We have been having a lot of discussions at Green Collar recently with companies involved in helping Vehicle Fleets become more efficient.  The great thing about this area of the Green Collar Economy is that it is an easy area to get a great business ROI (which CFO’s love) and a area where a huge amount of carbon emissions can be eliminated (which is good for all of us).  This short video highlights how quickly both of these benefits come to fruition when dealing with fleet vehicles.

If you haven’t yet, you should check out the White Papers and Case Studies on GreenCollarEconomy.com reviewing the different approaches and benefits to improving fleet efficiency, saving money and lowering carbon emissions in companies operating fleet vehicles (I’m looking at you municipalities, delivery companies, repair companies, etc.). Also, check out the huge directory of green fleet solutions.

Building efficiency may be the most visible low-hanging fruit in the race to become more sustainable as a nation and a planet, but with the ROI available to fleet managers going green, this area is going to get hot and get hot fast.

Following up on my post (rant) from a few weeks ago about the brilliant American auto industry and the troubles they are having - surprise, surprise - moving all of their behemoth SUV’s, there are some truly disturbing July numbers out.  GM lost $15.5 Billion in a quarter, Ford over $8 Billion, sales of SUV’s down over 40% from a year earlier.  Yikes.  Even though I’ve felt like the Big 3 had it coming, I do want the US auto industry to survive and reclaim its leadership position in innovation and design.

The front page article from the New York Times today outlines the sprint the Big 3 are in to see if they can completely revamp their offerings and business structure prior to running out of cash.  I hope they make it.

This is not really why I’m posting today, however.  There is another article I noticed while sitting on my front porch, reading the Times on my laptop, called Ditch the Gas Guzzler?  Well, Maybe Not Yet. that outlines the  financial reasons why, if you are an SUV or a truck owner, you may want to consider holding onto your big vehicle or even getting a new one (wow, can you get a deal now!).  It cites a number of factor to take into consideration, including trade in value, practicality of a small car for your needs, how much gas you would actually save compared to cost of trading in your vehicle for a rock bottom price, etc..

The genesis of the article is described like this:

Philip Reed, senior consumer advice editor at Edmunds.com, was on the tennis court a month ago when a friend asked him what he ought to do about his Ford Escape S.U.V. “I said, ‘You probably don’t want to hear this, but your best thing is to keep driving it,’ ” he said.

Mr. Reed and his colleagues huddled to come up with a way to help consumers do the math, and the result is the new “Gas Guzzler for Gas Sipper” trade-in calculator at edmunds.com/calculators/gas-guzzler.html.

Nowhere in the article does it encourage people to take carbon, or environmental impact, into consideration.  The calculator does not take this into consideration either.  I understand that it is the “Money” section of the paper, but it is nearly malfeasance in these times to not even mention this.  With all of the data they are gathering in this calculator, it would be an easy update to also allow people to get an idea of how they would be impacting their carbon footprint by trading in.

By the way, I am also not saying that trading down would make a positive carbon impact - or at least not for a long time.  There was a great article in Wired a few months ago that detailed the carbon ramifications of trading in your big car for a Prius.  Thier analysis?  Between building a new car, crushing and getting rid of the old one, combined with the actual carbon savings based  on how much you drive, you would not break even until you had put over 100,000 miles on the Prius.  Their suggestion is to buy a used car that gets decent mileage - it creates a much lower carbon footprint. 

What I am saying is that we need to have this kind of information at our fingertips whenever we make large decisions.  If we are going to ask our corporations to consistently make decisions with the triple-bottom-line in mind, then we - as consumers - need to do the same thing.

Hey Edmunds, update your calculator…we need all the information we can get.

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.

If you want to read an eloquent and powerful article about the way the American lifestyle is going to change as a result of higher gas prices and the environmental crisis, check out this one, from today’s Washington Post Op Ed page.  It is by Bill McKibben from Middlebury College and the author of Deep Economy.   He argues that we are undergoing a profound and (most likely) permanent change in our way of life.  As he puts it:

Pulled back by the inescapable gravity of higher prices and the growing scarcity of fossil fuels, we’re starting a slow recoil into more dense and compact regions and localities. The frontier of endless mobility that we’ve known our entire lives is closing.

Americans are feeling it and things are already changing.  He points to the fact that we are driving less (amazingly we drove 6% less vehicle miles this May than last May), airlines are contracting, and small farms are on the rise for the first time in a century.  Closer to home, I just learned about a friend of mine that is starting to make biodiesel for his contracting business.  His trucks and equipment all run on diesel, which seemed like a good idea 3 years ago, but the current fuel bill is threatening to put him out of business.  So he bought $5000 worth of biodiesel conversion equipment and did deals with 2 local restaurants that use (and throw away) about 100 gallons of cooking oil a week and he and his wife are going to start making their own fuel in the barn.  If they hussle, they should make about 80 gallons of good diesel a week which should eliminate the entire fuel bill for the company.  Projected ROI on the $5000, about half a year, including the labor to make the diesel. (Current fuel cost = 70 gallons per week X $5.15/gallon this morning at the pump X 50 weeks = $18,025).

I really feel like we are at the same point we were at in about 1995 with the Internet.  We are entering into an age of remarkable change, and optimists like myself see unprecendented opportunity when there is this much change.  The Internet revolutioninzed everything about what it means to be a business and how we communicate.  Sure it caused pain to some businesses and eliminated outdated business models, but this churn also released trillions of dollars in new economic growth.  Green should dwarf the Internet in terms of impact.

With that said, this ride is going to change our lifestyle a lot more than most of us are thinking.  As Professor McKibben puts it in a paragraph that is worth reading several times:

For the moment, watching gas prices roll relentlessly higher, we’re transfixed by the slightly terrifying novelty of it all. But it won’t take long for these changes to become permanent realities. This shift will change our sense of identity and expectation more than anything that’s happened in decades.

I couldn’t have possibly said that better myself.  No really, not a chance.