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William A. Levinson

Customer Care

Life Without the Paris Agreement

We already have the tools, knowledge, and monetary incentive to address environmental issues

Published: Monday, November 25, 2019 - 12:03

How will the United States’ withdrawal from the Paris Agreement affect greenhouse gas emissions? Quality Digest editor in chief Dirk Dusharme and Mike Richman, principal at Richman Business Media Consulting, point out that most manufacturers already recognize that waste, including waste of energy as represented by carbon emissions, costs the supply chain money.1 This leads to my conclusion that withdrawal from the agreement will not have any significant effect on U.S. carbon emissions.

Involving relevant interested parties

It is a basic principle of ISO 9001:2015 that organizations must identify the needs and expectations of their relevant interested parties, but not all interested parties are relevant. The Paris Agreement offers little identifiable value to organizations, so it is not a relevant stakeholder. Neither are investment banks that had hoped to profit from cap-and-trade mandates.2 The supply chain should contain nothing that does not deliver value to the other supply chain participants.

Relevant interested parties, on the other hand, include investors, employees, suppliers, customers, and the surrounding community. Investors have a right to a fair return on their investment, workers are entitled to the highest wages that are consistent with the value generated by their jobs, suppliers are entitled to fair compensation for their inputs, and customers are entitled to the lowest possible prices consistent with fair compensation to the other stakeholders. (This was exactly how Henry Ford ran his company, and it created the American middle class while helping to make the United States the wealthiest nation on earth.) The surrounding community has, meanwhile, the right to not have its air and water polluted by industrial emissions.

U.S. businesses, and in fact businesses all over the world, have recourse to highly effective off-the-shelf tools they can use to meet all these objectives. These are:
• The ISO 50001:2018 standard for energy management systems and the closely related ISO 14001:2015 standard for environmental management systems.
• Leadership in Energy and Environmental Design (LEED), which promotes resource-efficient construction. As Quality Digest’s reader focus is on quality rather than construction, we will not devote further detail to LEED other than to say it reduces a building’s long-term utility costs, including those for water as well as energy. Its implementation is therefore highly recommended.

The ISO standards and the green building certification, and more important, the thought process behind them, tell us everything we need to know about environmental protection and also the needs and expectations of our relevant interested parties. The thought process is very simple: Any form of material or energy waste squanders resources that could otherwise be distributed to stakeholders. Benjamin Franklin’s statement in The Way to Wealth (CreativeSpace Independent Publishing, 2015 reprint), “If you would be wealthy, think of saving, as well as of getting. The Indies have not made Spain rich because her out-goes are greater than her incomes,” as well as similar observations, makes Franklin not only the founding father of the United States, but of lean manufacturing as well. It means, simply, that avoidance of a dollar in waste is a dollar of profit that can be shared with investors, workers, customers, and suppliers. It might be necessary to generate $10 in sales to yield the same dollar.

Combine ISO 50001 and ISO 14001 to deliver financial and environmental results

A strong argument can be made for combining ISO 50001 and 14001 standards into a single standard for “material and energy management.” First, waste of materials and waste of energy are two of Henry Ford’s key performance indicators (KPIs), the other two being waste of the time of things (cycle time) and waste of the time of people (motion inefficiency). Ford wrote accurately that it is possible to waste time, material, and energy, and nothing else, and his company made a lot of money by using these KPIs. All seven Toyota Production System wastes can be expressed in these terms.

Second, materials and energy are two quantifiable inputs into any product realization process. The material and energy balance used by chemical engineers relies on the very simple fact that inputs must balance outputs in quantity and kind. Any input that does not result in a saleable output is waste by definition. This is a strong argument for considering materials and energy together rather than separately.

Third, it is often possible to identify a gap or disparity between the amount of material and energy a process currently uses and the amount of material and energy the process actually requires. ISO 50001:2018, figure A.3, shows a reference energy performance indicator (EnPI), an energy target, and a current energy performance indicator. If we know the minimum amount of energy the process actually needs, we can expose a gap between that and our current performance. This concept is more than 100 years old.

For instance, in 1909 Emerson Harrington wrote that “the fire-fly converts the hydrocarbons of its food into light with an efficiency of 40 per cent. It flashes its light at intervals, thus making it most effective by contrast with the surrounding darkness, and it emits no more light than is necessary for its purpose.”3

Harrington added, “Man wastes three-quarters of the coal in the ground, brings the remaining quarter to the surface by inefficient labor and appliances, doubles, trebles, or quadruples its cost by transportation charges to furnace door. Rarely is as much as 10 per cent of the energy of the coal transformed into electrical energy, and of this only 5 per cent can appear as light. Ten to twenty times as much light is provided as necessary on a writing table, because of the distance of the bulbs from the place where the light is needed.”

Harrington, in other words, identified losses related to labor and energy necessary to mine and transport the coal, further inefficiencies of heat engines, and also the fact that the Edison bulb generated primarily heat rather than light. He concluded, “Out of ten thousand Btu [British thermal units] in the coal mine we use in necessary light the equivalent of about six,” which means an efficiency of only 0.06 percent vs. the firefly’s 40 percent.

Energy-efficient solutions, such as the light emitting diode (LED) bulb along with occupancy sensors that shut off lights when nobody is present, weren’t available until roughly a century later, but this gap analysis showed, even more than 100 years ago, that it is possible to do better. Harrington exposed waste that would have otherwise hidden in plain view for decades if not longer. We cannot solve a problem of whose existence we are unaware.

The newer ISO 50001:2018 standard also contains very useful clauses that have no counterparts in the older ISO 14001:2015 standard. These are:
• 6.3 Energy Review, must address significant energy uses (SEUs).
• 6.4 Energy Performance Indicators (EnPIs)
• 6.5 Energy baseline, established from the Energy Review
• 6.6 Planning for Collection of Energy Data, includes consideration of static factors and relevant variables
• Annex A, Guidance for Use, adds A.6.3, Energy Review.

Is there any reason not to add significant material uses, material performance indicators, and a material review to ISO 14001? Once this is done, is there any barrier to combining the two standards to have, for example, a material and energy review?

Spraying the air with light and paint

Isaac Asimov’s “Nightfall” (Astounding Science Fiction, 1941) is a science fiction story about a planet whose inhabitants have never seen the stars because multiple suns mean there is always daylight. There are rare occasions, however, in which none of the suns are in the sky, whereupon people go insane and the society collapses. The movie Pitch Black, with Vin Diesel as Richard Riddick, is based on “Nightfall.” Not just the stuff of science fiction, National Geographic reported that, when a blackout hit Los Angeles, “Startled awake, some residents who had stumbled outside called various emergency centers and a local observatory to report a mysterious cloud overhead.”4 The mysterious cloud was the Milky Way, which many Angelenos had never seen before because of light pollution.

Shigeo Shingo asked of a painting operation in which overspray not only wasted paint but also caused water pollution whether the objective was to paint the parts or the air.5 We can ask similarly whether the purpose of municipal lighting systems is to illuminate streets and sidewalks, or the sky. Light pollution is wasted energy in plain sight.

With many standard outdoor lights, “50 cents of every dollar in energy costs goes right up into the sky,” says Anthony Arrigo, who sells dark-sky-friendly fixtures on his website, www.starrynightlights.com.6 If the energy for the outdoor lights comes from fossil fuels, the implications are obvious, but we do not need the Paris Agreement to act on this opportunity to eliminate waste. We would also act on it if the energy came from renewable energy because any we don’t waste can be sold back to the grid.

Break paradigms to reduce costs and greenhouse gas emissions

A paradigm is a thought-limiting belief that prevents people from even recognizing a potential risk or opportunity. A classic example was the challenge to undo the Gordian Knot, which was tied in such a manner as to make it impossible to unravel it. Alexander the Great pointed out that the challenge did not require anybody to untie the knot, so he cut it apart with his sword.

Another paradigm, with environmental consequences, is that meat comes from farm animals, which has been the case ever since humans domesticated them. Elliot Swartz points out, quite accurately, “Growing crops to feed animals to produce meat is a vastly inefficient process, as most calories are expended for metabolism rather than creating edible meat.”7

This is obvious, but there was no way around it until roughly 2013, when “...Mark Post revealed the first cell-based hamburger, demonstrating that the animal could be cut out of the equation altogether.” The reference adds that 14.5 percent of all greenhouse gas emissions, including methane as well as carbon dioxide, come from animal agriculture and therefore (even if horses are included) primarily from animals that are raised for food. The reference also features a picture of a meatball on top of onions and what looks like a tomato slice, but no animals were harmed in this meal’s creation. The meat was grown in a bioreactor from bovine stem cells.

It is easy to imagine the benefits of growing rather than raising meat. First, the cost will be much lower because almost no food energy is squandered on keeping an actual animal alive long enough to be raised for slaughter. Second, it eliminates all controversy over how animals are treated on farms and in stockyards. Third, it eliminates the relatively dangerous meat-packing industry, a frequent source of repetitive motion and other injuries.8

This example also underscores the fact that material and energy issues are often connected because traditional meat production wastes food, a material, much of which is squandered in the form of metabolic energy with consequent greenhouse gas emissions. A material and energy balance on a cow would probably show how much material input comes out as carbon dioxide, methane, and excretion rather than meat and leather. This is a quantifiable gap between where we are and what is possible.

Don’t focus exclusively on environmental aspects

The phrase “environmental aspects” in ISO 14001 creates yet another self-limiting paradigm because it diverts attention from material wastes that do not involve environmental aspects. Suppose, for example, we purchase consumable X for $400, and it costs us another $600 to dispose of it because it is an environmental aspect. We also purchase consumable Y for $1,500 and because it is not an environmental aspect, we can legally discharge it into the air or dump it in a landfill. If we focus on “environmental aspects,” we will pay no attention to consumable Y.

Environmental protection laws were once so weak in the United States that the Cuyahoga River caught fire as recently as 1969, and there were numerous jokes about being able to walk on Lake Erie. Henry Ford nonetheless made an enormous amount of money by treating anything that was thrown away as wasted money. This was when he could have legally dumped into the nearest river whatever waste wouldn’t go up his smokestack.

Consider, for example, waste wood that, as long as it has not been chemically treated, is unlikely to be an environmental aspect. Ford’s position was that, since he had paid for the wood, he was going to get as much value from it as possible. Distillation of the wood into methyl alcohol and other saleable by-products yielded $12,000 a day in the money of the 1920s, when $6 a day was a very high wage. Kingsford Charcoal, which is even now popular at barbecues, was among the by-products. Slag from Ford’s steel mills was meanwhile made into paving materials and cement.

ISO 14001 users can therefore get a lot more out of the standard if they treat everything that is thrown away, whether it is a consumable or part of the bill of materials (such as metal or other stock, part of which becomes machining waste), as a waste to be prevented (refuse to buy or create), reduced, reused, or recycled. ISO 14001 users can then go back and check off everything that is in fact an environmental aspect to meet the standard’s requirements.

Ford would today, for example, identify sulfur in coal (if burned to make sulfur dioxide) and discarded wood as wastes. He would then refuse to make the sulfur dioxide by perhaps extracting it from the coal prior to combustion and selling it as ammonium sulfate fertilizer. He would reuse the wood waste by distilling it and then, almost as an afterthought, check off “environmental aspect” next to the sulfur.

The only circumstance under which “environmental aspect” becomes a decision-maker is when it is cheaper to throw away the waste than to refuse, reduce, reuse, or recycle it. If it is indeed a pollutant, the law requires proper disposal even if this costs money. The fact that Ford threw away almost nothing, even when there were no meaningful environmental protection laws, proves, however, that it is almost always economically feasible to refuse, reduce, reuse, and recycle.

Conclusion

ISO 14001 and ISO 50001 offer value-adding structures for environmental and energy management systems. They should be used together to attack all forms of material and energy wastes, which would deliver lower prices for customers, higher wages for employees, higher profits for investors, and fair compensation for suppliers. LEED meanwhile reduces the long-term ownership and operating costs of commercial and even residential buildings, which again delivers tangible benefits to all relevant interested parties.

References
1. “Off Script: Paris Climate Accords.” Quality Digest Live, June 2, 2017.
2. Booker, Christopher. “Financial crisis: Lehman misses out on carbon credit scam.” The Telegraph, Sept. 21, 2008.
3. Emerson, Harrington. 1909. “Efficiency as a Basis for Operation and Wages,” New York: The Engineering Magazine, 1909.
4. Drake, Nadia. “Our nights are getting brighter, and Earth is paying the price,” National Geographic, April 3, 2019.
5. Robinson, Alan, ed. Modern Approaches to Manufacturing Improvement: The Shingo System. Portland: Productivity Press, 1990, pp. 101–102 for the Shingo example.
6. Sharkey, Joe. “Helping the Stars Take Back the Night.” The New York Times, Aug. 30, 2008.
7. Swartz, Eliot. “Meeting the Needs of the Cell-Based Meat Industry,” Chemical Engineering Progress, October 2019.
8. Lowe, Peggy. “OSHA Injury Reporting Rule Sheds Light On Meat Packing Accidents.” National Public Radio, Aug. 10, 2016.

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About The Author

William A. Levinson’s picture

William A. Levinson

William A. Levinson, P.E., FASQ, CQE, CMQOE is the principal of Levinson Productivity Systems P.C. and the author of the book The Expanded and Annotated My Life and Work: Henry Ford's Universal Code for World-Class Success.