Polluting is a waste of money

[The Big Al]

One thing I just don't get about business is their problem with protecting the environment. And the biggest arguement is "it costs money". Yeah, any kind of upgrade costs money. It's called investment. And doesn't polluting cost money as well? All that smoke being belched out of a coal fired power plant is fuel that's not turned into energy and so represents wasted money. All the waste prodeuced by manufacturing represents materials bought but not made into marketable products. Older technology tends to waste energy which wastes money. So going green makes green. Maybe not at first but the investment will pay for itself and then some.

So why does business beat down environmental policies when they help them as much as the environment?

 

[Trip]

I'm no economist (and I'm sure Mozz will remind me of that) but today's market seems to reward companies that can maximize their product THIS QUARTER and not the ones that will make a steady profit over a period of time.

Though there may be a return, it won't come quick enough, and it may not even be big enough x number of years down the line for a company to consider it now.

Sorry if that insane rambling makes no sense; I just woke up and am too stupid to wait til I'm fully awake.

- Trip

EDIT: 800th Post.

 

[Mozz]

One thing I just don't get about business is their problem with protecting the environment. And the biggest arguement is "it costs money". Yeah, any kind of upgrade costs money. It's called investment. And doesn't polluting cost money as well? All that smoke being belched out of a coal fired power plant is fuel that's not turned into energy and so represents wasted money. All the waste prodeuced by manufacturing represents materials bought but not made into marketable products.

I don't particularly understand this. Aren't waste products called waste products because they serve no purpose? I'm sure the smoke coming out of a stack could be used to power a small wind turbine, but I doubt you could do anything useful with the smoke itself. And if it was profitable to change their ways and somehow use the 'waste products', they would in a heartbeat.

Older technology tends to waste energy which wastes money. So going green makes green. Maybe not at first but the investment will pay for itself and then some.

I'm sure the company weighs their options on a regular basis and decides what is best, after taking profit, public relations, safety, etc. into consideratoin.

So why does business beat down environmental policies when they help them as much as the environment?

Because they don't. Environmental policies are simply government mandates overriding the businesses on decisions on profitability. If you owned 100 shares of, say, DuPont, would you want these top-level decisions made by the executive team or the government?

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[The Big Al]

I don't particularly understand this. Aren't waste products called waste products because they serve no purpose? I'm sure the smoke coming out of a stack could be used to power a small wind turbine, but I doubt you could do anything useful with the smoke itself. And if it was profitable to change their ways and somehow use the 'waste products', they would in a heartbeat.

This is where science comes in. The more smoke produced by the fire, the less efficent it is. So if the plant used more efficent fuel or burning techniques, they could produce more power for less fuel, saving money and the environment.

I'm sure the company weighs their options on a regular basis and decides what is best, after taking profit, public relations, safety, etc. into consideratoin.

As Trip said, corporation now think quarter to quarter, not in the long term where the real success of the company should be measured.

Because they don't. Environmental policies are simply government mandates overriding the businesses on decisions on profitability. If you owned 100 shares of, say, DuPont, would you want these top-level decisions made by the executive team or the government?

I do hold shares in GM and think the government mandating fuel efficent vehicles is a good idea. For one thing, if companies are forced to do something, they might excel at it. Why do you think GM and Honda (I think it's Honda) came out with the first fuel cell Vehicle prototypes.

And then there's the utter stupidity of companies. There with large wooded area/wetland in my neighborhood. When we got hooked up to the sewer system, this developer came along and wanted to develop the area. He lied to the state claiming it wasn't a wetland despite the township having classified it as such and it being the bad old days of Fatso Engler got a permit. He bullied our neighbors out of their land, tried to do the same to us but my family threatened to sue, cut down all the trees and created a civil engineering nightmare. Not only did he go bankrupt but so did two other developers after him. And I doubt the money made from the homes will make up for not only the money wasted in developing the land also loss of natural capital the wetlands provided our neighborhood.

 

[Mozz]

I love your assumption that corporations aren't out to make money, they're too stupid to realize your plans are the correct ones and if they only followed the "green" method they'd maximize profits.

Corporations have both short-term and long-term strategies. POORLY RUN companies can fuck up in either direction by focusing too much on one. Focusing on short-term goals could be unsustainable, while focusing solely on the long-term can be unsustainable due to lack of short-term growth.

Regardless, the companies that will survive are those that balance correctly and make the correct decisions. GM has not, it should die a quick death.

 

[Fig]

Greatly amusing note of the day :

All those industrial people who hide their ill-gotten (ie, through pollution) gains oversea should really take note about global warming. The highest point in the Cayman islands is 140 feets above sea level...and that's what they call a mountain over there. Underseas bank accounts, anyone? :-D

As for Mozz's statement, he is blindly (as is typical of economical ideologists, whether their names be Adam Smith or Karl Marx) ignoring arch-typical human nature (read : Selfishness).

The basic problem is, we do not know what the future holds. We can make educated guesses, at best, but the trouble is - there are far too many things we have no control over. Suppose a person invests in a company which has little value now but they believe (entirely reasonably) will have a great value in twenty years. All fine and good - they'll be rich in twenty years!

Except they get hit by a car five years from now and die. Ooops, no getting rich for them. Oh, sure, their kids (well...if they bothered to have them) might eventually get pretty wealthy (not rich, due to death tax, but...), but the person who actually made the investment got nothing out of it. This, for most people, is not a desirable outcome.

The same goes for corporation. A corporation can make long-term predictions and make some work on it, but the fact is, there are many things they have absolutely no way to control/predict (see : air transports vs 9/11) that could badly damage their company, or even wreck them entirely, before their long-term projects even starts having a positive impact (or start preventing a negative one).

Thus, people and company prefer dealing in short (0-1 year), or mid (1-5 years) terms projects; ie, projects that are likely to benefit them BEFORE life/random luck/fate comes and bite them in the ass. Long (5-10 years) and very long (10+ years) term stuff are extremely risky decisions.

(This isn't, of course, how companies will refer to them usually - they will just lump mid term with long term, focus mostly on the "mid-term" half of that "long-term", and not talk much if at all about very-long-term)

Where this goes wrong is, of course, pollution. Pollution promises to be absolutely disastrous. Eventually. That eventually being, most likely, 20+ years off, ie, way off even what most long-term-thinking companies calls "long-term". In 20 years, the world can change so much that it makes very little economic sense to sacrifice anything in the short or mid term ranges for benefits that won't really come in until then.

Hence why they don'T like environmental regulation that force them to sacrifice now to benefit later. Hence also why some such regulations are most likely necessary : because otherwise, this sort of thing won't happen nearly as much as it needs to.

Keeping in mind, after all, that it's us - the people discussing it now - who'll pay the price if there's no move made against pollution.

 

[The Big Al]

I love your assumption that corporations aren't out to make money, they're too stupid to realize your plans are the correct ones and if they only followed the "green" method they'd maximize profits.[/QUOTTE]
I know they're out to make money but too many ARE too stupid to realize what they're doing. That developer though he'd make a killing but wound up going backrupt because he went where he didn't belong. It's the stupidity that gets me.

Corporations have both short-term and long-term strategies. POORLY RUN companies can fuck up in either direction by focusing too much on one. Focusing on short-term goals could be unsustainable, while focusing solely on the long-term can be unsustainable due to lack of short-term growth.

And yet I'm seeing this huge bias towards quarterly gains over long term growth. And short term growth does mean investment. You have a really good quarter, you take that profit use it to upgrade your eqiupment and expand. I thought that's the basics of economics.

Regardless, the companies that will survive are those that balance correctly and make the correct decisions. GM has not, it should die a quick death.

Too many good people work for it. I say we kick the klepto bastards running it out of Detroit. Then find someone with at least the sense God gave a head of cabbage to run it.

 

[McGraw]

All publically listed companies try to maximise profits, because it is the shareholder that owns them. There is a tendency for shareholders to err towards short term profits, and why not? As Mr Keynes put it; "in the long run, we're all dead". Companies will only invest if there is an incentive to, and incentives differ from market to market i.e. in a monopoly, there are no incentives to cut costs, because without any (readily available) alternative, the monopolist can charge almost whatever they like (hello Microsoft). Further, costs can be passed on to the consumer.

I can assure you that going green is not currently a viable alternative, otherwise the green revolution would have already happened. The simple matter of it is, the expected return of the investment is not desirable enough to prompt a switch. In addition, the capital that companies already own may be polluting, but they have every incentive to continue to use it until the use by date, or until marginal revenue is outweighed by marginal cost of the technology.

 

[ChaosRocket]

Do you really think Keynes is the best example to bring up here? I mean Keynes wanted to create jobs through deficiet spending, he would have supported paying someone to dig a ditch and fill it up. Deficiet spending obviously isn't sustainable in the long run...kinda like pollution.