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Creating a
Green Growth Strategy
Workshop notes
Philip Sutton
Convener
Greenleap Strategic Institute
29 October 2006 (Version 1.c)
Up-to-date notes can be found at:
http://www.green-innovations.asn.au/green-growth/Green-growth.htm
Anchoring
Green Growth Strategies
on actually achieving
sustainability, very fast
The real structure of the economy
Conversion of Nature’s economy to the
Human economy
There is a rapid switch in
the ratio of Indirect vs Direct Costs of
developments as nature’s economy shrinks
and the human economy grows
Once the human economy gets
large enough
(relative to the size of the earth)
indirect costs escalate
at a hyper-exponential rate,
and both the natural environment
and the human economy
become unsustainable
Climate change
case study
400,000 year record of
CO2 and temperature
Petit, J. et al. (1999). "Climate and atmospheric history of the past 420,000 years
from the Vostok ice core, Antarctica", Nature, Volume 399 Number 6735 Pp. 429436.
Flows of emissions of CO2 from burning
fossil-fuels have risen rapidly since 1950
25
Gt CO2
20
15
10
5
0
1850
1875
Source: World Resources Institute, CAIT
1900
1925
1950
1975
2000
Strong Global Warming Observed
Hadley Centre for Climate Prediction and Research
Based on Folland et al (2000) and Jones and Moberg (2003)
Global soil moisture trends – 1948 - 2002
This depiction of linear trends in the Palmer Drought Severity Index from 1948 to 2002 shows drying
(reds and pinks) across much of Canada, Europe, Asia, and Africa and moistening (green) across
parts of the United States, Argentina, Scandinavia, and western Australia. (Illustration courtesy Aiguo
Dai and the American Meteorological Society.) National Center for Atmospheric Research (NCAR)
http://www.ucar.edu/news/releases/2005/drought_research.shtml
Global insurance losses
1970 – 2005
45
40
35
30
25
20
15
10
5
0
1970
1975
1980
1985
Natural catastrophes
1990
1995
2000
Man-made disasters
Source: Swiss Re sigma no1/2005
www.theclimategroup.org/assets/Bruce%20Thomas%20(06-04%20pm).ppt
Additional short term threats
• Increased frequency and more intense fires
• Increased storms severity (cyclones, hurricanes,
tornados, hail storms)
• Bigger sea storm surges
• Higher temperatures / heat stress
• Increased soil loss / dust storms
• Water shortages
• Migration of pests and diseases
• Loss of soil carbon
• Food shortages
2 ºC warming is thought to be a
rough boundary between
‘dangerous’ and ‘catastrophic’
climate change
Global average surface equilibrium temperature change for various stabilization targets.
Source: Azar, C., & Rodhe, H., 1997. Targets for Stabilization of Atmospheric CO2. Science 276, 1818-1819. . Dashed
line a) refers to an estimate of the maximum natural variability of the global temperature over the past millennium, and
dashed line b) shows the 2oC temperature threshold.
Modelling the recent evolution of
global drought and projections for
the 21st century with the Hadley
Centre climate model
Eleanor J. Burke, Simon J. Brown
and Nikolaos Christidis
Hadley Centre for Climate
Prediction and Research
October 2006
• Severe drought over 40% of land (agriculture
unviable on 30%)
• Near total loss of the Amazon
• Between 20% - 60% loss of all species on Earth
• Accelerating sea level rise
• Loss of Himalayan ice sheet (and seasonal snow
melt)
• Loss of the Arctic and Antarctic sea ice
• Melting of the permafrost
Crucial Prevention Aspect
Avoiding Catastrophic Climate Change
Dangerous & catastrophic climate
change
• We have already entered the realm of
dangerous climate change
• It is thought that warming more than 2ºC over
the pre-industrial level will lead to catastrophic
climate change
• There is a 20-30% chance that we will trigger
2ºC warming with 400 ppm CO2 – an
atmospheric level that will be reached in less
than 10 years – unless massive cuts now.
“We need to treat climate change not as a longterm threat to our environment but as an
immediate threat to our security and
prosperity” “It is now becoming
increasingly clear that it is what we do in the next
15 years that matters most.”
John Ashton, the UK's climate
change envoy, 8 September 2006
One scenario for stabilising atmospheric CO2 at 350 ppmv.
Enting, I., Wigley, T. and Heimann, M. (1994). Technical Paper No. 31: Future emissions and concentrations
of carbon dioxide:
Key ocean / atmosphere / land analyses. CSIRO Division of Atmospheric Research: Melbourne.
There is too much CO2 in the air
right now!
• We need to get to zero greenhouse gas
emissions as fast as possible (within 10
years)
• We need to take excess CO2 out of the air
as fast as possible – to bring the
atmospheric level down to between 300280 ppm (precautionary principle)
End of
climate change
case study
A completely new development
paradigm needed
• Green growth must be 100% decoupled from
damage and it must enable the restoration of
nature’s economy (our sector zero) to safe
condition.
• Economic development must now be truly
ecologically sustainable.
• This is not comfortable political rhetoric – it has
huge implications for how to change and
manage the economy – and for how politics is
conducted.
Key is to 100% de-link
economic growth from
environmental impact / waste
Economic growth
Environmental
impact/waste
Homeostatic management
Prevention

Safety zone
or mode
Restoration


Dynamically creating/maintaining a state of sustainability
o
o
prevention (eg. Natural Step principles)
recovery/restoration

Key concepts
• We need to be clear about what we are trying
to sustain and the scale and urgency of the
task
• We have to apply double-practicality - get
things done and do things that actually solve
problems
• Sustainability requires having no major tradeoffs
• We need to recognise that we are facing a
global sustainability emergency.
Creating a
Green Growth Strategy
Economic growth relates to the service
flow (of the ‘whole product’),
not to the physical platform
(which makes it possible for dematerialisation to work)
Near term economic growth is
compatible with a major once-off
restoration of the environment if…..
• the total of all the physical platforms of all economic
output can be changed in character and shrunk small
enough physically to be compatible with the
maintenance of everything that needs to be
sustained, AND
• the real value of economic output does not collapse
in the process of physical adjustment and can keep
rising during the transformation period
Economic growth is compatible
with perpetual prevention of
damage to the environment and of
wastage of resources…….
• if the total of all the physical platforms of all
economic output remains small enough and
of the right character physically to be
compatible with the maintenance of
everything that needs to be sustained, AND
• the total service flow from economic output
can keep increasing within that constraint
This means that once basic human
physical needs are met …
• all future economic growth is
generated through net qualitative
change, not physical expansion,
AND
• compatible productivity boosting
mechanisms are tapped
What is the character of the physical
platform shrinkage and change?
•
A Factor 20 or more dematerialisation (for developed countries), and then
maintenance of a capped quantity of materials and energy for all purposes
(Developing countries will also need to ‘dematerialise’ inefficient sectors
and processes)
•
The creation of a virtually closed-loop economy (everything recycled)
•
Stabilisation of population (after gentle shrinkage??)
•
Declining use of oil from now
•
Effectively zero greenhouse gas emissions
•
Full transition to renewable energy
•
Sequestration of past greenhouse gas emissions to stay below or get
below 400 ppm CO2 fast and to trend towards 300 to 280 ppm over time
•
Major restoration of habitat for threatened species
•
Move to zero toxic emissions
•
etc.
The conditions under which a truly sustainable
economy could have continuing economic growth
Fixed (or
declining)
stock of
materials
maintained
in a closedcycle (with
minuscule
top up from
nature)
Continually rising service
flow
- to benefit a stable
population at a
sustainable level
Stock enhanced while in use
New
capital
Fixed (or declining)
flow of renewable
energy
Reuse &
recycle
How can service flow be boosted in
perpetuity?
• via improved qualities
• via more qualities
that benefit the user and the
environment/community
• achieving this depends on compatible
sources of productivity growth
• and this depends on continuing innovation to
overcome diminishing returns
Major sources of productivity growth that
needn’t drive physical expansion and can co-exist
with physical contraction:
•
Lean production / closed-cycle production
•
Increased knowledge & information intensity / intensified education
•
Internet communications
•
Fast, needs-based leapfrogging-innovation system driven by sustainability
transition
•
Whole-system design
•
Green chemistry / nanotechnology / biotechnology (miniaturisation)
•
Physical proximity (new model of urban form)
•
Reduced scale & therefore opportunity to mass produce/speed up creation of
production capacity & infrastructure
•
Reduced environmental damage / reduced wastage
•
Full employment
•
Artificial intelligence
Old: Sources of productivity
diminished by shift from
physically growing economy
•
•
Cheap physical resources
and abundant supply
(materials, energy, water,
land) (But this source of
productivity is being
constrained anyway)
Quick and easy singlepurpose decision-making
on most things (but leads
often to poor/low wisdom
decision-making)
New: Sources of productivity boosted by
shift to environmentally sustainable
economy
•
•
•
•
•
•
•
•
Speed and ease of proximity (in urban
design)
Increased skills in whole-system design
opening up greater access to leapfrog
innovation
Necessarily ubiquitous application of
lean thinking
Necessarily ubiquitous application of
smart technology and AI
Low levels of health/environment
damage
More highly skilled workforce /
community
Reduced real expenditure on raw
materials
Drag on economy released due to low
unemployment / underemployment
Can the necessary short-term
physical shrinkage/change be
achieved without collapsing
economic growth?
• Arguably yes, if there is sufficient innovation to keep
boosting productivity, and
• there is enough time, so that normal investment
levels can cover the restructuring, or
• for a short-duration transition, there is a big enough
increase in investment, with temporary shrinkage of
discretionary consumption, plus really effective
redeployment of sunk capital (cf. WW2 US)
Theory of natural capital
• In perpetuity: Natural capital as ‘infrastructure’
with service flow – ecosystem services and
renewable resource flow
• Once-off: draw down / economic take off /
payback: restoration/resequestration is the
payback – those who benefit from the
drawdown (through economic take-off) should
pay for the restoration (eg. fossil energy use >
CO2 resequestration)
Theory of rationing, ecotaxation &
related instruments
• Rationing, ecotaxes (& related economic
instruments) are regulatory tools – they
should be managed for regulatory effect – in
innovative system revenue should fall if
ecotaxes are effective
• The way revenue is recycled from auctioned
rations, ecotaxes etc. is critical to maximising
productivity and minimising inflation
How can we avoid rebound?
• Through macroeconomic management using:
– rations
– ecotaxes
– tradable permits
– regulation
• Rebound is a symptom of the failure of
macroeconomic management.
• Rebound is also a symptom of 300+ year old
institutional arrangements that cause resources to
become systematically cheaper than labour intensive
products (factor price problem).
Simplifying the task of dealing with
multiple issues
– at the level of industry/economy restructuring
• Pick the issues that have the biggest impact that can’t be
ignored or that we can’t afford to ignore (eg. climate
change, peak oil, water, food supply)
• Use these issues to work out the maximum scale &
speed of action necessary – this calibrates the
restructuring (calibration issues)
• Identify other important issues that ought to be taken
really seriously – where’ if these issues are taken into
account’ solutions to the other issues will need to be
changed (eg. biodiversity) (solution-changing issues)
• Deal with all other issues at the level of detailed
implementation of the restructuring program.
Divide action into a ‘crash program’ & a
‘long run innovation program’
• If any of the calibration or solution changing
issues require major changes to the economy
within a 5-20 year period, they need to be
managed through a formally recognised ‘crash
program’
• Any issues that will have (a) a big impact on the
economy or (b) must be responded to, but can
be tackled over an extended time period, should
be part of a long run radical invention &
innovation program.
Analyse using supply chains* rather than
industry sectors & regional economies
• The economy is going to have to change so
much, in so many detailed ways, that if we use
industry sectors & regional economies as the
basis for analysis and solution building, we will
lock in old (bad) practice and vested interests
• Information about transformed industry sectors &
regional economies should be created by
aggregating data or ideas about the new supply
chains.
* Includes the “end of life chains” as well to make up a full lifecycle chain.
Old business-as-usual, new businessas-usual and the sustainabilityachieving economy
• The old business-as-usual economy is based on
physical expansion, resource throughput and only
(sometimes scant) attention to local environmental
problems
• The new business-as-usual is beginning to emerging in
response to climate change and other environmental
crises – it is using a new generation of technologies to
make a big reduction in externalities – but it does not
attempt to fully eliminate externalities – so it will face
new crises down the track as the economy grows
• The sustainability-achieving green growth paradigm is
based on systematically eliminating externalities – so
that economic growth does not periodically recreate
major crises.
Positive correlations
• In the developed world, generally the
countries and provinces with the strongest
environmental controls have the strongest
economies.
• In the developed world, generally the
countries and provinces with the strongest
environmental controls have the leading
exports of related technologies
Fastest industrial restructuring
• Korea: from agricultural nation to world
competitive manufacturing economy in
20 years (complete infrastructure change)
• US: after Pearl Harbor: from world’s
largest consumer economy to world’s
largest war economy in 1 year
(complete change to how
infrastructure is used)
Questions for workshop
(following)
Questions: Framing issues
• How much development do we need for social
reasons? (The more economic development we want
the stronger our environmental policies need to be to
get 100% decoupling.)
• How big and how urgent does the environmental
restructuring program need to be? How will the ‘crash
program’ and the ‘long run innovation program’ run?
• How do we want to position our economies within the
world economy? - in relation to (a) the old businessas-usual, (b) the new business-as-usual and (c) the
new sustainability-achieving elements of the
economy?
Questions: Backcasting strategy
methodology
• Where are we now? (judged by success
principles)
• Where do we want to be, when?
(with the least loss along the way)
(based on success principles)
• What do we have to do to get there, in time?
• For an effective start, what should we do
now?
More questions for workshop
session - 3
• What would an appropriate green growth strategy be
for your society?
• What are the supply chains that make up your economy?
How well do the end purposes and the elements of the
supply chains fit with an ideal sustainability-achieving
economy?
• What changes need to be made to the supply chain
profile of your economy if it is to be sustainabilityachieving?
• How should your economy relate to the “old business-asusual”, “new business-as-usual” and sustainabilityachieving elements of current or new export markets?
Tools to help with the questions
(following)
So, where do we want to be,
when?
Pulling all the issues together……
•
we want to be in an environmentally sustainable state as soon as possible,
with the least loss (to people and nature) along the way
•
exactly what that means should be determined by careful assessment –
the ideas in this paper are merely a crude illustration of such an
assessment process
•
the assessment process in this paper suggests that:
–
possibly we have an immediate issue to deal with the peaking of world oil supply
– requiring major and continuing demand reductions to rebalance
supply/demand
–
at the same time we need to make massively deep cuts in greenhouse emissions
(down to zero?) and begin sequestration of past emissions
–
at the same time as these transitions are made, solutions to other pressing
environmental, social and economic issues should be built in
– so that timely solutions are not pre-empted and opportunities for ‘economies of
renewal’ are not lost – this is comparable to the advantages that have accrued to
economies rebuilding after the devastation of major wars
Major end-state integrated goals
• To create an environmentally sustainable economy
very fast
• To be the global pioneer of the full “environmentally
sustainable economy” paradigm
• To create economies based on the new quality-driven
paradigm
• Having used the low wage strategy to kick start
economic take-off, to end the dependence on this
strategy for driving economic growth
• To spread the benefits of the new economy through
the whole of society
What do we have to do to get
there, in time? 1
• Educate decision-makers and innovators in areas of society
about the need for change, the possibilities for change and the
methods/technologies for change
• Build institutional capability to drive fast structural change to
achieve an environmentally sustainable economy
• Proactively seek the most environmentally demanding
customers in the global economy
• Preferentially encourage the most creative environmentally
minded investors to be active in the region
• Develop very strong sustainability R&D and innovation programs
• Make sure that all long-lived investments are compatible with an
environmentally sustainable economy
What do we have to do to get
there, in time? 2
• Try to shorten the lifecycle of traditionally very long-lived
infrastructure
• Lobby to establish international treaty obligations to mandate the
adoption of production systems that are compatible with an
environmentally-sustainable economy
• Build the most advanced environmentally sustainable urban
systems
• Expand the domestic and regional economy – and build it on
environmental sustainability principles
• Build a social movement to promote the rapid achievement of an
environmentally-sustainable economy
For an effective start, what should
we do now?
Catalyse change
• create methods and scenarios for the fast
achievement of an environmentally sustainable
economy – use these for discussion (& then action)
• create a network of professionals to build skills and
promote the idea, within mainstream society, of
creating an environmentally sustainable economy
• Promote the “Race to Sustainability” program as a
way of engaging societies
http://www.green-innovations.asn.au/Race-to-Sustainability.htm
The principle of eco-efficiency
(dematerialisation)
• Aim for Factor ‘x’
improvements in
eco-efficiency
• Don’t lock into
arbitrary Factor 4 or
Factor 10 goals
• Calculate afresh
See Dutch
“Sustainable
Technology
Development” book
The principle of closed-cycle
• Power with renewable energy
Strategies/initiatives for
zero waste - 1
• Physical products and materials & energy should be
managed to retain their entropic quality as long as
possible: through combined processes such as:
-
Maintenance / containment
-
Repair
-
Reuse (whole systems)
-
Re-manufacture (component reuse plus)
-
Reprocessing / waste warehousing
-
Up-cycling
A new waste hierarchy for a zero
waste society
Mining
from the
earth's
crust
Processing
Biological
resource
harvesting
and mining
from the
biosphere
Earth’s
crust
Biosphere
(zone of
life)
Biosphere
(zone of
life)
Earth’s
crust
Reprocessing /
resource
stewardship /
closed-cycle
production
Reverse
processing /
reverse
harvesting
Reverse
processing /
reverse mining
(sequestration)
•Closed-cycle
•greenhousefriendly
•biodiversityfriendly,
renewable
Producing the
physical
platform
•Eco-efficiency /
Dematerialisation
(ratio of service
value/materials)
•Product stewardship
(attached to the
dominant brand
managers)
Delivering
services via a
physical
platform
All
powered by
renewable
energy
The new sustainabilityorientated economy
Meeting
individual,
social &
environmental
needs of the
world’s human
population; and
meeting the
needs of nature
Using
services on a
physical
platform
Philip Sutton
Green
Innovations
19 May 2002
Version 2.e
Price
(factor cost)
Signals
Financial
imperative
Elasticity
Responsiveness building
(technical, social, financial)
How can we drive the change?
Macroeconomics
Mesoeconomics
Microeconomics
Factor price
Investment flows
• Industry level
lifecycle management
(supply chains)
• Industry policy
• Regional economics
• Gross drivers
• Rebound control
• Infrastructure shaping
• Structural innovation
level
• Strategic mobilisation
• Product level lifecycle
management
•Bottom up influence
• Innovation
•Mass mobilisation
• Organisational
capability building
Introducing broad-based
ecotaxation
Introducing broad-based
ecotaxation
$
expand
Wage
supplements
Eliminate payroll taxes
Investment
/subsidy
Research and development
Education
Time
Opportunities for economic growth in a
physically constrained world
Protected slower
zone
Fast changing or accelerating zone
Benefit
Impact
Carefully manage interface
Impact
Expansion
of coverage by service of
the population
(includes
humans)
Benefit
Improvement
of service quality
The
living
world
Carefully manage interface
Zone of intermediation
The
social
world
Protected slower
zone
Transition time:
30 years or
less
Action on
the ground
Cruising
Winding down
the transit ion
#### delayed takeoff
The constipation
stage (partial
action, major
resistance)
Awakening
Imag in ing/
mobilising people
The big leap
- making it
happen on the
ground
Gearing up/
mobilising
resources
Managing for sustainability-promotion
through the business cycle
Spread new paradigm
Cost saving, risk management &
customer loyalty measures
Peak 1
Peak 2
Early movers
explore
Cost saving, risk management &
customer loyalty measures
Early movers
explore
Reach consensus on new paradigm
Sell new paradigm products
Start new
investments
Start
Lock in initiatives
regulatory
Upswing 1
taxes
Prepare initiatives
Downswing 1
Downswing 2
Trough 2
Trough 1
Year X
Year X+1
Year X+2
Year X+3
Year X+4
Year X+5
Year X+6
Year X+7
Year X+8
Year X+9
Modelling the green growth
program
• To understand proposed or real economies that are
intended to be ecologically sustainable it is essential to
model both the money economy and also the physical
economy (from the macro to the micro level
• The green growth / sustainable economy transformation
will involve so many micro initiatives that need to be
assessed for their aggregated macro effects that new
modelling technology will be needed
• The only technique that can deal with this level of
necessary detail and policy flexibility is agent based
modelling. All players in society will need to be able to
access ‘whole economy’ agent based simulations to test
their initiatives to make sure that they add up to a
sustainable outcome.
Making the
Green Growth Strategy
possible
3 stages
to make the strategy feasible
Creating a mandate
Developing the mandate
Implementing the mandate
Motivations - ethical
•
•
•
•
•
Caring for local people
Caring for future generations
Caring for people globally
Caring for nature, locally and globally
For example: 2400 years before current era, during
the Warring States period, Chinese philosopher Mozi
(墨子) argued that we need to act on universal, not
partial love. Compassion for all life, human and nonhuman, is central to Jainism, a philosophy of even
greater antiquity founded in India.
Motivations (pragmatic) - threat
•
•
•
•
Food security, risk of widespread famine
Economic viability
Risk of global depression, armed conflict.
We stand in relationship to climate change and
its consequences where people stood, in 1900,
in relation to WW1 (and its aftermath - the
Depression, WW2 and the Cold War).
Motivations (pragmatic) - opportunity
• Chance for viable/sustainable
development
• Opportunity to seize competitive
advantage – leapfrog to success
• Chance to build a highly innovative and
creative culture
• Opportunity to show leadership, wisdom
and courage.
Strategies to promote the feasibility
of the Green Growth Strategy - 1
• Obtain a formal declaration of a State of Sustainability
Emergency
• Develop a self-generating network of people to promote
effective action
• Carry out widespread education & training
• Work with innovators and professionals across
government, industry and general community
• Create &/or develop centres for innovation and strategy
development – link globally
• Use “concurrent engineering” methods (multiple actions
in parallel) to get faster development and implementation
of strategies.
Strategies to promote the feasibility
of the Green Growth Strategy - 2
• Campaign to change the World Trade
Organisation rules so that countries can
discriminate against imports on the basis
of their inferior methods of production
• Press the rich countries to establish a
multilateral “new Marshall Plan” for large
scale sustainability investment.
Questions for workshop
(following)
Questions for workshop session
• What barriers do you see to a Green Growth
Strategy being feasible in your society?
• How could a Green Growth Strategy be made
feasible for your society?
• How can elites be engaged? How can the
community at large be engaged?
• What combinations of motivations could be
tapped for greatest effect?
• How can innovation and education processes be
put into motion in your society?
• How can resources be mobilised to catalyse the
needed transformation?
Thank you