I’ve been working for 30+ years actually, on the mysteriously omitted features of sustainability and “no-growth” economic models. It’s remarkably easy to demonstrate that the way markets work, multiplying money involves about equally expanding all the economy’s physical impacts on the earth.
So one is the perennial great omissions from the discussion has been how to end the endless “making of money” and so make investment growth responsive to natural finite limits. Another is to deal with the problem misbehaving free markets, which just record popular choices, is direct evidence of popular misconceptions… These are two very serious cognitive gaps in nearly all the “advanced” plans being discussed in Rio, is the problem.
I propose corrections for these in my two RioDialogues.org proposals, doing necessities first as a strategy, to avoid omitting them as the expedient popular plans keep doing:
1) http://www.synapse9.com/signals/2012/06/02/the-next-big-challenge-a-biomimicry-for-a-self-regulating-commons/ and [https://www.riodialogues.org/node/245656]
2) http://www.synapse9.com/signals/2012/06/05/budgeting-the-commons-needs-business-ecobalance-sheets/ and [https://www.riodialogues.org/node/247876]
They propose new institutions for adopting “commons based economic models” to make creating an sustainable world commons rather than development to solve the of world economic crisis, as proposed by Helene Finidori
3) http://globalcommons.posterous.com/sustainable-development-requires-new-institut and https://www.riodialogues.org/node/240649
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1. – Actual sustainable business wouldn’t survive in the free market
Most approaches are to create a new category of businesses, “sustainable businesses”. My approach follows the observation that the “non-sustainable businesses”, managed to grow faster than all others as their business model, will surely take over and dominate all sustainable business models, as the very natural and normal course of things, as whatever grows faster does take over.
So, my observation is, OK, so we actually can’t have real “sustainable businesses” without all businesses fitting the model. So what I think we really need is a transparent means for transforming *ALL* businesses into sustainable businesses. I think the best approach is to start at the top, and acknowledge that in practice, it would require business investors to stop using their profits for just pumping up ever growing profits for themselves, till all their profitable businesses collapse their environments…
I’m open to suggestion, but think the one most clear way is for the individual humans who own the financial assets of the world to change the management rule for their own investment funds, from self-inflation to serving as pure endowments. That would retain free markets and end their driven growth, providing a “peace dividend” diversion of profits to better purposes.
In practice that means carefully studying the details of the financial rules, and how that change would need others to be made. The aim is to create a financially steered free market economy, that also genuinely serves the interests of the commons. That’s what my two proposals to the RioDialogues together (1,2,), make a stab at. In the discussions people from many different backgrounds would need to become clear about the moral, conceptual and practical differences, and their cultural effects.
Most everyone on every side seems to already feel a revulsion for “the system” we find ourselves part of, but not so clear that it’s a system we in fact made for ourselves. Most don’t even seem to realize that when free markets take horrible directions, the presumptive fault is the misguided popularity of the choices people are making. That’s what “free markets” mean, the freedom to steer the world with the popularity of choices.
One of those still very widely popular but misguided choices, (even within the ethical investing wing of sustainability), is to manage the world to have ever multiplying financial returns, expecting to blame any problems on someone else. That can’t really work, of course, but it seems to take unusual heart, courage and clarity for people to even admit it…
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2. – Circular economies are quite often “square”…
I note most sustainabilty models assume that to achieve a “circular economy” it’s good to promote “closed loop production systems”. I wouldn’t want to discourage exploration of local solutions or biomimicry, of course, but the rub is closed loop business production models are often not really better, when you add everything up.
The reason is that open loop systems (i.e. free market choices) are better than theory at identifying the real efficiencies of self-organization (their “invisible hand”). It may be either impossible or very complicated to analyze, though… So the safe bet seems to be to first assume real solutions need to be **both** economically and environmentally efficient. Economic inefficiency (i.e. high prices) is virtually a sure sign of hidden resource consumption pushing up the price somewhere in the supply chain.
That’s one of the secondary implications of my Systems Energy Assessment (SEA) research paper. [ http://synapse9.com/SEA ] On average “high prices” end up as “paying for increased average consumption” is the basic principle. I could make some list of examples, but I think it better that people learn to be self-critical on this. It appears some “circular economy” concepts will be truly synergistic and some just theoretically so, but needlessly wasting resources on ceremony.
It’s one of the subjects I’ve proven is relevant and written a good bit about, but have found better not to hurry the discussion of. Still… READ THIS AGAIN, seems to be appropriate, to push all to try to really understand, as it’s important that we use all the sound indicators for good choices available.
My understanding of “closed-looped production systems” is different from your definition here. The context in which I’ve always seen this term used is environmental impact…not markets. The concept is perhaps best developed by Bill McDonough and Michael Braungart in “Cradle to Cradle”. They describe production systems in which an open-ended linear “take – make – waste” process is transformed into a closed cycle that eliminates waste by mimicking natural systems and converting it into inputs for other processes. They further refine this concept by differentiating between “biological loops” and “technical loops”. Biological loops consist of those substances which do no harm to living organisms or ecosystems and can therefore be safely recycled through natural processes. Technical cycles refer to toxic substances for which we do not yet have benign alternatives, and therefore need to be recycled in isolation from the biological environment.
Katherine, Yes there are two quite different concepts of “circular” economy. There’s the 1st type of “circular economy” with money not managed to produce growing spirals of expansion (like ours), but which is financially stable and just reproduces itself in scale, with a stable or declining footprint. Then there’s the 2nd type, for businesses that produce wastes that are more useful as resources, for which technology exists for some things and not others. In practice that mostly becomes businesses using creative efficiencies to stay profitable while reducing their individual long term resource use.
The big trouble is that no businesses of the 2nd type (ideal or otherwise) presently operate in a circular economy of the 1st type. That’s the subject of the blog post. All businesses are operating in and serving to energize our traditional “BAU” spiral economy. Their revenues all go to hiring people with average consumption habits, and so go to generating profits for average investors and average corporations throughout the the spiral economy. Whether any individual business may try to operate differently or not, it is funding the spiral economy by operating at all.
The point is then to say, we need to very carefully shape out theories to fit the workings of the real world, or they won’t work as we want. They’ll very often have the opposite of the intended real effect as in this case. Efforts to create businesses for a 2nd type circular economy will sure help,… but only after we are on our way to having a 1st type circular economy… and virtually no one is even yet discussing how to do that.