Jeff Bezos And Amazon Can Empower Consumers On The Greatest Challenge Of Our Time
With great wealth comes great responsibility.
Whether it was due to the ghosts of the Great Depression or just plain humility, the wealthy used to feel an obligation to use their means to better humanity, often by learning about and tackling the greatest challenges during their lifetimes. Now, we see many billionaires — like Jeff Bezos — pursuing smaller initiatives instead of tackling the truly intractable and important problems of their age.
Like, for example, climate change.
Don’t get me wrong: Bezos has invested before in endeavors crucial to the harmony of our country and our world, including bolstering a free and independent press. But there is a certain self-promotion that comes from those efforts.
Another vanity project is his recently launched Blue Origin initiative. While space tourism has many spillover benefits, this project does more to burnish his own image than help humanity.
Bezos has himself said, in explaining the importance of protecting our planet, that earth is mankind’s best bet for long-term survival and that climate change — the chief moral and logistical challenge threatening our planet — is of dire importance. So why is he not using his money and the company he runs to do more to protect the planet?
In short, he should — both to save the world and to make even more money for his shareholders.
Here’s where he can start.
Clean Electricity
Like their peers, Amazon has been transitioning to fuel its data centers with solar and wind power.
In January 2018, AWS stated that it had achieved 50% renewable energy usage. This achievement only includes data centers, but it’s noteworthy, nevertheless.
Reaching 100% renewable energy usage, as it were, would only require another roughly 1,000 Megawatts of renewable energy — something which should be quite easy, given that more than 100 times that amount is currently being produced around the U.S.
More importantly, Amazon has over 200 million devices running around the world, with more being sold every day. If Amazon greened all of the electricity used by its devices, Amazon would have to add another 2,000 MWs of renewable generation — or, just save the nuclear power plant currently slated to be shutdown in Ohio. Such an investment would only be about 21% of the $11.2 billion in profits Amazon made in 2018, and it could earn them a compelling rate of return over the next 50 years.
Action: Invest $3B into clean energy plants at an expected return after leverage of 20%
Smart Homes
An average household spends over $320 per month on electricity, heating and cooking fuels, trash collection, home security monitoring, and phone service, among other things.
From a customer perspective, the best way to reduce these costs is to install Smart Home devices.
Amazon, so it goes, already has over 100 million Alexa and Echo devices in consumer homes — devices from which you can control your thermostat, security, electricity loads, and so on. Through these devices, Amazon could — in addition to lowering consumer costs — analyze everyone’s bills automatically and propose custom energy efficiency solutions for each household. They could also negotiate cheaper power for their customers using the low-cost renewable energy sources available to them.
Amazon can do all of these things for its customers while selling billions of additional devices and making even more money.
Action: Buy a Retail Electricity Provider like Just Energy for $500m and sell consumer power from the renewable energy projects they already have under contract, increasing their return on those investments.
Transportation
Amazon ships over 600 million packages a year. The climate footprint of the packaging material and their transportation to your door in massive.
This is why Amazon has launched the “Shipment Zero” initiative. The goal is to make half of its shipments net zero (emissions) by 2030. The company said it intends to meet that benchmark by ramping up the use of aircraft biofuels, renewable energy, and reusable packaging.
“It won’t be easy to achieve this goal, but it’s worth being focused and stubborn on this vision and we’re committed to seeing it through,” said Dave Clark, Amazon’s senior vice president of worldwide operations, in a recent blog post.
Action: Buy SGPreston for $500m which would produce enough aviation biofuels to meet their aircraft fueling needs.
Help Americans Share Instead of Buy
Around the world, people are captivated by Marie Kondo. Her Netflix show has inspired millions to declutter and find “joy” in their possessions. Her show was such a hit in Australia that too many people donated their belongings, and charities had to stop taking donations.
With over 600 million boxes shipped annually, Amazon has the ability to help get those donations to people in need. Americans are generous and apparently have an abundance of stuff. But like many places around the world, America’s inequality is massive. Amazon, by helping American’s donate, could do its part to close that gap.
Further, with natural disasters becoming a regular occurrence, Amazon could take up regular collections for people in need by allowing people to reuse the boxes that they receive to ship essential goods needed for families that have lost everything.
Action: Donate 10% of annual profits for this endeavor or roughly $1 billion per year
Allow Americans to Buy with a Lower Carbon Footprint
There are many groups that measure and label goods and services for consumers. Walmart led this effort through The Sustainability Consortium in 2009. Today, the data exists for Amazon to sort its search results by the carbon footprint.
Global production and use of consumer goods accounts for more than 60 percent of all greenhouse gas emissions, 80 percent of water usage, and two-thirds of tropical forest loss globally. With 2.5 billion more people joining the consuming class in the next few decades, we must address the production, use, and disposal of consumer goods: a sustainable world requires sustainable production and consumption.
Action: Charge a negligible carbon tax on every product of $0.001/ton. The money would be unseen but forcing every vendor to comply and list their sustainability would force changes by the vendors and even encourage some changes in consumer behavior. The money collected could be used by Amazon to help improve the quality of the labelling and research.
We need our powerful players to contribute.
At the end of the day, in the fight against climate change, our most powerful and capable citizens and companies have to do their part to further the cause.
Amazon and Bezos serve as uniquely powerful and capable examples who, if they were to invest time, effort, and money, would make a big difference in humanity’s ultimate chance at survival and success.
I don’t mean to suggest, either, that Amazon should completely halt its plan to send rich tourists to space. But I believe the company can both pursue unique profit strategies and contribute meaningfully to this dire and complex issue.
Doing so would, truly, benefit all of mankind. After all, there’s no planet B.
