Our economic security can be 'sustainable'.
Indeed there is. When sustainability practices are boiled down to their core outcomes, we find they are key to our economic security and economic competitiveness.
Few would doubt that Sept. 11 changed our world, and in particular our economy. Oregonians can no longer depend on uninterrupted flows of imported energy and raw materials to fuel our economy. Nor can we rely on strong international markets or stable international transportation systems to sell our goods and services. What to do?
Luckily, knowingly or unknowingly, Oregon has been preparing for this type of situation. As the sustainability insert points out, a number of leading firms, the state of Oregon, and some local communities have adopted sustainability practices. In doing so, these firms and agencies have enhanced their economic security and competitiveness.
These are just baby steps. If we significantly upgrade and target the efforts of government, the private sector and communities, Oregon - and the southern Willamette Valley in particular - could use sustainability practices to help weather the current economic and political storm and end up all the better for our efforts.
Unlike earlier cost-cutting efforts by businesses and governments, which often focused on cutting labor costs, sustainability practices focus on cutting costs associated with the generation of waste and the use of energy, water and raw materials. Wasting energy and raw materials is the same as throwing away money and forgoing higher profits, incomes and jobs. Sustainable practices involve new product designs, production technologies, and behaviors that reduce or eliminate waste and generate cost savings while maintaining - or even increasing - our production of goods and services and jobs.
How can these steps enhance our economic security and competitiveness?
Sustainability practices can reduce our vulnerability to economic disruptions:
Energy security. Disruption of oil supplies in the 1970s sparked recessions. Disruption of electricity markets have had a similar, though smaller, effect in 2001. The region responded to the current crisis by reducing electricity consumption by about 4,000 megawatts (enough to power four cities the size of Seattle).
The events of Sept. 11 suggest that future energy disruptions could occur, but their impacts on our economy can be diminished. We can increase the region's energy efficiency and reduce the amount of energy consumed per unit of economic output. And we can expand the supply of energy produced by wind, solar and other renewable sources. With greater energy efficiency, future shortages and price increases will have less leverage on the economy. With greater use of renewable energy supplies, the region will be less vulnerable to future droughts and increases in natural gas prices.
Transportation security. Similar reasoning applies to the transportation sector. The greater the fuel efficiency for cars, trucks, airplanes and ships, and the more we fuel our transport systems with renewable energy, the lower the region's vulnerability to potential disruptions in the nation's petroleum supplies.
Food security. As farmers adopt sustainable farming practices, they will diminish their use of petroleum-based pesticides and fertilizers. They can also employ cultivation techniques, such as planting seeds without first plowing fields, that entail less use of tractors and other heavy equipment. Consequently, their production would be less dependent on petroleum supplies.
Water-supply security. When water for a municipal utility comes from a degraded watershed or a polluted aquifer, it must pass through a complicated treatment process to kill pathogens and filter out impurities. Such systems are expensive, and - as occasional warnings about outbreaks of waterborne diseases reveal - they are fallible. Conserving watersheds and aquifers to prevent their degradation offers greater assurance of reliable, safe water supplies.
In addition to their contribution to security, sustainability practices can be used to protect and create jobs. Research shows that sustainable practices already are supporting thousands of jobs in Oregon. If we put our minds to it, we can create thousands more similar jobs in Oregon and the southern Willamette Valley.
Case studies of firms and agencies that have implemented sustainable practices indicate that many, perhaps most, of the jobs associated with these practices require skills and pay wages similar to those associated with unsustainable practices.
Construction consistent with Green Building principles, for example, requires architects, carpenters, plumbers and electricians, just like any other building job. But instead of constructing the building to be wasteful, it is built to reduce the consumption of energy, water and other raw materials, to avoid using toxins, and to eliminate waste. In some instances, the jobs associated with sustainable practices are new, as when used equipment components are remanufactured rather than discarded in a landfill.
National studies indicate that energy use in existing public buildings can be reduced by 22 percent or more (up to 50 percent in new buildings) through the installation of energy-efficient technologies and the adoption of energy-efficient behavior. If we made it a priority to implement these steps, the annual savings would total more than $48 million in Oregon. If these savings were used to expand employment, with the current average mix of costs (land, equipment, labor, etc.) roughly 2,000 new jobs would be created. Alternatively, the savings could be passed to taxpayers and consumers, or used to keep employment at current levels in the face of budget cuts.
These are rough estimates. But they illustrate important tradeoffs. The more businesses and governments can cut energy costs, the less pressure they'll be under to cut labor costs. This can be seen most clearly as the public sector strives to cope with higher energy costs caused by the recent energy crisis and lower revenues occasioned by the current recession. As governors, mayors and administrators are forced to reduce costs, they will have to cut labor costs unless they can find savings elsewhere.
Not only can sustainable practices promote security and economic well-being, they can improve workers' health and productivity. Improvements in health and productivity are especially important to workers who already have health problems or who earn so little that they cannot afford illness-related job absences. When sustainable practices create better working conditions, workers can remain healthier and incur fewer health-related absences from work.
They can also become more productive. Efficient lighting can help people see better, which reduces mistakes, increases work quality and boosts production. Optimal heating and cooling systems can increase worker comfort and output. Eliminating the use of toxic materials can prevent illness and absences. Good health can help workers be more productive, thereby increasing their job security. Sustainable practices in the workplace can improve the health and productivity of workers directly, by making the work site a healthier and better place to work, or indirectly, by making the larger community a healthier place to live.
In two model sites, the U.S. Green Building Council estimates that paying attention to the quality of work-site features increased worker productivity between 6 percent and 16 percent. Even small productivity gains can justify an investment in green techniques. Consider a 10,000-square-foot office space renting for $20 per square foot, including energy costs of $1.80 per square foot. If 25 workers occupy the office, and each earns an average annual salary of $50,000, the workers cost $125 per square foot - or 70 times more than energy. In this example, a 1 percent increase in worker productivity would pay for the company's entire energy bill for eight months.
Increased economic security is especially important to distressed communities and their families, for they have the least economic reserves to tide them over if jobs are lost and social services are cut. Research we are now completing shows that some sustainable practices generate jobs that are particularly well-suited for distressed communities and families.
For example, Marathon Recovery, a unit of Boise Cascade Corp., buys waste plastic materials and remanufactures them into building products. The company plans to open a $70 million facility in Elma, Wash., next spring to produce a wood/plastic composite siding for buildings. The plant will be in an area that once had one of the region's highest concentrations of timber-industry workers. It plans to hire 200 workers with wages at $9 to $17 per hour, plus benefits. The new plant, when fully operational, is expected to use 8 million to 9 million pounds of post-consumer plastics per month. This is just one case study of how sustainability can benefit distressed communities and families.
Sustainability practices can have the added benefit of inproving firms' competitiveness. Businesses that reduce their costs and increase worker productivity by reducing wasteful use of energy, water and raw materials and eliminating toxins in the workplace can produce the same output for less cost. Similarly, governments can save taxpayers money by eliminating toxins, reducing waste and increasing worker productivity. Together, businesses and governments can improve the business climate by preventing pollution in a cost-effective manner, rather than allowing pollution to build up and then cleaning it up.
Lower costs and higher worker productivity mean a firm can become more competitive relative to firms that do not adopt sustainable practices. Firms that are more competitive are more likely to exhibit increased sales and growth in employment, and will be affected much less during an economic downturn. Existing jobs can become more secure, and new jobs can be created as firms implement sustainable practices to retain and increase their competitiveness in regional, national and global markets that are tightening sustainability standards.
We recently completed a study that catalogued 160 firms in the Pacific Northwest that reduced their costs by more than $55 million annually by reducing their impact on natural ecosystems, diminishing their use of raw materials and eliminating excess energy and water use. Extrapolating from an earlier study, we concluded that if only one-quarter of the firms in nine industrial sectors were to take similar actions, the total savings (and increase in profits) for the region would exceed $1.1 billion over five years.
These findings, and others like them, have helped business leaders and elected officials recognize the importance of taking the steps needed to encourage broader adoption of actions that can improve the region's economy and environment.
A number of leading firms have shown the types of cost savings possible from the adoption of sustainable practices: Epson Computers in Portland reduced its waste to landfills to zero and has saved $300,000 in the process. Ten percent of its waste is incinerated for energy production.
Interface Inc., a leading global manufacturer of carpet and floor coverings, is also striving for zero waste. From 1994 through 1998 Interface cut its waste by 54 percent by weight and in doing so cut costs by $76 million.
BF Goodrich Aerospace, with a $200,000 initial cost to redesign its ventilation and heating system, reduced annual energy costs at an aircraft-maintenance facility in Everett, Wash., by $448,000.
Xerox Corp. in 1993 initiated a Waste-Free Factory Program to decrease water discharges and municipal, hazardous, and chemical waste by 90 percent. Savings exceed $90 million.
The adoption of sustainable practices can enhance our economic security by reducing the region's vulnerability to disruptions from market instability and terrorism. These practices can also dramatically increase our economic competitiveness. Elected officials, business and civic leaders should make the expansion of this field a priority. Our communities and workers will benefit today, and we will all benefit in the future.
Bob Doppelt lives in the McKenzie River Valley and is director of the Center for Watershed and Community Health at Portland State University, where he is an associate professor of public administration.
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|Title Annotation:||Environment: Companies are better able to weather tough times by conserving energy and materials and reducing waste.; Commentary|
|Publication:||The Register-Guard (Eugene, OR)|
|Date:||Nov 18, 2001|
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