Green Marketing, The Alleged Hybrid Car Scam, and the Power of MR

Okay, you’re waiting for the rest of the Poschiavo mysteries, like the Alpine witch trials, right? Well hang in there. I wanted to post something about Green Cars and Green Consumption first. The Swiss Horror stuff is coming soon….and it’s juicy….

This is a different kind of story. It start with an updated major research study by CNW Marketing Research. The report looks at the “life cycle” energy required for more than 100 makes of cars and trucks, a rather gargantuan task that had been tried once by Volvo, and then abandoned. The article in the newspaper I read, one of Canada’s national rags, the Globe and Mail, calls this “the world’s most comprehensive analysis” of this sort.

Here’s their punchline: when you account for all of their additional energy costs, and for how many miles they are likely to be driven in their lifetime, hybrids like the Prius are not very Green at all. Many different cars and trucks, Hummers, Durangos, Explorers, TrailBlazers, and Grand Cherokees are more environmentally friendly than hybrids in terms of the reports’ energy costs. That cost is the dollar cost of energy per mile of use, or “US dollars per lifetime mile.” So while a Toyota Prius has a lifetime energy cost of $2.86 a mile, the Hummer has one of $1.90 according to the report. The writer of article, Neil Reynolds, used this finding to consider that the tax credits being offered by a Provincial government in Canada are a waste of money and energy (the American government does something similar). Rather than subsidizing Prius drivers, if we really want to look at all-in energy costs, we should be looking at the best cars overall.

Which cars are those? Although Toyota disagrees with a lot of CNW’s findings, assumptions, and figures, CNW doesn’t see to be biased against the company, it just critiques their (and others’) hybrids. The report finds that Toyota makes some of the most energy efficient cars on the road: the Scion (48 cents per lifetime mile), the Corolla (72 cents), and the Echo (77 cents). Apparently, those are the cars we should be subsidizing. If you drive one of those cars, you deserve some subsidizing.

On closer reading, the article gave me a sense of deja vu, since I remembered reading something like it last year and sure enough, the main findings seem to date from April 2006. But this is the second annual report.

As someone who has thought carefully about these issues, and taught the Toyota Priis case for several years in my Consumer Behavior course, I think that the article raises some very valid points about hybrids. Consider what it says about the massive, vaunted nickel-hydride battery of the Prius:

“Toyota buys 1,000 tonnes of nickel a year from Ontario (mined and smelted in Sudbury). This nickel gets shipped to Wales for refining, then to China, for further processing, and then to Toyota’s battery plant in Tokyo – a 10,000-mile trip, mostly by petrol-gulping container ships and diesel-powered locomotives.”

This is good cradle to grave sustainable design stuff. That’s very valuable in that it points us to the lifetime energy costs of cars, directing us to try to guesstimate holistic environmental impacts.

These ratings don’t take into account other important factors in environmental degradation and cultural reality however, and that’s been the point of some negative responses to the report. An extremely well-reasoned response, for example, is Prius versus Hummer: Exploding the Myth by Bengt Halvosen. Halvosen has read the entire 300 plus original report and makes some insightful comments.

Here are two additional things to consider. First, consider the development of innovations. At the beginning of innovation cycles, products are always more expensive to produce and can be considerably more energy intensive. But as production grows, the kinks come out of the system, scale efficiencies are realized, and the innovation realizes its potential. According to this way of thinking, hybrids will, as they get popular, achieve real energy returns on the energy invested, and reduce dependence on oil. Of course, this future gains type of thinking can be used to justify almost anything and, at its core, isn’t all that different from any ends-justifies-the-means kinds of argument (and we all know where those tend to lead).

Secondly, and even more importantly, I think the symbolic identity function of cars like the Prius fulfills a very important cultural role that transcends (for the moment) their actual environmental impact. The Prius says something about Being Green. It sends out a message that tells people that you (yes, you Mr. And Mrs. Upper-Middle class) are willing to shell out extra money to drive a slower, smaller car in order to seem environmental. To me, that says something about Green Chic, which we need a lot more of. Of course, the ultimate Green Chic is to drive you bike to work, but there are lifestyles that make this difficult (commuting with four kids, for example). In a culture in which personal and collective prestige is built through massive potlatch like burns of money and resrouces, this is a movement in the right direction. Maybe the crest of a real, lasting Green movement. Maybe.

A bigger implication of the study that is worth thinking about is the role of marketing research firms like CNW Marketing Research. A lot of the complaints about the report sounded something like this:

But the biggest problem with engaging in a serious debate is that CNWMR won’t release its data or methodology from its report for critical peer review. Meanwhile, the report’s conclusions are often stated as fact throughout conservative and anti-environmental commentary (from autobloggreen, which is, you guessed it, a Green Auto blog).

So who is CNW Marketing Research? Searching their web-site, reading their FAQs and other information, I gather that…they apparently like to golf. A lot. And, apparently, to boat. From my read of it, the studies that they specialize in look at the purchase process, including such consumer behavior-y types of elements as the size and income of intended car purchasers, and consumer “wish lists” of product features. The survey-regression skillset of this kinds of study seem pretty distant from the delicate engineering calibrations and resource engineering perspectives required of a cradle to grave resource impact study of the entire automotive study.

This type of research study is called a “Syndicated study” which means that they perform the research and then sell it later to clients. They claim that they did this so as not to be influenced by anyone during their data gathering and analysis. Perhaps, but they still probably had a target consumer in mind. They still likely knew that their report was going to appeal more to particular players than others, depending upon what it says, and who it favors.

That leads to my central point. Marketing Research is increasingly politically important. Because it is legitimized as factual “research” it gives companies like GM confidence to present products like the Hummer in a particular light. It gives newspaper and blog writers material they can use as “facts” that then go to publicly criticize government policies that affect consumption and to encourage consumers to take actions in forms both political and financial. It can be used to influence consumers and to suggest to politicians material changes in legislation and regulation that affect consumption. In the absence of other facts, it becomes the de facto set of facts.

In North America today, we are currently in the Age of Green Consumerism, where the consumer is expected to bear almost the full weight of making the right environmental decisions, from using the right recycled toilet paper and replacing light bulbs to driving the right car. But where is the quality assurance of the information that the consumer is to use to make those decisions? It’s a free for all! How is the consumer to decide on the scientific rigor and general accuracy of research? How do we judge its quality? Who is conducting and overseeing the research? Who is paying for it, and whose interests is it likely to manifest? Who is rating it and telling us it is legitimate? As it currently stands, anyone can hang up a shingle and practice marketing research, saying just about anything they want. They get coverage, they get press, they have influence.

I’m not saying that I completely mistrust this particular set of findings. But is this marketing research firm really qualified to make the delicate and highly-skilled engineering types of estimations that this type of report requires? I am saying that I don’t have enough information or knowledge to really be able to evaluate its quality. And I’m a skilled marketing research professional with a Ph.D. and twelve years of intense research experience. I’d expect the average consumer to be even more confused. And the fact that the way these important judgments are reached is kept “proprietary” doesn’t help things one bit.

In this age of Green Consumerism, when there are a lot of people who care and truly want to try to make a difference through their shopping and consumption, I think we deserve better information, valid and validated research.

Not only is Knowledge Power, but in this contemporary world (Marketing) Research is Power. Those can be very different things: knowledge and research findings. That power is in the hands of a lot of private companies right now, with almost no oversight. We need to ask ourselves if self-regulation is adequate in these important matters? Are operational codes tight enough? Are we really trying to change to world through redirecting our consumption? If so, then these are by definition world-changing matters and should be taken seriously as such. Could a government agency or another arms length certified party start to oversee the quality of work that impacts the environmental impact ratings that products contain ? How can we all get more critical of the research that gets report to us as fact?