How To Cut Your Carbon Footprint by 50%: What We Can Learn From Ramit Sethi and Personal Finance – Part 2

technotheory

This is the second part of a long post, but – again – worth it.  Go grab a cup of coffee.

How does the personal finance model translate to “going green”?

If you recall from Part 1, I made the observation of two patterns:

1. The assumption that to live responsibly (or do the right thing) means a drop in the quality of life
2. That people say one thing, but they do another

In this post, I’m going to show how the assumption that doing the right thing means giving up what you love and a drop in your quality of life is a myth by looking across disciplines to personal finance and applying a successful solution as flushed out by the NY Times Bestseller, Ramit Sethi.

Point 1: Living responsibly means a drop in quality of life – myth

Rebuttal: Living responsibly is another way of saying “I am consciously aware of what my values are and I prioritize them while also permitting myself to be ‘frivolous’ where I choose to be”.

I think the word “responsible” causes some people trouble.  It suggests we’re being judged and told what to do.  And who likes that?  Plus, when I write the word “responsibly” it really opens me up to ridicule and I (and what I say) can be easily dismissed, as David Foster Wallace discussed.

The point here is that the quality of your life is always improved when you are making conscious decisions on how to allocate and use your resources, like time and money.

If you value showing your children how to do the right thing, if you value a healthy home – and I know you do, because you tell me that, too – then consciously arranging your lifestyle to align with these does not mean a drop in your quality of life, it actually means an increase in it!

Now, you might say that you value these things, but you also value other possessions or activities that you feel guilty about, that you know are not the best thing for the earth or the environment or the limited amount of petroleum left to use.  Here’s a tool to help with that: a conscious carbon spending plan.

The Conscious Carbon Spending Plan

Let’s use Ramit’s formula as a place to start:

60% Fixed Costs (translates to: heating, lighting, cooling, transportation, food, etc)

10% Long term investment (translates to: setting aside carbon use for a currently unknown use in the future)

10% Savings (translates to: setting aside carbon use to use for specific goals)

20% Guilt-free spending (translates to: vacations, flying, must-have-home-products, etc)

Like Chris pointed out in his recent blog post, finding the amount of carbon generated by your choices is less than perfect.  But, let’s not sweat the details – at least not yet.   As Ramit always says, “Just get started!”  We can optimize later.  All you perfectionist, type A people take a deep breath.

Personal carbon “budgets” are not entirely new, although they aren’t discussed in the same way that I am here.  For example, the UK government is considering mandating this in 2020 for all UK citizens.  The proposal has some issues, such as the cost-benefit ratio of personal carbon credit trading, but the notion of establishing a budget is gaining steam.  Trial runs in the UK show that the use of a spending plan reduces personal emissions by 5%.

I think cutting 5% is very easy to do, especially for Americans.  Consider the average household in the UK has emissions that are roughly 30% of a family of four in the US.  It’s much easier for Americans to trim the fat when compared to the relatively carbon-fit Brit.  I think a family of four should easily be able to cut 30% of their carbon emissions, especially using a conscious carbon spending plan and other ideas on this website.

If you’ve never thought about the carbon content of your decisions, this process will be eye opening, and it will also guarantee it will be very easy for you and your family to reduce your carbon emissions.  Study after study shows that if people are simply made aware of how much energy they use (especially in comparison with their neighbors) they quickly make changes – a time when keeping up with the Jones’s is actually a good thing!

So, what’s a “good” total carbon target for you and your family?

The average CO2 emissions for a family of four in the US are 100 tons CO2e per year – the Nature Conservancy says 110 for family of four, but I’m going to round off to keep the numbers easy.  And the average is 22 tonsCO2 for each American – which is equivalent to the global average for a family of four!

What the carbon spending plan translates to based on 100 tons of CO2 per year:

60 tons (120,000 lbs) for Fixed Costs

10 tons (20,000 lbs) for Long Term Investments

10 tons (20,000 lbs) for Savings

20 tons (40,000 lbs) for Guilt-free spending

Let’s put these numbers in context so they make some sense:

• How much does a long haul (over six hrs one-way) flight cost?  2,000 lbs per person
• How much does a 42” plasma screen tv cost?  726 lbs / yr
• A dvd player? 110 lbs / yr
• Your laptop?  About 44 lbs per yr if it’s turned on for 4 hrs per day and unplugged when not in use.

Energy misers

Here is an example of how an American family of four could get to 37 tons per year as outlined by the Rocky Mountain Institute:

• Meet the Miser family. This family of four lives in a three-bedroom house in town. [in Colorado]
• Dad bikes to work. Mom works from home. The kids walk to school.
• Mom shops and does errands, driving either the family’s Prius hybrid or riding her bike. The family checks the air filter and tire pressure on their car monthly.
• This vegetarian family buys organic food and recycles everything they can. They compost, spreading the black stuff around their backyard vegetable plot.
• Plane trips? Rarely. They prefer to drive to sites in Colorado or other nearby locales for family vacations.
• Their monthly electricity bill is well below the Xcel Energy average of about $57 a household. Their February gas bill is well below the Xcel average of about $108.
• TV? Only for the occasional DVD. It’s unplugged most of the time. And they don’t subscribe to cable.
• Mom does use a computer for her home office, but she unplugs it when it’s not in use. Lights – many using compact fluorescent bulbs – are turned off when not needed.
• The thermostat is turned down in the winter to below 60 degrees. Sweaters are a ubiquitous part of the household wardrobe. They rarely use air conditioning in the summer.
• Showers are short, and the hot water temperature is turned down to 120 degrees.
• 37 tons of carbon dioxide equivalent are released by this family yearly.

Your reaction to this scenario is probably “No way! This is too different from what my family does now, and I can’t see us living like this.  For example, we like meat and both my husband and I need to drive our cars.”  That’s why I’m suggesting a better way that I’m confident will work.

A reasonable way to cut your CO2 emissions in half

Instead of being a miser – even that word primes a person to reject the notion of changing behavior because it sounds so awful – try this out:  the conscious carbon spending plan can outline a reasonable path for you and your family.

For example, let me show a reasonable way to get a Philadelphia family down to 51 tons of CO2e per year – more than a 50% reduction in their carbon footprint if you use the Nature Conservancy’s published average of 110 CO2e.

Assume a family of four:

1. Knows the things they value the most (for example, a big annual vacation including long haul flights, organic food, the need for cars to get to work, outings with family, large tv’s)
2. They plan accordingly, using a conscious carbon spending plan – splurging on what they value and consider necessary for a high quality of life, but ruthlessly cutting back on the things they don’t care about (for example, they are satisfied with less exotic but more efficient cars, they optimized their thermostat settings, they continue to eat meat every week but make it a side dish rather than main course)

Here’s what their life looks like:

• Both parents drive a combined total of 18,000 miles per year – one an efficient car (30-40mpg) and the other a sort-of efficient car (20-30mpg).  No hybrids.  They try to not drive too much.
• Their home is automated, optimized and they invested in insulation, weatherization and other recommendations their energy audit suggested.  See my post here on how to automate, optimize and invest and why you should pay a pro to audit your house.
• As part of their home automization, they never leave lights on anymore (without having to remember to turn them off) and they never have electricity vampires draining away kilowatts as they sleep – again without having to think about it.
• All of their appliances are Energy Star
• They have low-flow shower heads, and still take hot showers for about 10-15 minutes
• They save their carbon to splurge on vacations – they love to fly to Europe and the US west coast
• They recycle all they can, but don’t compost.  Instead they put all of their food scraps into their garbage disposal.
• They invest in organic food

Calculated using The Nature Conservancy's Calculator

Does this seem better to you?  This is what’s possible if you simply become aware of how much your choices cost you in carbon and align your carbon spending with your goals.  So, what do you think – is it possible to do the right thing and have a very high quality of life – maybe even higher than you’re accustomed to?

If you already doing these things – then pat yourself on the back.  You have aligned your carbon spending with your goals.  But please remember, these are only the beginning steps.  There is so much more you can do.  You may have more goals.  You may still feel guilty about other choices.  But rest assured that you are on the right path.  If you are comfortable doing these things, then I urge you to keep going.  I will be laying out specific steps later.  Stay tuned.

Here’s what you can do now

Step 1: The first step is to identify the things you and your family value most.  It may be that you are in love with your 3,500 sf home.  Fine.  It may be that your Hummer is your raison d’être. Fine again.  I’m not judging, I just want to you to be honest and get started.  Rank this list roughly into three categories: touch-it-and-I’ll-hurt-you, medium, and like-it-but-don’t-need-it.

Step 2: Calculate the emissions associated with each item.  A good source of calculators and figures is here:

The Nature Conservancy Calculator

Terra Pass Calculator

The EPA’s Calculator

Step 3: Compare these results to the ideal spending plan (60-10-10-20).  Are you within budget for the average family of four (100 tons or 120,000 lbs of CO2e)?  If so – can you reduce your carbon footprint by 30%? 50%?  Start by identifying the big wins.

Step 4: If you are not within 100 tons, then identify the big wins – these are the places that you are spending the most carbon. For most of you it’s going to be your home and transportation.  If you find items that you’re spending on, but don’t value – be ruthless and reduce them, or maybe even eliminate them!

Step 5: Check out my posts (here and here)  to see how to start to tackle your home and make it more energy efficient

Please leave a comment and tell me if this post was helpful – or not.