Friday, April 19, 2013
A Few Earth Day Facts
April 22nd is Earth Day. This year it seems we really are not paying much attention to the day that is supposed to inspire us to clean-up. The horrific bombing at the Boston Marathon on April 15th and the devastating explosion at a fertilizer plant in West Texas occupied the headlines this week. We need to bury our dead and dress the wounds of the injured before we can turn our heads back to things like trash detail and pollution standard setting. In the wake of the losses our neighbors suffered this week, such projects now seem like entertaining diversions.
Poor Earth! We call her Mother, but treat her quite shabbily. I thought it might be interesting - and maybe even a bit inspiring - to consider a few Earth Day facts.
The first Earth Day was April 22, 1970. The Beatles song “Let It Be” was the number one hit single. The Dow Jones Industrial Average has recently topped 800.00. The Nasdaq Composite Index had yet to reach 100.00. Inflation was pegged near 6.5% and mortgage rates were near 7.0%. That might seem crushing until you note that the average home was valued at $26,600. A McDonald’s cheeseburger cost $0.38. Approximately, 4,050 million metric tons of carbon were released to the atmosphere.
Over the last 43 years we have managed to tame inflation and our Federal Reserve has successfully tamped down interest rates well below levels in 1970. To mark Earth Day 2013, we can sing Pink’s “Just Give Me a Reason” while we munch on a $1.00 McDouble. Alas, carbon emissions have soared to 35.6 billion metric tons in 2012, threatening irreversible global warming. What is more, a recent report by the Environmental Protection Agency found that over half of rivers and streams in the U.S. are in poor condition for aquatic life.
It appears we really need to step up the pace on clean-up. Most of the time analysts like me focus on the market opportunity presented by environmental concerns. We look for promising technologies to eliminate emissions or treat wastes. However, that might be a bit shortsighted. In the next few posts we will be looking at the implications for costs and expenses presented by pollution. Which industries are the most vulnerable to global warming? What does a dirty environment mean for competition? For profit margins? Is environmental threat registered in valuation multiples?
Posted by Debra Fiakas