Tuesday, June 30, 2009

We Are in the 11th Hour

In 2001 Warner Brothers introduced a film (“The Eleventh Hour”) that, given the state of our world, should have been a box office hit and should be distributed at federal government expense to every school and university in America as mandatory viewing for every student who passes through their halls. The stars are not Hollywood heroes, but concerned scientists and citizens who present convincing evidence that mankind is on the road to self-destruction. They point out that homo sapiens, the only species that has the capacity to reason and to manipulate the environment to his advantage, discovered that the accumulated solar energy over billions of years is stored under the earth’s surface in the form of what we call fossil fuels - coal, oil and natural gas.

The industrial revolution was powered by those fossil fuels. That revolution has now spread around the world through corporate globalization, built on the free market concept that each individual or corporation pursuing its own self interest will result in the best allocation of scarce resources and that the system would be self regulating, as if there is an invisible hand guiding mankind to optimize use of resources and make his life easier. In other words “greed is good”. But the recent global financial crisis has proven otherwise, as one of the American cheerleaders of the system, former Federal Reserve Chairman Alan Greenspan, admitted in congressional testimony: “I thought the system would be self-regulating but I was wrong.”

It has only been about 200 years since man discovered how to exploit fossil energy, first using coal to make steam power and later electricity, then using oil to make gasoline and diesel fuel to power trains, cars, trucks, ships and airplanes, then using natural gas to make electricity, plastics and fertilizers among other things. All those uses have made life easier and more enjoyable. But those 200 years are only an instant in the 4 million years since the human evolutionary line became distinct from other primates, or the 4.6 billion years since the earth came into existence and life on earth began producing the accumulation of plant and animal life that was eventually converted into underground coal, oil and natural gas.

We may discover that those good times fade into total insignificance in light of the reality that a high percentage of fossil energy has already been burned up, leaving behind billions of tons of carbon dioxide, carbon monoxide and other chemicals that have been trapped in the earths air, land and sea. The Eleventh Hour documents how that phenomenon, coupled with the free market system and the global corporation has morphed into a monster that threatens to tip the delicate balance of the earth’s ecosphere into a downward spiral much sooner than most people realize.

The last line in the movie notes: “We are not in the 11th hour but in the 11th hour and 59 minutes.”

If you haven’t seen the movie I urge you to view it with your entire family, including small children whom you may not think will understand it. Don’t let that bother you. There is nothing that will frighten them or disturb them; and they may not understand much, but what they do get will stick with them and be built upon as they mature.

Why do I mention this in a corporate blog? Because I believe we only have relatively few years to dramatically change our behavior in order to arrest the impact of global warming, chemical buildup in our soil and water and the dire consequences that will result. And I believe Superior Green Building Systems, Inc. is a very important technological innovation that will help mitigate some those problems. It is an example of what the economist, Joseph Schumpeter, called “creative destruction”. He noted that throughout the industrial revolution, there has been a steady stream of innovative technology. He noted that often an old technology enjoys tremendous success for a time but can be totally replaced by another technology that is less costly or more advantageous in other ways. Examples abound - the replacement of steam driven locomotives by diesel engines, the substitution of jet engines for propeller driven aircraft, the replacement of the typewriter by personal computers.

The basic technology of home construction in the United States has not changed since wood frame houses became prevalent in the early days of the
Republic. Logging mainly in the Northwestern and Southeastern regions of the United States produces the required collection of wood framing and enclosure materials. Those wood materials are cut, shaped and shipped to building sites all over the nation. There, over a period of several months, carpenters, plumbers, electricians and others slowly cut and piece together the new home for a happy family. The whole process is costly and uses huge amounts of trees that often have not been properly replaced with new growth. And the fossil fuels that are burned up in the process can never be replaced, at least not as long as man inhabits the earth.

For many reasons it is time for a technological revolution in home construction – a process of creative destruction is upon us. Superior Green Building Systems will spark that revolution. It represents a way to reduce wood usage to a bare minimum, replaced by locally produced agricultural by-products. Those agricultural by-products are pressed into fire proof, panels with about twice the insulating capacity of wood. Panels will have pre-cut windows, doors and utility conduits. An ingenuous system of plug and play electrical, plumbing, heating and air conditioning ducts are provided. All of which can be assembled on site in a matter of a few days. The home can be built to any architectural specification using solar energy and incorporating cost effective sewage treatment on site. The home will look no different than any home built in conventional ways. But the environment benefits will be significant and the whole process is significantly less expensive than conventional construction.

The Superior Green Building System offers the perfect opportunity to re-start the home construction industry in the current economic crisis. Creating jobs as more affordable homes make buying easier, with lower fire insurance costs and more energy efficiency, and it will be done while using less fossil fuels in the entire process.

This is the kind of technological creative destruction that will help the world overcome the environmental crisis.

In future blogs we will explore these and other economic and environmental issues in more detail. Meanwhile, I hope you will take an hour and a half to watch “The Eleventh Hour”, an experience that could dramatically change your consumption and re-cycling habits.

And welcome to the future of home building – SGBS.

Kelly M. Harrison, PhD. Economist

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