6 foolish ways to go green

Another example is buying a new car to get better gas mileage. The most environmentally friendly car you can drive is probably the one in your garage, assuming it's in good repair. Say your car gets 20 miles per gallon. You'd like to trade it in on a car that gets 35 mpg. The new car costs $15,000 more. At $3 per gallon, you'll save about 6 cents per mile on gas. You'll have to drive more than 200,000 miles before you break even.

At least you're saving energy, right? Remember, if you're not saving money, you're probably not saving energy. It took a lot of energy to manufacture that new car. If you buy a car, choose a fuel-efficient one. But don't think you're saving the environment by buying a new vehicle just because it burns less fuel.

Recycling the wrong way -- or for wrong reasons

We've all heard: Recycle paper and save the trees. But according to James Wetzel, a professor of environmental economics at Virginia Commonwealth University, the end result of all that recycling is fewer acres of timberland, not more. More than one-third of paper pulp now comes from recycled sources.

"Alas, one result is a decrease in demand for pulpwood -- thus the price of timberland falls," Wetzel says. If timber companies sell fewer trees for paper, they find more-profitable things to do with the land, like sell it to developers.

"The road to hell is paved with good intentions," Wetzel says. "If you want people to plant more trees, they need a reason. In 30 to 50 years, they will harvest those trees."

Shredded paper may not make it into recycled paper, anyway. Anca Novacovici, founder of Eco-Coach, says, "Shredded paper cannot be recycled with regular paper because the fibers are cut short. Therefore it is demoted to a lower-grade material."

So what should you do with used paper? If you're worried about carbon, it's best to have it buried in a landfill. Wetzel says: "Buried is better than mulched. If it's buried, it deteriorates underground, and the carbon stays put. If it either decays in the forest or it's mulched, the carbon gets released back into the atmosphere."

Recycling aluminum cans is also supposed to save energy and water. According to Wetzel: "The problem is, we are supposed to rinse the cans first. If we rinse the cans, we can use more water and energy than we would if we tossed them. The question becomes how much energy we use in that process versus the saving at the manufacturing level. The question is also more complex since aluminum cans now use less material than 10 to 15 years ago."

It takes a lot of water and energy now to recycle a ton of aluminum.

No one is suggesting that we waste paper or other products. But we need to think about what we are doing and unintended consequences of our habits.

Buying carbon offsets to get off the hook

Say you're too busy to change your lifestyle, and it's all too confusing anyway. Why not just buy carbon offsets and forget the whole thing?

Buying carbon offsets may give you something to talk about at your next party, but buying them in lieu of being environmentally responsible is throwing away your money. Kyle Cahill, the manager in corporate partnerships at Environmental Defense, recommends consumers make lifestyle reductions first.

"There are many lifestyle changes that are economically feasible, if not economically preferential, (that) consumers can make in everyday lives that can have a significant impact," he says.

Cahill says consumers should first look at the type of vehicles they drive and utilize car pools and public transportation. Then they should look within their homes: For instance, are they purchasing compact fluorescent light bulbs? Each step alone, Cahill says, "may seem simple or insignificant, but when you add them up, they absolutely have a substantial impact."

No matter how much we conserve, however, we're not going to get our environmental impact down to zero. "So then, a consumer could say, 'I do want to get down to zero.' The best way to do that is to look at quality carbon offset. It's not paying for your sins. You've taken the steps individually to reduce your emission, and you would like to offset what's remaining," Cahill says.

Investing green and losing diversification

As investors, we can have an impact by investing in companies that share our values. Some investors are exclusionary; they avoid investing in companies that do animal testing or are in the alcohol, gambling or tobacco industry. Green investors are often inclusionary -- investors look for biofuels, renewable energy, organic foods and green building.

Nancy Johnson, the senior investment officer and head of trust services at Borel Private Bank & Trust, says socially responsible investing is one of the company's investment objectives. It cannot be the only objective, however. "People would like to do socially responsible investing. However, it limits the diversification of their portfolios," Johnson says. These stocks tend to have high P/E's (price-earnings ratios), and they tend to be newish companies as opposed to more-mature companies."

Do your research and invest in companies you can support. But don't limit yourself to a narrow area, or your portfolio may suffer. "The major tenet of a good portfolio is diversification," Johnson says. "Social responsibility should not be to the exclusion of a diversified portfolio."

Published Jan. 11, 2008

< previous |  1 | 2 |