Natural Capitalism Provides a Foundation for Sustainability
Reviewed in the United States on 27 September 2010
If there was one key to turning around the damaging business and environmental practices of modern culture, what would it be? 'Natural Capitalism,' the seminal 1999 call for a broader focus on sustainability, presents an overwhelming case that the key is resource efficiency and effectiveness. Just as conventional capitalism is all about using financial capital effectively, so 'natural capitalism' is about expanding that bottom line focus to include the natural resources and ecosystem services underlying the ability of business and society to function in the first place. The authors argue that with appropriate shifts in business perspective and government policy, our economy could be something like 90% more efficient in its use of irreplaceable natural resources, thereby mitigating ecosystem impacts, enabling global development, and staving off climate change.
Throughout history, until very recently, man has been a small actor in an overwhelmingly large world. Most of the book explores how this has given rise to our ingrained cultural patterns of wasteful resource utilization, limited focus on capital efficiency, and drive for production volumes, while assuming unbounded access to subsidized natural resources and 'free' ecosystem services. Shifting perspective to include natural capital on the business balance sheet, and to expand lean manufacturing principles beyond the factory walls is what's required to address the ecology/climate change nexus. This change in perspective is embodied in a range of sustainable business concepts, including the 'triple bottom line' (profits, people, and planet), and the 'cradle-to-cradle' model for recycling products and integrating industries to eliminate 'waste'.
The basic principles of natural capitalism put forward can be summarized as: (1) focus on natural resource efficiency (2) using closed loop, biomemetic, nontoxic processes (3) to deliver more appropriate end-user services (4) while investing in restoring, sustaining, and expanding natural capital. Following these principles leads not to constraints on business or lowered expectations, but an enormous range of new business opportunities to profit from improved efficiencies and environmentally beneficial activities. One of the best expressions of this perspective comes in the discussion on climate change, providing a refreshing contrast to the recent spate of bad news on this front: "Together, the [available business] opportunities can turn climate change into an unnecessary artifact of [our] uneconomically wasteful use of resources."
While the authors deliver an awesome, deeply researched articulation of their vision, showing with many examples why it's important and how it can work within our current capitalistic economies, the book has two key flaws. First, it falls prey to the syndrome first articulated by Paul Saffo, founder of the Institute for the Future, of confusing a clear vision of the future with a short path. This combines with an excessive reliance on sheer volume of examples to make their points, too many of them poorly explained, bristling with non-comparable numbers, and substituting hand-waving for real outcomes. Deeper exploration of fewer examples might have illustrated the principles better, and have been much easier to read. Also, 11 years after the original publication, many of the examples are seen to be hastily chosen and and used to support glib and overreaching conclusions that make the authors seem naive. Examples include the advent hydrogen powered cars ("hypercars"), the potential for shutting down Ruhr Valley coal production in favor of direct social payments to coal workers, or the imminent triumph of the Kyoto Protocols for international carbon trading. And, while much attention is paid to articulating the perverse incentives, misguided taxes and subsidies, and split responsibilities that impede more efficient system approaches, there's short shrift given to new technology adoption rates, the scale of existing infrastructure investments, or the political complexities of changing incentives and subsidies.
However, if you are interested in understanding the genesis and foundations of the modern sustainability movement, this is a fundamental text. Despite its flaws, after 11 years the fundamental argument and principles hold up well and are still inspiring.
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