New Metrics
While Celebrating Improvement in One Metric, Beware of Unintended Consequences:
Part 18

In 17 earlier parts of this series, Claire Sommer, Jill Lipoti and I developed 34 pitfalls in the sustainable business metrics field, based on the experiences of many mostly non-business fields. (Find them here.)

It’s time in our Series to consider whether a few fundamental sustainability concepts mentioned earlier deserve status as "Pitfalls," supported both by the remembrance of an infamous mis-metric from a bitterly painful episode in the U.S.’ past, as well as a more recent foreign policy success (whose cost, though, is getting a second look). Along the way, fundamental assumptions about "What is success" will be tested, as well as when do we, as Kenny Rogers might say, count the winnings?

Unintended Consequences

According to Roger Cohen, if President Obama was our boss, he might expect us to answer one question regarding a possible intervention in a foreign affairs crisis: "What happens after that?"

Perhaps, now, he would also ask us a follow-up question: "And what about after that?"

Consider a longer-term consequence of what even most critics would agree was a great foreign policy achievement of President Obama — the killing of Osama bin Laden. Now we know the ruse to use hepatitis vaccination as a pretext in the strategy subsequently led (however misguided) to the Taliban’s killing of polio workers and people not receiving the needed inoculations to avoid getting that disease. After complaints by the Deans of U.S. Schools of Public Health, President Obama said fake vaccination campaigns would no longer be used.

The point, in this case, is not that the assassination should not have gone forward;but could the collateral damage of that particular strategy been foreseen, and, if so, could an alternative one been employed?

Back on more conventional environmental ground, when we focus on solving one problem, we sometimes find out later we have created a new one. For instance, to combat malaria in the United States, marshlands were crisscrossed with mosquito ditches, and DDT was widely applied. Malaria was all but eradicated, but the integrity of marshlands was compromised, and their ability to mitigate storm surges was diminished. Further, famously, DDT caused thinning of birds’eggshells, which impacted bird reproduction. While an unintended consequence, it galvanized the population after Rachel Carson wrote about it in Silent Spring.

Had we been wearing our metric hats back then, what should have been measured: malaria or birds? Or perhaps both?

So when there was a United Nations push to eliminate malaria in sub-Saharan Africa, DDT and ditches were not considered. Instead, long-lasting, insecticide-treated bed nets were used, and distributed for free or at nominal cost. People slept under the nets, which attracted the mosquitoes, which were then killed by the pesticide. This has been very effective, decreasing malaria deaths by 60 percent since 2000, according to UNICEF.

So now do we have an unambiguous success?

Well ... the nets are not all being used to kill mosquitoes. In a world where malaria kills slowly but hunger is a daily occurrence, many people are repurposing the bed nets for fishing. Bed nets use a much finer mesh than traditional fishing nets, which means that people can catch smaller fish and fish eggs, but may deplete the fish stock.

The unintended consequence, longer time frame, and systems properties of sustainability need to be recognized in a Pitfall. Gregory Mankiw, a prominent public policy economist, calls unintended consequences "the norm. What seems like a utility-maximizing policy can often backfire."

Pitfall 35: While celebrating improvement in one metric, beware of unintended consequences. Better yet, consider the negative collateral effects during the planning, and try to avoid or minimize them.

Yes, it violates a cardinal rule of communications to keep things simple, but this bullet-biting is appropriate for a sustainability-pursuing organization taking its next steps. Foresight becomes more important, even where it is simply impossible to project all consequences, as does scanning for the early indirect effects and surprises from activities meant to improve performance.

The Longer Term, Ecosystem Services, Externalities and Market Prices

John Tierney’s latest buzz-creating, contrarian article, "The Reign of Recycling," charges that it is not economically beneficial to recycle all the waste streams we create. It has generated a number of counter-arguments.

One response is that he might be right that markets for recycled materials (at any given time) may make recycling a specific material uneconomic, therefore financially preferable to send it to a landfill. However, recycling markets fluctuate, in part because of the price of oil. Since oil prices have gone down, recycling isn’t profitable at the moment. But we generate waste constantly, not just when the spot market is where we would like it to be. Businesses can’t simply turn their recycling on or off based on today’s market and therefore need to look beyond that. Over the longer term, reuse of natural resources will probably be more lucrative than developing new, virgin sources.

Tierney states that abundant landfill space is available in rural areas, so there is no reason not to fill that land with refuse. Landfills have traditionally been built on marginal land, particularly marshland. This has led to a decrease in saltwater and freshwater wetlands, which have high value for the ecosystem services they provide, including but beyond the above (see Part VI of this Series). These values are obviously not zero, despite that being their usual market price. Increasing numbers of companies are now, for internal purposes, trying to understand and quantify those values, and then assess their options to reduce their impacts.

However, as price is so determinative of how we usually think of value, our pursuit of sustainability means it is time to promote ecosystem services to a front-and-center position, and incorporate the best estimates of how externalities are harming them into market prices. We could then use these numbers when considering the tradeoffs between recycling and disposal.

If we don’t, we continue to create externalities, the presence of which we all still pay for one way or the other. Part of the point of sustainability is to eliminate externalities.

Pitfall 36: Environmental costs and benefits cannot be monetized solely based on short-term commodity pricing. Also, the prices that go into these calculations cannot continue to ignore ecosystem services, which provide long-term benefits, including to the company, whether it knows it or not. It is time to accelerate this recognition beyond the early adopters, with externalities factored in, making these the "market price," and heavily affecting how business, in general, is done.

Note that even if the wetland is already largely degraded, and it is argued why not take further advantage of the site’s landfill status, the field of restoration ecology provides an answer. It is possible to partially upgrade old landfills for sustainability-oriented purposes, such as biodiversity enhancement (thus helping address one of the biggest, if still lesser-known, crises we have) and public education. See this General Electric project at its Schenectady site.

Becoming Wedded to a Particular Metric — and Missing the Point

Another metric mistake — learned the hard way — is to place so much emphasis on a particular measure that it comes to symbolize the success of the overall effort, enticing involved individuals to do anything to increase the "count." Remember body counts from the Vietnam era?

Then-U.S. Defense Secretary Robert McNamara believed that "war could be mathematically measured" and his people used them "in their quest for numbers to prove we were winning, [so] the body-count syndrome was born."

Colonel Harry Summers, Jr., a retired military specialist, wrote, "Ironically, although condemned as wildly inflated, U.S. body counts reflecting heavy North Vietnamese and Viet Cong casualties were borne out. ... But accurate or not, the figures were meaningless. ... There is much more to war than those things that can be counted."

General Norman Schwarzkopf, the Allied commander during the first Gulf War, believed body counts were also "misleading and that...[they] can push junior commanders into a numbers game that compromises their integrity." He vowed his U.S. Central Command "will never engage in the body-count business."

Despite the infamy of "body counts," reporters during the first Gulf War still couldn’t understand why General Schwarzkopf wouldn’t use them, wondering if he was hiding something.

Pitfall 37: Don’t forget the hard lessons learned from possibly the most infamous mis-metric when rehearing the field’s mantra: "We only manage what we measure.”

If metrics are to fulfill their role to help guide us towards sustainability, those extremely pesky "And then what" questions — along with the fullest information about actual costs and benefits, remembrance of painful lessons, and even the fuller price of successes — cannot be avoided. Even when unanswerable, as often likely to be the case, they are consistent with a common theme of this Series: The importance of the metrics-setting process itself,the quality of thought that goes into it, and the questions that unexpectedly arise — even when we don’t know the full answers!