Emissions, hybrids and accountants
A limousine fleet's CEO weighed many factors when considering whether to add hybrid vehicles to its stable.
Robert Mackasek, chief executive officer of Valera Global, had a green headache. The condition stemmed from the public's expressed desire to reduce tailpipe pollution coupled with its unwillingness to give up much in terms of comfort or convenience to help shrink the carbon footprint of automobiles.
For Mackasek's New York-based company, which operates one of the nation's largest chauffeured vehicle fleets, the condition was acute. Valera's lineup of 215 limousines and sport-utility vehicles, including models such as the long-wheelbase Lincoln Town Car, the Mercedes-Benz S-550 sedan, and the GMC Yukon Denali, were decidedly non-green in a world where green was becoming hip - even among Valera's well-heeled clientele.
"We had a general concern about our fleet because some rival services were beginning to buy Toyota Prius models," Mackasek said about the little gas-electric hybrid car, popularly hailed as the automotive definition of "green."
Mackasek considered moving Valera in the same direction. But he then discovered that the Prius-green movement of his rivals was not all it seemed to be.
"They would have a few Prius models on display at their stands at conventions" of livery-service providers, Mackasek said of his competitors. "But it was mostly for show . . . sort of like what happens in Hollywood when celebrities are going to an event."
The stars "are chauffeured in their limousines, or they drive their luxury cars and Hummers to a certain drop-off point. Then they get out of those vehicles and into Prius cars" and arrive at the red carpet looking green, Mackasek said.
But maintaining a fleet of show-off Prius cars or other hybrids is an expensive ruse in a business where most clients still demand all of the amenities of luxury limo service: plush comfort, rear-cabin work desks, and liquor bars to help reduce the stress of travel for the mobile elite. Valera scoured the globe for plush, green rides, but did not find much.
Also, there was Valera's accounting department. To put it simply, going gas-electric did not add up for the company's bean counters.
"We'd have the extra purchase cost involved in buying hybrids. How could we justify that extra cost in vehicles that would go mostly unused?" Mackasek asked.
Valera also was uncertain about the pace of development in hybrid technology. Would today's gas-electric have the market appeal and, thus, the relative resale value of yesterday's laptop? And what about maintenance costs? Valera, a privately held company, estimated that it would cost $7,000 to replace each nickel-metal hydride battery pack used in current-generation gas-electrics. The company's bottom line: Going bust in an attempt to go green was not an option.
Valera staffers came up with the idea to join the Chicago Climate Exchange, which bills itself as the world's first voluntary but legally binding greenhouse-gas-emissions registry, reduction and trading system.
After joining in October, Valera now is legally bound to inventory and report its company's carbon emissions to CCX for verification and audit. Reporting requirements include vehicle fleet emissions, as well as those associated with the company's air travel and its general operations.
Valera reports its carbon emissions to CCX. The exchange, using United Nations and other standardized verification and crediting protocols and procedures, approves the report. Valera is then required to pay for CCX-approved programs, such as reforestation and the development of wind- and solar-energy projects, designed to offset the carbon emissions Valera described in its annual report.
It is complicated. And there are many critics who say the carbon-offset program is as much of an environmental ruse as putting little gas-electric hybrid cars in the service of a luxury limousine company. But Mackasek said the program had definite value for his firm and its clients.
"It's a way for us to show our concern" for global warming and related environmental problems "and to educate our clients without inconveniencing them," Mackasek said.