Sustainable Policy; Constructing a New World; The Future of Resource Efficiency

BOOK RECOMMENDATION:

Jevons' Paradox and the Myth of Resource Efficiency Improvements
by John M. Polimeni, Kozo Mayumi, Mario Giampietro, and Blake Alcott
ISBN: 9781844074624
A man by the name of William Stanley Jevons, in a book he wrote called The Coal Question back in 1865, stated “increasing the efficiency of a resource leads to the increased use of that resource”. This simple statement was made concerning the introduction of the coal-fired steam engine and has had many test applications over the years across numerous industries. The Jevons Paradox, as it has come to be known, is widely used in the field of economics and can help us understand the realistic availability of our natural resource supplies. One of the central concepts of the book recommended here is the increase in agricultural production efficiencies over the past fifty years and how those efficiencies in yield resulted in larger human populations, which then required more feedstocks to sustain them than in the system with pre-efficiency modifications. Jevons Paradox stipulates that increases in efficiency alone will not lead toward sustainability. Today, the theory is as valuable as it was one-hundred fifty years ago. Many people who argue that renewable energy is the way to future technological innovations that will ultimately reduce our consumption of natural resources to sustainable levels might change their opinion after familiarizing themselves with Javons Paradox. By pulling on lessons from the past, this book leaves the reader asking if sustainability is an unattainable dream.

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Whether we are talking about the food we eat or the cars we drive or the electricity that powers our homes, the same five-step process applies. Natural resources are harvested and then manufactured into products that are transported to a marketplace so that consumers can use them and then ultimately dispose of them; harvest, manufacture, transport, consume, and dispose. This simple five-step process applied millions of times over the course of several successive centuries, collectively, is having a catastrophically detrimental effect on virtually every ecosystem and species on earth, including the human species.

Contrary to what renewable energy advocates often claim, simply retrofitting our existing consumerist structure will not solve all of our problems. If we simply change the resources that we are consuming rather than changing the underlying assumptions about our consumerist society, we will remain locked on the trajectory of depletion, simply depleting alternative sources.

We need to change more than the list of resources that we consume; we need to adopt a new business structure that allows for our environment to be cleaned up. Our entire economic system needs to begin to enact regulations that will allow for it to evolve into a one that is based more upon the natural systems from which it draws all of it feedstocks. If our society is to thrive, it will have to learn how to sustain itself into the future where our planet will house an ever-increasing human population.

Jevons Paradox warns us that increasing efficiency is not enough to solve our depleting natural resource stock on earth. The conditions in the decades after the advent of the coal-fired steam engine showed us that, even though the energy efficiency levels of a resource (coal) were increased, overall use of that resource increased. The reason this happens is because, as the efficiency of a resource increases, price decreases, making the resource more affordable to a wider array of consumers. If we do not change the consumerist culture that has been created by capitalism, we will continue to consume more and more resources as the population grows. Even after efficiency levels are increased, the same five-step process exists: Harvest, manufacture, transport, consume, dispose. This process is what is unsustainable; by simply putting a different resource through the equation, we are not addressing the root cause of the problem.

Harvesting resources will always be damaging to the environment; we cannot get around this, but we need to start looking at the amount of waste that is being created collectively by a consumerist economy. If we begin to look more closely at the amount of waste created through the manufacturing process and analyze ways to incorporate waste back into the production loop, we might be able to lower our levels of resource extraction to sustainable levels.

Businesses can streamline their manufacturing processes in many ways that ultimately benefit their bottom-line and the environment. Capturing waste heat to produce energy to be used on site, or capturing emissions to be processed into industrial chemicals that can be sold as feedstocks to other industries, or reuse and recycling program costs that are figured into the production process are but three ways to streamline consumerist culture and can lower long term manufacturing costs and benefit the overall environment.

Once the products are made, they are often moved across the world by airplanes, trains, trucks, and cargo ships. This process of sending goods across the planet is extremely costly in terms of its use of fuel. For now, petroleum is the central source of power for the transportation industry, but not only are we running out of this fuel, we also have come to understand that burning petroleum on the scale that we are is having detrimental effects on human health and on the health of several key ecosystems across the planet. To continue shipping goods around the planet using petroleum as the base fuel is insane. We need to start creating local economies that do not depend so heavily upon economies of scale in order to reach their economic equilibrium. We need to start figuring the costs associated with environmental degradation into the equations relating to sending goods around the globe.

Depending on the product, the consumer usually uses a particular good and then disposes of it in the trash. Most goods that are made today are not built to last very long; computers are obsolete in 3-5 years, cars are inefficient after 10 years, televisions, refrigerators, and other household appliances are simply not built to last. Instead, it is in a company’s best interest to design a product that needs to be replaced in a cyclical fashion in order to keep revenues coming in over time. This kind of degenerative systems-thinking is what is causing us to realize that our current economic structure is unsustainable. We are running out of places to discard our waste; we are running out of energy to manufacture our goods; and we are running out of resources to harvest.

Companies have a responsibility to design products in a way in which they can be discarded in a responsible manner, a manner in which the components of the original product go back into the manufacturing process instead of heading to a landfill. Old computers need to be reengineered, old refrigerators need to be rebuilt, old car parts need to be reused and recycled. Not only is the marketplace currently adopting measures that will allow society the ability to easily adapt to these measures, but political momentum is building behind the idea of evolving capitalism so as to make it more sustainable.

So, how much efficiency will be enough to overcome Jevons Paradox? Is there one innovation in manufacturing, transportation, or in consumption that promises a substantial return on an investment? The answer is that we need legislation to be enacted that helps create a new system of ground-rules that will govern the business world. There is no one innovation that is the answer. Sustainability will be met through the use of a variety of practices; efficiency is just one of these practices. Much like the patchwork of renewable energy sources that will power the future, sustainability is made up of a consortium of different practices across every sector of our society.

Finding an alternate fuel to oil, one that comes from a renewable source, is just the beginning. How about wires that transfer energy almost instantaneously with 100% efficiency, or filters made from algae blooms that capture CO2 from industrial smokestacks? The point being made here is that innovation is coming in many forms spread out across every industry. This is an evolution of the human imagination, and it is all set to come to a reality near you over the course of the next century. We can either choose to innovate, or we can continue to operate from behind the eight-ball in a perpetual state of disaster recovery for the foreseeable future.

The patchwork of innovation that is forming presently will not be allowed to enter the arena of entrenched industry moguls without legislative help. If the past few decades are an indication of the stakes, there is destined to be a fight in order to change our capitalistic society. American capitalism was built upon monopolies and connections between insiders, but the evolution of economics over the course of the next one-hundred years does not have room for monopolies or for old-world cronyism.

The world, and hence, political participation, is evolving toward an open, information-based arena similar to the one that is developing on the internet; one where every individual is afforded the opportunity of a fair playing field. Customers and citizens alike can learn so much about a company or country and its products or actions before they decide to buy an item or support a candidate. The availability of information makes it so that companies and leaders who abuse people or the environment in bringing their product or vision to life are being held responsible for their actions; in some cases, companies or leaders are even held liable for the unintended social and environmental consequences hidden in their manufacturing processes or caused as a result of their legislation.

In other words, sustainability requires information, and information leads to rules being put in place to protect stakeholders. Regulations, generally speaking, have been seen in the past by the established ruling class to be intrusive, but without regulation, we can not achieve sustainability. Regulation is the key to creating a foundation for the global economy upon which certain principles will be honored. Regulation is good for people and the planet and bad for those who seek to take advantage of the system at the cost of others. We have learned countless times in our past that without regulation, people and businesses will take advantage of others and pollute the environment.

Let us look at an example here to highlight the evolution of an industry so as to maybe shed some light on where we are headed. We will look more closely here at how the application of Jevons Paradox is spurring the advancement of the field of biofuels. Perpetually applied, this idea of economic evolution fueled by innovation will ultimately lead to the development of a sustainable system that can then be implemented to legislative policy.

Once the world agreed that our use of oil was unsustainable, we set out to design a system for producing fuel that was able to sustain itself in spite of the planet’s global population projections. Corn ethanol production came online as the first solution to the energy matrix we set up for ourselves. It was touted as a sustainable solution to some of the concerns regarding petroleum, mainly price spikes and atmospheric pollutants. In terms of harvesting, it could be grown and produced domestically, cutting down on transportation costs; but in terms of manufacturing, we found that the increased demand for corn caused price spikes in the food sector. It was also speculated that consumption would increase because no system was put in place to lower these rates. In terms of disposal (in this case, burning it), analysts have suggested that instead of reducing atmospheric pollutants, we will simply be emitting similar levels of different, equally harmful contaminants. Innovators set out to design a process of making our transportation industry sustainable by only addressing one of the five steps of production. Through research and financial simulations, the market’s first choice, corn-based ethanol, was shown to be a complete failure at addressing most of the concerns that initiated the project because it did not address the root of the problem.

Their second choice, cellulosic ethanol, while addressing more of the concerns, has proved itself to also be unsustainable in the long-run. In terms of harvesting, the feedstock is grown domestically or taken directly from local landfills. In terms of manufacturing, since we are not using food crops, we detach ourselves from food price spikes (although some analysts have suggested that marginal cropland will have to be used for switchgrass and woody vegetation growth). In terms of consumption and disposal, the rates remain the same as with corn ethanol. The fundamental production cycle remains in place with cellulosic ethanol, and we are still locked on an unsustainable growth track in terms of atmospheric pollutants and consumption levels based upon population projections and feedstock availability.

The idea of an ethanol-powered economy, though, did not die because it failed twice. That is because the fundamental concerns with a petroleum economy are real and ethanol relieves some of them in terms of CO2 emissions, future extraction costs, foreign policy issues, and environmental degradation. Sure, we can go electric with all of our automobiles, but where will all of the power to charge the vehicles come from? Most likely, it will come from burning more coal at power plants, which will be more damaging than driving on petroleum. Creating a sustainable substitute for oil will allow us to begin the shift from a fossil fuel economy toward a renewable one.

Accounting for the population increases and the growing global middle class of the future is a difficult task, but ethanol innovators must account for future demand when figuring the sustainability of a given feedstock. While first and second generation biofuels, as some analysts suggest through their use of computer models, are unsustainable, researchers have found their answer to the source of the next generation of biofuels in the most unlikely of sources. What they have found is algae. Yes, algae. This fledgling industry may be the solution we have been waiting for; it is poised to provide energy in a multitude of forms for an unlimited number of people.

Algae grows quickly, cutting down on costs associated with production while increasing the availability of feedstocks; some strands are nearly 50% oil by mass, making the refining process extremely efficient; it absorbs CO2 from the atmosphere, so it can act as a filter for pollutants while it creates fuel; and innovators and scientists are working to bring the costs of commercial production in line with those of petroleum refining.

The technology exists, or will shortly, to be able to produce algae-based ethanol in a cost-competitive manner. Algae can be grown on filters at industrial sites inside smokestacks to consume valuable CO2, or it can be grown in giant algae ponds located next to power plants where smokestacks are bent around to pump their CO2 back into the water, or it can be grown in laboratory conditions where it can be genetically engineered to grow faster and produce more oil. Scientists are also working to genetically engineer algae so as to emit more hydrogen through the growing process. The hydrogen gas can then be used as an additional fuel source. In terms of consumption, since algae sequesters CO2 from the air, the more we grow, the cleaner our atmosphere becomes. As the population grows and more power plants are built, more algae farms are installed in order to keep pace with increases in emissions. Algae requires less acreage than cellulosic ethanol’s feedstocks, and therefore environmental concerns regarding sustainability are addressed. We are left with a different set of atmospheric pollutants than petroleum, but we have addressed four of the five steps in the production process. Only time will tell what next generation biofuels will bring.

From corn to biomass to algae, the innovation keeps evolving because of the need to clean up the entire production process; it is important to consider all of the five steps in the production process, harvesting, manufacturing, transportation, consumption, and disposal. If we don’t, we are simply re-disguising the original condition and are, in no way, solving problem we are facing collectively.

Will ethanol help in cleaning up the five-step process? Some people say that it does. Others say that it might in the future, and still others claim that it makes the situation worse. Depending upon which generation technology these people are referring to, they are all correct.

Once the questions regarding its primary feedstock are resolved, ethanol will contribute to a sustainable world in three major ways. First, it will burn considerably cleaner than fossil fuels, lowering air pollution and the trickle-down environmental poisoning that ensues from dirty air. Second, feedstocks that are grown for production will sequester CO2 from the air; and third, environmental degradation that occurs around extraction sites for oil, coal, and natural gas, not to mention the number of oil spills on the world’s oceans or the wars currently being waged to secure access to oil, all will be a thing of the past.

Obviously, though, algae ethanol is not at your local gas station available for purchase right now. This is because the evolution of economics is only in its infancy. It is still much cheaper to poison the air and degrade the environment than it is to enact environmental regulations around the fossil fuel industry. The sustainability movement is still trying to break in to mainstream economics and politics. It is still in its initial phase where it is trying to define itself, fleshing out different scenarios before innovations are mass-produced and regulations legally enforced.

While consumer items created from renewable or sustainable sources are mostly scattered about and hard to find here at the beginning of the twenty-first century, over the course of the next one-hundred years, those items will be the standard, and our way of life that we are living now will seem as archaic as that of those who lived in the nineteenth century do to us.

For now, though, we have to deal with what we have, and for us that means investing in the initial sustainable economy infrastructure and pressuring politicians to enact legislation that puts a realistic value on a functioning ecosystem. We can no longer continue living lives filled with creature comforts at the cost of future generations. It is time to start building the bandwagon that will drive the evolution of capitalism toward sustainability.

Big innovations in sustainability are not readily offered to the public yet. They will all be here soon. You, however, are being offered an opportunity to help create the sustainable economy of the future by investing in innovative companies on the forefront of the renewable economy. Only through conscious investing can we create a sustainable domestic energy policy. We can no longer just sit idly in the status quo and hope that change will come. Through bold investments, the individual investor can be a part of creating the momentum that will enable legislation to be passed that will allow for the creation of a sustainable economy. The markets respond to shifts in monetary investment and politicians listen to markets.

The exciting part about living in a polluted world where many life forms are going extinct is that the human imagination is in overdrive trying to come up with a solution to our environmental end-game that we have created for ourselves with our economy. Over the next one-hundred years, we will witness an age of human discovery equal to other great periods in human history, or we will become part of one of the greatest mass-extinction events in the history of this planet. The smart investor will help build the vehicle that will help us travel into the future.


___________________________________web recommendation
International Energy Agency
www.iea.org
The International Energy Agency (IEA) is “an intergovernmental organization which acts as energy policy advisor to 28 member countries in their effort to ensure reliable, affordable and clean energy for their citizens”. It was created during the global oil crisis in 1973-74. It is primarily concerned with energy security, economic development, and environmental protection. Some of their current work is focused on climate change policies, market reform, energy technology collaboration, and outreach. This website is important to review in order to analyze some of the global trends developing concerning energy development in the twenty-first century.

Sustainable Policy; Constructing a New World; A Non-Linear Model of Human Evolution

BOOK RECOMMENDATION:

Neanderthals and Modern Humans: An Ecological and Evolutionary Perspective
by Clive Finlayson
ISBN:0521820871

Like the purpose of most books, Finlayson’s book is no different than others in its attempt to reveal lessons learned from the past to us living in the modern era. The topic of his book, Neanderthals were primitive people inhabiting Europe and Western/Central Asia beginning between 600,000 and 350,000 years ago. These modern human predecessors then began to disappear around 130,000 years ago and disappeared completely around 30,000 years ago. Why did their evolutionary strand go extinct after hundreds of thousands of years? One view of their extinction was that it was due to the arrival of modern humans and the mixing of the two species. Finlayson’s book provides evidence to the contrary; while he does not dispute the reason for the mixing of the two species, he provides evidence that the Neanderthal extinction may have actually been a result of not adapting fast enough to changing ecological and environmental conditions, thus causing Neanderthal populations to seek adoption into modern human societies. The question Finlayson’s book leaves us with is this, what will the modern human’s response be to the current changing ecological and environmental conditions, and at what pace will our species adapt to these changing conditions. By extension, we need to ask ourselves, will we head the way of the Neanderthals toward extinction and ultimately be locked away in the fossil record buried deep in the stratified sedimentary layers of the earth waiting for future civilizations to figure out what went wrong?

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If we were to align the economic principles and capitalistic philosophy that has guided the United States and the rest of the world over the past few hundred years with a branch of science, they would most likely all fall under the topic of classical (Newtonian) physics. Classical physics and its subsequent linear equations depend highly upon constants in order to be graphed. These constants are what give the graphs their underlying linear, and hence progressive, nature; but are there really constants in nature, or is the impermanence of a cyclical world the only constant in the nature?

Classical, or Newtonian physics is lined with linear representations that describe the natural world. (pun intended) An object’s position, mass, and the force applied to it are of central importance. In a classical world, conclusions can reasonably be drawn based upon assumptions that objects will move linearly along their development continuum; but what about non-linear systems? Those functions involving an infinite number of variables from a multitude of systems that are interlinked and dependent upon each other tend to behave in different ways than Newton predicted.

New developments in quantum physics are beginning to provide better representations of our natural and business worlds. These new developments, in essence, are beginning to call our classical, linear representations of reality into question. Quantum physics states that matter has both particle and wave-like behavior, essentially meaning that everything on earth is interrelated. Reality, then, is more cyclical than it is linear.

We are discovering that matter is made up of more space than it is of substance. The information age that we are embarking upon with the advent of the computer is evidence of this. We are also discovering that subatomic particles do not behave under the assumed principles of classical physics. Therefore, our entire economic system, which is based upon classical physics principles needs an overhaul or it will continue its path toward irrelevance for the existence of life on earth.

Instead of a linear representation based upon constants, it seems that reality is based more upon happenstance, or what philosophers like to call fortuitous evolution. This concept of fortuitous evolution can then be traced through cyclical patterns. Whereas classical physics declares certainties and makes measurements, quantum mechanics suggests probabilities that move in spiraling cycles through the universe. In the business world, what we call evolution is innovation. The habit we have gotten into in the business world of rewarding the big players and the established moguls with larger contracts is contrary to the nature of evolution. Each species in the natural world has established its own niche and evolves accordingly.

Fortuitous evolution is supported by Darwin’s Origin of Species. Living organisms are opportunistic creatures that adapt to environmental influences in order to continue on existing. Countless variables are figured into the equations of evolution every day. No computer or human being can possibly figure with absolute certainty the outcome of the great experiment that makes up life on earth. Of all of the multitudinous possibilities that were offered to the human species, this one, the one we are living now, is the one that has come to pass; but there exists countless alternate possibilities that could have just as easily come to pass had different conditions existed or were chosen. We are being offered an opportunity here to nudge our economic system down the path of evolution.

While the natural world shows an abundance of constants on the surface, the underlying structure of the natural world that we live within does not appear to be linear at all. Measuring, in a quantum universe, brings matter out of its wave-like state into existence. Production makes consumables out of resources. On the surface, it appears that classical economics has all of the tools to help us through the twenty-first century, but the recent tremors throughout the global economy show this to be a false assumption. We are in dire need for more people to begin seeing themselves as part of a living system that is becoming more and more disconnected from the cycles of creation in the universe. Our business world has become stagnant, lacking innovation.

Let’s look at weather systems as an example of a non-linear complex system. The atmosphere is a dynamic system driven by a number of interrelated factors; in a way it appears to behave based more upon the principles of quantum mechanics rather than on the laws of classical physics. When viewed from above through the use of satellite images, weather systems appear to move from one point to another in the form of spiraling waves; when measured from below, they are quantified in the form of matter. While classical physics models and mathematical formulas are regularly applied to weather forecasting, the overall structure of weather systems exhibits the interrelatedness of global patterns. The reason weather forecasts are so often not accurate is because they rely so heavily upon classical physics. (This representation drawn here simply serves as a visual interpretation of the dual nature of reality; matter is but a resting point in an infinite progression of wave-like motion.)

Predicting the weather three days out is an arduous task because of the nature of the number of variables that need to be considered. Predicting the weather three decades from now is an impossible endeavor, right? What about one-hundred years from now?

What scientists are doing regarding long-term climate prediction is an indication of where we are headed in the evolution of our species. Scientists are running computer programs that take into account countless variables, and they are repeating the process millions of times. What they are ending up with is a graph of numerous possibilities grouped around a trend. What they are realizing from these trends is that, because the natural world is intimately linked together, certain environmental events are destabilizing to the entire ecosystem and ultimately shape every event after it occurs. For example, the melting of Greenland’s glaciers can be seen as a climatic tipping point. Events such as this can be referred to as a tipping point because it tends to tip the results in a certain direction and is irreversible.

When we run these same kinds of non-linear models using our current economic structure, we discover quite early on that our current capitalistic system is unsustainable.

The Neanderthals (or the Maya or the Ancestral Puebloans or the Roman Empire, for that matter) passed a tipping point when they neglected to adapt to the changing environmental conditions of their era. We are being asked to interpret certain sets of data in the present in order to change our current economic course and halt our linear progression toward an environmental tipping point swiftly approaching us from the not-so-distant horizon.

The modern human is heading away from certainties based upon linear calculations, and we are moving toward a future based upon quantum mechanics. If we continue to interrupt the wave-like progression of natural systems through the use of economics for environmental exploitation, we risk bringing to a halt all life on earth (at least until the energetic systems can recover).

While linear representations may have described, quite well, trends over time in the past when human populations were smaller, their use in describing action in the present is limited because of the sheer volume of human beings. In the past, there simply was not enough of us on the planet to interrupt the natural global patterns of renewal. We are being asked to develop a deeper understanding of the human condition because there are more of us living here; one where we see ourselves as part of a continual loop that is based upon probabilities and possibilities rather than on certainties. We are being asked to recognize that our economic system falls within the non-linear, cyclical systems of the natural world.

It is becoming apparent to more and more people in this world that economic principles are appropriately grouped under biological concepts like growth, adaptation, evolution, and interdependence, all of which have their base in the quantum mechanical view of the universe. These kinds of terms are generally expressed in non-linear relationships that operate more cyclically than linearly. They are based upon concepts of interdependence where each organism depends upon the others for its own survival. Competition exists but not in the modern human’s sense of global dominance.

The fact that capitalism, in its essence, is based upon biological principles rather than simple linear mathematical concepts is a relatively recent advancement in the evolution of the human species. It is only through the population explosion of the last century that we came to this realization; it was a fortuitous development in our evolution only if we are able to implement our scientific findings into our business strategies. If we fail to enter the implementation phase, then our survival as a species will have just been one possibility of the infinite number of possibilities that could have come to pass. Like the Neanderthals who were relegated to the fossils of the past, modern humans will have failed to adapt to the changing environment around them.

It goes without question that the business world is heavily tied to the natural world through the extraction, manufacturing, use, and ultimate disposal of the planet’s resources. To bring consumer goods into existence requires energy and resources. Our current business models incorporate linear mathematical formulas to accomplish these tasks that have no place in a world based upon quantum mechanics. In fact, linear thinking is what has caused us to stand of the brink of our own extinction.

Business would benefit in the long-term from adapting to more non-linear practices like closed-loop production systems and zero waste principles. Redefining our growth expectations and incorporating social and environmental concerns into the bottom line of corporate spreadsheets will go a long way in bringing the human condition back into line with the natural world.

The renewable energy and sustainable business movement is the ultimate form of life-systems thinking. Renewable energy taps into the wave-like structure of the universe for power. Capturing it allows us to capitalize upon an endless source of energy. Fossil fuels are based upon dead organic matter being converted into chemicals spewed into the air we breathe; no wonder the earth and all of its creatures are dying off in one of the largest mass extinctions on record. We are interrupting the natural flow of energy in order to bring consumer goods into existence, and this is not sustainable. It is not the consumer goods that are bad in and of themselves, it is the process by which they are brought into existence that needs to be changed.

Another example of non-linear practices in the business world is shown through the concept of sustainable design, which means figuring all of the costs associated with the life cycle of product. Using life cycle assessment software, companies can figure out the full cost of a given product including emissions from production, availability of resources, and the product’s ultimate disposal. Until we consider the social and environmental impacts of our production processes in addition to financial concerns, we will remain trapped on a linear progression toward the destruction of our own society. When a horde of grasshoppers eats all of the leafy vegetation in a given area, the group then begins dying off until its numbers reach a more sustainable level. We are smarter than grasshoppers; we are smarter than Neanderthals.

There is no way that Adam Smith could have forecast the ways in which the discoveries in science, particularly those of quantum physics, would alter our concept of the earth and of ourselves, and there is no way he calculated how the exploding global population would affect business and the availability of resources. At the time that Adam Smith was postulating his views in his book Wealth of Nations, Newtonian physics was the dominant science of the day; Einstein hadn’t even been invented yet. In his day, America was not defined in terms of its borders, and resources seemed unlimited to him; therefore, growth, in his mind, could go on increasing forever. We are now in the position where we have to redefine the definition of growth. Certain aspects of capitalism have become like weeds that have overrun the garden.

The philosophy of economics outlined by Adam Smith is linear in its conception; as long as resources are unlimited, growth of the economy is unlimited. However, the constant of unlimited resources that Smith assumes is not true. Economic models based upon biological concepts of growth instead of linear growth should become more adopted over the course of the next few decades. If we adopt economic models based upon these kinds of principles, then much like the natural world, our business world will continue to provide ample harvests for as long as they exist. In nature, there is no such thing as waste, and perpetual growth is the norm.

Ecological economics is the idea that we can assign numbers to aspects of the environment in order to understand the complex system better. These formulas that are developed can help us figure out possible courses of actions and probable outcomes. We have a number of scientists and mathematicians all coming together to describe a similar situation; that is, we need to fundamentally change the way in which we do business. There is no ‘away’ anymore; we all live on the same planet. The natural world and the business world are the same world. To destroy one is to destroy the other.

One of the simple principles involved in the calculations of formulas in the field of ecological economics is that clean water, air, and land is important to the foundation of business. Up until now, environmental regulations were seen as limiting factors to growth. Without protecting these basic resources, though, through economic incentives, as well as penalties for polluters so that future generations on earth can sustain themselves, we seek to bankrupt the very system that we have based our entire civilization upon. By incorporating the interdependence of the natural world into the economic principles of Adam Smith, we are able to create a new system of economics that is able to sustain itself and provide future generations with the same sense of wealth experienced by former generations.

Resource consumption based upon sustainable practices and renewable sources is the future of business. Economic dogma will have to be rewritten. Limiting the use of exploitative principles that inflate the unsustainable concept of unlimited growth potential will be commonplace in the future. Legislation will be drafted and the human species will evolve.

Are we doomed to repeat the mistakes of past species and ultimately disappear like the Neanderthals? I think not. The modern human will adapt to the information it is being given because we are more evolved than the Neanderthals. We are on the cusp of greatness, just steps away from tapping into the limitless power generated from the waves that created the entire known universe. If only the governments of the world can unhinge themselves from the chains of business as usual and dive whole-heartedly into a period of endless innovation, then capitalism can be saved.

The good news for investors today is that many companies are beginning to spring up that operate under more sustainable practices. These companies adhere to principles that protect the ecosystems where their resources are taken from. These industries seek to limit the production of waste or use it to produce other goods. Whole industries are beginning to spring up around capturing energy from the sun or the wind or from the heat of the earth’s core. We are beginning to take notice of the limits of our global environment and innovate our business strategies to be more in line with natural systems. Nature does not have to be conquered; it needs to be harnessed.

Investing in sustainable economics is a lifelong endeavor, and it is proving to be lucrative for those investors keen enough to ‘get in’ in the early stages of the crossover from fossil fuels to renewable energy. The transition from linear thinking to non-linear thinking will involve a complete metamorphosis of capitalism; but just as a butterfly cannot assume its majesty without first being a caterpillar, next generation technologies will owe a debt of gratitude to all of those industries that came before them.

____________________________web recommendation
What the Bleep Do We Know?
www.whatthebleep.com
This website goes along with the 2004 documentary by the same name. The film was initially not picked up by any distributors so the film makers went ahead and released it themselves. The movie combines a storyline with a multi-media format to introduce and discuss some of the concepts involved in quantum physics. The world that we have come to know through our lives is a diverse place capable of holding multiple dimensions of endless possibilities. Did you know that your life could have an alternate ending if you so wish? Go in and explore a bit.

Sustainable Policy; Constructing a New World; Opportunity Knocks

BOOK RECOMMENDATION:

Growth Illusion: How Economic Growth Has Enriched the Few, Impoverished the Many, and Endangered the Planet
by Richard J. Douthwaite
ISBN-0-933031-74-2

Douthwaite’s book raises a fundamental question that we should have considered from the start of civilization, that is, whether or not the path of economic development that we are on is improving the quality of life for ourselves and for our future generations. The common opinion held by most economists is that growth and development spur increases in individual income levels and this, in turn, results in a better quality of life for all; but is this true for ALL of humanity? The ideas presented in Douthwaite’s book offer a contrary opinion to that of common economists. The overall implications of current economic policies being enacted by governments around the world may increase national income levels, but only for a select few. The end result of current capitalistic policies is the consumption of more resources, and as the population of the planet increases, we will push up against the limit of global resources available within one generation. While we have pursued unsustainable production methods since the inception of American capitalism, recent innovations have allowed us to begin to produce many of our consumables on a sustainable basis. Douthwaite’s book acts as a warning for us by making the claim that humanity has been running backwards, and that we are currently living on borrowed time. This idea that our economic system is not sustainable as it currently exists is becoming a more mainstream idea in business communities around the globe. As different sectors of the consumption economy feel the crunch of globalization, international standards, and overpopulation, more interest will develop around the creation of sustainable economic policy.

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Environmental Disasters: A Chronicle of Individual, Industrial, and Governmental Carelessness
by Lee Allyn Davis and Lee Davis
ISBN:0816032653

This book is offered here together with Growth Illusion to not only show the environmental costs of the unsustainable economic policy pursued over the course of the last century, but also to propose the question, how much longer can the planet sustain ‘our way of life’? Weill we heed the warnings blaring all around us, or will we fade into the dust of the earth like every great civilization of the past?

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Many businesses today are only beginning to sense their relationships to the natural resources of the earth. For example, computer manufacturing giant Dell (and many other Fortune 500 companies, particularly the oil and coal industries) are beginning to realize the potential of greenwashing their image; this is the idea of initiating marketing campaigns to change the public perception of business as usual. Dell recently announced that its company had gone carbon neutral. This means that for all of the pollution Dell emits through the production and use of its products, they have made efforts to offset their carbon emissions through planting trees and buying carbon credits. The truth of the matter is that they, along with the oil and coal industries, are nowhere close to carbon neutral.

While the standards for evaluating carbon neutrality are anything but uniform, the trend of companies caring about their environmental impact is an important step in the evolution of American capitalism. Greenwashing, however, is a smokescreen and needs to be addressed through international standards before any real progress can be made, but humanity has begun its progression toward sustainability.

Even the big oil companies in America and beyond are beginning to acknowledge the limits as well as the pollutive nature of their resource, and they are starting to realize that their industry is not sustainable in the long-term. Companies like BP are realizing the potential of renewable energy sources and are beginning to pursue investments in the industry. IBM is beginning to focus on creating the computer servers capable of handling the demands of a smart grid. This realization by Big Business that sustainable processes ARE the future is becoming, more and more, a sound business strategy, and the more foresighted companies are building the bandwagon by beginning to pursue renewable energy technology in the form of wind, solar, biofuel, smart grids, battery, and geothermal development.

The idea that our economy as it exists today is tied to depleting our natural resources is something completely contrary to the principles upon which our whole economic system was founded; limitless resources and continuous progress is what our nation is built upon. The notion that our entire economy is intimately connected to the natural world is a new generational concept, and it will become the dominating philosophy of the future. The population explosion of the last century has led us to the realization that we need to find a balance located somewhere within the borders of sustainable progress. This is the most important discovery of the twentieth century, and it can only be ignored at our own peril. We will either listen to and heed the warnings we are being given from the living planet, or we will enter a period of prolonged economic decline before the ultimate collapse of the entire economic system upon which we have built our civilization.

The earlier on in this process that we adopt sustainable principles into our economic system, the better off we will be and the more prepared America will be to lead the world through the twenty-first century. The warnings we are being given are coming from every corner of the earth; whether it be from the melting glaciers, the acidification of the world’s oceans, the dying coral reefs, the increase of toxic algae blooms, the spreading of the earth’s deserts, the mass extinction of the planet’s animal populations, the rampant deforestation and loss of animal habitat that is occurring, the spread of disease, the frequency of war, or the lack of available space to dispose of our collective waste, the warnings we are being given are LOUD and CLEAR!

Let’s take a look at the forestry industry as an example of an industry making efforts to responsibly manage their resource. We can all agree that without forests there would be no forestry industry; so for this reason alone, forestry officials have the incentive to protect the resource. We also can agree that to continue clear-cutting the forests of the earth on the scale that we are will lead to the ultimate collapse of the entire ecosystem. Without healthy forests, CO2 levels in the atmosphere will spiral out of control and more animal populations will become endangered and ultimately go extinct; the entire web of life that our economic and physical survival depends upon will be in jeopardy. It makes no sense to destroy one of the fundamental building blocks of life on earth, or to destroy one of the pillars of the foundation of the entire global economic system. Upon realizing this, regulations for forest management began to be put in place, and forestry officials actually created an industry standard handbook in order to try to achieve their goal of adopting sustainable forest management practices. We are still clear-cutting forests and are in danger of destroying the bedrock of biodiversity, but the blueprint for the bandwagon has been drawn for future generations to begin construction.

After beginning to realize the rate at which forests were being clear-cut worldwide, the logging industry went through the process of changing itself into the timber management industry. Was this simply an act of greenwashing? Only time will tell, but the main difference between these titles is that a timber management company cares about the shape the forest is left in after the logging is complete. There is no reason why every industry within our economic system should not go through a similar metamorphosis. Shouldn’t utilities be concerned about efficiency regarding the transfer and use of electricity? Shouldn’t the automobile industry be concerned about the diminishing availability of petroleum?

To consider the limits of an industry’s feedstock is sound business strategy. If forest management practices are not employed, the industry itself runs the risk of depleting its main resource.

As the forestry industry continues to mature, timber management companies are beginning to value the forest as a whole, not as its parts that can be cut up and sold. This is good for the planet, the people, the animals and plants, and our capitalistic economic system. To deplete the entire ecosystem in one generation and leave future generations with an economic system that is unsustainable is, simply put, irresponsible

Fifty years ago, sustainable business practices were virtually unheard of. The echoes from the 1960s in America echoed throughout the seventies, eighties, and the nineties. We were given the Clean Air Act, the Clean Water Act, the Endangered Species Act by our government as tools to help ensure that the future would provide future generations with the same opportunities that our predecessors had. We are the future generations!

Since these Acts were passed by congress, corporations have hired their expensive lawyers to find loopholes and ways to get around the principles that ensured clean air, clean water, and the biodiversity necessary to sustain life on this planet. People who voiced concern for the planet over the course of the past several decades were labeled hippies, treehuggers, irrational, non-realists, and the like. We have come a long way from the beginning days of our industrial revolution, and the tide is beginning to shift once again. It is becoming more and more mainstream to care about the planet, and those who strive to preserve biodiversity are being hailed as heroes; I don’t see Big Oil or Big Coal winning any international awards, I see them fighting for their very survival as their empire begins to crumble beneath their feet.

Over the past decade, sustainable economics has moved from an obscure concept that was developed solely in Ecology and Environmental Science academic centers to now, where it is at the center of discussion in big business’ development strategies. Companies like IBM, GE, BP, (even Dell) and the like have begun to see a strategic advantage in developing renewable energy and sustainable business practices (or at least talking about it). They say that change happens slowly, and perhaps, it could be that we need to talk about this concept for two decades or so before we begin acting on the principles being discussed here.

The question being sounded by scientists and economists alike is whether or not we have time to waste. On a global scale, America and China are systematically beginning to position themselves to be the worldwide leader of clean energy. We fought the cold war against the Soviet Union to fight back communism in the past, and now we are seemingly allowing communist China to position itself at the forefront of the clean energy revolution while America clings to the dirty industrial habits of the past. It is only a matter of time before sustainable business is the global standard, and if America sits on its hands much longer, other countries in the world will seize the massive fortunes that will pour into the clean energy industry as the next generation matures and comes into power.

Over the past decade, America has used its resources to attack the clean energy industry; instead of seeing the transfer of power as an opportunity, the establishment sees it as a threat, but this generational shift in the tide of economic philosophy can not be held back. The future generations are beginning to fight back.

Under attack are some of the most prominent myths perpetuated by old-school thinking. Among them is the idea that increasing production in new industries associated with renewable energy requires additional resource use. Established businesses use this argument when lobbying government as the main reason for not supporting sustainable energy policies. This may be true at first, but long-term projections prove this concept wrong. For example, developments in the solar industry will require use of silicon and other industrial chemicals in the industry’s first years of development, but once established, solar cells can deliver energy with no pollution and relatively low maintenance costs compared with the fossil fuel and coal industry that we are currently dependent upon to meet our energy needs. Reductions in CO2 emissions alone, over the lifetimes of solar cells, is reason enough to abandon the oil and coal industries entirely.

The myths that are centered on regulating pollution are also false. Any efforts to reduce pollution will affect the bottom line negatively, we are told. Environmental issues are best dealt with through public relations campaigns; this is how Big Oil and Big Coal choose to deal with the problem. Marketing is the best way to change the public perception of the crisis we are in; this is what many companies today are basing their business strategies upon. This is a short-sighted strategy that will lead to the ultimate collapse of the entire economic system within one generation. If we begin to figure into the bottom line of oil and coal companies the cost of pollution, it is a simple accounting problem that will bankrupt the entire American economy. Business as usual has brought us to the precipice that we now stand upon.

It is time for America to begin its transition to a clean energy economy; it is time to encourage innovation. Whether it is a carbon tax or a cap-and-trade system, American business will be better served on its march toward innovation by regulating carbon. Regulating carbon will finally put a fair value on our most precious resources, and it will punish those who seek to destroy life on earth and hope in the future for the ensuing generations. It is always better to innovate than it is to hold on to the errors of the past as though they were dogma (as it always has been); to hold on to the past is to admit failure. The future generations of this country should always remain the most treasured resource we have, and their prospects should be protected with every breath we take. To fight his fight is to be a true patriot, as well as a global citizen.

Globally, the movement of economic policy toward sustainable business practices is well under way. In 1992, the United Nations hosted the Earth Summit. At this meeting, a global environmental bill of rights was drafted, which detailed ‘principles for economic and environmental behavior of peoples and nations.’ (UN) The topics of most concern at the 1992 meeting were forest management, climate, and biodiversity. Since then, the United Nations Framework Convention on Climate Change has evolved to draft a global treaty signed by a majority of the nations on earth; albeit the largest polluters on the planet refused to sign (the United States, China, and India). The global climate treaty signed in Kyoto, Japan was a step in the right direction for the planet, the people, and our entire economic system. It forced businesses to innovate towards better efficiencies. America chose to stick to its guns, defending the industries of pollution, inefficiency, and waste.

The world as a whole is moving toward sustainability. Globally, many national governments have created their own research channels into sustainable development that are responsible for ‘integrating the social, economic, and environmental dimensions of sustainable development in policy-making at international, regional, and national levels coordinating efforts between all sectors of society.’ (UN) Countries that fail to adopt sustainable methods of development, for the time-being, are still included in the global marketplace, but the time is coming when tariffs and regulations will be put in place that will leave them far behind the rest of the world that takes the initiative to innovate now.

In the United States, because of backward thinking involving energy policy over the past decade or so, individual states have banded together in regional treaties and have adopted their own sustainable economic plans in direct opposition to federal policy regarding environmental regulations. Regional agreements in New England, the Midwest, and the West Coast have been implemented to foster renewable energy development and sustainable policies through a carbon emission regulation marketplace. Combined, member states of the Regional Greenhouse Gas Initiative (Northeast), the Western Climate Initiative (Northwest), and the Midwestern Greenhouse Gas Reduction Accord (Midwest) and their observers contain a majority of American States who are ahead of the national curve. These agreements made by individual governors have allowed America to begin its clean energy revolution in spite of opposition from the federal government, who seemingly have been bought off by industrial lobbyist insiders.

While every region of the United States is beginning to regulate emissions, we will use the Northwest region as our example here to highlight some of the language and societal changes that will take place over the course of the next several decades. The city of Portland has required ‘all of its bureaus and agencies to integrate sustainable principles into plans that impact transportation, housing, land use, economic development, energy use, air quality, water quality and supply, solid and hazardous waste, and many other areas.’ The city also broadcasts its acceptance of policies that ‘maintain a stable, diverse and equitable economy, protect the quality of the air, water, land and other natural resources, conserve native vegetation and fish and wildlife habitat as well as other ecosystems, and minimize human impacts on local and worldwide ecosystems.’ In addition, ‘elected officials and staff are encouraged to develop connections between environmental quality and economic vitality, promote development that reduces adverse effects on ecology and the natural resources, and include long-term and cumulative impacts in decision making that protects the natural beauty and diversity of the city for future generations.’ (City of Portland, Bureau of Planning and Sustainability) This is sound government policy!

The overall theme shows the direction that many of America’s largest cities are beginning to head. This path toward sustainability, over the coming decades, will be lined with opportunities as businesses adapt to the environmental regulations of the twenty-first century. As the federal government comes more into line with the individual states’ policies, America as a whole can then begin the business of exporting these new technologies that will come about from our environmental regulations. If we just have the courage to innovate and evolve our economic system toward sustainability, the United States can become the world leader in renewable energy technology, and we will be able to secure the American economy for the entire duration of the twenty-first century. We have the talent and the resources; all we lack is the political will. It would be a shame to allow the greed from one generation of Americans to take away opportunities from several successive generations of Americans.

This transition to sustainable economics is not limited to America. The European Union’s renewable energy industry has been growing for nearly a decade now. China is beginning to innovate towards sustainability. Brazil has reached energy independence. Russia, on the other hand, is frantically trying to secure oil and natural gas resources in the regions surrounding the country. We, here, in America have a choice. We can either see this trend toward sustainability and move to the front of the innovation curve, or we can hide our heads in the sand and prepare to fight more and more wars in the future as dwindling resources are controlled by fewer and fewer players. If we hide our heads in the sand, we are dooming future generations of Americans to failure, and this should be an inconceivable concept in a country that is founded on the principles of opportunity.

There has been plenty of research published in the last decade that has pointed us towards the conclusion that is being drawn here; that is, now is the time to act. A democracy allows the voices of the majority to drown out the lobbyists and industrial insiders. If America is a democracy, then we investors have the opportunity to put our money where our children’s and grandchildren’s mouths and futures are. The dissenting voices on climate change and ecological pollution are beginning to wane. The blueprints have been drafted and the bandwagon is being constructed. As the former generations of the past century lose their grip on power, and the younger generations reach maturity, America will choose nothing less than hope, prosperity, and optimism (like we have done throughout our past). The age of fossil fuels is coming to an end over the course of the next century, and clean energy and sustainable business practices will become the new standard. Innovation will, at first, be encouraged through governmental policy, but as it has been in the past, once capitalism take hold of an idea, individuals will use the free market to drive the innovation curve to maturity.

Many foresighted businesses have seen this trend and have already begun to adopt sustainable practices. This initiative, now being picked up by many of today’s most successful businesses, is beginning a ripple effect that is traveling all the way through the halls of Washington D.C. United States Federal Policy is beginning to change. The coming Clean Energy Revolution has the potential to not only allow the world’s ecosystems a buffer period in which to recover, but it also provides a path for America to retain it position of leadership in the world.


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The Center for American Progress
www.americanprogress.org

CAP was founded in 2003 and has a progressive slant. The ideas and discussions pursued by this organization are meant to challenge the conservative agenda. This think-tank is dedicated to restoring America’s global leadership, developing a clean energy economy, and delivering universal health care. While progressives are often termed idealistic by conservatives, CAP is realistic in its agenda; the thought that America is a land of unlimited possibilities is essentially American. The reports put out by CAP will become more influential in an Obama Administration and will serve as good preparation for foresighted investors seeking to secure their investments for future generations.