How Business Thrives in a 'Carbon Nation'

Two Steps Forward

How Business Thrives in a 'Carbon Nation'

I met Peter Byck in 2008, when he was making his documentary “Carbon Nation,” which focuses on climate-change solutions happening today from people of all occupations and political stripes -- some of whom don't even believe in climate change. (I have a cameo role in the film.) It’s an upbeat, business-focused film that aims to be non-preachy and non-partisan about how the U.S. can achieve national and energy security while promoting health and a clean environment.

On the occasion of today's release of the film’s DVD and on-demand versions, I asked Byck, "Carbon Nation's" writer and director, to reflect on the experience: what he’s learned about business, his hope for the movie, and why he remains optimistic about the potential to solve our climate challenges.

Joel Makower: What was the business message you and the “Carbon Nation” team had in mind when you started the movie?

Peter Byck: Early on in the filming, the second day in fact, we were at an American Council on an Energy-Efficient Economy conference and I was hearing how $1 spent on energy efficiency produced $2 in savings. That sounded like good business to me. We learned that Dow Chemical had spent just under $2 billion on energy-efficient programs since 1994 and had saved nearly $10 billion so far. It seemed like a no-brainer that every company would jump on this bandwagon. And it gave us hope for our movie, because we realized that if things don’t make money, don’t make business sense, they won’t really reach scale. So that was the early business message: cut energy use and save money.

Then, during the filming, and even after, as I’ve been screening the movie all over the U.S., I’ve learned how business decisions, based on energy savings, can have unexpected cascading benefits. We have a story that takes place in Roscoe, Texas. Cliff Etheredge and his son David took on the challenge of organizing 400 small cotton farms into one large tract of land, enticing Eon Energy to develop a wind farm — the world’s largest at the time. Big ranches were easy to develop, with one or two owners, but Cliff’s small cotton farm, along with his neighbors’, was seen as unworkable – too many contracts. But Cliff is a natural leader and got it done. Now, farmers who were solely dependent on their hit-or-miss cotton crops had a steady source of income, derived from the turbines: a royalty that ranged from $3,000 to $15,000 per year, per turbine. This changed lives.

That benefit was intended. The re-birth of their small downtown area makes sense, since more money was being earned. The benefit no one expected was that folks in their early 20s, who had left Roscoe for Dallas or San Antonio for work, could now find work at home – and grandparents got to live near their grandkids. Every renewable-energy or energy-efficiency story we found for “Carbon Nation” had this sort of positive human side benefit.

Makower: Did you find what you expected to find, in terms of business innovation and engagement around climate change? What surprised you most?

Byck: I’m an optimist, so I was hoping to find all sorts of business innovation. Many are still early, like thin-film solar, plastics made from carbon dioxide, algae-derived biofuels, and redesigned wind turbine blades that increase efficiency by adding humps based on those of the humpback whale.

Many of the people we found working in these fields were very concerned with climate change. It was a motivator for them. But in Alaska, we met Bernie Karl, a geothermal pioneer, creating basically what’s an air conditioner in reverse, enabling him to generate power from relatively low-temperature water – what he calls “Water that’s not as hot as McDonalds coffee” — 160-180º F, that sort of range. He got the attention of UTC Power, which provided the Carrier air conditioning equipment, and he’s saving big money on energy, cutting costs from 30 cents a kilowatt-hour down to 5 cents — and he’s hoping to reach 1 cent soon. Bernie hates smokestacks — he’s an industrial-level recycler. He’s going to do more to slow climate change than I’ll ever do.

Then came a huge surprise for me: He doesn’t think humans are the cause of global warming. At first, I was pissed and thought he should just accept that climate change is human-made. Then I realized that he was a gift for our movie, and to the world really. He’s in action, lowering carbon, reducing the use of fossil fuel, all things good for slowing climate change. He and I don’t have to agree on the climate issue. That’s okay, because as he says, “I like clean air and I like clean water. And that’s so simple.”

Makower: What did you find to be the biggest barriers companies face when it comes to viewing climate issues from the business perspective?

Byck: I met Michael Johnston about a year into filming – he spoke at a Ceres conference at the United Nations. He suggested that what every company needs is a chief resources officer — a CRO. He was highlighting the biggest barrier I can see: that the person in charge of buying equipment, or building and managing buildings, is not connected or responsible to the person in charge of paying the energy bills. So, the life-cycle costs of equipment isn’t a priority in every single purchase and installation. Most things these days that have higher energy efficiency — HVAC systems, passenger jets, etc. — cost more. But when you factor in energy savings over the life of the piece of gear, then the more efficient piece is much cheaper.

The smart companies can make sure this is a strong part of their marketing. Boeing’s new 787 is more expensive up front because of the carbon fiber materials that replace aluminum for the plane’s structure. The carbon fiber is much lighter, thus about 30% less fuel is needed to fly the plane. Boeing simply shows its customers how quickly 787s’ higher cost is recouped through fuel savings. And, again, with the cascading-benefit angle, the carbon fiber is stronger, thus safer. So, depending on fuel costs, which most would agree are only going up, after a certain number of years, the 787 will start saving the airline money, even though it costs more upfront.

People just have to get used to thinking about life-cycle costs, not just the initial costs of their gear. When life-cycle and initial purchase price are coupled, I would guess energy efficiency would win most of the time. Then the market for energy-efficient goods just gets that much more cost competitive, robust and effective. More cascading benefits.

Makower: It seems so simple. What do you see as the biggest obstacles? Is it political, bottom-line, or something else?

Byck: Clearly, an informed and inspired national political leadership would be the quickest way we get to a low-carbon economy, where we get incredibly strong energy-efficient building standards and a national grid policy that supersedes the Byzantine patchwork of state and city laws, where the true costs of coal are factored in, because then it becomes clear that cheap coal and clean coal don’t exist. On buildings, according to Ed Mazria at Architecture2030, if we push standards to our current limits of technology, and keep up that pressure for the next 19 years, we won’t need any new coal-fired power plants to be built in the U.S. — just from the energy saved, even counting for expected population growth.

On the national grid, if I owned an aluminum factory, for example, and wanted to capture the waste heat off of my smokestacks to create steam to spin a turbine to generate electricity, and run a power line to my office to use that electricity — but that line had to run across a state highway because my office is across the street — I would be prohibited in many utility districts because only utilities can string a power line across a state road.

And on the true cost of coal – Harvard did a study that came out in February that shows using coal as an energy source costs the U.S. — costs all of us — anywhere from a third to a half-trillion dollars — that’s trillion with a “T” — every year, when factoring in all the charges that don’t show up on my utility bill or any company’s books. These costs are a huge tax that we’ve been paying for decades. I say, let’s put a price on coal, led by the national government. I bet that we could actually reduce that coal tax we’re currently saddled with — that my parents were saddled with, and that my children certainly will be saddled with.

Now that I’ve made my national government policy wish list, I’d like to praise the cities. Mayors get this stuff. They know a building-retrofit bonanza equals a jobs bonanza — as Art Rosenfeld tells me, it pays for itself, and then some. He calls energy efficiency “a Saudi Arabia under our cities.” Fayetteville, Arkansas is already on it’s second low-carbon-aspiring mayor in a row. New York’s Mayor Bloomberg not only pushes NYC building standards to the limit and mandates plug-in hybrid taxis, he tosses in $50 million of his own cash to put big roadblocks in front of new coal-fired power plants. The list of cool U.S. mayors is in the hundreds.

Makower: Who inside companies do you see as the best audience for the movie?

Byck: Personally, I would start with the CEOs. “Carbon Nation” is a business film, a national defense film, an energy-reduction film. The heroes in our film are pragmatists; Bernie Karl calls himself “The most pro-development son-of-a-bitch you’ll ever meet” — he just hates waste. Stonyfield Farms’ CEO Gary Hirshberg hates waste. Fisk Johnson, CEO of SC Johnson, hates waste. And any stockholder should feel the same way.

The best way for Earth School Educational Foundation, our 501(c)3 nonprofit, to be sustainable is for companies to buy a passel of DVDs and dole them out. DIRTT Environmental Solutions CEO Mogens Smed is our first large-scale customer, and we’re hoping to close some huge deals by mid-August. Enlightened CEOs know that when they empower their employees to lower the company’s energy use the employees respond in wonderful ways: they become more productive in their original jobs, they call in sick less (which lowers health care costs), and they stay in their jobs longer rather than look for new ones. For their companies, they save money from lower energy costs, and they are much more attractive to the next generation of potential employees — they recruit better talent.

That much we know. We also know “Carbon Nation” is inspiring people around the world. Our goal is to be a catalyst, to inspire employees to be even more aggressive in their quest for lower energy costs, and to give the inspiring CEO that much more ammunition. The inspired employee is just that. Boeing calls it their “secret weapon.”

Makower: What does success look like for “Carbon Nation”? That is, what do you hope will happen if enough people in enough companies watch it?

Byck: We are optimists and pragmatists. We’ve spent four and a half years bringing “Carbon Nation” to market because we are inspired by the folks in the movie. They show using technology we have in hand, and getting it to scale — no small feat — can truly slow climate change and make big bucks at the same time.

This isn’t magic. This is good, old-fashioned horse sense. Success for “Carbon Nation” is to be seen by as many eyeballs as possible. To have DVDs in the hands of hundreds of thousands of employees because they will in turn show the movie to their social groups and their kids, who probably know more about energy efficiency that they do. We are aiming for the middle. We want enough Americans to get this practical information so they can insist their leaders get on board. As Ray Anderson of Interface says, “When the people lead, the leaders will follow.”

We know, from hundreds of conversations across the nation, that we are not a polarized country. Especially when it comes to energy efficiency, national and energy security, and even clean energy. There is great agreement for healthy solutions in the middle. It’s just that we’re constantly being told we’re a polarized country, mainly because our political leaders are polarized and TV networks make more money selling the idea of a polarized country. And good people are believing this stuff, and acting as if we are polarized. The old self-fulfilling prophecy.

But when you get down to it, listen to people, respect their opinion, and be open-minded, you will find, as I have, that the middle 60% of the U.S. would be on board if they were hearing the right stories. We’ve been lucky enough to find the right stories while making “Carbon Nation.” The folks in our film are heroes. If enough people hear from them, see them in action, then we can achieve our biggest aspirations: to have this movie influence lawmaking, to inspire companies to tie life-cycle costs to all purchases, and to push clean energy so that it simply becomes cheaper than coal. That would be huge.