it will drive the biggest economic and industrial transformation in history. This is the fun part we come to later in our story.
My point on technology as the solution is simple. Itâs not that technology is not crucial; it most certainly is. Itâs just highly unlikely that it will be physically possible to drive new technology and its adoption fast enough to overcome the inertia for ecological change already in the systemâsufficiently to prevent an economic and social crisis.
This is particularly so given that the challenge is not primarily a technical âis it possibleâ one, but more a political/economic one. In this context, what the lag means is that we will be fixing the causes of future problems (such as reducing current emissions) while also dealing with the economic and social consequences of yesterdayâs behavior (for example, dealing with rapid climate change, famine, and the like). This need to respond to past behavior will undermine our economic and political capacity to reduce future impact. An example might be the collapse of the global insurance industry in the face of rapid changes in the physical climate.
The momentum driving ecological change in the system is just too powerful to overcome smoothly. When the scale of change required to keep the issue from becoming a crisis is translated into arithmetic, as weâll do shortly, it defies belief that it can be achieved. So, yes, I believe in markets, I just donât believe in miracles that ignore the laws of physics and mathematics.
The final straw clutched at by market-focused technology optimists is that we can avoid the crisis by decoupling material and energy growth from economic growth. This has long been the holy grail of corporate sustainability experts and has been advocated by many, including myself until five years ago, as the solution to the growth dilemma.
The idea is that we can shift the structure of the economy away from stuff and pollution. We would move to renewable energy and resources and drive dramatic resource efficiency improvements, thereby using less and cleaner material and energy per unit of economic output. It assumes we can do so at sufficient speed and scale that economic growth can occur while total absolute environmental impact is dramatically reduced.
It is a good idea, and it is the right direction for the economy. Indeed, the focus on the concept has led to some very good business ideas that are being implemented around the world, like a shift from selling physical products to selling services. A good real-world example is the idea that we should buy the service of air-conditioning rather than the equipment. The logic is that we donât want to own a machine, we want the air at a certain temperature and humidity, so we buy that service. The company we buy it from then owns the machine and pays the energy bill, so they would be encouraged to design it for longevity, recyclability, and efficiency because the company rather than the customer would bear the costs of repair, disposal, and energy consumed. The company would be incentivized to improve these, as they would get the resulting savings. This approach has long been applied in commercial photocopiers, where you can pay by the page.
Another example is the sustainability-focused carpet company Interface, led by the legendary sustainability-focused CEO Ray Anderson. They promote an âEvergreen Carpetâ lease, where the customer pays for the service of having their floors covered. Interface is then incentivized to produce the carpet in a way that minimizes life cycle costs, including making the materials recyclable and hard wearing.
So why canât we pursue decoupling by putting in place structures like these that incentivize efficiency? We can and will. The challenge is that we again face the problem of the math. Returning to Ehrlichâs formula, we are in this case dealing with the T in I = P Ã A Ã T.
An excellent
My point on technology as the solution is simple. Itâs not that technology is not crucial; it most certainly is. Itâs just highly unlikely that it will be physically possible to drive new technology and its adoption fast enough to overcome the inertia for ecological change already in the systemâsufficiently to prevent an economic and social crisis.
This is particularly so given that the challenge is not primarily a technical âis it possibleâ one, but more a political/economic one. In this context, what the lag means is that we will be fixing the causes of future problems (such as reducing current emissions) while also dealing with the economic and social consequences of yesterdayâs behavior (for example, dealing with rapid climate change, famine, and the like). This need to respond to past behavior will undermine our economic and political capacity to reduce future impact. An example might be the collapse of the global insurance industry in the face of rapid changes in the physical climate.
The momentum driving ecological change in the system is just too powerful to overcome smoothly. When the scale of change required to keep the issue from becoming a crisis is translated into arithmetic, as weâll do shortly, it defies belief that it can be achieved. So, yes, I believe in markets, I just donât believe in miracles that ignore the laws of physics and mathematics.
The final straw clutched at by market-focused technology optimists is that we can avoid the crisis by decoupling material and energy growth from economic growth. This has long been the holy grail of corporate sustainability experts and has been advocated by many, including myself until five years ago, as the solution to the growth dilemma.
The idea is that we can shift the structure of the economy away from stuff and pollution. We would move to renewable energy and resources and drive dramatic resource efficiency improvements, thereby using less and cleaner material and energy per unit of economic output. It assumes we can do so at sufficient speed and scale that economic growth can occur while total absolute environmental impact is dramatically reduced.
It is a good idea, and it is the right direction for the economy. Indeed, the focus on the concept has led to some very good business ideas that are being implemented around the world, like a shift from selling physical products to selling services. A good real-world example is the idea that we should buy the service of air-conditioning rather than the equipment. The logic is that we donât want to own a machine, we want the air at a certain temperature and humidity, so we buy that service. The company we buy it from then owns the machine and pays the energy bill, so they would be encouraged to design it for longevity, recyclability, and efficiency because the company rather than the customer would bear the costs of repair, disposal, and energy consumed. The company would be incentivized to improve these, as they would get the resulting savings. This approach has long been applied in commercial photocopiers, where you can pay by the page.
Another example is the sustainability-focused carpet company Interface, led by the legendary sustainability-focused CEO Ray Anderson. They promote an âEvergreen Carpetâ lease, where the customer pays for the service of having their floors covered. Interface is then incentivized to produce the carpet in a way that minimizes life cycle costs, including making the materials recyclable and hard wearing.
So why canât we pursue decoupling by putting in place structures like these that incentivize efficiency? We can and will. The challenge is that we again face the problem of the math. Returning to Ehrlichâs formula, we are in this case dealing with the T in I = P Ã A Ã T.
An excellent
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