The Natural Edge Project The Natural Advantage of Nations Whole System Design Factor 5 Cents and Sustainability Higher Education and Sustainable Development

"We have learned a lot of lessons since Natural Capitalism came out in 1999, that I think will make the next explications of this subject even more powerful and effective."
Hunter Lovins, Co-Author of 'Natural Capitalism: Creating the Next Industrial Revolution', President, Natural Capitalism Inc.


Foreword by Amory B. Lovins

‘To be truly radical’, said critic Raymond Williams, ‘is to make hope possible, rather than despair convincing.’ That is the charge of anyone who thinks it’s better to avoid problems than solve them, and better to solve them than whinge about them. It is also the purpose of this book and the opportunity of all who read it. I recently taught a college class where a young lady bleakly explained how she’d lost hope. Every step forward was offset by two steps back; politics was irreparably corrupted; community was eroding; destruction had gained the upper hand. She felt she could never bring children into such a world. Yet as further discussion revealed, she had not actually lost hope. She knew exactly where she’d left it. So do we all. If we’ve set down this precious bundle somewhere on the path, it’s time to pick it up again, strengthened in our common purpose by the many signs of renewal glimmering all around us, even in the darkest times and the most unexpected places. Many big changes in the world are now converging to help those whose hearts are guided by hope, brains by invention (which Edwin Land called ‘a sudden cessation of stupidity’) and hands by the discipline of the severely practical.

Today the foci of power and action in the world are tripolar: business, civil society and government (all too often in order of decreasing effectiveness). More than perhaps any other institution, business has the leadership, management, resources, skill, speed, innovation, integration and motivation to solve tough problems quickly. Such a dynamic force in a tripolar world creates many new ways to get things done. No longer need one wait for new public policies to emerge from the legislative sausage-works. To do what government should do but often can’t or won’t, business is increasingly teaming up with civil society – whether in outright collaboration, in predator–prey coevolution, in response to customers’ market preferences, or in the certain knowledge that sustaining one’s public franchise or ‘licence to operate’ depends on public approbation that is hard to earn and easy to forfeit. Business leaders increasingly realize that green innovations can make money and make sense, simultaneously and without compromise. Business can evolve, as Interface Inc’s Chairman Ray C. Anderson puts it, to take nothing, waste nothing, do no harm – and do very, very well by doing good.

Another revolution comes from demographics. Brains (as Libba Pinchot reminds us) are evenly distributed, one per person. Most of the brains are therefore in the developing world, and half are in the heads of women. As women, the poor and the oppressed gain a greater voice, they become better able to contribute their ideas to the global conversation and spread them through the new global nervous system so solutions emerge faster. Teaching and technology transfer are starting to flow ever faster from poor to rich – if the rich gain the humble and receptive spirit to learn. So far as we know, there is nothing in the Universe so powerful as 6 billion minds wrapping round a problem. And the problems we have, from the village to the planet, suffice to concentrate those minds wonderfully.

Another powerfully emerging force for good is the revolution in design – in the translation of intention into action. Turning depletion into pollution, resources into wastes, is a problem we needn’t have, and it’s cheaper not to. Radical resource productivity, far from costing more, typically costs less up front. In recent months, my colleagues and I have helped major firms worldwide to redesign over US$10 billion worth of major facilities – from a giant LNG plant in Australia to a microchip fabrication plant in Texas, from a hydrocarbon synthesis plant in the Middle East to the world’s largest platinum mine a kilometre beneath South Africa. Without exception, we find enormous scope for saving energy, water, pollution and money while reducing capital expenditure in new installations, or with paybacks of a few years or less in retrofits. Whether it’s saving 92–98 per cent of the energy in a pumping loop, 89 per cent in a data centre, 50–70 per cent in a supermarket or 90+ per cent in a home or office, the bar has been reset far higher than we dared to leap before – yet surpassing it is easier than ever. The bigger the savings get nowadays, the cheaper they get – turning diminishing returns into expanding returns through the new kind of design described in Natural Capitalism and here.

This wouldn’t be possible, of course, if those facilities had been properly designed in the first place. Typically their designers had optimized isolated components for single benefits, thereby ‘pessimizing’ the system. Designing instead to optimize whole systems for multiple benefits yields multiple forms of value from single expenditures. Expertly practised, this can often cut energy and resource use by fourfold, tenfold, even a hundredfold, whilst reducing capital expenditure, slashing operational expenditure and improving performance. Few if any engineering schools yet teach this rediscovered Victorian systems engineering: we need a fundamental shift in how design is taught and done. Rocky Mountain Institute’s 10XE (Factor Ten Engineering) project, which The Natural Edge Project is supporting, therefore aims to create a compelling casebook of such designs, ranging across all the engineering applications and their main applications, to serve as a fulcrum to leverage the non-violent overthrow of bad engineering. Meanwhile, the word is spreading among business leaders that what was considered impossible is now not just possible but deliciously profitable, and that many of today’s inefficient technologies are worth so much more dead than alive that we should pay bounty-hunters to find and scrap them.

A fruitful question as we choose technologies is how to make them the right size for the job. The hallmarks of advanced industrial economies are gigantic, vulnerable, highly centralized infrastructures: power plants and grids, potable-water plants, sewerage and wastewater treatment plants, wireline telecoms, hub airports, car-centric land use, vast farms. Yet Small Is Profitable found ample evidence that the lowest-cost size is often orders of magnitude smaller than today’s norms. Rather than connecting all our new buildings to remote infrastructure via pipes and wires, we may find that all the purposes so served can now be better served by autonomous services at the scale of the building itself.

Another key part of the design revolution comes from Janine Benyus’s synthesis in Biomimicry: Innovation Inspired by Nature. For the past 3.8 billion years, nature’s design genius has been learning what works. From zany experimentation and rigorous testing came roughly 99 per cent successful failures (designs that didn’t work, all long recalled by the Manufacturer) and 1 per cent successes – the life around us. With nature as model, mentor and measure, we can imitate how life makes things, how they work and how they fit to achieve succession and resilience. The biomimetic revolution – every bit as important as nanotechnology but a lot less double-edged – is only just beginning, but it will change everything. Whether you want to dissipate heat, show colour, glue things underwater, extract water from air, whatever – somewhere in the world is an organism that can teach you how to do it with brilliant innovation, benign insouciance and elegant frugality. The Zero Emissions Research Initiative (ZERI) applies its own flavour of bioinnovation to remarkably effective practical solutions for development challenges. The ‘biophilic’ design of buildings that embracing nature can also make people healthier, happier and more productive. The knock-on benefits of better thermal, visual and acoustic comfort can be immensely valuable: 6–16 per cent higher labour productivity, 40 per cent higher retail sales. In Curitiba, Brazil, my team recently installed simple lightshelves in a primary schoolroom. The 75 per cent electricity saving let the school afford books. Students also learn approximately 10–26 per cent faster in well-daylit classrooms. Those sheets of white wood or plastic, guiding the light up on the ceiling where it belongs, become really important when you remember the multiplier from education to democracy and prosperity. And such multi-purpose investments may soon become financeable through Hank Patton’s institutional innovation of ‘intergenerational commerce’ – a partnership that enables our descendents, despite not having been born yet, to buy in today’s marketplace the goods and services, or the abated bads and nuisance, that best serve their interests as well as ours.

Even the world’s biggest problems are falling before the power of a vision across boundaries. Those who believe, for example, that protecting the climate will be dreadfully costly have got the amount perhaps about right but the sign wrong, for a simple reason: saving fuel costs far less than buying it, so climate protection is profitable even if climate is valued at zero. DuPont set out to raise its energy productivity in this decade by at least 6 per cent a year (the same rate IBM has sustained) whilst shifting a fourth of its raw materials and a tenth of its energy to renewable sources and cutting its 2010 greenhouse gas emissions by 65 per cent below the 1990 level. Through 2003, DuPont had cut those emissions by 67 per cent and saved US$1.5 billion. STMicroelectronics, one of the world’s largest chip makers, has similarly cut electricity use per chip by 6 per cent per year with a 2.5-year average payback just by retrofitting its plants. (New plants offer manyfold efficiency gains at reduced capital expenditure.) BP bashfully announced in 2003 that its 2010 goal for operational carbon reductions (10 per cent below 1990 emissions) had been achieved seven years early at no net cost. Actually the firm’s net profit from this accomplishment was US$0.65 billion, because efficiency is that much cheaper than fuel.

These and many other private-sector examples of profitable climate protection are but the tip of a vast world of integrative benefits just coming into view. In July 2004, my team at RMI will publish Winning the Oil Endgame: American Innovation for Profits, Jobs, and Security. Co-sponsored by the Pentagon, for all the right reasons, this study shows how to get the US – and any other society so inclined – completely off oil, attractively, rather rapidly and profitably even for oil companies. No magic is required – just methodical application of modern techniques for using oil very efficiently, displacing some with saved natural gas, and replacing the rest with a least-cost mixture of biofuels and hydrogen. The efficiency opportunities alone, if fully used in 2025, could save half the projected oil use at half its price, but with none of its hidden costs or nasty side-effects.

Oddly, nobody seems to have added this up before. It’s a bit like the mid-1850s, when American whalers ran out of customers before they ran out of whales: whale oil’s high price had already elicited fatal competitors (kerosene and manufactured gas, both made from coal) even before whale stocks crashed or Drake struck oil in Pennsylvania. The whalers were surprised, because they hadn’t paid enough attention to what was on the market or emerging from the lab (ultimately including electric lighting). Now history may be about to repeat itself with petroleum as private enterprise discovers the compelling case for providing oil’s services more cheaply without it. Innovative public policies can help, but fundamentally the transition to the post-oil economy will be led by business for profit. This will be good for the world, and all the more so if other countries seize their own opportunities – most of all if China fulfils its potential to leapfrog the West. onsider, for example, a single compact fluorescent globe (lamp), of which nearly a billion are made each year (mostly in China). It yields the same light as an incandescent globe whilst using 75–80 per cent less electricity and lasting 5–13 times longer. Over its life it will make its owner about US$30–70 richer and will keep a tonne of CO2 out of the air. Such globes, deployed in numbers, can cut by a fifth the evening peak load that crashes the Mumbai grid, or raise an American chicken-grower’s profits by a fourth, or boost a Haitian family’s disposable income by as much as a third. Making the globe needs about 10,000 times less capital than supplying additional electricity to produce the same light from incandescent globes. Such savings could turn the power sector, now devouring a fourth of the world’s development capital, into a net exporter of capital to fund other development needs. Compact fluorescents are also the key to affordable solar power for the homes of 2 billion poor people without electricity, so girls can learn to read at night, greatly advancing the role of women. Compact fluorescents are cheaper for an electricity company to give away than just to operate its existing thermal power stations. You can buy such a globe and install it yourself. One globe at a time, we can make the whole globe fairer and safer. Sometimes, as Churchill reminded us, one must do what is necessary.

As summarized in Natural Capitalism, that task and opportunity are arrestingly simple. The first Industrial Revolution made people 100 times more productive because people were relatively scarce while nature seemed boundless. The next industrial revolution faces the opposite challenge – abundant people and scarce nature. Therefore it uses nature 10–100 times more productively, with integrative design that makes very large resource savings cost less than small or no savings. It produces in closed loops with no waste and no toxicity. In its ‘solutions economy’ business model, service providers and customers both profit from doing more and better with less for longer. Their increased profits support reinvestment in natural capital. These four interlinked ways of behaving as if natural capital were properly valued are called ‘natural capitalism’ because they productively use and reinvest in the natural capital that supports all life. Even today, when nature is valued at approximately zero, natural capitalist firms are achieving higher profits, lower risks, more innovative and excited workers, happier customers and strong competitive advantage. This approach appears to offer important potential benefits for development, and is receiving encouraging attention in China. That nation’s 5000 years of experience teaches that societies whose human wisdom follows the way of nature and nurtures nature’s fecundity will outlast societies whose human cleverness liquidates natural capital. So arises the natural advantage of nations.

Striving to become much higher primates is a risky business with an uncertain outcome in a dangerous world. The bold evolutionary experiment of combining a large forebrain with opposable thumbs clearly has its dangers and drawbacks; the jury is still out on whether it was ultimately a good idea. But it has equipped us to avoid or solve the problems we’ve created, and already the search for intelligent life on earth is turning up promising specimens. We are all starting to realize that ‘We are the people we have been waiting for’.

There is much hard work to do, much suffering in the Universe, much to be fixed and healed. Making the world better and more life-sustaining, its beings healthy and whole, its people free from fear from privation or attack, is an endless task in progress, but one worthy of our species’ promise and potential. We need good tools and provisions for our common journey. The Natural Advantage of Nations will help guide that long passage from
here to hope.

Rocky Mountain Institute
Old Snowmass, Colorado
14 May 2004