Tag Archives: environment

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Gallons per One Hundred Thousand Miles

Gallons per One Hundred Thousand Miles

Back in 2008, I blogged about Fuqua professor Rick Larrick’s research on flipping the way we talk about fuel efficiency from the familiar “miles per gallon” to “gallons used per 100 miles driven” and later that year I followed up with a post on some of the traction that idea had gained and the GPM calculator they had posted online (still up and running now).

“Giving the gas cost over the lifetime of the vehicle seems to give people a better understanding of its fuel efficiency,” Larrick said. “The current metrics used don’t help people to understand the true value of a fuel-efficient vehicle.”  -from the latest research

Last week I got a Fuqua email update that featured Larrick’s latest work on GPM, including the info that in 2013 the EPA had added “gallons per 100 miles driven” to its fuel economy labels. Larrick’s latest work shows that this label may soon warrant an update – apparently consumers prefer a fuel-efficient vehicle when they are shown the statistic of gallons per 100,000 miles driven, even when the expected cost savings in fuel efficiency does not make up for the higher cost of the fuel efficient vehicle.

“Consumers place a lot more weight on fuel efficiency when this information is given to them in terms of gas cost over 100,000 miles,” Camilleri said. “The amazing thing is that this greater weight persists even when the efficient vehicle doesn’t necessarily pay for itself in savings, which makes sense for the consumer who also cares about the environment.” 

I always find it fascinating when a change in language is able to impact cultural values and individual behavior, and the idea that this is so powerful that environmentalism could trump cost in a purchase decision is remarkable. However, I’m also a bit skeptical, as survey answers are not always a reliable indicator of actual consumer behavior. Still, even if this only works for cases when fuel efficiency is also cost efficient, this is a great way to make an impact by simply changing the language we use.

Better fuel efficiency through better labels – gpm vs mpg

We all know how important language is in persuading people to think certain ways, and that certain words and phrases in common use are politicized rhetoric (think pro-life and pro-choice).  However, I never thought of “miles per gallon” as one of those potentially misleading phrases.  Until I read this in a Fuqua Alumni email:

For example, most people ranked an improvement from 34 to 50 mpg as saving more gas over 10,000 miles than an improvement from 18 to 28 mpg, even though the latter saves twice as much gas. (Going from 34 to 50 mpg saves 94 gallons; but from 18 to 28 mpg saves 198 gallons).

These mistaken impressions were corrected, however, when participants were presented with fuel efficiency expressed in gallons used per 100 miles rather than mpg. Viewed this way, 18 mpg becomes 5.5 gallons per 100 miles, and 28 mpg is 3.6 gallons per 100 miles — an $8 difference today.

“The reality that few people appreciate is that improving fuel efficiency from 10 to 20 mpg is actually a more significant savings than improving from 25 to 50 mpg for the same distance of driving,” Larrick said. (See table.)

See the full article here, including a video link.

Going Negative with Green Messaging

Struggling for years with a decreasing market share and tumbling stock price, Nortel is going negative with a campaign against Cisco.  This Wall Street Journal article details their PR blitz utilizing bloggers, YouTube, anti-Cisco websites, and trade show demonstrations.  The message?  Use Nortel to avoid “the Cisco energy tax.”

Nortel is countering with the argument that Cisco’s technology, as successful as it has been in the marketplace, is an energy hog. In its ads, Nortel claims that Cisco’s data networks “are costing you 100% too much.” At trade shows, Nortel staff attach wattage meters to comparable Nortel and Cisco gear in an effort to show that Nortel’s gear is much more energy-efficient. The company posted a film of the demo on YouTube.

Energy prices are finally rising to a point where being energy-efficient is not just something to make a consumer feel good, but something that affects purchasing decisions by price-sensitive customers.  That Nortel is taking this message to large corporate customers is evidence that at least some people in corporate purchasing departments are concerned with cutting costs by conserving energy.

In a previous post, I talked about the strategy of going negative with marketing, and why it’s rarely done.  This is one of those cases where a very small company with much to gain and little to lose takes on the market leader with a campaign aimed at gaining some awareness and hoping to steal just a bit of the leader’s market share.  Or, as pointed out in the WSJ article, survive and keep their current customers as their competition makes persuasive presentations to switch.  It’s not unusual for a smaller company to paint the larger one as evil, and it’s not that unusual to use an environmental rationale to make that argument.  What might be unusual is that with the price of energy rising so quickly, customers might listen.

And frankly, Cisco’s response that “there are no industry standards to measure “green”; and Cisco’s gear meets the environmental requirements of the product-testing company Miercom” falls a bit flat with me.  Not a counter-argument about green manufacturing or building initiatives, but a lack of industry standards? No pledge for improved performance or details of why the additional energy usage creates a superior product?  This lack of rebuttal leaves me thinking Cisco either isn’t taking Nortel seriously or isn’t taking energy efficiency seriously –  either case may not be a big mistake now, but could be a huge mistake in the future.

RecycleBank on CNN

Just saw an interesting short news story on RecycleBank, which I hadn’t heard of before.  They motivate people to recycle by offering incentives from big corporate partners like Coke and Kraft.  Cities pay RecycleBank with money saved from landfill overuse fees, and the founder claims that most cities that implement the program have seen increases in recycling of over 100%.

A very interesting model for social entrepreneurship, and definitely seems to be scalable.  Seems that they’re currently located primarily in the northeastern US, but I’m guessing that the CNN story will help them scale out more quickly.  I’m very curious as to whether the customers (actually, I guess they should be called “end users,” as the customers paying for the service are the cities) have found the rewards program to be actually valuable.

I’m also really curious as to how the revenue works and the costs of the scanning equipment being retrofitted to the trucks (particularly upkeep/repair costs), but I’m sure that those things are trade secrets that won’t be revealed anytime soon.  Very interesting model, though, and the type of thing that I’d love to write a case study for!

MapEcos – an intersection of business, environmental activism and research

MapEcos is a joint venture led by business school professors at Harvard, Dartmouth and Duke. It “brings together information about companies’ environmental management, provided voluntarily by managers in real time, with companies’ pollution data from the U.S. Environmental Protection Agency,” according to a recent article in HBS Working Knowledge.

Virgin biofuel flight planned

The New York Times reported today that Virgin Atlantic will conduct a test of one of its Boeing 747s using biofuels. The most interesting thing to me is that there seems to have been a lot of thought put into both the sustainability and the business aspects (even though this first step is actually a blend of 20% biofuel and 80% conventional jet fuel).

Sustainability: Virgin spokesman Paul Charles is quoted as saying the company rejected fuels derived from crops like palm oil because of the land that would be needed to cultivate such crops, and that the biofuel production would not compete with food or freshwater resources.

Business: This joint project between Virgin, Boeing, and GE Aviation splits the costs of innovation among several companies, and had smart business requirements. For example, the test plane will use one of GE Aviation’s CF6 engines as a “drop-in solution,” meaning the use of biofuel requires no modification, and will not affect the engine’s performance or range.

I recently read a New Yorker article about Branson and his work with Al Gore to create the Virgin Earth Challenge with its $25 million prize.  I’m impressed that he’s so intent on solutions that are market-driven, commercial, and don’t require major lifestyle changes, as I believe that these are the ones that are truly scalable.  An excellent article that shows that for Branson, business is very personal.  I just wonder whether he’ll consider himself eligible to win his own prize?

Real estate, social entrepreneurship, spirituality and more…

I’m back at work after a brief holiday break with my wife and her parents – it feels great to eat too much and just spend time relaxing with family during the holidays! My mother-in-law (MIL), a doctor, is not usually conversant in social entrepreneurship, so she shocked me by letting me know about a social venture I hadn’t heard about yet! I thought that the hot socially-conscious gift this year was the goat, given to families and communities in need throughout the world through organizations like World Vision and Mercy Corps. However, according to the mainstream media that my MIL has been watching, the hot gift is actually The Giving Tree GiveCard™.

The GiveCard is a pre-paid MasterCard® gift card, with a twist. In order to activate the card, the gift recipient must go online and donate 10% of the value of the card to the charity of his/her choice (any non-profit listed in GuideStar). The Nashville, TN company Giving Tree, LLC seems to have hit a home run, garnering this much attention for its flagship product in the few months since an October press release announced both the product and the formation of the company. A for-profit company targeting socially conscious consumers, Giving Tree hopes to have a dual social impact: 1) It teaches gift recipients (often children and teens) the rewards of philanthropy, and 2) It raises money for non-profits. I give them kudos for great marketing, a name that’s easy to remember (and brings strong emotional associations with Shel Silverstein’s book), and a clever way to tap into the socially conscious consumer who wants to teach philanthropy to their kids in a way that won’t engender anger and resentment (e.g. “I wanted new games for my Wii, but my dad just gave me a card saying that I gave a goat to some family in Africa”).

Another conversation was focused on real estate, and the way that the Triangle (Raleigh-Durham-Chapel Hill) and the Triad (Greensboro-High Point-Winston-Salem) continue to grow despite the national housing market slump. When my MIL asked about potential property investment in Hillsborough, my wife (who is much more up-to-date on such matters than I am) replied that all of the good investment property there has already been bought up by developers and real estate investment firms. Apparently, in order to be able to find a deal on property in the I-40/I-85 corridor between the Triangle and the Triad, you need to go west to Mebane or farther.

This confirmed for me the brilliance and foresight of my friends and colleagues involved in the creation of the Stone House, a project of stone circles. A 70-acre retreat offering space for spiritual renewal and strategic action, this non-profit social enterprise is a brilliantly conceived and well-planned endeavor including elements of environmental and financial sustainability. Still in construction (very green construction, at that), you can learn more about this facility at its website (including a download of their long-term strategy) and keep track of their ongoing efforts at their blog. I’ll be bringing some information on this facility back to the in-laws when we return this weekend for additional holiday celebrations with more extended family in town, including our beautiful nieces (who, despite living far away in Atlanta, have really enjoyed keeping track of one of my pet projects at work, the Museum’s Animal Department blog).

I found Free Rice in Blue Egg

Since one of my colleagues is going to be starting a blog on sustainability at the Museum, I’ve been keeping my eye out for potential resources for him. I had an hour of relative downtime this morning, so I started clearing through some of my unread e-mail, including November’s free newsletter from Origo Inc. Sidenote: I love their newsletters, but they’re so full of information and articles that I want to read, they often remain “marked as unread” for quite a while. I have the same problem with my physical/paper issues of the New Yorker, which I generally skim immediately and, if possible, tear out articles to read later (although often there are so many articles I want to read that I end up just putting the entire issue in a pile to be read later).

One of the several links I followed was to a site called Blue Egg, a “beta” site for all things eco. Great design, interesting articles, and ambitious video. Nice enough for me to recommend a look, but not quite enough for me to sign up for their newsletter, on first visit at least. The thing that actually excited me the most about this was a link to Free Rice – a vocabulary quiz game that provides donations to alleviate world hunger via banner ads at the bottom of each quiz question. I answered about 10 questions and was disappointed in my score of 40, and kept going and slowly my score rose. I checked the FAQ and found that the best possible score is 50, so I’m pretty happy with my score now. With 20 grains of rice for each correct answer and questions that get harder or easier depending on your score to date (like the GMAT), I’ve currently earned 1200 grains of rice (that’s 60 correct answers for the math-impaired) and risen to a vocab level of 44. Thanks for making me take Latin, Mom! Thanks for making reading with a dictionary close at hand a pleasure, David Foster Wallace! To be fair, many of my correct answers have been guesses – the multiple choice format has always helped me in this way – but I have been surprised at how many words I’ve known without resorting to multiple guess. I’m guessing squire on this next one:free-rice-screencap.jpg