A penny now costs about 40% more to make than the 1 cent it is worth.  That is the kind of thing that makes us at Green Collar nuts.  We are losing taxpayer money, burning through natural resources and all for a coin that is more of an annoyance that it is worth.  I mean, when you get a coffee and a donut from Dunkins and it is $2.51, what is more frustrating than getting $0.49 in change…aaarrghhhh.

Not every  green initiative has to be focused on saving energy…although this idea will save energy, and resources and vital metals, and MONEY!  The idea came to me while helping my 6 year old son sort through his piggy bank and make neat little stacks of 10 out of all of the different coin types (oh my god, what a pain).  It turns out that while scavenging around the house, he had collected 396 pennies.  I was impressed with his persistence in getting them all stacked (not to mention scamming all those coins from his mother and I).  We were going to bring them to the bank to cash them in - until he dumped them all back into his piggy bank and mixed them with all the other coins as soon as he had finished. 

But that got me thinking.  How many pennies are in the average home?  And how much does it cost to make a penny in this era of spiking commodity prices?  And how many pennies are we minting every year?  And how much time are we wasting dealing with these things.

According to the New York Times, the US Mint produces about 7.7 billion of the useless little suckers a year.  That’s $77 Million dollars worth of pennies put into circulation per year, but here is the kicker…It is costing the US at least $107 million to produce them.  That’s because the price of zinc (which makes up 97.5% of the penny) and price of copper (the other 2.5%) are at historic highs.  Just like oil, this is not because of commodity traders, although that had something to do with it.  It is due to the fact that demand is sky high.  Countries like China are consuming vast amounts of these metals and there are limited amounts available.  Thank goodness the zinc market has cooled off a little bit.  This time last year, zinc was trading for well over four times as much as it was in 2003.

This brings me to my next point.  The reason we have to produce so many pennies is because they are all in jars in our houses, and retailers need them to make change.  When retailers need them they go to their banks, who go to the fed to get shiny new pennies because the banks don’t have any because nobody is turning in their pennies.  Let’s be honest, when was the last time you rolled up all your pennies and brought them in to be turned into cash?  Even my 6 year old was horrified that all that work netted him less than $4.  So here is some back of the napkin calculations on the number of pennies hidden in houses.  According to the US Census, there are  111,162,259 households in America.  Figuring 400 pennies (we’ve got at least 5 times that many if I look around), we are looking at over 44 Billion pennies hanging out in people’s homes, and my guess is that this is an extremely conservative estimate.

I’m not the only person thinking about this.  There is a pretty strong movement out there to retire the penny, and the most well known group, Citizens for Retiring the Penny, makes the case that pennies, in addition to costing more than they’re worth, are a waste of time:

Most cash transactions involve the exchange of pennies, leading to an increase in the time for the transaction to take place.  The National Association of Convenience Stores and Walgreen’s drug store chain estimated that handling pennies adds 2 to 2.5 seconds to each cash transaction (remember that we are including the occasional customer who spends 30 seconds looking for the penny in his pocket).  

Let us estimate that each person goes through two of these transactions per day and that on average there is one person waiting in line (making for a total of three people’s time wasted in each transaction).   We can then calculate that the presence of pennies wastes (2 transactions/day) X (2 seconds/transaction) X (3 people per transaction) = 12 seconds per day, or 1.2 hours per person per year.  Of course, when you get home you still have to find something to do with your pennies, meaning that probably only about half of the wasted time is directly connected with a cash transaction (the other time is associated with counting pennies etc), giving a total of 2.4 wasted hours per person per year.  The mean wage in the US is approximately $17/hour, implying that each of us is effectively “paying” $40 per year to keep pennies in circulation.  Given that the US has ~ 240 million adults, using pennies is currently costing the nation $10 billion per year!

OK, I think that is interesting….but my issue is that we are not going to retire the penny cold turkey…not gonna happen.  So my little brainstorm is to use the green movement to give us a call to action and a ’time horizon’ (to quote our beloved president) to begin retiring the penny.  This is how it would work.

1.  Have the fed suggest to every bank in the country that they get a self service coin sorting machine.
2.  Run a public service announcement encouraging Americans to gather up their loose change and bring it to the bank - it is good for the environment, saves taxpayers money and helps ensure that we don’t run out of important metals (I don’t know about you, but I don’t want to run out of copper anytime soon…I like electricity and microprocessors).
3. The fed will figure out an amount (less than $0.004 premium they are paying for every penny produced now) that they will pay the bank for every penny collected in this manner.
4.  The banks submit notarized accounts of the number of pennies collected each year and put back into cirulation (fed sends check).  They can offer bonuses to the banks that order fewer than ‘X’ new pennies each year
5.  We announce at the same time a 10 year timeline leading up to the elimination of the penny, and make it a stated goal of the US to mint as few pennies as possible during that time (make it patriotic to turn in the pennies - it is green and good for the economy!)
6.  At the end of the penny era, we ask Americans to turn them in again, and we have a huge smelt-fest, put all the metal on the open market and use the proceeds to help pay down this outrageous-freaking deficit we’ve been handed.

So if my estimated number of orphaned pennies is even close and we can get 10% of the households in America to turn their pennies into cash each year, we will be able to eliminate 57% of our new penny creation.  This is about a $60MM savings to US taxpayers each year (minus what would be paid to the banks) and we get to (literally) put our money where our mouth is when it comes to sustainability.  We also get the added benefit of, in the near future, never getting 49 cents in change again!

Go green…save the planet…kill the penny.

I just read a great story in Renewable Energy World about researchers at Rice University taking another look at the nasty junk that is a byproduct of Biodiesel production.  Apparently, for every 10 pounds of biodiesel produced, 1 pound of glycerin (also known as glycerol) is produced.  That is hugely inefficient and wasteful.  When only a small amount of biofuel was being manufactured in the country, the companies making it simply sold the glycerin.  However production has gone up so much that the manufacturers are now having to pay to get rid of it.

Enter Rice University and lead research Ramon Gonzales. 

They found a way to use a modified version of E. Coli bacteria to cost effectively transform the glycerin into formate, succinate and other valuable organic acids.  They have also discovered a method of turning the glycerin into ethanol.  Now if you’re like me and didn’t pay that much attention in organic chemistry class you have no idea why you should care about this.  Well the answer is simple:  Profit.

 These manufacturers have a major waste problem, not to mention a cost center that eats into their margins.  With this new technology, they can sell these and add to their bottom line instead of subtracting from it.  According to the release by Rice:

Succinate is a high-demand chemical feedstock that’s used to make everything from noncorrosive airport deicers and nontoxic solvents to plastics, drugs and food additives. Most succinate today comes from nonrenewable fossil fuels. 

According to Renewable Energy World:

Gonzalez said he’s had similar success with organisms designed to produce other high-value chemicals, including formate and lactate.

“Our goal goes beyond using this for a single process,” he said. “We want to use the technology as a platform for the ‘green’ production of a whole range of high-value products.”

This is the type of breakthrough that we are going to see more and more of.  New ways of thinking about waste that will create opportunity.  Who would have thought that the gunk created when we make biofuel would have the potential to create profits and green collar jobs?  I just don’t know if I want to be the guy working with E. Coli every day.

The Blue Green Alliance, which if you don’t know is the partnership of the Sierra Club and the United Steelworkers Association (yes you read that right), came out with an unequivocal endorsement of Al Gore’s call to action.  These guys are my favorite group…I mean could you have possibly imagined this partnership existing 5 years ago…strange times make strange bedfellows. 

When you think about their joint venture, however, it is not as surprising as you would think.  The Sierra Club wants to save the environment and fight global warming, and the Steel Workers want to stop the bleeding of American manufacturing jobs and help stimulate the next great American industry…eliminate our dependence on fossil fuels.  This effort will create millions of good Green Collar Jobs and bring to market products that will be in high demand and that we can actually - wait for it - build here and export!  How great is it that these two goals not mutually exclusive?

In discussions with friends and colleagues this weekend, I made the case that the former Vice President was using his new-found celebrity and gravitas to break new ground that the current politicians could not enter on their own.  Just imagine the screams that would take place in the ‘drill-our-way-out-of-this-mess establishment if Obama came out and said this…it would be as if a million 7 year old girls just had snakes dropped on their laps. 

But someone had to say it so that we could get used to the idea.  The first time someone suggested replacing a human liver with a pig’s liver, I’m sure people were horrified.  But then it worked and it was suddenly not so scary.  I feverently hope that this is the case with Gore’s statement.  Shocking at first, but worth opening a dialogue about.  If we start discussing it like rational adults now, by the time our next president is taking office, we may have enough momentum to bring about the sea-change we need. 

America can figure out how to to save the planet and do so profitably.  We have to.   And two of our most iconic organizations have agreed that eliminating our dependence on fossil fuels in 10 years is the way to do that.  Who else is going to sign on?

Stay tuned.

I finally had the opportunity to watch Gore’s speech.  I’d love to hear from those of you out there that think he’s nuts…what exactly do you disagree with?  And for those of you that think he’s nuts, how many of you have actually watched this? And for those of you that think he’s nuts and have watched it, how many of you would agree that lying is a better rule of thumb than telling the truth…because it seems like we are faced with the same type of moral quandry in this situation?

And finally, spend a minute and just imagine how different our post 9/11 world would be if Al Gore hadn’t lost in 2000.

I told you so.  And by you, I mean stupid American car companies, and their enablers in Congress that have been shielding them from the need to innovate for 25 years.  And while I’m at it, you Japanese car makers aren’t all that swift either (I’ll get to that in a minute).

The numbers that came out this week were staggering, although not surprising.  In a shocker, GM’s sales for the month were the best amongst the Big 3, down a mere 18% year over year (although their shares traded at a 50 year low earlier this week).  Ford’s numbers dropped a precipitous 26% (with the F150 pickup losing the top-selling vehicle status for the first time in 26 years), and Chrysler’s year over year numbers were down *gulp* 36%. 

But you can’t blame them, can you?  I mean, how could ANYONE - especially these high-powered auto executives - have possibly seen this coming?  Well, I did.  Just ask any of my friends about my rants against SUV’s over the years, and you will know that I was watching it come at us like a slow motion train wreck.  And if a big dummy like me could see if coming, then missing the boat on this one is malfeasance.

Now Detroit is going to have to pay the piper for their years of arrogance and stonewalling.  Yesterday’s New York Times article was full of quotes from Big 3 spokesmen declaring that they are not going to go bankrupt.  GM even went so far as to say, they don’t have to worry about that for a year.  Good god.  Thank goodness our politicians have been protecting our auto industry for so long. 

And before I forget about the Japanese automakers (those of the miraculous hybrids, and fuel efficient vehicles).  You guys missed the boat too.  The point of hybrids was not to get us (close to) V6 gas mileage from a V8 - like Toyota is pushing at us with their Lexus SUV hybrids - or to get us a V6 Accord Hybrid that has more horsepower than the normal V6 Accord, like Honda is peddling.  The point is MILEAGE you boneheads.  I was waiting for 8 years for the Accord hybrid to show up, and when it did it had a full sized V6 in it.  What were they thinking?  If they had put out a V4 version that got 53 miles to the gallon, you would not be able to get your hands on one for 2 years.  As it is, their hybrid is a big ‘who cares’. 

Sorry about the rant, but this has been ticking me off for years, and the train wreck has finally happened.  Now all that is left to do is clean up the carnage, and try to make sure that it never happens again. 

 Follow up:  The only glimmer of hope in this disaster is to be found on http://GreenCollarManufacturing.com where Sean Keller discusses the possibility that those 4 SUV plants GM just closed cold-turkey, will be reborn as the manufacturing hubs for the new high-speed rail that they are planning on opening in the midwest.  Woohoo!

Finally my home state it taking a leadership role. With Governor Deval Patrick leading the charge on one of his signature issues, Massachusetts just passed a landmark energy bill that puts the state in a clear leadership position when it comes to energy policy. Thank goodness.

Among the attributes of the bill, according to today’s Boston Globe:

A requirement for utilities to invest in energy efficiency when it is cheaper to do so than it is to buy power.

 Utilities would have to enter into 10- or 15-year contracts with renewable energy developers, an effort to help those developers get financing from banks.

(A_ provision that lifts a prohibition on utilities owning solar electric panels and allows them to rent the panels to customers. The law is designed to allow utilities to recoup the cost of panels over time from rental fees while the customers reap energy savings.

By 2030, utilities would (be required to) buy 25 percent of their power from renewables.

The creation of “Green Communities.” The state will commit $10 million annually to help communities figure out ways to become more energy efficient or invest in renewables, including giving them no-interest loans.

These are all good things.  When I bought my new house a few years ago, we knew we would need to replace the systems (60 year old steam boiler and no A/C).  We looked into wind, solar, heat pumps, and although there was some support from the state, the premium was so cost prohibitive that it was unrealistic.  We were running ROI numbers that looked as if it would take 25 years to recoup the extra cost.  Unfortunately, that was completely unrealistic for us.  With this new approach, we are going to be taking a look again.

Way to go Massachusetts.  I know that you are all a bunch of northeastern, liberal elites, but this aggressive new law is just about the best “Independence” day present I could have hoped for.  Definitely generating some mojo here.