Assumptions and the True Cost of Going Green

Green initiatives are often promoted as paying for themselves, leading to widespread acceptance. Why wouldn’t we do things that also have environmental benefits if they have little or no financial cost? When considering such matters, it’s important to use conservative estimates of the true costs.

According to a recent Newsweek article, Are We Underestimating the Cost of Going Green, author Robert J. Samuelson argues that in far too many cases, computer models make assumptions that are much too optimistic. As someone who models complex systems regularly for my day job, I can tell you how quickly the accuracy of a model can diminish when faulty assumptions are made. Even the best of models is only as good as its worst assumption.

I am not suggesting that we should blatantly disregard modeled results. In fact, they are often highly accurate and superior to other estimation methods. I simply try to approach all cases where things seem too good to be true with a moderate amount of skepticism. Would you blindly trust a stock-picking algorithm that promised above-average returns for below-average risk? No, you need to balance modeled results with known laws and rules, such as, it takes more risk to achieve more reward.

As stated previously, there are certainly non-monetary reasons to transition to a greener lifestyle. On a micro scale, you often see monetary benefits as well. A simple change, like transitioning to energy-efficient appliances, really can save you more than the cost of the upgrade over time. On a larger scale, coming to accurate cost conclusions can be more difficult. Green initiatives are also a politically charged topic. Supporters can produce highly favorable models as quickly as denouncers can produce ones with conflicting results. A minor change of assumptions can have a major effect on the results. So take the steps you feel are necessary to achieve a greener lifestyle, but remember that it will probably cost more than the supporters suggest and less than those opposed would have you believe.

Did a green project you implemented cost more or less than you expected?