Tuesday, October 11, 2011

Positive Steps Toward a Sustainable Future

I believe that investments can be a force for good in the world and that for-profit companies that provide solutions to environmental and social problems can as a consequence find profitable growth opportunities.  While it can be frustrating that progress isn't faster as, for example, the world still relies primarily on 19th century fuels, there are signs of progress.

Two recent examples involve a public company and a private one, thousands of miles apart.  First, London provides a concrete example of the move toward "smart cities."  The combination of using the price system for proper incentives (charging stiff fees during high-traffic hours) with administration by a private company (IBM) has resulted in marked improvement in the quality of life for Londoners.  Traffic congestion has fallen 30%, traffic speed increased 37%, and air pollution (particulate matter and nitrogen oxides) fell 12%.  Money raised from the fees has been used to improve public transportation.

This has been an area of great promise for public policy, in my opinion.  Use the price system to provide incentives (or disincentives to pollute or add to traffic congestion) that further public policy goals.  If only we'd see that here in the U.S.

Transportation is clearly one area with negative externalities (fossil fuel use and pollution).  Real estate construction and operation is another.  Yet at the margin, some good things are happening with "green building" construction.  In Pittsburgh, PNC corp. will build what it claims is the world's tallest "green" skyscraper (with LEED platinum designation).  In Seattle, the Bullitt Center will be certified as a "living building."  The building is designed to produce as much electricity as it uses, making it both energy- and carbon-neutral.  The building will supply and treat all of its own water, capturing and storing rainwater.  And it will exclude numerous common hazardous materials in the building's construction.

The knowledge gained from projects like these will lower costs for future similar projects.  And if governments would do more to make the price (market) system incorporate negative externalities in items such as coal and oil, progress could be even more rapid.

Steve Lehman

No comments:

Post a Comment