Clarifying My Position

There was a bit of a scramble yesterday when Business Week put their own subtitle on my submitted op-ed. Their anti-offset interpretation brought me a bit up short, since the focus of the piece wasn’t supposed to be offsets, but carbon neutrality. So clearly I had missed the mark, so thought I’d take another shot here.

First, let’s start with what I believe about out our collective situation. GHG emissions and associated climate change are a major challenge, and we don’t have a simple solution. We absolutely need a dramatic increase in zero and low-carbon energy sources, but we use so much energy that that won’t be enough. We need improvements in basic efficiency, but that’s probably going to be good for 20-40% improvement, and won’t be enough either. If we want to make serious headway and still have the have the quality of life we all strive for, then we’re going to need a lot more, and part of that ‘more’ is going to have to be some radical innovation and improvement in the design, manufacture and delivery of all of the products, services and infrastructure that make up our economy.

So the main point of my op-ed wasn’t about offsets, it was about carbon neutrality. I’m talking to more and more companies whose environmental strategy is defined by a goal of being carbon neutral. They are generally doing some efficiency projects, purchasing some green energy and offsetting the rest. Is this bad to do? Of course not. Their efficiency gains help them and the atmosphere, their green energy purchases help grow the investment in even more green energy, and if they bought quality offsets, those should spur further GHG reductions somewhere in the economy. These are all good things - we’re doing them, too - but I personally don’t believe they’ll get us where we need to get to. So if carbon neutrality spurs people to action, that’s a good step, but I don’t believe it is sufficient, and here’s why.

From the examples in my Business Week piece, if Toyota uses their environmental efforts solely towards carbon neutrality, they never build a Prius. Same goes for the Sun, WalMart and GE examples. So is carbon neutrality bad in these cases? Not necessarily, but it is very important to understand that the positive impact that these companies could have on the environment is way way bigger than what is measured by the carbon accounting that defines ‘carbon neutrality’ today. It is possible that resources or focus are being diverted away from the big impact in order to be ‘carbon neutral’, and I’m worried that, in some cases, this may be happening today.

So I believe that if you care about the environment, you want the bulk of Toyota’s focus to be on designing cars that can be built and operated far more efficiently. And the good news is that there’s a great way to say “thank you” to Toyota and others, which is to buy their products when they make sense for you. Many of you have done that, which is way cool. Businesses also buy tons of products and services, so this can apply to them as well. I’ve seen some really great ideas for greening corporate car fleets recently (with good financial returns, btw), so Toyota is being rewarded by corporations as well. This is where the virtuous cycle that I discussed lies - a robust market for environmentally positive innovation drives an increase in that innovation, which helps grow demand in the market and so forth.

Summary: carbon neutrality is a step in the right direction, but for many companies, its only a very small part of the overall impact they could have. It is in the best interest of those companies, as well as our collective best interest, that they take a broad view and prioritize appropriately across all of their potential environmental opportunities.