Markets can be surprisingly inefficient. Until this month, no composting facility near Nashville could accept food waste. A couple of Lipscomb University graduate students noticed this opportunity a couple years ago. Now, finished with their degrees, they have started a business, obtained permits, and built a 37-acre facility in an adjacent county that has just begun operations.
They are already contemplating expansion.
When I met them in November, they had just gotten final approval on a composting permit from TDEC. Nashville’s locavore and sustainable restaurants gave the new business a core of committed subscribers, but they were worried 37 acres was too big. Once they had their permit, however, new subscribers “came out of the woodwork,” Scott Thorpe said. Now they are sure they will be operating at full capacity.
It’s a grand business model. Composters get paid on both ends. They collect tipping fees when accepting waste, and they sell products made from the waste. Thorpe thinks they may be able to work in a third revenue stream as a distributor of compostable flatware, cups, and plates.
How does such a profitable opportunity go unfilled in a city as big as Nashville? A free market would never be so blind. One reason is political bigotry. The wealthy class disdains environmental causes, and they see composting as something people do only to make themselves feel good. This prejudice has kept capitalists from noticing the profit potential in composting food waste.
I am implying, of course, that our economy has become so centralized that an elite ownership class can impose a political bias on the national economy. If that were true, there would be protests and occupations all over the country!
In addition to politics, contrary interests and a bigotry of scale conspire to keep “green” investments from their full potential. Home energy efficiency is probably the most potent economic stabilization measure our country could take, but it is dismissed as a hippie cause and, even worse, it yields profits for homeowners and businesses, not for utilities and power generators.
Utilities have a common interest with consumers in reducing peak demand, so energy audits and low-cost financing for weatherization and cooling-unit upgrades have been offered for years. Utility interests diverge from consumer interests, however, somewhere along the spectrum between efficient consumption and going off the grid. As a result, utility investment in energy efficiency has been half-hearted and misdirected.
Finally, however, financing methods that do not require utility funds are being devised, empowering consumers. We can all live in homes with significantly smaller power bills.
In Nashville, stimulus dollars are being leveraged into a revolving-loan fund that brings lower utility bills to neighborhoods while training apprentices in the green arts. Numerous states have passed PACE legislation, which bills efficiency upgrades through property taxes rather than utility bills, so loans are paid off by whoever owns the house. Because utility bills and tax bills are more secure debts than even mortgage payments, bond markets are now taking an interest in energy efficiency investments.
In Knoxville, a leading proponent of efficient homes is Stan Johnson, executive director of SEEED (Socially Equal Energy Efficient Development), member of MPC, and a businessman who has chosen to turn his skills toward community betterment. Over the past couple of years, SEEED has created an apprenticeship program in weatherization and other green-job skills. They have also been promoting efficiency upgrades for older homes.
For now, Johnson works with grant money, donations, and volunteer efforts, but he has a business model that is proven in other cities. If there were more capital available for home energy efficiency, SEEED’s fledgling program could take wing, creating jobs and improving living standards in urban neighborhoods.
With so much promise, this clean-energy industry should not be undercapitalized, but the rewards of efficiency are broadly distributed among homeowners and small businesses. Capitalists like their rewards in big piles. Perhaps we need an economy that puts the interests of consumers first. Some of our best economic opportunities are being neglected.