Thursday, August 23, 2007

More for Less

On the scale of sexiness, hybrid cars beat out hand-washed clothes and brown eggs beat out the white ones. In these comparisons, both examples result in a similar CO2 savings, but we pay a premium for the products that appear more green. This line of thinking influences decisions made by governments and corporations alike, as well as the debate between carbon reductions and carbon offsets.

Earlier this year, the European Union made the decision to replace 10% of its diesel fuel with renewable biodiesels by 2020, with the intention of reducing its greenhouse gas pollution. Unlike corn ethanol, which provides little benefit to the environment, a lifecycle assessment of biodiesels suggests that a switch to biodiesels can reduce the carbon footprint of diesel fuel by 78%.

But a lifecycle assessment only includes direct costs due to the production and manufacturing of a product. Any economist knows that opportunity cost is a major factor in decision-making, and a recent study by scientists in the UK finds that tropical climate forests reduce our overall CO2 footprint 9 times more than a biodiesel farm on the same patch of land. Not to mention that a whopping 38% of European farmland would be required to make the 10% substitution. Even those of us who sneer at the idea of offsetts would have a hard time maintaining that 9 carbon offsets don’t out-value a single reduction.

On top of this, the feel-good-factor of biodiesels doesn’t come for free. Government subsidies are required for biodiesel to compete with its fossil fuel counterpart and costs the government money in the form of the subsidies as well as lost profits from diesel taxes.

My advice… if you have a couple extra dollars for the brown eggs, go ahead and spend the money. But when it comes to big decisions that affect the planet, don’t let green appeal dupe you into paying more for less.

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