Composting is often presented as once of those things good environmentalists or serious gardeners do in their backyard . But from the purely economic perspective does it really pay?
Composting contrary to popular belief doesn’t have to be hard. In is basic form you putting your vegetables/fruits/coffee grounds and some yard waste into a pile with some dirt and then you let the entire thing decay into a black/brown mess which is just full of nutrients for your soil. You can take the lazy route where you just pile it up and ignore it except for the occasional turn with a pitch fork and wait up to a year to get your compost. Or you can give it some more attention and balance nitrogen/carbon/moisture and air flow to get your compost in as little as three months (for more details see here).
On the economic side you are spending around $20 for a small pitch fork as all the basic equipment you need. Then after that your spending your time to turn the pile to produce a bag or two of composted material per year (at least) saving yourself perhaps at most $8 per year. So yes you can save a tiny amount of money, but if you value your time at all you are likely losing money on the deal.
So if you aren’t doing it for money, you are basically just doing it for environmental reasons. I personally do it because it is fairly easy to do and it makes my wife’s garden produce veggies like mad. Who said you can’t save the planet and still be selfish?
Ok, I’ll admit it. I’m a bit of eco-nut under all this talk of personal finance. I like to save money, but if I can save the world too, better yet! In fairness to you the reader I do try to keep those posts that edge on the environment some what tied to personal finance.
Well a few weeks back I came across this blog called No Impact Man and from the environmental side it was a great read. The idea of the blog is simple, can a family live in the middle of New York city with no net impact to the environment for one full year. My only problem about sharing this blog was the fact he never talked about his finances. So at last the blogger finally made a post to this regard, which you can read here.
Granted his methods are a bit extreme (like not using toilet paper) but it got me thinking. Beyond the entire save the world thing is there a significant economic benefit to living a green lifestyle. So far in my life and that of the No Impact Blog I would have to say YES. By reducing your ecological footprint you also reduce your economic footprint. Granted it going green often takes some investments to get going (like a low flow shower head or compact fluorescent light bulb), but in the long haul you also can live with less money which also allows you to retire earlier since you need a reduced cash flow.
So with this in mind and my tax return in my ING account I’m going to go shopping to reduce my water bill. I’ve got some old 13L/flush toilets I have to replace anyways and some old taps in the sinks which are just starting to leak a bit. I’m currently spending $50/month on water and I’m curious with a few changes how far I can get it to drop. I’m going to try and keep track of my the cost differences to go green and the amount of money I save and let you know how the economics all turn out. This should be interesting.
After working for months (or was it stalling) the Canadian federal government finally rolled out the details of their air pollution/climate change plan. The main focus was on big businesses which generate about half of the pollution in Canada (for a quick summary see here).
There was lots of interesting points in the plan and everyone is already lining up to say ‘it’s great’ or ‘it’s horrible.’ Some like the 55% reduction target of air pollutants like sulfur dioxide (acid rain), nitrogen oxidizes (smog) and particulate. While others dislike how vague the plan is on reducing carbon dioxide being released into the atmosphere and how Canada will not meet its Kyoto targets.
Perhaps not realizing what they have done, the most important thing the government gave industry was the number: $15/tonne of CO2 tax starting in 2010. You see industry has seen this coming. Despite all the rhetoric to the contrary they have not had their heads in the sand. They have bought studies, funded R&D and attended conferences getting to know their options for CO2 reduction. The biggest problem with all their efforts was the economics. How much was avoiding producing a tonne of CO2 going to be worth? Now they know and now the real work begins.
In the next several months we are going to see two things happen. One a lot of current projects will be canceled since they are no longer economically feasible. The second thing will be a series of announcements on new projects starting up. Why? Well to actually engineer, fabricate and construct most of what the facilities required to clean up the emissions to the new standards will take at least four to five years. The deadline of the first phase is 2012 meaning most of these projects will have to start not six months or year down the road, but NOW.
So in the end, Canada has turned the corner and entered a new age: the carbon age. The old rules are now gone for power generation and oil & gas. The entire economics of any major construction project have just changed overnight. So what is an investor to do?
Well let’s follow the money. First you will need lots of engineering for these new projects, so check out any publicly traded engineering firms such as SNC-Lavalin. Then materials to build everything such as steel (from Ispco for example) and concrete. Also there are typically a fair amount of chemicals involved in these processes so you might want to look at Dow Chemical. Then there will be the other big winners of all this: alternative energy production like wind turbines, solar panels, ethanol and biodiesel (there is so many different companies involved in these I’ll leave you do your own research). Perhaps the most interesting change of all for potential investments will be the construction of a Canadian carbon credit exchange. Will the public be allowed to trade? Is so will the credits be in high demand or will the market be flooded and have the price crash like it did on the European exchange?
The other issue swirling around all of this is the fact Canada is currently run by a minority government. So if the opposition really dislikes this plan it might trigger an election and drop Canada back into limbo with its climate change plan. Hold on to your seats, this could be an interesting few weeks.