Fund Balance

Fund Balance has been examining the Dead Zones occurring in coastal and estuarial zones over the last year. Their magnitude is striking. Their damage to ocean ecosystems, seafood supplies and business is severe. And they are connected to vital food supply economies in the Midwest. Nitrogenous run-off from fertilizer used in large scale agriculture binds up and removes oxygen in the Gulf.

Does it have to be one set of regional American economic interests over another? The answer is no. For example, research performed at Dauphin Island Sea Lab off the coast of Alabama develops “resource management strategies which will foster the wise stewardship of diminishing natural resources”. There are ways that such principles are being applied in the Midwest along the Mississippi river. The book, “From the Corn Belt to the Gulf” (Nassauer, Santelmann, and Scavia, eds., Resources for the Future Press), details how farmers and industrial agricultural operations could reduce the amount of nitrogen flowing into the Gulf of Mexico by 40 percent. And it is increasingly clear that by planting specific types of grasses and engineering buffers, grain production in the great American Midwest does not have to contract in order for coastal economies to thrive.

Scientists and policy-makers in the Midwest have been at the forefront on this work. The Science Museum of Minnesota has produced an excellent presentation on the Deadzone in the Gulf of Mexico.  Fund Balance is working with policy-makers and bankers on our capital markets strategy for dealing with this issue in Washington, DC.

This past week, countries meeting in Doha at the United Nations Convention on International Trade in Endangered Species voted down a proposal by Monaco and the United States to ban international trade in Atlantic bluefin tuna. The species, Thunnus Thynnus, is spiraling toward extinction, and is listed as endangered by the U.N. and every major international conservancy group.

This outcome underscores the need for policy makers and those charged with execution of policy to factor in the serious crisis that the world’s oceans and riverine systems face: our Blue Economy in peril.

Dead Zone Remote Sensing Imagery: Sannich Inlet off coast of Vancouver, British Columbia

A major issue for the world’ s coastal regions are the rise of Dead Zones. These vast expanses of ocean contain oxygen levels that are too low to support life outside of algal blooms. The Gulf of Mexico Dead

Zone is the size of New Jersey, or approximately 22, 608 square kilometers. The hypoxic state of these dead zones is caused by run-off from fertilizers used in industrial agriculture. Some recent informal polling at i-say.com conducted by Fund Balance gives some hope that the issue registers with the public. In addition, Fund Balance learned from several Iowan farm ope

rators about their efforts to reduce their run off: from  relocating feed lots farther away from rivers, to applying buffers made of specific nitrogen loving indigenous plants and compounds of gravel and sand. Many have realized economic gains from reducing nitrogen application to crops and benefited from increased production. Informative coverage on these Dead Zones can be found at Link TV.

Demarcation from living to dead zone off the coast of North Carolina

Such activity makes important steps forward. These actions require increased attention from agronomists, urban planners, policy makers and consumers. Just last week major media expanded its coverage of Dead Zones off the coasts of California, Oregon and Washington. Such man-made disasters unfold daily in the Chesapeake Bay as well as in within coastal regions across the globe.

One hears frequently these days that eco-nomic needs trump eco-logical ones in the public mind – especially here in early 2010. But it is increasingly hard to see a difference between the two at all.

Tanya Ott’s recent coverage on WBHM reporting on the challenges the city of Anniston, Alabama has faced is instructive. A large military base, Fort McLellan, closed there in 1995. The city was largely dependent on the revenue this installation created. Then came wide-spread land devaluation as a result of PCB contamination in the surrounding waterways. Next there was national publicity over local resistance to the incineration of deadly nerve gases left over from the military installation.

That was not the last chapter in the story. Ms. Ott notes how arts and humanities-based activities are leading the way toward the revitalization of downtown Anniston. This process also includes uncovering a formerly paved-over creek that runs through downtown.

–

On the policy front, various campaign officials for local and federal offices insist that jobs matter more than the environment in the vox populi and voting booth.  A recent article in the Demopolis Times on concerns over coal ash disposal indicates that wastewater from coal fired plants might not just be a NIMBY (not in my backyard) issue. Rather it may well indicate that yet another zone in the Black Belt is starting to question the long-term cost/benefit analysis of energy consumption that produces toxic water:

“While the Tennessee Valley Authority’s cleanup has removed much of the ash from the river, the arsenic- and mercury-laced muck or its watery discharge has been moving by rail and truck through three states to at least six different sites. Some of it may end up as far away as Louisiana.

At every stop along the route, new environmental concerns pop up. The coal-ash muck is laden with heavy metals linked to cancer, and the U.S. Environmental Protection Agency is considering declaring coal ash hazardous.

“I’m really concerned about my health,” said retiree James Gibbs, 53, who lives near a west-central Alabama landfill that is taking the ash. “I want to plant a garden. I’m concerned about it getting in the soil.” Gibbs said that since last summer there has been a “bad odor, like a natural gas odor.”

After the spill, the TVA started sending as many as 17,000 rail carloads of ash almost 350 miles south to the landfill in Uniontown, Ala. At least 160 rail shipments have gone out from the cleanup site, said TVA spokeswoman Barbara Martocci.

Since the EPA approved that plan, unusually heavy rain – including about 25 inches from November through February – has forced the landfill to deal with up to 100,000 gallons a day of tainted water.

The landfill operators first sent it to wastewater treatment plants – a common way that landfills deal with excess liquid – in two nearby Alabama cities, Marion and Demopolis…”

–

Birmingham’s Green Building Focus, mentioned in last week’s blog for their Green Industrial Real Estate Project, has just announced their second Green Building Focus Conference and Expo to be held in Birmingham, Alabama this August 24-26. Such activity exemplifies economic opportunity emerging from ecologic planning.

The Great Pacific Garbage Patch — as covered by firstaffirmative.com

By Sara Laks and Steve Schueth

Why is it so important to be a conscious consumer and a responsible investor?

Here’s a reason for today:  The Island of Garbage swirling in the Pacific Ocean, also known as The Great Pacific Garbage Patch, North Pacific Gyre, Trash Vortex, and Plastic Graveyard.

This mass of plastic waste and debris is estimated by scientists to be anywhere from twice the size of Texas to twice the size of the continental U.S.  And the impacts for the environment and society are potentially just as colossal.

Captain Charles Moore, who discovered the patch in 1997, warns of the mounting implications of our floating pollution explaining:  “In the central North Pacific Gyre, pieces of plastic outweigh surface zooplankton by a factor of six to one,” according to a report based on Moore’s research.

“Ninety percent of Laysan albatross chick carcasses and regurgitated stomach contents contain plastics.  Fish and seabirds mistake plastic for food.  Plastic debris releases chemical additives and plasticizers into the ocean.  Plastic also adsorbs hydrophobic pollutants like PCBs and pesticides like DDT.  These pollutants bioaccumulate in the tissues of marine organisms, biomagnify up the food chain, and find their way into the foods we eat.”

So what does this mean for us investors and consumers?  It means that everything comes full circle.  Where we buy our goods from, where we invest our money, where we throw out our trash—it all matters.  The negative ramifications of not paying attention to the impacts our consumer and investor behavior produce are all too visible in places like the Great Pacific Garbage Patch.  Even if you live thousands of miles away as waste works its way up through our food chain, the problem looms closer and closer to home.  No one can afford to ignore it.

One of the most powerful strategies for change as an individual is supporting companies that have the most environmentally conscious products and services.  The more the public becomes aware and shows support for green companies the more incentives there are to make a difference on a larger scale.

Why is it important to be a conscious consumer and investor?  For the simple reason that if we don’t pay attention now we will pay for it later.

Steve Schueth, President

steveschueth@firstaffirmative.com

Sara Laks, Assistant to the President

saralaks@firstaffirmative.com