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OPINION: America's Chicken-Egg Problem PDF Print E-mail
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Politics & Law
Written by Greg Stevens   
Friday, 01 October 2010 11:24

Recently I was listening to a local Dallas radio talk show that was discussing the recent Paris Motor Show 2010.  The woman who was the "on site reporter" was telling the host of the show that the one overwhelming theme of the show was: electric cars.  Every single manufacturer had at least one (but often several) new models of car that ranged from hybrid to fully electric.

But the reaction of the Dallas talk show host was stereotypical almost to the point of being cartoonish: complete with thick Texan drawl, he focuses on what obviously really matters: "How did they look?" and "But how do they expect these cars to get into the American market, when we don't have the infrastructure for electric yet?"

This second objection he felt was important enough to repeat several times, and he even ended his show with that commentary: It doesn't seem like a smart decision to be pushing all of these electric cars out, when here in the United States we don't have the infrastructure yet for them. 

Our friendly Dallas talk show host isn't alone in this mind-set, either.  According to one report, Ford Europe boss Stephen Odell expressed the same concern: "Frankly the technology needs to get better, with a longer range ... and the cost has got to come down. And there's the infrastructure -- where are you going to charge your car?"

I call this the "Chicken and Egg" argument against adopting new technology:

"It's stupid to build electric cars when there is no infrastructure to support them!" and "Why should we waste money on building an electric car infrastructure when nobody has electric cars?"

This argument got my attention, because it is the exact same argument that people in the United States use against moving toward bioplastics.

In Europe, in the world of bioplastics, just like in the world of electric cars, the outlook is progressive and forward-looking.  According to Steve Davies, director for corporate communications and public affairs at NatureWorks, the European market is upbeat. In July, the US-based biopolymer manufacturer boosted its presence in Europe by linking up with Trevira, a German polyester fibre specialist. "The European market is performing very well in some applications and solidly in others," explains Davies.

But just like in the electric car industry, the United States is falling behind.  Recent reports on technologies and global markets related to bioplastics say it outright:

Use of bioplastics got off to a faster start in Europe than in the United States. European usage is now reported at 175,320 metric tons in 2010 and is expected to increase at a 33.9% compound annual growth rate (CAGR) to reach 753,760 metric tons in 2015.

Even the most positive spin describes the United States as a places of "untapped opportunity":

Biome’s Mines also notes that in the US, there is an opportunity for growth. "The US market is starting to become aware of the issues and the potential of biomaterials although is still behind Europe," he observes.

Why is the United States chronically behind?  Based on what I've heard, it is the same chicken-and-egg mindset.  When you have been reading blogs and opinion pieces critical of bioplastics, what are the main objections you have heard?

  • We can't start pushing compostable plastics, most people don't have "compost" bins, only "trash" and "recycle" bins
  • We can't start pushing compostable plastics, because there aren't as many composting facilities as there are landfills
  • We can't start pushing compostable plastics, because there are so few manufacturing facilities for it that it is too expensive to make in bulk.

How many of these sound familiar? Every single one of these arguments has the same format: the Chicken-and-Egg format.

From now on, every time you read or hear this type of argument against bioplastics, please remember to point this out:  This is a Chicken-and-Egg argument.  This is a "I won't do it until the other guy goes first!" argument.  It is not an argument against bioplastics in particular.  It is simply an argument against any kind of change.

 
OPINION: PLA and the Free Market PDF Print E-mail
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Politics & Law
Written by Greg Stevens   
Monday, 13 September 2010 07:57

The Bankok Post reports that NatureWorks LLC, the world's number one bioplastic company, has been in talks with potential partners to jointly invest in a large-scale bioplastic plant in Thailand worth about $400 million.

This would be only the second large-scale polylactic acid (PLA) plant ever built: the first opened in 2003 in Nebraska.  According to the article:

NatureWorks is currently in the process of selecting the location of the 150,000-tonne facility. Brazil is among the candidates while other potential locations are Thailand, Malaysia and Singapore...  Three basic factors in the final decision are local availability of raw materials including tapioca and sugarcane, markets of the product, and incentive programmes.

This is fantastic news, of course: one of the biggest obstacles to the wide-spread use of PLA is the price, and a big component of the price of PLA is the fact that there simple isn't the same level of industrial infrastructure (such as manufacturing plants) that there is for regular plastics.

But in addition to the general "hurrah!" and promise of this article, one other thing caught my eye: "Three basic factors in the final decision are local availability of raw materials including tapioca and sugarcane, markets of the product, and incentive programmes."

In the United States, President Obama gets a lot of criticism in some circles for wanting to spend money to incentivize green energy and green industry more generally.  Some people say that the government shouldn't be trying to influence private businesses or the free market.

The problem with this mindset is that in other countries, the government is getting involved, is creating incentives for green businesses, and as a result these other countries could emerge as centers of leadership in important new industries.  According to recent reports, China is so dead set on incentivizing green industry that it is breaking international law to do so.  But their motivation is simple and obvious: the short-term cost of pouring government money into an infrastructure of green industry is easily outweighed by the long-term benefits of being the global leader in that industry.  The government is participating in the "free market" by making a very straight-forward market calculation.

And so is Natureworks, by the way.  They are also participating in the free market, and have calculated that they can maximize their profit and productivity by building their plants in locations where there are incentive programs to do so.  This isn't very complicated, from a business perspective.

So from a purely "free market" perspective, it is important to realize that a mindset dedicated to "smaller governments" and "keep the government out of business" is also a mindset that will be crippling the United States' ability to be a leader in the global Green Industry market.  Ultimately, it's a decision that is bad for the "free market" and bad for the United States.... not to mention, bad for the environment.

 



 

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