At the REDESIGNING RESOURCES conference, held in Christchurch last month, 200 invited business, government, science, arts and community leaders spent two days in presentations and workshops around the theme of Natural Capitalism.
The conference was hosted by the Christchurch Employers' Chamber of Commerce and the Christchurch-based Recovered Materials Foundation. It included presentations from Paul Hawken (co-author of the book Natural Capitalism), Ray Anderson (Chairman and CEO of the Interface Corporation, one of the world's largest carpet companies), and New Zealand Prime Minister Helen Clark (who shifted her weekly cabinet meeting in order to attend).
PAUL HAWKEN argues that the environment cannot be "saved" nor can unemployment be "solved" as long as people cling to the outdated industrial assumption that the best business strategy is to use more natural capital, and fewer people. He told the conference that moving the economy toward greater resource productivity can drastically reduce the impact we have on the environment, while at the same time creating more profitable businesses and increasing the overall levels and quality of employment.
Several members of the MAYORS TASKFORCE for JOBS also attended the conference, and took time for a special meeting with Paul Hawken to discuss sustainable cities, local government, and the employment advantages that come from following a Natural Capitalism agenda.
In this special feature, The Jobs Letter gives an essential summary of Hawken's comments from this meeting.
But cities are just so much larger in scope and size than any other corporate sector, and yet they are always seen as "other", and we don't include them with business. But, without exception, a city of 100,000 people is far more complex than a company that turns over $100 billion in revenue. In other words your city is more complex than Royal Dutch Shell or Exxon or IBM or whatever.
A city that is a capital exporter is just like an organism that is slowly starving itself. With people, it's called anorexia an anorexic eats just a little bit less every day than the amount of energy they expend and they slowly degrade as an organism. First they become skinny but later it's a real internal breakdown in terms of the organism until they die. Now, cities don't die that way but the fact is that the analogy is perfectly apt.
Whether cities are capital concentrators or capital exporters is something anyone can feel by looking at the revenues, or population demand, or housing stock or things like that. But in fact there is no map, there's no mechanism, software, or inventory that allows cites to really understand and measure their capital flows, and get to see the changes that are occurring.
The problems attendant on capital exporters or concentrators are very different. The problems of capital concentrators are growth and sprawl and noise and traffic and pollution etc. The cities who are de-capitalising tend to have crime and unemployment and drugs, poor housing etc. But whether a city is capitalising or de-capitalising, the fact is that in both cases the strategies to create a more healthy city and more jobs is to actually the same. The strategy is to close the capital loops, and to plug the capital leaks. That's why it is important to understand what the leaks are.
The fact is the money goes through the dealer ... but it keeps going right out of this country to Japan, to the rest of the world. The fact that money is being transacted is a good thing but the point is that the transaction doesn't come back to New Zealand very much. Maybe they buy some lamb, maybe they buy some wool but the fact is it is not coming back to you.
We were going to use the power of the city to borrow money in the United States a city can issue industrial development bonds which are tax deductible which have very low interest rates. So we would use IDDs to finance the factory, finance the retrofit, and people would pay for the windows over time but they would pay for it in the savings of energy that they were getting from having their houses retrofitted ... which also included insulation and other types of energy conservation measures.
Well, it was the last thing the city wanted. They wanted clean water, but they didn't want to spend $100 million, and the last thing they needed was a higher tax rate. This is a city that had seen industry leave, not come and they were trying to make the city more attractive to business, not less attractive with higher taxes.
And so again they came to us and asked: "What would you do using natural capitalism?" We studied it and looked at it and then we asked them a question: How were you going to tax the businesses on their water run-offs? They replied that they were going to tax businesses by the square footage of roof and parking lots. This makes sense the bigger the footprint, the bigger the water runoff , and the more you pay a fair share. But we thought about it and said: Well, we think you should tax the runoff by the gallon, not by the square foot. They asked: What's the difference? The answer is that the businesses have no incentive not to have a runoff. There's no incentive at all.
What we talked about is retrofitting them with permeable or pervious paving which is used in industrial parks all throughout Europe. It is standard operating procedure over there right now but somehow America never figured that out.
What we suggested is making the parking lots whether they be private or public into "parks" that you park cars on. So not only was there pervious paving but we also put very tough resistant sedges and grasses in these tiles so that they take up a tremendous amount of water, and act to recharge the groundwater. And in all the medians and perimeters of the parking lots, we planted trees that were water-loving and fast-growing that also reflected the variety of trees that were once in the area. We actually named them just like in a botanical garden
We suggested to the city that since they were going to pass a $100 million bond anyway (for the secondary wastewater treatment plant) that had to be paid for in perpetuity we suggested that they pass a $10-15 million bond and this bond would be used to hire youth during the summer to maintain the parking lots to trim the shrubberies, and the trees and the flowers and so forth, because this is when the trees grow the fastest, and you're gonna have to do some trimming work. So not only would you be employing in the summer the youth in the city, they'd also be learning the unique botany of the region.
The normal idea is that, if you want to create jobs you've got to spend a lot of money. People usually need money to make jobs. But the fact is these examples are taking the money people were already spending on their cities and re-circulating it in an entirely different ways to create local employment.
And when you look at these examples, they end up with better cities to live in, they're better cities to walk in, they're better cities for business, and they raise property values. So again, the "wins" are so endless. It sounds ridiculous, but in fact as you can tell here that the solutions are cheaper than the problems as they existed. And yet you create jobs.
These included: The Warehouse (NZ's largest retail group), Macpac (manufacturers of outdoor and wilderness equipment), Landcare Research (a NZ Crown Research Institute), Orion NZ (A national electrical network management company), the Christchurch City Council, and the Shire of Yarra Ranges (the largest metropolitan council in Melbourne, Victoria).
The workshops at the conference were challenging and creative and sometimes combative and argumentative. It's not every day that six major companies and organisations open themselves up to direct and frank feedback from a cross-section of business, government and community leaders.
But the Redesigning Resources organisers were clear from the outset that this conference was also designed to be a catalyst for action. At the end of the two-day workshops, these six "case study" organisations committed themselves to genuine progress on their own natural capitalism agenda. They drew up specific goals covering a two-year timeframe, and progress on these goals will be reported on in the Resigning Resources website at www.redesigningresources.org.
Dramatically increase the productivity of natural resources.
" Reducing the wasteful and destructive flow of resources from depletion to pollution represents a major business opportunity. Through fundamental changes in both production design and technology, farsighted companies are developing ways to make natural resources energy, minerals, water, forests stretch 5, 10, even 100 times further than they do today. These major resource savings often yield higher profits than small resource savings do and not only pay for themselves over time but in many cases reduce initial capital investments."
Shift to biologically inspired production models (bio-mimicry).
" Natural capitalism seeks not merely to reduce waste but to eliminate the very concept of waste. In closed-loop production systems, modeled on nature's designs, every output either is returned harmlessly to the ecosystem as a nutrient, like compost, or becomes an input for manufacturing another product. Such systems can often be designed to eliminate the use of toxic materials, which can hamper nature's ability to reprocess materials."
Move to a solutions-based business model.
" The business model of traditional manufacturing rests on the sale of goods. In the new model, value is instead delivered as a flow of services providing illumination, for example, rather than selling light-bulbs. This model entails a new perception of value, a move from the acquisition of goods as a measure of affluence to one where well-being is measured by the continuous satisfaction of changing expectations for quality, utility, and performance. The new relationship aligns the interests of providers and customers in ways that reward them for implementing the first two innovations of natural capitalism resource productivity and closed-loop manufacturing."
Reinvest in natural capital.
" Ultimately, business must restore, sustain, and expand the planet's ecosystems so that they can produce their vital services and biological resources even more abundantly. Pressures to do so are mounting as human needs expand, the costs engendered by deteriorating ecosystems rise, and the environmental awareness of consumers increases. Fortunately, these pressures all create business value."
For specific comments by Paul Hawken on employment issues from a Natural Capitalism perspective, see The Jobs Letter No.118 (our special issue on "Jobs from Waste").