Harnessing Corporate Power to Heal the Planet

By L. Hunter Lovins & Amory Lovins

Also in The World and I

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Pioneering companies in sectors ranging from wire to plastic films and planned residential communities have already demonstrated that today’s environmental challenges hold many profit-enhancing opportunities.

The late twentieth century witnessed two great intellectual shifts: the fall of communism, with the apparent triumph of market economics; and the emergence, in a rapidly growing number of businesses, of the end of the war against the earth, and the emergence of a new form of economics we call natural capitalism.

This term implies that capitalism as practiced is an aberration; not because it is capitalist but because it is defying its own logic. It does not value, but rather liquidates, the most important form of capital:natural capital, in other words the natural resources and, more importantly, the ecosystem services upon which all life depends.

Deficient logic of this sort can’t be corrected simply by placing a monetary value on natural capital. Many key ecosystem services have no known substitutes at any price. For example, the $200 million Biosphere II project, despite a great deal of impressive science, was unable to provide breathable air for eight people. Biosphere I, our planet, performs this task daily at no charge for six billion of us. Ecosystem services give us tens of trillions of dollars’ worth of benefits each year, or more than the global economy. But none of this is reflected on anyone’s balance sheets.

The best technologies cannot substitute for water and nutrient cycling, atmospheric and ecological stability, pollination and biodiversity, topsoil and biological productivity, and the process of assimilating and detoxifying society’s wastes. With the human race increasing by 8,700 people every hour, more people are chasing after fewer resources. The limits to economic growth are coming to be set by scarcities of
natural capital.

Sometimes the value of ecosystem services becomes apparent only when they are lost. In China’s Yangtze basin in 1998, for example, deforested watersheds fostered flooding that killed 3,700 people, dislocated 223 million, and inundated 60 million acres of cropland. That $30 billion disaster forced a logging moratorium and a $12 billion crash program of reforestation. This is not to say we’re running out of such commodities as copper and oil. Even with recent fluctuations, prices for almost all commodities are near record lows and will fall for some time, in part because of improvements in extraction technologies. But in many instances these technologies impose environmental costs that further degrade the ability of living systems to sustain a growing human population.

Before the Industrial Revolution, from which capitalism emerged, it was inconceivable that people could work more productively. Nonetheless, textile mills introduced in the late 1700s enabled one Lancashire spinner to do the work previously done by 200 weavers, and the mills were only one of many technologies that increased the productivity of workers. Profit-maximizing capitalists economized on their scarcest production factor: skilled people. They substituted seemingly abundant resources and the ability of the planet to absorb their pollution to enable people to do more work.

Given today’s patterns of scarcity and abundance, that same business logic dictates using more people and more brains to wring 4, 10, or even 100 times as much benefit from each unit of energy, water, materials, or anything else borrowed from the planet. Success at this will be the basis of competitiveness in the decades to come and will be the hallmark of the next industrial revolution.


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Posted in Articles, Hunter Lovins