Roland Geyer on the Business of Less
Ramanan Raghavendran speaks with Roland Geyer about alternatives to "eco-efficiency."
In this episode from our archives, Ramanan Raghavendran speaks with Roland Geyer, a Professor at the Bren School of Environmental Science and Management, University of California at Santa Barbara. Since 2000, Dr. Geyer has worked with a wide range of governmental organizations, trade associations, and companies to develop the science and knowledge necessary to reduce the environmental impact from industrial production and consumption. In this conversation, they discuss the fallacy of eco-efficiency and how to avoid green-washing in corporate climate efforts. Time stamps and the full transcript are below. This episode is also available on Apple Podcasts and Spotify.
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[00:06:21] Fallacy of Eco-Efficiency
[00:11:02] Examples of Net Green
[00:15:02] Making Net Green Possible
[00:22:18] Labor and the Environment
[00:00:14] Ramanan Raghavendran: Hello, everyone.
I am back with the Amasia research interview series, and today I have Dr. Roland Geyer, who is an Assistant Professor at the Bren School of Environmental Science and Management at the University of California in Santa Barbara. Prior to this, he researched at the Center for Environmental Strategy at the University of Surrey, the Center for the Management of Environmental Resources at INSEAD. He consulted in financial risk management in Germany and he studied physics as an undergraduate. So, quite the path and we'll get to that in a second.
Since 2000, he has worked with a wide range of governmental organizations, trade associations, and companies on environmental sustainability issues. In addition to being the author of numerous articles, he has also written a book whose very title gets us at Amasia all warm and fuzzy, which is The Business of Less, which challenges standard approaches to corporate sustainability. We'll get to that in other things in a minute, but I'm going to kick this off with our usual question.
[00:01:09] Roland, would you mind talking us through your life and career? You started with physics, there was business in the middle, environmental science, and how did you end up here?
[00:01:20] Roland Geyer: Very happy to do that. Thanks for having me. So as they say, "Not all who wander are lost." So I like to think that of myself. So I did actually manage to get a graduate degree in physics, so I did a lot of physics. And one of the reasons was that when I was at university, I was already passionate about environmental sustainability. I think that started in the mid '80s when I read books like The Limits To Growth, Silent Spring, Small Is Beautiful by Schumacher. All these books had a huge impact on me, but you couldn't actually study anything. There were no degrees in environmental sustainability at that time.
So I picked physics because I also liked physics, but I was already really into environmental sustainability. And then towards the end of my studies, I already looked towards a career, I was trying to basically find a job in environmental sustainability in Germany, I was studying in Berlin. But basically I did not find anything. Maybe it's a German thing, but they were very focused on formal qualifications. So occasionally I would get an interview, maybe for an accounting firm that got their feet wet in environmental accounting, and then they looked at my CV and said, "Yeah, but you're a physicist." And I say, "Yes, I know that but I think I can do environmental accounting if you give me a chance." But it didn't work out, I ran out of money and I needed a job. So the only company that actually offered me a job was an American consultancy doing financial risk management in market risk and credit risk in Germany.
Turns out they love physicists. They actually have a name for it, they call us quants in the financial world. And so I did that for a year. It was very rewarding. I learned a lot, but it really only just reinforced my desire to actually do my passion for a living. And then I started going to conferences, emailing, bothering everyone. I read their papers and emailed them. And one person took pity and that was Professor Robert Ayres. And he happened to be a professor at CMER at INSEAD. So he was a professor in environmental resources management at a business school, INSEAD in France, south of Paris. And he offered me a researcher position.
And so I didn't think twice. I think just by agreeing to that, I must have halved my salary from financial risk to being a lowly researcher, but I never looked back. And that was the beginning of my career in environmental sustainability. And then I decided to do my PhD at a university in the UK, University of Surrey, to study with professors Tim Jackson and Roland Clift at their Center of Environmental Strategy as it was then called. And finally I had the qualification on paper and I thought I was done with academia, but then this job found me here at the University of California, Santa Barbara. There's this wonderful graduate school, it's called the Bren School of Environmental Science & Management, and they had a job opening, and I applied, and they offered it to me, and I had a chat with my wife. We lived in London at the time with two cats and said, "Well, should we just go for it?" And we did. And that was 17 years ago and I'm still here. And I actually made it all the way to full professor now, so I must-
[00:05:11] Ramanan Raghavendran: As you said that I was thinking, we got your title wrong, didn't we?
[00:05:16] Roland Geyer: Not to worry, but I'm a legitimate academic now in environmental sustainability.
[00:05:22] Ramanan Raghavendran: You made your mom happy, so that is wonderful. Did you bring the cats?
[00:05:27] Roland Geyer: We did bring the cats. Actually we got a very generous relocation budget and we flew the cats over. Not very environmentally friendly, but they had a great life. What do you call it? The golden years in Southern California, they loved it.
[00:05:44] Ramanan Raghavendran: Well, I'll get to our next question in a second. I do want to say, the UC in Santa Barbara is widely viewed as being one of the best located universities in the world, because you are in Santa Barbara, what's not to like? So that's wonderful.
[00:06:00] Roland Geyer: I'm not complaining.
[00:06:01] Ramanan Raghavendran: So you may know or you may not, we had Tim Jackson on our interview series last year.
[00:06:06] Roland Geyer: Oh, how wonderful.
[00:06:08] Ramanan Raghavendran: And he was very charismatic and colorful in ways that we liked. And one of the things he discussed was, "the battle between efficiency and scale." And this battle features prominently in your own work.
[00:06:21] And so I think just to kick us off, maybe you could spend a few seconds for our audience on what you call the fallacy of eco-efficiency, which you touched on in your book.
[00:06:33] Roland Geyer: Yes, indeed. Yeah, of course Tim is a wonderful academic and intellectual, and I felt like I was writing my book, The Business of Less as a microeconomic, business centered compliment to his book, Prosperity Without Growth, which I thought was amazing on a macroeconomic level. But I felt like there was a lot to be worked out on the microeconomic market and even individual firm level. And that's what motivated me to write the book. But the drivers behind it I think were probably the same that Tim had, which is that I just increasingly realized that with our sole focus on what I call eco-efficiency, we are missing the forest for the trees. And it's the same as what Tim said, that total environmental impact is the product of impact per unit output, times the total output that we produce.
And especially in corporate sustainability after the Earth Summit in Rio de Janeiro in the early '90s, the focus started to be almost exclusively on this idea of eco-efficiency. So, weren't talking about total output anymore, it was just, the pure focus was, all we have to do is become more environmentally efficient and drive down environmental impact per unit output, and that would allow us to completely decouple economic growth, which was a thing that you can't question, and environmental impact. And that would somehow allow us to keep growing while bending down the curve of environmental impact to a to-be-determined sustainable level. And we had eco-efficiency for 30 years, so there's lots of data to look at how we did over the last 30 years and it basically failed miserably.
So if you look at the data, it almost doesn't matter what material you look at, what industrial activity you look at, growth in total output, or products, or materials, or services has always outgrown our efficiency improvements. And I think that's what happens when you take your eyes off the ball, and the ball was total environmental impact and not impact per product or impact per service. And that's why I almost start the book with this sort of what you call the fallacy of eco-efficiency.
Probably the most important example at this point is of course the carbon intensity of global GDP. So the IPCC just published another ever more desperate sounding report about how at this point we really have to reach net zero greenhouse gas emissions as quickly as we can. And the eco-efficiency enthusiasts, they would tell you the good news that between the Rio conference and 2019, the carbon intensity of global GDP has gone down. And it's gone down from around 560 to 420 grams of CO2 per US dollar. So that's the good news, but at the same time, we more than doubled global GDP.
[00:10:12] Ramanan Raghavendran: Yeah.
[00:10:12] Roland Geyer: And as a result, of course the greenhouse gas emissions went up from 22 to 36 gigatonnes. And that of course is the exact opposite of what we need to achieve.
[00:10:25] Ramanan Raghavendran: As you could imagine, we couldn't agree with you more. I mean, in general, a bunch of the per unit analysis ignore the fact that you have to multiply by something to get the total, right?
[00:10:35] Roland Geyer: Right. Basically.
[00:10:36] Ramanan Raghavendran: So there's a bunch of per capita analyses that, over long periods of time, ignore the fact that population grew 10x. So we've got to do that. But I want to bring us back to another element of your book, which is that it lays out a new way of looking at environmental impact that you called “net green.” And it does a great job of using examples to explain how this differs from eco-efficiency.
[00:11:02] Can you walk us through one example, because this is the systems thinking that I think we want more of in our audience.
[00:11:09] Roland Geyer: Yeah, absolutely. And I couldn't agree more. I think this is the only way to really measure and envision meaningful environmental change. So the one example, let's just stick with greenhouse gas emissions and of course, electricity generation, biggest greenhouse gas emitters. So if you just look at say the carbon intensity of electricity generation, and so typical numbers would be 1000 grams of CO2 per kilowatt hour, if you use coal fired power plants, maybe half, 500 grams of CO2 per kilowatt hour if you use natural gas, and then a typical number for solar PV would be 50 grams. A huge reduction obviously. And there is no controversy over those numbers. There's a range rather than just one single value of course, but orders of magnitudes are established.
So of course then, the recommendation that comes out of that is said, "We need to dramatically increase solar installed PV capacity globally." And luckily that is starting to happen, which is wonderful. But again, everyone now celebrates the low-carbon intensity of renewable electricity and the increase in installed renewable capacity. But really what we should be thinking about is whether we are decreasing our use of fossil fuels, because that's really what this is all about. And eco-efficiency approach just doesn't tell you that, it just says PV solar is better than coal, so now we just need to massively invest in PV solar, and in wind and maybe wave or other kinds of water and problem solved. But the final step, and I think this is where it connects with your idea of “behavioral change is key.”
The final step is that the point is not to increase renewable energy, the point is to decrease fossil fuel use. And that is all about markets and behavioral change, micro and macroeconomics. It's not a technological problem. And so net green basically says, we need to at least estimate what the total actual consequences of any activity or investment or effort are. So what are the consequences of massively increasing solar capacity? Does it automatically follow that fossil fuels will be used less or could it actually just increase the total pie? I hope that was useful to you.
[00:14:07] Ramanan Raghavendran: That is actually a phenomenal example. And these are the things that gnaw at us as well. We could spend an hour just, the IPCC has finally focused on demand-side items in the most recent report, which is related to the point that was just made. Because you can only reduce fossil fuel use as you said, through widespread behavior change which involves thinking about lower demand. One of the challenges you delve into in the book is how to make it such that buying recycled products or buying no products is so attractive to individuals that they are willing to resist—and I'm thinking frankly of my life more than anything else—that they're willing to resist the temptation to buy cheap and abundant goods that they don't need. And our entire society is designed in the United States to make it easy for us right there.
[00:14:59] Roland Geyer: Indeed.
[00:15:00] Ramanan Raghavendran: The Amazon one-click, for example.
[00:15:01] Roland Geyer: Yes.
[00:15:02] Ramanan Raghavendran: How do you think we get to this? How can we accomplish, overcome this challenge? How far can businesses go on their own? And when do policymakers need to step in? Feel free to opine.
[00:15:14] Roland Geyer: Yeah. I mean, that is the billion dollar question for sure, and that was really the motivation behind writing the book. And I tried to put at least an inkling of my idea just straight into the title, which is The Business of Less. So it's how do you sell less rather than selling more? How do you make that happen? And of course, the main thing is we need to somehow sell less environmental impact, and the eco-efficiency fans would like you to believe that this does not translate into selling less stuff. But I think there's just, we have now enough evidence that that doesn't work, so selling less environmental impact almost unavoidably means selling less stuff. And that is the real challenge.
I don't want to pretend that I have a simple answer in the book. I think I'm trying to work towards the solution and I'm also not the person that is going to claim that businesses and industry can do it on their own because they can't. I think so, just like to be completely upfront, I think without very robust policy support, it's not going to work and without getting the households, the consumer on board, it's also not going to work. But I still think companies, the corporate world should not take that as an excuse for inaction and basically just point the fingers, "Oh, it's down to the consumer, we need policy." Yes we do, and yes it is, but I think businesses need to play a major role. And one of the ways... What I think is missing at the moment, I mean, there's no shortage of corporate sustainability activity, or maybe activism in a questionable way, like pledges of carbon neutrality are popping up left, right and center, how they are going to be achieved is currently beyond me.
But I think one thing that needs to happen is that businesses are prepared to fundamentally question and rethink their business models. So I don't think the willingness to change is going deep enough. And you know what I mean by that, and I have one example in the book, is car sharing. And first, the question is car-sharing actually green, net green. And if it is, what makes it net green? And there was a very wonderful large survey done by UC Berkeley about five, 10 years ago, where they surveyed the behavior of car-sharing users. And what turns out is that what really makes car-sharing net green is that it makes a critically important fraction of the customers drive substantially less. So basically what car-sharing does is it sells less driving, if that makes sense.
So it facilitates, it provides all your mobility and accessibility needs with less driving. And that's what makes it net green. So it's this idea of, while we are no longer selling cars... and some car companies are claiming that we are no longer in the business of selling cars, we are now access providers, so mobility providers. And if they were serious about that, I think it could actually open the door to really meaningful greening because at that point they wouldn't have to just sell as many cars as possible. They could actually try and sell less driving and still get everything done. Another example, for some reason, I increasingly get involved in the apparel space. It's another meander and I'm really excited about it because one thing I learned is that the environmental impacts of the apparel industry, global power industry are massive.
[00:19:45] Ramanan Raghavendran: They're massive.
[00:19:45] Roland Geyer: They're actually the third largest plastic users after packaging and construction, which is wild. It's all synthetic apparel. It's basically, we're wearing PET. If we wear a polyester, it's the same polymer. And I feel that some companies in the apparel space are getting serious about repair models and renewal or reuse models. Again, I think it would be a business model that is not based on trying to sell as many clothes as possible but selling longevity for example of clothes or repairability of clothes. And that way the company could still make revenue, and provide employment, and meaning to its employees but it wouldn't be tied to having to sell garments.
[00:20:42] Ramanan Raghavendran: Those are great examples. And the clothing stuff really dwells on my mind. I was just telling one of my colleagues that I've made a personal commitment not to buy a new garment again. For that to happen, repair needs to be working.
[00:20:58] Roland Geyer: Absolutely. And it's much harder than it should be.
If you are trying to repair a garment, you would think there are options everywhere, but it's actually really, really difficult. So there's maybe one shout out here that I can do is a wonderful outfit, I think it's up in Oregon, Portland maybe, it's called the Renewal Workshop and some people out of the apparel industry also basically said, that this is not working, we need to completely rethink apparel. And they started this company that is exclusively focused on repairing and refurbishing garments, which I think is wonderful.
[00:21:45] Ramanan Raghavendran: We're going to track them down just for our own stuff. I want to keep going although each of your responses spawns 15 new questions, but I want to keep us tight. So one of the propositions for reducing the total environmental impact of products is holding constant, or even raising their prices and directing those revenues towards labor, rather than savings or investment or profit.
[00:22:10] Roland Geyer: That's right.
[00:22:11] Ramanan Raghavendran: And in American capitalist circles, you say the word labor and everyone's hair begins to stand on air.
[00:22:18] I think it would be helpful to hear from you, why is labor so powerful with regards to environmental impact?
[00:22:25] Roland Geyer: Yeah, absolutely. Just maybe an advance warning, this is WIP, this is work in progress.
And I'm excited to actually really work through this very thoroughly academically. But I think there's tremendous potential there and I got so excited that I put it in the book even though as some of my students say, "I was surprised you put it in the book because usually you think everything through right to the end and then you put it on paper." That's not quite there, but I think there's enormous... It actually came, it's an idea that I had in the middle of teaching a class on pollution prevention. And the idea was we looked at the environmental impact of households, like the greenhouse gas impact of households and which activities have the largest carbon footprints, turns out to be unsurprisingly heating, travel, and so on.
Roland Geyer: And then the question of, well, what should a household do? And I just ad-libbed at some point and said, "You know what, the household should just redirect as much of its discretionary income into labor. And by labor I just mean people's time and skill. So in that respect, I'm a laborer, I'm a knowledge laborer. Because that is… people's time and skill is truly the only thing, it's the only production input that has zero environmental impact.
So every dollar I redirect from buying some stuff, physical things, and I redirected as a household to just paying for people's time and skill is net green. By definition, I'm reducing the household's environmental footprint. And the funny thing is that suddenly some of the greenest things you can do, you would never find in lists of green products. For example, getting a haircut is... I decided this, one of which I urgently need, I actually have one right after this phone call, but I decided that things like paying someone to cut my hair is actually a way to reduce my environmental footprint.
[00:24:45] Ramanan Raghavendran: And we're going to move on from this question, but I want to just say how much I love and believe in that idea because... And I want to make an extended point, which is one of our beliefs, and perhaps it's yours is, it's really the affluent who do need to do the most for a variety of reasons. They're responsible for the emission, but they're also role models for other people's behavior.
[00:25:06] Roland Geyer: Absolutely.
[00:25:07] Ramanan Raghavendran: And instead of having a house two times the size that you need, you could turn that excess capital into funds that are directed to labor of various kinds that serves multiple purposes in your life. Like the barber, or to pick an extreme example because it has to do with affluence, another assistant or another person in your company, et cetera.
[00:25:33] Roland Geyer: Music lessons, yoga lessons, a massage. I mean, the options are limitless, absolutely. And so, my end goal is that we as a society just collectively decide to just spend money on each other, and our skill sets. And of course, we still need food, we still need shelter, we still need clothes but we already talked about how we overconsume all of those things. I mean, we even overconsume food which is crazy. I think the estimate is always that 30 to 40% of the food that gets grown never gets eaten, this is just crazy. And you said, houses are bigger than they need to be. Cars obviously are bigger than they need to be.
We have too many clothes, so there's so much money that we could just take from that and just spend on each other and that might be the greenest thing we could do, ironically. And the wonderful thing is all the social sustainability benefits that we could also create.
[00:26:44] Ramanan Raghavendran: We should come back and talk again about this because it's a deeply interesting topic. And specifically I want to come back and talk about how the affluent can reconstruct their lives and not feel like they're living in a ditch, but still do better things than buying a large vacation home.
I'm going to take us to our last question. There is clearly a lot in corporate sustainability of, as we think of it, virtue signaling that is not working. But there are also many encouraging things that are happening. The rise of so-called B Corps, the leadership of green parties both in the US and in Europe and maybe one day in Asia, the overall changing tide of discourse.
[00:27:27] Where do you find hope and optimism as we work towards the realization of “the business of less?”
And feel free to share with us examples of successes. And I loved the one you did of Renovation Workshop, that was amazing. We will get to it. But what makes you optimistic?
[00:27:47] Roland Geyer: Well, I mean, I live in two minds. I mean, I've just decided to be an optimist because what else is there to do? So I just believe that... I do really fundamentally think that there is a way of life where we could live sustainably and live the good life, but also leave room for all other species on this planet, I truly believe that. Where I still feel that if anything, we're moving away from it, not towards it, and it is, if you read the IPCC report, is it five to 12? Is it five past 12? Time is running out.
But my wife, who's a very wise woman, in times that I get impatient, she has this one saying that she likes to tell me, which is, "People overestimate what they can achieve in one year and underestimate what they can achieve in 10." And when I look back on my life, that's the story of my life, that I look back and say like, "We are not moving, nothing's changing." But when I do look back to me as the physics student in the mid '90s wanting a career in environmental sustainability, and basically there not being one, I mean, things have changed.
[00:29:13] Ramanan Raghavendran: Things have changed.
[00:29:14] Roland Geyer: Dramatically. I mean, the things, the views that I had back then would've been fringe views, they're thoroughly firmly mainstream now. It really is encouraging. Society as a whole is changing and I think is moving in the right direction, it's just not fast enough for some of those urgent environmental issues. So for me, encouragement, it's my children who are the main driver and motivator.
[00:29:45] Ramanan Raghavendran: How old are your kids?
[00:29:47] Roland Geyer: They are almost 15 and 18.
[00:29:50] Ramanan Raghavendran: Okay.
[00:29:54] Roland Geyer: I mean, they're teenagers, they talk like teenagers, behave like teenagers, they drive me nuts, I love them to bits. But when we do not talk about TikTok or video games, then they just stun me with their environmental literacy that they have already acquired. And that is astonishing and that gives me hope.
[00:30:16] Ramanan Raghavendran: I want to make one editorial comment because I also have teenage children. I'm very surprised by how little they are attached to things and stuff which was very different from me at their age. At their age... I mean, you sound like an evolved human being, I wanted stuff, I wanted things, and my kids don't. They just don't. And it's not just them, it's not because we have some special parenting going on, it's true for much of their peer group.
[00:30:50] Roland Geyer: I think you're right. It's a societal trend that... I also read about that, where ownership of things like cars or even houses is just not a priority for millennials or whatever they're called that come afterwards. So there truly is hope. Another encouragement for me is the amazing students we have here at the Bren School. We have a two year master's program and they all choose this program very carefully and they’re in their twenties, early to late twenties and they're all just completely value-driven individuals that want to make a change and that absolutely gives me hope.
[00:31:36] Ramanan Raghavendran: We are going to wrap things up here. I want to just express a tremendous amount of gratitude for your time. I'm afraid you are stuck with us because we will be back to talk about other things.
[00:31:46] Roland Geyer: That sounds lovely.
[00:31:47] Ramanan Raghavendran: We may get to Santa Barbara, you may get to the Bay Area. If you do so, please come say hello.
[00:31:57] Roland Geyer: Well, thanks for having me. That was a great conversation.