musings of a financial nerd…
RSS icon Home icon
  • Why Efficiency Rocks

    Posted on September 21st, 2009 shultice 5 comments

    Back in July, two fellow members of my Toastmasters club gave speeches outlining their views on global warming. The first explained why he believed the science was shaky and that the issue was being used mostly as a political power-grab. The next week another offered a rebuttal, arguing that global warming is a genuine, imminent danger.

    Naturally I decided that I’d like to speak on the topic as well. It seemed as if our members were fairly polarized on the issue though, so I decided to take a little different route.

    It’s rehashed a bit from the outline, but the speech I gave on 9/14 was similar to this:

    While the science behind the global warming debate is certainly important, I don’t believe the uncertainty should affect our actions much.

    Imagine that we conclude that global warming is not a threat, and realize in 20 years or so that we were wrong. At that point we’d probably be up a creek.  But what about the opposite error? If we agree that global warming is a serious threat, and happen to be wrong, it might just be the most beneficial mistake in history.

    The reason is because many of the solutions that fight global warming will benefit the entire planet, regardless of whether global warming exists at all. One such solution is the cheapest, cleanest, and most readily abundant source of energy that we have today- efficiency.

    By focusing on the demand side, efficiency means that we don’t have to create as much energy in the first place, and this directly benefits us in several ways.

    1.)  The first benefit should be obvious- efficiency saves money.

    We simultaneously have a *likely* climate crisis, and we’re in a long-term financial mess, so why not attack both problems at once? No matter what your stance on global warming is though, it’s hard to argue against a fatter wallet.

    Some changes, such as driving more sensibly, can literally save money in an instant. Others, like installing a programmable thermostat, require an upfront investment but will easily pay for themselves in time.

    2.) In addition to saving money, efficiency would help us become more energy secure.

    The energy crises of the 70s proved how overly dependent we were on foreign energy. In response, tax credits were rolled out to promote clean energy, speed limits on highways were lowered, and President Carter even had solar panels installed on the roof of the White House.

    But in time the crisis passed, cheap oil returned, and President Reagan tore down the solar panels. Now here we are, over three decades later, and energy imports are still our lifeline. Somewhere along the way we must have missed the memo that said- “those who fail to learn from history are doomed to repeat it.”

    Then there’s the even bigger issue of how much oil is left. Less than a century ago Texas and Oklahoma were practically drowning in the stuff. Now the world uses over 80 million barrels every single day, and we have to go to the ends of the earth to find it.

    Some scientists think we’re near the point of peak oil, which is where global oil production tops off and then gradually falls thereafter.  If we weren’t ready for it, which at this point we are not, peak oil could be extremely painful and destructive. Prices would skyrocket as we’ve never seen before ($150 oil might seem cheap before long) as a falling supply fails to meet demand.

    To correct these mammoth problems, we need to things; clean, domestic energy and more efficient lifestyles. Moving towards renewable energy sources takes a great deal of time and money, but many efficiency practices can be implemented today.

    3.) The third reason to embrace efficiency is for the sake of the earth.

    Humanity has wreaked an enormous amount of damage upon the earth, a good portion of which can be attributed to our voracious energy appetites.

    In the March 2009 issue of National Geographic, there’s a lengthy article discussing the oil sands projects in Alberta, Canada. Since traditional oil fields are becoming more and more difficult to find and drill from, our friendly neighbors to the north are tapping into less conventional sources of black gold. The oil flows at a tremendous cost to the environment though.

    At this point in my speech I had the magazine passed around after pointing out two pictures- one showing the pristine landscape before the oil companies move in, and the second showing the barren world after operations began. You can see these same pictures here.

    The irony is, that drilling is considered economic progress. The oil company will probably see its profits increase, shareholders will be happy, and the GDP will increase as well. Econ 101 would consider that to be a success, but it’s hard for me to see how anyone actually wins when we treat our planet like that.

    We don’t all have to become full-fledged tree-huggers, but we do need to work to lower our personal impact on the environment. Living more efficiently happens to be one of the simplest ways to do just that.

    ~

    The U.S. is numero uno in many different ways, many of which aren’t worth bragging about. Here is one such statistic- with about 5% of the world’s total population, we use about 25% of the world’s energy. Global warming or no, we would reap many benefits by working to reduce this imbalance. It should be a no-brainer.

     

    5 responses to “Why Efficiency Rocks” RSS icon

    • I read an interesting article lately that said even though we think some energies are green such as water dam technologies, it actually creates more waste and hurts the environment due to the motors that run to collect the energy from the dams/rivers.

      Truly green technologies that don’t produce more waste are wind mills and solar panels, but one has to question what waste it DOES produce to create those machines and panels to save on electricity.

      Great food for thought.

    • Interesting point Minimalist. The only truly, 100% ‘green’ energy source is to use less of it in the first place.

      Thanks for stopping by! :D

    • You make some very good points Blake. I think focusing on efficiency is a no-brainer, as well. What I don’t understand are the global warming neh-sayers who are totally against efficiency? Besides all the obvious environmental benefits, going green is big business! There is a ton of money to be made and jobs to be created, developing the technologies to increase the efficient use of energy. And as far as changing our personal habits to become more energy efficiency, who doesn’t like saving money? No-brainer.

    • “There is a ton of money to be made and jobs to be created, developing the technologies to increase the efficient use of energy.”

      Definitely! I just hope that many companies actually realize this, and aren’t just on the bandwagon for PR purposes.

    • Well put. Last time I checked, cheap energy wasn’t putting us on top of the competitive heap either. I few well placed policy hurdles will do wonders in bringing out the innovators and investors to move past them.


    Leave a reply