Wisconsin Public Television University Place Sustainable Communities Public Policy Forum  David Morris The Rules of Sustainability  March 25, 2011 UP606    cc >> Christine Quinn: It's great to be here. There were certainly lots of details that took place behind the scenes and to see all of you here today and all of the pre-work that's been done in terms of the round tables, it's really exciting for us to come together today. So to get us thinking, and hopefully by the end of today you're going to have so many thoughts about sustainability bubbling, but I want to get that thinking started now. So you asked the question, why is this forum so very important? We heard Regent Connolly-Keesler talk about how it links to the growth agenda and to the priorities of the UW System. And if we go even broader than that, we think about the world population. What's happening to our world's population today? It's tripled since 1920. That, indeed, is putting pressure on our ecosystem, leading to local changes. Bring it home. Is that impacting us in Wisconsin? Yes it is. Was there a time when we could step back and say the Earth is so big, how might it matter? As population grows, we can't say that. 

As we continue to consume more, as we continue to have fewer, excuse me, more cars and more airplanes and more technology, we continue to consume more. So now that we have a population of 6.5 billion, we are making a significant impact on our ecosystem. Here at home, the Wisconsin Initiative on Climate Change Impacts indicates that the state is projected to warm by four to nine degrees by the middle of the century. Some of you may have even noticed the warmer and the wetter nature of our climate. And as we look at sustainability as including the environmental aspects, the economic aspects, and the social aspects, we also look at economically, what's happening in the state of Wisconsin. In Wisconsin, we're struggling economically. Our employment rate is hovering around 10%. Within the last two weeks in the Sunday paper of the Wisconsin Cap Times, they reported that 169 rural schools have already closed. What does that mean to us in Wisconsin? Those are all significant things that we need to keep as top of mind as we talk about sustainability. Sustainability is important. 

We hope you think of it from the various aspects. The aspect of the economic sector, the environmental sector, the human aspect, and certainly how it impacts our communities as the context we're using today and those relationships and interactions. So we hope that you walk away from our forum better informed, that you've had an opportunity to grow in your understanding around sustainability and how this might be used to create sustainable communities. We hope you learn from each other. We hope you learn from all of the case studies, some of those local, some of those even further away. And then we hope you stay tomorrow where you can also engage in the conversation that began in the round tables around policy. How do we really take action as a group? What are some of the barriers that are creating difficulties for communities from becoming sustainable? We need your insights. We're going to use the insights that have been gathered already to share this information so that at the end one of the desired outcomes is informed policy, and I'm convinced that, indeed, it will be that. So I say to you that there's no time like now for us to be taking action on critical issues that are going to improve the health of our local communities and allow them to thrive into the future. We must make our communities attractive to young people. 

We must ensure that future generations will love our fine state and experience a quality of life and a quality of place that this great state of Wisconsin provides. Hopefully also as you walk away there is a theme that you walk away with and that is the power of local communities, the power of grassroots efforts. Well, I must say to you the event that you see in front of you is definitely the result of grassroots efforts. Jim has made reference to the team that's made this possible. I would actually like to ask each of them to stand. And so our Sustainable Community Conference Planning Committee consisted of Andrew Dane, would you please stand and I'll walk right through the list here, Sean Dargan, Tony Garton, Eric Giordano as co-chair, Ana Haines, Jerry Hembd also as co-chair, Sandy Kallio, Mary Kluz, Daniel Kuzlik, Jay Moynihan, Catherine Neiswender, Lou Pech, Jim Perry, Greg Peter, Jamie Poindexter, and James Resick. Please give them a round of applause. [APPLAUSE] So that's the team that have really put the on the ground picture together. However, it also takes leadership and there was a team that was engaged in the Wisconsin Idea forums and engaged in the conversation system as well as set direction for this event. And I would like them also to stand. 

Rick Klemme who is our dean of Cooperative Extension, David Schejbal who is the dean of Continuing Ed Outreach and eLearning, Kim Kindschi who is our director of Entrepreneurship and Economic Development, Malcolm Brett was also part of that, I don't think he could be with us today, Greg Hutchins was part of that initial team, as was Tom Blewett. These leaders that is you see standing are not only committed to sustainability and the execution of the forum but they're also committed to taking this to the next level. So when we have the document regarding policy, these folks are going to provide leadership and say how can extension take this to the next level to make an impact on our communities. Please give them a round of applause as well. [APPLAUSE] So we have a great day in store. We're going to begin this morning with a keynote. Then we will have lunch. We will return and then you will hear case studies, both locally and from out of state. Then we will come back here at 4:30 for another keynote and at 5:30 with networking and socializing, trying to connect, build partnerships, learn from your peers. Tomorrow we will be back here to talk more about policy and what we've learned, what we've learned in the round tables and how might we use to that advance our communities. 

So with that I'd like to introduce our first keynote speaker. We are very fortunate to have with us Dr. David Morris. He's a prolific writer, a speaker, and advocate who has provided an extraordinary array of path-breaking policy and initiatives. He's also the co-founder of the Institute for Local Self-Reliance, which is an organization that focuses on innovative strategies, working models, and timely information to support environmentally sound and equitable community development. In terms of his authorship, he has five nonfiction books with quite an array of topics ranging from the analysis of the Chilean development to the future of electric power, to the transformations of cities and neighborhoods. Has columns in many top publications including the New York Times, the Washington Post, the Wall Street Journal, International Herald Tribune, and the Smithsonian magazine, just to name a few. He's also been a consultant at the local, state, and federal levels. He has served as an adviser and consultant to the energy departments of presidents Ford, Carter, Clinton, and George Bush. So today he's here to talk to us about the rules of sustainability. He'll do his presentation and when he concludes his presentation, there will be time for question and answer. 

So please help me in giving a warm welcome to Dr. David Morris. [APPLAUSE]  >> David Morris: Thank you. Is it possible to turn those lights out up there? Or dim them? Thanks, it's a pleasure and an honor to be invited here to speak especially about a topic that is so near and dear to my own heart. In deference to where I'm speaking and the sports fans in the audience, I left out of my bio that I graduated from Cornell. [LAUGHTER] My charge this morning is to present a context for the local-specific, action-oriented, and content-rich discussions that you're going to be having in the next day and a half. When I was preparing for this talk, I was reminded of an insight by the French poet and philosopher Marcel Proust. "The voyage of discovery," he said, "lies not in seeking new lands but in seeing with new eyes." And I think that in essence this conference is about seeing our communities and our surroundings with new eyes. The word sustainability is almost always used in an environmental context, but we forget sometimes how environmentalism itself has evolved over the years. At the turn of the 20th century the modern environmental movement was born. It focused on preservation and its legacy is the national parks. 

A half century later, the environmental movement widened its scope and began to focus on materials that were toxic to human beings, PCBs, lead, mercury, and the great legacies of that era of environmentalism are the Clean Water Act and the Clean Air Act and the Environmental Protection Agencies at the federal and at the state level. And then in the late 1980s and the 1990s, the movement widened its lens once again to regulate materials which undermined ecosystems, and the biggest development, the biggest issue as we know is climate change. And there's a reason that climate change and global warming has elicited such a vigorous and I might say vicious opposition. The reason is that from an environmental perspective now we are in essence saying and declaring that we must change the materials foundation of industrial society. The fight against global warming embodies and illustrates two fundamental laws of environmentalism. One, there is no free lunch. And number two, everything is connected to everything else. When we see with new eyes, it means to understand and to tackle the central design flaw of modern economies, which is separation. We've built a modern society in which we've separated the worker from the workplace, the power plant from the appliance, the farmer from the kitchen, the manufacturer from the customer, the banker from the borrower, and ultimately, as we, I think, increasingly understand, the citizen from the government. We've created a system in which those who make the decisions are separate from those who feel the impact of those decisions. 

And then adding insult to injury, we tweak the system a little bit so that we separate those who benefit from decisions from those who feel their costs. We've separated authority from responsibility, and the result is poor decision making and sometimes catastrophic decision making. We did this all willfully and we did this consciously. There was no conspiracy involved in it. We did it because we felt it was necessary and for many that it was an historical inevitability, the outcome of the technological revolutions that we were experiencing in the 19th and the 20th century. And there's some justification in that. When steel replaced wood, big manufacturing replaced small manufacturing. When concentrated energy sources like fossil fuels replaced diffuse resources like wind turbines and water power that humanity had used for millennia, we went from small and dispersed to centralized and big. We replaced batch production, that is producing small amounts of quantities on a discreet process, to mass manufacturing. Railroads and then cars replaced the horse and the buggy and markets expanded geometrically. 

Commerce overflowed boundaries and became national and then an international affair. And we designed rules that fit that technological development, that technological state of affairs. State legislatures, for example, in the 1920s granted private companies, electric utilities but private companies, the governmental authority, that is authority that only governments had previously had, to seize private property to build high voltage transmission lines because bigger power plants generate electricity much cheaper than smaller power plants and bigger power plants tended to be further away from their customers and so it was in the society's interest to build high voltage transmission lines, but people don't like high voltage transmission lines going through the middle of their farms or their houses and so we gave the utilities, private companies, the right to seize that property. The federal government preempted state authority to regulate railroads. Railroads crossed interstate boundaries and we felt that the railroad was so important to the nation that we didn't want states fiddling with railroads even when railroads were gouging their former customers. We allowed interstate banking and then we encouraged an orgy of mergers. And this is all recent news. The four largest banks in 2010 were 37 individual banks only 20 years ago. And those 37 individual banks 20 years before that were 200 banks. And so we created and, in fact, encouraged larger and larger banks which, as we understand, could create a problem. 

We signed free trade agreements that stripped us of our ability to regulate the flows of capital and goods across our borders. Because we figured that if another country could produce something more cheaply than we could, no matter what the reason, we paid less. If we paid less, we had more money in out pocket. If we had more money in our pocket, we would spend it elsewhere and we would all grow faster. And then in the last 40 years, very recently really, since the 1960s, some would say maybe from the 1950s, the dynamic of history abruptly changed. And it was driven, that change, but two mutually reinforcing factors. One was technological and one was cultural. In terms of technologies, the new technologies, the new machines, are in their impact centrifugal, not centripetal. They are decentralizing in their impact, not centralizing. They encourage and honor smaller scale rather than larger scale. 

When we shift as we are doing now from concentrated energy sources like fossil fuels back to more diffuse and decent energy sources like solar and wind and slow moving water, we shift from big and centralized to small and dispersed. The Internet not only makes all of us customers, but it makes all of us potentially producers in an increasingly information intensive economy. Culturally we've begun to question the economies of scale. We've begun to question the conventional wisdoms that have underpinned, if you will, the policies that we've developed over the last 150 years. We've rediscovered the value of community, and we've discovered the dark side of globalization. We've discovered the dis-economies of scale, as well as the economies of scale. And all around us we see that sometimes in inchoate areas, sometimes in fragmented areas, but I think it's fairly clear now that the word local and community, or the words local and community, which I think maybe just a few years ago were considered quaint sort of pastoral romantic yearnings for yesteryear have become, in fact, much more profound and much more concrete. The local food movement is strong and is growing rapidly. Indeed it has coined its own new word: locavore. We talk of energy independence, not of nations but of states and of cities and even of buildings. 

At my organization we're thrilled that the term local self-reliance, 36 years after we coined it, is now becoming a matter of the zeitgeist. An excellent indicator of the power of the local in 2010 is the eagerness with which the global corporations have tried to change the obvious meaning of the word local. My colleague at the Institute for Local Self-Reliance, Stacy Mitchell, has widely written on this subject. And if you're interested in reading her writings and find out what we do in more detail, newrules.org, and you can look at them or you could read her writings at the Huffington Post. Arianna Huffington called us up a couple months ago and asked if we would partner with her on her new campaign which is called Move Your Money. It has generated enormous amount of activity nationwide and of interest, and it essentially asks that cities and states and individuals and businesses move their money from big banks to small banks and community banks, banks that are rooted in your locality. The first column that Stacy did for the Huffington Post on that issue said moving your money to the deposits of local banks is nice but let's remember that local banks lose money on deposits. Even if they pay you a very small amount it still is an amount. Much better is to move your borrowing to local banks. That's how they make their money. 

So move your credit cards, move your consumer loans, move your mortgages there. Stacy has written recently about how the word local has now been embraced by the global. She writes in a spade much new advertisements and PR maneuvers the nation's largest banks are working hard to win us back. They are in effect standing on our door step, flowers in hand, trying to convince us they have changed. They're using words like local and community because they know quite well that there's a rival for our affections. A recent Zogby poll found that nearly one in 10 Americans has already moved at least some of their business to small banks or credit unions. During the Olympics, Wells Fargo, now Wells Fargo may have as its logo a stage coach, but Wells Fargo has $1.2 trillion in assets and 10,000 locations. During the Olympics it ran a television commercial in which it described itself, and I quote, as the nation's leading community bank. HSBC, which is also one of the largest banks on the planet, has taken to calling itself, and I quote, the world's local bank. In a biting response to these new commercials, the head of the Independent Community Bankers Association warned, and I quote, Wall Street mega firms better be careful what they call themselves, lest they be confused with actual community banks that regulators allow to fail. 

[LAUGHTER] Well, the technique of what Stacy has dubbed local washing goes far beyond the financial sector. Starbucks has begun unbranding its stores. The first of which just reopened as 15th Avenue Coffee and Tea. Hellmann's, the mayonnaise brand owned by the giant retail Unilever, is test driving a new eat real, eat local initiative in Canada. Barnes and Noble, the world's top seller of books, has launched a video blog site under the banner all book selling is local. Well, it's clear that when they're calling themselves local it means that they understand that it has caught our fancy, not as a romantic concept, but as a place that can guide our intentions and guide where we spend our dollars and where we buy our goods and make our investments. We have a new, or maybe I should say a renewed appreciation of the power of community and of community institutions. We've begun to realize that it's not a fuzzy concept at all. It's a forward-looking strategy that encompasses technological, economic, and political components. We are learning that mutual aid practiced by strong communities not only makes us feel good, it makes us stronger and it saves us money. 

Before he died, the eminent psychologist Erich Fromm invited me over to his house and we had a conversation, and during the conversation he said that he was fairly sure that there was a direct correlation between the decline of neighborhood taverns and the increase in the number of psychiatrists. [LAUGHTER] And I thought about that, that's interesting comment because in the old days we, probably mostly men, could go to their neighborhood tavern. They had a terrible problem that they had to deal with. The bartender knew them, knew their family, knew that he wasn't going to be able to solve their problems but was very interested in listening to them, and for 50 cents or maybe a dollar they cried in their beer, then they stumbled out, maybe a little drunk. They could walk themselves home. Today if you have a serious problem, an emotional problem, you drive across town and you pay a hundred dollars an hour to somebody who doesn't know you, doesn't know your family but thinks he can solve your problem. And then you get in your car and you drive home. Well, if you multiply the number of individuals who do that you find that an enormous amount of money has sort of disappeared from your pocket on a collective basis. Our communities have become poorer, not only in an emotional way, not only in a sense of mutual aid way, but they've become literally poorer in terms of their dollars because that neighborhood institution has been disappeared. There's a great deal of hard evidence, not just anecdotal evidence, that communities based on diversified economies and widespread ownership have stronger civil cultures and their practice of mutual aid leads them to spend their money more wisely. 

And I see that when we talk about sustainable communities in the next day and a half that one of the things that we talk about is spending our money locally and supporting local business. The seminal study about diversified economies and their effect on civic society and civil culture was conducted about 70 years ago by a man named Walter Goldschmidt who was a researcher for the United States Department of Agriculture. And Goldschmidt was a sociologist and he examined two farm communities in California's San Joaquin Valley. He chose them because they were remarkably similar. Each had the same volume of crop production. They had comparable soil quality. They had the same climate. Both communities were equidistant from major urban areas and were similarly served by highways and rail lines. They differed in only one major respect. The Dinuba economy was centered on many small family farms. 

The town of Arvin, on the other hand, depended on a few large concentrated agribusiness operations. Goldschmidt discovered that Dinuba's family farm economy provided its residents with a substantially higher median income and standard of living and that the Dinuba citizens were much involved in their communities. For example, the quality and quantity of public project, that is projects that benefited the entire community like paved streets and sidewalks, garbage and sewage disposal, were far superior to Dinuba. The agribusiness town, for example, had no high school and only one elementary school. Whereas, Dinuba provided citizens with four elementary schools in addition to a high school. The family farm town had three public parks. The large farm town had a single play ground, of course lent to it by the corporation. Dinuba's residents not only invested their money in expanding their community's physical infrastructure, they also invested their time in building their civic infrastructure. Dinuba had more than twice the number of civic associations as Arvin. In Dinuba various government bodies existed that enabled residents to make decisions about their public welfare through direct popular vote. 

No such bodies existed in Arvin. This was an astonishing finding. This was the late 1940s, an astonishing finding, and one would think that the government's reaction to his findings would have been delight for he had emphatically validated the uniquely American belief that the key to a healthy society was the broadest possible ownership of productive assets, and you would be wrong. For the next 30 years, the United States Department of Agriculture suppressed the report, and under pressure for industry it went even further. It abolished his position and later it abolished the entire office that studied agriculture's impact on communities. Well, I mentioned that the technological dynamic has changed, that the flow of history has, if not reversed, moved into another channel. The external context has certainly changed, but the rules for the most part have not. Institutions and habits and paradigms have an enormous built in inertia. The conventional wisdom doesn't change simply because the rationale for it has disappeared. And of course, once entrenched, as we have found out, bigness in all of its manifestations does not give way easily. 

Part of the sustainability movement looks to change individual behavior. We should buy local. We should recycle. We should use efficient light bulbs. We should bicycle. And these are important for many reasons because changing individual behavior leads us to understand that the change itself was neither wrenching in our time or our habits nor wrenching in our pocket books. And as we change our behavior, we change the flow of our dollars and as we change the flow of our dollars, we enable new business institutions, new technologies, and new industries to arise. That is, we lay the foundations for a sustainable economy. But we also need to act collectively. Now, the word collective, I think, has somewhat of a pejorative meaning in the United States in the 21st century. 

Why don't we just call it democracy? But we need to act as a community, as a number of citizens to change the rules. We need to change the rules that guide entrepreneurial energy. We need to change the rules that guide investment capital and scientific genius. We need to change them so they move in different directions. We need to change the current rules that undermine the ability of communities to be self-governing and self-reliant, and we need to enact new ones that encourage communities to get the most out of their local, human, natural, and capital resources. Let me give you a few examples of how the rules discourage and then a number of examples of how the rules can encourage sustainability. The best way to encourage recycling is to discourage the dumping of garbage in landfills. But when states have tried to do this the Supreme Court has stepped in and said that although we might call it garbage, they would call it commerce. And according to the Constitution, states do not have the right to interfere with interstate commerce, only Congress has the power to do that. And so when New Jersey tried to ban the dumping of Pennsylvania's garbage inside New Jersey, the Supreme Court said you can't do that, that's the flow of commerce. 

Well, Wisconsin said we got a better idea. Let's redesign that law such that you can dump garbage inside of Wisconsin but only if the content of that garbage is similar in terms of the recycled content, that is the amount removed because it's recyclable, as the garbage in Wisconsin which has a mandatory recycling law. And the Supreme Court overturned that law as well. And then came Michigan which said I think we can do it even better. I think we can do it in a way that you have to support this. It's a fascinating law passed in the late 1980s. And it was a law that said each county has to be responsible for its own solid waste. It what to build a landfill or expand a landfill such that it could cope with 20 years of increased generation of solid waste. And in return for requiring that county to accept the responsibility for its own wastes, it gave it the authority to stop outside garbage from coming into its landfill, either garbage from other counties in Michigan or garbage from other states. Now it's a fascinating law in some ways because what that means essentially is that the county has a very substantial incentive to maximize recycling or reuse because the more you recycle, the longer the life of that landfill. 

But if you can't stop garbage from coming into that landfill from outside, then you essentially have done nothing to help your county overall. And the Supreme Court said no, that Michigan could not, in fact, stop garbage from coming in outside and the law was essentially overturned. Well, this can be easily remedied. Easily remedied. Congress could pass a one sentence law that says states have the authority to manage their wastes, even if in doing so they impinge on interstate commerce. A very simple law, although I'm sure when Congress got through it would be a 1500-page law, but nevertheless, it could be a relatively simple law in concept. There's another obstacle that we need to overcome. Today when you buy from a local bookstore or a local store of any kind, you'll pay a sales tax in Wisconsin and in virtually every other state in the country. But if you buy from Amazon that same product, you don't have to pay a sales tax. Now what that means is that right off the bat that local business is trying to desperately to compete with huge companies and now we have, right off the bat, given them a 5% and in some cases up to 10% price disadvantage. 

When states tried to require companies like Amazon and the like to collect the sales tax and give it to the states, the Supreme Court once again said you can't do that because that's interstate commerce. And there's another complicated aspect of it that I don't need to get into, but in any case they said no, you can't do that. But Congress could give you the right to do that. And for the last 25 years people have been trying to convince Congress to pass the one sentence law that says that states can tax the sale of interstate goods and Congress has not done so. And it has not do so in part because of the lobbying of companies like Amazon and others but in part because those of us who use the Internet don't want to pay taxes. We think it's terrific that we can buy for a few percent less some place else. We don't think about the fact of what it might do to the local economy. It's a little like the free trade argument where you save a few bucks by importing everything from China. Well, yeah but if you import everything from China, you're actually producing nothing yourself and eventually you go under. And so we need to understand the relationship of our individual behavior to our community behavior, but we need a little help here in terms of changing the rules. 

Well what would the rules be like if, in fact, we developed them for sustainability and community? Well, I'm in this area of the country and so there's an obvious example, the Green Bay Packers. I don't need to tell you necessarily the history but I always find it fascinating. The Green Bay Packers, a little teeny town has a national football league team. Little teeny town. Well, because when it started everybody got together and put in 25 bucks and they had a self-franchise. It was 1920-1921. So everybody could buy a little share. And then the genius of it came in because after all you've got a $25 share that's probably worth, I don't know, $50,000 now. I don't know. Right? Well, you can sell it. 

After all it's your share. You get to sell it. But the money, the appreciation over $25 would have to go to a fund that would build a war memorial. It was after World War I after all. So it eliminated your individual greed incentive, if you will, to sell your share in the Green Bay Packers. And so there you have it. A team which is clearly an embodiment of community, a team that has generated enormous amounts of money, forget about pride, to the local area all because of a rule that was developed almost 100 years ago. Well, let me give you some other rules. Let me start with a thought experiment. I mentioned that the Clean Air Act was one of the great legacies of the modern environmental movement. 

Well, the Clean Air Act had to deal with the problem of pollution caused from smokestacks in factories. And it dealt with it by requiring factories to raise the height of their smokestacks. In fact, there was a term related to this that became very popular in the early 1970s: the solution to pollution is dilution. So what happened when you raised the height of the smokestacks is that you converted a problem, which is essentially a particulate matter problem, into an acid rain problem, into a problem that was now regional and in this part of the country even international. Well, what if instead in the Clean Air Act it had said not that you would have to raise the height of your smokestacks but you would have to lower the height of your smokestacks, curve the end of it so that it came into the window of the boardroom. [LAUGHTER] Now, at that point, what we had done is marry authority and responsibility. And I assure you that the nation's CEOs would have immediately given the order to their industrial engineers that they want zero emissions manufacturing. We wouldn't have had to wait 50 years for one or two plants to come up with that idea. Let me give you, what's not a thought experiment but a possibility, another example of rules. Every year thousands of pieces of property are seized for public purpose. 

Sometimes the public purposes are good, and sometimes the public purposes are bad. But in each case we are required by the Constitution that the property owner be compensated fairly. Well, what is fairly? Well, fairly means you get the market value of the house, although often you have to fight for it, but nevertheless fairly means you get the market value of the house. Well, let's say that we're going through a community. Let's say it's a highway that's going through a community, and in the community there are two identical homes. In one home people have lived there for 50 years, or the family has lived there for 50 years. In the other home people have just moved in as renters and the house was just sold so an outside investor. From a compensation standpoint, they both will get the same amount of money, but from a value to the community standpoint they are profoundly different in their impact. So what if we had a law, a compensation law which would be done at the local level, county level, state level, that said that at a minimum you get the market value, everybody gets the market value because that's required by the Constitution, but then for every 10 years that you've lived in that house you get 10% more or 20% more or 30% more. In other words, we're recognizing, in a crude way, but we're quantifying where we can the qualitative value of rootedness in the community. 

The qualitative value of somebody in that house having an institutional and neighborhood memory, someone in that house watching the street, someone in that house knowing their neighborhoods and knowing what goes on in that neighborhood. If we did that, we would raise the price of taking a property. And that would raise the cost of whatever that public purpose was supposed to be. But that just means that we have valued community. Sometimes we might change the cost/benefit ratio to the point where we would abandon the proposed project. For example, a high voltage transmission line or a new interstate highway. Well, here's another example. And it's an example from the energy area, and it's an example of how we can, in fact, move toward self-reliance. The Institute for Local Self-Reliance did a study, which is available on our website, that looked at every state in the country and every renewable resource that every state in the country had, and we looked at the amount of renewable energy that could be generated from inside the state from that renewable resource. And we only looked at those renewable resources which were commercially harvestable. 

In other words, wind over a certain speed, sunlight on rooftops. And what we concluded was that 60% of all the states in the country, including Wisconsin, could be self-sufficient in renewable electricity. Now I know what you're saying, renewable electricity is intermittent so you would need storage capacity or some backup natural gas plants. And that's true. But essentially what we were saying is there's an enormous amount of renewable energy that could be harvested inside of states like Wisconsin. And it would make sense for states to, in fact, emphasize in-state development of renewable energy resources because it marries an environmental objective to an economic development objective. It maximizes dollars that flow through the state economy, it maximizes jobs that are created from that. But only Ohio, only Ohio in the entire country actually requires that part of its renewable energy mandate be met by in-state renewable electricity. Now Wisconsin has a renewable energy mandate, Minnesota has a renewable energy mandate, many states have renewable energy mandates right now, over 30 of them, but only one has said it's important for us that a significant amount of this electricity is generated in-state. Now for those of you who might be economists, you will argue to me that this is a very inefficient way to go about creating a market because the winds blow more fiercely in North Dakota than they do in Iowa and Ohio. 

And so, therefore, it's cheaper to generate electricity in North Dakota through wind than it is in Ohio and that's absolutely true. It is. But to get the electricity from North Dakota to Ohio requires you to build a high voltage transmission line. And when you take into account the costs of that high voltage transmission line into the cost of electricity, then the cost of generating electricity in Ohio from wind is about the same and even lower than it is generated in North Dakota and transported to Ohio. And moreover, if you build a high voltage transmission line, you have to, there is, as they say in the military, a lot of collateral damage. There may be tens of thousands of homes and businesses and farms that are taken in the path of that high voltage transmission line from North Dakota to Iowa. There are people who will lose part or all their land and everybody in that path is going to lose a certain amount of the value of their land. Now in the rush to build high voltage transmission lines, the Congress of the United States has increasingly given the power to the federal government to force high voltage transmission lines on states like Wisconsin. So Wisconsin might say we don't really think we want one because all it's going to do is pass from a North Dakota through Minnesota through Wisconsin and end up in Chicago. This is no benefit to us and it's us that we have to worry about. 

And what Congress is saying increasingly is no, no, it's not you have to worry about, it's the broader us you have to worry about. And we all want renewable, isn't that a major national goal, and so therefore you are forced to accept high voltage transmission lines. Well, no. We should say to Congress let's do it inside of the state until such a point where we exhaust it. Or until such a point where it's so dramatically different in terms of its economics to take it from another state rather than generate it from inside the state that we are forced to do it. There are other rules related to renewable energy that we need to change. There's a tax incentive. The whole reason we have renewable energy right now is the mandate, which is the major reason, and then the other is the incentives that are given by the federal government. But the incentives that are given for renewable energy right now are incentives that encourage large scale absentee-owned systems. The current federal incentives are tax deductions and tax credits. 

And the value of a tax credit and a tax deduction to you is the amount of tax liability that you have. Many people don't, 40% of all Americans don't itemize deductions on their income tax. So for them it's worth nothing at all. And it's even worse than that because the wind energy tax credit for example, can be taken only against what's called passive income. Now, you and I don't earn passive income. We earn ordinary income because we're ordinary. We earn wages. Maybe we'll get some interest from an account. We might get a dividend from a stock. All of that is ordinary income. 

But passive income comes from selling goods. It's business income essentially. And so that's why wind turbines are now almost invariably financed by large corporations, profitable large corporations, because they tend to have the tax liability. Well, from a government's perspective, they're going to lose a dollar, they give a  dollar of a tax deduction or a tax credit, they're going to lose a dollar. So why not just change the incentive. Don't increase it, just change it so it becomes a refundable tax credit so it's available to everybody. Well, what happens then is from the federal government's perspective they still lose a dollar but the dynamic in terms of widespread ownership of wind or solar would be dramatically different. There are changes that we can make in terms of renewable energy which I think are extremely important. In this area, you have a city utility, those of you who live here locally. There's a city utility. 

A municipally-owned utility. A municipally-owned utility is a very interesting vehicle for doing many of the things that we want to do because a municipally-owned utility can treat the community as a whole when it does strategic planning. It can, once again a word that I hate to use, socialize the costs of moving toward renewable energy. Utilities, even municipal utilities don't like to do that very much so what they tend to do is they have a green energy program. Does yours? I don't know. But in any case almost all of them do where they said, essentially, if you want to buy green electricity you can pay two cents more a kilowatt hour, buy a hundred kilowatt hours a month, and feel very good about yourself. Well, okay. But I always find it somewhat perverse that those people who want to do a good thing have to pay a much higher price than those people who accept doing bad things. That's not a good message to give. So rather than green pricing, what about green citizenship, which means we, the community, the city as a whole have decided that we want to maximize renewables. 

So rather than your having to pay two cents a kilowatt hour more, we will all pay a 10th of a cent a kilowatt hour more. And rather than us ending up having 200 kilowatts or so of wind because there aren't that many people who want to pay two cents a kilowatt more, we've got 10 megawatts of wind or 50 megawatts of wind because we're all coming up with the money for it. Green citizenship, not green consumerism, if you will. We need to think about things like this in terms of the new rules for sustainability. And one other thing is that when we talk about sustainable communities, we need to adopt full-cost accounting, not partial-cost accounting. We need to be able to have accounting systems that allow us to understand the actual cost to the community as a whole as well as individuals. We need to make accounting transparent. Now this is the time of the year, actually last month I believe, the Texas Transportation Institute comes up with its figures for congestion in major cities and major metropolitan areas. And there is then a state of articles about the billions of dollars we're paying in lost time as a result of being stuck in traffic. Look at the data a little more closely. 

We're at a university here. I presume everybody looks at data and doesn't just accept the conclusions the newspaper tells you, I assume. If you look at the data very closely, what you find is that, in fact, it's true, commuting time has increased. In the case of the Twin Cities, where I live, it's increased by three minutes each way in the last 20 years. Six minutes. But they don't tell you that, the Texas Transportation Institute. What they do is they take the six minutes increase for me, then they give a dollar figure of four times the minimum wage, $21 an hour, as the dollar figure for lost time, then they multiply the hundreds and thousands and millions of cars that commute every day by that six minutes and they come up with a very big figure which is justified at the legislature for building new roads. It's always at every legislature it's justified for building new roads. You go to your legislature and you find out why it is they want to build a new road, and the answer is because congestion is a very serious problem. Well, okay, I get it but I'm bemused that we don't use the same concept of applying a value to a very small amount of time in other aspects of our lives and use that to guide public policy. 

For example, I am old enough to remember that when you called some business you got a person on the other side. Last generation maybe. But in any case, I remember that. 20 years ago, about that time I moved to the Twin Cities, but I would travel a lot so I would call the Star Tribune to hold the newspaper for a few days. It took me approximately one minute to make that change. Then they got rid of the person and there was a menu. And there was a menu and you had to put in what's the hour of the day, what's the day, and so forth. It took me about, not that long. Three minutes, three and a half minutes to make that change. Well, now let's multiply the number of people who go every day and try to use the phone and get into a menu and you get your five minutes or 10 minutes or there are the horror stories of the half an hour and the hour and the two hours because people are expensive and so what essentially the society has done is imposed those costs on you and away from the business. 

What if we said, well, maybe we should think of this in the same way we think about roads and time saved. And maybe we should come up with the legislature providing money so people answer the phone. It's ridiculous, isn't it? Maybe. But a few years ago the mayor of Boston, Thomas Menino, was infuriated when he tried to call the mayor's office of business services which was created to help small businesses cut through red tape. [LAUGHTER] He found that it was a test of endurance. He had to put up with convoluted electronic messages and voicemails and so forth. Infuriated he instituted a policy the next day that all phone calls to the city would be answered by a person. He said, and I quote, I just think that between 9:00 and 5:00 there should be someone answering the phone. We forget the human factor. Well, he had to hire people to do that, right? Which means he had to raise taxes. 

Now, he didn't say that to people, he certainly should have, but he raised taxes in order to have people to answer the phone so that you would, first of all, feel a lot more like a citizen in that government, but also that you would be able to save your time. And the citizens of Boston seem to have accepted that. Last November, six months ago Menino was elected mayor for an unprecedented fifth term with 60% of the vote. They're beginning to call him mayor for life. And so we need to begin to think about how we can think of ourselves as individuals but also think of ourselves as a community. One final example. And this is an example about sustainable communities and equity. Once again, you don't remember, but there was a time when all gas stations had full service pumps. I know, I know, you've got to be very old to understand that, right? Now, of course, almost no gas station has a full service pump, and if they have a full service pump, it's going to cost you an arm in a leg to get the gasoline from that full service pump. There were two states in the country that have said you will have full service and self-service pumps and you will charge the same price: Oregon and New Jersey. 

And they did that as a matter of equity, as a matter of civility. They did that because there are old people and there are infirm people who can't, in fact, pump their own gasoline. Now, should they be penalized, penalized by having to pay 20, 30, 40 cents a gallon more because they can't pump their own gasoline? No. We're all going to pay a little bit more for that gasoline so that we can treat grandpa and grandma and the infirm among us with a certain amount of decency. Now it turn us out that Oregon and New Jersey's gasoline prices are actually lower than in the states surrounding them. But let's say it wasn't lower. Let's say they were higher. So what? So we need to begin to understand that when we talk about sustainable communities we are talking about environmentalism, we are talking about energy, we are talking about recycling, we are talking about food production, we are talking about biking, we are talking about walking, but in a larger sense we are talking about us. We're talking about a sense of community. Now, I've covered a lot of ground this morning but my essential message is that sustainable communities are not only those that lower their carbon footprint, they are communities that have a sense of community, and a sense of community comes from thinking and acting for the common good. 

They're a community that tries to maximize community wealth. There are a number of states in this country that call themselves still commonwealths. It's a community that strives to get the most from its local natural capital and financial resources. It's a community that tries to make decisions as transparently as possible. It's a community with a municipal corporation called your local government, looks beyond its internal balance sheet to the community balance sheet when it makes resource decisions. At every conference, we hear pundits, and we read in the newspapers, and on TV, we hear politicians and commentators tell us about how we live in an age of change, great change, dramatic change, and that certainly is true. We must remember the distinction between change and progress. Bertrand Russell describes the differences as well. Change, he said, is inevitable, while progress is problematic. Change is inevitable, whereas progress is ethical. 

We will have change whether we will it or not, profound change, but we will only have progress if we create the rules that channel human genius in the directions that maximize the common good and build strong local economies and strong self-confident and self-reliant communities. Thank you very much. [APPLAUSE]