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All Things Considered: May 2010

Efficiency may trump climate change


April 23, 2010
By Jim Knisley


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OK let’s accept that climate change and energy conservation is just
some green, lefty, tree hugging conspiracy based on flawed science.

OK let’s accept that climate change and energy conservation is just some green, lefty, tree hugging conspiracy based on flawed science.

I suggest this not because I believe it is a conspiracy, but because it doesn’t matter anymore and getting all of that stuff off the table may lead to discussions and actions that generate a bit of light and not just heat.

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There is a concerted effort afoot to drive energy costs out of production and distribution, which will have a profound affect on carbon dioxide emissions. Leading the way on this is, of all  companies, Wal-Mart.

The king of low cost retail seems to have determined that best way to keep costs of just about everything down, is to reduce the amount of energy used in production and transportation.

It has been doing that itself for some time by replacing light bulbs, building “green” stores, using alternative fuels and improving its logistics. Now it is calling on its suppliers to do the same and is promising to provide guidance and advice.

Suppliers are free to ignore Wal-Mart’s advice, but Wal-Mart is also free to ignore them.

In February, the company said it would begin by focusing on products with the highest carbon costs – which includes most of the food the company sells. They will call on suppliers to take a hard look at their every aspect of their operations.

In effect, the suppliers are being asked to examine their carbon footprint and account for it.

The goal is to allow suppliers to lower their costs and, presumably, pass some of the
savings through to Wal-Mart and consumers by way of lower product costs.

Michael Duke, Wal-Mart’s president and chief executive, said in a February webcast: “We know we need to get ready for a world in which energy will only be more expensive.”

“Energy efficiency and carbon reduction are central issues in the world today,” said Duke. “We’ve been working to make a difference in these areas, both in our own footprint and our supply chain. We know that we have an opportunity to do more and the capacity to do more.”

If anyone thinks Wal-Mart is just singling out its North American suppliers they would be wrong. Last year, Wal-Mart’s then-CEO H. Lee Scott Jr., went to China and told more than 1,000 suppliers they had to reduce energy use and cut emissions.

“Our goal is for supplier factories to meet or exceed all social and environmental laws and regulations.” Failing to do so is not an option, he said. He promised that Wal-Mart would work with companies to help them become more energy efficient. Anyone who failed meet the new standards by 2012 would no longer supply Wal-Mart.

Meanwhile, one of the most arch conservative U.S. senators has also decided that cutting carbon emissions makes sense.

Lindsey Graham, Republican Senator from South Carolina, recently told the New York Times that for people under the age of 30 cutting the use of fossil fuels and reducing carbon dioxide emissions is not up for debate. It is a value for them, he said. It is a value Graham has been able to adopt by focusing on the need to clean up the air and make the U.S. more energy self-sufficient.

“The future economy of America and the jobs of the future are going to be tied to cleaning up the air, and in the process of cleaning up the air this country becomes energy independent and our national security is greatly enhanced,” he told the Times.

This led him to the need to put a price on carbon emissions. “You will never have energy independence without pricing carbon,” he said.

Pricing carbon emissions and no longer allowing companies to take a free ride by pumping carbon into the air would force companies and consumers to take a hard look at true and total costs. Once all the costs are included wind power, solar power and even nuclear power become more profitable.

It’s all but certain that other companies will follow Wal-Mart’s lead and begin insisting on cleaner, greener operations if for no other reason than to reduce costs.

It’s also becoming clear that even extremely conservative U.S. politicians are becoming serious about cleaning the air and reducing carbon emissions, if only in the name of greater U.S. energy self sufficiency.

Because of this, maybe the best way for all the lefty, tree huggers out there to win the climate change debate is not to debate at all. Just focus on efficiency as Wal-Mart is doing or talk about clean air, as Graham is doing and move on.


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