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Business and Sustainability

Reading

The End of Our War Against the Earth


by Walt Hays
(Originally appeared in Timeline #59 September/October 2001)

What will historians record as the two great intellectual shifts at the end of the 20th century? According to Amory Lovins, cofounder of the Rocky Mountain Institute, the more obvious one was the fall of communism and the "apparent" victory of market economics and capitalism. In reality, however, Lovins maintains that industrial capitalism will eventually be recognized as a "temporary aberration which defied its own logic by liquidating and not valuing its largest source of capital, namely Nature." And thus the much more significant shift in thinking, Lovins says, was "the beginning of the end of our war against the Earth, and the rise of a new way of doing business as if Nature and people have value."

Lovins expounded these ideas and others in a talk at Stanford University in connection with Earth Day 2001, drawing on the book he wrote with his wife and partner, L. Hunter Lovins, and Smith & Hawken cofounder Paul Hawken: Natural Capitalism: Creating the Next Industrial Revolution.

NATURAL CAPITAL

In explaining why he refers to Nature as our largest source of capital, Lovins pointed to Biosphere II, an experiment in the Arizona desert in which people tried to create a self- sustaining ecosystem in a large closed dome. Despite a $200 million investment and a lot of good science, they proved unable to provide reasonable air for eight people. By contrast, Lovins noted in his typical dry style, reasonable air is one of the "nifty ecosystem services" that Nature provides free every day for six billion of us. Other such services include "drinkable water, the flow of nutrients, the regulation of pathogens and pests, detoxifying and assimilating society's wastes, the regulation of climate (until we started experimenting with it!), and a lot of other things we can't live without." When scientists try to place a monetary value on all these services, they typically come up with numbers "about as big as gross world product."

As a result of the "take-make-waste" philosophy of industrial capitalism, Lovins notes that we all know that our natural capital, in the forms of living systems, is deteriorating under increasing pressure, and every major ecosystem on Earth is in decline. And with that decline, the limits to the human prospect are coming to be set by "how many fish there are in the sea, not by how many boats and nets we have; by forests, not chainsaws; by fresh water, not pumps; by fertile land, not plows."

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THE FIRST INDUSTRIAL REVOLUTION

Today's conditions are very different from those that existed at the beginning of what Lovins refers to as the "First" Industrial Revolution, a quarter millennium ago. In Lovins' words: "At that time, the notion of increasing labor productivity was unknown. If you wanted more cloth, you had to hire more weavers, just as if you wanted two horsepower, you needed two horses. So if somebody had come into Parliament around 1750 and said we don't have enough weavers to make enough affordable cloth for the mass of people, so we're going to make weavers 100 times more productive, nobody would have understood what this meant-and if they had, they would have thought it a ridiculous idea. But it did actually happen, because technical innovators got together with profit- maximizing capitalists, and soon a mechanical spinner produced the cloth that had previously required 200 weavers. This spread through one sector after another of the economy and created affordable mass goods, purchasing power of the middle class, and everything you see around us. It was rightly called the Industrial Revolution."

The guiding principle of that revolution, according to Lovins, was straightforward-"at a time when the relative scarcity of people was limiting progress in exploiting seemingly boundless Nature, the obvious response was to make people 100 times more productive."

That logic is still correct today, says Lovins; i.e., economics teaches us to economize on our scarcest resource. What's changed-what has reversed-is the pattern of scarcity: "In the next industrial revolution, which is already under way, we have abundant people and scarce Nature, not the other way around. Therefore, it is now not people, but Nature we need to be using far more productively, bringing four or ten or a hundred times as much work from every unit of energy, water, materials, topsoil, or whatever else we're borrowing from the planet."

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THE SECOND INDUSTRIAL REVOLUTION

Principle 1: Radical Resource Productivity

That fundamental change, which Lovins refers to as "radical resource productivity," is the first of four "interlinked and mutually reinforcing" principles of natural capitalism set forth in the book of that title.

Lovins capsulizes our current dilemma as follows: "Just to take materials flow as an example, the things we extract from the planet, process, use, move around, and throw away are on the order of 20 times your bodyweight per person per day in this country. Globally that's a half-trillion tons a year, of which only one percent ever gets into durable products. The other 99 percent is waste," which Lovins calls "a vast business opportunity." Not only that, he said, "a lot of the waste we're throwing away is toxic, so when it gets assimilated back into Nature, it harms the regenerative capacity that we need to grow things and to get the ecosystem services without which there is no life and therefore no economic activity. So this sounds like a design problem."

Lovins practices what he preaches. At the headquarters of his Rocky Mountain Institute, at 7100 feet, not far from Aspen, Colorado, he created a "passive solar banana farm," where the outside temperature sinks to minus 47 degrees Fahrenheit on occasion, frost can occur any day of the year, and they've had 39 days of continuous midwinter clouds. In that challenging environment, Lovins has harvested 27 banana crops without a heating system, with a 90 percent electric saving, "because if you have enough insulation, then you will be kept warm by the sun coming through the windows, even on a cloudy day. Also warming the place "are the people, lights, appliances, and our dog," whom Lovins refers to as a "50-watt portable supplementary heating system," adding that "she is adjustable to 100 watts if you throw the ball a bit."

Lovins notes that the conventional notion of energy conservation is that the more energy and resources you save, the more steeply the marginal cost rises, with diminishing returns, "until you hit the wall on cost effectiveness and have to stop." By going further, however, he was able to save much more by eliminating costly heating and cooling equipment, an approach which he refers to as "tunneling through the cost barrier." Explaining the phrase, he added: "It turns out that enough super-insulation, and super- windows, using Krypton fill and heat-mirror, thin-film coatings on plastic film, and air- to-air heat exchangers, can make the design 99 percent thermally passive. And it costs less to build that way, because those things add less to the capital cost than you save upfront by not needing to install furnace ducts, pipes, wires, controls, and a fuel system."

Given these incredible savings, why doesn't all construction incorporate the same principles? According to Lovins, it's because our laws and contracts don't offer the right incentives. Lovins uses electrical wire as an example. The wire-size table in the National Electrical Code is designed to prevent fires, not save energy. So the minimum code wire, spec'd by all low-bid contractors, is skinny, gets hot from resistance, and is very energy inefficient, whereas wire twice as fat, while it would cost more, would save much energy-and therefore money-in the long run.

"These problems are not trivial," Lovins adds. "For example, the United States has misallocated about a trillion dollars of capital for 200 million tons or so of air conditioning equipment, and about 200 gigawatts of power supply to run it," all of which would not have been needed in the first place "if we had designed the buildings to produce the best comfort at the least cost. Why didn't we do that? Well, for example, we pay our architects and engineers according to what they spend, not what they save. That's pretty easy to fix-offer your design professional, say, three years worth of measured energy savings on top of their normal fee, and you'll really get their attention. They can double or triple their fee: it's fair compensation for the extra work, and actually, you'll save money even upfront, because you'll typically save more on the capital cost."

Lovins has been increasingly called on to furnish such services himself. One famous case is the flagship Condé Nast Building in Manhattan: "We got into the process a bit late, so we could only help save half the energy instead of a lot more. The opaque wall in between the view glass on the south and west elevations is photovaltaic, and there are also fuel cells up on the roof. The developer was able to sign up premium tenants at premium rents rather quickly, because they really liked having the two most reliable power sources built right into the building, and not have to worry about whether Con Ed would have a problem keeping their computers going."

But in terms of radical resource productivity, Lovins seems most proud of his "Hypercar," which is being developed in a for-profit company which he chairs. He gave it a loving and lengthy description, of which the following is representative: "It's perhaps the first uncompromised super-efficient car. It's comparable in class to a Ford Explorer or a Lexus RX 300. It can haul half a ton up a 44 percent grade, handle five sizeable adults and 69 cubic feet of cargo. Yet it's less than half the weight of cars of that class, because it's made not of metal but of carbon fiber composites.

"Because it's light, it's quite peppy-zero to 60 in 8.2 seconds. Average is 99 miles per gallon equivalent, but it doesn't use gasoline; it uses safely stored compressed hydrogen gas and a fuel cell. It can cruise at 55 mph using the same amount of energy that the Lexus uses just for its air conditioner on a hot day. It has an air conditioner, too, but it's five times more efficient than usual. The only emission is hot water, so I'm tempted to put a coffee machine in the dashboard." In addition, the Hypercar "has none of the top 20 causes of road breakdowns in today's cars; the body does not dent, rust, or fatigue; and it can bounce off a six-mile-an-hour collision undamaged.

"The Hypercar concept can be applied to vehicles of any shape, style, and size, and ultimately worldwide they'll save about as much oil as OPEC now sells. They permit a rapid transition to a hydrogen economy that is profitable at each step, starting now. Such cars could be in production in five years. I think they could be dominant in new sales in ten years, and the old way of making cars would be in serious trouble in 20 years."

Lovins gave numerous other examples of how radical energy saving can also save money. For example: "Protecting the climate is not costly but profitable, because it's cheaper to save fuel than to buy it....Twenty-five years ago I was heavily criticized for suggesting that over the next 50 years, rather than following the very high official forecast, U.S. energy demand could support the same economic activity, and deliver the same or better services, with an amount of energy that would stabilize and go down as we wrung out losses. Well, actually, that's just where consumption is right now. And we now know how to do a lot better than that target set 25 years ago. In fact, already, just in the past quarter century, efficiency has become a bigger energy supply than oil. It's the biggest and fastest growing energy supply we've got, it provided two-fifths of our energy services last year, it's over five times the size of domestic oil output, twice our oil imports, twelve times our Persian Gulf imports-and in fact we've doubled our oil productivity in 25 years."

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Principle 2: Biomimicry

Lovins calls the second principle of natural capitalism "biomimicry," which involves "closed-loop production with no toxicity and no waste." As an example, he cited a case in which green architect Bill McDonough (see Timeline, July/August 2001) was asked by the Steelcase Company to design a textile to cover the backs of office chairs, replacing a cloth whose edge trimmings had been declared by the Swiss government to be a toxic waste. McDonough and his partner, a chemist, looked at 8,000 chemicals used in cloth treatment. They rejected any that caused cancer, mutations, birth defects, endocrine disruption, persistent toxicity, or bioaccumulation, narrowing the choice to 38 chemicals. All 38 could make any color, make the cloth look better, and last longer. And, because the natural fibers they used were no longer being harmed by harsh chemicals, "the cloth would also cost less to produce because you were using ordinary, not exotic, chemicals, and you no longer needed to have any of those embarrassing conversations with OSHA and EPA, because there was nothing left in the process that could harm either the workers or the neighbors. When the Swiss environmental inspectors came, they thought their measuring equipment must be broken, because the water coming out of the plant was cleaner than the Swiss drinking water going in: the cloth product was acting as an additional filter. And by the way, when you're through with this cloth, you can use it to compost your vegetable garden, or if you have a fiber deficiency you can eat it."

Where are all these developments taking us? According to Lovins, it is to an emerging business world in which the "successful firms take their values from their customers, their designs from Nature, and their discipline from the marketplace. It's a world in which conventional environmental regulation starts to look like a quaint anachronism, because the companies that need it will already be out of business, having devoted too much of their time and money to making things nobody wants-things that in the 20th century we used to call wastes and emissions, but now we have a better name: We call them 'unsaleable production,' which focuses our attention on why are we making this stuff if we can't sell it. Let's stop making it, let's design it out."

Principle 3: Service-and-Flow Economy

The book refers to the third principle of natural capitalism as a "service-and-flow economy." Lovins describes it as changing the business model so that "both the provider and customer make money the same way, by doing more and better with less for longer- in other words, following the first two principles of natural capitalism." He also calls it a "solutions economy."

For example," Schindler would rather not sell you any of its excellent elevators. They believe that their elevators use less electricity and maintenance than competing models. So they prefer to lease you the elevator, pay its running costs themselves, and just provide you what you want, which is not a bunch of metal but the service of moving up and down-a vertical transportation service. They can do that cheaper. The better the elevator is, the cheaper it gets for both of you, the more money you both make."

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Principle 4: Reinvest In Natural Capital

According to the book, the fourth and last principle is to "reinvest in natural capital...so that the biosphere can produce more abundant ecosystem services and natural resources." Lovins says this is the easiest of the four to follow, "because Nature does the production. All we have to do is get out of the way and let life flourish wherever it wants to-it's very good at that." He gave a California example: "In this state we used to burn the straw after harvest in dryland rice farming. The straw is rich in silica, so this created suspicions of silicosis downwind. But then the Rice Growers Association got together with the environmentalists, and they said let's try flooding the rice fields after harvest to create a seasonal wetland. This will invite in millions of ducks and geese, which will provide free fertilizer and cultivation. We'll harvest that high-silica straw as a valuable construction material, because bugs don't like to eat it, and as long as we have the ducks and geese there, let's sell some lucrative hunting licenses, and we'll get paid for recharging the groundwater. We'll still grow rice, but now it's merely a byproduct of a much more lucrative value web."

THE END OF THE WAR

Some have criticized Amory Lovins for being over-optimistic and underestimating the cost of his recommendations. However, it is hard to argue with his thesis that traditional capitalism has squandered natural capital and wrought environmental disaster. And his concept of the Second Industrial Revolution, in which companies preserve and restore that capital by seizing the "vast business of opportunity" of eliminating waste, is an inspiring vision of how to recover from that disaster. Lovins' term "war against the Earth" is an appropriate metaphor for the mess we have created, and he offers a path toward ending that war and at last making peace with the marvelous system that supports all life.

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