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Green Supply Chain Expert Insight

By Dan Gilmore	Aug. 10, 2009

Green Supply Chains and Economic Growth are Joined at the Hip

Too Many Environmentalists Have it All Wrong

You can be on any point on the global warming belief continuum and still (I hope) be aware of this fact: at almost every level of Green-ness, there are trade-offs.

I actually engaged in a mild debate with one SCDigest reader awhile back who just didn’t want to hear that, but it is simply true – while there do seem to be many “free lunches” in the Green Supply Chain (e.g., such as getting more product on a truck, to pick an easy one) often going Green at a macro or micro level means giving up something else.

To just take the most dramatic example, clearly we could dramatically reduce greenhouse gases if all of us stopped driving tomorrow. The obvious fact that we aren’t going to do that says we do not agree that the potential threat of global warming is worth that level of personal sacrifice.

Maybe two years ago, I heard a UN climatologist on a radio show who was mostly (but not completely) convinced there was man-made global warming. What he did question, however, was whether the costs to modestly abate the eventual results were worth it versus other things that could be done with the money. I don’t remember the specifics, but it was something along the lines of starvation and much poverty could be eliminated around the world and then some if the costs of reducing CO2 were channeled instead to that effort.

And that leads to an interesting point made last week by the Wall Street Journal’s Bret Stephens: the richer and stronger a country’s economy is, the cleaner its environment inevitably is.

“Try naming a U.S. city whose air quality is even remotely as bad as Beijing’s, or an American river as polluted as the Han,” writes Stephens. “You can’t. America, the richer and more industrialized country, is also by far the cleaner one.”

Stephens point is that the Green advocates that see economic progress as the villain have it totally backward. And that those who somehow think they can retard in the the enormous economic ambitions of India and China in the name of Green are simply deluding themselves.
Economic growth has led to a much clearer environment in the US. That will be true across the globe. Environmentalists need to recognize this truth.

The stronger the economy and growth, the more business and consumers can afford the “luxury” of Green.

Feedback

August 25, 2009

Interesting article and I would generally agree with you.

Usually there are trade offs and this is often the cost of investment versus the savings going green provides. 'Going green' does of course provide savings because the investment is in energy saving equipment which saves money and reduces carbon emissions.

But there is more to green than carbon emissions and global warming. Cleaning up groundwater and soil pollution as a result of industrial and agricultural activity is a cost that industry seems to be able to avoid taking itself. We have seen how the car manufacturers going into chapter 11 and reorganizing has allowed the new 'viable' organizations to dump many of the abandoned polluted sites into the remaining bankrupt rump and as a result the taxpayer gets landed with the clean up cost.

At the moment, with lax regulation and especially with 'grandfathering' of historically high polluters, the trade off for the corporation is high and pollution continues. If the companies that caused this type of pollution had to bear the full costs of cleaning it up and knew they could never escape these costs then there would be even more investment in environmental protection in the USA.

Even so I agree with the quote: 'Try naming a U.S. city whose air quality is even remotely as bad as Beijing's, or an American river as polluted as the Han,' as Stephens says. 'You can't. America, the richer and more industrialized country, is also by far the cleaner one.'

When I look at what is happening at many industrial sites in developing nations, I am appalled and fear for the future generations that are going to have to live there literally absorbing the consequences of short term thinking.

As for the USA being richer and cleaner -- the same applies to Europe. Especially Scandinavia, which seems to be even cleaner and provide a higher standard of living than the USA.

As far back as 20 years ago I learned about a Swedish Zero Emission paper mill using trees from managed forests. Even the waste heat was used to provide hot water and heating for all the homes in the local city. They do not seem to have had any problem competing in a global market despite high tax rates and higher regulation. Something American business should think about when they complain that going green would make them uncompetitive and throw people out of work.

Despite a greener record in the USA compared with China and India we should also do what we can to stop abuses such as clear cutting of national forests with no replanting and 'mountain top removal' as a method of coal mining. We need to stop thinking cheap lumber for houses and think about long the term value of national resources. As for mountain top removal, if the coal producers had to pay for the clean up of the valleys they fill with waste and the power producers had to deal with the groundwater and mercury pollution from their emissions then the price of coal powered electricity would rise and we might not need a carbon tax or cap and trade to reduce GHG emissions after all!

Nick Turner