Tuesday, 17 July 2018

Review of "Natural Capitalism: Creating the Next Industrial Revolution" by Paul Hawken, Amory Lovins and Hunter Lovins



“I don't want a nation of thinkers, I want a nation of workers.”— John Davison Rockefeller. John D. Rockefeller was an American business tycoon and industrialist. I quoted him to illustrate that how capitalism really works, and this book serves as a cornerstone to refute the claim that exploiting capital will sustainably maximize wealth without posing any threat in the long term. 

Even after 19 years of its publication, “Natural Capitalism: Creating the next Industrial Revolution” co-authored by Paul Hawken, Amory Lovins and Hunter Lovins, is still so opportune and meaningful.  The book is full of ideas of innovation and revolutionary examples which businesses or entrepreneurs can take inspiration from. Authors tried to distinguish Natural Capitalism from Capitalism, but, I believe, an integral part of the economic system called capitalism, is natural capital which has been ignored from the very beginning by not taking into account the environmental footprint or irreversible repercussions of the industrial actions into the cost of production. This is high time we got out of the short-term wealth maximization mentality for environment is where all the economic activities take place and we have been granted only one earth. “First, many of the services we receive from living systems have no known substitutes at any price; for example, oxygen production by green plants. This was demonstrated memorably in 1991-93 when scientists operating the $200 million Biosphere 2 experiment in Arizona discovered that it was unable to maintain life-supporting oxygen levels for the eight people living inside. Biosphere 1, a.k.a Planet Earth performs this task daily at no charge for 6 billion people.”  We have been exploiting nature— clean air, water, fertile soil, rainfall, ecological systems etc. as if it were free: Has any grain producing company tried to determine the value of 1mm of rainfall and to incorporate it in the "Liabilities" section of Balance Sheet or in the COGS? Poorly-designed business processes, population growth and wasteful consumption (both by individuals and businesses) are the main causes of depletion of natural resources and obstacles towards sustainable economy. 

Automobile transportation is one of the biggest industries of the world and in the chapter 2 of the book, the authors talk about how a transformation in the energy source and material can prevent the destruction of natural capital. Polymer composites instead of steel to make the body of car and hydrogen fuel cell to produce electricity in the cleanest and most efficient way are the two most game-changing ideas, but sadly yet to be put into effect in a commercial way. Coupled with sensible design of cities that limits use of car, Hypercar could reverse the erosion of natural capital. 

Chapter 3 is eye-opening exposing the amount of waste we produce (in 1999) because we fail to “close the loop” or recycle like biological systems do. “Two quarts of gasoline and a thousand quarts of water are required to produce a quart of Florida orange juice. One ton of paper requires the use of 98 tons of various resources.” “Total annual wastes in the United States, excluding wastewater, now exceed 50 trillion pounds a year. (A trillion is a large number: To count to 50 trillion at the rate of 1 per second would require the entire lifetimes of 24,000 people.” We also waste human capital. Rikers Island (in the US) is the world’s largest penal colony which needs an annual budget of $860 (in 2015) million with an average daily population of 10,000 inmates. Isn’t there something profoundly wrong with the design of the society that incarcerates so many people at an overwhelming cost to the society itself? 

The authors emphasized the fact that the society that wastes its resources wastes its people and vice versa by providing statistics of unemployment and disemployment rates which are rising faster than employment rate globally.  Companies are downsizing to increase the profit one more percent; but greater gains can come not from eliminating people, but from eliminating those wasted energy used by ACs to keep the temperature exceedingly lower in summer days, those extra barrels of oil that were mishandled and those wasted papers to produce hundreds copies of reports which could easily be e-mailed. 

The book is also filled with lots of examples of how businesses benefitted from small and smart changes in design and process making the system more efficient and cost-effective by wringing more service from a given artifact. Remanufacturing and recycling are essentially closing the loop and “saving energy equivalent to the output of five giant power stations”. For example, big companies like Xerox and IBM employ “Dedistributing” where products come back from customers for remanufacture. 

Chapter 5 and 14 are my personal favorite where in chapter 5 authors underscores the importance of building self-sufficient green buildings as oppose to just laying out some concrete blocks. Because we spend ninety percent of our time in them (nowadays it should be more than ninety five percent) and “one-third of our total energy and two-thirds of our electricity” are consumed by them. Also billions of tons of raw materials are being used annually to construct them and a major part of it goes wasted instead of going into the building because of improper planning. Incorporation of natural air and light handling, solar design, strong sense of community etc. would contribute to astonishing energy savings as well as to an increment of quality and value of human lives. One solution could be paying compensation to designers and architects on the basis of what they save in terms of energy consumption by the building, instead of paying them a percentage of the cost of the building. There are also various examples of innovations in the book, for example, photovoltaic power generation, superwindows, which could make buildings more efficient optimizing passive solar heat gains and passive cooling. 

The highlight of chapter 14 is how Curitiba, an archetypal Brazilian city with chaos, poverty, unemployment and pollution at its center of existence, became a standard in sustainable urban planning by being the greenest city or the most innovative city in the world in only three decades. Combining entrepreneurship, good governance and vital leadership, Jaime Lerner, an architect and also the mayor of the city by treating all its citizens not as burden but as its resource. If someone is intrigued by the book, but does not want to read the whole book, she or he may go through this one chapter.

Industrialization of farming may seem to be a triumph of technology, but actually it uncomfortably worsens the situation. Despite improving efficiencies, “….farming still uses ten times as much fossil-fueled energy in producing food as it returns in food energy. Our food, as ecologist Howard Odum remarked, is made wholly of oil with oil left over.” Industrial agriculture destroys soil’s organic richness and most civilizations collapsed because they destroyed their topsoil. It also uses about two-thirds of all water drawn from the world’s rivers, lakes and aquifers. One-third of world’s cereal are being fed to livestock which turns only 10-45% of grain inputs into meat. Organic farming, Biointensive minifarming could be the answer. 

There is a chapter dedicated to fresh water usage and designs to minimize water waste. Charging households for their actual use rather than a flat rate combined with education and awareness program usually saves up to a third of water usage. Harvesting rainwater, using of graywater for flushing toilets, biological treatment plants in neighborhoods are proving to be pioneering. 

The economic viability of the businesses who not only want workers, but also thinkers suggesting and designing innovative ways incorporating the value of natural and human capital should be considered by businesses. The simple proposition of this great work is that all capital be valued. If it is not practically possible to attach a value to a hundred years old tree, one may ask how much it would cost to make a new one. How much would it cost to make a new atmosphere after we are done destroying this, a new culture, a new Earth?

Pori

I wished my daughter sang the song on annual day, That I grew up singing, And my son recited the poem I still know by heart. But my posi...