Unconscious Green: how people who really change the world get the job done

Feeling ready to go to the next level, but trapped where you are by a lack of support?

How do some companies find customers, finance, market conditions, stakeholders — when others don’t?

What are the instruments of change, how are they tapped?

To find out more, we start our story with a look at how Starbucks rocked the commodity-priced, “same-old, same-old” world of coffee. 

In the early 1980s, a fraternity brother called me just as we were heading off for our respective summer jobs.

“Do you have $5000?” he asked.

“Are you crazy?” I replied. “I think I have fifty.”

“Could you get five thousand?”

“If I robbed a bank,” I said.

“No, really. What if it was important?”

“I have no idea. I suppose. Maybe I could borrow from my family. What is this?”

“A couple of us are thinking about putting some money together. I heard Starbucks is looking for investment. We could get with them and open a new store.”

At the time, I knew Starbucks reasonably well, and occasionally frequented their downtown or U-District Seattle locations. A number of us would buy our coffee beans there, when we were feeling flush with cash. And I had bought a grinder there, not long before.

“I’m going to pass,” I said.

“Why?” My friend asked.

“First, I’m broke. Second, there isn’t going to be any room for a third Starbucks.”

No. Room. For. A. Third. Starbucks.

A statement that, I believe, safely qualifies me as the single dumbest investor in the history of the planet.

Pioneers, the branded experience, and price

But hold on just a minute, there’s a catch.

At the time, Starbucks did not sell lattes, frappucinos, pastries — or even coffee of the day. Just beans, grinders and some brewing equipment. In the back of the store there was a coffee maker, and you could get a sample of a new blend they were brewing, just one shot. Store traffic did not inspire comparisons to the California Gold Rush.

Eventually, they did raise some money, because about a year later they bought out Peet’s coffee, a San Francisco legend. They started to serve brewed coffee for sale, began opening new stores — and the rest, well, is history.

Back in the early 1980s, you had to be blind to miss the coming Seattle coffee craze. No high-end repertory or art film movie theater like the Harvard Exit was without a good selection of exotic coffees and teas for sale. Small theaters like the Grand Illusion and the Seven Gables were paired with European-style cafés. Freestanding coffee houses such as the Last Exit did a roaring trade. Coffee was everywhere.

The center of just about all of this activity was the University of Washington. You see, in addition to having a drinking age of 21, the city of Seattle prohibited bars from opening less than one mile from the UW campus. Opening up a wide swathe for the coffee houses.

There were a ton of them and they had a lot in common. Cappucinos, mochas, lattes — great pastries — big generous spaces where you could meet a friend, study for a midterm, or write a paper, and no one would bother you. Daily specials on the blackboard. A lively, fun staff.

Sound kind of like a Starbucks today? You see, it was Starbucks who figured out how to make it global, how to make it repeatable, how to market it and price it and make it work as a business.

One thing about all those coffees, then and now. They were never sold on price. You could get coffee for half, or even less, at the Coffee Corral. Yet hardly anyone went there, even among the poor students I knew and counted myself amongst. Few preferred the dingy, hurry-up-we’re-turning-tables experience at the Corral, even though it was cheaper and money was scarce.

The powerlessness of subsidies, taxes, incentives

College experiences form us, in so many ways, and if I have been less than enthusiastic about experiments in the carbon economy such as carbon taxes, and the power of subsidies to alter the fundamental character of markets, it is probably because of how I think about those times in Seattle.

I’ve not been much of a believer in any of the discussions about green premiums — whether they exist or not — because I have believed for a long time that market actors are affected more by convenience than price, more interested in the opportunities presented by technology and new experience than cost.

It would be convenient to think that the reason I opted to take an electric bus in Seattle during my college years was because of a green preference, or the fact that due to subsidies it was cheaper. In fact, it cost the same 50 cents as the diesel bus. It was just that the route was electrified — and that was the way downtown, to work at my job as a production assistant in television. It was a job I treasured, the bus was all-electric, and that was that. So I became a green consumer.

Agents of change

Though I have been an occasional Starbucks customer for some 30+ years now, I have been visiting more often lately, along with many people here in the Digest’s hometown of Key Biscayne, Florida — a tiny enclave of 1.3 square miles which eventually has become home to its own Starbucks. The lines are out the door many mornings. Previously, the nearest outlet was on the mainland, some 25 minutes away and at a tough spot for parking. It was a twice-a-year treat. Now, we go on a semi-regular basis, because it’s a few minutes walk.

You see, that’s the transformative power of access and convenience. The lines are long for $4.00 drinks that might have 50 cents or less of raw inputs, and compete successfully with lower-priced equivalents at the Winn-Dixie, which just put in an espresso machine and is whipping up the ‘cinos.

The baristas remember you, even if you’ve not been around for a month or so. Their attitudes invite you, upon arriving at a store, to lighten one’s mood and be more receptive to ideas, more aware of the world and the people around you. Max, Andy, Victoria, Ginger, Carlos, Marilyn and others have been our guides to a whole series of new products, new drinks, new CDs. When something is new, they point it out. When the Starbucks app is improved, they explain it. When something can be made better, or healthier, they pitch the idea.

With their bright spirits and friendly personas, they are more than baristas, they are agents of change — the evangelicals that most new experiences, and practically anything green, are lacking in. But they are not evangelical for what they want — rather, to help you to find what you want.

By contrast, what about green evangelicals. As a rule, they’re prescriptive, aren’t they? Use this, don’t use that. This is good, that is bad. Tut-tut, finger-wag, and shame on someone. Probably shame on you.

By contrast, the unconscious green is walking into a room filled with good choices, good moods, good information, good people — and someone asks, what do you want? And good choices flow for unconscious reasons.

The messaging around the green experience

When we talk about clean energy and fuels, we generally ignore the consumer in the discussion altogether — preferring to talk in terms of mandates and regulations, incentives, subsidies, credits, tariffs, blends and specifications. We hear price-and-performance, it’s all about price-and-performance like repetitive birdsong.

In all the years that I have been a customer for fuels, I have yet to be engaged one time, at the point of purchase, by anything approaching, on any level, a consumer education or transformational customer experience. Oh, Propel Fuels has some locations that engage the consumer in California or Washington state, but they are few in number.

The closest I have seen to consumer messaging about renewable fuels are warning labels – advising me that my fuel might contain up to 10% ethanol. As if it were a viral plague, or a deadly poison.

The failure of Kyoto

When we talk about the failures of climate change and emissions policies — and there is a lot of hand-wringing these days in global circles about the abject failures of the Kyoto Protocols and the impending fate of the planet — we hear a lot about the need for more carbon taxes, or carbon trading schemes, or feed-in tariffs, or what have you.

Maybe those are important things.

Here’s one report out this week that says none of those are affordable drivers of the necessary levels of changed carbon behavior. Primarily because the cost of transitioning to a renewables economy is too expensive to tempt developed countries, or be affordable for smaller ones, or provide the returns the private market seeks and are commensurate with the risks.

This particular report suggest transitioning from the old paradigm based on subsidizing an unaffordable generation of technologies to a new paradigm: investing much more in innovation, and structuring subsidies on a rapid-sunset basis, where they would be transitional supports to solve valley-of-death deployment problems that new technologies face. In other words, a new technology might have access to an intense subsidy for a short period of time, say 10 years.

It’s an intriguing idea.

In the report, Matthew Stepp and Megan Nicholson write:

There is little political will to implement the high carbon prices needed to truly change the market. This is because absent innovation to lower the price of low-carbon energy, carbon pricing simply raises the price of energy writ large, which elicits political and consumer resistance.High-income countries are constrained by unwillingness to pay higher energy prices or place limits on the economy.

As a result, the best countries can do is implement a low, politically acceptable, but ineffective carbon price within the range of what consumers are willing to pay. For instance, in early 2014, after significant price volatility, the EU’s carbon trading price stood at a paltry $5 per metric ton of carbon, or the equivalent of increasing the price of a gallon of gasoline by roughly 5 cents—far too little to change the incentive structure of the energy market.

But, would even steep carbon prices help? Stepp and Nicholson are skeptical, looking at the case of Europe.

In Europe, the price of a gallon of gas is often double that of the United States—around eight dollars per gallon in Belgium, France, Germany, and the Netherlands, and closer to nine dollars in Italy—the equivalent of roughly a $500 per ton carbon price.Yet this de facto carbon tax has done little to spur the adoption of electric vehicles or the development of better batteries. Instead, high gas prices have encouraged Europeans to drive less and use more fuel-efficient vehicles.

They conclude:

International and national decision makers in high-income countries have pursued a set of policies (e.g., carbon emission targets, carbon pricing, subsides, and regulatory mandates) that have failed to make clean energy technologies cheaper than fossil fuels outside of niche markets and accounting for the costs of storage.

As a result, global carbon emissions have grown faster since 2000 (2.2 percent per year) than from 1970 to 2000 (1.7 percent per year), and show no signs of stabilizing, much less dramatically falling.

Well, the fine minds on the thrones of influence in the carbon and climate world will look at these items, and figure out if Stepp and Nicholson are right, or wrong. Probably with a tut-tut, finger-wag and a shame on you, and you, and you. Probably, shame on me, too.

But the solution may be more straightforward.

The retarding power of uncertainty and doubt

It is pretty obvious that the reason that more consumers don’t embrace, say, E85 ethanol, is that the fuel is confusing, and hard to find. It feels risky, strange, and for the few, not the many. Most of what drives people to embrace the fuels they use — the mass market that is, not the pioneers and early adopters — is that, well, you buy from what’s convenient, and obvious, and safe, and known.

I doubt very much if the average consumer understand whether $2.50 E85 or $3.50 gasoline represents a better deal, or very much at all about the emissions reductions obtained with this gallon of E85 compared to that gallon of gasoline. Probably a good many people have no idea what E85 actually is, on any level whatsoever. Most of them are fairly overwhelmed just paying the bills, and living their lives. Not one in a hundred might feel motivated to drive around town looking for E85 — only to find, when he or she gets there, that the staff at the location aren’t generally much more educated about it than anyone else is. All you get is a pump, a warning label and a price.

Imagine a Starbucks built like that. A confusing menu with no explanations, or anyone to explain anything. Prices that don’t relate back to known choices. No environment, just an espresso machine, a price list — and throw in a warning label about caffeine content.

It’s not entirely unlike the set-up that Starbucks had back in 1983 when it came to serving coffee. Serving coffee was an after thought, at the back of the store. There was a brewer, the free samples, and a staff that could tell you just about anything about the beans and almost nothing about the drinks. Part of the reason, probably, that Starbucks took 16 years to get to six stores.

Doesn’t sound like a recipe for transforming the coffee economy, or the energy economy, or any economy. At least to me.

Deciding what is convenient, and what is not

Coercion isn’t fun, that’s why anti-mandate campaigns gather supporters besides those employed by the incumbent.  Transition to a better world shouldn’t have to start with the consumer equivalent of water-boarding. There are 127,000 Google references to “shorter showers” as a path to saving water.  A million experts prescribe it. Never gets beyond some early adopters. Why? As green marketing guru Suzanne Shelton once observed, “shorter showers are not awesome.”

But I do believe in one government action — the power of zoning, the power of access — the power to decide what is convenient and what is not.

Now, some cities don’t have much in the way of zoning laws — famously, Houston among them. Some of those cities say they get along just fine, that natural social and market forces are really all you need to ensure that plutonium reactors aren’t built next to elementary schools. I have a hard time squaring that theory with the developmental jumble seen in many cities in the developing world. But that’s a debate for experts to undertake in the world of peer-reviewed journals.

Here in Digestville, we look at Starbucks and are reminded that the coffee phenomenon fostered out of Seattle did not happen in a vacuum. It happened through zoning. Not the coercive kind — some well-intended mandate to locate a coffee-house every two blocks. It was a zoning requirement that kept saloons from establishing themselves next to the campus and plying willing students with cheap beer. Clearing the niche for something better.

The niche goes on

Absent the kind of gathering spots that bars provide, arriveth the alternative. In the case of Seattle, the alternative was coffee. But it happens all the time. Not entirely unlike the arrival of mammals to fill in the ecological gap left by the extinction of the dinosaurs. The niche goes on — transformation comes not always when the alternative is cheaper, or better, or mandated — but when it is acceptable, and the closest game in town.

Towns have a tremendous potential impact on clean energy by the way they zone for clean energy — and alternative vehicles. Here on Key Biscayne, we have a zoning variance that allows golf carts to be driven on any road, excepting one main thoroughfare. Towns like this have green adoption rates that would make plug-in electric car marketers envious. I read that in the city of Peachtree City, Georgia, 9,000 homes have a golf cart (this is a town of 34,000 people, mind you) and use 80 miles of cart paths that weave throughout the community. Keep in mind that the plug-in Chevy Volt is selling, after five years of promotion and hustle, something like 1300 vehicles per month.

We have a golf cart emporium here on Key Biscayne, KB Green, that is everything an E85 ethanol location should be and isn’t. Have a question about the economics, technology, options, or experience of owning a golf cart — just ask. Prefer to lease instead of own? No worries. On a budget? A reconditioned cart may be just the thing for you. Absolutely love the electrics but don’t have a plug-in outlet? Gas carts are popular too. Prefer to rent? Can do.

Symbols of a new culture, unconsciously green

Golf carts are Key Biscayne’s cable cars — a symbol of its culture — a green choice that isn’t really the product of green preference. In fact, I doubt most of our neighbors think of it as a green choice at all. The carts are a safe, affordable, reliable, and fun way to transport kids throughout the Village, shop, get to the beach, or to go out to dine. It’s the best kind of green — green unconscious.

So, a powerful change was effected at the village level, through the power of zoning — that made accidental green consumers where once there were fleets of BMWs and Mercedes. Did I mention that the golf carts are made in the good ol’ USA?

Other towns have looked at golf carts — and cited liability concerns — and not passed the traffic laws necessary to make them usable in daily life. Or, they have permitted the kind of urban sprawl that makes long-range vehicles a must-have, and make it nearly impossible to build out infrastructure for alternatives at any kind of affordable price.

Cost, cost, cost, they’ll tell you. Liability! Exposure! Risk! But try and get affordable flood insurance in coastal Florida, these days. As we’ve noted in the past, there are many climate change skeptics, but strangely none work in underwriting at insurance companies.

Nothing is a commodity unless you want it to be one.

Making something more convenient, or something else less convenient. That’s a powerful instrument for change.

And, in the form of golf carts, provides a pretty good way to get to our local Starbucks, and one reason that Starbucks will be hopping on this hot late-spring morning. It’s unconscious green, and that’s the most pleasing shade of green of all.

(Note: Starbucks photos by Carolyn K, as posted at foursquare).