IHS Chemical Week


An Earth Day Reality Check

1:29 PM MDT | April 23, 2010 | By VINCENT VALK

A little full disclosure here: My gut reaction to Earth day is as follows – "I do not work for a public relations firm. Why should I care about Earth Day?"

Well, I'm all for helping out the environment. I'd guess I just have a tough time with fake holidays. But this whole Earth Day business did remind me of a segment I heard on NPR's Marketplace Wednesday night.

In sum, the segment features two farmers. The first farmer is very, very, upset because carbon emissions regulations (cap-and-trade, Clean Air Act, whatever) will cost him money. The second farmer is quite content with the whole limiting-carbon thing, as he's bought some voluntary emissions credits and seems to be doing just fine.

The first farmer kind of reminded me of some things industry says. While certainly many, if not most, chemical companies stand to benefit from the "green economy," everyone seems pretty much scared out of their minds that new rules will cost them money. We need our manufacturing capabilities to make the products of the future at home, the argument goes – how can we possibly increase their costs for any reason?

It's true, to a large extent, that killing industry to save the atmosphere would be tantamount to cutting off our nose to spite our face. Unless we all move to caves and treehouses, stifling industrial manufacturing won't do much good. So, by all means, give companies some carrots to ease the transition and encourage them to invest in new technologies.

But carrots, as you might have guessed, are useless without sticks. The fact is, if you shower grants and tax breaks on companies to invest in clean technology without giving them some reason to disinvest in dirty technology, they'll happily take the cash and fund some research and maybe change the business when it makes financial sense, but they won't stop polluting. Not because they're evil. Not because they don't take their environmental obligations seriously. Because its human nature. We humans are not very good at changing unless we are poked and prodded along, and purely positive incentives generally do not do the trick. Don't believe me? Ask a psychologist.

Look, its not just industry that complains about the cost of climate change. If I had a dollar for every time I heard cap-and-trade compared to a hidden tax – well, I don't know how many dollars I'd have exactly, but it would seriously fatten my bank account. Most individuals are no more enthused than most companies about the prospect of higher energy costs.

Here's the problem, though: someone, somewhere, has to pay. You say cap-and-trade is a tax on energy. I say yes, it is – what of it? Are we to stop burning coal without spending any money at all on new infrastructure and technology? Are we all to be given electric cars, for free, just because we're nice people? Transitioning to a low-carbon economy is going to cost some money.

If you think about anything this Earth Day, think about this: building this green future we're all supposedly so excited about will cost money. It will cost everyone money – you, me, your company, my company, the government, everyone, everything. And maybe, just maybe, that's as it should be.

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