After watching the video below from an old professor from college, I found myself with the sudden urge to blog on the topic of money,cash flow, and sustainability.
The video demonstrates how people feel about cash and the different types of cash. Needless to say, an interesting topic for everyone because we all have it and usually want more of it. But how does cash relate to sustainability and the decisions that are affecting our planet, our lives and our species.
My hypothesis: Feelings of cash correlate directly with assumptions of sustainability investments.
At the end of the day a dollar is a dollar right? One dollar from one source is no different than the physical and power characteristics of a dollar from another source. They both empower the holder of the dollar with the ability to buy something with a market value of $1 (think McDonalds here).
What happens when those dollars come from different sources? What happens when those dollars are accounted for differently? These questions are at the heart of the sustainability movement.
When people value the cash they have in their 401K or child’s college savings account differently than they value the cash they have in their wallet (otherwise known as disposable income) you inherently have a problem of conscience. People will be unwilling to invest those 401K dollars (assuming all things being equally liquid of course) in investments outside of what they are dedicated to do – save up for retirement, child’s college savings, etc, etc.
This creates a problem with energy efficiency and clean energy adoption because right now, no one has cash on hand. Very few people have “disposable income” and let’s face it, the question of “do i have cash?” is the number one question we ask before traveling, doing projects, or buying things.
Energy efficiency is no different – cash is king. No one has it and no one is willing to part with their savings, retirement or child’s savings account to invest in it. This is true even with the transparency of data out there telling us that investments in sustainability, energy efficiency and conservation practices yield the greatest return on investment possible in today’s society.
Yes you heard me say it – sustainability offers the greatest return on investment (ROI) – better than stocks, bonds, mutual funds, savings accounts, 401Ks, kitchen + bath upgrades to your overvalued McMansion, or your corporate advertising budget.
For proof I performed an analysis at the end of 2009, comparing the ROI in Google stock to a lighting retrofit. Google is all too often considered one of the greatest investments of the 21st century but when you compare a purchase of it’s stock at IPO and sale of that stock 5 years later (end of 2009) to that of a lighting retrofit, you will find that the ROI is virtually equal. Roughly a 200% ROI (5 year horizon).
Our perceptions of money compared to our understanding of sustainability valuation helps explain why we can’t adopt faster and saturate quicker as we move toward our goals of being a net zero energy economy and a carbon free economy.