December 18, 2014

Glaciers have the Wrong Business Model

Posted by Mauri Pelto

This is the story of a glacier that recently went to a bank for a loan, the Sholes Glacier, North Cascade Range, Washington. … “A recent resolution of mine is to work to change my future. I first had to go to the trouble of getting registered as a business so the bank would even recognize my existence, simply having existing on a map was not sufficient. This despite the fact that the water I store and release each summer is valuable to many businesses. I was ushered into the loan office where my basic need was explained, I need to replenish my main asset snow and ice, otherwise the water resource service I provide to others will diminish. The documentation requested included the state of my overall sector.  The World Glacier Monitoring Service, collects data on glacier mass balance and terminus change from around the globe, showed that my sector had lost net assets for 25 consecutive years, see below.  This graph showed not only that global glacier mass balance has declined 25 years in a row, but that North Cascade glaciers have lost an equivalent amount of volume, the 2014 data is preliminary.

Global Glacier Mass Balance

In fact auditors, glaciologists, have examined my asset sheet each of the last 25 years, and this data was not helpful. I then provided my own net asset sheet indicating a 25% asset loss in the last 20 years.  The increased stream of liability from me was eating the long term assets, that were literally no longer frozen. The bank officer, took a hard look and pointed out that, “banks loaned money with the expectation that there would be a return on their investment, improved assets of the loan recipient being crucial”. Given the recent history in the glacier sector I was told, “that our business model was wrong. We cannot expect after 25 consecutive years of loss that a positive asset trend is possible”.   I noted that the business model was hard to change and that is was the overall “business” climate that was wrong. This yielded a final rejection, “that maybe true, but until the business climate changes, you still have an unsustainable business model, and any loan would likely simply melt away, so to speak”.   So I ask for advice. What can I use for a business model? Will the business climate change in time for my business… How about the other businesses I supply too? I am afraid Kickstarter is not an option. Examine the other glaciers and their stories to see that my story is not unique.

sholes overvieew 2014

Sholes Glacier, North Cascades of Washington assets melting away.

sholes 2013 August melt

Snow melt from August 4th to Sept. 12th, 2013 on Sholes Glacier.

ba north america

Annual balance of glaciers in western North America all losing assets.