Category Archives: Policy discussion

Budgeting for “the commons” needs business “eco-balance” sheets

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A comprehensive method guiding investors
to compete for profiting the commons

It would not just count profits but also liabilities, in financial terms, using monetized business ESG balance sheets (eco-balance sheets), in combination with normal financial balance sheets.

Then everyone will see the real societal financial costs of making money today, that present or even past investors might well be held responsible for.

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The full application of this principle is “A World SDG“, to provide TRUE MEASURES of sustainability for business, consumer and policy choices, and applying the basic science research for ‘Scope 4’ accounting and the 2011 Systems Energy Assessment (SEA) paper It is still “new science” though, and so demands fresh questions too.  It takes investigating the actual organization of the working systems of our world, looking for regular patters of in the system as a whole, what causes them and how they are change, more than theory.  It’s surprising both how little we notice going on around us, and how much we see but don’t notice what is implies.   A workshop method for opening people’s eyes to what’s really happening all around them can be found in the 3Step Method of Learning to Work with Nature. 

The original version of this proposal was submitted to the Rio+20 Dialogues for comment and voting as: Budgeting for “the commons” needs business “ecobalance” sheets, to compare environmental liabilities and benefits”. See “News of the Commons” for introductions to the vision and the systems thinking needed for a commons based approach to sustainability.  It’s part of my “reality math” series.

It’s proposed as part of the foundation of collaborative free market institutions needed for the health of the competitive free markets, as an element of Helene Finidori’s “Commons-Sense” and the “commons based economic models” she proposed.  Their intent is to solve the global economic crisis by making the commons work for the whole, as a replacement for the paradigm of “prosperity” with ever expanding development.

The proposal would accelerate how the business community is responding to their environmental liabilities. They’re hiring teams of sustainabilty experts, using comprehensive sustainabilty reporting (CSR) to track Environmental, Sustainability and Governance (ESG) factors, following both private and public standards, such as for the Global Reporting Initiative (GRI). The reason business has a new interest in environmental liabilities is that they are driving corporate assessed values, as economic liabilities.

To protect natural resources local stakeholders would still need a say in the use of local resources.   To protect global resources for the future an equitable way to restrain growing economic demand is needed.   World standards for Comprehensive Sustainability Reporting (CSR) wold accurately assess the impacts of business products.  Then Economic Liability Assessments (ELA) of their economic costs to our future, would allow the world to act as a resource commons.   It would provide equitable market constraints on high impacts would, to suppress demand, and fund investment in alternatives.   ELA reports would be the basis of the “Eco-balance sheets” called for below, to be reported in business annual reports and factored into Pigovian taxes/tariffs on their products and services.

The basic scientific methods of doing accurate CSR and ELA assessments are what are discussed below.    The current statistical methods of environmental and economic accounting contain a major systematic inaccuracy. Simply said the error is in relying on tracing individual records rather than assessing whole system requirements,

an inaccuracy caused by not asking who sliced up the pie, to check the accuracy of trying to trace all the crumbs.

a scientific method difference
between economic accounting and systems accounting

Slices of a business energy pie mostly go uncounted when relying on traceable records, leaving out all the energy demands of business services.

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Our Economic Liabilities for Environmental Damage
are direct costs of prior profits for business
that went unaccounted for.

New systems physics (3) would now allow the development of model “eco-balance sheets” to be placed along side normal “financial balance sheets” in annual business reports.   That would provide a clear and quicker way than others for using market forces to correct our systemic problem of unaccountable impacts on our future.

Businesses have long accumulated unaccountable impacts by investing in growing irreversible exploitation, and now accelerating depletion, of what once seemed limitless capacities of people and the earth.   It’s enormously costly for our future.

Investors and business managers can make better investing decisions if ESG measures capture the whole impact.

Those investment strategies incurred very costly economic damage to our future economy, that the businesses that created them were not charged for.   For estimating environmental impact costs like that there are various methods, and some major recent innovations. Continue reading Budgeting for “the commons” needs business “eco-balance” sheets

“The next big challenge” a biomimicry for a self-regulating financial commons

Using a new paradigm of biomimicry
to create a global self-regulating financial commons.

This proposal was submitted to the Rio+20 Dialogues for comment and voting. See “News of the Commons” for introductions to the vision and the systems thinking needed. It’s part of the foundation of collaborative free markets needed for the health of the competitive free markets, as an element of Helene Finidori’s “Commons-Sense“.  In this case to recognize that the profitability of the whole is threatened by a continued common investment strategy for growth, and needs a way to change to a common investment strategy for well being.

It works for us

Nature systems initially develop using a “bootstrap” mechanism, growth, that continually expands their control of their environment.  For any system’s own internal as well as external needs that self-investment strategy needs to become responsive instead ever more controlling to survive.

See UN Proposal to guide the UN SDG’s by this principle for OWG 7 & 8
Early version: Jan 2014 –
A World SDG- and way to thoughtfully manage global systems
This and the earlier versions contain a lot of good thinking…
the Most polished final version is a Feb 2014 proposal to the UN:  
A World SDG

 

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A new economic paradigm: The next big challenge

The proposal is followed by a discussion of some of the systems thinking
on “the commons” that developed with a group of contributors to a Systems Thinking World discussion group. It is intended as a sample of the kind of “commons based economic models”proposed in the 2012 RioDialogues, by Helene’s Finidori, to solve the global economic crisis by making the commons work for the whole, as a replacement for the paradigm of “prosperity” with ever expanding development. Below is the original article (with references) for the UNCSD Rio+20 Outreach Forum Continue reading “The next big challenge” a biomimicry for a self-regulating financial commons

Adopt natural system principles to keep economies profitable at their limits

The collection of “Hacks” for the Long Term Capitalism Challenge offered byHarvard Business Review, McKinsey and MIX, for the M-Prize for Management Innovation now has this proposal from me…

Please leave comments for reviewers on The official competition entry at the MIX site (here too is fine for conversation).  If you request information I’ll respond as I did for Bill Rees, and post it if it’s OK with you.

It’s a nice new version of the long series of proposals for using natural economies as models for better ways to organize ours, a kind of systems biomimicry.

General References: (added proposal references at the end)

  1. For closely related world system biomimicry see “News of the Commons
  2. To introduce systems ecology “Self-organization as “niche making
  3. I got very good detailed questions on the MIX proposal from Bill Rees, and posted my responses as Questions from Bill Rees.
  4. For an introduction to the physics and general systems theory of natural open systems, see Natural Systems Thinking

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The Summary

A good goal for growth would be to end at a stable peak of vitality providing a sound capital endowment for life on earth.  That would be better than ending at a peak of exhaustion, like other “tower of Babel” societies of the past such as Rome and the Mayans.

It can also be thought of as a change of “ism’s”.

It would also represent a change in form for our economic system, while still being the very same economy with the same people and rights, and reliance on creative innovation funded by investors.   By giving profits an end purpose, of caring for things rather than just for multiplying profits, it woud give the whole economy a very different purpose.    So, it can also be thought of as a change of “ism’s”. Continue reading Adopt natural system principles to keep economies profitable at their limits

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# Reads                   Page/Post Title

3. Top 39  in Jan 2012

557           2007/08/18    Whether successfully averted for the moment or not/

328           2011/07/18    My most disturbing finding/

322                                 Phpub.htm (publications list)

302                                 Systems Energy Assessment (SEA)/

186           2011/07/27    Urges arousal and keynes animal spirits/

162                                 Design/dollarshadow.htm ($’s = btu’s)

118                                 Cartoons/ (mostly New Yorker’s)

115           2011/08/05    Its the leeches that make us strong/

101                                 Pub/EffMultiplies.htm (natural effects of efficiency)

100                                 Chapters.htm (“S” curve reading templates) Continue reading All time Top 22