—Dr. Alan G. Whitney, president of Pacific Synergies Ltd., Vancouver

Companies are cleaning up.

During the past 20 years, many businesses challenged the environmental movement, minimally met pollution controls, fought stricter standards, and resisted costly cleanups. Today. however, changing consumers and a changing economy are demanding that industries take action.

“Over the last 20 years, as environmental limits have become more apparent, communities, businesses and governments have started to take action.”

“Twenty years ago, corporate leaders had to be dragged into pollution control,” state Emily T. Smith and Vicki Cahan of Business Week.

“Today, a minority are taking up the cause of pollution prevention, for good reasons…. Accidents such as the one that killed 2300 people at Union Carbide Corporation’s plant in Bhopal, India in 1984 drove corporate credibility on the environment to an all-time low.” (“The Greening of Corporate America.” Business Week, April 23, 1990, p. 96).

Questioning Growth

One of the engines of change has been the publication of The Limits to Growth in 1972. This book was based on a two-year study at the Massachusetts Institute of Technology in which a system dynamics model was built to explore the long-term consequences of growth in population, industrial capital, food capacity, resource consumption, and pollution. It warned that if current growth trends continued unchecked, the limits to growth on the planet would be reached sometime within the next 100 years — and it created a furor.

Debated, criticized, and praised, the book went on to sell 9 million copies in 29 languages. Many readers questioned the validity of the model, while others claimed the book was making unjust predictions about growth. Perhaps the most controversial aspect of the book was that it challenged the belief that continual material growth is desirable. The book’s message was an uncomfortable one — it called for fundamental changes in beliefs and actions in order to create a sustainable future.

Over the last 20 years, as environmental limits have become more apparent, communities, businesses, and governments have started to take action. Research to control pollution emission has led to stricter emission standards and the exploration of alternative energy and power sources. Pollution control and cleanup has become an over $100 billion market, and it is still increasing as the demand for cleaner technologies and products grows. Criminal fines for polluters violating federal laws increased over 80% percent in 1989 alone. Companies have found that eliminating toxic wastes and pollution can actually save money in resources and energy as well as waste disposal.

So where do we stand now, 20 years later, in relation to the earth’s limits? How can we work toward creating a sustainable economy that will not overshoot its limits? And what are the future implications for business? These are the questions addressed by a follow-up to The Limits to Growth that was published just last month — a book that is likely to prompt more debate and awareness as well as more action.

Growth: A Tragedy of the Commons

Beyond the Limits: Confronting Global Collapse and Envisioning a Sustainable Future, is an attempt by three of the original authors (Donella Meadows, Dennis Meadows, and Jorgen Randers) to re-evaluate the earth’s sustainability and society’s impact upon it, given the present conditions. What they found is sobering: despite the world’s improved technologies, greater awareness, and stronger environmental policies, many resource and pollution flows have grown beyond their sustainable limits. How did this happen?

According to Beyond the Limits, the limits to growth on our planet are equal to the limits of the planet’s ability to provide materials and energy, as well as the ability of the planet to absorb pollution and waste (see “Environmental Sources and Sinks”). Since 1973, the earth’s population has risen from 3.6 billion to 5.4 billion. As this ever-increasing population demands more resources to support it, the subsequent strain upon the earth’s resources has also grown exponentially. The result is a “Tragedy of the Commons” situation, where actions taken for individual gain are collectively overtaxing the earth’s resources.

As Garrett Hardin described this phenomena in a 1968 essay, imagine a pasture (like the Commons in an English village) that is open to all townspeople. Each villager is allowed to graze as many cattle as he or she desires — the more cattle they graze, the better their profits. But if too many cattle are added, the whole commons could become overgrazed, depriving the entire villages’ cattle of food. Despite the threat overgrazing presents to each villager, the “Tragedy of the Commons” structure encourages the villagers to each add to their own herd to increase profits (“Tragedy of the Commons: All for One and None for All,” Vol. 2, No. 6). Eventually, the pastures can become so depleted that even the grass roots disappear, permanently destroying the pasture itself. As a result, each individual pursuing actions in his or her own best interest creates an outcome that is worse for everyone.

Environmental Sources and Sinks

“The human population and economy depend upon constant flows of air, water, food, raw materials, and fossil fuels from the earth. They constantly emit wastes and pollution back to the earth. The limits to growth are limits to the ability of the planetary sources to provide those streams of materials and energy, and limits to the ability of the planetary sinks to absorb the pollution and waste.” (Beyond the Limits)

To compare this scenario with the exponentially growing world population and industrial base, imagine that not only the number of cattle (resource drains and pollutants) are growing, but that the neighboring townspeople have all heard of the beautiful, spacious pastureland and want to use the commons for grazing. So the number of cattle herders (people, companies, industrialized countries) increases as well. Not only will the group reach the pastureland’s limits, but they will reach them more quickly. That, according to Beyond the Limits, is the situation we face as a world population.

Reaching the Limits

What will happen as we reach the earth’s limits? There are four possible outcomes (see “Approaching the Limits: Four Possibilities”):

1. If the limit is very distant or growing faster than the demand, growth can continue without interruption.

2. Growth can approach the limits smoothly and then level off when it reaches those limits.

3. It can gradually come into balance by overshooting the limits, coming back down, and shooting back up again (much like how a thermostat adjusts the temperature in a room).

4. It can overshoot the limits, destroy the resource base, and subsequently collapse.

One of the most common arguments for continued industrial growth is that better technology will find solutions to the problems we are creating. This argument supports the first possible outcome — it says that by continually pushing back the limits, we will allow continued growth.

Structurally, however, the rate at which growth is occurring is too fast for correction. Due to the layering nature of limits, the number of limits we will run into is increasing as well — once we remove one limit, we often encounter another one. Technological advancements that remove one limit can create additional limits: nuclear power plants, for example, have helped replace fossil fuel usage, but their by-products are choking landfills with toxic waste.

The example of emission control for cars illustrates the structural difficulties inherent in trying to use technology to manage the dynamics of exponential growth. Even if we can cut pollution emission by 50, 60, or even 90%, if the number of cars is always increasing exponentially, the amount of pollution will also continue to grow exponentially. After a certain point, reducing the emission levels will prove too costly for any technology.

The Danger of Overshoot

Systemically, the only way for an exponentially growing human economy to prevent reaching a planet’s physical limitations is to balance its inflows and outflows. This requires two actions: (1) reducing usage of nonrenewable resources to the rate at which renewable resources can be substituted for them, and (2) reducing the rate of renewable resource use to equal regeneration rates. Likewise, the emission rates for pollutants need to be brought down to equal the rate at which they can be absorbed, recycled, or rendered harmless.

The difficulty in smoothly balancing the inflows and outflows lies in the time delays involved. Anything that is growing will stop at its limits only if it recognizes that it is reaching those limits and responds quickly. Due to the inherent delays in the global system, it is almost impossible to get accurate and timely feedback on the impact of industrial growth on the environment. For example, in the case of the impact of chlorofluorocarbons on the ozone layer, there is a long delay between the release of a CFC molecule into the air and the subsequent destruction of ozone. Because of the long delays, even if all the CFC releases into the air were stopped today, ozone depletion would continue for at least a century.

The result is that in most “Tragedy of the Commons” structures, the system shoots beyond its limits before it gets the signal that it has gone too far. That, in effect, is what has happened already, according to the World3 model used in Beyond the Limits — we have already overshot many of the earth’s limits. Whether or not we will ease back down below the limits (by bringing the inflows and outflows in line), or destroy the resource base and experience a collapse, depends on the quality and timeliness of our response to the challenges we face as a planet.

Implications for Business

The basic message in Beyond the Limits is that the pressures created by growth are not going to disappear — there are fundamental structural reasons why they must be addressed sooner or later. The situation is analogous to the case of our trade debt and federal debt — we have been borrowing from the future in order to live better today. In the same sense, we have also been accruing an environmental debt without knowing what the true cost of borrowing is nor what the payback schedule is going to be. A systematic plan to begin paying back our environmental debt needs to be put in place before we reach the limits of nature’s reserves.

In presenting World3’s findings, Beyond the Limits challenges companies to examine long-term investment and future limitations rather than gauging success based on short-term profits. Art Kleiner, in a recent article in the Harvard Business Review, stressed that such changes are crucial: “Industry (and nations, for that matter) cannot thrive if they sacrifice future quality of life for present economic gain” (“What does it Mean to be Green?” July-August, 1991, p. 38). Keeping within the earth’s limits and working toward a sustainable society will require fundamental changes in the way our organizations’ goals and incentives are structured. For example, the following will need to be addressed:

• Product Lifecycle Waste Management. Every ton of garbage at the consumer end has already produced 5 tons of waste at the manufacturing stage and 20 tons of waste at the initial site of mining, pumping, logging, or farming. As recycling and conservation efforts increase at the consumer level, pressure for pollution cleanup and prevention upstream in the manufacturing process is likely to increase.
• Total Package and Product Redesign. Current packaging methods produce a large amount of no recyclable waste. Companies that invest in changing the way they manufacture, package, sell, and dispose of their products can be more competitive in the emerging environmentally conscious marketplace. Some car manufacturers, for example, are experimenting with new designs that will allow for easy dismantling so that each part can be recycled.
• Environmental Accounting. Being able to track the costs associated with harmful by-products of manufacturing will become increasingly more important. While any good accounting system can report on the usual financial measures, new systems will be required to estimate environmental liabilities that may be growing beyond industry’s means to deal with the future costs that are being accrued.
• Shades of “Green.” There is now an opportunity to redefine the marketplace into shades of green consumers: from the “pale green” end where consumers will choose products that are environmentally friendly but require little effort or sacrifice on their part, to those who are “deep green” and will go out of their way to patronize companies whose products and services are deemed to be environmentally friendly. Companies who can appeal to the full spectrum of the green consumers are likely to be well positioned to compete in the new marketplace.

If there is anything to be learned from the last 20 years, it is that the environmental movement is not a passing fad but a permanent reality. There are genuine structural reasons why the issues will continue to grow in importance. The choice that companies must make is whether to be a leader in becoming more environmentally responsible, to be in the middle of the pack, or to be a laggard that kicks and fights inevitable changes at every step.

Building a Sustainable Future

“A sustainable society,” according to the authors, “is one that can persist over generations, one that is far-seeing enough, flexible enough, and wise enough not to undermine either its physical or its social systems of support…. From a systems point of view a sustainable society is one that has in place informational, social, and institutional mechanisms to keep in check the positive feedback loops that cause exponential population and capital growth.”

Sustainability does not mean stagnation. A sustainable society is interested in qualitative development, not sheer physical growth. It requires that we begin to ask questions such as what the growth is for, who would benefit, what would it cost, how long would it last, and whether or not the planet’s sources and sinks could accommodate it.

To achieve a sustainable economy, according to the authors, the most important change of all needs to take place individually, as we re-evaluate our mental models about consumption and waste. We must let go of the “sacred cow” that growth at all costs is desirable. People might have to change from a “have it all now” philosophy, valuing a high standard of living, to an attitude that values an improved quality of life for the present and the future. Asking ourselves about the actions we take and what their future effects will be — not just in terms of market share and profits, but in terms of future resource availability and environmental impact — will challenge us to make the right decisions for a shared world.

Businesses have the opportunity to make the greatest impact toward building a sustainable future. Activists can educate, consumers can work on an individual level, and government can legislate — but businesses can act. Industry has the opportunity to innovate and create the changes that will push the environmental movement past the “hype” and into a world of genuine action.

As the economy tightens, some businesses and consumers may think they can’t afford environmental improvements. But failing to protect the environment might end up costing far more than preserving it. Eastern Europe’s current “ecotastrophe” is a case in point: Hungary’s Deputy State Secretary estimated that health problems and loss of production due to pollution reduced their nation’s gross domestic product more than 6%. (“Is the Planet on the Back Burner?”, Time, Dcc. 24, 1990, p. 48-50).

Making educated choices around such issues is the challenge of operating a business in today’s world—the largest industrial group on the smallest overpopulated pastureland that has ever existed. But if businesses do not stop to challenge the choices they are making, they might discover they have travelled down the wrong path in the long run—the path of real economic loss and the destruction of vital resources.

Meadows, Donella, Dennis Meadows. and .10rgen Randers. Beyond the Limits. (Chelsea Green Publishing Company. 1992); Further Reading: Milbraih, Lester. Envisioning a Sustainable Society: Learning Our Way Out. (SONY Press, Albany, 1989)

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For three decades, Lester Brown has been dedicated to researching and communicating the major trends in the world’s use of resources, the health of our ecosystems, and the state of our society. His hope has been that by understanding the patterns of behavior of our economic system and its impact on the environment, all of us—individuals, businesses, nations would commit ourselves to halting destructive activities. But despite the many efforts that Brown’s work has inspired, he says they’re not enough.

Linking Economics with Environment

In the long run, if we do not create an economy aligned with the Earth, then we will erode the natural systems on which life depends.

In his latest book, Eco-Economy: Building an Economy for the Earth (Earth Policy Institute, 2001), Brown urges us to recognize that our economy does not function separately from the natural world. While we may be able to ignore the effects of our economic activity on the environment in the short run, in the long run, if we do not create an economy aligned with the Earth, then we will erode the natural systems on which life depends. Brown argues that “the economic policies that have yielded the extraordinary growth in the world economy are the same ones that are destroying its support systems.” He cites statistics that show how worldwide mismanagement has been eroding forests, range lands, fisheries, and croplands ecosystems that provide both raw materials and food.

Brown offers us three challenges: We need to understand how our current economic system and population growth are incompatible with the way that natural systems function; we need to create a positive, hopeful vision of an economy that works in harmony with ecology; and we need to change the structure of our current economic system to fulfill that vision. This last challenge in particular caught our interest as systems thinkers. The central premise of systems thinking is that a system’s underlying structure drives its behavior. As such, before we make changes, we should first understand that structure—that is, look at things such as information flows, rewards, and incentives to understand why people and physical systems act the way they do. Then we need to change the structure in ways that harness the energy of the system to push itself in a needed direction and don’t require constant effort and energy to sustain progress (see “Non-Structural vs. Structural Interventions”).

For our economy to support the natural systems on which all life depends, Brown says we need to create incentives that guide behavior naturally in positive directions. In the first section of Eco-Economy, he concisely summarizes the ecological trends that are motivating the need for change, from global climate instability to regional water-supply issues to species loss. In the next section, he moves quickly from the bad news into an ambitious, inspiring vision for a more sustainable economy. This vision includes a hydrogen-based energy system, a closed material product economy, and a redesign of cities. In the final section, Brown explores ways in which we could rewrite some of the rules of our economy to support the necessary changes.

Harnessing the Power of the Market

Brown’s approach in these last chapters feels refreshingly practical; he describes how various existing public policy tools could harness the power of the market to improve our economy by including both better information and truer costs. The theory is that the market provides a powerful system of product self-selection through supply and demand—in other words, how people spend money is what determines whether products and services are successful or not. So if ecological goals were better incorporated into the market signals (through costs and information), then the market could help nudge the world into alignment with natural systems. Some of his ideas include:

Eco-labeling. Consumers ultimately drive the success of products and businesses. Currently, many commodity products compete primarily on cost, and companies are forced to continually reduce their costs. This emphasis generally takes away from efforts to reduce the impact of products on the environment. Brown believes that when product labels provide information about superior environmental practices, such as farming organically, recycling fibers in paper, and designing for energy efficiency, consumers will reward the companies that are committed to developing more sustainable solutions.

NON-STRUCTURAL VS. STRUCTURALINTERVENTIONS

One of the most interesting contributions of Brown’s book is his focus on changing the structure of the market economy to make it more consistent with the ecological world. As shown in these examples, well-designed structural changes are changes in physical structure, information flows, or rewards and incentives that align the implicit goals of local decision-makers (such as individual consumers or investors) with the desired change in the overall system’s behavior.

Tax shifting. What we tax sends a powerful signal throughout the economy. For example, high taxes on wages limit the number of people we hire and the pay increases we offer. Conversely, low taxes on pollution and resource usage encourage us, as Brown writes, “to exploit our natural resources as rapidly and competitively as possible.” To align taxation with a more robust environment, Brown proposes “tax shifting”—changing not the level but the composition of taxes. To do so, we could decrease taxes on salaries and raise taxes on undesirable things, such as toxic waste and emission. He outlines actions that people in the U. S. can take similar to what many European countries have already done.

Subsidy shifting. Government subsidies also produce economic incentives that damage our ecosystems. Brown quotes a recent report that identified over $700 billion of environmentally destructive subsidies that encourage the overuse of water, fossil fuels, pesticides, and fishery resources. Many of these subsidies initially helped sectors such as farmers and fishing companies that were struggling with high costs, but, eventually, the subsidies led those same sectors to ignore signals of resource scarcity. Brown asks us to see this problem in the positive: What if we subsidized environmentally constructive activities? What would the impact of $700 billion be?

Eco-Economy’s focus on moving from understanding the trends to integrating our economic systems with the ecological world is appealing to systems thinkers—it helps us understand both the physical system at work and the rewards and incentives that encourage our decision making. While no single book can answer the question of what the sustainable economy is, Eco-Economy reminds us that we have practical policy tools that can guide the economy in a better direction and inspires us to try again to do so.

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It turns out that Viagra has reduced demand for reindeer antler velvet and for the sex organs of Canadian seals. It may be helping green turtles, geckos, and sea horses, too. Parts of these animals are used in Chinese cures for impotence, and, because Viagra provides a cheaper, more effective remedy, demand for the organs of these animals is diminishing.

Wildlife protection programs that have been trying to protect these species for years have been pushing against a pressure arising out a very basic human need. With the discovery of a better way to meet that need, protecting these species might no longer be such an uphill battle.

This story has its amusing side, but it also makes an important point about the transition to sustainability. If a problem is arising from an unmet need, meeting that need directly can make the problem fade away almost effortlessly. This makes addressing fundamental needs a powerful point of leverage, a place where small efforts can create large changes.

So, what are our real needs? Are they actually met in the ways we expect them to be?

These tend not to be comfortable questions. If you don’t believe me, play out these two scenarios in your mind.

Imagine yourself wondering aloud over Thanksgiving dinner at Aunt Mary’s house how well her new rug has filled her needs for acknowledgment, respect, and self-expression. Or imagine yourself standing up at town meeting and asking if others agree that your town has grown prosperous enough to have no need to attract more businesses. You may be brave enough to ask questions like these, but I’d be surprised to hear that you find the asking easy.

These are hard questions because they reveal a growing tension in our society.

On the one side lies the set of assumptions that most of us grew up with. According to this way of thinking, we need an awful lot. And much of what we need is scarce. We need to be strong and smart to secure our share. The only way we will be able to satisfy our needs is for our economy to grow and grow and grow.

On the other side of the divide the assumptions are flipped around. According to this mindset, we have some basic physical needs that could be easily satisfied on our finite planet if we could just be efficient with resources and equitable about their distribution. The rest of our needs, this way of thinking proclaims, are nonmaterial. We need love, respect, appreciation, creativity, and a sense of contribution. The resources to meet these needs are virtually limitless, although not yet very well tapped.

If two such different ways of thinking co-exist within one society, then things are bound to feel uncomfortable. All of us, from the most fervent believer in the status quo to the most radical tree-hugger, carry at least a little bit of both of these paradigms inside of us. We can’t help it. Pretty much all of us grew up in the midst of the first way of thinking, and the second way is slowly percolating in the oddest places. Movie stars question a war over oil. Demand for organic food is rising. Quiet church congregations market fair-trade coffee. Our culture embraces two contradictory views of the nature of our needs and the best way to meet them. As individuals, most of us do as well.

That’s why these questions are so hard to ask. It feels pretentious to question Aunt Mary’s apparent attempts to satisfy a non-material need with a material object when we know that we did something similar ourselves last week. And it is hard to have faith that there really will be enough if we could just share, when we have never lived in a world based on sharing.

New paradigms replace old ones when peoples’ confidence in the old paradigm is shaken by observations that can’t be explained by the old paradigm. That is why we must ask these questions no matter how hard they are to raise.

How will having more stuff make any of us happier? Ask yourself, your aunt, your church group, and your senator. Ask as clearly as you can, and as compassionately, remembering that each of us is a mixture of the old thinking and the new.

Build up the new, even as you see the old thinking faltering. Talk about the happiness you find in family or community, the joy that fills you on a walk to the sea, the meaning you find in serving others. Make your own life a reference point that shows how it looks when non-material needs are filled non-materially.

What we take from the earth today shapes our children’s future. How we see our needs shapes what we take from the earth. And the questions we ask shape how we see our needs.

Which is to say, our questions shape our children’s future.

So be brave. Ask good questions.

Elizabeth Sawin is a mother, biologist, and systems analyst who lives in Hartland, Vermont, and works at Sustainability Institute (www.sustainer.org). Beth’s columns appear in Grist Magazine (www.gristmagazine.com). Contact her at bethsawin@sustainer.org to receive her monthly column on systems and sustainability.

The post Questions to Shape the Future appeared first on The Systems Thinker.

For example, in August, White House Science Adviser John Marburger briefed a Senate panel on climate change, saying, “We know we have to make very large changes if this turns out to be a problem. The consequences of human-induced global warming could be quite severe.” Yet at the same briefing, the administration stood behind its “wait and see” policy, articulated by President Bush in February: we should only “slow the growth of greenhouse gas emissions,

and—as the science justifies—stop, and then reverse that growth.” Climate change could be severe, and yet we should wait before acting. How can U. S. leadership reconcile these two seemingly contradictory statements?

Climate As a Delayed System

MIT professor John Sterman and Harvard’s Linda Booth Sweeney explain that this “wait and see” approach makes sense if you believe the world’s climate to be a nondelayed, responsive system in which a change in human activity has an immediate effect. Their recent experiments confirm that many highly competent people instinctively see climate as behaving this way. Most of their business-school student subjects thought that if humans reduced emissions of GHGs, the storehouse of those gases in the atmosphere would promptly decline and global temperature would follow.

CO2 IN THE ATMOSPHERE

Carbon dioxide (CO2) in the atmosphere, the primary heat-trapping gas, can be thought of as a stock or accumulation. The stock is now at its highest level in almost half a million years. To reduce the ecological and economic changes from producing global warming, we need to lower the level of the stock by reducing the inflow (CO2 emission rate) to less than the outflow (Net CO2 removal rate).

The inflow is currently about double the outflow. If we were to reduce the inflow by, say, 20 percent, it would still be greater than the outflow and the level of CO2 would continue to rise, albeit at a slower rate. No wonder the students predicted incorrectly—it is counterintuitive to think that the CO2 emission rate can go down while the level of CO2 in the atmosphere continues to go up! Nevertheless, it’s true. If the removal rate were constant, we would need to cut the inflow rate by more than 50 percent to finally begin to lower the CO2 level. The bottom line is this: If we, as the Bush administration says, “slow the growth of greenhouse gas emissions, and—as the science justifies—stop, and then reverse that growth,” it could still take many decades for levels of CO2 in the atmosphere to decline.

A Robust Plan

If we believe Mr. Marburger that the effects of climate change could be “quite severe,” we need a robust plan.

The Bush administration’s plan would work well if the climate had short delays. But the plan is not robust when managing a slow-responding system like our climate; the possibility of negative, irreversible effects from waiting are too high.

We see two important steps. 1. Teach ourselves the basic mechanics of our climate.

Prudence leads us to act now to educate ourselves about the dynamics of the climate system and to address the source of the problem with practical measures. If Sterman and Booth Sweeney are right, our generally poor intuition about the climate enables many of us to accept a “wait and see” approach. For our society to engage in an effective public discourse about global warming, we need to ground ourselves in the basics of the climate inflows, levels, and outflows. Then we can evaluate the impact of national-level proposals and really understand the challenge that we face in stabilizing the climate.

2. Act now to reduce GHG emissions. The best way to deal with a slow-moving system in which we know we will eventually need to make a change is to begin the change as early as possible. We need not initially focus on retooling our entire industrial base; we can begin with the significant reduction in emissions available through hybrid cars, better designed industrial motors, fuel cells, and renewable energy production. Such improvements could come at relatively low cost, improve our short-term economic vitality, and reduce energy dependence.

How can we get the process started? We suggest designing incentives and rewards that would unleash people’s tremendous capacity for innovation. A similar outpouring of new ideas came as a result of the ban on CFCs to prevent additional damage to the ozone layer. Let’s introduce similar mechanisms into our market system to encourage technological and behavioral changes for reducing GHG emissions.

Prudence leads us to act now to educate ourselves about the dynamics of the climate system and to address the source of the problem with practical measures. These actions will not be easy—technologically, culturally, or politically. But they are certainly easier than navigating a barge while pretending it will handle like a Ferrari.

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But we hear less about the cost of environmental damage to human social life. To be sure, news about revolutions, internecine warfare, poverty, disease, and crime abounds. However, few of us explicitly make the connection between those human ills and the failing health of the living system that is Earth. Instead, we chalk up social hardships to a shortage of initiative, to laziness, to inevitable human aggression.

Natural Capitalism (Little, Brown, 1999) establishes the link between our attitudes toward the Earth’s bounty and our most challenging problems. As the authors explain, even Westerners can no longer ignore the mounting evidence that limits to our growth do exist and that those limits are fast approaching.

Still, many people struggle to accept that we must take action now to stave off complete biological and social breakdown. Why? Some of us feel hopeless. Others deny that a problem even exists. Yet others are with holding judgment until they can see proof that change can work. And many businesses assume that anything they do to help the environment must necessarily hurt their bottom line.

Natural Capitalism challenges all these attitudes and assumptions. The book not only takes a fresh look at capitalism, it also shows, through detailed examples and cases, that companies can be kind to the environment and profit more than ever.

A Reversal of Fortune

As the authors point out, businesses have focused on three kinds of capital: financial, or cash, investments, and monetary instruments; manufactured, including infrastructure, machines, tools, and factories; and human, the labor and intelligence, culture and organization that people bring to the workplace.

Natural capital the living systems, resources, and services (such as recycling carbon dioxide into oxygen) that our planet provides for free—hasn’t received as much emphasis, perhaps because it’s hard to attach a monetary value to it. Yet businesses use the other forms of capital to transform natural capital into the “stuff” of daily life: highways, cars, cities, bridges, houses, food, medicine, hospitals, schools.

In earlier times, financial, manufactured, and human capital were in relatively short supply compared with natural capital. Now, that ratio is reversed. Thus we must reverse our thinking.

The True Bottom Line

Natural capital makes up the true bottom line for any human endeavor. To boost it, we must attend to four interconnected principles:

• Radical resource productivity: using natural resources more effectively, so that what we get from, say, one kilo watt of electricity is far greater than what we used to get.
• Biomimicry: reducing wasteful and toxic through put of materials and, like nature, constantly reusing materials in closed cycles.
• Service and flow economy: shifting from an economy of goods and services to one of service and flow; for example, selling quality, utility, and performance, not objects.
• Investment in natural capital: sustaining, restoring, and expanding stocks of natural resources.

By outlining these principles, the book puts out a call to action. But it also holds out hope. As it turns out, numerous industries have already begun putting these principles into action—with remarkable results. For example:

• The automobile industry is slowly shifting from traditional car models to fuel-cell-powered vehicles that are lighter and safer, produce little pollution, cost consumers and producers less, and get up to 200 miles per gallon of gasoline.
• New, inexpensive-to-build houses designed with heat-trapping “super windows” remain cool even in 115 degree Fahrenheit temperatures without air conditioning—and warm even at–47 degrees—with no furnace.
• Innovative techniques for using wood fiber could supply all the paper and wood the world currently needs—from an area about the size of Iowa.

These and other examples in the book serve a vital purpose: They reveal that change is possible—and more profitable than even the most budget-minded business person could have dreamed.

Lauren Keller Johnson is a freelance writer living in Lincoln, MA.

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