In A Perfect World, Capitalism Would Actually Work.

Capitalism is often vilified as the source of most modern evils, from the rich getting richer and the poor getting poorer to inequalities in environmental health. The problem is we don't live in a perfect capitalist society so capitalism is as flawed as the system that supports it. There's really no such thing as a perfect capitalist society though. According to Adam Smith in his The Wealth of Nations, in true capitalism every man pursuing solely what is best for himself will result in what is best for society. True capitalism means everyone has; perfect access to information, perfect access to all goods and services, free movement of goods and labor, no external factors like taxes or subsidies affect prices, and all goods and services are economically quantified and accounted for.

None of these parameters are true in our current economy. Environmentalist often focus on the last aspect of capitalism, the idea that all goods and services are economically quantified and accounted for. Environmental resources like metals, minerals, wood, water, air, and soil, along with environmental services like water and air purification and soil production, are often severely undervalued or not valued at all. The cost of polluting the air and the water are born by society at large, not by the company which does the polluting.

The secret to a sustainable society according to Paul Hawken, Amory Lovins, and L. Hunter Lovins in their book "Natural Capitalism; Creating the Next Industrial Revolution," lies in giving natural resources their fair value - hence 'natural capitalism.' How would this work? Put simply, stop subsidizing industries that harm society (like giving oil companies millions in tax breaks every year and selling large scale industrial agriculture heavily subsidized water) charge a reasonable prices for limited resources (like expanding 'pay as you drive systems' including more tolls, higher parking fees, or including the cost of insurance in gasoline so more driving costs more, all working to reduce driving and limit the expansion of asphalt) and close the resource loop by making industries responsible for all of their waste.

All of these practices would encourage business to take natural resources into account in all their economic calculations, and lead to innovation in industries that realize there is an economic benefit to preserving the natural resources they rely on. The other main reason industries have been slow to adopt high efficiency resource saving practices, is that they are too focused on short term profits, and are unable to see the multiple benefits of holistic solutions. Factories with outdated generators could install new ones that use half the energy and would pay themselves back in a year and 5 times over in their entire lifetime, but they aren't upgraded because stakeholders will only accept a payback of 6 months. Industries fail to realize that by constantly moving their production centers to countries with the cheapest labor they impoverish their own customers and cripple their ability to innovate new technologies by never developing a strong base from which to grow. Instead of competing to produce the best product, they are competing to produce the cheapest. This works well for a short while, but it is a race to the bottom which everyone will loose.

A more holistic approach, realizes that well thought out solutions solve multiple problems, which in the end is more cost effective. Take efficient buildings for example. Investing in small amount of efficiency, like better windows can be expensive and barely pay itself back. But with a holistic design, a building can become much more efficient and economical. For example, the Rocky Mountain Institute spent a good deal of time and money designing their new office. Despite the larger initial cost, because it was so well designed the final building ended being cheaper to build then a standard design due to reduces materials. It was so efficient, even though the center was in the Rocky Mountains where temperatures can easily reach -40 degrees in winter, the only heating system for the 4,000 structure was two small stoves, and the Institute was able to grow bananas there!

The book cites in-numerous other success stories of companies, communities, governments, and individuals that used creative new approaches to economic and resource and created amazing innovative solutions which saved money, resources, and improved standards of living. Natural capitalism can help people break out of the old business as usual models, and reconsider new solutions to old problems. It is a fascinating read, and for anyone who thinks sustainability is hopeless or pointless, you will find the solutions in this book incredibly inspiring.

Green Hot Water to Save Yourself Some Green

I recently replaced the old water heater in my house. The old heater was, unfortunately, electric which is far less efficient, more expensive, and carbon intensive to run then a gas water heater. But, as retrofitting the house to accommodate a gas water heater was prohibitively expensive, electric it must stay.  I discovered an interesting new technology however, which is the only Energystar rated electric water heater, the electric heat pump. The top electric heat pump is the GE GeoSpring which uses less then half the electricity of a normal electric water heater by using heat in the ambient air temperature to warm water through a heat pump exchange. The Energy Guide rating of a GE GeoSpring says that its annual cost of running is $199, which is a huge improvement over the top rated standard GE electric water heater of $501 a year.

I also unfortunately discovered that the GeoSpring is not for everyone - it is just slightly larger then a standard water heater (which in my case made it impossible to fit underneath the old water hookups coming out of the wall) and since it uses surrounding air it requires at least 5 inches of open space on all sides of the heater and a well ventilated or open room to work efficiently. The heat pump works best when ambient air is warmer, so it will not be as efficient in cold regions, and it actually puts out cold air so you probably wouldn't want it competing with your heating system in a cold climate anyway. This however is perfect for typically warmer climates like California or the Southwest. The space requirements both for the size of the heater and the air flow means it would most easily replace systems that are already installed in the garage or other large space, and all of the hook ups are the same as a standard electric heater. Don't worry about 'energy efficient' meaning poor performance either - the heat pump actually heats water faster, more consistently, and more of it then a standard.

The biggest drawback most people see however, is the price tag. Currently the GeoSpring sells for $1400 to $1600. Up until the end of this year federal stimulus money will write off a third of that, and additional rebates are available through states and local utilities which could make the upfront cost competitive with a standard electric heater. All these rebates expire at the end of the year, however, and few people are willing to shell out $1500 when they could shell out $500 or less. A GeoSpring is still a good investment for any willing to do the math however.

If you use as much hot water as the Energy Guide estimates when they calculate average yearly cost of running a hot water heater, and large households use more, that means you would save $300 a year by switching to a heat pump. At that rate, the heat pump would make up the $1000 difference in just over 3 years, and its entire cost in 5. Add all this up over the lifetime of the pump and you can save thousands of dollars, about an extra $1500 after it has paid itself off if you only keep it for 10 years. The way todays stock market has been performing, I'd say a guarantee of at least doubling your money is a pretty good investment.

Learn more at http://www.energystar.gov/index.cfm?c=heat_pump.pr_savings_benefits and http://www.geappliances.com/heat-pump-hot-water-heater/