• Getting to Green

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

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Structures and standards

Of late, when I speak of a "structural problem", it's not about an older outbuilding on my farm that's in danger of falling down. Rather, it relates to the way Greenback does its budgeting, and its accounting, and the (dis)incentive schemes created thereby. A simple example might be in the Accounting department itself where, if they want to invest in some software which will do a better job of turning off their computers and printers when no one's using them, they're certainly free to do so.

August 31, 2009
 
 

Of late, when I speak of a "structural problem", it's not about an older outbuilding on my farm that's in danger of falling down. Rather, it relates to the way Greenback does its budgeting, and its accounting, and the (dis)incentive schemes created thereby. A simple example might be in the Accounting department itself where, if they want to invest in some software which will do a better job of turning off their computers and printers when no one's using them, they're certainly free to do so. Of course, the benefit to the university will come in the form of reduced energy consumption, and the savings won't ever go to the Accounting department (even though it was their investment which created those savings), because energy usage is charged to the various departments on campus pro rata, based upon the number of square feet of building space each occupies. Actually using less energy doesn't save a department any money on their energy charges; only occupying fewer square feet will do that. Kind of makes you wonder why they'd spend the money on the energy conservation software. Or, it might just explain why they haven't.

Universities are infamously complex organizations, so simplifying mechanisms are pretty common. Realistically, it's hard to see how anyone could hope to manage such a beast without some sort of serious simplifications. But the simplification known as "prorating" has come to be a red flag, from my perspective. It creates disincentives, and misincentives, and even malincentives. That's not its intent -- I know -- but that's its predictable effect.

Prorating takes individual behavior (in this case, the behavior of the Accounting department), and treats it as if it were undifferentiated below the group, social, or institutional level. Everybody is presumed to use the same amount of electricity per square foot, although every single individual on campus knows that's not true. Some studios in the Art and Architecture departments are occupied by students at least 25 hours a day (some days, longer). And some offices are assigned to part-time faculty, or emeritus faculty, or faculty who are on sabbatical this year. If one of those studios has the same number of square feet as one of those offices, they'll pay the same energy charge. Reality be damned.

An article I was reading brought all this back to the front of my mind. The article, typically, had absolutely nothing to do with universities -- at least, not explicitly. It had to do with vaccines. More specifically, a malaria vaccine which has been developed and is in testing. Unlike most vaccines, though, this one doesn't keep the injectee from getting sick. Instead, it prevents the injectee from passing the disease on to mosquitos who, in turn, transmit the disease to other folks. One question the article asked was whether private health insurance would be likely to pay for this vaccine, as vaccination would have no health benefit for the insured. Real benefits, for sure. But not for the specific person covered by the insurance policy.

Unlike Greenback's proration of energy charges -- which takes individual behavior and tries to deal with it at an institutional level -- (private) health insurance, at least in this case, takes group or social behavior (transmission of a disease among a population) and tries to deal with it at an individual level.

Neither structure makes sense. Health is a societal problem, and requires a societal solution. Energy consumption is an individual problem (at least at the margins), and requires individual action. Disincentives to such individual action make a bad situation worse.

Sometimes, however, the problem is more profound than just bad management choices. Sometimes, structures evolve which make change difficult, but the structures themselves make perfect sense. One such case was referred to in an earlier post. It had to do with semi-trailer trucks, and it included reference to improved aerodynamics.

The truth of the matter is that semi's aren't going to become significantly streamlined anytime soon. Not that we don't know how. Vehicle designers have come up with a number of models which are more aerodynamic than current semi-trailers, with greater cargo capacity, lower weight, lower operating costs and no significant increase in production cost. But the new designs have little chance of ever being adopted. Again, the problem is structural.

See, while what you see on the Interstate is one tractor pulling one (or occasionally two) trailers, that's not how the industry is structured. There's not (except in the case of independent owner-operators) a one-to-one correspondence between a tractor and a trailer. Across the industry, for every one tractor there are about three trailers. Most of the time, the trailers are sitting still. Getting loaded, or unloaded, or providing storage capacity for cargo not needed quite yet. Tractors achieve efficiency by constantly moving, and a lot of that near-constant motion is achieved by dropping off one trailer and almost immediately picking up another.

As a result of this operating model, what's more important than aerodynamics (to a big-rig operator) is interchangeability. Any trailer can pull any tractor from any location to any location. All the tractors and all the trailers hook together very much the same way. It's an industry standard, and it works pretty well for everyone.

The problem with the new aerodynamic designs is that, while each of them still features a tractor and a separate trailer, the pieces aren't boxy anymore. (That was the whole idea, right?) But because the pieces aren't the same shape, they don't fit together the same way. The standard for how tractors hook to trailers would have to change. A lot. Which means that old tractors couldn't hook up to new trailers, and vice versa. The loss to the industry in terms of overall operating inefficiency would far outweigh any benefit from lower fuel consumption. So they're not going to do it.

Profound structural problems will take a while to solve. (In terms of the big rigs, I hold out hope that some of the independent owner-operators -- for whom one tractor does correspond to one trailer -- will get the ball rolling towards industry transformation. It could happen.) But problems with administrative structures should be easier to address. We just have to keep reminding ourselves that thoughts and behavior patterns are less concrete (or steel) than trucks.

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