Human nature is predictable

Embracing alternate energy or bracing for change

Complacency and ignorance are terms that likely best sum up sentiment for energy costs, adoption of green behaviour or enthusiasm to experiment with experimental solutions.

Human nature is predictable. Seek the easiest path to accommodate basic needs. Inducing behaviour change generally only occurs through pain or reward. Thus, early adopters of green technologies will be motivated to action through financial need or tax-induced pain. Alternatively, some are motivated through rewards of saving money or achieving a philosophical commitment to better the environment.

North Americans have enjoyed consistently low energy prices, notwithstanding oil shocks of the ‘70s, this is in stark contrast to other areas of the globe. Countries in Europe, Japan and emerging countries have suffered through energy crisis and adapted. Consequently, there has been very little inducement to change behaviour locally, as there has been elsewhere.

In the last number of years, oil has fluctuated between $40 and $150 per barrel; through these swings there was very little change in behaviour of the consuming public.

Several years ago economist Jeff Rubin wrote a book that considered the impacts of rising oil prices. His argument was that at some sustained level, maybe $200 per barrel, people will be forced to alter their behaviour. As energy prices rise, the impacts become irresistible.

Beef from Argentina, vegetables from California, fruit from New Zealand or coffee from Peru is no longer an option as result of exorbitant energy prices. Even goods from China and emerging markets lose their economies if transportation costs become too great.

The Walmart distribution model fails and communities are forced to become more self-reliant and selfresilient.

My argument to businesses – take energy costs more seriously. Energy is tied to fossil fuel and while oil prices remain low (which will continue in the medium term), induced carbon taxation will penalize traditional behaviour. The cost environment will change, prepare now with even modest investments.

Today business, and to a lesser extent consumers, can make the necessary investments to embrace a predictable environment. Fossil fuel prices, electrical prices, transportation prices remain low. The economic benefits of these savings needs to be applied to new technologies and new models in advance of change.

If change is not implemented now, when prices are low, financing costs are low and technologies are affordable due to low demand; the opportunity to adapt in the future may have been missed. Businesses will fail if they can’t adapt, and now is the time to be progressive.