Everyone is going green these days, or so it seems.Excluding the obvious environmental advantages, there is a definite financial one for the consumer.
When the Conservative Party of Canada took power in 2006, they applied a heavy hand in scrapping most environmental programs the previous government had put in place.In total approximately 70 million dollars was “saved” across several departments.This represents about 7% of the total budget cuts they made; at least of those that could be seen.While this may seem significant, the actual portion of the actual government revenue represented about 0.04%.The impact of these cuts was largely on the environment but also on the consumer.The cancellation of the “One Ton Challenge” Program definitely impacted the consumer by removing rebate incentives to the consumer for upgrading energy efficiency in their homes.This also impacted the financial institutions who were making home improvement loans as well as the construction industry who were doing the work.
Along the way, a funny thing happened.The consumer didn’t sit still.Smaller but still significant changes were happening.More efficient lighting was being used, financial institutions began to offer lower cost loans for energy savings and utilities began offering lower rates for “off hours” energy consumption.People began to rely less on vehicular travel opting for public transit or other means, they purchased energy efficient appliances.Utility companies began to offer incentives for these purchases.
So, one could argue that these savings in expenditure were a good thing because people continued to go green regardless.This may very well be true at least in part, however, the government policies ignored the larger polluters, business and industry.How does this impact the consumer?
First of all, it is business as usual.If business and industry, agriculture and other resource sectors were to get on board the green train, it would spawn a new sector of industry devoted to environmental protection.Of course there is a cost involved just as there is for the consumer and it is a high cost.The question is how will that cost be managed?
Consider that the consumer can expect on average that they will recover their costs of improvements over a 7 to 10 year period.The consumer has no choice if we are to keep our energy costs down during these times of increasing prices.The consumer only cares that their disposable income remains the same or increases.
Business on the other hand expects that it will recover those costs of implementation before the cost of improvements are written off their financial statements.If the recovery for business is approximately the same as the consumer then from a financial perspective, it is not an investment with a return.In other words, it doesn’t contribute to profits.In short, if it doesn’t contribute to profit, the expense is suspect.The other option business has is to directly pass on these costs to the consumer which of course will create problems of a competitive marketplace.Remember, domestic goods still have to compete with off shore imports where no environmental legislation exists to any degree.In short, business has no incentive to go green.
So is business justified in its resistance?Perhaps or perhaps not.One of the key ingredients of going green is to recapture energy.Remember, energy is converted from one form to another.It becomes a matter of reusing that energy.Many companies have already done so but they are in a very tiny minority.Strangely enough, they are also competitive in the marketplace and they are not all small organizations.There are other steps that can be taken but each company has to examine its own consumptions.
What can the consumer do to improve things?First, you can express your displeasure with the pen.Anyone can write to a company expressing their opinions and consequently withdraw any future purchases you might make.You can direct your investment savings toward funds or stock purchases for those companies who are green.In doing so you are providing funding for their operations and in return can realize a dividend from their profitability.You can invest in companies who are developing green technologies.
You can write to government and express your feelings and convictions and you can back it up with your vote.Business can not do this alone and needs the assistance of government.This doesn’t mean it needs government money (although that would be preferred) but it could use some protection from those imports.