Category Archives: Provocations, Thoughts and Big Ideas

How the world might be a more sustainable and equitable home for us all.

Terra sapiens – are we fit to be a planetary species?

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Humans were being overwhelmed….because the intelligence required to build a certain level of technology was less than needed to survive it.

Stephen Baxter

Is humanity in office but not power?

As a species, humanity has global ambitions and global impacts. There is scarcely a corner of our planet untouched by human activity, either directly or through our influences on weather, water and biological systems.

However the mere ability to create planetary scale impacts does not make us fit stewards of the Earth. Our current approach to planetary management leaves much to be desired. Wise human stewardship requires a significant evolution of our understanding and behaviour.

It is time we evolved from Homo sapiens to Terra sapiens. This would not be a genetic evolution, but one of intelligence, organisation and action.

The limits of human sapience?

“The sapient mind not only thinks consciously by habit, but it thinks in connected sequence. It associates one thing with another. It reasons logically, and forms conclusions, and uses those conclusions as premises from which to arrive at further conclusions. It groups associations together, and generalizes.”

H Beam Piper

Human sapience has been vital in getting us where we are today, but appears to fall short in dealing with the challenges it has created for our long-term wellbeing. There is a major dissonance between sapience at an individual and species levels; it appears that the mass-effect of a lot of clever people can sometimes result in a rather dumb crowd.

We are running down finite natural resources and degrading our life support systems at a time when we need them to support more of us. Our societal and organisational structures are failing to deliver the species-level outcomes we require just as we need them most.

The survival imperative

Any species unable to adapt to changing conditions is likely to die out – a truism that applies to both sapient and non-sapient organisms.

On an increasingly pressured planet, the ability of our species to act with global intelligence becomes more pressing as each year passes. Relying upon the thinking of the past to solve the problems of the future will become ever more problematic.

Building the infrastructure for an intelligent planet

We must provide humanity not just with the motivation to act, but also the means. Our ability to act sustainably is strongly mediated by the infra/structural choices that we are presented with and the technological options available.

We need to develop an economic reality that allows people to behave sustainably as a matter of course. Moving from production processes, technologies and economic dependencies that cause problems to those that solve them.

Delivering such a change relies upon a number of characteristics; the knowledge, technology and science that provides us with a reasonably accurate and reliable picture of the state of the planet, the deployable resources and intelligence that would enable us to either fix problems we can see or arrest the continuing injury we give rise to and a reasonable degree of social stability and democratic organization that would allow coordinated and concerted effort should we choose to.

Towards Terra sapiens – a species with planetary intelligence?

The sapient being can imagine. He (sic) can conceive of something which has no existence whatever in the sense-available world of reality, and then he can work and plan toward making it a part of reality. He can not only imagine, but he can also create.

H Beam Piper

Transcending our unfit approaches to managing vital resources for the good of all species is the defining challenge of our evolutionary history.

To become globally sapient we need to imagine a future that overcomes this challenge and plan for its creation. This lies in our ability to:

  • Recognise that humanity is in a shared endeavour – to act with shared, strategic intent.
  • Make use effective use of the time we have – our species lives more than 19,000,000 years every day-night cycle.
  • Compound rather than discount future value – so that a sustainable future is more valuable than an unsustainable present.
  • Align common and self interest – over sufficiently large periods of time, private interest should be indistinguishable from the common interest.
  • Evolve rejuvenative technology – which utilises, borrows from or harnesses natural production processes.
  • Develop planetary enterprise resource management – to use our science and technology to monitor and manage strategic resources and for the good of a vastly expanded market of 9 billion.
  • Collect, store and distribute plentiful renewable energy as a birthright and for free – competition for energy undermines freedom of choice, action and ingenuity.
  • Balance common and private ownership – such that one does not automatically undermine the other.

The Golden Hour for humanity?

The challenges we face are not about the future of the Earth (it will abide) or our species (it will likely persist) but for the current form of interdependent, consumption orientated societies that have developed in recent centuries.

We are currently dwelling in the golden hour for humanity (the period following injury where medical intervention stands the best chance of preventing death).

If we wish to preserve the aspects of modern democratic capitalism that we find attractive we must act now to evolve a globally sustainable future for our species.

 

This post was originally published with a less illuminating title by Guardian Sustainable Business on 2/03/2013

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The Rights of Future Trade

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But our people could not be got to see how artificial our prosperity was….that the course of trade once turned away from us…might never return.

George Tomkyns Chesney

Should we protect the rights of future trade?

The right to trade, though perhaps not at the top of the list when considering the innate rights of humanity, is nevertheless comprehensively represented and defended.

The World Trade Organisation influences and shapes the economic and enterprise policies of its signatory countries which represent the vast majority of the Earth’s population.

Laws governing the conduct of policy and practice in enterprise and competition could be said to be the most comprehensively and consistently enforced regulations on the planet. They have lead to the dissolution of monopolies such as Standard Oil and “Ma” Bell and the levying of huge fines for breaches of competition law.

This implies that the rights of enterprise, private trade and market activity are important and worth protecting. However, given the environmental and social challenges of the next few decades, how likely is it that such rights can be protected in the future?

 

The right to trade on a declining planet?

Trade as we have known it is endangered. Clear trends in demographics, urbanisation, water quality and availability, climate stability, resource scarcity and ecosystem health represent risks to the continuation of trade as usual.

There is no point preserving the rights of private enterprise when the very viability of the market itself is threatened by risks that are being largely ignored by trade law, economic rules and governmental policy.

 

Enterprise can see the challenges of business as usual…

…look not at the greatness of the evil past, but the greatness of the good to follow.

From Thomas Hobbes’ 7th Law

A growing number of companies have made commitments to ambitious sustainability goals which derive from a clear eyed and rational interpretation of observable environmental and social trends.

Unilever, Nike and GE, recognising that their longevity relies upon the health and vitality of natural capital and the continuing stable functioning of natural systems, have developed plans to transform their production activities to become sustainable.

 

A restraint of future trade?

Transition pathways to a sustainable future have also been developed by groupings of progressive business, yet the success of such plans are existentially imperilled by an economic and political consensus which seems to be more concerned with protecting and valuing the enterprise of the past than building the enterprise of the future.

Economic and political frameworks have so far failed to present a cogent and consistent pathway for sustaining global enterprise in the face of predicted disruption.

This failure represents a restraint of future trade.

 

A declaration of the rights of future trade

Thus such a people reap jointly the whole advantages of their country, or neighbourhood, without having their right in so doing called in question by any.

Thomas Spence

In the eighteenth century Thomas Paine and Thomas Spence coined the phrase “The Rights of Man” – establishing the idea that humans are born with what should be inalienable rights. Such rights were integrated into the foundations of the French Declaration of Human and Civic Rights and the US Declaration of Independence.

Perhaps it is time for a parallel declaration to enshrine and protect the birthright of all humans to partake in activity which brings them reward, security and the use of their physical and cognitive abilities in perpetuity (or until the end of their world).

  • Just as commercial entities have a right to trade now, they should also have a right to trade over the long term.
  • Just as people all across the world wish to earn money for themselves and their families, so they should have the right and ability to do this over time.
  • Just as the graduates of today seek to apply commercial and technical skills to careers in enterprise, so they should have the rights to do so without massive structural instability and market failure.
  • Just as those living today have had the opportunity to use the rules of trade and enterprise for personal and common gain, so those as yet unborn deserve the rights to do the same, without being born into a bankrupted, broken system on a declining planet.

It is time for trade law, policy and regulation to protect the rights of future trade, identify and remove barriers which represent a restraint on future trade and to allow all current and future members of our species to thrive and share in the enterprise which sustains us all.

A short version of this piece was published by FastCoExist on 5/03/13.

 

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Sensational! Against the tide of shallow value (Part 2)

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This post is the 2nd of 2, click here for Part 1 (which gets hot under the collar about an obsession with shallow value).

I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.

Benjamin Franklin

The calculated sensationalism of price

The grand champions of sensation over meaning are not peddlers of sex or even of products but those in financial markets who have mistranslated the real, underlying sources of social, ecological and economic value into abstracted price.

Price is not value itself, it is a signifier of value. However, it is one which largely omits the value of externalities.

In sustainability terms this is a problem because the major means of determining behaviour in our capitalist world is the price signal. We continue to knowingly explore and exploit dwindling and dangerous sources of non renewable fuel because price perversely pushes us to, telling us that the use of free energy from the wind and the sun is somehow more expensive overall. Renewables are often currently more economically expensive, but the price of such fuels is not the same as their value to us.

Ceteris non paribus – all things are not equal

Efforts to define the price and value of natural capital can equally fall prey to confusion between price and value. We are easily lulled into the notion that if we price something we can make a rational decision to trade it and that it is somehow fungible (capable of mutual substitution) – that the money we receive in return for a trade can be used to obtain a substitute which is functionally useful in the same way as the property traded in the first place.

Yet there are some areas where such fungibility just does not apply. If you could achieve a price that you were happy to receive in order to sell your mother, could you use that money to buy yourself another?

Trading the stuff of life

…intellects vast and cool and unsympathetic, regarded this earth with envious eyes, and slowly and surely drew their plans against us.

H. G. Wells

Financial markets have become obsessed with shallow value and too remote from anything that resembles real life for too long. Recent years have shown us just a fraction of the dangers of exotic financial instruments, of bundling up a range of debts, and labelling them as risk free investments for trading long after we have forgotten the underlying value of the asset (or absence of asset) upon which they were originally based.

Such abstraction goes far beyond the re-packaging of potentially bad debts. Financial markets have, in recent years, undertaken trading in food – the fundamental components of human survival for purposes far removed from the allocation and distribution of those assets to those in need of them. This trade has become a sensational distortion of the purpose of markets in food stuffs, focussed merely around the idea that the thing traded can give rise to profit, rather than that the thing traded can give rise to adequate nutrition. 

Can life arise from poisoned markets?

Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.

John Maynard Keynes

In such a fetishised market, can the trading of environmental and natural value, through Carbon Credits, Conservation Banking Credits, Transferable Development Rights and other such theoretically “sustainable finance instruments” possibly give rise to the sort of long term, strategic outcomes that our planet needs or will they merely become just another means by which common value can be turned into private profit?

Surely if we are to truly use the mechanisms of capital markets and international trading to deliver environmental and social good then those markets need to be fundamentally reformed, such that they are capable of truly valuing a common future as more valuable than a private present.

Such markets must have both the incentive and capability to deliver the required strategic outcomes. They must rise to the challenge of valuing activities and behavior which pay off over the long term, to compound rather than discount the value of a more sustainable future and to start to value decisions that allow the growth and stability of ecosystems and societies as an outcome of value to the market as a whole. Allowing sustainable decisions and behaviors to be inherently valued and prioritised rather than considered as an afterthought.

Truly sustainable markets, those dedicated to the discovery, trading and distribution of real value would therefore, naturally:

  • Value abundance: consider the longevity and safety of supply of the resources they depend upon;
  • Preserve & grow vitality: act to value and enhance the quality and diversity of the natural capital upon which human life depends, and:
  • Value & balance interdependence: prioritise mutual equity in relationships with suppliers, customers and other stakeholders.

It is time for real value. It is time to value the abundance, vitality and interdependence of all that exists on this precious, irreplaceable planet. To move beyond the surface, sensational value of current market price and start to define and trade the real value which sustains us all.

 

Part 1 of this post gets all excited about market hysteria and the fetishism of financial markets.

This post was originally published (with the odd minor difference) by Green Conduct  on 25/1/2013.

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Sensational! Against the tide of shallow value (Part 1)

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What does the world weigh? Its scales are crooked. It weighs life and labor in the balance against silver and gold. That will never balance, it spills a lot of life that way.

Walter M. Miller Jnr “A Canticle for Liebowitz”

 

We need to campaign for real value

Real value refers to those things which have meaning in sustaining and supporting life, whether human or otherwise. are we excited yet?

Shallow value refers to value priced beyond its worth; where value is the product of hype, glitter and market hysteria rather than of human and ecological need or meaning.

It is time to value what is precious to us all. The water, food and air that give us life, the shelter and warmth that allow comfort, the security of place, equitable income, education and communication that allow us to plan for our and our children’s future and the ability to develop, share, discuss and distribute ideas about the world and our existence.

Swamped by shallow value

Shallow value dominates our media, our discourse and our markets.

Shallow value is the triumph of sensation over meaning, surface over depth and gratification over satisfaction. It is by no means restricted to the obvious and literal elevation of image over substance in the media but has increasingly pervaded the everyday, becoming the base currency of capitalism itself and influencing the very core of how we understand and value what is worthwhile.

Capitalism has come to depend upon sensation to sell its products; brand has become the medium for translating a set of corporate behaviours, undertaken to maximise private profit, into a set of implied emotions and sensations. Buying a product or wearing a brand, capitalism implies, will help us to be who we want to be, to be happier, more beautiful, better and more fulfilled people.

Of course this is nothing new, sensational bubbles have been a feature of markets for many hundreds of years. More explicitly, the foundations of modern advertising consciously used and adapted the then emergent science of psychology for the purposes of linking products to a buyer’s sense of self and self-worth.

Alastair McIntosh, the scholar and activist, has written extensively on the issue, related to tobacco marketing and the pornography of consumerism. In his logical and emotional tour de force “Hell and High Water” (2008) McIntosh summarises consumerism’s deliberate “hacking” of psychological circuitry as follows “Could this be the core dynamic by which consumerism sustains itself? Addictions are powerful precisely because they taunt us with our heart’s longing. But they fake it. They short-circuit and actually block off the real thing – the focus of our ultimate concern.”

Building upon McIntosh’s thesis, I would argue that this sensationalist agenda has gone far further than merely representing the (now) unspoken design principles of advertising and marketing, it has also become unconsciously embedded within the very DNA of every facet of economic and financial activity, warping our conceptions of what is valuable, mistaking shallow economic price for real value.

The fetishisation of financial markets

One of the main reasons financial markets struggle with real value is due to the problem of economic externalities. These are the environmental, social and economic costs and benefits which either take place “outside” institutional accounts or occur across the balance sheets of multiple actors, stakeholders or proxies. The reconciliation and adequate pricing of economic externalities has become a major source of activity for environmentalists and economists seeking to address systemic and unpriced risks and market failures.

The problem of externalities becomes much, much more problematic when we consider the active disinterest of modern financial markets in their original, fundamental purpose. Financial markets first grew as a way of providing financial resources to agricultural and mercantile enterprise, allowing endeavours to be undertaken in expectation of future reward. For instance, to allow a farmer to buy next year’s seed on the promise of this years’ crop or a merchant to invest in stock for the next sea voyage in the expectation that the current one would land and its cargo be sold.

Financiers supporting such endeavours would of course need to make an assessment as to whether the investee in question was likely to be able to make good on the debt – and the way that they organised and conducted their business was therefore a key area of judgement for investors.

Today’s markets in listed companies are theoretically no different – representing a set of companies seeking investment and requiring a judgement on behalf of investors as to whether those companies have the strategy, risk management and staff capabilities to execute that strategy and deliver a return on investment.

It may therefore be presumed that an interest in, and analysis of, the fundamental viability, utility and longevity of those companies would be an essential area of interest for investors. While this is certainly the case for a wide range of individual investors, it is not necessarily true for the market as a whole. Market movement and the behaviours and inferred intentions of other market actors have become more important than the analysis of company fundamentals.

Market movement has become king, coupled with the rise of automatic, sub-second trading technologies, investors have become more interested in making sure they are not left stranded by market hysteria than acting as financiers and stewards of companies.

The UK economist John Kay entertainingly explores this fetishised market in his Parable of the Ox, which describes the perverse development of a market focussed solely upon market actors (experts in the art of Ox weighing) rather than upon its original purpose (weighing an actual Ox).

I would additionally argue that beyond the pornography of marketing and advertising, beyond the mistaken belief that price equals value, beyond a focus upon the market rather than the investee, there is one further perversion of real value that we have allowed to take place, the belief that just because a thing can be traded, that it should be.

 

 

Part 2 of this post explores the sensationalism of price and describes a market capable of defining and trading the real value which sustains us all.

This post was originally published (with the odd minor difference) by Green Conduct  on 25/1/2013.

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Which straw broke the camel’s back; how useful are planetary boundaries?

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The promise and problems of planetary boundaries

`Tis not contrary to reason to prefer the destruction of the whole world to the scratching of my finger.

David Hume

Which straw did break the camel’s back? It was, of course, the final oAre you going to pay my physio bills?ne.

Retrospectively, this is obvious, but is it so obvious that
the breaking point could have been predicted?
In theory the answer is clear, it is logically inevitable that if you keep piling increasing burden on an ungulate or any other load bearing creature then at some point the equilibrium of its spine will rapidly transit from one metastable state (unbroken) to another (broken).

Once that happens the whole camel being useful to carry stuff paradigm goes out of the window.

So, if it is obvious that ever more straw on said dromedary is a bad idea then why is it so difficult to stop adding to the load and would it help if we knew precisely which straw was going to be the problem?

An operating space for humanity

This is a question that environmentalists must start to grasp in the context of environmental limits and their translation into fixed system and condition boundaries.

A clear offspring of the Club of Rome’s 1972 Limits To Growth, the Nine Planetary Boundaries were developed by Johan Rockström et al in a 2011 paper in Nature and are being used as the basis for campaigns and policy work by NGOs such as Forum For the Future and WWF. They are also at the heart of the popular Doughnut model developed by Kate Raworth of Oxfam, an analysis of the space (between the limits of the planet to support complex human activity and the needs of humanity) within which a sustainable world might operate.

Boundaries: useful in theory but in practice?

The concept of planetary boundaries is a powerful and seductive one, but also one that may have limited utility for driving a sustainable world for a mix of illogical and logical reasons.

Humans aren’t all that rational, especially en masse…

Normal human behaviours tend to explore and test limits. When we are told that it is unsafe to go beyond a particular point close to the edge of a cliff or a canyon, what do most of us do? We go right up to the point and peer over the edge. If we all did that at once many of us would fall. So, telling us that there is a boundary we should not cross is a pretty sure-fire way of giving us the message that it is absolutely safe to go up close, even though it might be death to cross. Humans are bloody-mindedly binary in that way.

Knowing boundaries exist doesn’t really help in a massively plural world

On a global scale, environmental and social impacts arise through the actions of billions of actors undertaking trillions of actions, each with varying implications. They are not all coordinated and not all directable. They take place within a general framework of economic and capitalist behaviour, mediated by varying legal codes and social mores.

There is no single or homogenous audience to warn about crossing boundaries. Instead different actors, be they individuals making consumption choices, governments setting legislation or corporations making production choices will tend to make these choices in isolation even if they have cumulative common impacts.

Boundaries frame the territory but don’t provide a solution

The best plan, of course, is to reconsider the whole camel/straw equation. Are there other ways the two could interact that would avoid inevitable systemic breakdowns (a cart perhaps)?

Knowing the limits to (current models of) growth is very useful but in the long term, not as useful as finding and valuing other ways to grow that do not add further burden to the Planet’s overloaded systems.

We could remove the threat posed by approaching or crossing boundaries by developing sustainable industrial and production systems and technologies that innately respect and reinforce the boundaries rather than pushing against them. 

Beyond rationing unsustainable behaviour…

Rather than focusing upon rationing the amount of unsustainable behaviour that we are allowed to undertake, we would be better putting our time and ingenuity into developing modes of production and consumption that have inherently positive, restorative, ecological and social implications.

The vast majority of humanity, whilst they may or may not actively admit it, tends to share an interest in sustaining complex and interdependent modes of economics, trade, business and quality of life.

If this desire is to be met there are clearly some changes that need to be made which allow an alignment between individual choices and collective outcomes. Ecological and social problems are not actually often conscious or deliberate choices but the side effects of other (consumption) actions. It is the side effects which stand to threaten the continuing operations of global capitalism, not the natural individual intentions of citizens to buy and use things that they want or need.

Recognising the breaking points of environmental systems should spur human ingenuity and creativity; stimulating science and technologies that push at the limits of what is possible, not at the limits of what is sustainable.

This post was originally published (with a lower camel quotient) in Guardian Sustainable Business on 19/11/2012

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How much is your Mother (Earth) worth?

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All human things of dearest value hang on slender strings.

Edmund Waller

Like pricing the Earth, getting the right price for your Mother might be harder than you think

So you want to sell your Mother. It’s a free market, most other things are bought and sold these days and all sorts of exotic items are priced and traded every second.

In addition, you reckon she must be worth a decent amount. I mean, she is your Mum after all!

How to figure out the asking price though? That’s where it starts to get tricky…

Assuming you like her, you may feel that she is worth more than a simple calculation of what you might fetch with the sale of her possessions, the change and notes in her purse and the sum of flogging off any decent clothes or shoes she owns.

Similarly, selling her house, car and jewellery (if she has them) may well not come close to telling you how much she ought to fetch. It is possible that you may be able to calculate what her actions are worth. For instance; to multiply the number of meals she has cooked you at the going rate, then add a cook or chef’s salary, likewise with laundry and sundry other services…

The trouble is that if you take this approach you may be left with a nagging feeling that you have sold yourself (and perhaps your dear old Mum) rather short.

The Earth presents a pretty similar challenge for pricing. You can price its results, its productivity, but that price comes nowhere near a true reflection of the value of its capacity to continue to sustain us and everything else in (pretty much) perpetuity.

This is why the seductive notion of pricing ecosystems as a route to sustainability must be seen clearly for what it is and what it is not.

As I have said elsewhere, factoring the Earth’s ability to sustain us into economic value is a little more complex than just finding a price that we would be prepared to pay or forgo to preserve or develop parts of the environment.

To flog the metaphor one last time – ecosystem prices tell us what it would be worth if we sold all of our Mum’s stuff but it wouldn’t buy us a new Mother (Earth).

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A sustainable world before the end of our world?

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“Life will not perish! It will begin anew with love; it will start out naked and tiny; it will take root in the wilderness, and to it all that we did and built will mean nothing — our towns and factories, our art, our ideas will all mean nothing, and yet life will not perish!”

Karel Čapek

The possibility of death in the mind of someone living

Many years ago when I was studying Human Ecology in sunny West Yorkshire we learned about Deep Ecology; which sought to place the human species in the wider context of the Earth’s history and its other inhabitants. Viewed via this perspective the infinitesimal instant in the planet’s history in which we have been around is a mere blink of the Earth’s eye, we are newcomers when compared with almost any of our companion species on this planet.

This planetary perspective gave me, as a callow youth, great comfort. I had grown up lucky enough to have the free run of countryside and had always felt an empathy with the eternal changing of the seasons and cycles of life and death. To feel that, in time, my life would conform to these natural cycles felt natural and right and that life on this planet, in whatever form, would persist long after the passing of our species felt equally right.

Of course, with age, the naive bravery of idealistic youth gives way to elements of fear, for ourselves and for the next generation. This warm comfort, whilst I still feel it, is mixed with a desire and hope for the end of our species and civilisation to perhaps be further away in our future than charging ever faster around time’s corner towards us.

Why all this talk of death? Because a subject that seems to be emerging in sustainability circles is that of remaining optimistic in the face of overwhelming odds. The past decade or so has seen massive progress in the acknowledgement of the need for sustainable change by international institutions, visionary businesses and governments, yet the actual practice of modern life is still dreadfully unsustainable.

Given this lag or dissonance between rhetoric and practice, the extent to which sustainability professionals can remain optimistic has been the recent focus of a number of bloggers, activitists and writers.

Some are arguing for optimism, such as Hunter Lovins, and some, such as Osbert Lancaster, calling for a recognition that the possibility of achieving a sustainable world is slipping further from our grasp with every passing day. This latter call for realism makes the point that professional optimism – focussing on sustainable hope for a possible future rather than unsustainable likelihood – is disingenuous at best, and that truly acknowledging the likelihood of failure is a pre-requisite for re-imagining our possible futures.

Such an approach is an interesting one, acknowledging not just the possibility but the likelihood of failure does not come easily to those of us who have dedicated our lives and our hopes to making some contribution to a sustainable world.

Of course, in planetary and universal terms – what we do with our lives matters not one jot…

Eschatalogically speaking – we really are all doomed

Of course, we are, as individuals, societies and likely as a species, all doomed. Death is the inevitable reciprocal of life, so as individuals we have to get our heads around this at some point.

Human history, short though it is planetary terms, has seen the rise and fall of many civilisations and societies- there is, after all, no certainty but more uncertainty.

In a cosmic context, the long term outlook is not too rosy. Eschatology (religious or philosophic studies of the end of the world/ the end of the universe) presents many, many physically certain ends for our planet (e.g. when the sun burns all its hydrogen in about 4.8 billion years) or the slow heat death of the universe (likely to come at a time in the future with so many noughts attached that its best if you just look here).

Is wilfully blind optimism dishonest?

Many people involved in sustainability and CSR are professional optimists, celebrating relative gains in company performance or highlighting the positive possibilities for a sustainable world. Great swathes of the internet are dedicated to CSR and sustainability news sites trumpeting the most minimal changes in the environmental and social impact profiles of companies. They ignore the overwhelming trajectory of our species’ consumption habits and trends and instead try to link these tiny changes to a wider (possible) trend towards different, more sustainable, industrial models.

I have often called myself a (wilfully) blind optimist – an optimist by inclination rather than faith. The trouble with acknowledging that we are all doomed is having to find something to do with the rest of your life – I would rather my life was dedicated to trying to make positive change happen than to spend the rest of my years buying an isolated property on the top of a hill, laying down the tins of soup and long life milk and building a high wall.

OK, we are all doomed, what shall we do now?

Optimism for a sustainable future might be pointless in cosmic terms but then so is pretty much anything when viewed in this light. I would rather feel that I were a soldier in a thousand year war – unlikely to see victory but pretty sure of the rightness of my cause – than give up trying to achieve a sustainable and equitable future.

Of course it is unlikely that we are going to seamlessly achieve the transition of economic, industrial and social models, but the question that we need to ask ourselves is not whether it is logically possible, but whether it is impossibly logical? If we value what we have now then surely it makes no sense not to strive to sustain it.

I believe that, whilst unlikely, a sustainable world remains within our species’ grasp.

“There’s a 50/50 chance of achieving a sustainable world, though there’s only a 10 percent chance of that.”

(after) Ed Hocken (George Kennedy) in The Naked Gun

 

This post was originally published (with fewer jokes) in Guardian Sustainable Business on 14/09/2012

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Valuing abundance – breaking the tyranny of scarcity

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We can only see a short distance ahead, but we can see plenty there that needs to be done.

Alan Turing

Scarcity is So now…

Every day we hear more and more about scarcity. We hear that the expected demands of an growing world population will increase conflict over scarce resources. We hear that delivering against the growth plans of global companies and the expectations of a growing middle class will put pressure on supplies of food, water and the rare metals present in the goods we have grown to depend upon for our sense of self.

We are fixated upon the scarcity of valuable resources.

In the coming decades, we are told, we will need to compete ever harder over smaller and smaller quantities of materials which we once treated as effectively limitless.

Limits to growth?

The earth is an island of life floating in a pretty sterile sea of space. While we receive a daily bounty of 84 Terawatts of solar income every day, we get precious little else. Were we to receive new supplies of minerals or metals they would likely arrive with the rather high delivery cost.

It would be logical to organise ourselves in cognisance of these facts.

However, our economic and industrial models do not recognise these parameters as part of their design principles. The two big challenges we face are that:

  • We are using resources which are only replenished over geological timescales at a rate likely to give rise to intense scarcity, and:
  • Our use of such resources, combined with the unsustainable harvesting of natural productivity, endangers the functioning of our life supporting ecosystems.

Who ate all the pies? – We did (in the West). The pies that we ate were extravagant, wasteful and wonderfully tasty. How extravagant? Very – eighty percent of the world’s resources are consumed by just 16% of the world’s population. Moreover, that consumption is highly wasteful; the US economy for example, has been estimated to have a total material efficiency of between only 1% and 10%.

The pies we have been enjoying are going to become increasingly scarce and expensive in the coming years – and more people have equally justified expectations of being able to enjoy them. We either need to stop eating pies or change the recipes we use.

On a crowded planet, scarcity is of limited utility

As the churn through vital resources gets ever faster we become necessarily more and more fixated on scarcity and the perverse relationship between scarcity and value grows ever stronger.

Yet scarcity is pretty useless if you have big plans. We need to break the link between scarcity and price.

Scarcity may be economically very powerful, but it is of very limited value for a future of 9 billion people, all seeking the material and financial wellbeing and security that those of us lucky enough to be born in the West have grown to consider as our birth right.

Scarcity is not a good basis for a viable business strategy

Basing technology on recognisably scarce resources and materials makes no business sense either. What rational business would, on the one hand, make plans for growth in the production and supply of products and services whilst on the other hand building those technologies and services using resources that are not abundant or safe enough to meet these growth targets? Surely such an inherent contradiction should be of prime concern to company leaders and investors?

But scarcity does exist, it can’t be denied

Of course scarcity exists – but the risk that it poses to our ambitions in business, economic and quality of life terms depends almost entirely upon how we undertake the following:

  • Focus on the sustainable use and continued re-use of scarce resources.
  • Prioritise the use of abundant and renewable resources.

 

 New opinions are always suspected, and usually opposed, without any other reason but because they are not already common.

John Locke

Abundance is So tomorrow

Scarcity is a fundamental component of the derivation of price. Current economics uses the scarcity of a good or service to determine its price through a combination of supply and demand.

However, price has failed to adequately equate to value – the value of the natural systems that support life has been treated as an externality and largely ignored.

Scarcity may provide a simple and effective way of generating price but it is fatally flawed as an approach to delivering a sustainable future on a populated planet. Abundance is a far more valuable criterion for informing price than scarcity.

Delivering abundance

In this context, abundance is either a natural aspect of a resource, good or service, or can be achieved through the sustainable management of non-renewable resources, thereby suggesting two forms of abundance, literal and functional.

Literal abundance

Literal abundance is just that, a good or resource which depends upon components which are naturally abundant, or which can be derived amply through sustainable production and stewardship approaches.

Ecosystems run on abundance, not on scarcity or even efficiency. Natural systems produce material in abundance and wastage provides feedstock for other parts of the system. Basing our technological and industrial models upon these types of raw materials and flows would allow us to operate without the conventional limits to growth which currently constrain us.

Technologies are starting to exploit such resources, including the use of materials such as hemp for making body panels on cars, microalgae for producing jet fuel and bacteria to extract precious metals from waste.

Functional abundance

Functional or technical abundance, though often under another name, is a relatively recognised concept. In their Cradle-to-Cradle approach, McDonough and Braungart talk of a “technical cycle” – where scarce and potentially harmful materials are cycled endlessly through closed loop industrial models.

The concept is echoed in the developing circular economy approach. The focus of the Ellen MacArthur Foundation, the circular economy seeks to design industrial models based upon stewardship and symbiosis, where the waste of one process becomes the feedstock of another.

There is much distance left to travel

While many of the technologies and approaches needed to build our economies upon abundance exist, some require vast efforts of R&D and investment in order to discover, implement and scale technologies that can deliver performance and utility to the whole of the world’s population.

If one way be better than another, that you may be sure is nature’s way.

Aristotle

Vital technologies – the next industrial revolution

Our technologies and production processes must take a step towards the realms of science fiction to crack the mysteries of nature, to mimic the elegance, simplicity and safety of biological production.

We call such production “lifelike vital technologies”, those which borrow from and harness biological production techniques, including: ultra-low energy growth, abundant degradable production and room temperature chemical and material production. Such approaches are not just fiction; Biomimicry seeks to learn from and adapt design techniques from nature and even more revolutionarily, significant investments are starting to be poured into advanced approaches to using biology for technological and industrial production.

Defeating the tyranny of scarcity

Scarcity makes us think small at a time when we should be thinking big. Scarcity makes us fight for our share of the scraps when our planet’s life could support us in sharing abundance. Scarcity fills us with fear when we need to grow our hope.

It is time to defeat the tyranny of scarcity and to truly value abundance.

 

This post was originally published in Guardian Sustainable Business on 08/08/2012

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A desirable property…how might we value our home planet?

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 A good decision is based on knowledge and not on numbers.

Plato

This post presents a gentle meander around some of the issues and ideas generated by our modest proposal to explore an Initial Public Offering (IPO) for the Earth, an EPO.

The post represents a snap shot of our thinking – it does not raise or answer every question associated with the idea. I should also stress that it does nEarthEqualsMoneyEqualsEarthot represent a wish for the private ownership of the Earth – merely a thought experiment on the nature and fitness of financial markets to value our home and our common futures.

While many may find this at best distasteful, we should have no illusions here, economies are currently getting on with doing what economies do while placing little or no value on natural capital and a positive future for a growing global population.

Conversations with financial experts

Over the last few years I have had the pleasure of being able to share some of my more leftfield thoughts on the adequacy of the financial system for valuing the things that are important to us all with a number of people working at the very heart of that system.

Through their generosity and patience I have been able to ask my deliberately naive, wide-eyed questions about why the world is as it is and not how it might be.

Some of these conversations have focussed upon the apparent absurdity of how the financial system is able to value private entities but not the common wealth and property that allows those private entities to exist in the first place – the Earth.

These conversations gave rise to our admittedly blackly comic plans to explore an Initial Public Offering (IPO) for the Earth, an EPO.

The EPO seeks to explore the following question:

“Is the earth a good investment opportunity?”

 Why an IPO for the Earth?

Put simply, the EPO is a way of highlighting the strengths and weaknesses of the current economic and financial system to value the ability of the Earth to sustain life and, through that valuation, to prioritise investment in the Earth’s capacity to thrive and support us and other species over the long term.

Current economic and financial models struggle hugely with the challenge of prioritising behaviour which is innately and fundamentally sustainable. To a large extent this relates to the concept of environmental and social externalities.

Externalities occur when the market price for a good or service does not fully reflect the total costs (and benefits) which actually accrue.

In environmental and social terms, many externalities derive from the founding principles of modern economics, which tended to treat resources as “free goods” and effectively limitless.

Such costs are definitively “real” but are not priced in to the risks, operating costs or share price of companies. They often appear on “social or ecological balance sheets” but not on economic balance sheets and may indeed lie across the balance sheets of many actors and entities.

Solving the problem of externalities at one stroke?

The EPO is designed to wipe out the very concept of externalities by making it impossible for anything to take place off-balance sheet, as the balance sheet of the Earth would reflect all economic activity – simple!

Problems with an EPO

There are, of course, a number of (possibly fundamental) challenges with conducting an EPO.

An alternative Earth?

One of the experts with whom I initially discussed the concept of an EPO with responded that the process (to adequately value the proposed property of the Earth for sale) could only be properly conducted if another Earth existed as an alternative assessment by which to conduct the primary valuation.

This is a key part of a normal IPO process, where the underwriters and coordinators of the proposed IPOs (investment banks) would present a valuation of the property in question through a comparison with multiples (relevant measures of value e.g. Price to Earnings, EBITDA etc) assigned to comparable traded companies.

This is clearly a problem for an IPO of the Earth, there are no comparable properties so how could we possibly start to price a share?

It would be rather absurd though, if we were unable to value our only home just because it is our only home. Surely there should be a difference between priceless and worthless.

Who is selling and who is buying?

These are issues we have some interesting thoughts on but no hard and fast answers as yet, the following questions do come mind though:

  • What are our birthrights as human beings and shouldn’t we also have “Earthrights” – an inalienable right to a stake in our home planet?
  • Are humans the only potential shareholders of the Earth?
  • What rights should shareholder status bestow?
  • What obligations should shareholder status bestow?
  • Should it be impossible to trade Earth Shares?

A blatant corporatisation of the Earth?

The EPO could, of course, be interpreted as ushering in the idea that the Earth is simply a property to be commoditised and sold off to the highest bidders.

However, the problem is that this is pretty much exactly what is happening now. We have an almost unfettered market in the buying and selling of vital and strategic resources by both sovereign entities and private interests.

Rather than provide a pathway to global corporatisation, our purposes are as follows:

  • to explore, examine and challenge the value of the Earth and why this is not reflected in the current economy and;
  • to make a solid first principles and economic argument for significant maintenance and re-investment in the natural and human capital that allows the ship of capitalism to stay afloat.

Management objectives for the EPO

Like any good strategic objectives, those of the Earth should be simple to express and to evaluate. Ours are as follows, shared with our wider Towards 9 Billion concept:

“For the Earth, over the next 40 (ish) years to 2050, to deliver the following:

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

Our plans for the EPO

We are committed to exploring how this concept may stimulate creative and innovative thinking in valuing and prioritising a sustainable future for our species and for the planet as a whole.

We believe that it makes overwhelming sense to connect the viability of our social, economic and industrial models to the viability of our home planet.

We are working to explore the idea with potential partners, funders and free thinkers and welcome all constructive support and help with those that find the idea of interest.

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Towards 9 Billion: Infinite economy on a finite planet – Part 2

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“Pessimism never won any battle.”

Dwight D. Eisenhower

Towards 9 Billion – capable citizens, thriving ecosystems – delivering the vision

Towards 9 Billion is Terrafiniti’s vision for a sustainable and equitAre we naturally plugged in?able future economy. Part 1 introduced the concept, this post contains some subtle but radical solutions required to achieve a future which benefits us all.
There are two key changes required in the way that markets function that are required to deliver this vision.

1.    A shared strategic goal for markets

Rather than a real coordinated mass-effect of capitalism, Adam Smith’s “Invisible Hand” is instead a post hoc rationalisation of the sum of a multitude of individually motivated market actions, not the actions of individuals subscribing to a shared grand plan – markets lack shared strategic intent.

A lack of coordinated intent makes the delivery of strategic outcomes difficult and to an extent explains why global objectives such as the Millennium Development Goals and other international accords are difficult to achieve in practice. They exist outside or in addition to the daily priorities of capitalism rather than as an integral part.

Towards 9 Billion is designed to address this issue through introducing a clear and economically meaningful purpose to market and business activity, the achievement of a vastly larger and more sustainable market. One which would also provide greater well-being and long-term common good as an innate aspect of its operation.

A shared vision provides a goal for aspiration and also allows clear judgments to be made about whether market and company behavior is likely to achieve that vision or undermine it.

Exactly what goal should markets share?

Over the next 40 years to 2050, markets should seek to deliver:

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

(Part 1 of this post, provides definitions of healthy ecosystems and capable citizens).

“The importance of money flows from it being a link between the present and the future.”

John Maynard Keynes

2.    Evolve price to equal sustainable value

Towards 9 Billion also requires simple but fundamental changes to the irreducible heart of economics – the price function. All economic behaviour flows from the price function, the ability to generate a price for a good or service which allows it to be bought, sold and traded.

“If you only have a hammer, you tend to see every problem as a nail.”

Abraham Maslow

At present the price function is too one dimensional, it reduces the physical reality and mind boggling complexity of ecological systems to the simplistic binary metrics of supply and demand, completely failing to adequately reflect or consider long-term human or ecological value.

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

Benjamin Franklin

The consequences of the failure of price to reflect such value present cleaWe really are all in this togetherr, existential threats to the continuation of our current model of capitalism, the prospects of security of the developed world and the legitimate hopes for improved quality of life for everyone else. Not to mention the destruction of the very fabric of life which supports and subsidises human existence in the first place. The stakes are (ahem) high.

Three principles for putting sustainable value at the heart of economic price

Subtle but radical changes in the origination of price would allow ecological and social sustainability to become a natural outcome of economic behaviour. We therefore propose to “hack the price function” by suggesting that instead of deriving price simply from supply and demand it should also be based upon:

  • Abundance rather than scarcity – scarce things are only of marginal utility in a world of 9 billion capable citizens – either natural (e.g. biologically based) or managed (e.g. through closed loop stewardship) abundance is inherently more valuable in this context.
  • Natural vitality – making use of the planet’s natural restorative and productive abilities and learning from and utilising natural production techniques as the basis for our technological and industrial models.
  • Interdependence – nothing happens in our modern world without the involvement of others. We need to recognise and balance this interdependence so that our quality of life is not bought at the cost of someone else’s and that our quality of life is not at risk if others we depend upon decide to withdraw their subsidy.

Practical Impact

The development of this vision, and the evolution of the price function, would be a major step towards the integration of environmental and social value within price and cost. It would provide a significant drive towards a sustainable world and inherently deliver reductions in systemic risk and market failures.

“There are noble fortunes to be made in the transition to sustainability.”

Ray Anderson

In addition, the motivation of businesses would change towards a positive sum (win-win) view. It would become an economic benefit to design industrial producAbundant opportunitiestion activities around resources which are more likely to have longevity of supply and which enhance, work alongside, utilise or borrow from naturally productive processes and capacity.

In the social dimension, valuing and maintaining interdependence would result in increasing global equity and help ensure a more even global spread of economic development and increased quality of life.

In summary, companies and markets would, as a natural aspect of market capitalism:

  • consider the longevity and safety of supply of the resources they depend upon;
  • act to value and enhance the quality and diversity of the natural capital upon which human life depends, and:
  • prioritise mutual equity in relationships with suppliers, customers and other stakeholders.

“Big results require big ambitions.”

Heraclitus

Making the vision a reality…

Terrafiniti is committed to playing a role in developing the pathway, identifying opportunities and leverage points towards equipping 9 billion capable citizens.

Our goal is to develop tools, solutions and materials that will encourage, support and drive change, which can be used by organisations of all kinds and which will be freely available where possible.

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

John Maynard Keynes

Partners

We are actively seeking relationships with entrepreneurial and visionary organisations, investors and thinkers who share our passion for positive change towards a sustainable world.

Partners may be companies which understand that business as usual is insufficient to cope with current environmental and social trends, investors who can see the long-term challenges of short-term thinking, organisations whose role is to stimulate change and philanthropists and visionaries who want to make a meaningful, compelling contribution towards making humanity fit for the planet and fit for the future.

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