate has devolved into an emotional argument, not a logical one. Emotions are incredibly difficult to change because they don’t respond to facts or logic. Once an argument becomes emotional, a person will defend his or her position to the bitter end, no matter what the evidence may be. Perhaps it’s just part of our culture; we absolutely must prove we’re right and we won’t back down. So instead of explaining the threat of global warming for the umpteenth time, I’ve stopped discussing it all together. Now I just change the subject.
Of course, that doesn’t mean I’ve given up on saving the environment. It just means I’ve found a better way to get people to change their habits. (Isn’t this why we started the debate in the first place?) So instead of discussing global warming, I focus on something almost everyone is worried about: money.
When it comes to money, we’re all self-interested. Unless you happen to have a healthy trust fund and don’t mind wasting your inheritance, you probably pay close attention to your finances. The U.S. Personal Savings Rate may be a paltry 4.9%, but the average American still tries to save a buck or two whenever possible. Yes, money talks. Those of us concerned about the environment can use this simple fact to help stop global warming. All we need is the right message.
There are plenty of issues we could base our message on. Recycling, using less water, eliminating pollution – they’re all good for the environment. But if we really want change, if we really want to save the planet, we need to spend a lot more time discussing the cost of energy.
The United States uses more energy than any other country in the world. While we represent just over 4% of the global population, we’re responsible for 25% of global energy consumption. The U.S. is the world’s largest economy, so it may be easy to understand why we use more energy than other countries. Examine our per capita energy consumption, however, and it becomes obvious that something is wrong.
The average energy use per person is almost twice as high in our country as it is in Japan or Germany, the world’s third and fourth largest economies. Compared to China, the second largest economy, we use six times more energy per person. So while the United States may have the leading economy, we also have the highest energy bill. The opportunity to save money by reducing our consumption is huge.
I realize the idea of saving money by saving energy is nothing new. Everyone’s heard that tune. The question is, if it didn’t change consumer attitudes in the past, why should we expect it to work now? That’s an easy one. Most of the time, when people talk about preventing climate change, they focus on individual actions. This seems like a smart approach, after all there are over three-hundred million people in America. Getting them to be more energy efficient would pay big dividends.
Here’s the problem –for a typical consumer, the effort required to use less energy may not be justified by the savings. Suppose your monthly electric bill is around $100, excluding taxes and other fees. If you’re able to reduce consumption by 10%, you’ll save $10. That’s about the price of a burger and fries at a premium quick serve restaurant. For a lot of people, it’s just not worth the hassle.
To a large corporation, however, a 10% savings can quickly add up. One of the world’s leading apparel retailers spends over $100 million a year on energy for their stores in the U.S. and Canada. For them, a 10% savings is worth more than $10 million. Now, apply that same 10% target to the hundreds of thousands of commercial buildings in the U.S., a group that happens to be responsible for almost 20% of the nation’s annual energy consumption. Improving the energy efficiency of these buildings by even a small percentage will have a much bigger impact on the environment than arguing ad infinitum with the global warming skeptics.
Here’s the good news: even if the cost of energy right now isn’t high enough to motivate action, it soon will be. Thanks to new technologies like smart meters, the utility industry has begun rolling out new pricing programs that penalize customers for using too much energy at the wrong time of day. These so called dynamic pricing programs include variable electricity rates that rise and fall in response to changing energy demand. Building owners who don’t invest in energy savings initiatives should expect significantly lower net operating income.
In summary, the threat of global climate change is very real, but continuing to argue about it won’t get us anywhere. If we want to save the earth, we have to change the message. Everyone cares about money, so let’s focus on that. Every commercial organization wants to reduce operating costs and increase profits. Once they grasp the financial consequences of doing nothing, they’ll quickly change their ways and operate more energy efficiently. The end result will be reduced greenhouse gas emissions and a healthier plant.
Corporate avarice may not be pretty, but in the words of Gordon Gekko, when it comes to saving the environment, “Greed, for lack of a better word, is good.”
Michael Nark is CEO of Prenova, an Atlanta-based enterprise energy management company that helps large organizations control energy spend by reducing utility costs and improving energy efficiency.