Green decisions are as clear as mud

We had an interesting discussion today and it wasn’t academic. The topic was about money and how to best spend it for both the environment and financial return. The question was about spending money on the purchase of “green power”. The argument was made that it would be more valuable to spend $100K (a made up number for this blog) on new energy efficient equipment than it would on green power.

If you buy green power, presumably the premium you pay is invested in other green power sources, but the money Intel spends is gone. It’s a one time shot. You may get some good PR, some tax breaks, and you can claim off-sets to your carbon emissions, but the money is gone. However, if you spend that same amount of money on more energy efficient equipment, you save energy (carbon emissions) and you save money on operating costs over the life of the equipment because of lower energy usage, plus this is a savings that you get every year.

The money spent on buying “green power” could over time produce less carbon emissions and may therefore be more beneficial to the environment. However, the money you save on the reduced energy bills, through more efficient equipment could be used towards other environmental projects; and the savings increases returns for shareholders who could invest their profits in green initiatives. I don’t know if there is a “right” answer here, we are trying to do “the right things right”, but it’s not always a clear path.

6 Responses to Green decisions are as clear as mud

  1. You can do both because some things are inevitable.
    Some of the equipment will ultimately have to be updated or replaced – so you can invest in efficient replacements.
    While investing in changing to Green power when repairs or expansions are undertaken.

  2. Igor says:

    Best thing would be to invest in “green” power sources. For example solar cells, wind turbines, etc — start using it today.
    Intel might even do some of its own research and development to increase the efficiency of said power sources which itself would be a contribution far greater than any other.

  3. Kevin says:

    It’s also important to understand that there are tax and utility incentives to invest in more energy efficient equipment. For example, there are programs from the Bonneville Power Administration to offset up to 60% of the cost differential when purchasing energy-efficient equipment. **If** you can add this to a 35% State of Oregon tax credit for the differential cost of energy-efficient equipment, you would have only a minor differential. Refer to http://www.bpa.gov/Energy/N/projects/industrial/pdf/ConAug%20Standard%20Offer–Customize.pdf and http://egov.oregon.gov/ENERGY/CONS/BUS/BETC.shtml for details on the two programs mentioned.

  4. EcoGuy says:

    I understand the quandary, Gary. Both are good decisions, and it is difficult to determine the total carbon footprint impact either decision will have. Just rest assured that either route benefits the environment; doing NEITHER would be the bad decision.

  5. Perry Gruber says:

    Kevin points to a good strategy: leverage state and federal incentives that drive investments in both areas, thereby benefitting the environment as a multiple of capital investments (efficiency improvements) and expenses (utility costs). Good discussion!