Environment & the World

Wednesday, January 31, 2007

Natural Capitalism, Ch. 4

Filed under: Corporate Sustainability, Reading Group, Waste — amirj @ 7:31 pm

Reading this chapter didn’t spark off any strong reactions or deep thoughts for me. In fact, very few–if any–of the ideas in this chapter (as with others) were new to me, and I wonder if that would have been the case had I read the book closer to its publication date. Either way, I’m curious to hear what your reactions were. The basic premise of this chapter revolved around the notion that we can drastically reduce natural resource extraction and waste production by implementing smart processes that will keep the same materials circulating in the economy.

H&L expand the typical call of “reduce-reuse-recycle” to include repair, upgrading and remanufacturing to improve the efficiency of material flow and use. In their typical style, H&L accompany these ideas with concrete examples: design away scrap, reduce the number of parts, improve quality, and on and on. The jist seems to be that “innovations turn trash into cash” (80).

If this innovation thing plays out according to plan, H&L argue that we will move towards an economy that mimicks a mature “type 3” ecosystem (73). Such an economy will be characterized by heavy recycling of materials, little new material inputs, diversity and many niches. I thought this ecosystem comparison was instructive, and it plays into a larger theme of the book–to emulate efficient natural systems and processes when possible.

One other interesting idea they mentioned was the “take-back” laws in Europe and Japan.
These discussions of materials efficiency and waste have a tendency to focus on the role of industry and corporate leadership, so it was encouraging also to see a fruitful and benevolent role that government can fill. In this case, government does not directly lay down hefty fines and taxes. Instead, it simply transfers the burden of product disposal into the hands of the producers rather than onto public lands and waste collection services. True to the capitalist spirit, this sort of policy has spawned innovation in production, design, materials use, etc. and “the market” then rewarded the companies who best responded to the call. The U.S. already has such a policy in place for certain items like car batteries, perhaps it’s time to expand its scope..?


Sunday, January 7, 2007

Natural Capitalism, Chp. 1: Karen’s comments

Filed under: Corporate Sustainability, Reading Group — kwolfgan @ 5:07 pm

When I start reading a new text, I usually want to know something about who wrote it, so I seek out background information on the author(s). Knowing even a little bit about their lives helps me to put what they say in context.

To get started on these missions, I am a fan of Wikipedia.org. Some of my college professors saw Wikipedia as a perfectly reasonable source; others seemed to think the site was the work of nefarious forces and should not be taken seriously. I leave it up to you to take advantage of the encyclopedia (or not): interested parties are encouraged to visit http://en.wikipedia.org/wiki/Paul_Hawken and http://en.wikipedia.org/wiki/Amory_Lovins, in addition to http://www.natcapinc.com/core_hunter.htm, for background info about the authors of our chosen text. One of many tidbits of information available there: Natural Capitalism “has been referred to by several heads of state including President Bill Clinton who calls it one of the five most important books in the world today.” This makes me think we hit upon an appropriate text to discuss.

As a precursor to joining this conversation, I investigated Hawken and the Lovinses on and beyond Wikipedia because I know that their work has broken new ground and set trends within and outside of the environmental(ist) community. I have been acquainted with all three (through their writings and through media coverage of their work) for several years. My most recent interaction with the founder of Smith & Hawken garden supply company, Mr. Paul, was via projection screen: I attended the Oregon satellite of the 2006 Bioneers conference. For whatever reason, I did not expect to be thoroughly impressed by his keynote. But I was. Check it out: it’s entitled “Biology, Resistance and Restoration: Sustainability as an Infinite Game.” The audio can be purchased for the lowlow price of $1.99 on the Bioneers website; it can also be viewed for free on Hawken’s website. I highly recommend it as a complement to the proffered Wikiorientation to these authors’ lives and works.

Now that you have some of the same background information as I for this endeavor, let’s see what these guys (affectionately termed H & L by Amir and Cathy) have to say.

H & the Ls carefully define their terms in the first chapter of this book: natural capital, which includes both resources and living systems, is one of four capitals that make up a healthy economy. The others (human, financial, and manufactured) are factored into the industrial system currently in place, while natural capital is left out of the picture. In a sense, the purpose of this book is for H & the Ls to jumpstart a concerted effort to bring natural capital back into existing economies—not just as one of the four, but as the form of capital considered primary. There are no known substitutes for natural capital, they are quick to point out, and this (along with the facts that 1. valuing natural capital is difficult and 2. there is likewise no substitute for human ingenuity) make it impossible to simply correct the deficiencies in the present system by placing monetary value on natural capital. (For more on that, see earlier posts.)

The bulk of this chapter centers on the suggestion that four central strategies be pursued in order to bring about a “natural capitalist” state of affairs: radical resource productivity, biomimicry, a service and flow economy, and investing in natural capital. H & the Ls contend that some efforts in this direction are already taking place, and in the second half of this chapter give glimpses of the hoped-for future. However, perhaps the most interesting idea of the chapter comes at the transition point between the description of what is and the elaboration of what could be: there, the authors ask “what if, in the absence of a rigorous way to practice [accounting that accepts the biological realities of nature], companies started to act as if such principles were in force?” (9).

“Acting as if” is one of the fundamental techniques used in twelve-step programs; people newly in recovery are encouraged to fake it till they make it, so to speak—to behave as they have seen others (who are further into the program) behave, and in the course of doing so, acquire the habits of mind and heart that go with those behaviors. The connection between recovering from addiction and recovering from the industrial economy here is subtle. I understand the rest of the chapter as an attempt to show concerned businesspeople examples of what businesses that operate in line with natural capitalism look like so that these readers can take the plunge and start reforming the ways they do what they do. They don’t have to have all the internal pieces in place when they take that plunge, but perhaps the hope is that those pieces will start to fit after the external operations have changed.

I have not participated in a twelve-step program myself, but I have heard from several people who have been in recovery for years that the practice of “acting as if” has been of major importance for them. And if it works for people who have substance abuse problems, it can work for businesses dependent on unsustainable practices. Can’t it?

Thursday, January 4, 2007

Reading Group: Natural Capitalism, Ch. 1

In this first chapter, “The Next Industrial Revolution,” Hawken and the two Lovinses (H&L) give us a brief history and description of capitalism, point out its shortcomings, and from there sketch out their outline for a new industrial revolution to correct the situation.

Their description of capitalism and the problems that arise from it seem on the mark. In fact, much of it echoes the concerns we’ve already voiced in our threads about environmentalism and economics. Essentially, H&L argue that natural capital (meaning the resources and living systems that make life possible) is on the decline, and that the problem with the current capitalist paradigm is that it fails to value natural and human capital. Moreover, they outline several reasons why simply assigning a monetary value to natural and human capital is neither straightforward nor enough of a corrective measure. H&L hit a high note when they point out that the fallacy in contemporary and past economic theory assumes “that natural and human capital have little value compared to final output.” This assumption worked when labor was scarce and natural capital was abundant. They argue, however, that we now face the opposite scenario in which labor is abundant and natural capital is on the decline–we therefore need a new type of economic theory to effectively address these changing conditions.

H&L’s “natural capitalism” attempts to be just that. They propose a natural capitalism based on four main strategies: resource productivity, biomimicry, service and flow, and investing in natural capital. While these four categories bubble with exciting ideas, many of them come from the stock of ideas that have been floating around in the environmental movement for quite some time (or are they the originators of some?). Their main points are that the current industrial model is quite wasteful: according to H&L only 6% of material flows in the U.S. economy end up in final products (p. 14). Their solution, then? To increase our efficiency, to improve productivity, to waste fewer resources, to remove “vestigial subsidies” that promote inefficient processes, and to correct “deliberate distortions in the marketplace” that favor extracting virgin materials over recycling.

H&L also envision a new business model in which companies retain ownership of their products and instead of selling them, lease them to customers. Because companies would own their products, and therefore be responsible for repairs and disposal, H&L hope that this would inspire a new kind of corporate benevolence. They believe that it would then be in the company’s best interest to reduce the toxicity and improve the recyclability of their products. Furthermore, H&L argue that this would encourage companies to develop more efficient processes which also would create more jobs. (more…)

Friday, September 22, 2006

Branson and CGI Investments

Filed under: Climate Change, Corporate Sustainability, Energy — amirj @ 9:42 am

Money talks. So when billionaire Richard Branson announced yesterday an estimated three billion dollar investment in renewable energy initiatives over the next ten years people listened. It was nice to see that when Neil Cavuto suggested that some people believe climate change is still debatable (so why invest so much money in it?) Branson just wasn’t having it. I guess if people can’t be convinced by the scientists, maybe they’ll listen to the billionaires. That in and of itself might be a little irksome, though.

Anyway, back to the investment. You can trust that Branson’s being a savvy businessman about this. The three billion dollars will come from the proceeds of Virgin Group’s airline and train operations, and this money will be reinvested into a new Virgin company: Virgin Fuels. So shareholders and such need not fret–the money won’t wander far.

Virgin Fuels, which will initially focus on bio-fuels, will however share the wealth in the form of international investments. To kick-start the giving bonanza, Virgin Fuels gets $400 million over the next three years, some of which will go to their first investment in Cilion, Inc.–a California based company that will build seven new, cheaper, greener ethanol plants by 2009.

More bits and pieces about the Branson/Virgin investment at the Clinton Global Initiative website.
Bill Clinton has also been making headlines this week thanks, in part, to his 2006 Clinton Global Initiative Annual Meeting. The summit brings together a global elite of big names, spanning dozens of political heavyweights, celebrities, business people, academics, philanthropists, and others. The goal is to discuss four progressive global challenges and to secure commitments from these people to invest in projects that will alleviate these problems.

Energy and Climate Change is one of the four areas. You can read some of the issues they’re addressing and also watch taped webcasts of the sessions. One session about Cities of the Future features the Ken Livingstone, the mayor of London, William McDonough, and Jamie Lerner, the former mayor of Curitiba. Indeed the discussion will be interesting, and these people have plenty of great stuff to say.

So far the Clinton Global Initiative has secured $5.7 billion in commitments to invest in projects related to the four focus areas: Energy and Climate, Global Health, Poverty Alleviation, and Mitigating Religious and Ethnic Conflict. On the one hand, it’s great to see high-profile discussions of these issues, and it’s equally great to know that so much money will translate into efforts to address these problems. On the other hand, one wonders if these megaconferences do more to raise the profile of these global leaders than change the realities on the ground. Furthermore, while I do not doubt that close to $6 billion in investments will make some real differences, one has to wonder what it means when so much of these investments and progressive global leadership and change is couched in the language of business deals and/or relegated to the privilege and whims of a global elite of leaders.

What this sort of project also accomplishes is to strengthen the current patterns of hegemony, to reinforce social hierarchies. So, we might be able to go carbon neutral thanks to corporate leadership without doing too much to change the social structure of our societies. At the same time, one must also wonder how self-defeating these projects might be in other realms, such as mitigating religious and ethnic conflict, when these conflicts might be the very product of the unequal social structures that currently exist.

Wednesday, July 19, 2006

Environmentalism at Wal-Mart

Filed under: Corporate Sustainability — Cathy @ 11:58 pm

Last week, Al Gore recently spoke at a meeting of Wal-Mart executives on sustainability. See
Gore and some other leading environmentalists (including Adam Werbach) are really working with Wal-Mart to try to get them to follow through on their environmental commitments. And Wal-Mart’s goals are quite lofty:

“Last October, Scott pledged to transform his sprawling company, which employs 1.8 million people worldwide and ranks No. 2 on the Fortune 500 list, into a lean green machine powered exclusively by renewable energy, producing zero waste, and selling sustainable products … He aims, for example, to reduce greenhouse-gas emissions at Wal-Mart’s existing stores and distribution centers 20 percent by 2012, and invest $500 million in environmental improvements each year.”

The whole idea of “greening” Wal-Mart is obviously highly controversial, since the very idea of an enormous transnational corporation that ships good all over the world and drives local competitors out of business seems antithetical to the idea of sustainability. But, on the other hand, there is little indication that Wal-Mart is going to go away any time soon, probably not in the next couple of decades that will be crucial to solving the climate problem. And the economies of scale that would come from Wal-Mart moving towards sustainability would be enormous. Wal-Mart’s goal is “to ‘democratize sustainability.’ … to use Wal-Mart’s unparalleled economies of scale to put everything from organic T-shirts to compact fluorescent light bulbs to pesticide-free foods within reach of the masses.” Given the huge volume that Wal-Mart requires, it will be interesting to see to what extent this is possible without corrupting some of the ideals of sustainability. For example, will Wal-Mart really be able to contract with local vendors near its store locations or will it end up shipping in organic produce from New Zealand?

I am extremely interested to see what will happen with this. If Wal-Mart is serious about this, it will dwarf all other attempts at corporate sustainability and probably end up shifting a significant portion of the retail industry along with it. It seems to be a real test of whether or not the current system of “transnational corporations run amok” can manage to fit itself within increasingly pressing environmental constraints.

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