Discounting the discount rate…how can we value a sustainable future?

“We are made wise not by the recollection of our past, but by the responsibility for our future.”
George Bernard Shaw

A bird in the hand…

We know that a bird in the hand is worth two in the bush. The adage worksBird-in-the-hand well, and it makes sense for a hunter-gatherer, but does it also hold true for a globalised species seeking a sustainable future?

Under some circumstances might the bird in the hand actually be worth less than a larger number of birds which are potentially available but currently out of reach?

Does the value proposition change at four birds in the bush, at six, or at ten?

How do we value something we could have against what we have already?

Such questions abound as we focus upon on of the most fundamental challenges to the achievement of a sustainable and prosperous future; the lack of a functional economic mechanism to help us positively value the future.
Our financial measures predominantly focus upon the value of the immediate. There is of course a certain logic to valuing today more highly than we value next week or beyond – the present actually exists (for the sake of argument) whilst next week is only a logical probability. In any case, even if we could be sure that next week will exist, we have no idea what might happen between now and then, what new technologies would transform the opportunities we might have to catch birds/make bird substitutes/change our dependency upon birds etc.

Discounting our chances for a sustainable future

A consideration of future value is a key part of any investment decision, financial planning or accounting process. An amount of money in your hand can be considered as definitely real (in as much as money is ever real) whereas money in the future is always considered to be less valuable as it is far more notional and conditional upon circumstances. This is referred to in terms of the discount that future value would have when set against its value now (net present value).

The mechanism for calculating this reduction of value over time is the discount rate. A seemingly innocent and rational accounting technique, the discount rate is perhaps the most significant reason why we find it so hard to invest in a sustainable future.
Some approaches exist which allow us to value future outcomes, yet each is substantially constrained by the deadening effect of the discount rate.
Cost benefit analysis, for instance, is the main vehicle for assessing the likely financial outcomes of different courses of action. It was used by Lord Stern to calculate that the costs of a transition to a lower carbon economy were a fraction of those of dealing with the implications of unconstrained climate change.

Logical? Sort of…

Discounting future value makes a great deal of sense for many things but it also projects a restraint on forward planning that restricts adequate investment in sustainable change.
Like so many aspects of economics and accounting, it is intensely logical (and useful) within a very specific frame of reference. If that frame of reference shifts, then logic would dictate a re-consideration of its utility.
The frame of reference for the discount rate has definitively shifted.

From discounting to compounding – our route to a sustainable future

Economics, finance and accounting may not have developed mechanisms to compound value over time (as noted, because the future doesn’t exist yet). However, it’s conceivable to imagine a social and economic architecture that would innately involve an ability to compound the future.

There a couple of possible ways to increase future value and therefore encourage behaviour which pays off over the long term, these are:

1. For there to be a purpose to capitalism…
This solution is exquisitely easy to express, though perhaps rather harder to achieve. We need to introduce a long term purpose for economic activity. In addition to being financially and personally worthwhile for individuals to participate, economic activity should make a manifest contribution to the achievement of:

  • Healthy and thriving ecosystems.
  • A global human population of 9 billion capable citizens.

With these goals in place, it would be relatively easy to compound value, to judge behaviour by its contribution to these goals, asking the question ‘are these activities likely to achieve or to undermine our sustainable destination?’

Just as investors currently (in theory) assess the likelihood of a company achieving its stated aims and value them accordingly, so this could done in the context of a shared long-term goal.

2. Long money and short money – changing the rules of money

This refers to ideas which either change the conception of money itself (I have previously suggested that thermodynamic performance, abundance, contribution to natural capital and balanced social interdependence are good suggestions to add to the current basic elements of scarcity, supply and demand) or which alter the rules that are applied to money.

One such approach to the rules of money would be to create “Long money” and “Short money”. Short money would have a use by date and be spent on day-to-day things, Long money would be more suited to infrastructure investment and projects with a long term or common-good payoff.

The mechanism for creating such distinctions exists, it is called demurrage, it is a reverse interest rate and refers to a cost levied for holding or owning money for a given period. Applying demurrage universally would naturally discourage people and organisations from sitting on money, and encourage its circulation or investment as Long money which would be inherently more useful for the common good.

A practical example of this type of thinking is in the area of alternative currencies, which have been used in reality across the world in order to achieve a range of rather amazing things. A pioneer of alternative currencies is Bernard Lietaer, his books and websites give a number of incredibly inspiring and creative examples as to how alternative money can change the world and in many cases already has.

We meant to save our civilisation but didn’t have a budget code for the work…

The discount rate dominates and dictates an unsustainable future because, surprisingly or not, humanity doesn’t have a plan. As a species we are old enough, and dangerous enough, not to be blundering around without a destination and a plan by which to get there.
A common direction is not dictatorship, communism or even collectivism, it is simply an intention to survive, and perhaps even to thrive over the coming decades.

Our current mode of capitalism is no less collectivist than what I propose – it defines shared modes of behaviour, measurement, legality and value – however current capitalism lacks a definable and constructive plan for the prosperity of our species or planet over the long term. This is an issue which is manifestly worth addressing as it is clear that the demand is there: most of humanity is keen to ensure a viable and successful future for themselves and their loved ones.

LIkewise, our conceptions of the meaning and purpose of money are no more fixed in stone or incapable of change than any other systems (though they may have more inertia). Money is a tool, a means by which we signify value and facilitate exchange. Valuing the long term success of our species should certainly be worth something and perhaps it is time we considered the role that our means of exchange could have in achieving that success.

The forthcoming challenges of sustainability should spur our action, so that we might design ways to overcome the barrier of the discount rate and work towards building a greater future value than our limited financial mechanisms currently allow us to conceive.

“This is the first age that’s ever paid much attention to the future, which is a little ironic since we may not have one.”
Arthur C. Clarke

This post was also published by 2Degrees on 3/10/14 and by Sustainable Brands on 13/10/2014.

Traffic Jams – the manifest will of the people?

“There are two things a person should never be angry at, what they can help, and what they cannot.”


Just because we want one thing, must we want all that comes with it?

It is a peculiar fact of human existence that the mass effect of individual actions can produce an outcome at odds with or likely to underCar Marmalademine (even if in the long run) their original intent.

This not exactly earth-shattering observation reflects the challenge of balancing individual and collective freedoms; the subject of philosophical reflection on the nature and limits of the rights of the individual since the times of Socrates and Plato.

However, at times we humans seem to be prone to conflate intentions and implications, to erroneously ascribe a complete intent. That is to say, it is somehow inferred that because we want to undertake a given action, we must also be consciously seeking all of the possible consequences of that action.

For example, our wish to make use of the incredible benefits of accessible, concentrated energy doesn’t mean that we consciously desire irreversible climate change and a slow degradation of our planet and way of life. Similarly, we don’t actually demand a side-order of rainforest destruction and Orangutan death when we buy a packet of biscuits. We just want a biscuit.

While the cause and effect implications of such consumption choices can frequently be understood and asserted, it is not logical to assign conscious intent to all outcomes. Assuming such an intent implies that the net-effect of individual choices is deliberate and intended.

If this implication were taken to the extreme (for the purposes of playful provocation), this would suggest that: A traffic jam represents the manifest will of the people.

Err, seriously?

Its simple really. In a “free” society we have the following:

  • Freedom to choose (within legal and social reason, and as far as we can afford to do)
  • Freedom to act (again within legal and social reason, and dependent upon wealth, technology, etc.).

Given the above, the following should also be true:

People must be free to go to the seaside and come back if they want to.

On sunny days, the traffic jams and gridlock that arise as we seek out the sun and sand must therefore be a consciously desired aspect of the day too….

“I don’t want to just go to the seaside (people would need to say under this scenario), I also demand to be able to sit in a jam, breathe in exhaust fumes, have my children conducting an alternating programme of asking if we are there yet (when we are plainly forever “here”) with being sick over the upholstery. It is my right as a citizen and consumer.”

This is what drivers in such a jam want. It must be.

Because they they want one thing, every aspect and implication which arises from that initial desire or need must be conscious and deliberate. Therefore the traffic jam is an expression of the absolute, aligned, collective will of the (individual) people.

Isn’t it?

Or perhaps the relationship between desire and consequences is a little more complicated, more opaque and a little less deliberate….

….sometimes what we want brings us more than we bargained for.


 “Human behaviour flows from three main sources: desire, emotion, and knowledge”


 This piece was inspired by and owes a debt to “Gridlock” by Ben Elton.


This post was also published by 2Degrees on 1/09/14 and by Sustainable Brands on 12/09/2014.

Out with the old?

“Affairs are easier of entrance than of exit; and it is but common prudence to see our way out before we venture in.”


The old phrase tells us that new and old ideas find a natural balance, If you want to get into got to get out of it...that the introduction of the new requires that it is also “out with the old”. Indeed, sustainability should be about saying “let’s do something new” rather than “stop doing that old thing”. However, most sustainability practitioners and campaigners spend much of their lives fighting to change existing behaviour. Much time is spent rationing unsustainability, rather than doing as Buckminster Fuller advised: “To change something, build a new model that makes the existing model obsolete.”

This is to a large extent related to a combination of familiarity, status quo bias, infrastructural inertia and willful resistance to change of vested interests than the conceptual or practical problems of imagining and implementing new ways of doing things.Rarely do we find that the entrance of the new means that it is out with the old.

Indeed, the “new” seldom really is new, built as it so often is upon the ramshackle foundations of the old – not upon fresh footings of its own.

The asymmetry of acceptance and rejection

“Two quite opposite qualities equally bias our minds – habits and novelty.”

Jean de la Bruyere

In technological terms, there is a huge asymmetry between the ease of introduction of new things, be they technologies, products or processes, and the difficulty of phasing them out when they prove to be problematic.

It seems to be the case that the burden of proof required to retire a functioning (definably problematic) technology is far higher than that required to introduce it.

350 or 355 ppm? It is risky dancing on the head of a pin

The introductory narrative for technologies tends to be focused around utility (what this wondrous new technology will do for us) and the removal narrative upon a debate about the probability and extent of risk.

This means that instead of concentrating upon the introduction of innately and undoubtedly sustainable technologies, we tend to waste all our time in discussing and proving the dangerousness of unsustainable technologies already deployed.

We get stuck in internecine, angels on the head of a pin arguments about the exact thresholds of toxicity which are “acceptable” – rationing safety rather than producing products through processes that are innately safe (and for the most part eminently feasible).

The challenge to introduce technology, sometimes high though it may feel, is still lower than that required to remove it.

This is wonderfully demonstrated by the burden of proof seemingly required to demonstrate the blindingly obvious; that burning fossil fuel is a bad idea from pretty much any perspective (other than we are already addicted to it and the withdrawal comedown would hurt).

This level of required proof is way, way beyond that required to introduce a new drug (significant though this is), a new genetic technology or to flood the world with phones and computers full of complex, semi-disposable aggregations of precious metals, intensely energetic processes and scarce elements, produced by workers toiling long days in poor conditions.

Come on in…please don’t go!

“The difficulty lies not so much in developing new ideas as in escaping from old ones.”

John Maynard Keynes

The height of the hurdles to the removal of unsustainable and deadly technologies are set not only by custom, precedent and vested interest, they are also mandated by systems of economics and finance which seem to find it irrelevant and pointless to evolve the means to value the planet and its people as a going concern over the coming decades.

Just as the thresholds overcome for the introduction of industrial technologies in the 17th and 18th centuries were low, so were the ones required for the introduction of the economic theories which dominate, shape and drive our unsustainable world.

Conversely, the barriers that we face for the reform of our economic theories such that they produce innately sustainable outcomes are set very high indeed. It is not just a fight of fact against fact, but of sentiment, familiarity and private profit, set against the long term interests of us all.

Such a fight with either be long, or will suddenly flip, perhaps as we recognise that money and markets don’t represent the physical world we depend upon for our very existence.

Still, a long fight is no less worth fighting. As Winston Churchill didn’t quite say:

“Sustainability at all costs, sustainability in spite of all terror, sustainability however long and hard the road may be; for without sustainability, there is no survival.”

Its not you, its we: why values alone aren’t enough for a sustainable world

“The circumstances of the world are continually changing….That which may be thought right and found convenient in one age, may be thought wrong and found inconvenient in another. In such cases, who is to decide, the living, or the dead?”

Thomas Paine

Its not you, its we

The world abounds in theories (and models) of change, from Theory U to Kotter’s 8 Step Change model, McKinsey’s 7S model and many more.Yes there are two paths...

At the heart of many of these, and of many sustainability campaigns, is a focus upon the role and importance of values in supporting and driving any form of change.

Many sustainability approaches suggest that we must appeal to people’s values, so that they can persuade business and government of the importance of the issue and the need for action to move towards a sustainable world.

Calls for values based change for sustainability tend to look something like the following mildly straw-man-like statement:

All we need for a sustainable world is an evolution in human values, for humanity to move away from the shallow association of stuff with happiness…and to move towards a higher state of self-actualisation.

This approach revolves around the idea of sin and guilt – essentially indicating that if we were better people then things in general would be better.

However, while this is quite possibly true, the argument includes the erroneous notion that sustainability or unsustainability is somehow an easy matter of will or choice. Instead of being the product of the very warp and weft of our systems of value and production.

Context is everything – values do not arise from the aether

Below the level of change management models lie only 2 universal and immutable determinants for things to happen in our universe, in either physical or social dimensions. These are opportunity and capability.

If both are in place, change occurs. If not, the status quo persists. It is context which determines opportunity and capability.

The values of different societies have definitively varied over time. The value given by Roman society to the lives of gladiators or Christians was for a time very different to the value given to the life of a Senator. In the 17th Century slaves were considered as property, rather than as sovereign human beings.

Values do not exist in isolation – they arise out of a complex mix of factors; human psychology and neuropathology, social mores, physical reality and the political and economic norms that are at play.

The range of behaviour expressed across human societies has a firm relationship with the hard and soft infrastructure of those societies – from the methods by which things are valued and priced, to the way that things are prioritised and produced.

  • People make choices contextually – not on an absolute basis – choice arises primarily from availability.
  • Economic, cultural and industrial infrastructure is a significant determinant – it mediates the range of choices available to us.
  • Only a minority of people will act on their values when it is difficult – at variance to the social norm – the publication “Rethinking Consumption” (2012) from BBMG, Globescan and SustainAbility found that such people, termed “Advocates”, represent an average of 14% of the world’s population.
  • The majority will follow their peers and go for the easy and obvious choices – “Rethinking Consumption” classes these as “Aspirationals” and “Practicals”, together representing an average of 71% of the world’s population.

Fertile ground for change

If the conceptual and physical infrastructure of the world plays such a huge role in defining and driving the human choices that are open to us, so it must also be the determining factor in whether values for sustainability move from intent to action.

Intent and action are inextricably either supported or enabled by our systems of value, prioritisation, production and supply. We cannot buy what is not available. We might have the intention to, but the action is impossible until that choice becomes available. Intentions need fertile ground to thrive in.

Turning the tide

“To change something, build a new model that makes the existing model obsolete.”

R. Buckminster Fuller

Allowing the potential values we hold to be expressed through action is not a matter of guilt, nor should it require that we must swim against the prevailing tide. Sustainability will come when we turn the tide.

Making sustainable choices the norm, rather than the exception, is the major means by which sustainable intent will turn into sustainable action. However, making such outcomes the default (e.g. “You can have anything you like, as long as it’s sustainable”) requires a more significant evolution of value than is currently underway through most current responsible consumption and “green growth” initiatives.

While a greater number of sustainable choices are becoming available, they still struggle to become mainstream because of the dominating value of conventional, unsustainable alternatives.

Many efforts to re-conceptualise the nature of economics and value are underway, from Kate Raworth’s tools for the 21st century economist, the Natural Capital Coalition’s work to put the value of nature on the agenda of business, the Capital Institute and Long Finance’s approaches to exploring new models of money and markets, a range of Green Economy and New Economy initiatives, to our own Towards 9 Billion vision for a sustainable economy with a point and purpose.

All such ideas, and any successful system, must focus upon providing humanity with sustainable access to the eternal verities of human existence; energy, sustenance, shelter, and materials (the miscellaneous other stuff that we need and want).

Each is required, none can be significantly ignored.

Given this, if we wish for our species to persist, and even thrive, we must be able to understand how to deliver these requirements (like this perhaps) without giving rise to our own demise. Sustainability must become a natural outcome or side effect of being alive.

The capability for us to act is manifest in the form of existing sustainable tools and solutions, the potential for action is already present in the majority of us. We need economics and capitalism to provide us with the opportunity, the fertile ground needed, to turn sustainable aspiration (I would if I could) into actual sustainability (I will and I can).

What’s the point of capitalism?

“Every step and every movement of the multitude, even in what are termed enlightened ages, are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human design.”

Adam Ferguson

Capitalism has no stated end-goal, no clear point or purpose, yet it dAre We Where Yet?ominates our planet; increasingly defining the prevailing norms of public policy enterprise, social life and even ethics. This lack of purpose should be of great concern.

Yet bizarrely, more and more effort is poured into preserving our erratic stumbling from one crisis to another. Just as the strategic challenges of a populous, increasingly consuming and polluting planet become ever more clear, so the capitalist response seems to be “leave me alone, I’m busy just now”.

A tactical planet

Who would run an enterprise on tactics but no strategy? Of course, governments have, over the last two decades substituted reaction to headlines for any long term vision, but companies are thought to have a more strategic perspective. Global business leaders are lauded as “visionary”, “far-sighted” and “prophetic”. All such terms are associated with the idea of moving beyond short term reaction to events, indicating an ability to read the runes, see the way the world is going and to envision and enact activities strategically over the long term.

If this is a quality that we value – or at least aspire to value, why is it not a characteristic we also seek in the world’s de-facto operating system?

If capitalism has no strategic intent, why are we so comfortable to let it drive our future?

Just what is the point of capitalism?

No direction, just travel
Capitalism is like a spaceship with no long range maps, not seeking an ultimate destination, valuing only the journey itself.

Of course philosophically we can tell ourselves that the journey is the destination, but given the clear picture that is emerging of the place that business-as-usual capitalism is taking us, it is becoming increasingly difficult just to relax and enjoy the ride.

Why are we in thrall to a system which recognises no common outcomes, which intends nothing except the agglomeration of an abstracted indicator (capital) regardless of its provenance or the sustainability and longevity of its foundations?

Capitalism works (for some)

There is lots of focus at present on a post millennial re-capitulation of Marx’s analysis of international capitalism. For instance, Thomas Piketty’s recent book “Capital in the 21st Century” asks (and answers) whether capitalism works, and if so, who for.

If you were to ask the world’s 85 richest people on a bus (as recently described by Oxfam), they might well say “well, it works for me”. Indeed you could probably count on another one and a half-odd billion saying “it works for us and we hope it might work harder in future”.

The rest of humanity might still have a faint hope that capitalism is their best bet for personal enrichment and security.

Capitalism does work. However, it works much, much better for some than others, and it works best for a very small number of us and not at all for our fellow species.

Like a rolling stone
For the bus passengers above, capitalism is a bit like rolling a stone downhill; you do best if you live at the top and have access to stones.

Live at the bottom of a hill though and the stones will either be mostly static or coming downhill on a collision course with your house or your foot.

If so, your opportunities to benefit from the natural ease by which stones roll downhill will be severely compromised. Some living at the bottom of the hill will of course, through luck and hard work, make their way to the top. Generally though, where you start plays a defining role in where you end up.

What is the point?

We really ought to require a little more from our operating system. Capitalism needs a point and a purpose.

It doesn’t have to be much, just some intended outcome that we might judge and assess behaviour against, perhaps something simple such as:

“A sustainable and equitable world for humanity.”

We shouldn’t demand anything too prescriptive that would get in the way of creativity or entrepreneurial spirit, just something to indicate a clear direction and possible destination for the good of us all.

Within this context some people would of course do better than others, this is capitalism we are talking about, not communism. It’s just that a planetary operating system should be useful to the people who are part of it, not just those lucky enough to live right at the top of the rocky hill.

What’s the point of capitalism? It’s time we (all) made up our minds.


This post was also published by Sustainable Brands on 20/05/2014.

Beyond Sustainability, Towards Rejuvenative Enterprise

The future that’s coming…

The human population is set to grow to more than 9 billion by 2050. WhBeyond Sustainability, Towards Rejuvenative Enterpriseat sort of world do we want new arrivals to come in to? One of scarce resources and extreme competition for the basic elements of survival, or one in which they are able to build stable and meaningful lives for themselves and their children?

The future we can build…

The time has come to build a world where we can welcome 9 billion people rather than fear their arrival. A future of healthy and thriving ecosystems and 9 billion capable citizens is an ambitious vision and a powerful driver for the development of economies, businesses and societies. The companies that will build such a future will be Rejuvenative Enterprises.

Rejuvenative Enterprise

A Rejuvenative Enterprise is one which provides a manifest contribution to the abundance, vitality and productive capacity of natural capital and societies upon which it depends for skills, resources, markets and customers.

The goal of Rejuvenative Enterprise is to play a clear and positive role in building a world of 9 billion capable citizens.

Principles for Rejuvenative Enterprise

At the heart of these ideas are the following principles, rejuvenative companies would be able to demonstrate that they:

  • Are Thermodynamically optimised – their use of energy and materials would be in alignment with the physical characteristics and limits of the planet with a focus upon ‘entropic efficiency’.
  • Value abundance rather than scarcity – prioritising technologies and behaviours which deliver either natural (e.g. biologically-based) or managed (e.g. through closed loop stewardship) abundance.
  • Enhance natural vitality – valuing technologies and processes which make use of the planet’s natural rejuvenative and productive abilities, learning from and utilising natural production techniques as the basis for their technological and industrial models.
  • Balance their interdependence – recognising and balancing the web of social interdependencies they exist within, seeking mutual equity within all relationships.

The path to rejuvenation

Building a sustainable, equitable future requires a clear and consistent pathway of corporate evolution from the leading business practice of today to the Rejuvenative Enterprises to come.

With a focus upon key areas of business practice, there are three fundamental steps on this evolutionary journey: Transitionary, Sustainable and Rejuvenative Enterprises.

Transitionary Enterprises

Transitionary Enterprises incorporate sustainability best practice in many of their activities based upon business as usual approaches, with an ambition for best but not leading sectoral practice.

These companies have a good grasp of incorporating good citizenship in business operations while maximising profit, but work fundamentally within traditional ‘business as usual’ cradle to grave models.

They offer a wide range of products that have integrated sustainability characteristics in either sourcing or production. While some products and services have lower than average sustainability impacts, the majority are conventional relative to their competitors.

The company uses mainly conventional energy sources together with some renewables. Carbon free goals are reached through the use of additional offsetting.

Sustainability and CSR strategy is integrated into core business structure and stakeholders are involved in some processes.

Ecological and social capital relationships are acknowledged but external costs are not accounted for or addressed. Targets for fundamental performance improvement are set, focussing upon direct and indirect impacts.

Sustainable Enterprises

Sustainable Enterprises look to achieve best in class sustainability performance. Sustainability is part of business strategy, with a class leading ambition for net positive impacts.

These companies examine their products and services in-depth and strive to operate their businesses following best sustainability practice. A number of products and services follow cradle-to-cradle production models and several products have class leading performance in energy and material efficiency. The overall product portfolio is zero-impact based.

Carbon-free production is achieved through means including integrated on-site renewable energy generating production facilities.

The corporate ambition is to achieve net-zero impact and efforts are made to achieve ‘best-in-class’ position. Business strategy is largely defined by the sustainability ambition while material sustainability issues are analysed in terms of their impact upon financial, environmental and social risk.

The CEO plays a clear leadership role in sustainability strategy and sustainability is viewed as a source of business opportunities and driver for innovation.

Sustainability communication is highly prioritised within Annual Reports (AR) and stand alone Sustainability reports include in-depth, best practice third party assurance.

Rejuvenative Enterprises

Rejuvenative organisations align and optimise their activities to long-term sustainability factors such that their ability to grow is not constrained by traditional resource limits. Taking a stewardship approach to all their resources, they make a positive contribution to social and ecological capacity.

A circular, Cradle-to-Cradle approach is used in all aspects of business operations for scarce and potentially dangerous materials where alternatives have not yet been developed.

A positive focus is placed upon the development and maintenance of the stability and capability of customers and potential customers.

Business operations function with minimal energy utilization and go beyond renewable energy with use of bio-energy harvesting. Technology utilises massively distributed industrial production capable of aggregation, hyper low voltage technology/energy systems and biological production processes.

The planning and execution of commercial activities is required to demonstrate a positive contribution to social and ecological utility, which in turn is supported by staff reward systems. Because it is in the company’s interest to maximise the pool of capable healthy customers, it ensures that none of its activities undermine this goal and that instead they make a positive contribution.

A sustainable future is within our grasp

The vast majority of the behaviours and technologies likely to support a future fit for us and our descendants already exist – should we decide to use them at the scale required.

Business evolves all the time, the coming decades will bring a more seismic change to business as usual than has been seen since the Western Industrial Revolution.

Rejuvenative Enterprises are those which understand, respond and capitalise upon the changes our planet faces, for the good of themselves, the planet and its people.

Rejuvenative enterprise promises new life, new hope and new wealth for us all, let’s embrace its challenge.


This post was first published by Sustainable Brands on 27/03/2014.

Sustainability: 21st Century Natural Philosophy

“Science is the knowledge of consequences, and dependence of one fact upon another.”

Thomas Hobbes

The Times They Aren’t a-Changing

We are at a point in our species’ history when the need for change has never been stronger. Therefore it is with some frustration that the change we require Natural-philosophyremains ever out of reach, trampled by business as usual.

At every sustainability or CSR conference a plethora of gurus will tell you that sustainability and CSR types use the wrong language, are too techy, are too interested in the difference between GRI G4 and G3.1 or are too immersed in the internecine antics of the IIRC and SASB.

This is of course true. Few consumers will prioritise a company’s use of ISO26000 over the design, performance and desirability of the products it sells.

However, the lack of mainstream acceptance of sustainability is not down to the choice of words that sustainability practitioners use. The reasons are more fundamental, more wilful, more concerning and occasionally more ludicrous.

Natural philosophy for the 21st century

We have entered a period which has strong echoes of the European Enlightenment. During this period, “Natural Philosophers” such as Newton, Leibnitz and Hooke, just as others had before and did after them, applied curiosity and investigation to their examinations of the world. They then held their thinking up against the orthodox world views of the day – thereby exploring the dissonance.

Eventually the approach they developed, and the “truths” they uncovered, became the foundations of the scientific method.

Today, many groups are nagging at the gulf between what economic and financial orthodoxy preaches and what “reality” suggests. For instance, rebellious students enraged by being taught economic theory rendered obsolete by the financial crash are lobbying for the development of courses of “post crash economics”. Similarly, calls for the consideration of Natural Capital as the source of all human value have their arguments founded in an article of physical truth (humans need to eat, drink and breathe) aligned against the social science conception of economic theory (economic growth can be infinite and disregard the parameters of the planet).

Truth just doesn’t cut it anymore

A strange aspect of our current orthodoxies is that for some reason they have only needed to be “truthy” or have “truthiness”  – to have the feeling or appearance of truth in order to be accepted or responded to.

So, economic theories only have to work with certain baked-in assumptions, or in certain contexts, to be considered capable of applying globally; regardless of whether they work in all cases and at all scales.

Likewise, theories about how the world works, or whether certain environmental issues represent threats or are the result of human activity, tend to be reliant for their success not upon the level of verifiable facts at their disposal, but whether they appeal to what we would like to believe.

Of course, even the term “truth” is a difficult one, as people can share many different conceptions of the word. Scientific method remains the only really reliable way humans have to obtain agreement on what is “true”. Sustainability advocates stray from the scientific method at their peril.

The idea that it is only “the truth will set you free”, that people faced with a strong body of evidence would choose to change their minds and their behaviour, is clearly not often the case. However, this does not mean that we can afford to move away from facts; otherwise we become untethered from any defensible position.

Divided by a common language

The challenge for those of us seeking to achieve a sustainable world is that our means of persuasion – which must acknowledge uncertainty and be rooted in the scientific method – are not always the ones which appeal to the majority. We should also recognise that those who do not share our belief in the need for change may use very different means to convey their message.

This produces an asymmetric situation – each side plays by different rules.

A stunning example of this is the conception of the “reality based community” – a phrase coined by a neo-con advisor to the G. W. Bush administration. This was used as term of pity and abuse and essentially said (the following mildly paraphrased): “you scientific empiricists are slaves to ‘reality’ and are hidebound by your commitment to scientific method. We, on the other hand, are history’s actors; we make our own reality through our actions and will have created a new world while you are struggling to keep your notes up to date”.

Comfort with familiarity

We also have a strong disposition to the familiar, the status quo, despite the fact that the familiar may be impermanent and itself the product of radical change. As humans we don’t tend to perceive cumulatively significant but incremental change and we also actively welcome certain other types of change – those that we consider to be “progress”.

In addition, there is some fascinating emerging psychological analysis which suggests (broadly) that progressives (perhaps most likely to be sustainability advocates) tend towards considering themselves distinct or different from others with similar views (they overstate this difference) whilst conservatives (perhaps more likely to be distrustful of sustainability) tend towards considering themselves as more aligned with those holding similar views.

In essence one side leans away from like minds and the other leans towards! This means that sustainability’s advocates are less cohesive and aligned than those that “reject” it – perhaps a significant reason why we find it hard to develop a collective voice for the our species’ future on the planet.

Speaking truth to power

Of course, the means and modes of communication that we need to employ must be varied, and capable of appealing to the different dimensions of what it means to be human; to rationality, desire, empathy, emotion, reason, aspiration and gut-feeling.

To-date, we haven’t done too well. But it is worth remembering that for every dollar spent espousing greater sustainability, there are many thousands, if not millions, spent encouraging a world that is profoundly unsustainable.

It is hardly surprising that, as a species, we haven’t made much progress towards being sustainable. We haven’t actually tried yet!


An extremely similar version of this post was published (under the sub-title above) on Sustainable Brands on 13/03/2014.


Entropic Valuation – energy economics as if thermodynamics mattered

The constitution of the universe

“Everything you are, and have, you owe to the radiations from your sun.”

Chocky (John Wyndam)


The Laws of Thermodynamics provably frame and shape our scopeeverything we have...

for existence, yet they are effectively ignored by economic policy and process.

The first and second laws of thermodynamics are sometimes called the “constitution of the universe”. They describe the fundamental physical principles of the behaviour of energy. The 1st Law refers to change in energy states, the 2nd Law to energy dispersal, which can be expressed as follows: “energy of all kinds in our material world disperses or spreads out if it is not hindered from doing so.

To use a metaphor, energy is like water, it only moves in one direction: towards dispersal (energy) or downhill (water). However, not all water moves downhill at the same speed, just as not all energy flows from concentrated to dispersed forms at the same rate.

The measure of the dispersal predicted by the 2nd law is entropy. As entropy applies without exception to all energetic processes, it can provide a common metric to measure the lifetime performance of different energy sources.

Why isn’t overall thermodynamic performance part of energy economics?

Despite recent advances in renewable production, fossil fuels still make up more than 80% of our planet’s energy use. There are some good, practical reasons why coal, oil and natural gas (CONG) dominate supply in the global economy. Most significantly, CONG provide concentrated, transportable sources of utilisable energy.

However, this ease of use distracts us from their lifetime energetic (entropic) performance: that is, how efficiently they capture, store and render the sun’s energy over their lifetime.

We tend to think of CONG as energy itself, but this is not accurate. They are storage media for concentrated solar energy which was aggregated by photosynthesis in prehistoric vegetation and then subjected to nearly 100 million years of geological process. In conceptual and literal terms they are natural batteries, comparable to a lithium ion battery storing energy derived from solar PV.

The Sun is the original source of almost all energy, arguably excepting nuclear, geothermal and tidal. This common origin provides the opportunity to derive like-for-like comparisons of energy sources.

Comparing the entropic performance of energy sources provides us with a way of assessing and therefore pricing the total efficiency of a wide range of energy sources. This could be called ‘entropic valuation’.

Why entropic valuation matters

Entropic valuation is a means to compare the total energetic efficiency of solar derived energy sources, it considers: “How many solar kilojoules (kJ) have gone into this storage media in order to obtain 1 kJ of usable energy from it?” This ratio can then be used to assign a nominal price to the results.

If common solar origin is considered for a range of energy types then a very different picture of value and efficiency emerges. For example, if we consider the conversion of solar kilojoules into usable kilojoules, then solar PV is circa 100,000 times more efficient than oil.

This may be technically correct, but what difference does it actually make? After all, while CONG includes many million years of investment, we don’t pay for that time and can simply reap the benefits of its existence. However, there are compelling reasons to explore the real total energetic (entropic) performance of different energy sources.

Benjamin Franklin wrote that “the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things”.

The false estimates that we make of the value of fossil fuels blinds us to the challenges which arise from their use. Beyond the pollution impacts of burning irreplaceable stored energy, the belief that fossil fuel energetically outcompetes other sources of energy has lead to distorted markets and incentives to pursue resources that are ever harder to exploit.

Projects such as Carbon Tracker have begun to highlight the extent of the problem, calculating that only 20-40% of carbon assets held by listed companies could be burnt without exceeding global warming of 2°C. Yet the worth currently assigned to these assets can only be realised if they are used. In our current industrial model this would be a onetime use: valuable in the short term, but catastrophic in both planetary and financial terms in the future.

Applying entropic valuation to differing solar derived energy sources reveals that fossil fuels carry sunshine at a much lower rate, in terms of original energy received, than the real-time production of solar PV and storage.

overpowering fossil fuels

The above table compares the energy conversion (of solar input) efficiencies of a number of energy sources. Put simply, coal, oil and natural gas capture only 2.4% of solar input received, while solar PV captures vastly more, varying between 15 and 40%.

This ‘capture gap’ is compounded through the geological translation of ancient vegetation into concentrated fossil fuel, meaning that while every KJ of sun energy received by solar PV produces around 0.1kJ of usable energy, oil produces only 0.00000094 kJ – more than 100,000 times less!

This analysis highlights an interesting relationship between the energetic efficiency of ‘real-time’ or ‘live’ energy generation and that of fossil fuel energy generation.

These differences can be translated into money. Using the relative efficiency figures from the table above, energy sources can be priced on an equal basis. If each input kJ of Sun energy cost $1, the product energy price required to break-even per kJ produced are shown here:

The fossil fuel price problem

The whole picture – don’t forget the externalities

While comparisons of total energetic performance are dramatic, we should also remember that significant external costs arise from the use of CONG.

These costs, rarely integrated into the actual price paid for energy, exist across a range of “balance sheets” and consist of the following dimensions:

  • Climate impacts the contribution of CO2 and other emissions driving climate disruption.
  • Pollution direct impacts from extraction, production and refining in addition to combustion emissions for energy and other uses.
  • Opportunity costs one time use of such complex, time-rich compounds precludes a huge range of other uses, for: plastics, agriculture, pharmaceuticals and possible future technologies.

Use of oil - entropy

There appears to be a correlation (but not necessarily a causal link) between energetic performance and the scale of these externalities. While climate and pollution costs are well documented, the huge differences in energetic performance perhaps highlight the scale of opportunity costs incurred by our predominantly “one-time” use of fossil fuels.

Towards real-time energy

Francois de La Rochefoucauld noted that “The principal point of cleverness is to know how to value things just as they deserve.”

It is just such intelligence that humanity must apply to the environmental and energy challenges of the coming decades.

Clear and unarguable environmental and resource trends indicate an overwhelming need to connect energy pricing with the fundamental realities of physics in terms of:

  • overall energetic performance
  • longevity & replenish-ability
  • cleanliness/pollution
  • significant/irreversible opportunity costs

Entropic valuation provides a means to connect these aspects, founded in immutable physical law.

Entropic valuation reveals the orders of magnitude difference between the life time efficiency of “live” solar generation and the ‘stored sunshine’ of fossil fuels.

It suggests that truly sustainable solutions lie in growing ‘real-time’ energy and moving rapidly away from our dependence on upon finite, and borrowed, prehistoric time.

It’s time we paid rather more mind, and money, to entropy.


Entropic Valuation is idea developed by Joss Tantram in conjunction with Sean Grunnet Cuthbert and first tested in public at the Energy Storage World Forum, Berlin, April 2013. Our motivation in developing the idea was to explore new ways of looking at old problems and to connect energy perspectives with the energy reality defined by the laws of thermodynamics.

A slightly shorter version of this article was first published by Green Futures Magazine on 3/02/14.

SWOT on Earth?

“The Analytical Engine has no pretensions whatever to originate anything….Its province is to assist us in making available what we are already acquainted with.”
Ada Lovelace

SWOT’s Your Resolution for the planet?

It’s a brand New Year and here in the UK, like many countries, New Year brings new aspirations and resolutions. These tend to have a strong self-improvement theme and range from the trivial to game changing – at least some people like to think so.

We thought it would be interesting to focus upon resolution for a sustainable future, and rather than just jumping on the latest trendy bandwagons or buzzwords, take stock of the state we are in before planning for the future.

As we claim to be evidence based sustainability experts here at Terrafiniti HQ, we really need some sort of management tool (however simple) to help us focus on what is really important.

We thought we’d go very strategic and take a planetary approach, so here’s our SWOT on Earth for 2014.

Of course it’s difficult to force sustainability issues into boxes so you will find some things feature more than once – it’s an interconnected world out there!

SWOT on Earth's going on?

Questions to consider

  • What would you add to the above?
  • What would you remove?
  • How can we move more entries from the right to the left, from the bad to the good?
  • How might this analysis have changed compared to 50 years ago and how might it be different in 50 years?
  • What are your New Year Sustainability Resolutions?

That which does not kill you makes you stronger

Of course, such a simplistic analysis can never contain the fantastic and sometimes bewildering complexity of life on our planet, nor map all of its facets.

The fact remains, however, that many of the issues in our SWOT present both a negative and positive face for the planet’s future.

As ever, we have in our grasp either the means to make or to undo a sustainable future.


Vitality! How life makes the best of the 2nd Law of Thermodynamics

“There is no wealth but life.”

John Ruskin

The magic of life

There is much we do not know about how life works to transform the basics of matter and energy into complex materials and massively diverse interdependent systems.
Despite many miraculous advances in science and technology, our manufacturing and production is often shamed by the scale, simplicity and systemic safety of life.

Arthur C Clarke’s famous quote “Any sufficiently advanced technology is indistinguishable from magic” applies just as much to the wondrous technology of life as it does to as yet only imagined technology of a myriad science fictions.

Learning from life

Our species faces ever increasing challenges of ecosystem damage, pollution and inequity, against a background of rising demand and emerging scarcity. In parallel, efforts to understand and include the value of Natural Capital within economics, accounting and business are gaining momentum.
Given this, the very foundations of humanity’s technology and industrial production must be re-shaped to become capable of delivering goods and services with radically different energetic and material efficiency performance.
To do this we must learn from the ways by which life does it; cleanly, safely and abundantly.

Life’s mysterious mechanics issue a challenge for the development of truly sustainable technologies. They have also lead to a number of misapprehensions about how this aspect of life works, especially when related to the framing rules of physical existence, the Laws of Thermodynamics.

Life and entropy

The most significant of these misapprehensions is the belief that, uniquely in the known universe, life is anti-entropic, disobeying the 2nd Law of Thermodynamics. This Law states that energy inexorably disperses or spreads out from higher concentrations to lower concentrations if not hindered (by the need to overcome chemical activation energies) from doing so.
This has often been described as a flow or change from an ordered state to a disordered state. However, this is scientifically incorrect and works at best as a metaphor, albeit a misleading one. Because the disorder meme is so embedded in our culture, life is seen by many as anti-entropic because it provides high levels of ‘order’ through complex structures.

The energetics of life

I stand squarely in favour of life….I have a decided personal aversion to death, I find entropy distasteful, and if invited to the heat death of the universe, I would most certainly make other plans.

Haviland Tuf (George R.R. Martin)

Life, like everything else, doesn’t break the 2nd Law, it is just good at making the most of the energy available in the environment. This happens via photosynthesis by primary producers (photoautotrophs – mainly plants) or through the eating of plants by primary consumers (herbivores), or the eating of herbivores by secondary consumers (carnivores).

While life has no magical powers, it has a magic all the same. Virtually all known life on earth is driven by solar energy and is phenomenally good at diverting a proportion of available energy to drive photosynthesis. Only around 0.02% of the sun’s energy which reaches the Earth is captured for photosynthesis, yet these “scraps” are still more than enough to fuel stunning complexity and diversity across the globe.

Photosynthesis is not anti-entropic. Plants intercept around 30% of the energy available from solar radiation and use it in incredibly complicated biochemical processes to store smaller amounts of concentrated energy. The 70% not used in photosynthesis results in an increase in entropy through heating the plant and the atmosphere. Overall, this process results in lower entropy in the short term than if 100% of the energy hit bare rock or soil.

As organisms of the natural world humans are innately good at making productive use of the 2nd Law. However, our industrial production systems and technology are woefully poor at harvesting and utilising energy in any but the most ham-fisted of ways.

Our use of fossil energy is stealing time

Our prevailing economic and industrial models depend upon the accelerated entropy represented by fossil fuels – vast stores of concentrated, processed biological matter holding in suspension many millions of years of processed, prehistoric sunlight. We are burning through this bank of stolen time at a frightening rate, millennia of stored energy gone in one-time use every year.

Nature makes use of real-time energy conversion to produce complex materials in abundance. Humanity uses fossil-time energy to fuel its industrial production and drive scarcity.

Learning more about the energetics of life, and making much better use of these techniques for our own technology and industrial production, would present us with the means by which to achieve a seismic change in the capacity and sustainability of our species.


Towards real time energy utilisation

““Everything you are, and have, you owe to the radiations from your sun.”

Chocky (John Wyndam)

The Sun is a vast opportunity machine – dedicated (at least for the next few billion years) to trying it’s hardest to give this planet a chance to do stuff. Neither the Sun nor the planet has an opinion on this. The Sun is equally happy heating the surfaces of sterile planets. It is humanity which has an emotional stake in this game. Humanity which has the chance to take the almost endless opportunities offered to us by the ready supply of 84 Terrawatts of energy every single day.

This abundant solar income is utilised readily by life in general but, strikingly, is all but overlooked by humans. We turn our back on this diffuse daily bounty in favour of concentrated forms from our fossil past.

Achieving a sustainable future requires us to reverse this relationship, to explore and develop massively distributed industrial production capable of aggregation, hyper low voltage technology/energy systems and biological production which takes place at the speed of our seasons.

Our challenge is to use real time rather than stolen time to achieve more than we could ever have dreamt of.

This post was also published by Sustainable Brands on 13/12/13.