Tuesday, March 18, 2008

Garbage Land: On the Secret Trail of Trash - Book Review

As a follow up to my blog Recycling: Does it Make a Difference, I decided to take a look at Elizabeth Royte's book Garbage Land: On the Secret Trail of Trash. I wanted to get a broad picture of what our garbage is and what happens to it. Royte offers an adventure (albeit somewhat sensationalized) of tracking all forms of waste from her household to the collection trucks, the various sorting facilities, and eventually to the dump.

Tracking the Garbage
Royte embarks on a mission to sort, categorize, and weigh all of the trash that her household (her husband and one child) for an entire year. In the process, she follows her recyclables, compost-able materials, hazardous materials (e.g. TV's and computers), sewage, and her garbage to the places where they are either turned into new products or landfilled.

She visits any site where she is allowed access (and to some that don't) to document a process that starts at the household. Most Americans don't give a thought to their garbage besides when the day it is picked up and making sure that they don't miss it. However, Royte seeks to describe how various waste streams make their way around the world.

She does a thorough job at covering the major waste streams in a Western society and looks at the economics and environmental impacts of each often uncovering the good and bad of waste and even something as seemingly innocuous as recycling.

The Ugly Side of Recycling
Recycling has become pretty synonymous with being a liberal environmentalist trying to save the world. However, to the surprise of many, recycling may not be as benign as one may think. We see nice happy stories like Nike creating basketball courts from used shoes and we get to buy post-consumer recycled paper. Recycling only extends the life span on these products but they are only making a brief pit stop before eventually heading to the landfill.

The most insidious "recycling" is probably that of e-waste. Electronics have many precious metals like gold and copper in the circuit boards. But environmental regulations and the high cost of labor in America makes it uneconomical to extract these metals (it is cheaper to just buy virgin materials from mines).

Thus, the electronics get shipped on container ships from the United States to China (which would otherwise be empty because of the tremendous import/export imbalance). It is economical because the cost of labor and environmental regulations in China are significantly lower than in the United States

In China, villagers will use chemicals such as cyanide to leach gold from the electronics and are exposed to many other chemicals such as mercury from monitors and lead solder. We think that we are helping othe world by recycling our electronic goods, but in reality we are pushing the environmental and health costs to third world nations willing to recover these materials. See the Basel Action Network (BAN) Photogallery and Digital Dump Trailer for more information.

Zero Waste
In the last few chapters Royte discusses the possibility of a world with "Zero Waste". Despite her recycling habits and her attempt to reduce as much waste as possible, she still ended up disposing of approximately 4.65 pounds of trash per week (which is 19.5 times lower per person than the national average according to an EPA statistic).

The fundamental problem is that we have externalized the costs of waste and pollution and therefore the costs to dispose of items costs much less than the damage that is done to the environment (this is measured by the amount it would cost to replace or restore the natural function that an environment previously had). The only real solution towards creating a truly sustainable society is to design the goods we used to not produce any waste.

Virtually all products sold today are designed with a Cradle to Grave philosophy: it will eventually find its way into a landfill. However, William McDonough proposes in his book, Cradle to Cradle: Remaking the Way We Make Things, that we need to design our products such that the "waste" products will be the "nutrients" for another system, whether that is natural or created by man. Only then will we be able to live with "Zero Waste".

My Thoughts
Garbage Land is a great primer for people who are unfamiliar with the recycling and garbage industry. My main criticism is that it feels more of an adventure rather than a scientific paper with strong supported facts and evidence. At one point she said the methane "smelled like rotten eggs". Methane gas is actually odorless and is the main component in natural gas. However, mercaptans (sulfur based molecule) are added to natural gas to give it the "rotten egg" smell. I was upset that she couldlet a fairly well known fact slip through.

After reading this book I was reminded at a slogan that was on a paper towel dispenser in a bathroom at my office which simply has the words:

"Green is using only what you need"

I think that this sentence pretty much sums up sustainability and the conclusions reached in Garbage Land. It isn't about buying a green product just because it is available. It means reducing your consumption, and if no other options are available, then try your best to buy an eco-friendly product. We need to reduce our consumption of products, especially those that are designed to be disposable.

Although the amount of waste produced from municipalities seems tremendous, it does not clearly convey the amount of waste that was generated to make the products that eventually end up in landfills. According to Paul Hawken, author of Natural Capitalism and the The Ecology of Commerce, for every 100 pounds of product that is sold, at least 3,200 pounds of waste was created. McDonough also has a similar statistic that municapial waste is only 5% of the total waste that gets created to produce and deliver your product.

The easiest way to decrease your environmental and save money in the process is to consume less. This way you can get more satisfaction out of the things that you do have and also enjoy some of the simple joys in life.

Related Blogs:
Related Links:
Recommended Books:

Thursday, March 6, 2008

Blog Update #4 - 500 Hits and 40 Subscribers!

So I hit a pretty big milestone yesterday and got my 500th hit! I know it is nothing compared to popular blogs out there, but I'm trying to generate content and traffic as best as I can and the little steps make me happy. As my daily hits increase, I am getting more and more "random hits" from Google who are looking up terms like "top issues in today's world" and "issues today" (these search topic and similar ones are the most popular links from Google to my blog)

I have had people find my blog throughout the world including countries like England, France, Germany, Italy, Poland, China, Taiwan, Japan, Australia, The Philippines, and even the small country of Lesotho! Out of all of the readers, 40 people have subscribed to the blog and get a regular feed feed of Meaningful Issues in Today's World.

It makes me really happy that people are finding and reading the blog, not only because there are so many important issues, but because it really does take a lot of effort (3-5 hours) to produce a blog that doesn't just regurgitate the news or post a link. I want to give my readers a synthesis and analysis of the top meaningful issues in today's world and won't compromise my content just to get better search engine results.

When I see the blog hits I get excited because it means that people want to educate themselves and take action. If you missed any of the action, I've posted some of my more popular posts from the first two months below.

Related Books:

Wednesday, March 5, 2008

Peak Natural Gas - Will we go cold?

Natural Gas - Fuel to Transition to Renewable Energy?
Natural gas is a vital source of fuel primarily used for electricity generation and heating in homes. It is also used as a feedstock for many organic compounds used in industry such as methanol and hydrogen. For peak oil optimists, natural gas is described as a possible fuel to help us "transition" from petroleum energy to various forms of renewable energy such as solar, wind, and hydro.

Natural Gas Background
Natural gas is an extremely clean fuel when combusted/burned and has the lowest amount of carbon emissions for any fossil fuel. Despite these advantages, there are many problems that natural gas must overcome. The first is that it is a gas and will only become a liquid at 77K (approximately -320F if we assume it is primarily methane) under atmospheric pressure. This leads to a problem that natural gas has an extremely low volumetric energy density which means that it is difficult to store and ship. We have only been able to transport natural gas because we have built an expensive natural gas pipeline network.

Natural Gas Production Decline
Jon Friese from The Oil Drum recently posted an article titled North American Natural Gas Production and EROI Decline. I could not possibly do the article just by trying to regurgitate the information, especially because the graphs are so vital for understanding the situation we are in. Please see The Oil Drum's article to see the details in depth.

I will state though, that the future of natural gas in the United States and Canada does not look very promising. Based on an extrapolation of the EROI trend line for Canada, it appears that natural gas may not be technically feasible to extract after 2014! This is significantly sooner than the government agencies have predicted based on their reported reserves.

I am always wary of extrapolations. However, I find that the analysis is sound and also looks at historical data to compare trends. It is not exact, but the analysis and extrapolation will give us a good idea where natural gas production is heading. To quote the conclusion of the article:

"The natural gas industry has clearly been mounting a heroic effort to keep natural gas production on plateau in North America. This effort has raised costs dramatically. The EROI of Canadian production shows a rapid decline. Drilling statistics suggest a similar EROI decline is happening in the US. The falling EROI makes it impossible for natural gas production to maintain both low costs and current levels of production. It is clear that most of the reserves in the official forecast will never be developed. Jean Laherrere’s predictions are more likely to be correct. And if EROI continues to fall at the current rapid rate, he will be remembered as an optimist."
EROI - The forgotten statistic
What is EROI? It is an acronym for "Energy Return on Investment". Simply put, it is the amount of energy that a resource has once it is extracted, divided by the amount of energy used to extract it or Available Energy/Input Energy. According to the article, some natural gas fields peak at an EROI of 40:1 but then decline rapidly. See the article's graph for the trend of EROI.

This is particularly worrisome because it shows that the "Break Even" point according to the extrapolation of the trend line is 2014. After this point, it will take more energy input than energy available from the natural gas extracted. This means that it is no longer worth it to extract the natural gas because we spend more energy than we can recovery.

But I thought that the "Market" would solve our problems
Economists from the Chicago Economics school of thought, strongly believe in free market forces. The people believe that peak oil will be a non-issue because alternative forms of energy will become "available" as the price of oil and natural gas increase. This analysis has also been used to argue that we will "never run out of oil" because there will always be oil in the ground. The recoverable reserves are defined as the resources that we can economically extract and the recoverable reserves can increase when prices rise. That is, as prices go up, oil that was previously not economical to recover, will become affordable. Or so the theory goes.

The free market economists fail to recognize the physical and thermodynamic LAWS that NO market can solve. As the price of energy increase, we will afford to dig down further, pump oil further to a certain extent. But there is a limit to the amount of oil we can physically extract. As we dig deeper we expend more energy per unit of energy recovered. Once we approach the "break even" point, it will no longer be rational to extract the oil, no matter what the price is.

It doesn't matter if oil is $1 per barrel, or $1 million per barrel. If we need to use more than one barrel of oil to extract one barrel of oil, it won't happen.

My Thoughts
Just like with petroleum reserves, it appears that government agencies have once again overestimated the true recoverable reserves. They still believe that the "market" will ultimately balance the cost and therefore demand of oil/natural gas (or whatever natural resource is estimated).

However, for as stated above, cost will not be the only factor that will determine the amount of fuel we will be able to be able to extract. The Energy Return on Investment (EROI) will determine the physical limitations to extracting any resource and will ultimately determine the amount that we will be able to recover.

It will be interesting to see whether or not Jon Friese's analysis is correct and that the EROI is indeed in a sharp decline and if we will reach the "break even" point by 2014. If it is indeed correct, we have many problems ahead of us and will not be able to count on natural gas to transition us to renewable energy. Let's hope for the best but prepare for the worst.

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Monday, March 3, 2008

The Pardox of Choice: Why More Is Less - Barry Schwartz - Book Review

Western Civilization has been flooded with so many choices in every aspect of our lives. Whether it is cleaning supplies, college course curriculum, or even finding something as simple as a pair of jeans. We have typically associated choice with an increase of freedom and the ability to steer our life in the direction that we so choose.

However, paradoxically we have become a victim to the plethora of choices out there and it is affecting us psychologically. The extra choices do not liberate us, but instead cause us to agonize over decisions and regret any "bad" purchases that were made.

Barry Schwartz's "The Paradox of Choice" is an excellent book that looks into the choices we make, the psychology of making choices, why we suffer from the choices we make, and lastly, what we can do about choice to live better lives.

Maximizers vs. Satisficers
Barry Schwartz identifies two different types of purchases: Maximizers and Satisficers. The key difference is that maximizers will strive to make the "best" purchase possible, while the satisficers are content with a purchase that is "good enough", which is to say that it meets their basic requirements. Typically maximizers are less satisfied with their purchases and also have more regret. It is okay to be a maximizer when shopping for products that are really important for you. It is only dangerous when you attempt to maximize every aspect of your life.

The Psychology of Choice
Barry Schwartz has a PhD in psychology and gives many psychology examples on how people will make decisions to buy products and their perception of gains and losses. Below, I have outlined a few of the key areas which he mentions that affect our decision to choose. The main purpose of these different factors is that the subjective value can be much different than the objective value. Typically the studies compare things that are equal in objective value, $20 for example, but then see how the different factors change the subjective value.

Suppose that you have not yet paid for a concert ticket ($20) but lost a $20 bill the day before the concert. Would you still pay to the concert? What if, instead, you bought a concert ticket for $20, lost it, and had to pay another $20 for the concert ticket?

Although these two scenarios are identical objectively, subjectively they are much different because we tend to filter money different accounts. In the first case, the $20 loss was filed into a "general" account. But for the second scenario, the lost cost was $20 and the "real" cost of the concert ticket would then be $40. In the study that Schwartz cites, over 90% of people would be willing to buy the concert ticket in the first case, yet only 50% would do it in the second case.

The idea of an anchor is to create a high price item in the store, a "deluxe" or "luxury" model, and then offer a more standard one. For example, a $100 pair of jeans may seem like a lot, but when compared to $200 pair of jeans, it looks like a bargain. Although not many of the $200 jeans will be sold, they will "anchor" the $100 jean products which leads to higher sales.

Like I wrote in The Dangers of Shopping, it is important to make sure that the purchase is needed and affordable on an absolute scale, not comparing it to the cost of the "high end" or "retail price". Otherwise, we can always justify a purchase as long as it isn't the "most expensive" model out there.

I personally witnessed a shameless example of anchoring at the Guess Factory Outlet store in Vacaville, CA. I asked them if they carried any products from their regular Guess stores and they said "No, the products are made specifically for the Guess Factory Outlet." What really disturbed me was that EVERY price tag had a MSRP (Manufacturer's Suggested Retail Price) and the "discount" price printed on it. Despite the fact that it was made specifically for the outlet, they framed it by posting an artificially high number to make it seem like it was a "bargain".

Gains and Losses

I thought the psychology of loss and gain was the most interesting part of the book and it really sets up the framework for why we agonize over choices. Briefly summarized, we feel more pain for a $100 loss than we feel happiness for a $100 gain. When choosing between a set of choices, there is seldom an option that is superior in every criteria. By not picking the "losing" option, we are giving up a trade off and thus a loss.

The studies explored in the book show that the more choices there are, the more trade offs or "losses" must be taken when making a decision. Because the pain of loss is greater than the happiness in gains, when confronted with too many choices, the buyer/consumer will often not make any decisions. This is true even when it is clear that there is an advantage by picking ANY choice (for example, employers would not pick his/her portfolio of 401(k) funds when there were too many choices, even though they knew they got an employer match).

The Green Factor
Within recent years, environmentalism has become a hot issue in the media and in people's everyday lives. There is now the option to offset your carbon emissions related to electricity use, buy organic produce,

However, by adding these options, it has further multiplied the number of choices that consumers must deal with. What is more important?

  • Greenhouse Gases or aerosols?
  • Organic or local?
  • Water pollution or air pollution?
  • Lower energy uses in CF lightbulbs or no mercury in incandescent light bulbs?
All of these decisions are contributing to a phenomena known as "green fatigue". This is the idea that people are tired from making green and eco-friendly decisions. With so many different factors that can affect the environment, anyone trying to be green must factor these into their purchasing decisions.

Strategies for dealing with choice
In the last chapter of the book, Schwartz suggests multiple ways and details how we can cope with the the abundant choices and making decisions. I have listed his suggestions below.
  1. Choose When to Choose
  2. Be a Chooser, not a Picker
  3. Satisfice More and Maximize Less
  4. Think About the Opportunity Cost of Opportunity Cost
  5. Make Your Decisions Non-Reversible
  6. Practice and "Attitude of Gratitude"
  7. Regret Less
  8. Anticipate Adaptation
  9. Control Expectations
  10. Curtail Social Comparison
  11. Learn to Love Constraints
I plan to create a mini-series and at his suggestions in depth in future blogs. I will say though, that all of the advice seems very practical and is based on the scientific research that has been conducted which looks at the psychology of choice. By simply understand why we act the way we do, we can strongly reduce the negative affects that choice has on our lives.

My Thoughts
I think that this is a great book that has cleared up a lot of things in my life. I am one that is more of a maximizer rather than a satisficer. If I find out that I "could have" saved more money by doing X action, I tend to regret my purchase and am mad that I didn't make the best purchase possible. I will look to follow the steps that Schwartz has recommended, and that I outlined above. I need to be able to not regret my purchases and be happy when I have made a "good enough" purchase.

Although Schwartz suggests that you should worry less about your choices, I believe that it is still important to scrutinize your purchases, especially if it is above your hourly wage (see The Dangers of Shopping). However, it becomes dangerous when the cost of extra scrutiny goes beyond the cost of your time and mental health. The main thing is to "Choose when to choose". This of course will depend on your values and what you think needs to be the "best" and what you can be satisfied with "good enough".

You should only sweat the small stuff if the sweat that you put out is at least equal to the amount of sweat you might get back. An adage that would be appropriate here is "Penny wise, pound foolish". If you look at scrimping pennies on your small purchases, you might be overlooking the larger picture. The time you spend with your penny-pinching could be directed to something that will increase your well being or even make more money.

I really think that reading this book has the potential to make you much happier in life. You will look at life differently and your choices can bring true excitement and happiness. I plan to start a mini-series of blogs related on psychological issues of choice and discuss how just being aware of the psychology of choice can change your outlook and spending on life.

Recommended Books:
The Paradox of Choice: Why More Is Less - Barry Schwartz
GoogleBook: Paradox of Choice (Sample)

Recommended Movies:
Barry Schwartz talk at Google

Saturday, March 1, 2008

Mint.com - Website Review

Mint: Refreshing Money Management
Have you ever overdrawn an account or just missed paying your bill by one day? Do you want something that would remind you when a bill is due and budgeting based on your previous? Well there is one place that can do all of that. Mint.com is a online resource which helps you avoid these costly fees from banks and credit.

Setting it up
Setting up an account on Mint is as easy as entering your user ID and password for your different bank accounts and credit cards that you can access online (Which, hopefully for all people today's age, is for all their accounts and cards). You will have to enter your "secure" questions, but once this is set up you only have to enter your Mint ID/Password to gain quick access to all of your accounts.

Tracking Money Made Easy
With the click of one button, you can get an updated status on all of your accounts that is summarized and shows you your net worth which includes your assets and liabilities (debt). It will import a few months of data from your card, so it isn't optimal to create a large history. However, any future transactions with your linked accounts will be kept in Mint for future reference.

Trends, Budgeting, and Saving
One of the cool features of Mint is the ability to automatically categorize your expenses when they are imported. Some transactions are recognized, but depending on your needs, you may want to label it differently.

Your information is then compiled and it shows you how much you have spent in every category for any time period that you choose. Then based on this information, it creates a budget based on your previous spending habits.

Also, an handy feature is that it also shows you ways that you can save based on your current cards/banks and what else is available. For example, my Capital One account has an interest rate of 3.25% and Mint tells me that if I switch to Washington Mutual, then I can earn an extra $80 a year.

Fortunately, that is the only recommendation it makes because all of my banking is free and I don't carry any balances on my credit cards. However, for those who are not in this situation, Mint shows you cards and banks that can save you significant amounts of money.

Credit Only?
The biggest problem with Mint is that it only can track transactions made on your cards and bank accounts. But many places don't take credit cards or you have to pay in cash when there is a large group.

This of course creates difficulties if you get paid cash and put the entire bill into your check. Mint will only give you an accurate spending pattern if you charge only your expenses, or if you are willing to do some extra work by breaking down your purchases.

The Breakdown
If you pay for something in cash, or you pay for a dinner and your friends pay you in cash, you will have difficulties making Mint know how you really spent the money. For example, if you spent $100 on dinner for 4 people, it only cost you $25 for your own meal but Mint will think you spent $100.

They designed it so that you can break it down, but then this can be difficult to track where the rest of the $75 went. As you spend cash, you will then have to sub-divide the remaining $75 and categorize it into the proper categories. If you spent $10 on a movie, $20 on a shirt, $30 on two new DVDs, and $15 on a dinner with that cash you got from your friends, it means that you would then have to break it down and itemize each purchase.

My Thoughts
I think that Mint is a great tool for people use to monitor and track their finances related to bank accounts and credit cards. If you use credit cards exclusively, it can give you an extremely accurate picture of your expenses. However, if even a small portion of your cash flow is in cold hard cash, Mint is not forgiving and you must manually break down your purchases to see where all of your money goes.

I personally use Mint just to get a quick overview of my accounts and to get a reminder when my bills are due. I currently use an Excel spreadsheet to track all of my expenses (as described in Your Money or Your Life). Although Mint does a "good job" at tracking my expenses, it does not make it easy to track transactions with cash. Because I am want a very accurate representation of my cash flows, I decided that I would only use Mint as I described above, and use my spreadsheet to track and categorize my expenses.

Although it is far from a perfect tool, I think that any person can find Mint.com helpful in some way. It is a useful tool to give you an overview of all of your accounts, keep you on top of your spending, and help you find ways to save.

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