• Getting to Green

    An administrator pushes, on a shoestring budget, to move his university and the world toward a more sustainable equilibrium.


Higher ed opportunities -- hi-tech, lo-tech

First, the hi-tech -- a tremendous opportunity for innovative engineering and business schools.

November 25, 2008

First, the hi-tech -- a tremendous opportunity for innovative engineering and business schools.

I know this isn't going to win me any friends at MichState, but it's pretty obvious that the "Detroit 3" (formerly the "Big 3") automakers have run their course. They've had their day and, not that long ago, they were making money hand over fist. Ford, for instance, was able to give its investors a 200+ percent run-up over a 3-year period (1996-1999). Unfortunately, that sort of return came from externalizing lots of environmental costs -- those were the days of big SUVs, big markups, big profits (up to $15,000 per vehicle). The money that went into Ford's stockholders' pockets is being paid off right now by you, me and everyone else on the planet.

Go a little further back in history, and the same pattern is even clearer. In the 1920's, GM conspired with at least two oil companies and a number of GM suppliers to purchase and dismantle US electric trolley systems. The initial objective was to replace them with internal-combustion-powered buses. Then, after World War II, came the era of interstate highways, multi-car families, and suburban sprawl. Lots of profit to the automobile industry and associated trades; lots of costs (some of them only now coming due) to all the rest of us.

Sure, a country as large, and as prosperous, and as economically active as the USA will need lots of transportation capacity, but where's the evidence that Ford, GM and/or Chrysler have any better idea than my idiot uncle of how to provide that in an ecologically and economically sustainable way? Every success they've ever had would indicate that their natural abilities lie in precisely the opposite direction.

But what about the investment, what about the infrastructure, what about the factories, and the dealer networks, and the labor force? Isn't it realistic to think that these companies, with their tremendous capabilities already in place, can get up to speed faster than just about anybody else? Not the way I see it. Even the most "fuel efficient" models currently being offered aren't even close to what we need. GM's promised game-changer, the Chevy Volt? An overweight, overpriced subcompact with a 1.4-liter gas-powered engine. A marginal improvement at best, and so strong evidence that Detroit's newest thinking is still well inside the box that they've created in the last hundred years.

And as for the existing investment, please look up "sunk cost" in any dictionary of business terminology. What those factories and office buildings originally cost is irrelevant. The factories are designed around existing products and existing production processes, and the offices only make sense at a scale of production which is based on planned obsolescence, worldwide. They're worthless, or close to it. Wall Street currently values Ford at $4B, and GM at only $2B. That's total market capitalization -- all in. Heck, a Deutsche Bank analyst recently estimated that GM is totally worthless! (Chrysler numbers are not available, since it was taken private last year. However, its parent company, Cerberus Capital, is struggling. Hardly encouraging.) A government bailout will only prolong the inevitable (and who wants to take a $25B position in a $6-8B industry?). There's no sense pouring money, or engineering grads, down those holes.

Where the USA, and Canada, and every other similar country should be pouring its money, its research, and its graduates is into start-up companies. The pre-great-depression (the last great depression, that is) auto industry had literally hundreds of players, most of them serving regional markets with quality products at good prices, and most of them turning a profit. There's no law that transportation has to be an oligopoly, that's just the situation we've all gotten used to. Since localized electric-powered transit is inherently more efficient (especially if it's on steel rails), local/regional transit companies might be a good place to start. Good public transit sustains and revitalizes central cities -- homes and commercial locations on the transit line become more desirable (and so more valuable) than real estate you have to drive to. This isn't hypothetical, see Portland OR, or Vancouver BC, or Montreal QC, or any of a large number of European and Asian cities, all in thriving, developed countries.

An economy that needs to reinvent itself, in a society that needs to reinvent itself. Sounds like an educational market opportunity to me!

And the low-tech opportunity? Well, that comes from re-envisioning another industry that's been a major contributor to climate disruption -- construction.

We know that there's enough energy available in sunlight, wind, and other sustainable forms to keep the world humming along -- particularly if we start consuming more intelligently and efficiently. But we also know that harvesting sun, wind, etc. takes infrastructure we don't yet have. We'll need to build that infrastructure. It's gonna be a helluva construction project.

Unfortunately, mainstream construction (and, for that matter, fabricating) processes consume huge quantities of fossil fuels and emit even huger quantities of greenhouse gases ( e.g., creating a ton of concrete produces about as much CO2 as hauling it to the job site does). Multiply typical project-related GHG emissions by the size of the necessary infrastructure project, and it could well be that we can't build the facilities we need to avoid tipping the climate over the cliff, without tipping the climate over the cliff in the process. (Sharon Astyk has an interesting essay on the problem here.)

So, the opportunity (again, mostly for engineering and business faculties) is to design large-scale construction processes which emit small-scale greenhouse gases. I'm presuming that the solution will be low-tech, but I could be wrong. (I know there are low-tech solutions possible. Think Giza. Think Stonehenge. They might present social sustainability issues, but their fossil fuel emissions were minimal. So, how much have we learned in the last 3,000 years? How much better can we do?)

Time for some original research. Time for some organized chaos. Time to throw some technologies and some business plans up against the wall, and see what sticks. Is there a high likelihood of failure? Probably. But higher than the likelihood of GM going bust in the next ten years? Higher than the price of doing what we've been doing, and getting what we've been getting?


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