Green Small Business Ideas

I was asked to be a speaker at the Pasadena seminar series, the Art of Business Survival, which is put on by the City of Pasadena, the Pasadena Chamber of Commerce, and the Workforce Investment Board. The focus of the seminar was "What it Means to be a Green Business."

The audience was mostly small business owners in Pasadena and surrounding areas. Here's a copy of the presentation:

TerraPass - Consumer Driven Change

A few years back my friend Tom Arnold founded a company called . The company has been getting a ton of press and momentum, and for good reason. I love what they do and the concept is simple. You want to be carbon neutral, so you decide to offset the CO2 you put into the air by driving, flying, or heating your home. You go to TerraPass.com, input your driving/flying/home energy habits, and buy a corresponding TerraPass. They then put your money into clean energy projects, such as wind energy, that replace enough "dirty" energy to offset what you've pumped into the air, functioning like your own personal carbon offset. Great idea.

I just offset two business flights, a weekend flight for me and my girlfriend, and my flight home for Christmas, all for just $37. Then I offset my car for a year for $30 (I know, no electric car yet, can you believe it?). Conscience clear, but even more important, CO2 clear.

They've also announced great partnerships to effect change at the point of purchase, such as the ones with Enterprise, Alamo, and National. When you rent a car through these companies you'll be given the chance to offset the CO2 from your rental. Or with Expedia, which allows customers the same option when they book a trip.

I'd love to see even more of this, such as a GreenGrocer TerraPass at grocery store checkout lanes, giving you the ability to offset CO2 involved with the manufacturing and transport of your groceries. I'm sure Whole Foods customers would jump all over that, and it'd be a great marketing move for Whole Foods. Alternatively, other grocery chains could move first to capture more of that lucrative customer segment.

And my personal favorite would be if they could put an option right at the gas pump. Pay an extra 5 or 10 cents per gallon, and your entire fill-up is carbon neutral. I'd do that. But I wonder if Exxon and co. would go for that... "hey, pay a little extra to help put us out of business!" Hmmm, somehow I think it's a tough sell to the execs. But BP just might go for it, since they're trying to position themselves as the environmentally friendly oil company.

The Gas Tax - Is It Feasible? (Don't Kill Me!)

I was talking with my friend J-Ro* about his favorite subject, Peak Oil, and we began talking about taxing gasoline. Obviously it's not the most popular of political moves (ok, it's political suicide), and there are concerns about the ripple effects to the economy, including potential recession. But on the upside it could be used to develop renewable energy (see my first post for the benefits of this), and it could speed the consumer's move to reducing energy/oil consumption and demanding renewable energy. So I did what I am wont to do... I opened up an Excel spreadsheet.

People complain to no end about increases in gas prices, and to me it's highly irrational. A tax of $1 per gallon (which would cause large-scale mobs to burn in effigy whomever had proposed such a monstrous tax, which, I now fear, they could think is me!) only costs the average driver $50 per month.

A tax of $0.20 per gallon, which would most likely still be hugely unpopular, would only cost $10/month.

So consumers seem to resist anything that costs them $10/month.

Now let's look at that same average consumer and see what they might save by replacing current 100-Watt bulbs with 26-Watt fluorescent bulbs.

$8.16! That's almost the $10 the gas tax would cost. So it's basically a wash.
I just installed these bulbs and they're actually brighter than the old 100-watt bulbs. So now the consumer is resisting using a better product that saves them the $10 per month they were about to kill me for suggesting I put into renewable energy.

I really believe this is an information war. The ultimate answers to the Energy Crunch will come from rational decisions. We just need to make sure the rational arguments get into the heads of the decision-makers.

*Incidentally, J-Ro, whose full name I won't use to protect his identity, was the one who suggested starting this blog in the first place. Thanks J-Ro!

What will spur change in the energy industry? Gas that costs more than your car?

I was driving around yesterday and got to thinking... with the rising price of oil due to shrinking supply and rising demand, we'll soon realistically see gas prices in the $5 to $6 per gallon range. Some Americans will scoff, but as many people have pointed out, Europe's been above this level for a long time. At that level, we can see from some pretty standard calculations that the gas will cost more than the car over the life of the car.








And if we slightly modify some of those assumptions, we see a dramatic shift where the fuel now costs nearly 3X what the car cost.








Prices such as these would look more like the razor blade model, where you get the razor for cheap, but the company nails you when you buy the blade refills for 12 bucks. Come to think of it, if I were an oil company I'd launch a series of ads showing just how sexy and cool these un-economical cars are... you know, distract people from the fact that they're paying more for the fuel than the car.

But I think consumers are smart, and while they've already begun to wake up, they'll REALLY wake up when gas hits $6/gallon. And I do believe demand for electric cars, not just hybrids, will begin to come from the bulk of society, not just the "green fringe."

And that's really where we have to go on this issue. Change will have to come because it makes economic sense to the consumer. I fear we're living a pipe-dream if we think that consumers will think 30 years into the future and make a choice that hurts them economically today. They have to feel some pain so that the better choice becomes the economical choice, and vice versa. Unfortunately, we'll see just how much pain we have to endure first.