The economics of climate change, sustainablity, veganism, health and then some

"There is, however, a moral basis for the vegetarian diet for which the indeterminate value of an animal’s life takes on irrelevance. And that moral basis is a concern for the environment, a value as absolute as the value we all place on human life, since humanity will not long survive on a poisoned planet. To be an environmentalist who happens to eat meat is like being a philanthropist who doesn’t happen to give to charity."  (Mad Cowboy: Plain Truth from the Cattle Rancher Who Won't Eat Meat" by Howard F. Lyman, Glen Merzer")

Rational capital allocation is not our forte as a society. Indulging human foibles is more like it. The dialog about climate change is a case in point. If 51% of GHG-emissions is due to animal husbandry and the self-destructive habit of eating meat, and moreover the our nastiest health problems (heart disease, osteoporosis, cancer, CJD, antibiotic resistant bacteria et al.) are partially or wholly attributable to the same self-destructive habit, then why is it not on the agenda for serious discussion?

For me, there is a personal side to the story, I was raised vegetarian, as in lacto-vegetarian, and though I realized a long time ago that milk was for baby cows and not for human consumption, I loved cheese. From my late teens to my early twenties I became more of an omnivore, but after age forty, I simply noticed a tendency to vegetarianism, ever so slowly, but without any particularly strong commitment. I simply drifted towards a more vegetarian lifestyle. In the last ten years health issues made me gradually more and more interested, and I got briefly interested in the Esselstyn diet that was made famous when former President Bill Clinton switched from Mickey D's to veganism. The first time I read the Esselstyn book, I was half-hearted about it. An old friend and I were both experimenting with this diet for a while, and kept some ideas from it, without necessarily going through with it, but the drift continued, aided by the growing realization that even if I did not have any symptoms of hearth disease, why wait till I did? In the last two years all dairy was permanently phased out. For Christmas a giant apple-pie came along, and while I enjoyed it, I also informed Santa Claus that this would be my last apple-pie until after my funeral. Who needs all that white flour and sugar? Most importantly the last year especially, I found myself enjoying food more as I discovered more and more vegan recipes that I really liked.

Meanwhile I am into planning the energy economics for some real-estate developments, and looking into vertical agriculture options in an urban setting, while at the same time I am listening to feedback from my community, Community Board #9 in the Bronx, where a young mother of two stated0 in a recent planning session that she did not want another fast food restaurant in our district, and a young man in the same session was polling people on the idea of establishing a food co-op in our area. But a local supermarket just lost their lease, and that neighborhood is screaming for a half-way decent supermarket to fill the vacuum.

Against that personal backdrop, I have been reading Howard Lyman's Mad Cowboy book, and watching some documentaries on YouTube, including:

• Cowspiracy, a brilliant documentary of our collective economical and environmental and nutritional insanity from 2014, which included an appearance by Howard Lyman, the Mad Cowboy.
• Then came Earthlings, another brilliant piece on the gruesome realities of  the animal husbandry system.
• Next was Gary Yourovsky, who verbalizes it all brilliantly, here, including the most viewed speech in Israeli history here.
• And finally, I had to revisit the whole Howard Lyman story, which I was only vaguely aware of when Oprah and he got sued in 1996, but now it was time to refresh that experience, and this documentary about the Mad Cowboy just his the spot.
• Since I first wrote this post, it got even better, see the story of the Rowdy Girl Sanctuary, yet another rancher to vegan story.

And at the final end it is the economist in me who basically realizes that economics will prevail in the end, and we are well on our way to veganism. It will take a few generations, but choices are multiplying now, with more and more vegan food choices, and now even fast food restaurants, it is clear that change is on the agenda. The group of people who turn vegan and get off their meds is growing - the perfect answer to our out of control healthcare system, so not only can the planet not afford animal husbandry, we cannot afford the health consequences of eating all that meat and dairy. I had a home visit from a nurse practitioner from my health insurance provider, and the guy fell of his chair, for just the week before the doctor had taken me off all meds, or rather confirmed that I was doing great without them - not that I was taking that many but still... On top of that, I know I feel more stamina at the gym.

One of the big things I am realizing about net-zero development is that moving combustion out of residential spaces is one of the biggest things we can do for indoor air quality, and this in turn adds to real estate values. Insights like that are pretty potent if you live in the asthma capital of the world, the Bronx. So there is a straightforward connection between economics, environment and health. 

The same goes for vertical agriculture: it is now economical to grow fresh vegetables in an urban setting, and eliminate chemical agriculture, and thousands of miles of transportation, to get better, fresher, healthier vegetables, as you can see in this little video from Terrashpere. 

And the transition to more and more vegan living will eliminate the most obvious food safety problems, a vast array of health problems, as well as unsustainable agriculture in the service of animal husbandry. Again, economics, environment and health all go hand in hand. And the forces that drives us towards a more sustainable economy are absolutely inexorable. Veganism is a new idea today, or so it seems to many, but it is unavoidable economically. We are literally at the point of realizing that we are feeding the pigs at the expense of human beings, and wiping out the rain forests to raise cattle, which is the most insane misuse of land that ever was. It is that inexorable force of economics and sustainability, that is driving us towards a more sustainable, and therefore increasingly vegan, lifestyle.

Since I originally wrote this post, I have also started a blog on vegan living in my hood.

Energy Efficiency Exposed

Blissfully, even the New York Times is starting to let some light in on one of the biggest consumer frauds in history, energy efficiency. With an opinion piece, The Problem With Energy Efficiency, by Michael Shellenberger and Ted Nordhaus of Breakthrough, the prospect of addressing this fundamental flaw of energy policy is coming closer. The authors point out on the occasion of a Nobel prize for LED research, that LEDs will not save us, but lead to increased uses of lighting and thus energy. It is doing so already.

Energy Efficiency as it is promoted today, is a consumer fraud, it is a way of selling energy efficient products without the guilt.  The Energy Star program is the cheerleader for this misdirection, for it encourages incremental fixes, not radical solutions. There is not really any perpetrator other than the collective public delusion that energy efficiency will somehow magically bail us out, but the short-term beneficiaries are the utility industry, and the manufacturers of energy efficiency technologies, and property owners are paying the economic penalty for failing to do the economics of their energy decisions properly. The presumed benefit of energy efficiency is an unexamined assumption that seems sensible, but does not work in practice. Yet there is mathematical certainty that it cannot, because it is a limit function, which MUST produce  diminishing returns, as I have extensively documented on this blog.

The fundamental deceit which underlies the mistake is the labeling of energy efficiency as "green," and conflating it with renewable energy, and further to train clueless property owners to pursue energy efficiency on an incremental basis, as though it were additive, which it is not, because of the problem of diminishing returns, so it becomes a permanent money drain. This energy efficiency-driven approach amounts to a greenwash of carbon energy, and keeps us hooked. The result has been a massive market failure, and significant capital destruction. To this day, government is encouraging this pattern of helter-skelter spending on efficiency, which diverts resources from potentially productive investment in worthwhile projects that build value for investors. The beneficiaries of this confused guidance have been the utilities and energy companies. Current government programs are very successful if the goal were to save energy companies and utilities.

Environmental and Economical Fraud: Energy Efficiency

Fortunately, there are a growing number of critical voices who have taken to uncovering the misleading claims of energy efficiency, and hopefully to put us on the track to productive investment.

1.  First there is Steve Hallet's excellent book, The Efficiency Trap, which argues the case on a parallel to over specialization in nature. Clearly if the problem is over-dependence on carbon-based energy systems, it is not merely like the Jevons paradox, that there is blowback, in the sense that increased efficiency reduces the cost of energy and thus raises demand. There is a deeper effect of throwing good money after bad, which is ridiculous at a time when renewable technologies are becoming easily cost competitive on the margin.
2. Then there is David Owen's The Conundrum,  which deconstructs all our thinking about energy, and debunking solutions which make the problems worse.  It exposes the fallacies of energy efficiency and alternative energy on a deeper level.

These two books here are eye-opening, and will make sure that you never look at energy efficiency or even some of the renewable energy discussions the same way. This is the place to start to sort out the chaff from the wheat and learn to think for yourself about energy solutions.

Energy Investment, not Energy Savings

My focus continues to be on the viewpoint of the individual property owner, in terms of how to create maximum value from renewable energy retrofits. The only meaningful way to evaluate the issue is to look at your property value, and how you can increase it by going renewable. There are people who want to live net zero out of social responsibility, or religious conviction, but that is not interesting to me. It is interesting to me only when it is done on the basis of sound economics.

The trap we are falling into as a society is that typical programs we now have benefit either the utilities, the energy companies, or the manufacturers of e.g. solar panels. No program is looking at it from the standpoint of the economics of the property owner, and that is the only possibly meaningful way of approaching the issue. And, in many cases you will find that, with the right analysis, there is a hell of a lot that can be done, for energy is a big part of your running cost in a house.

Energy Efficiency done right

The right energy efficiency definition would make it clear that you first need to decide what your energy system should be, or you risk throwing good money after bad, and making your bad system more efficient, which is what happens a lot today. In other words, if it is done right, you would first implement renewable energy wherever it is economical and make the whole system as efficient as possible.

If you're spending $1,000/mo on energy, and you can eliminate 75% of that bill with a renewable energy retrofit that is $9,000 annualy in cash available to finance your conversion. And when you do make the changeover, you now have a permanent hedge against energy price increases, and mostly renewable technology has lower maintenance costs than fossil fuel burning equipment does. Most importantly, as part of your life-cycle planning for your property, you would consider ALL renewable energy technologies and prioritize them according to the highest yield, which today looks approximately as follows:

1. Solar Thermal energy 85-95% efficiency.
2. Geothermal 400% efficiency (it consumes electricity to run, but you might be able to generate your own.)
3. Wind energy gives more bang for the buck in the right location than does solar PV, certainly when considering the footprint, so per square foot of space the yield is much greater than Solar PV.
4. Solar PV, with efficiencies currently going from the high teens to the low 20s.
5. Various passive thermal measures, insulation, glazing, thermal storage, and so on will complement the picture.

The currently prevailing paradigm is one of incremental "energy savings," and as a result people never treat these decisions as investments, but they serially fritter away the money, and the more 'efficient' they get, the more the power company is ensured of retaining their business. This is one good reason why power companies are happy to finance these efficiency programs.

We need to shift our focus to investing in energy, not merely saving energy, and for that we need always to have a 30 year energy plan, which includes life-cycle planning for all major componentry, such as boilers, and a/c plant. We need to realize that thermal technologies, both active and passive, are often not as easy on a retrofit basis, but if you can do it, they give the most bang for the buck.

Under the incremental approach, people buy e.g. solar panels and they save 10% on 30% of their energy usage, so they lowered their bills by 3%. The same amount of roof space, if it were used for a solar thermal system, could eliminate 70, 80, or even 90% of the energy bills, particularly if it is combined with passive thermal solutions.

Conclusion

Energy Efficiency and energy savings sounds good but they are the wrong approach for long term asset values, especially when they are done on an incremental basis, and without a plan. They are a greenwash of carbon-energy.
Investment in permanent energy infrastructure to improve asset values is focused on creating the maximal increase in your property value with a renewable energy retrofit and energy efficiency, instead of a greenwash of carbon-energy with energy efficiency alone.