Is E-Commerce Truly Good for the Planet?
<p>Besides being convenient, e-commerce is a way to help fight climate change. So says eBay and a carbon-footprint consulting firm called Cooler, in a report due out today. The report contends that eBay's business of enabling peer-to-peer selling and small retailers generates significant environmental value.</p>
I'm not much of a shopper, but when I buy stuff, I prefer to do it online. I don't like shopping malls, driving in traffic, crowded stores or dealing with "customer service" people. I do enjoy getting packages at home.
Now, it turns out, there may be another reason to shop online: E-commerce is a way to help fight climate change.
So, at least, says eBay and a carbon-footprint consulting firm called Cooler, in a report due out today. In particular, the report argues, eBay's business of enabling peer-to-peer selling and small retailers generates significant environmental value. You'd expect eBay to say that, of course, but there's logic behind the claim. The report says:
By minimizing infrastructure, reducing the need for warehousing, and maximizing transportation efficiency, small online retailers have created a climate-friendly way to buy and sell. All-electronic, with no need for everything from mannequins to signage to giant rooftop air conditioning units, they have dematerialized considerable parts of the retail process.
This morning, I'll be moderating a discussion about the study at the National Press Club with John Donahoe, eBay’s president and CEO; Michel Gelobter, the founder of Cooler and author of the white paper; and Eileen Claussen, president of the Pew Center on Global Climate Change.
This Washington showcase for Donahoe, to which environmental leaders have been invited, is the latest effort by eBay's to position itself as an environmentally-friendly company, largely because it sells used products. [See my blogpost Why eBay is a Green Giant and this GreenBiz.com interview with Donahoe.] To its credit, eBay is also a founding member of BICEP, a coalition of companies pushing for climate change regulation.
I have to admit that I was skeptical about eBay's claim that e-commerce is climate-friendly when I heard about it from Amy Skoczlas Cole, who leads eBay's Green Team. After all, aren't big retailers like Walmart renowned for their efficiency, their logistics, their fine-tuned global supply chains? The economies of scale and all that?
Well, yes, but peer-to-peer retailers -- the small businesses supported by eBay -- tend to be pretty efficient, too, because they have to be. (The last time I bought a book online from a small store, it came in a previously-used box.)
These small e-tailers operate out of their own homes and garages. They don't need big parking lots of warehouses. They ship by delivery services like UPS, FedEx and the post office which move goods around a lot more efficiently than suburban shoppers do when they drive to and from a big-box store.
They're also a force in the economy. In 2009, the report says, peer-to-peer online sales operations generated more than $31 billion in sales and despite the recession, their revenues grew, as did their market share of all online sales, to about 20.9 percent. Using admittedly rough estimates, the report says:
Compared to a single big box retail store grossing $100 million per year, the day-to-day operations of $100 million in sales through Web-based peer-to-peer marketplaces generate approximately 1,400 tons fewer CO2-equivalent emissions per year.
Three types are savings are significant, the report argues:
1. Without the need for stores, or chains of them, peer-to-peer retailing saves everything from the carbon cost of making bricks and cements to the everyday costs of heating and lighting retail spaces, not to mention the giant neon signs outside big box stores.
2. Warehousing in garages and spare rooms can eliminate big warehouses that eat up land and consume energy
3. Home deliver is more efficient than people driving mostly empty cars around.
I'll be interested to learn more during today’s discussion. Did Cooler take the energy costs of operating the data centers than run the Internet, as well as individual home computers into account? How much of eBay's business comes from the mom-and-pop retailers, and how much from big companies that operate warehouses and manage global supply chains? And, while the big box model has its obvious problems, shouldn't green consumers at least consider supporting retailers like Walmart and Best Buy that use their clout to promote environmentally-friendly practices. (See Walmart, bully for good and Best Buy wants your electronic junk at fortune.com.) Will peer-to-peer sellers recycle phones as Sprint does, or support sustainable forestry practices as Staples does?
None of this is simple. I love the fact that eBay sells used stuff -- that's almost surely better than buying new -- and I'll remain a fan of Internet shopping. But let's not forget that when it comes to saving the planet, the best buying decision we can make is not to buy at all.
Background image CC licensed by Flickr user kathryn in stereo. Logo courtesy of eBay.