Wednesday, January 6, 2010

Q: What do you call 4 million autos in the junkyard?

A: A good start.

The Earth Policy Institute reported today that the domestic car fleet shrank from a record 250 million cars to 246 million.  From an environmental sustainability standpoint, this is a small step but an important one: it represents the first time since World War II that the nation has experienced a year-over-year contraction in the number of vehicles on the road. Since car usage is a substantial source of the greenhouse gas emissions suspected of accelerating Global Warming, a reduction in the number cars on the road (assuming a constant rate of miles driven per vehicle) translates into GHG emissions reductions.
The title is not meant as a jab at Detroit, the UAW or what appear to be doomed "investments" by Uncle Sam in our failed domestic auto-makers.  There have been many casualties from decades of poor management, bad planning and unsustainable union contracts, and the human toll of that misery stands as a compelling argument in favor of Corporate sustainability.  How?  At all three levels of "the triple bottom line", because better long-term planning and operational management would have paid dividends to people, planet and profit.

People.  An American transportation sector (as distinct from an American automobile "industry") that creates a suite of useful, well-designed products that appeal to both market demands (quality cars, not just SUVs on truck frames) and geo-political and environmental realities (trains that run on electricity sourced from renewable fuels) would be a source of sustainable, well-paying jobs.  Instead, we get inferior products and bloated union contracts and medical plans that have no possible way of ever being paid.

Planet.  Migrating transportation from fossil-intensive fuels to renewables reduces demands on a spectrum of environmental resources--the extractive aspect of petroleum production is energy intensive and higly polluting, as are both refining and transportation.  In addition, private auto ownership and use is COMPLETELY unsustainable, based on both the current product mix and its low-level of fuel "economy."  The current American pattern of car use represents not only a savage misappropriation of natural resources (and national treasure, required to secure far-flung oil reserves in hostile lands), but also a disconnect between domestic planning and reality. Suburbs--and the highways and mall-structures required to serve them in a car-driven economy--are a dispiriting misallocation of land and fossil fuel.

Profit. A transportation sector that builds products people want, and does so in balance with responsibly negotiated labor contracts can guarantee a solid, reliable revenue stream. It then becomes incumbent upon management to take a sustainable view: run the company to create long-term shareholder (as opposed to short-term exective) value. Companies like Interface and Toyota do it. Detroit, in concert with the railroads, has an opportunity to apply these paradigms in a way that can re-shape both our domestic transportation system, but do so in a way that redefines industrial economics in the context of sustainability.

Transportation is a massively important issue in the broader sustainability dialog.  Mobile sources account for roughly 29% of all GHG emissions in the United States (and over 40% in such vehicle-intensive hot-spots as California--source: California Energy Commission, 2005 IPER report).  While stunning, this statistic is somewhat misleading.  To the downside.
Why?  Because it does not embed either the direct emissions costs of such activities as steel manufacturing (and transportation), vehicle assembly (and transportation), oil extraction and refining (and transportation).  Or the indirect emissions from such collateral activities as military training and deployment required to maintain supply lines in hostile and unstable regions.
As a result, the type of vehicles we choose to build (and how we build them) as well as the broader structural accomodation of what James Kunstler calls "the happy motorin' society", beceome critical underpinnings of the sustainability dialog.  This matters to the enterprise for a variety of reasons.  Two, however, top the list: how firms conduct their supply chain and delivery activities (including vehicle and fuel programs for the sales force), and how they interact with their employees.  In the latter case, everything from the siting of facilities to support for employee use of mass transit and ride-sharing, to scheduled telecommuting and flex-schedules impacts how the enterprise engages transportation services.

No comments:

Post a Comment