The Clean Air Act and the Theory of “If One then All”

A Brief History of the Clean Air Act

A little under two weeks ago, I had the pleasure of attending a lecture and discussion given by Professor Ann E. Carlson, a lecturer of environmental law at the UCLA School of Law, which was entitled What Can the Green New Deal Learn from Environmental Law. Departing from the name however, it seemed that the Green New Deal had just one law to learn from, the Clean Air Act, which I paraphrase Professor Carlson in asserting as the single greatest piece of legislation (environmental or otherwise) passed in the history of the United States.

For those unaware, the Clean Air Act was passed in reaction to the deteriorating breathable air quality in major cities and rural towns alike. Los Angeles especially, was hit with waves of pollution that had been unprecedented for the time. However, unlike previous spikes in pollution in cities like Chicago and New york, Los Angeles' problem was not due to manufacturing. Rather, it was the automobiles at fault, and a growing body of evidence was starting to pin the majority of the city's health crises on one of the most popular modes of transportation in the world (and LA especially). Professor Carlson mentioned how when the finger began to point more fixedly on the automobile manufacturers to reduce the carbon footprint of their vehicles, many were slow to act, although the solution had existed for some time now: catalytic converters were standard equipment on most modern imported cars from Europe.

So why were the American automobile manufacturers so slow to react? Well, because there was no cost effective measure at the time to implement catalytic converters at the scale of the automobile industry in the United States. However, Professor Carlson concluded in stating that once the regulatory policies of the Clean Air Act were passed and enforced, the automotive companies suddenly found the most efficient way of adapting their designs in record time. You can read a lot more about the Clean Air Act in Professor Carlson's upcoming book, Lessons from the Clean Air Act: Building Durability and Flexibility into U.S. Climate and Energy Policy, but I wanted to begin with a history lesson before jumping into how we can change the future.

The Theory of "If One then All"

The second part of this article's title actually comes from a meme that I had seen on Facebook, which was calling on laundry detergent companies to switch to recycled, non-plastic packaging, since Seventh Generation had recently come out with its Free&Clear detergent line with these exact qualities. The meme went something along the lines of: 

If ONE company can do it, then ALL companies can do it.

This image struck me, because it seemed to so accurately describe the situation presented not only by Professor Carlson in her talk, but also that of my past articles regarding ALDI and Testa Produce. Clearly the inaction of companies to promote and enact the kind of sustainable initiatives that will assuredly guarantee their, and our earth's, continued livelihood comes not as a result of lack of funding, but rather lack of priorities. This issue is pervasive not only in capitalist spheres, but in all economic systems where growth and cost minimizing are weighted above sustainability and longevity. This is also the result of extending the classical accounting assumption of a going-concern into facets that can cause immense environmental and social externalities.  

In that regard, if companies want to avoid the kind of federal regulation enforced by the Clean Air Act and posed by the Green New Deal, it might be best to realize that if one of their competitors could have executed and implemented an idea once thought impossible, perhaps its best to invest in some R&D and try it out themselves. The future of the environmental free market may soon be a race to the bottom of emissions rather than an attempt to zero-out costs. 

How 4Ocean Made a Market out of a Mountain (of Trash)

I was surfing through YouTube yesterday, looking up Minecraft tutorials (kidding) and watching the new Toy Story trailer (not kidding) when I was shown an ad for a new, socially-driven, privately owned corporation called 4Ocean. Founded by professional surfers, Alex Schulze and Andrew Cooper, 4Ocean is focused on removing plastic sea waste from the ocean and making a profit off the recycling of that waste; they have thus created a macro market for extracting trashing from the ocean. What is most interesting about 4Ocean therefore, is the way in which its novelty and modernity confront its more classical, socially focused principles to sublimate into the ideal form of corporation that I speak heavily about in this blog: a socially focused organization with a profit motive to promote scaling and a desire to educate other people and corporations through its innovation. And this is not speculation on my part, because 4Ocean actually spells out that this is what they are up to. 

Optimizing Technology - We utilize the latest technology to prevent, intercept, and remove trash from the ocean and coastlines.

Creating Jobs- We have full-time captains and crews that are cleaning the ocean and coastlines 24 hours a day, 7 days a week.

Education & Awareness- We strive to educate individuals, corporations, and governments on the impact that plastic has on the ocean. We host cleanups all over the world, both above and below the water, to raise awareness and change behavior.

New Global Economies- By giving ocean plastic a value, we are creating a new economy for the removal of trash.

Evidently, 4Ocean is more than aware of the social and economic niche they are carving out for themselves, and further evidence the success of disruptive privately-owned corporations with a cause, that really give publicly traded companies a run for their money. Because despite 4Ocean's size, "in less than 2 years, 4ocean has removed 4,491,214 pounds of trash from the ocean and coastlines" (4Ocean). Now this is a tiny fraction of the estimated 275 million tons of trash out in the ocean right now, but this can actually attract larger companies to start doing their part to extract and refine what was once thought to be a purposeless material. And while 4Ocean uses their collected materials to manufacture and design bracelets to support their operations, I can see the market for recycled plastic waste going the route of fast prototyping materials. Imagine using a 3D printer fueled entirely by plastic waste, ala Back to the Future, now that is the kind of world I want to live in.

What do you think of 4Ocean's business plan? See any other product offerings from recycled plastic waste? Leave your answers in the comments below or email austin-regalado@uchicago.edu to tell me what you think!

ALDI and the Case for Cleaner Casing

Privately-owned grocery store, ALDI has recently announced in a press statement to shift the material of their manufactured plastic packaging to be either reusable, recyclable, or compostable by 2025. The statement comes as a result of many petitions and public policies designed to incentivize grocery and retail chains to reduce or eliminate the use of plastic bags and packaging in order to reduce urban pollution levels and plastic sea waste levels. For an example of a recent success on this front, Chicago’s plastic bag taxes, which charge consumers seven cents per plastic bag used in as store, and conversely subsidizes them for bags brought from home, have reduced plastic bag purchases to just above 50%. But is that enough? Should not corporations that have a hand in pollution through the plastic waste generated by their packaging also maintain a responsibility for the environment? ALDI recognizes this need and has set out a goal to reduces its own carbon footprint, and ideally such policies may be adopted by similar corporations when the potential economic benefits from doing so are realized. So what savings, if any, may ALDI be hoping to receive out of this sustainable goal? Well that’s what we are here to hopefully uncover, since a lot can change from now to 2025.

Let’s take a look at how ALDI compares to their competitors in terms of product line, size, and growth potential. As stated before, they are a privately owned by a German family and like most other grocery chains carry a generic brand for all popular items. But where ALDI differs from its competitors is that over 90 percent of the products on its store shelves are sourced, manufactured, shipped, and handled by ALDI themselves. Clearly, they are uniquely positioned as one of the only companies that can update the packaging of quite nearly all the goods they carry in an operationally efficient manner.

However, the size of ALDI's product line becomes both a blessing a curse, as ALDI is rapidly becoming one of the largest grocery store chains in America, with more than 1,800 U.S. stores in 35 states, serving more than 40 million customers each month. And since ALDI was able to get this big by minimizing its labor costs, and undercutting even low-price competitors like Walmart, it is constantly at risk of running into the red if it is not cost-effective in managing its growth-strategy with its costly packaging updates. Therefore, as ALDI gets bigger, both in terms of stores and product line, its costs of implementing this environmental strategy start to scale up, but the average cost of producing this packaging should decrease as they reach economies of scale. All that is left now is for us to see fi they can reach such efficiency in time for this packaging update to become worth the investment beyond the typical environmental appeal to morals.

To give some final perspective on the timeline and scope of this endeavor, ALDI hopes to complete the following by the stated dates:

• By 2025, 100 percent of ALDI packaging, including plastic packaging, will have reusable, recyclable or compostable packaging;
• By 2025, packaging material of all ALDI-exclusive products to be reduced by at least 15 percent;
• By 2020, 100 percent of ALDI-exclusive consumable packaging to include How2Recycle label;
• By 2020, implement an initiative to make private-label product packaging easier for customers to reuse;

All in all, ALDI has been successful in making major updates to its product line in the past, becoming the "healthiest grocery store" in the United States behind Whole foods, so I have no doubt that even if they do not succeed in terms of timeliness, they have already succeeded in ambition.

Thoughts from Testa Produce

I just came back from an industrial tour of Testa Produce, one of the world's leading green produce distributors, thanks to a recommendation that my classmate, Tatiana, made to our Being Corporate Class, and I had some thoughts regarding the future of infrastructure and corporate organizing principles under capitalism.

For those unaware, Testa Produce is privately-owned and operated by Peter Testa, whose father owned and operated the company before him. Being privately owned allowed Peter to seek greener means of growing, storing, and transporting produce, because it could all be at his expense and direction. He was not beholden to shareholders or financial entities with exterior interests. In that regard, when Peter set forth to create a facility that was LEED Platinum certified (the highest rank that any building can earn under current national environmentally conscious construction efforts) that produces 30% of the energy it consumes with solar panels and wind turbines, and that powered its vehicle fleet with exclusively low-emission fuel, he was told it could not be done.

And for good reason, because up until then it had never been done. But this was primarily due to the public nature of other companies in the produce market, run by shareholder interests and directed by quarterly gains. However, Peter did not set out to pay so much cash out of pocket for a facility like this just because of his altruism: it was actually about the cash in the long-term.

See, where other companies are able to skate by with cheaper equipment, dirtier facilities, and destructive means of transportation, they are similarly forced to pay hand over fist when the inevitable consequences of their miserliness begin to realize. Peter Testa told us how his years in the industry taught him that going cheap in the short-term would lead to greater overall repair and reservice fees in the long-term: the real expense came from upkeep rather than foundation. And so Testa Produce constructed this facility as a means to guarantee its long-term viability, sacrificing some short-term profit potential in the future.

What does this mean for companies like Sysco and US Foods? Well, maybe shareholders and executives could take a hit to bonuses to work towards constructing these all-around more efficient, effective, and ecological facilities. But this kind of coordinated voting effort almost never comes out of intrinsic motivation, rather it must be extrinsically incentivized.

I think this is where public policy and social planners must step in to provide tax subsidies, grants, and allocate funds towards the greener infrastructure updates needed to carry us through this century. We are at a pivotal moment in our country’s economic development, wherein an environmentally sustainable and arguably more long-term cost effective refocusing of the central organizing principle of corporations is necessary.

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